TV 18 - Demerger Will Unlock Value

Studio 18, Ashtavinayak In Films Deal

Studio 18, the holding company of the TV 18 group, has announced a Rs 100-crore co-production deal with Shree Ashtavinayak Films for four of its forthcoming film projects. The four projects are going to include directors such as Rohit Shetty (Golmaal), Priyadarshan (Hungama, Malamaal Weekly, Bhagham Bhaag), Abbas Mastan (Aitraaz, Ajnabee) and Neeraj Vora (Phir Hera Pheri).

Confirming the news Sandeep Bhargava, CEO, Studio 18, informed Business Standard that each of these projects are worth around Rs 25 crore and will spread over the next two years. One project will go on floor in the first quarter of 2007 and will be ready by mid-next year. The second one will go on floor by around mid-2007 and will probably be ready by early 2008. And the others would be in 2008. The names and starcast of the four projects have not been finalised.

Bhargava said this agreement was only because the two saw many complementary aspects in each other. “For instance, Ashtavinayak has a good record and has recently given films like Golmaal. Besides, it also has good presence in domestic distribution. We, on the other hand, come with good syndication record, marketing and international distribution strength,” he added. But the fact remains that today most production houses and studios prefer to get into a fairly large deal to ensure a consistency in their project pipelines.

Recently, the Anil Dhirubhai Ambani Group-promoted Adlabs is learnt to have entered into four film agreements with director Vipul Shah and actor Akshay Kumar.

Studio 18 that entered the fray in motion picture business just last month has already got into a co-production deal with BR Films for ‘Bhoothnath’ a medium-budget film starring Amitabh Bachchan and Juhi Chawla that will be ready for release in mid-May next year. It has also acquired ‘1971: prisoners of war,’ a film to be directed by Amrit Sagar (grandson of Ramanand Sagar). The unit has also signed on Sagar for his next directorial venture as well.

Gateway Distriparks - Cool Move

GDL acquires control of Snowman

Gateway Distriparks Ltd (GDL) has acquired a 50.10% stake in Snowman Frozen Foods (Snowman) for Rs48.12 crore. This deal puts the enterprise value of the firm at about Rs104 crore. GDL will infuse fresh funds in Snowman by subscribing to 34,390,000 new equity shares of Snowman at a price of Rs10.50 per share. Further GDL will purchase 861,000 existing equity shares of Snowman at a price of Rs17.50 per share from Amalgam Foods. GDL is already sitting on a huge cash pile of Rs300-350 crore that it had raised from a global depository receipt issue earlier this year. Hence the funding of the latest acquisition will not be an issue.

About Snowman

Snowman is engaged in the business of providing cold-chain logistic services across the country through its comprehensive facilities for storage, handling, refrigeration,transportation and secondary distribution of chilled and frozen foods. Snowman is owned by Amalgam Foods, Mitsubishi Corporation, Mitsubishi Logistics Corporation and Nichirel Logistics Group Inc. These stakeholders will hold the balance stake of 49.9% in the company.

Acquisition at 3.6x FY2007 sales

Snowman has recorded revenues of Rs14 crore for H1FY2007 and an operating profit of Rs2 crore. However at the net level, the company has not made any significant profit because of its Rs8-10-crore debt and high depreciation. For FY2007 Snowman is expected to earn revenues of Rs30-32 crore and an operating profit of Rs4-5 crore. Hence Snowman’s acquisition has been carried out at valuations of 21x FY2007 enterprise value/earnings before interest, depreciation, tax and amortisation (EBIDTA) and 3.6x sales.

Deal will expand GDL’s portfolio of logistic services

This acquisition will bring another business segment within GDL’s ambit, thereby further expanding the Indian company’s portfolio of logistic services. Agreed that at FY2007E EBIDTA of Rs5 crore, Snowman will not provide GDL with the much-needed growth trigger, but with the gradual scale-up in its operations coupled with the ramp-up in its capital expenditure, Snowman can add significant value to GDL’s business in two to three years’ time.

Jain Irrigation - Onions Dehydration

Jain Irrigation Purchases Majority Interest In Cascade Specialties Inc, USA

Jain Irrigation Systems Ltd has announced that the Company, through its subsidiary in USA, has entered into an agreement to purchase the majority interest of Cascade Specialties, Inc.

Cascade Specialties, Inc. is an onion dehydrator based in Boardman, Oregon, USA, specializing in natural low bacteria onion products and organic dehydrated onion.

"We are very pleased to be involved with Cascade Specialties," said Anil Jain, Managing Director of the Company, "Cascade’s commitment to produce high quality products coupled with its excellent reputation for customer service is exactly the approach we take to the marketplace with all of our other businesses," he stated.

With this acquisition, the Company becomes the third largest dehydrated onion producer in the world with total combined capacity in excess of 25000 MTS. The Company, earlier this year had also made two onion related acquisitions in India. This new capacity along with Cascade capacity at full utilization is expected to generate revenue in excess of US$ 50 M by FY 2009 as against US$ 10 M in FY 2006. This is in line with the Company strategy to be among the top 5 Companies globally in the lines of businesses it operates.

No major changes are planted regarding personnel and the management leadership of the business. The transaction is expected to close before the end of December 2006.

The Company is a diversified entity and has been operating in the growth oriented businesses of Micro Irrigation Systems, plastic pipes, plastic sheets and food processing over the last 25 years. With the addition of this new acquisition, the financial year 2006-07 is going to be a year of significant growth for the food division of the Company.

Multiplex Magic

The Fastest Growing Lifestyle Segment

The Indian lifestyle segment is headed for strong growth during the next few years, propelled by the dramatic changes in the lifestyle of the Indian consumer. Lifestyle categories that are associated with higher quality, taste, and aspiration, have put traditional spending on food, groceries, and clothing, on the back seat. This has led to a boom in organized retail which, in turn, has trickled down to the entertainment segment. Mall developers have responded to the latent need of the Indian consumer for a consolidated entertainment complex with an ‘under one roof’ positioning. Not surprisingly, the number of multiplexes across the country has increased significantly during the past few years. The growing share of entertainment expenditure in the disposable income pie is driving a revolution around India's favorite entertainment option today - Movies.

Check Out This Report From - IL&FS Investmart

Future Group - Synergy In Businesses

Biyani Sets Foot In Outdoor Media Biz

Venturing into the outdoor media business, Kishore Biyani’s Future group, with retail brands such as Pantaloon, Big Bazaar, Food Bazaar and Fashion Station, has set up an out-of-home media division called Future Media India Ltd to tap the Rs 900-crore market. The idea is to use the company’s retail spaces as a media platform. “We are present in 32 cities, where we have over 140 stores. The number of stores will double in 2007 and will attract over 200 million customers. Future Media’s unique selling proposition is that it will provide a communication platform to reach out to these 200 million customers just before they decide to purchase goods at our stores,” said Kishore Biyani, CEO, Future Group.

Future Media plans to offer a range of media solutions to advertisers at the points of purchase at its malls and other multiple format stores. It will use digital signages, large format television sets, and the audio media to advertise brands. “It’s far more focussed than any other media platform and is completely measurable with respect to actual sales,” he said. Future Media CEO Partho Dasgupta said using retail media spaces effectively was critical as India’s growing consumer class spent a large chunk of its leisure at malls and retail stores. The media solutions would be aimed at branded products and services ranging from telecom and insurance to automobiles and the FMCG sector.

Other than using its malls and retail chains, the company will bid for outdoor media space at amusement parks, Delhi Metro etc. The company’s business model is fashioned after Focus Media, China’s largest out-of-home media company. But does Future Media plan to tie up with an international outdoor brand or rope in an investor? “It is a high return opportunity. A lot of people have shown interest in investing in this venture. We are exploring various options,” said Biyani.

Elder Pharma - Getting Bigger

Elder Pharma Eyes European Company

Elder Pharmaceuticals, one of the fast growing pharmaceutical formulation company, is getting ready to make its maiden overseas acquisition. The company, which has several product-marketing alliances and a few joint ventures with overseas companies, has now zeroed in on a generic company in Europe for acquisition.

Elder, which shortlisted three to four medium scale generic companies in the Europe, was currently in the final stages of discussions with one of them located in the UK, said sources close to the development. The deal, which would be in the range of Rs 80 to Rs 100 crore in value, was expected to be signed in two months, said sources. Confirming the move, an Elder Pharma executive said that the company was scouting for a suitable base in the European market but that the company could not divulge more details at the time.

Elder Pharma, which has been following a mixed business model of own products and inlicensed products focusing mainly on the domestic market, is now looking at the growing generic market abroad, especially, in Europe to leverage its manufacturing capacities in India. The company had recently set up joint ventures in Nepal and Ghana.

The Rs 400-crore company has also set a target of achieving a significant growth in its export business. Last month, it entered into an in-licensing agreement with an Australian company Rye Pharmaceuticals to develop, manufacture and market the latter's wound care products for first aid and burn applications in India. Rye Pharma is a pioneer in self-researched wound care, first aid and skin care products, selling them in 28 countries around the world. With the inlicensing agreement, Elder will be launching the burn therapy product – BurnAid of Rye in Indian market. BurnAid, a range of burn gels, gel dressings and burn kits, offer rapid cooling to the burn and offer fast ongoing pain relief.

Elder is also working out plans to manufacture the product and similar other products of Rye in India at its newly-set up Uttaranchal facility.

Patel Engineering - Huge Land Bank

Expect 25% Growth In Topline:- Patel Engg

Patel Engineering did an FPO in the first quarter of this financial year. Rupen Patel, MD of the company speaks about its business fundamentals. According to Rupen Patel, the current land bank stands at 500 acres and the order book is at Rs 5000 crore. Patel expects 25% growth in the topline. He also expects margins to improve, going forward.

Excerpts of CNBC-TV18's exclusive interview with Rupen Patel:

Q: You have got quite a land bank that you are sitting on at this point and plan to develop it as well. Could you tell us a little bit about that?

A: Right now, the land bank exists in various metros, primarily Bombay, Hyderabad, Bangalore and Chennai. We are planning to now encash or monetize the value of this land bank. The board is looking at various options as to how to monetize it.

Q: How much of it would you sell and how much of it would you seek to develop? Could you give us some of the details of the development plans and break it up into what kind of sq ft, it may actually generate for you saleable?

A: It will be a little premature for me to give you the size of how much we will sell and how much we will develop. The board is looking at various options; not of selling as such, but on debt of developing the entire land bank. It is under consideration right now and we should come up with the details very shortly.

Q: Can you give us a rough idea of what the current market value of the land bank would be?

A: The size of the land bank will probably be an excess of 500 acres held in the balancesheet at historical values. The market value of the land bank, about five years ago, was about Rs 250 crore.

Q: So where would you valuate that at today’s market price then?

A: It would be difficult to evaluate at today’s market price because we have not evaluated today’s market price because it is in a different stage. But I am sure that it is substantially high.

Q: Have you worked out any rough idea of this 500 acre, how much do you want to develop and what sort of development plans do you have?

A: The development plans would primarily be into commercial and residential spaces in some areas and in some areas, it will be in joint venture with other estate developers. But we have not worked out our exact figure. It is probably premature for me to give out the figure before the board finally discuss it and let it out.

Q: Whatever the board decides, by when do you see work progressing on this?

A: In about a month’s time, in which I think we should come out with the concrete numbers.

Q: For any of these development plans, will they all be routed through the listed entity of Patel Engineering or will you float a new subsidiary? What is the game plan as you see it?

A: Right now, the game plan is that the lands have been held up by Patel Engineering. So everything will be done in Patel Engineering itself. In the separate subsidiaries, right now, we do not intend to float a separate subsidy for this.

Q: As regards to your core business, how is the orderbook shaping up there and how much of it do you see executing by the end of FY08 fiscal?

A: The orderbook right now is close to about Rs 5000 crore, of which 50% is in the hydro sector, 35% in the irrigation sector and 15% would translate into miscellaneous and the transportation sector. In terms of the execution period, on an average, it is about four-five years.

So what you will see based on this orderbook, minimum growth of 25% in topline as guarantee. Even the company does not take any more work, which is highly unlikely. So you will atleast see YoY of about minimum 25%.

-Moneycontrol

Sangam India - Growth Through Expansion

Sangam India To Hike Capex Plans

Sangam India Ltd has announced that the Company plans to further increase its on-going expansions plans by Rs 167.40 crore aggregating to Rs 707.40 crore, board of director has approved the expansion plan in their board meeting dated October 31, 2006. Under its expansion plan the Company plans to add further 51840 spindle for manufacturing PV yarn and 12 Knitting machine to add further value to its cotton yarn business. The increased cap expenditure would be financed through term loan under TUFS and mixed of equity & internal accrual Company has already tied up the Rupee term loan of Rs 125 crore at competitive interest rate. Company targeting to complete this expansion plan by Dec 2007. With this expansion plan, the total capacity of spindles will increase to 211584 and the total number of weaving & knitting machine increased to 279.

The Company on November 16, 2006 has announced that the Company has bagged new orders worth Rs 81 crore, thus taking the total order book position to Rs 100 crore. The Company has bagged fresh export orders worth Rs 36 crore from its customer in turkey, Poland, U.K. & Egypt. Further, the Company has bagged orders worth Rs 45 crore from large domestic fabrics manufactures. These orders are to be executed in the next 3-4 months.

Elaborating on Company's expansion strategy, Mr. R P Soni, Chairman, of the Company said, "The Company's plans are to increase its focus on exports market in post-quota scenario. With the products getting approved in global markets, we look forward to continue receiving large number of export orders from international firms," Company is further looking towards value added business segment in near future which will further strengthens its leadership position, add the growth to its business model and translate Company in to the complete integrated textile player.

Meanwhile, Company's existing Rs 540 crore expansion plans has progressed on schedule and it will reflect in revenue growth in coming quarter.

Pantaloon - Now Enjoy duty Free Shopping

Pantaloon-Alpha Get Rs 500-Cr Duty-Free Deal For Delhi Airport

Kishore Biyani's Pantaloon Retail (India) Ltd and its British partner Alpha Airports Group Plc have won a Rs 500-crore three-year, three-month contract to run duty-free shopping at Delhi's Indira Gandhi International Airport, the consortium said in a statement on Wednesday.

Delhi International Airport (P) Limited (DIAL), run by the GMR group, which is busy modernising the national capital's airport. DIAL's first phase of the airport would be ready with the completion of a new integrated terminal building in 2010. DIAL is a joint venture company comprising the GMR Group, the Airports Authority of India, German airport firm Fraport, Eraman Malaysia and the India Development Fund.

The Alpha-Pantaloon consortium said the stores at Delhi airport will feature an extensive range of products by some of the largest and most popular brands such as Armani, Gucci, Christian Dior, Calvin Klein, Nike and Swatch. “The brands for India have been selected after careful research in passenger demographics, customer profiling and destination requirements,” it said.

Asia, which now has some of the world's fastest growing economies, accounts for nearly 35 percent of the global duty-free sales, and airports could well turn out to be major hotspots for retailing activity as companies seek to tap footfalls in the catchment area of airports.

Privately built airports in Bangalore, Kochi and Hyderabad are also betting on retail outlets to boost their image and profitability. “No longer is duty free shopping just about loading up with as much cut-price liquor and tobacco as customs regulations back home allow. Instead, airports are increasingly becoming upscale bazaars, retailing premium goods, electronic products, gourmet foods and fashion accessories,” said a DIAL spokesman.

Alpha Airports Group Plc has more than 140 retail outlets across 40 locations in the UK, Europe, the US, and South Asia. In Asia it has outlets in Kochi, Colombo, Kathmandu and Male.

Srinivas Bommidala, Managing Director, DIAL, said that the Alpha group’s “experience across the globe would provide world class experience to travellers at the Delhi Airport.”

Also check out the article at Bloomberg.

3i Infotech - Commendable Presence

3i Infotech Buys Controlling Stake In Two Companies

Global IT solution provider 3i Infotech has acquired controlling stake in two companies that will help it increase its client base and revenues from developed markets. The company has acquired 51 per cent stake each in US-based Professional Access (PA) for $12 million and Delhi-based E enable for Rs 5.11 crore.

PA is an IT solutions provider and specialises in providing e-commerce services for the banking, financial services and insurance (BFSI) and retail segment. The company is a profitable company with revenues of $24 million, 3i Infotech Managing Director and Chief Executive Officer V Srinivasan told reporters here today. 3i Infotech has a right to acquire the remaining 49 per cent stake over a two-year period. PA has around 500 employees and has a “commendable presence” in the US. “The acquisition of PS is a strategic one for us and is a valuable addition to our suite of service offerings. The company has a clientele that includes Citibank, Goldman Sachs and J P Morgan, and this will help in strengthening our presence in developed countries,” he said.

The company has also acquired E enable, a firm engaged in providing business intelligence (BI). E enable has annual revenues of $1.50 million (Rs 6.50 crore). 3i Infotech’s Chief Financial Officer Amar Chintopanth said that the US acquisition was funded from the recent foreign currency convertible bond of $70 million, while the Indian acquisition was funded from internal accruals.

Earlier, 3i Infotech had acquired Datacons, a mutual fund products company for $5 million, 51 per cent stake in BPO player Delta Services for $28 million and 100 per cent stake in London-based software products company Rhyme Systems.

Raymond - Italian Connection

Raymond Enters Into 50:50 JV With Italian Company

Textile and apparel major Raymond Ltd today announced a 50:50 joint venture with Italian fashion company Grotto SpA to launch its GAS Brand in India. The new JV company would initially invest Rs 50 crore over a period of three years to distribute the brand through 600 retail outlets.

Commenting on the tie-up, Raymond Group President Pradeep Bhandari told reporters here today that the JV company is aiming a touch a Rs 125 crore in the next three years. Speaking on the occasion, Grotto SpA Vice Chairman Aldo Palmeri said: "We plan to distribute the GAS brand in the Indian market through flagship stores and other retail outlets over a period of three years." Thereafter, Grotto SpA plans to utilise the manufacturing capabilities of Raymond to export to other markets. Elaborating on the retailing strategy, Bhandari said that 600 points would be a mix of flagship, franchise multibrand and large format stores.

GAS will retail a total look, lifestyle collection that features its core business in premium denim clothing offering Indian consumers with international fashion. The 50:50 JV company will characterize a distinct identity in youth fashion casual apparel category India.

It may be mentioned that recently, Raymond had signed a Memorandum of Understanding with the National Institute of Fashion Technology (NIFT) to access its design inputs and enhance its tailoring services.

Multibagger Stock Recommendations

A New Comprehensive List

Its almost one year since I started this Blog and High Time to tweak the portfolio. It has been a relatively bad year for Midcaps & Smallcaps and most of my recommendations are from Mid & Small Caps basket. I am a firm believer that Midcaps with good management and fundamentally strong Balance Sheet give maximum return over a longer period of time.

Hence, The Comprehensive List has been edited with some Addition and Deletion. It also includes stocks recommended by me during the year.

1. 3i Infotech 95.50 (Ex Bonus)
2. ABC India 47.75
3. Adlabs 340.65
4. Aftek Infosys 115.65
5. Agro Tech Foods 125.10
6. Alps Industries 82.00 (Ex Bonus)
7. Amara Raja Batteries 193.00
8. Asahi India 120.00
9. Ashapura Minechem 220.00
10. Aztec Software 185.20
11. Balaji Amines 113.65 (Ex Bonus)
12. Batliboi 104.70
13. Bilcare 640.05
14. Biocon 493.75
15. Blow Plast 120.00
16. Centurion Bank 21.55
17. Clutch Auto 125.00
18. Crest Animation 141.10
19. Crew B.O.S. 172.30
20. Deep Industries 30.00
21. Elder Pharma 262.80
22. Emami 127.25
23. Encore Software 30.15
24. FCI OEN Connectors 407.55
25. Flex Industries 101.90
26. Gateway Distripark 220.75 (Ex Bonus)
27. Genus Overseas 156.85
28. GHCL 140.00
29. Greenply 94.75
30. Hind Org Chemicals 40.85
31. Hind Sanitary 105.00
32. Hitachi Home 87.00
33. Honeywell Automation 1,088.45
34. Hyderabad Industries 260.00
35. India Infoline 162.00
36. Infomedia India 178.55
37. International Combustion 335.00
38. ITC Ltd. 142.00
39. IVRCL Infra 146.80 (Ex Split)
40. Jagran Prakashan 210.80 (Ex Bonus)
41. Jain Irrigation 243.00
42. Jindal Stainless 97.40
43. JK Paper 62.00
44. Jyoti Structures 67.15 (Ex Split)
45. Kajaria Ceramics 45.70
46. Madhucon Projects 300.00
47. Magma Leasing 165.00
48. Man Industries 192.00
49. Medicaps 92.00
50. Mirc Electronics 21.90
51. Navneet Publication 58.00
52. Orchid Chemicals 210.00
53. ORG Informatics 172.55
54. Pantaloon Retail 299.35 (Ex Right & Ex Split)
55. Patel Engineering 347.95
56. Pokarna Ltd. 166.75
57. PSL Limited 277.85
58. Punj Lloyd 1,050.00
59. R S Software 116.45
60. Rajshree Sugar 140.00
61. Ramco Industries 1,400.00
62. Ramco Systems 317.25
63. Ranbaxy Labs 362.35
64. Ratnamani Metal 270.60
65. Raymond 403.95
66. Reliance Infra 293.80
67. Sangam India 67.10
68. Saregama India 226.60
69. Savita Chemicals 226.80 (Ex Bonus)
70. Shashun Chemicals 84.35
71. Shipping Corp. 162.85
72. Simplex Infrastructure 300.20 (Ex Split)
73. South East Asia Marine 175.00
74. SPEL Semiconductor 21.05
75. Spicejet 82.45
76. SREI Infrastructure Finance Ltd. 63.25
77. Sterling Holiday 70.52
78. Suashish Diamonds 104.60
79. Surya Pharma 140.65
80. Surya Roshni 64.15
81. Suven Life Sciences 19.75 (Ex Split & Ex Bonus)
82. Tata Steel 380.30
83. Transport Corporation of India 55.80 (Ex Split)
84. TTK Prestige 127.45
85. TV 18 389.30 (You also got Network 18 after my Recommendation.. keep it)
86. UB Holdings 262.40 (Ex Bonus)
87. United Spirits 496.75 (You also got McDowell Holdings after my Recommendation.. keep it)
88. Usha International 290.55
89. Vadilal Industries 27.00
90. Viceroy Hotels 112.00
91. Wockhardt 445.00
92. WS Industries 60.10
93. Yes Bank 68.55
94. Zicom 145.00
95. Zodiac Clothing 294.95

Besides, I am also tracking Jupiter Biosciences, SKF India, Gillete, NRB Bearings, NIIT Tech, Macmillan, Hikal Ltd., JK Cement, Reliance Energy, Tata Tea, Voltas, Hotel Leela, Aditya Birla Nuvo and India Cements. These stocks can also be considered as my favourites, I am not recommending them at this point of time because I am not comfortable with the price at which they are trading. I sincerely urge all the visitors to do their homework thoroughly before buying any stock and if you feel comfortable then buy it. As I said earlier, I am not a good timer of market. Everybody knows that a correction is eminent, but when it will happen, nobody knows. I lost several opportunities in above mentioned stocks because I was waiting for a correction. All I can say is that the stocks mentioned above are good companies in good businesses with good fundamentals. Its the entry price I am not sure about.

Those who want a complete assessment of my recommendations may download this MS Excel File. Report Card.

HAPPY INVESTING

PE Ratio - Good Or Bad

PE Ratio Is No More A Criterion For Investment

Times Of India - Srikala Bhashyam

Analysts often say that the BSE sensex at a PE (price-earnings) ratio of over 20 is expensive. But investors today seem to be paying little attention to the PEs of some stocks. The BSE index now has stocks trading at PEs of over 50 and some have even hit the century mark!

According to market analysts, the investors' willingness to pay a huge premium for a few stocks is driven by their future performance potential as reflected in their order books. "Companies like ABB, BHEL have turned expensive because of their huge orders on hand which run into thousands of crores of rupees. These companies have been growing their bottomline by over 20-25% and earnings growth has been around 40-50%. Investors are willing to pay a premium for these stocks," says Sheshadri Bharathan, country head (broking), Dawnay Day. Often, investors are seen to be chasing a sector more than a company. Pantaloon Retail is one example of this frenzy which has pushed the stock price to over Rs 2,000.

The company has managed to take its revenue from Rs. 285 Cr. in 2001-02 to Rs. 1960 Cr. in 2005-06, and the PE ratio has kept pace with this revenue growth.

According to VR Srinivasan, director & chief executive officer of Brics Securities, sectors like retail are unchartered territory for Indian investors. "You buy stocks for the future. These are structural plays, more than valuation plays," he says. But market sources admit that often the prices of some stocks run up because of institutional buying.

Foreign funds buy stocks which have a huge liquidity and a long term story. Though the retail investor doesn't have the same long term appetite, he ends up picking those stocks, says an official at a broking house. Similar "long term" stories had pushed tech and telecom stocks to dizzy heights in early 2000.

But not only did the growth rates drop significantly, but many firms even disappeared from the trading list. Investors would be better off if they kept an eye on the management of the firm besides the sector as history has often shown that when market crash, it is retail investor who pays a price.

- Times Of India

Simplex Infra - Bags Delhi Metro Rail Project

Simplex Infra Bags Rs 212 cr Contract From DMRC

Simplex Infrastructures Ltd today said it has bagged a contract worth Rs 212.11 crore from Delhi Metro Rail Corporation Ltd for construction works.

The contract entails Part Design and Construction of viaduct and structural work of Three Elevated Stations (Chattarpur, Ghitorni and Arjangarh) on Qutub Minar - Gurgaon Corridor of Delhi MRTS Project of Phase II.

Simplex Infrastructures' focus is on construction projects in segments like piling, thermal power projects and in marine construction projects. The company has an order-book of over Rs 5,000 crore, which is more than three times its FY 2006 revenue of Rs 1,342.80 crore. Simplex Infrastructures, whose overseas presence is mostly confined to West Asia, now eyes North Africa, South East and Central Asia. Overseas operations currently account for 15% of the company's order-book and 10% of revenues.

Its overseas projects at hand include the 23-km Dubai Metro project, and a project to construct roads and bridges in Sri Lanka. Simplex already has a permanent joint venture in Bahrain. Recently, the company decided to diversify into real estate development – in both commercial and residential properties. The company proposes to form a joint venture with the West Bengal Housing Board for real estate development projects.

Simplex Infrastructure reported 21.2% fall in net profit (due to seasonality of its business) for Q2 September 2006 to Rs 7.06 crore (Rs 8.96 crore). Operating revenue rose 29.8% to Rs 356.30 crore (Rs 274.50 crore). Shares of the company were trading at Rs 390.70, up 8.77 per cent at the BSE.

Punj Lloyd - Bags EPC Pipeline Order In Qatar

Punj Lloyd Bags Rs 804 cr Order From Qatar Petroleum.

Engineering & Construction major, Punj Lloyd Ltd (PLL), has bagged an EPC order worth Rs 803.70 crore for the Doha Urban Pipeline Relocations Project (DUPRP) from Qatar Petroleum.

Punj Lloyd’s scope of work includes laying of 97.2 kms pipeline; 36’’ dia bi-directional gas and spur pipeline, 12’’dia multi product and 8’’dia gas pipeline, 3 new and 6 modification stations, decommissioning of the existing pipeline and demolition of 9 existing stations.

With this, the order backlog for PLL group is Rs 13,394 crore. This is the total value of unexecuted orders as of September 30, 2006 and new orders received till date. Commenting on the bagging the contract, Mr Atul Punj, Chairman, Punj Lloyd, said, “Punj Lloyd has a very strong presence in the Middle East particularly in the civil pipeline and process plants segment. With this order, we would further strengthen our foothold in the Middle East.”

Patel Engineering - More Orders

Patel Engineering Bags Rs 360 Cr NTPC Project.

Patel Engineering Ltd today said it has bagged Rs 360 crore orders from National Thermal Power Corporation (NTPC) for construction of Loharinag Hydel power project penstock and powerhouse in Uttaranchal. In a communique on the Bombay Stock Exchange, Patel Engineering said the order comprised construction of a 600-Mw Loharinag Pala Hydro Electric Power Project penstock and powerhouse on river Bhagirathi in Uttarkashi district of Uttaranchal.

“Hydro power has always been the prime focus of the company. The company will capitalise on its vast experience and expertise in this sector,” said Patel Engineering director Sonal Patel. The company, which had earlier bagged the Head Race Tunnel package of the same run-of-the-river scheme project, added that the latest order will achieve closure in the next 45 months.

Patel Engineering recently acquired a controlling stake in Michigan Engineers Pvt Ltd (MEPL), an urban infrastructure company, for an undisclosed sum and was awarded the Loharinag Palo Hydro Electric Power Project head race tunnel package worth Rs 318 crore.

United Spirits - From Russia With Love

United Spirits, Russia Vodka Firm In Pact

United Spirits, the spirit business arm of the $2 billion Indian drinks major UB Group, has signed a mutual marketing alliance with Russia’s leading vodka manufacturer Russian Standard. Russian Standard is the vodka manufacturing and marketing arm of Russia’s Roust Group. With this strategic alliance, the United Spirits will introduce the genuine Russian vodka brands manufactured and supplied by Russian Standard in India. While the Russian company, which has a broad distribution network in Russia and other CIS markets, will market the premium whiskey brands of United Spirits in Russia.

This marks United Spirits’ strong foray into Russia , one of Asia’s fast growing consumer markets. Vijay Mallya, chairman, UB Group said that “While Russia is a virgin market for our whiskey brands, the genuine Russian vodka manufactured and supplied by our partner will be a real value addition to our Indian portfolio.”

Roust Group’s main company — Roust Inc is a private trading company specialising in premium consumer products. It controls over 60 per cent of sales of all premium alcohol in Russia and as a long-standing exclusive distributor of premium alcohol brands like Cinzano, Smirnoff, Johnnie Walker, Gordon’s, Bailey’s, Veuve Clicquot, Jagermeister and others. Russian Standard Vodka, one of the premium vodka brand of Roust Group has a share of over 60 per cent of all local and imported premium vodkas in Russia. It is also exported in more than 20 countries including US, CIS, Italy, UK, Greece, Bulgaria and Baltic Republics.

Emami - Rural Marketing

Emami Eyes Hinter Land

Emami Ltd is targeting the rural market to push sales of its Boroplus Antiseptic Cream. “Rural market contributes close to 45 per cent of our total Boroplus sale. So it makes sense for us to draft special advertising campaigns for this segment, especially during winters when the sale of creams automatically go up,” said H V Agarwal, director, Emami Boroplus. Emami’s rural marketing strategy was routed through over 2600 mobile traders and 130 small village shops covering states like West Bengal, Chhattisgarh, Madhya Pradesh, Andhra Pradesh, Orissa and Karnataka. It also sell goods in collaboration with ITC using its e-choupals, and the postal circle of Maharashtra.

"We will tie-up with more local distributors and also launch mobile campaigns in the rural market to push sales of Boroplus," informed Agarwal. ‘Melas’ are a regular part of the rural market. So, we would also participate at as many melas as possible to increase our brand visibility, “Agarwal added. Emami has a total advertising budget of close to Rs 10 crore for rural initiatives this year. The Rs 5 sachets (8gm) fetches a major chunk of overall sales as that pushes impulse purchase, informed Agarwal.

Boroplus, leads with a 66 per cent market share in India when the total antiseptic cream market is estimated at close to Rs 150 crore in India. Boroplus clocked sales of Rs 100 crore last fiscal and is targeting 20 per cent growth this year. The company also has plans to make Boroplus a global leader. Promotional campaigns are being planned at some 15 top international locations.

GHCL - More Acquisitions In The Offing

GHCL To Acquire Soda Ash Plants In US, China

GHCL Ltd, flagship company of the Dalmia Group, is all set for a series of acquisitions for soda ash plants in the US and China which would enable it to cater to the demand of the local soda ash market a big way. Sanjay Dalmia, chairman of GHCL said, “We will be acquiring soda ash plants in US and China.” He further said, “We have targeted a few of the soda ash companies in these countries but the finalisation is yet to be done.” The acquisition of soda ash plants will allow the company to cater the local demands in US and China. “The talks are in progress and we expect that the deal will be finalised before the end of first quarter of 2007,” said Dalmia. The company follows calendar year for its accounting purpose. He further said, “We will acquire one each soda ash plants in US and China.” When asked the kind of production capacity of soda ash plant it would be acquiring in China and US, Dalmia said, “The production capacity depends upon the deal that works out with the targeted companies.”

According to him, the targeted companies in US and China has different production capacity, so its hard to give exact figure on the production capacity that the company intends to acquire. The overseas acquisition of soda ash plants in US and China by GHCL will be its second major acquisition after it acquired a majority stake of 65 percent in S C Bega Upsom SA, a leading soda ash manufacturer in Romania.

GHCL is also increasing its soda ash capacity from 6,00,000 MTPA to 11,00,000 MTPA in its Indian plant at Gujarat. The company has also signed a definitive agreement to acquire the second and only other plant in Romania thereby set to increase its capacity to 7,00,000 MTPA capacity.

The company has registered a growth of six percent in net profit in the this quarter ended on 30 September, 2006. The net profit increased to Rs 24.71 crore this quarter FY 2006 compared to Rs 23.43 crore of corresponding quarter of last year. While the net sales jumped by 17 percent this quarter.

Recently in the month of June 2006, GHCL acquired Rosebys, UK’s largest home textile retail chain company, for $40 million. The company acquired 100 per cent of the shares of Rosebys. Rosebys has a strong presence in bedding, curtains and kids garments with more than 300 retail outlets across the UK and an annual turnover of close to $250 million. More than 2,000 people are currently being employed by Rosebys in the UK. GHCL had also acquired Dan River Inc, a leading textiles player in the US, for $17.50 million. GHCL, through its international subsidiary, had acquire over 90 per cent of Dan River. With Dan River acquisition, GHCL got excess to enter the existing marketing arrangements to the tune of $250 million and the US-based company will be used primarily as a marketing arm. Dan River has an annual turnover of about $250 million and caters to mega retailers such as JC Penny, Wal-Mart, Linen & Things and Bed, Bath and Beyond.

Patel Engineering - Low Equity High Growth

Patel Engineering Q2 Net Profit Up 100% To Rs 25.48 Cr

Patel Engineering Ltd., a civil-infrastructure construction company, reported a 103.23 per cent jump in consolidate net profit at Rs 25.48 crore for the second quarter ended September 30, 2006 as compared to Rs 12.54 crore in the corresponding quarter previous year. Consolidated revenues for the quarter rose 32.37 per cent at Rs 243.76 crore as against Rs 184.16 crore during the same period previous year.

The company has posted a 87.32 percent rise in net profit to Rs 45.59 crore for the six months period ended September 30, 2006 compared to Rs 24.34 crore in the corresponding period previous year. Net Income from operation increased by 30.99 percent to Rs 555.83 crore compared to Rs 424.32 crore during the same period previous year.

The company has also witnessed an improvement in margins, with net profit margins improving to 8.20 per cent as against 5.74 per cent during the same period in the previous year. The earning per share (basic and diluted of face value of Re 1) for the quarter stood at Rs 8.01 as on September 30, 2006 compared to Rs 5.01 in the corresponding quarter last year. “With government’s emphasis on infrastructure gaining momentum we continue on a high growth trajectory. We have witnessed significant improvement in our order-book positions and are in the process of bidding for several upcoming development projects”, said Ms. Sonal Patel, Director - COO, Patel Engineering Limited.

She further added, “Patel Engineering, as part of its growth strategy, is moving towards annuity-based projects in road construction and looking at opportunities in hydropower sector as an independent power producer (IPP). Also, with the acquisition of Michigan, technology-led focus is on urban infrastructure projects in metros as well as tier II cities. The company recently acquired a controlling stake in Michigan Engineers Pvt Ltd (MEPL), a Mumbai based urban infrastructure company, for an undisclosed sum. Also, the company was awarded the two projects by Rail Vikas Nigam Ltd, New Delhi worth Rs 176 crore.

Jagran Prakashan - Wake Up Call

Jagran Net Jumps 135%

Kanpur-based publishing house Jagran Prakashan today reported 135.24 % jump in net profit to Rs 17.54 crore for the quarter ended September 30 this year, on the back of a rise in advertisement and circulation revenues and better performance of its outdoor and event management businesses. Cost reduction was also achieved by lesser use of imported newsprint. “During this quarter, the company’s businesses have done well. We have substantially increased our client base in our out of home and event management business,” Chairman and Managing Director Mahendra Mohan Gupta said.

The publisher, which brings out the country’s largest read newspaper ‘Dainik Jagaran’, reported 25.88 per cent rise in its revenues to Rs 141.72 crore from Rs 112.58 crore in the corresponding quarter last year. The net profit had stood at Rs 7.46 crores last year. The earnings per share (non-annualised) of Rs 3.49 was higher by 82.72 per cent. The advertisement revenue shot up 30.11 per cent to Rs 91.48 crore, driven by the increases both in rates as well as total space sold. Circulation revenue rose 8.40 per cent to Rs 42.70 crore over the quarter.

Jagran Engage, the outdoor advertising division with a pan-India presence, has already acquired marketing rights of various properties in Kanpur, Pune, Kolkata, Delhi, Mumbai and Bangalore. Another revenue driver, Jagran Solutions – the event management arm – has clients like Microsoft, Hutch, Godrej, TVS Motors, ICICI Prudential, Escorts, Standard Chartered Bank, Bajaj, TATA Indicom and Hindustan Lever on board.

Excerpts from CNBC-TV18's exclusive interview with RK Agarwal:

Q: What has been the growth in ad revenues in the last quarter?
A: The ad revenue grew by 30%.

Q: Where do the pressure on profits come in?
A: One was revenues from out of home advertising. In fact out of home advertising pegged up, but definitely till September 30, 2006, it was not able to breakeven. In October it is expected to breakeven.

Q: You have also seen an increased expenditure of 10%, is it only because of the new launches that you had and in Noida and the City Plus launch, or is there anything else, and will this be made up in the next quarter?
A: City Plus has seen tremendous success and the response has been very encouraging and good. Going forward, we are going to launch a couple of more editions in a month’s time.

Q: Are you making money or is it still running cost?
A: This is the typical model of a newspaper where we are making money right from the very first edition.

Q: So where has the cost gone up? Your expenditure is up about 10%, is this normal or is there something extraordinary here?
A: The first reason, which I gave, was out of home advertising, which has yet to breakeven and in October it has broken even. The second reason is that in fact, whatever circulation we had lost in the first quarter we have now recovered. There was a sharp increase in the circulation in the current quarter, which was another reason. The third reason is that the second quarter had a maximum hit on account of newsprint prices. But now from October, these prices appear to be stabilised.

Q: Are you contemplating any ad rate hikes considering the fact that October-December is really a time of festivities and we could be looking at higher ad rates at this quarter?
A: There is not going to be any increase in the ad rate, but definitely volumes are going to increase.

Q: On the newsprint cost front, what is the pressure that you are witnessing right now, is there any pressure at all and going forward, what is the outlook?
A: No, I do not see any pressure coming from newsprint prices, but definitely in our area of operation, competition is getting intensified.

Q: Are you looking at sourcing from China because the prices are competitive?
A: We have not yet started buying from China. As compared to other commodities, those prices are not as expected, but definitely they are good prices.

Q: What is your raw material cost as a proportion to sales? It was 48% in the last quarter?
A: In the last quarter, the raw material cost was roughly about 48% and it should be slightly more than that.

Sangam India - Growth Through Export

Sangam (India) Q2FY07 Net Profit Up By 74.09% At Rs 10.08 Cr

Sangam (India), one of the largest polyester-viscose dyed yarn manufacturer in India, has posted a 74.09 per cent rise in net profit to Rs 10.08 crore for the second quarter ended September 30, 2006 as compared to Rs 5.79 crore in the corresponding quarter previous year. Net sales during the quarter rose 52.39 percent to Rs 125.39 crore compared to Rs 82.28 crore during the corresponding quarter previous year. During the quarter, the company witnessed a significant surge in export sales. Export sales rose by 155.00 per cent to $ 9.2 million from $3.6 million.

On a sequential basis, the company reported a 41.77 per cent rise in net profit at Rs 10.08 crore compared to Rs 7.11 crore in the first quarter ended June 30, 2006 . During this period, net sales rose 30.34 per cent to Rs 125.39 crore compared to Rs 96.20 crore in first quarter ended June 30, 2006. Exports sales during this period rose 41.64 % at $ 9.2 million compared to $ 6.4 million in the first quarter ended June 30, 2006.

For the six months ended September 30, 2006 , the company has registered a 72.76 per cent rise in net profit at Rs 17.19 crore compared to Rs 9.95 crore. Net sales during this period rose by 41.83 per cent at Rs 221.59 crore compared to Rs 156.24 crore for the six month ended September 30, 2005. During this period, the company witnessed a 144.49 per cent rise in export sales at $15.7 million compared to $6.4 miillion in the same period last year.

"We are witnessing an accelerated growth in the dyed polyester-viscose yarn segment. Higher Volume growth following better demand from international & domestic market . the company is looking forward to get more revenue in value added product. Despite of higher provisioning for depreciation and interest for ongoing expansion the company has been able to increase operating and net profit margin substantially," said Mr R P Soni, Chairman, Sangam (India) while commenting on company's financial performance. The company's on-going expansion plan of 97,000 spindles, 140 looms, coal based captive thermal power plant with a capacity of 21 MV and fibre dyeing capacity of 30 MT with processing capacity of 50000 meters per day has progressed as per schedule. By September 30, 2006, 31,200 cotton spindles, 19,200 PV spindle and 110 weaving machines have become operational. Meanwhile, the board of director's has approved third phase of expansion and diversification programme of installation of additional 51840 spindles and 12 knitting machine for value addition in cotton yarn segment under TUFS having an outlay of Rs.167.40 crore. While the legal process of amalgamation of SPBL Limited with the company is being carried out as per schedule.

Ratnamani Metals - Piping Dreams

Ratnamani Metals & Tubes Ltd Q2 Sales At Rs.143.51 Crores, Up 90.45%

Ahmedabad based RATNAMANI METALS & TUBES LTD., an Engineering Company into manufacture of speciality tubes and pipes in Carbon Steel as well as Stainless Steel has reported a very strong and solid performance for the 2nd quarter of 2006-07. Net Sales / Income from operations at Rs.143.51 crores is higher by 90.45% compared to the figures of the 2nd quarter of the previous year.

Profit before Tax at Rs.25.13 crores is up by 137.24% and Net Profit at Rs.16.77 crores is also up by 140% compared to the figures of the 2nd quarter of the previous year. EPS on an equity base of Rs.9 crore is very healthy at Rs.18.64. Exports at Rs.80.80 crores are also higher by 363% as compared to the 2nd quarter of the previous year.

It has been reported by the Company that the outlook remains very strong from the major markets namely Refinery, Petrochemicals, LNG, Capital Goods Industry and Power Plants. At present the Company is carrying an order book position of Rs.378 crores including export orders / orders for SEZ equivalent to Rs.212 crores.

IVRCL Infra - Moving Steadily

IVRCL Net Jumps 39% For Sep`06 Qtr

IVRCL Infrastructure & Projects has reported a jump in net profits by 39.04% at Rs 155.67 million for the quarter ended September 30, 2006, as compared with Rs 111.96 million for the quarter ended September 30, 2005. The sales of the company rose to Rs 3644.13 million for the current quarter as compared with Rs 2566.59 million for the same quarter last year. The total income also saw a rise to Rs 3698.69 million for the quarter under consideration as compared with Rs 2566.59 million for the quarter ended September 30, 2005.

The earnings per share (EPS) of the company however saw a decline to Rs 1.43 for the current quarter as compared with Rs. 5.41 for the quarter ended September 30, 2005. IVRCL recently bagged orders of the value of Rs 3.29 billion, which include water transmission works of the value of Rs 2.84 billion in the states of Gujarat and Kerala and building works of the value of Rs 450 million.

McDowell - Three Cheers

McDowell Net Zooms Ten Times For Sep 2006 Qtr

McDowell and Company has reported a jump in net profits by 10.88 times at Rs 667.60 million for the quarter ended September 30, 2006 as compared with Rs 56.20 milloin for the corresponding quarter of the year ended September 30, 2005. The net sales of the company more than doubled at Rs 7534.9 million for the current quarter as compared with Rs 3076.7 million for the quarter ended September 30, 2005. The total income rose to Rs 7540 million for the current quarter as compared with Rs 3067.7 million for the corresponding quarter in the previous year. The earnings per share (EPS) stood at Rs 7.07 for the current quarter as compared with Rs 1.09 for the corresponding quarter previous year.

McDowell and Company had earlier changed its name to United Spirits. McDowell and Company (MDCL) is the spirits division of the UB Group. The company`s products include whisky, brandy, rum, gin, wine, vodka and other white spirits. It manufactures liquor and beer in several locations.