GeojitBNP vs IndBullSec

Geojit BNP Paribas Financial Services vs Indiabulls Securities
BSE: 532285 NSE: GEOJITBNPP BSE: 532960 NSE: IBSEC

Balance sheet point of view (2009-10)
India Bulls Securities is having high capital gearing.
from shareholder point of view IBSEC (FV Rs 2) as against the book value of 9.56 has borrowed rs 13.50 and invested the same as
NFA 3.08
NCA 2.25
Invst 18.00
whereas GBNPPFSL (geojit bnpparibas financial services which is now owned by BNP) has a book value of Rs 14.03 (Fv re1) and has nil borrowings
investing the same as
NFA 1.78
NCA 5.56
Invst 6.69 (majority in subsidiary companies)

In short IBSec will give high returns when the main business (broking) and return from investment portfolio is greater than amount required to service the borrowings.
Geojit BNP wil give high returns when the main business is performing well

Both perform well in bullish market. IBSEC will have high beta and will outsmart the Index when in bullish as well as bearish market ie., more joys and more pains

Profit and Loss Account review (2009-10) support my Balance sheet point of view

Particulars GBNPP IBSEC
(per share data in Rs)
TIncome 12.75 14.99
OPBIDT 3.09 5.50
NP 2.54 2.66

OPM (%) 24.2 36.6
NPM (%) 19.9 17.8

In short IBSec will gave high returns Operating profit due to financial gearing however as the return was not enough to outsmart the service the borrowings.
The net returns were lesser than Geojit BNP

Geojit available at 32.05 is having a PE mutiple of 12.60
IBSec available at 26.05 is having a PE mutiple of 9.79

2010VP15 CEAT

CEAT
BSE: 500878
NSE: CEATLTD
CEAT a RPG Group companyis in manufacture of tyres, tubes, flaps for commercial vechicles, passenger car and two / three wheeler tyres
The installed capacity is around 10 Million units of tyres and its market share is around 12%. It has earned around Rs 450 from export of tyres etc in 2009-10.

1) The expansion at Nasik (50 crore) went on stream by July 31,2010
2) New facility to manufacture bus/truck radial tyres (new line of business for the company) at Halol, Gujarat in 124 acre facility (project cost 650 cr) is likely to go on stream by Ist half of October 2010
3) To add facility to manufacture 4.8 lakh bus/ truck tyre this year and expected to produce around 2 lakh units for 2010-11 which is having a EBIDTA of more than 10 percent
4) there is ample market demand backlog for radial bus /truck tyre where only 15-20% buses /truck are running on radial tyres. Latent demand expected is 62.5 lakh tyre a year with a supply of 36 lakh unit (2009-10) with the expansion for the radial tyres by other companies the installed capacity shall arise to 50 lakh units
5) turnover is expected to be around 3400 crore (36%) with EBIDTA around 192 crore and Net Profit of 72 (due to margin pressure) crore transilating into EPS of 21 per share


The value for replacement of asset at Current Market Price for 570 TPD tyre facility is around 2500 crore . out of the above the company shall be financed by loan around 1100 cr for meeting expasion need an net entreprise value Rs 1400 crore. The Book value of share is around Rs 183 (09-10)

Turnover expected at the full capacity at current product price is around Rs 3500crore with PBIDT of 192 crore which is around 5.5%

as against the same the market capitalisation is Rs 496 crore at CMP of 148.5

at .75 net entreprise value Rs 278 which discounts at PE 13.25 on the expected EPS 21 by 2011 on increased capital base (Rs 37.73 crore).

Concern are the higher rubber prices which constitute 60% of raw material cost which is ruling higher and inability of company to pass on the cost through price hikes due to severe competion (which is considered for working for EPS 21)
-------------------
Sudden spurt on shares traded on 17.08.2010
in BSE
10.86 lakh shares (3.1% of paid up capital) were traded valued at around 15.82 crore.

in NSE
16.46 lakh shares (4.79% of paid up capital) were traded valued at around 24.06 crore.

Spanco June 2010 Qtr Results update

results analysis standalone

Comparision of standalone results June 2010 against June 2009 as

--------- June 2009 June 2010 Var%
Turnover Rs 189.9 cr Rs 310 cr (+63.2)
PBIDT Rs 22.3 cr Rs 35.2 cr (+57.8)
Net Profit Rs 9.28 cr Rs. 14.32 cr (+54.3)
PBIDT Margin 11.74 pc 11.35pc
NPM 4.88 pc 4.61 pc

The above show that revenue is on rise however margin are on pressure due to competition / foreign exchange loss

expectation on consolidated results of June 2010 (unpublished but available to analyst on demand)

Turnover Rs 392 crore
PBIDT Rs 49 crore
PBIDT Margin 12.5 per cent
Net Profit 25 crore
NPM 6.37per cent

2010VP14 Phillips Carbon Black Ltd

Phillips Carbon Black
BSE: 506590
NSE: PHILIPCARB


Phillips Carbon Black, RP Goenka group has lined up an investment of Rs 350 Crore to increase its present domestic carbon black capacity from 3.6 Metric Tonnes Per Annum (MTPA) to 4.1 MTPA by expanding Mundra facility and entered into joint venture (80% stake), to set up 1.15 MTPA carbon black capacity in vietnam by 2012. The company is also having installed power co-generation capcity of 60.5 MW which it is increasing to 74 MW (domestic) and 16 MW planned at vietnam facility.

The company recently raised Rs 100 crore QIB Placement 50 lakh shares of of the Company. The present share capital of the company stands at 2.85 crore of 10 each after considering 50 lakh shares issued in QIB and 15 lakh warrants convertable to shares issued to promotors the share capital shall be 3.5 lakh shares. The company reserve position 296 cr shall rise to 415 crore after the above transaction and the Book Value of Rs 130 (expected after the transactions).
Promotors is likely to hold 47.71%, Institutional Investors 15.71% Body corporated 12.25% leaving a general float of 24.33% alone.

in 2009-10 it completed its Greenfield project located in Mundra (Gujarat), with a carbon black capacity of 90,000 MT which has started operations from 17th October 2009 and put up a CPP of 16 MW in Mundra which has commenced commercial operation from 24th December 2009.

The value for replacement of asset (excluding cost of land) at Current Market Price for 4.60 lakh MT of Carbon black facility is around 1930 crore with 90 MW co-generation Rs 270 crore and cost of Investment at Rs 70 crore making an entreprise value of Rs 2270 crore . out of the above the company shall be financed by loan aroung 760 cr making an net entreprise value Rs 1510 crore.

Turnover expected at the full capacity at current product price is around Rs 2120 crore with PBIDT of 276 crore which is around 13% of OPM and ROI of 12.15%

as against the same the market capitalisation is Rs 650 crore at CMP of 196

so guess what will be price target be within 18 months from now.

at .8 entreprise value Rs 364 which discounts at PE 8 on the expected EPS 45 by 2012 on increased capital base.