Analyst meeting notes - Transport Corporation of India
Keynote Capitals presents notes on the recent analyst meeting of Transport Corporation of India Ltd.
Incorporated in 1958, Transport Corporation ot India Ltd. (TCIL) is India's leading multimodal integrated supply chain solutions provider. It went public in 1974.
It has a network ot 1200 owned branches and 7.25mn sq. tt. ot warehousing space. Head count (on payroll) increased trom 5700 employees in FY07 to 6500 in FY08.
Results
- For full year FY08, income from operations grew 10%. Modest growth witnessed in all segments mainly Seaways, supply chain solutions, XPS, and transport.
- EBITDA margin flat at 6.4% vis-?-vis 6.5% y-o-y. The fuel price hike was passed on immediate or gradual basis depending on the client profile.
- PAT declined by 7% due to scheduled and unscheduled dry docking of 3 ships as well as the slowdown witnessed in the auto sector which affected the supply chain solutions division (65% of the clients are in the auto sector).
Transport
TCIL entered this segment in 1958. It currently operates a mammoth fleet of over 7000 trucks, 1200 of which are owned, serving 150,000 customers. It has leased trains too. This segment constitutes 54% of revenues, however with slim EBITDA margin of 3-5%. Going forward, it plans to reduce the contribution from this segment as it being a matured industry, has low margins. It however, serves as a good reference for other businesses.
XPS (Courier)
Launched in 1996, XPS serves 200,000 customers in 13,000 locations in India and 200 countries in the world. It has chartered space from airlines. XPS (Courier) division to grow by 25-30% through organic as well as inorganic routes.
Supply Chain Solutions
It designs the supply chain for clients on customized basis and then executes the same. In FY07, 65% of the clients were in the auto sector. Due to the slowdown in the auto sector, the profitability of this segment was impacted. Recently, it added new clients from other sectors viz., Spinach, ITC Foods, P&G and Ceat Tyres. The pipeline for clients is increasing with large scale contracts under finalization for Tata Nano car and Hero Honda. TCIL has been shortlisted for these projects.
TCI Seaways
It has 6 ocean going vessels, of which 5 are owned and one is on a joint venture basis. It plans to add 1 ship every year for next 3 years. This division contributes 5% to revenues and has EBITDA margin of 25%. TCIL seaways topline growth by 20-30%.
Others
- Wind power division with installed capacity of 11.5MW
- Real estate division with land value of approx. Rs60Cr at Delhi, Chennai and Bangalore.
New Division - TCI Global
TCI has set up a new division viz., TCI Global in FY08 which performs activities such as custom clearance licenses, freight forwarding, etc. It would target internal customers. It has opened 7 branches in India and 3 internationally, in Singapore, Hongkong and Indonesia. It plans to have 4 regional offices and 16 branches by Q2-FY09.
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Indian stock market daily morning report (September 02, 2010, Thursday)
Indian markets ended positive to a one month high yesterday on fund buying across the sector after firm global markets, strong auto sales, rising exports and expansion in manufacturing sector. Positive European markets also aggravated buying in the markets. TCS gained ~1.5% as its UK subsidiary Diligenta bagged contracts worth 250mn pounds. All sectoral indices closed positive with metal, real estate, IT and oil & gas led the market to close positive. Metals stocks rallied as a rebound in manufacturing in China propelled base metals.
Indian stock market and companies daily report (September 02, 2010, Thursday)
The market extended gains in morning trade and turned range bound in mid-morning trade. Strong global cues pushed the market sharply higher in the second half of trade. The market spurted to the day's high in mid-afternoon trade and extended gains in late trade as European stocks and US index futures rose. Strong auto sales, expansion in the manufacturing sector in August 2010 and resumption of buying by foreign funds underpinned sentiments. All the sectoral indices on the BSE were in green and the market breadth was strong. The Sensex and Nifty closed up by 1.3% each. BSE mid-cap and the small-cap indices closed up by 1.7% and 1.8%, respectively. Among the front liners, RCOM, Hindalco Industries, Sterlite Industries, Bharti Airtel and Tata Steel gained 3–5%, while Hero Honda, HDFC and ONGC lost 0–2%. Among mid caps, STC, FDC, United Breweries, Dredging Corp. and State Bank of Mysore gained 10–14%, while Allcargo Global, Shree Global Tradefin, Jain Irrigation, Fresenius Kabi Oncology and GSK Consumer lost 2–4%.
Indian stock market daily closing report (September 02, 2010)
The markets traded within a tight range after the positive momentum witnessed for two days and ended with modest gains. All the major sectoral indices ended on a very flat note. Sugar counters witnessed a significant spike on decontrol reports. The Sensex closed at 18,238 up 34 points and the Nifty was at 5,486 up 14 points after making an intra-day high of 5,513. The Mid cap and Small cap indices were up by 0.78% and 1.11% respectively. The breadth of the market was positive and the total turnover recorded at Rs.1,02,680 Cr. The Sept future ended with 3 points discount
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Godrej Properties IPO review and analysis by Angel Broking, 9 December 2009
Godrej Properties Limited (GPL) intends to develop its projects through joint development agreements with land owners. Under this asset-light model, GPL will enter into revenue, profit or area-sharing agreements with land owners, instead of an outright purchase of the land. This model avoids direct land dealings for GPL and the locking-up of extensive capital in land. Around 80% of GPL's existing land bank will be executed through joint developments with partners. The Godrej brand name has been associated with quality and strong corporate governance. Both of its existing listed entities, Godrej Consumer Products and Godrej Industries have given CAGR Returns of 48% and 77%, respectively, to investors since 2001. We believe that GPL could leverage its parentage brand (with respect to access to the land at Vikhroli and a strong customer preference towards it), assuring a timely delivery of execution. More than 50% of GPL's existing land bank is exposed towards township projects and in one location (Ahmedabad), which will be executed over the next ten years. Any delay in this execution or a fall in property prices in Ahmedabad will impact our NAV estimates, as 50% of our NAV is derived from this project.
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JSW Energy IPO review and analysis by Angel Broking, 7 December 2009
JSW Energy (JSWEL) currently has operational capacity of 995MW and is in the process of executing projects with capacity of 2,655MW. In addition, the company has 7,740MW power generation projects at an early stage of development. A major portion (2,145MW) of JSWEL’s upcoming capacities is expected to be operational by FY2011E thereby providing near-term visibility. Out of the plants under construction, the company expects to commission 570MW by end FY2010E, while another 1,575MW is expected to get operational in FY2011E. Thus, a robust portfolio and near-term Revenue visibility is a major positive for the company.
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