Just came to know 100,000 in secondary lease period is not for each wagon/coaches, it is for all the assets put in use during the year. So the question of excess RoE still remains open? The company in its investor presentation reported 14.86% RoE for 21-22. However wighted avg. cost of borrowing is ~6.2% (self calculated) and leverage is 9.25 (self calculated), therefore RoE could not have been more than 6.2% + (9.25+1)*0.4% i.e. 10.3%. I am not sure how the excess 4.6% of RoE is being generated. I have read IPO document and AR of last 12-13 years, I can not find any answer. The company has been disclosing higher RoE in all of prior years ranging from 1% to 4.6%. The company has not been able to convey in its reports its one of the fundamental nature of business which is contributing the higher RoE. Does anyone of you have an answer to higher RoE?
There is a report of ambit capital on IRFC where they also viewed this business as 10-12% RoE business.
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