Enterprise Wireline Tariffs to Come Down – Reliance Communication

February 2, 2010 · Filed Under conference call · Comment 

In an analyst call, the management of Reliance Communications have said that Wireline / Landline Tariffs are under pressure as Wireless Tariffs have fallen significantly and the company si facing pressure especially from the Enterprise Segment.

Other highlights of the call are – Although RCOM’s RPM declined 4.6% in Q310, its EBITDA margin was down 156 bp; management mentioned this was due to continued investments in network and higher Read more

Godrej Consumer Products – Lower market share in winter

January 25, 2010 · Filed Under conference call · Comment 

Godrej Consumer Products indicated that its lack of glycerine soap does not allow it to enjoy stronger market share in winter. Hence, it lost a 40-bp market-share qoq. Its recently launched moisturising soap is expected to drive growth in winter.

Though palm oil prices continue to trend upwards (and are now up 51% yoy), GCP pointed out that the forward cover would allow it to improve margins, and will not compel it to hike prices. It indicated it has
such cover till Apr 10. Read more

Mr. Bhave wants Long Term Retail Participation

June 25, 2009 · Filed Under conference call · Comment 

Citigroup hosted mr. Bhave, Chairman SEBI as the keynote speaker. Here is what he told @ the conference.

We live in uncertain times. While the pain has receded in the last few months, and is probably behind us, the uncertainty remains. Mr. Bhave pointed out that even as the Sensex fell from 21,000 to 8,300 and is now back to 14,000 levels, the Indian markets have proved stable through the crisis, with settlements and cycles on schedule. This is a marked change from the mid-90’s when settlements were severely affected.

Mr. Bhave stressed the need to increase retail participation in the Indian markets. The retail investor has acted as a counterbalance to institutional inflows and outflows in volatile markets. Citing mutual fund redemptions last year, Mr. Bhave pointed out that the majority were corporate. The slew of measures announced last week were expected to improve retail investor interest in the market.

The Indian markets offer investors many features comparable with the best in the world. Mr. Bhave outlined several areas which could improve conditions further. These included providing DMA (Direct Market Access) and cross-margining facilities for the secondary markets, facilitating IDR (Indian Depository Receipts) for foreign companies wanting to list in India, and improving issuance in the primary markets.

Jindal Steel and Power Plans to list JPL in the next one year time horizon

June 5, 2009 · Filed Under conference call · Comment 

Jindal Steel and Power (JSPL) held a conference call to disucss quarterly and yearly results and future growth plans. Sushil Maroo, Director (JSPL) and Managing Director (JPL) addressed the conference call

Highlights of the call

  • The Debt on the books of JSPL stands at Rs 4900 crore, while the debt on the books of JPL stands at Rs 3200 crore. The combined Cash balance stands at Rs 1300 crore.
  • The company plans to sell very small quantity on iron ore from the Bolivian mines over the period of next 2 months.
  • The Capex plan in JSPL is Rs 2000 crore each for the FY’10 and FY’11. The Capex plan in JPL for the FY’10 is around Rs 600-700 crore and for the FY’11 is around Rs 3000-4000 crore.
  • The total power profits contributed around 70% of the total profits. The management of the company expects this ratio of 70:30 tilted in the favor of power to continue over some more years.

JSPL

  • The raw material cost for the quarter under review includes write-down of high cost coking coal to the tune of Rs 590 crore.
  • Steel products sales are expected to increase to 2 Mt during FY’10 from 1.5 Mt during FY’09
  • For the quarter ended Mar’09 the Average realization was Rs 27000-29000 per tonne for the steel products and around Rs 13000-14000 per tonne for sponge iron
  • On the captive power front the company is planning to add 1350 MW (135 MW X 10) of capacity. From Dec’09 the company plans to commission 135 MW capacity each every 2 months.

JPL

  • JPL has announced further brownfield expansion of 2400 MW (4×600 MW) Power Plant at an estimated project cost of Rs 13600 crore. (US $ 2.83 billion). Order for Boiler Turbine & Generator (BTG) package has been placed on BHEL in December 2008.
  • This project will be completed in stages in the year of 2012 and 2013 and the same will be funded on the basis of 70:30 debt : equity. Debt of Rs 8400 crore will be tied up in due course of time and the equity of Rs 3600 crore will be arranged from internal accruals.
  • The average selling price for Merchant power sales was around Rs 5 + per unit
  • The sustainable Merchant Power rate for the next 2 years is expected to be in range of Rs 4-4.5 per unit.
  • Two Joint Venture Agreements executed with Hydro Power Development Corporation of Arunachal Pradesh (HPDCAPL) for development of 4500 MW Hydro Projects in Arunachal Pradesh
  • The Company plans to have a PLF of 90%+ for the FY’10.
  • Out of the Debt of Rs 3200 in JPL the company has plans to repay debt to the tune of Rs 800 crore by the end of the current Month (May’09).

Tata Chemicals Capital expenditure plan for FY 2010 is Rs 250 crore

June 4, 2009 · Filed Under conference call · Comment 

Highlights-

  • The consolidated top-line of the company for the full year ended March 2009 more than doubled to Rs 12,257.66 crore mainly backed by the record growth in sale of urea during the year under review.
  • During the year the company incurred a notional forex loss of Rs 92.31 crore on account of notional exchange loss or mark-to-market restatement (under AS-11) of foreign currency borrowings and also during the year the company incurred an EO loss of Rs 234.19 crore on account of actuarial deficit in overseas pension liability and asset impairment loss of Brunner Mond.
  • Loss on sale of fertilizer bonds and the mark-to market loss on the outstanding bonds was Rs 78.03 crore.
  • The PBT after EO fell by 22% to Rs 917.31 crore during the year ended March 2009, whereas the net profit of the company after minority interest of Rs 111.71 crore fell by 33% to Rs 648.09 crore during the year ended March 2009.
  • The company’s subsidiary viz Brunner Mond, IMACID and GCIP posted decent growth during the year under review.
  • Brunner Mond sales increased to Rs 2,079 crore during the year ended March 2009, whereas IMACID posted a sales of Rs 868 crore during the same period. The sales from GCIP was Rs 1323 crore.
  • Brunner sales were higher due to higher volumes and price increases that was initiated during the previous 2 quarters. Prices in Europe are presently in the region of USD 240 per metric tonnes.
  • However increased imports from China into South East Asia has considerably impacted Magadi’s performance. Chinese imports into Latin America have impacted GCIP’s exports to these regions.
  • In the domestic market the demand has remained strong on the back of traction of the detergents and chemicals segments. The soda ash prices in the domestic market corrected by around Rs 500 per metric tonne and the spot price currently is in the range of Rs 10,000 to 11,000 per metric tonnes.
  • Sales volumes (including exports) for soda ash at Mithapur for the quarter ended 31 March 2009 stood at 695,000 tonnes.
  • The global soda ash industry’s capacity utilization has fallen to 75% due to weakening demand during the past few months. The prices have also fallen and are currently in the range of USD 160-175 FOB China. The strong Chinese position in the global soda ash market is a major competitive concern.
  • The demand in UK and US are seen stabilizing; however the rest of Europe is witnessing a decline in demand.
  • The reintroduction of 9% export incentive for Chinese producers by the Chinese government has increased their production besides making their produce cheaper in the global market.
  • However the 20% safeguard duty for the next 6 months on Soda Ash imposed by the Government of India has to an extent protected the domestic market.
  • Urea production at the Babrala plant has stabilized at over 3,500 tonnes per day levels. The previous quarter saw the highest ever urea sales on the back of improved availability after debottlenecking the plant.
  • The company received Rs 4,264 crore total subsidy from the government during the year ended March 2009. Out this total subsidy the cash subsidy was Rs 3,245 crore whereas the subsidy in the form of bonds was Rs. 1,019 crore. Thus the outstanding subsidy as on 31 March 2009 was Rs. 874 crore.
  • Feedstock for the 30,000 litres per day Ethanol plant is being sourced and production is expected to begin soon. Trial cultivations of Jatropha for the Bio-diesel operations are continuing smoothly.
  • Tata Salt continues at number one position with market share of about 44%. Tata Salt Lite has become the market leader in the low sodium salt category within the first year of its launch.
  • The Nitrogenous fertilizer production by the company was 1.02 million metric tonnes whereas the sales during the year were 1.07 million metric tonnes during the year ended March 2009.
  • The phosphatic fertilizer production was 0.56 million metric tonnes during the year ended March 2009 as compared to 0.68 million metric tonnes during the previous fiscal. The sales during the year however were 0.58 million metric tonnes during the year under review.
  • DAP consumption in India increased considerably, however continued high phosphoric acid prices may render manufacture of DAP unviable. DAP prices currently has stabilized at around USD 330 per metric tonnes.
  • The average phosphoric acid price for the company during the 4th quarter was USD 760 per metric tonnes and the current price has fallen to USD 630 per metric tonnes.
  • The total cash in the book including Rs 446 crore fertilizer bond is Rs 1452 crore as on March 2009.
  • The consolidated gross debt as on March 2009 was Rs 6,283 crore. This comprises borrowings of USD 475 million taken on the Tata Chemicals balance sheet and a loan of USD 300 million taken on the GCIP balance sheet.
  • The payment of USD 475 million loan in the company’s B/S will begin in June 2012 while the USD 300 million loan in GCIP’s B/S has begun in February 2009.
  • The debt after deducting cash, value of investments and fertilizer bonds as on March 2009 was Rs. 4,831 crore.
  • The consolidated inventory turnover day of the company was around 38 days, whereas the debtor’s turnover day was 49 days.
  • The company has planned a capital expenditure of Rs 250 crore during the current fiscal. Out of this Rs 50 crore would go in setting up a customized fertilizer plant at Babrala in the northern state of Uttar Pradesh, and the rest in normal maintenance of assets.
  • The capex earlier planned for FY 2010 was Rs 500 crore, which was lowered citing current economic turmoil.
  • The company declared a final dividend of 90% for the financial year ended March 2009.

Edelweiss Capital Opening retail broking arm in next 3 months

June 4, 2009 · Filed Under conference call · Comment 
  • Edelweiss Capital For the fourth quarter ended Mar’09, reported 55% decline in consolidated Income from operations to Rs 180.08 crore. Income from all sources reported decline on y-o-y basis.
  • Gross profit declined by 51% to Rs 73.68 crore despite 95% increase in other income and 57% fall in total expenses. 74% rise in deprecation further brings Net Profit down by 50% to Rs 40.93 crore.
  • The PBT margin for the full year FY09 declined to 36.5% compared to 41% in FY08. This is largely due to two reasons – one, scaling down of market size and other due to STT of Rs 72 crore on treasury (Rs 62 crore during FY08).
  • The company currently has 4 integrated offices in leading metros and 18 branch offices across the country of which 3 branches are run on franchisees.
  • The Board of the Company has recommended a dividend of Rs 3 per share (face value Rs 5 per share)
  • Networth without minority interest at Rs 2115 crore for FY09. Networth including minority interest at Rs 2500 crore for FY09. Book value per share at Rs 282.3 as on FY09.
  • The Brokerage Services business has performed in line with the markets during the year. The company’s Research continues to cover over 125 stocks across 16 sectors accounting for about 65% of the total market capitalization.
  • Broking commission value fell more than 50% owing to shrinkage in volumes in market. Broking business roughly constitutes 55-60% of the Fee income of Rs 244.12 crore. While investment banking business income forms the remaining 45-40%.
  • The average daily trading volumes for FY09 is over Rs 3900 crore. Market share reminded at 6.4% of total average daily volumes for FY09.
  • The company was able to scale down its cost for the year. It brought down its staff head count from 1800 in FY08 to 1400 in FY09 due to this the employee cost came down by 19% to Rs 165.94 crore.
  • It has also brought down the risk collateral cover to 2.8x in FY09.
  • The Loans business has an asset base of around Rs 550 crore. It comprises of loans granted against capital market securities and is adequately collateralized.
  • The company has consciously brought down the book size given the current environment and focused more on collateral management. The interest income from loans business continues to be a distinct contributor to revenue streams.
  • Average yield on loan book is around 16.5-17% for FY09.
  • Balance sheet constitutes: Equity – Rs 2500 crore, Borrowing- Rs 700 crore (Rs 1800 crore in FY08), Bank FD’s – Rs 1300 crore.
  • The company’s main focus for FY10 will be maintaining liquidity and grow its balance sheet.
  • The Investment Banking activity in India has seen a marked slowdown in the year, both in the primary equity capital issuances and other advisory services. The company has closed 9 investment banking transactions in FY09.
  • Notable transactions amongst these were the acquisition of People Support, Inc. by Aegis BPO Services Limited for USD 250 million and private equity placement for SKS Micro Finance for USD 75 million.
  • The Debt Syndication Desk, which has been operational for about a year and a half so far, has gained a strong foothold and visibility in the market during the year.
  • The Alternative Asset Management activity in India has seen significant outflow from foreign investors during the year. It delivers highly valued investment advice, both direct and indirect to few select funds. During the year, this business launched a debt oriented fund. The AUMs/AUAs stood over USD 350 million as on March 31, 2009.
  • The Asset Management Company manages two Debt Funds, one Interval Fund and one Equity Fund as on 31st March 2009. It has recently launched an Equity Diversified Growth Equity (E.D.G.E.) Fund. The focus of this business continues to be on developing the product portfolio and investment management capabilities.
  • The company is setting up new retail broking business in 3 months time for which it has recruited 140 people. The retail branches will be both in franchise and own branches.
  • It has also started a new NBFC business which will focus more on collateralized liquid loans. The total market size of this segment is 25000-30000 crore and the company is targeting to build a business of 5000-7000 crore business in a years time.
  • Going forward, the company forecasts its Agency business, Investment banking and new retail broking business to contribute to its revenue stream while it maintains caution on finance business.

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