CCEA nods Rs 18,238 cr highway projects under NHDP
The government has cleared six-laning of highways of 1,409.93 km of in various states worth of Rs 18,238 crore, under the National Highways Development Project (NHDP). The highway project would encompass Uttar Pradesh, Haryana, Rajasthan, Orissa, Andhra Pradesh, Tamil Nadu, Karnataka and Madhya Pradesh under NHDP phase V was approved by the Cabinet Committee on Economic Affairs (CCEA).
The laning projects will be developed by the National Highways Authority of India (NHAI) under public-private-partnership (PPP) model with a construction period of 30 months and a concession period of 26 years.
Ballarpur Industries Plan capex of Rs 300 crore for next 2 years
Ballarpur Industries (BILT) held a conference call post announcing its results for the quarter ended December 2008. B Hariharan Group Director Finance addressed the call and discussed the performance of the company.
Highlights of the concall
During the December ended quarter, the net sales of the company on consolidated basis has decreased by 7% to Rs 646.31 crore while net profit has declined by 38% to Rs 45.91 crore.
For the half year ended December 08, the net sales of the company on consolidated basis has increased by 5% to Rs 1418.13 crore while net profit has declined by 23% to Rs 113.25 crore.
During the December ended quarter, the net sales of the company on standalone basis has increased by 14% to Rs 253.98 crore while net profit has inclined by 162% to Rs 31.87crore.
For the half year ended December 08, the net sales of the company on standalone basis has increased by 12% to Rs 501.48 crore while net profit has inclined by 132% to Rs 60.24 crore.
On consolidated basis for the December quarter, total paper sales volumes were down by over 9% to 1,36,516 MT as compared to 1,50,735 MT in the corresponding period last year. Revenues from sale of paper were up by 4% to Rs 545.9 crore from Rs 525.5 crore in the corresponding period last year. The Paper products sales revenue were up by 20% to Rs 76.3 crore from Rs 63.6 crore in the corresponding period last year. Total Pulp sales volumes were down by 58% to 9,842 MT as compared to 23,382 MT in the corresponding period last year. Revenues from sale of pulp were down by 67% to Rs 29.8 crore from Rs 91.4 crore in the corresponding period last year.
For half-year period on consolidated basis, total paper sales volumes were down by 3% to 285176 MT as compared to 294866 MT in the corresponding period last year. Revenues from sale of paper were up by 9% to Rs1134.9 crore from Rs 1039.6 crore in the corresponding period last year. The Paper products sales revenue were up by 23% to Rs 149.3 crore from Rs 121.1 crore in the corresponding period last year. Total Pulp sales volumes were down by 26% to 32926 MT as compared to 44693 MT in the corresponding period last year. Revenues from sale of pulp were down by 28% to Rs 119.9 crore from Rs 166.7 crore in the corresponding period last year.
There was no price reduction in month of January, but if required, the company can cut its paper prices in month of February or March due to import from China.
On the cost side, there has been significant drop especially in the pulp prices. The pulp prices currently hover around USD 400 per MT as against USD 750 per MT for the previous quarter. The full impact of the same will realized from March 2009 onwards.
The capacity expansion in Unit Bhigwan is in full swing. The expected additional capacity, which would be sold during the year, would be around 60,000 MT. This would have positive impact on revenue and profitability for ensuing quarters.
The capacity expansion of 1,65,000 MT in Unit Ballarpur is underway and is expected to be completed in July, 2009, as targeted.
The company’s kamalpur facility which is producing Rayion Grade Pulp has suffered due to Grasin its only customer has reduce its production by 70% in last quarter. This is will continue for netxt quarter also. Irrespective of the demand for Rayon Grade pulp, the company would have the option to link this unit for paper pulp production with Unit Ballarpur’s capacity expansion.
The company has gross debt of Rs 3100 crore and cash of around Rs 300 crore.
The company’s debtor days are less than 30 days.
The current coated paper price is at Rs 49000 and uncoated paper prices at Rs 46200 per tonne.
The company has increase price of uncoated paper by Rs 1200 per tonne in month of October 2008.
The company’s effective interest rate is 8.5%. The interest cost has gone up for the quarter due to high interest rate in month of October and November and rise in working capital of the company. The company expects its working capital to come down with release in inventory in SFI.
The company had launched 4 stores uptil now and plan to launch 5 more stores by June 2009.
The paper products & office supplies business sells more trade goods resulting into low margin.
The company has 2 days of finished stock inventory in December.
The company is working on 100% capacity.
Avanta Power, the company’s subsidiary is in process of setting up of two 600 MW power plants each, for which it will raise fund separately.
The paper demand in Malaysis has slow down. As a result, Sabah Forest Industries (SFI) which use to see 12000 tonne production a month has seen a 17000 tonne stock pile in month of December. By March, the company expects the company will see its inventory to return to normal level of 2000 tonne. Demand for paper in SFI is expected to improve after the Chinese New Year. Inspite of the drop in paper selling prices on the cost side also, the company has significant savings viz. in Oil, Chemicals etc. Hence there won’t be any further margin pressure in SFI.
The company has capex of Rs 300 crore for 2 years and $ 145 million for SFI for next 2.5 years. Along with it the company has maintenance capex of Rs 150 crore per annum.
In next 6 months, the company’s sales volume will increase by 60,000 MT due to capacity expansion at Bhigwan.
The company may go for FCCB buyback, only if it get back at a discount of 30% to 35%.
Demand for paper in India is stable. Though the overall paper demand is generally linked with GDP growth rate, coated paper, copier paper and Hibright paper which BILT currently manufactures is expected to still grow at 10%.
Thermax Expects slowdown in investments and delay of capex
Thermax held a conference call on Jan 29, 2008. In the conference call the company was represented by its Managing Director.
Key takeaways of the conference call
Total income for the quarter was Rs 803.8 crore, a fall of 6% and a PAT of Rs 72.3 crore which translate into a decline of 4%.
About 79% of the revenue for the quarter came from energy segment and 21% came from environment. For the nine months the share was 75.5% from energy and 24.5% from environment. Similarly the domestic: international mix is 69:31. For the nine months the international accounts for 25.5%.
Set back at the operational level is largely as the company deliberately slowed down the productions as there were some liquidity issues with the customers and there was no point in pushing the customers.
Order book of the Thermax Group as end of Dec 31, 2008 was Rs 4103 crore. The standalone order book was Rs 3854 crore, which was higher by about 44% on yoy basis.
Order inflow of Thermax standalone is Rs 731 crore for the quarter and its Rs 863 crore for the Group.
For the group the Order inflow breakup in-terms of Energy and Environment for the quarter is Rs 716 crore for energy and Rs 146 crore for environment. For YTD the share of energy in order inflow is Rs 3422 and environment is Rs 522 crore.
Order booking was in accelerating pace in the first half of current fiscal and since October onwards there is hesitance in finalizing orders. The month of November and December is not satisfactory in terms of order finalization. Delay in order finalization does not mean dip in enquiry, the company continues to have strong enquiry but only the finalization is delayed.
Cancellation of orders – Orders worth Rs 116 crore has been cancelled and that has been accounted for in the books. Order cancelled – 120 crore – export order from Canada which related to a petrochemical plant order and the rest of the orders were fairly well spread in sponge iron industry. The cancellation has been largely in orders where the client tried to convert from furnace oil to coal. With furnace oil price falling the viability of coal fired has diminished.
There are 3 big orders in the books of the company that is the Rs 800 crore worth Essar order, the Rs 414 crore worth order from SAIL and the order from Bramini Steels of Karnataka worth about Rs 340 crore in books of Thermax stand alone and Rs 100 crore in books of subsidiary. All the three orders were in engineering stage. Revenue recognition has started only for the SAIL order and for the rest two the revenue recognition is not expected in the current quarter.
In FY 2010 execution will be slower than earlier across the world as liquidity continues to be a problem. In prevailing economic conditions and credit squeeze many of the industries are reviewing their capex plans.
Broadly, the company’s order book position consists of orders from sectors such as power, cements, metallurgy, refinery and steel in equal proportion. The company expects no new investments coming in sectors of cement, steel and Metallurgy in the next 12 months. But the power sector is going to be strong. The investment in refinery projects across the globe is going to continue where the company expects supply of heaters etc. The FMCG and food processing industry is not going to cut down its capex.
Next year we have the capacity in place, if market grows we will be growing.
Thermax instrumentation is expected to clock profits by end of the current fiscal.
Currently the company has 12 ongoing projects. The company has put in place waste elimination process so as to save unnecessary costs. The company is taking all efforts to maintain current margin.
America market for absorption chillers is around USD 30 odd million. Out of which the Thermax targets about US 7-10 million.
In Utility segment the company has two more enquiries for which it has already Pre Qualified. The team is working on tendering bids for these two orders.
Margins of the company are related to product project mix. When EPC project are billed the margin will dip and when the standard products are more the margin will be higher.
With industries reviewing their capex plans especially the private players the company has shifted its focus on Government and PSU orders. The company has one big order from SAIL, Order worth Rs 250 crore for heaters from PSU oil refineries, municipal orders.
Start focusing on large order in water segment – bagged one order of around Rs 20 crore. The company has also got some orders in municipal segment.
Tata Steel – Volume guidance for FY’10 is 6.5 Million tonnes
Tata Steel held a conference call to discuss standalone quarterly and nine months ended results and future growth plans. Koushik Chatterjee, Group CFO addressed the call.
Financial Highlights
- For the quarter ended Dec’08 Tata Steel reported a 3% fall in Total Income (Net Sales / Income from Operations + Other Operating Income) to Rs 4802.14 crore. The OPM decreased sharply by 1000 basis points to 30.8%.
- The subsequent Operating Profit for the quarter under review stood at Rs 1477.95 crore which was 27% lower when compared with corresponding period last year. The subsequent PAT for the quarter under review stood at Rs 466.24 crore which was 56% lower on a Y-o-Y basis comparison.
Highlights of the Call
- The hot metal production during the quarter under review stood at 1.70 million tonnes, which was higher by 23% as compared to volumes in the same quarter last year.
- The Steel Production during the quarter ended Dec’08 was 1.235 Million tonnes as compared to 1.246 Million tonnes during the corresponding period last year indicating a fall of 0.9% on a Y-o-Y basis comparison.
- The Steel Sales during the quarter Dec’08 was 1.072 Million tonnes as compared to 1.244 Million tonnes during the corresponding period last year indicating a fall of 13.8% on a Y-o-Y basis comparison.
- The Saleable steel volume guidance for Q4FY’09 is 1.5 Million tonnes (Mt) while that for the FY’10 is 6.5 Mt.
- Performance during the quarter under review was impacted by a planned 17-day shutdown of HSM
- The average blended realization for quarter ended Dec’08 was around Rs 33000-34000 per tonne as compared to Rs 41000 per tonne during the quarter ended Sept’08.
- The prices of Ferro Chrome has declined sharply from Rs 100000 per tonne during Sept’08 to currently around Rs 62000 per tonne
- The Net Debt position as on 31st December 2008 stands at Rs 24000 crore
- The capex incurred during the 9MFY’09 stands at Rs 2100 crore
- The planned capex for the FY’10 is aorund Rs 3500 –4000 crore
Educomp bags work order for 2042 schools in UP and Assam
Educomp Solutions has received work orders from the state of UP and Assam for a total of 2042 schools.
The IT training company has received a work order from the UP government for implementation of computer education and computer-aided-education in 1401 Schools in 4 zones namely, Lucknow (372 schools), Meerut (380 schools), Jhansi (369 schools), Gorkhapur (280 schools) for the period of five years on BOOT Basis.
It has also received Letter of Intent from Axom Sarba Siksha Abhijan, (SSA) Mission, Assam for imparting training and for engagement of Technical Pan teacher in 641 Schools.
The orders are worth Rs 120 crore and with these orders the total number of schools under ICT implementation in the Educomp portfolio has gone up to 12012.
UAE Exchange ties up with LIC
The UAE Exchange has entered into a partnership with public insurance major Life Insurance Corporation of India (LIC). with this it becomes the corporate agent of the insurance major.
Under the deal, UAE Exchange will offer four LIC policies initially such as Endowment Plan, Child Plan, ULIP plan for pension and investment and investment and tax saving plan, to its customers . This facility will be made available across all the 221 branches of UAE Exchange across the country.
Besides, the company is also planning to act as LIC’s renewal premium collection centre for the public soon.
Ashok Leyland To execute domestic order book of 2000 vehicles
Ashok Leyland (ALL) held conference call on 29th Jan 09 to discuss its results for the quarter ended Dec ’08.
The meeting was addressed by Mr K Sridharan, Chief Financial Officer
Highlights of the Discussion
- In the quarter ended Dec ’08, Ashok Leyland the Hinduja Group’s flagship company in India and a leading commercial vehicle player recorded notable downfall of 44% in its topline to Rs 1000.85 crore largely owing 58% crash in its total sales volume. However the downfall in net sales was restricted due to growth in its engine business, spare parts business and exports. With 90 bps decline in its OPM, its operating profit crashed by 50% to Rs 83.14 crore. The profits further dwindled on decline in other income and increase in interest cost. However, as a boon, write back of tax in quarter ended Dec ’08 (against tax provision in corresponding pervious period), partially offset the degrowth in its net profit. Its net profit crashed by 84% to Rs 18.87 crore.
- The company expects reduction in raw material cost in Mar ’09 quarter due to softening of commodity prices though it depends on the current negotiation with suppliers.
- The company expects the demand to remain subdued in the quarter ended Mar ’09. It expects signs of revival in 1st quarter of FY10 after the elections.
- On basis of subdued demand outlook, the company is functioning on 3 day work week in Jan ’09 and plans to continue the same in Feb ’08. With regard to production plan in Mar ’09, it would review the market situation in mid Feb ’09.
- At the production front, it plans to produce total 6000 vehicle in quarter ended Mar ’09. Out of this, 1500 vehicles would be produced in Jan ’09 and balance 4500 vehicles between Feb ’09 and Mar ’09.
- Currently, the company has domestic order book of over 2000 buses and export order book of 2200 vehicle. They need to be supplied by end of Mar ’09.
- The company is facing pressure to reduce vehicle price by Rs 15000 to Rs 20000.
- The company has revised total capex for the financial year 2009 to Rs 900 crore max against Rs 950 crore previously. It has spent capex of Rs 825 crore upto nine month ended Dec ’08. Out of spent capex, it has spent Rs 800 crore towards the Uttranchal plant.
- The Uttranchal plant would commence operations by Mar 10. Its capacity has been reduced from 70,000 vehicles to 40,000 – 50,000 vehicles. The total capex for the Uttranchal plant across the years would be Rs 1300 crore.
- With regard to its Nissan JV, companies are revising the capacity and capex plan depending on the outlook on India and exports.
- The employee cost is anticipated to be lower by 20% in financial year 2009. The various measures undertaken to reduce staff cost are: cut in the 6 day work allowance, voluntary reduction in salaries of executives and reduction in production incentives.
- The various cost cutting measures undertaken by the company are (1) carrying out work that were previously outsourced especially on the engine side (2) cut in no. of working days (3) reduction in salary of the employees and reducing the media and travel expenses (4) reduction in the raw material prices which is in the negotiation stage with the suppliers.
- With the stimulus package 2, the finance availability for trucks has improved in Jan ’09.
- ALL has bagged order worth Rs 480 crore to manufacture 875 ultra high end low entry buses by Delhi STC. Besides the Delhi STC, the company has not received order from any other government.
- With regard to fuel price reduction by Rs 5 in petrol prices and Rs 2 in diesel prices, the company is wait and watch mode.
- Its domestic sales volume declined by whopping 64% from 17134 units in quarter ended Dec 07 to 6184 units in quarter ended Dec 08. It is attributed to high marketshare held by the company in Southern and Western area that declined by almost 65%. In contrast, the Eastern area, where the company holds low marketshare, declined by 10%.
- Its exports managed to achieve flat growth of 1% y-o-y from 1831 units in quarter ended Dec 07 to 1841 units in quarter ended Dec 08. It is attributed to 400 vehicle export to Angola and entry into new export markets such as Chile, Thailand, Libya etc.
- In revenue growth terms, its engine business grew by 60% in quarter ended Dec ’08 and 90% in nine month ended Dec ’08. Its spare parts business grew by 5 to 6% in quarter ended Dec ’08 and 25% in nine month ended Dec ’08.
- The contribution of the engine business’s revenue to total revenue increased from 8% – 9% in quarter ended Dec ’07 to 18% in quarter ended Dec ’08.
- The contribution from spare parts revenue to total revenue is 12% to 15% in quarter ended Dec ’08.
- The staff cost reduced on account of 700 to 800 employee reduction, 3 day work week and voluntary salary cut for executives.
- Its other income crashed by 76% to Rs 10.58 crore owing to the sale of its shares in IndusInd Bank in quarter ended Dec ’07 against none in the quarter ended Dec ’08.
- The interest cost grew by 158% to Rs 39.41 crore owing to higher working capital. Higher working capital is being held due to current inventory of 10000 vehicles.
- Its long term debt stands at less than Rs 1600 crore. Its short term debt is close to Rs 1000 crore. The short term debt is expected to reduce by end of Mar ’09. It expects its debt (net of cash) to stand close to Rs 2000 crore end of FY09.
FIIs net sellers of Rs 84.64 cr in cash segment on Thursday
Foreign institutional investors (FIIs) were net sellers of Rs 84.64 crore (provisional) in the cash segment on Thursday, according to information posted on the BSE website. While FIIs made gross purchases of Rs 2,066.04 crore, their gross sales amounted to Rs 2,150.68 crore.
Domestic institutional investors (DIIs) were net buyers of Rs 580.11 crore (provisional) on the same day. While DIIs made gross purchases of Rs 1,529.16 crore, their gross sales stood at Rs 949.05 crore.
EasyInsuranceIndia inks pact with 20 insurance companies
EasyInsuranceIndia.com has tied up with 20 insurance companies including public sector life and non-life insurers.
The Chennai based online insurance broker received the approval from the Insurance Regulatory and Development Authority (IRDA) recently to start this new form of business.
The company which recently partnered with Oriental Insurance expressed its hope to attain a 5% of premium business from this mode in the next couple of years.
Punj Lloyd – Expects slowdown in petrochemical
The company expects slowdown in petrochemical segment, but no slowdown in oil & gas sector, which constitutes 65% of total business
Key highlights of Post Q3FY09 results:-
Liquidity environment during Q3 was tight and the interest rates went up sharply. The business environment was not affected much but there was fear everywhere as to what will happen. However such environment has eased with many regulatory initiatives and it is business as usual for the company.
According to the management, the low oil prices are temporary and even though the current oil prices are hovering around US$ 40, the six months forward contract all are trading above US$60. The emerging countries will drive the overall oil demand going forward. Even if the oil prices remains around this region, there is no slowdown expected in Middle East and OECD nations because of the huge reserves of trillions of dollars and their low break even cost of production of oil. For Libya the break even is at US $20, Qatar is at US$9, Middle East at US$8 and Saudi Arabia because of its location, has breakeven at US$45.
As far as infrastructure spending is concerned, in Middle East and Gulf regions, the real estate investments have slowed down drastically. Oil & gas sector will continue to see investments given the low cost in the region. Saudi Arabia and Iran have planned major investments in energy downstream segments and other industrial complexes to diversify the economy. According to the management, the petrochemical cycle has peaked out and will see slowdown in investments going forward as the margins are down severely. For oil and gas sector, no international company in this business would make the mistake which Shell did in 2002 period where oil prices where hovering around US$35 and the company stopped further spending on Exploration business. As a result of which in 2007, the company disclosed that the reserves have gone down drastically which lead the change in management upfront and crash in stock prices of Shell.
In India, the power and gas pipeline business will continue to see major investments given the need of energy in India. However the projects of PPP may be impacted in short term. Robust investments in Oil & Gas will continue in countries like Libya, Algeria, Tunisia & Morocco due to large trade surplus which these countries are carrying.
Punj Lloyd together with its subsidiaries Sembawang Engineers and Simon Carves, has present order book position of Rs 21908 crore. Punj Lloyd standalone has order book of Rs 16500 crore, Simon Carves has around Rs 1300 crore and the rest orders are of Sembawang. Of the total order book position of Simon Carves, the legacy orders stands around Rs 400 crore. Punj Lloyd over the years has established itself as a vey strong player in Oil & Gas, Petrochemical, Power and infrastructure space. Punj Lloyd is present in the entire value chain of operations starting from engineering, procurement, construction and post completion activities.