Thanks. Absolutely, by current pace of repayment, they should be debt free by FY2016 or latest by 1H 2017.
Also, given the track record of succefully completing capex, I believe they should be able to do this one in timebound and efficient manner.
Thanks. Absolutely, by current pace of repayment, they should be debt free by FY2016 or latest by 1H 2017.
Also, given the track record of succefully completing capex, I believe they should be able to do this one in timebound and efficient manner.
Hi Santosh,
I have always found the cash issue to be a relevant question. Especially in the light of Mgmt's response. I don't think any of us would mind them holding onto cash provided a logical justification for the same is given.
I would personally write to them to get an answer on the pledge issue as well. I was surprised to see that questions about the pledge were not raised along with the cash issue. 'Coz of this cash issue I would like to understand that for what purpose are the funds against the pledge going to be utilsed for. I don't want the pledge money to land up as the USD converted money in the accounts or to be utilised to shore up valuations of the pvt. entity (maybe thinking too much; but none the less I find cash issue to be valid and mgmt. justification given unsatisfactory).
Regards.
Here are some updates from the AGM which I attended this year
Bangalore property (rental) market is slow and the rental expected is around Rs 40 to 45 per sft vs Rs 50 expected earlier.
The management was categorical that they will go slow on property development incl Hyderabad till an uptick is seen in the property market. They do not want to be stuck with unsold/unleased property
I think the land in Hyderabad which is freehold is around 280 acres and the value should be around Rs 11 - 15 crores per acre at least. The rest around 600 acres belongs to a Sikh trust (99 years lease with the company) and case going on for many years in Supreme Court. I met one of the trustees in the AGM and he does not expect a resolution soon
The quality of earning of explosive/mine business is also not great ....op profit was negative last year....However they said that it has turned positive in the current year.
I agree this company can be a multi bagger if the company shows some dynamism and gets its act together
Quick updates from the concall today:
Ambition: to have best EBITDA margins in India.
Changes in domestic business (one time correction): some hygiene initiatives (stopped bonus offers).
Abilify: 6% share in Sep data. Some customers do not report data.
On a contracted basis, estimate close to 15% share.
350-400 million tablets. Next 12 months high favourable.
H2: share could be a bit lower.
Nexium: more than 6 players in US market. Large attractive market.
Manufacturing intense. Target to have high single digit market share.
Shelcal: expect price rise 10% in November. 45% growth in volume terms.
Detrol: next 12 months - 3 more players to come in.
Long term loan 2200 cr. No plan to reduce LT debt in near future.
Brazil: impact due to currency devaluation. 10% growth in value terms.
Steps taken to mitigate:
1. Work on pricing (Improve)
2. Work on cost base (decrease)
3. Distributor margin (reduce)
Foreign exchange gain on net basis.
Receivables: Outstanding now 3 months and 9 days as compared to 4 months earlier
Inventory level is low.
ANDA filing: no filing this quarter.
Close to 20 products filed. Out of these expect 5-6 launches in next two years with limited competition.
Dahej facility: expect production/shipment to start before Xmas.
Expect increase in European tender business
European market:
Germany: main business in Europe. 16% growth in constant currency terms.
UK & Romania: short term slowdown.
Focus remains on Germany and UK.
Portfolio Derma close to 70 crore. Number 1 in face wash category.
why do you think so Santosh. Please justify the cash issue. Please do share your views or any such experience witnessed by you in past. It will help us. Thanks.
why do you think so Santosh. Please justify the cash issue. Please do share your views or any such experience witnessed by you in past. It will help us. Thanks.
Rajeev Jain - CEO of the company addressed the call:Highlights by Capital Mkt
Assets Under Management (AUM) surged 36% to Rs 37964 crore at end September 2015 from Rs 28004 crore at end September 2014. Deployments jumped 51% to Rs 9236 crore in Q2FY2016 from Rs 6115 crore in Q2FY2015.The company is targeting an AUM (loans) growth of 20-25% for FY2016, while expects the growth to be higher at 35%, if the festive loan demand turns out to be strong.New loans acquired galloped 42% to 13,93,309 in Q2FY2016 from 9,78,174 in Q2FY2015.Loan losses and provisions increased 71% to Rs 137 crore Q2FY2016 as against Rs 80 crore in Q2FY2015. The company made accelerated provisioning of Rs 31 crore in Q2FY16. Adjusted for this, loan losses and provisions growth is 33%.
Return on Assets and Return on Equity for Q2FY16 were 0.8% and 4.2% (not annualized) respectively. ROE is adjusted for capital raised by the company through QIP issue of Rs 1400 crore during Q1FY16.
Gross NPA and Net NPA as of 30 September 2015 stood at 1.67% and 0.46% respectively. The provisioning coverage ratio (PCR) stood at 73% as of 30 September 2015. Net NPA & provisioning coverage ratios have shown improvement from 0.48% and 67% respectively a year ago.Capital adequacy ratio (including Tier-II capital) stood at 20.49%. The tier I capital stood at 17.32%. The Company continues to be well capitalized to support its growth trajectory.
Two Wheeler financing business disbursed 139K accounts in the quarter (11% YoY). Three Wheeler financing business disbursed 8K accounts in the quarter (21% YoY). Consumer Durable business had a strong quarter disbursing 908 K accounts (36% YoY).Existing customer penetration continued to remain strong. The business launched its first co brand EMI Card proposition with Vijay Sales the second largest retailer in India.
Retailer finance business & extended warranty cross sell for consumer durable business remained strong, disbursing Rs 930 crore (83% YoY) and 45 crore. Extended warranty volume penetration crossed 16% in September 2015 from a low of 7.5% in the previous year.
Digital product finance business disbursed 126K accounts (102% YoY) during the quarter. Business crossed 50K accounts for the first time in the month of August 2015. Business is also exploring partnership opportunities with wireless carriers for financing packaged products.
Lifestyle finance business disbursed 38k accounts (92% YoY). The business continues to focus on identifying new categories like mattresses etc. New category additions should help the business accelerate growth in second half.
Salaried personal loans continued its strong run during the quarter and disbursed Rs 715 crore (88% YoY). The medium term strategy for the business is to grow direct business and deepen geographic penetration. Business added 15 new locations during the quarter to deepen its geographic footprint.Salaried home loans disbursed Rs 246 crore (119% YoY). The business launched Developer Finance product during the quarter. HFC license is expected further augment the delivery of its strategy.E-Commerce finance business launched in June 2015 with a ‘Seller Finance' offering for sellers of Flipkart and Snapdeal disbursed Rs 49 crore across more than 140 sellers in Q2.
Rural lending business continued to be the fastest growing business in Q2 as well, disbursing Rs 361 crore (284% YoY). The business added 18 new branches across states of Madhya Pradesh, Karnataka, Maharashtra and Gujarat during the quarter. The business is now present in 272 towns and villages in less than 3 years of its launch. The diversified business model pursued has delivered rich dividends.Retail construction equipment finance business now has receivables of less than Rs 90 crore. This business had 1,100 crore of receivables at its peak. Due to timely exit from the business, the company has managed to come out with no capital loss over the 5 years of this business. Incremental provisions are expected to be non-material and the business is expected to fully wind down in the next 9 months time.
Loan against Share business had a good quarter with a net assets addition of Rs 159 crore (80% YoY) catalyzed by growth in its retail segment.
Structured Finance, Financial Institutions (FIG) lending business & Light Engineering Vendor Financing business are beginning to grow well and disbursed Rs 310 crore in Q2 (Rs 195 crore in Structured Finance, Rs 105 crore in FIG & Rs 10 crore in Light Engineering).
Relationship management (RM) strategy launched this year has started to deliver on growth momentum. RM business disbursed Rs 376 crore in Q2 (61% YoY).
Fixed deposit business garnered Rs 413 crore of new fixed deposits during the quarter taking the total deposit book to Rs 1467 crore (233% YoY). The average deposit amount stood at 3.3 lakh with a weighted tenor of greater than 24 months.
Interest cost for the company continues to remain significantly lower amongst its NBFC peers. Borrowing mix at the quarter end stood at 47:48:05 between banks, money markets and retail deposits respectively.
There are improvement signs.
for e.g. the RM cost are reduced...need to see more in coming quarters
The SSGR is improving but still in red below 0.
For SSGR = Self Sustainable Growth Rate see http://www.drvijaymalik.com/2015/06/self-sustainable-growth-rate-measure-of.html
Debts are not big.
If you believe this is an good stock to add and hold then its at very good valuation given that recent growth it has shown and capex it has done.
Call add by Deepak Asher,Director &Mr.Devansh Jain ED.Highlights Capital Mkt
Sales volume including equipment and turnkey supply, in Q2 FY'16 stood at 212 MW as compared to about 114 MW YoY. Commissioning however stood at 140 MW as compared to 30 MW for Q2 FY'15. There are about 160 MW of wind turbines yet to commissioned and will be commissioned during rest of FY'16.For 6 months ended Sep'15, the sales volume including equipment and turnkey supply stood at 332 MW, an increase of about 84% on YoY basis. For 6 months ended Sep'15, commissioning stood at 218 MW an increase of about 627% on YoY basis.Of the total revenue of Rs 1008.2 crore for Sep'15 quarter, about 92% of revenue came from sale of products and rest from sale of services, as compared to the entire revenue of Q1 FY'15 of about Rs 304.37 crore from sale of products.
During Sep'15 quarter, about Rs 194 MW of orders were added as compared to about 212 MW of orders being executed. About 71% of total order book of 1202 MW is from Turnkey and rest from Equipment supply. About 39.1% of order book is from MP, about 38.3% from Rajasthan, 21.8% from Gujarat and rest from Andhra Pradesh. The order book has an execution time frame of about 12-15 months.The company has sufficient land bank of capacity more than 5000 MW as on Sep'15. The company is in process of increasing land bank in existing States as well as new States like Tamil Nadu. As per the management lot of action is seen from States like MP, AP, and Gujarat in terms of signing the PPA's from wind power while Rajasthan has slowed down. More States are expected to participate.
Orders are from clienteles such as Tata Power, Sembcorp Green infra, Bhilwara energy, CESC, Renew Wind Energy, Ostro Energy, Continuum Wind and PSUs such as GMDC, NHPC, RITES, GACL etc.The Blade plant at MP got commissioned in Sep'15 quarter. The Tower plant in MP is on track and will get commission in H2 of FY'16. The new 100 meter Rotors have higher efficiency and higher energy yields which will result in higher margins for the company. 113 meter turbines which will be launched in H2 FY'16 will also result in higher margins for the company.Ebidta margin for Sep'15 quarter stood at 13.6% as compared to 16% for Sep'14 quarter. Excluding forex fluctuations on like to like basis, Ebidta margins stood at 14.1% as against 15.3% for Sep'14. Lower margins were on account of higher employee costs and site related activities for future upcoming facilities. As per the management, margins are set to improve only from here on.Net working capital days fell to about 148 days as compared to 169 days as on June'15. Lower inventory levels and receivable days together with steady order intake, helped in improvement in working capital days.Government's thrust on Renewable energy continues to remain. RBI notified Renewable energy lending under Priority sector in end of FY'15. Government aims to add about 10 GW of power capacity every year through wind sector.Overall management continues to remain optimistic for rest of FY'16.
Call was addressed by Prashant Panday MD and CEO.Highlights by Capital Mkt
Sep'15 quarter earnings include costs that are built in for Phase 3 auction. On like to like basis, Ebidta would have grown by 20% and PAT by 26% for Sep'15 quarter on YoY basis.The entire revenue growth of 11.6% for Sep'15 quarter was led by price increase and better product mix. There was a price increase of about 7.5% in Sep'15 quarter and volume de-growth of about 3%.Volumes in major metros were higher on YoY basis, while in other market were lower on YoY basis.The company operated at 97.5% capacity utilization led by Metros. The entire focus in Sep'15 quarter was on pricing and company let go some of the volumes. Also the company increased its distribution of frequency in late night stations. Distribution of delivery was planned very well during the quarter.
Metros have done stronger due to E-commerce sector. E-commerce contributed about 11% of total revenue as compared to 4.7% YoY. Other sectors that positively contributed include Government, Auto and Automobile sector, BFSI sector. Some sluggishness was seen in sectors like Retail, Durables, Telecom and Media and Entertainment etc.The company bid very rationally in Phase 3 auction and there was no overbid. Entire migration of 36 stations was done at almost same license price. The company now holds license for next 15 years.
The company added new cities like Kochi, Chandigarh, Calicut, Gawahati, Jammu, Srinagar and 4 stations were acquired from TV today. With this, the company has now presence in more than 40 cities in the country.The company also acquired 2nd frequency and 2nd brand in the 12 out of total top 13 markets in the country. These 13 markets contribute about 70% of total revenues. This 2nd frequency will generate higher Ebidta as most of the programming and other costs are more or less the same. The company plans to do more with the product and will launch gradually.In all, the company spent about Rs 340 crore in Auctions of Phase 3 and on Migration led costs.Overall, management expects the Radio industry should grow around 12% in FY'16.
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