Sai Baba Investment and Commercial Enterprises claims to be in the business of buying, selling, distributing and marketing of goods and all kinds of commodities, providing loans and advances, financing industrial companies, offering management and financial consultancy and into real estate business. However, looking at the past annual reports, 100% of its revenue comes from investment.
In the March 2017 quarter, the company reported revenues of Rs40 lakh and net profit of Rs17 lakh. For FY16-17, the total sales amounted to Rs1.56 crore and the net profit was Rs74 lakh. In the past, the company didn’t show any sales for two years, FY10-11 and FY11-12, and, then, during FY12-13 and FY13-14, sales remained below Rs50 lakh. All of this revenue comes from interest income and a very small share from sale of investments. There are no long-term investments; short-term investments amount to just Rs27 lakh, whereas long-term loans and advances amount to Rs13.44 crore.
The promoters of the company hold no shares in the company. Even with no real business, the company’s share rose by 244%, from Rs139 on 21 November 2016 to Rs478 on 23 June 2017 and the stock is trading at a price-to-earnings ratio (P/E) of 736! Why? Only the regulator can tell; but it has to investigate first.