STEL Holdings Limited (STEL) – Can the 80% discount sustain?

STEL Holdings Limited (STEL)

It is an Investment Company of none other than Goenka Group (Sanjeev Goenka and Harsh Goenka).

STEL holds shares of Group Companies. These Group Companies belong to two brothers

Sanjeev Goenka of Kolkata (CESC Ltd) and Harsh Goenka of Mumbai (Ceat Ltd).

Its investments in Goenka Group Companies are as follows


Ceat Ltd 1,372,835 shares

Phillips Carbon Black Ltd 90383 shares

KEC International Ltd 4685880 shares

CESC Ltd 2493470 shares

RPG Life Sciences Ltd. 502550 shares

Summit Securities Ltd 69815 shares


Spencer & Company Ltd,Chennai (Spencer) (1057135 shares)

Besides above STEL holds shares of some other group investment companies also.

STEL holds shares in Spencer And Company Ltd, Chennai . Some perception is there in the market that this Spencer is Retail chain but actually this Spencer is investment and property play and owns very good properties in south including some hotels having negligible book value for lands.

An extract from the Company History –

Indian Hotels Company Ltd.”The Company signed an agreement with Spencer International Hotels, Ltd. a wholly owned subsidiary of Spencer and Company, Ltd., to get license to operate Connemara Hotel at Chennai, West End Hotel at Bangalore and Savoy Hotel at Ootacamund.” This dates back to the year 1983.

Spencer holds some properties and hotels in south which are leased out and rental income forms a substantial portion in its revenues.

Dividends from investments in group companies form approx.. 35-40% of its revenues.

Against a capital of Rs.9.84 crores Spencer has Reserves of Rs.75.45 crores .It has Cash & Bank Balances to the tune of Rs 11.53 crores in its books. A very cash rich and profit making company.


The discounting should be much lesser in such investment / holding company where there is interest of 2 big industrialists as compared to other investment/holding companies which are owned by rather a single promoter.
If we take the above at current market values on a very conservative basis the NAV for STEL shares should be anywhere around 400/-.

The discounting of more than 80% currently is not justified at all and has to narrow down in short time.


Disclosure: I personally hold the stock so my views may be biased.

Disclaimer: I, am not registered under SEBI (Research Analysts) Regulations, 2014. No content on this blog should be construed to be investment advice. Any security specific discussion on this site is not a recommendation to Buy / Hold / Sell. The purpose of this site is solely for investor education. You should consult a qualified financial advisor prior to making any actual investment or trading decisions.

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  • gaurang

    Mr Dhaval,

    Excellent your picking the stock ability can you guide for building long term portfolio.

  • Thanks Gaurang for your kind words. Maharashtra Scooters is a long term play. STEL is momentum play. Right now at this point of time there is no way one can invest but ride the momentum with strict SL.

    For long term keep an eye on Royal Orchid Hotels, Gulshan poly, Alembic Ltd and south indian bank. Don’t chanse. Add slowly.

  • gaurang

    Thnaks for reply , can you provide research report on Alembic coz want to buy huge quantity . Can i enter in goldstone at this level

  • Jay Shah

    Hi Dhaval,

    Can you please do an article on MM Rubber.
    It is the sister company of MRF and trading at a huge discount According to me.
    Thanks 😉

  • Jay Shah

    Nice research n efforts.

    But let me tell u one frank view which I have observed. These holding companies’ undervaluation looks juicy on books. But remember these holding companies should sell the shares of the companies they hold to get cash/profits. If not no use, it’ll be merely on books. Its like sbi acquired so much land few decades back which itself is worth xxx crores n so sbi price should rise. What’s the use of land until sbi sells it? Only when it sells it’ll reflect in books n p&l n eps rises. Same way holding companies. And thats y they are undervalued wrt pe and also undervalued wrt book value n the total asset holdings. This is what I have observed.

  • You are partially correct. Now lets do the math other way round. Even though they dont sell the shares the value of the shares which they are holding moves up? So if CEAT has moved from 100 – 1300 in 5 years even if we give 75% discount it should adjust its NAV accordingly? Secondly in bull market the discount % goes down. So one can easily assume that it will come to 50% of the NAV. We should take the benefit of that and ride the rally.

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