IRB Infrastructure Developers – Results Review

IRB Infrastructure’s topline for FY2008 increased by 40% yoy to Rs7.3 bn driven by 28% growth in toll collection segment (Rs3.7 bn) and 46% growth in E&C segment (Rs3.6 bn). Operating profit for the year stood at Rs4.1 bn, a yoy improvement of 47% and accordingly the operating profit margin for the year improved by a healthy 300 bps to 56%. PAT after minority interest witnessed a strong growth of 86% yoy to Rs1.1 bn against expectations of Rs996 mn.

The order book of the E&C division stood at Rs65 bn. Out of this, pure E&C order backlog is at Rs38 bn (Rs34 bn captive E&C) which is expected to be completed in next 30 months. The balance is operations & maintenance order book of Rs27 bn, which is to be executed over next 10 years.

JPT Securities – What’s Cooking ?

Mumbai Stock ExchangeA BUY was first recommended on JPT Securities on the 26th of May. Since then the stock has tripled and still locked in upper circuit today at Rs 124.

Lets closely look at what has happened in JPT Securities. JPT Securities suddenly came into the spotlight, striking an all-time high of Rs 124. They have appreciated 302.76% in the past quarter. The one-year period return was a massive 985.81%.

The rally materiliased after the promoters, headed by Managing Director J P Totla, sold their entire stake of 18.05 lakh shares, or 60.06%, at Rs 32.10 per share to Awaita Properties, Mumbai [Promoted by Nikhil Gandhi and Bhavesh Gandhi]. The shares were sold through a block deal on the BSE on 24 April 2008. Consequently, the promoters also agreed to transfer the management control to the acquirer.

On 30 April 2008, Awaita Properties launched an open offer to the public shareholders for acquiring an additional 20% stake in JPT Securities, at Rs 32.5 per share, as per the Sebi guidelines. The company’s equity share capital is Rs 3.01 crore, with face value of Rs 10 per share.

Nikhil Gandhi is said to be the right hand of Reliance Industries’ CMD,Mukesh Ambani. Speculation is rife in the market that Nikhil Gandhi will opt for a backdoor listing of his Mumbai-based SKIL Infrastructure.

What is the Modus Operandi employed by Gandhi and Mukesh Ambani ?
Ambani’s no doubt create wealth for shareholders, but in turn they create more wealth for themselves. Infrastructure is currently a Big Game. They want to unlock the value on this theme of their privately held companies and projects. If you look at what has happened to Horizon Infrastructure [PDF]- They buy a company which is listed in BSE completely, go for an open offer mop up as much more shares as possible. Now Change the name of the company and Transfer Big Infrastructure projects to this company thus giving it a way of backdoor listing.

If you have thoughts to share, you may write to feedback @ dalalstreet dot biz.

Indian Party Spolied for Sure, But Not Over

In a somewhat bold report written by Citigroup Economists, they are of the view that the Indian Party Sp’OIL’ed for Sure, But It’s Not Over [Reason OIL].

The 40% rise in oil prices since Jan 2008 is key to the direction change seen across all macro variables in India. The pressure could ease a bit from FY10 as new hydrocarbon discoveries come onstream. (more…)

Consumer Brand Launches – Emami + Nestle

Mens Parlour IndiaEmami has launched Emami Fair And Handsome – a fairness cream for men in a new sachet format for Rs5. Fair And Handsome is a market leader in the men’s fairness cream market.

Nestle India has launched Polo Xtra Strong, an innovation on its existing brand, Polo, with added menthol crystals. This is available in singles format priced at 50 paise.

Avesta Good Earth Foods, a subsidiary of Avesthagen, launched Good Earth Whole Wheat Crackers, enriched with Teestar, a proprietary ingredient that reduces blood glucose levels. Priced at Rs32 for a 100g pack.

Punjab National Bank – Falling treasury income + interest margin

Punjab National BankPunjab National Bank’s total business grew by 21% to Rs2860 bn on the back of 19% growth in deposits and 24% growth in advances, sequentially deposits grew by 9.1% and advances grew by 18%.

PNB’s reported NIM reduced by 41 basis points to 3.66% from 4.07% in 4QFY07 mainly due to deposits cost pressure, though the bank managed to hold the reduction in NIM by increasing credit-deposit ratio by 272 bps and increasing exposure to SME and retail sectors. Core operating performance was much better with other income and reduced operating expenses [33% (Y-o-Y) drop in employees’ expenses] led to 2.3 times jump in bottomline.

In percentage terms, GNPA and NNPA decreased to 2.7% and 0.6% from 3.4% and 0.8% respectively. EPS for FY08 was at Rs 65. The bank is expected to take significant hit on bottomline the current year due to NPAs, Agricultural Loans and Inflationary pressure.