Top 7 Stocks with Monopoly businesses | Analysis of Shares with Monopoly in the BusinessJan 02, 2022
Friends, let's talk today about the companies that have a
in its business segment.
business. Monopoly, which means that they have full control over the
businessand no other company offers the same in that sector. and in today's video, we will talk in detail about these monopolies and their business models I, Jagdeep Singh welcome you to Groww's youtube channel, if you haven't subscribed please do so so you don't miss any important videos So first time company we will talk about that IRCTC is owned by the Government of India and operates under the Ministry of Railways. and has a
in its business segment.
The company's business is catering, online ticket booking and bottled water on railways. The entry barrier is so high that no company can operate in this sector at the moment. The IRCTC website is the most visited in India, with between 25 and 28 million transactions every month. The company is also trying to expand into other
businesses, having recently opened train waiting rooms. The initial public offering was launched on 30th September 2020, priced at Rs 320, and today it is trading above Rs 1450 and once there was a time when the share price touched Rs 2000 and went down. As COVID affected all
businessesin all sectors, a drop in total sales and revenue was seen in Q1, 2 and 3.
More Interesting Facts About,
top 7 stocks with monopoly businesses analysis of shares with monopoly in the business...
In Q1, sales decreased by 71%, 82% in the quarter 2 and 68% in quarter 3. shows the impact of covid on the company If we talk about the financials of the company so we can see the impact of the monopoly on its share price. The market capitalization of the company is 23000 Cr and the PE ratio is around 112. and the company has no debt of late. The next company is HAL, Hindustan Aeronautics Ltd and it is a lone player in its sector. It was incorporated in 1940 by Walchand Hirachand in association with the Mysore Government. Full control was transferred to the Government of India and it manufactures different aircraft for them.
After 1951, the company came under the Ministry of Defense, which still owns it. It has a monopoly because for security reasons, the ministry does not allow any other company in air defense Sales went to -47% due to COVID in Q1 and increased to 45% in Q2. Market cap is around 31000 Cr and the PE is minus around 12.6 It has given a return of 15% in the last year and the debt to equity ratio is 0.31 which is a good number The third company is Coal India Ltd which is based in Kolkata Bengal Occidental and is the world's largest coal-producing company and the largest for corporate employment.
They have 82 mining areas spread over 8 states with 394 coal producing mines. The main consumers are the energy sector, the steel sector and the cement sector which also buy from Coal India. This is one of the few companies that saw no impact from COVID and usage stayed the same. It was a fully established monopoly until the government auctioned off 41 mines where private players are also allowed to enter. The interesting fact here is that Coal India provides 80% of the coal to the entire power sector. and the demand is expected to stay the same and even grow more. It is a for profit company that pays huge dividends to its investors and is the highest dividend yielding company in Nifty 50.
The market capitalization is around 78000 Cr and it has given more than -25% return to its investors in the last year. . The fourth company is Hindustan Zinc, which is part of the Vedanta group and produces lead, zinc and sulfuric acid. It is the only company that manufactures zinc and lead and is the largest integrated company in the world. The company is said to be the leading steel manufacturer and has the lowest costs. It was incorporated into the public sector in 1966 and after the disinvestment of 26%, it passed into the hands of the Vedanta group. The company's zinc market share is 78% and to challenge this would require a lot of capital because the company is already a market leader and the business is capital intensive. so the barriers to entry are tough and therefore the firm maintains its leverage.
The market capitalization of the company is 160000 Cr and the PE ratio is around 17 and the company has given more than 41% return to its investors in the last year due to which it has outwitted The next company is ITC Ltd, which has a very diversified business. divided by sectors ITC's main business is tobacco, agriculture, consumer goods and hotels, but the main one is tobacco with a market share of 77% due to the fact that the company has acted as a monopoly in that sector . The company's operating profit margin in this segment is 70% and the return on equity is 400% in the cigarette and tobacco segment, but of late they have tried to diversify their business into the FMCG sector in products like Aashirwad and many more where they have established a presence but how will their margins improve, that would be seen in the near future.
If we talk about the company's composite sales over the last 5 years, it's 5% and profit growing at 10% CAGR. The company saw a negligible impact from COVID, but its hospitality sector suffered the most. The hotel segment suffered, but compared to the size of the company, it can be adjusted and therefore has little effect on sales and profits. The market capitalization is 2.5 lac Cr and the PE ratio is around 17 and it has given returns of -13% in the last year. They have goals they aspire to in the FMCG sector as the valuations there are very high. but there are no margins.
This can become a very good case study of how your market share and margins grow. Before you start with the next company, you may have used fevicol once and the name is associated with the brand. and the company that owns fevicol is a brand called Pidilite and they develop their business in the adhesives and chemicals sector. where the market share is around 70%. It was incorporated on July 28, 1969, after which they made their brand and is now the most trusted brand. This display explains the company's products like adhesives, ceilents, construction chemicals. The company has some major brand names that are directly associated with products like Drfixit, mseal, feviquick where pidilite has a big name.
The company has 9 regional offices with 23 brands and international manufacturing serving the US, Thailand, Dubai and Brazil. The company has been giving good returns to its investors in terms of revenue and profit because the company has been innovating according to the requirements. due to which they have entered new segments and brought new products from time to time to meet the demands of customers. The company's sales have increased by 8.5% in the last 5 years and for such a large company to grow at this rate is a great impact. Now, if we talk about the company's earnings, they have compounded by 18% in the last 5 years, which is known as a positive sign.
Pidilite has given a return of 10% in the last year and its market capitalization is around 85000 Cr. The PE ratio is around 85, which means that it has been trading at good premium valuations due to the huge participation market and monopoly. You can assume that the company has no debt, it's just negligible. The operating profit margin is around 23%, which is a strong point, and if sales are high, profit will be too. Let's talk about the last company on the list called Container Corporation of India. It was established in 1966 and reports directly to the Ministry of Railways It has a 68% market share in its market segment and the Indian government has a 54% share in the company and the government plans to divest 30% of its share and will keep the remaining 24%.
The market cap is 25000 Cr and the PE ratio is around 35 compared to the industry ratio of 22, which means it is a bit higher than the industry ratio. The company has given a return of -24% to its investors in the last year
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