Sunday, August 17, 2008

Adlabs Cinemas

Adlabs Cinemas, which will be rebranded as Big Cinemas by October, has chalked out a king-size expansion plan that includes widening its presence to at least 90 cities and entering new markets overseas, including Nepal.

The company will roll out 50 digital screens in the next 30 days. Of the total 179 screens, 23 are digital as of now.

The theatre-chain, promoted by Reliance Anil Dhirubhai Ambani Group, is also pioneering a study to understand the cinema audience behaviour in collaboration with the Indian Market Research Bureau International (IMRB International). Adlabs Cinemas, which was acquired from Manmohan Shetty three years back, has already become the largest theatre chain in the country with 68 properties across 54 cities from just four properties.

Tushar Dhingra, chief operating officer, Adlabs Cinemas, said the company will have presence in 90 cities by the end of the current financial year. Adlabs will also be the first company to set up a four-screen multiplex in Nepal this financial year.

Currently, 70 per cent of Adlabs’ revenue comes from multiplexes and the balance is from single screens. Dhingra expects the ratio to change to 60:40 by next year. Adalbs recently signed up with Phoenix Mills to build the country’s largest multiplex in Mumbai, which will house 15 screens with around 4,000 seating capacity.

The move is in line with the company’s plan to increase its in-cinema advertising revenues. Currently, in-cinema advertising contributes around eight per cent to its top line; this will be raised to 10 per cent by 2009-10. The study will use the radio-frequency identification system that will track peoples’ movements in cinema halls.

On the overseas front, Adlabs is eyeing more acquisitions to enter new markets after its recent acquisitions in the US, Malaysia and Mauritius. It has 251 screens in the US, 51 screens in Malaysia and six in Mauritius.

Friday, August 15, 2008

Torrent Power

Transforming Life


Torrent Power is one of the leading brands in the Indian power sector, promoted by the Rs. 45 billion Torrent Group – a group committed to its mission of transforming life by serving two of the most critical needs - Healthcare and Power. Torrent Pharmaceuticals Ltd., the flagship company of the Torrent Group, is a major player in the Indian pharmaceuticals industry with a vision of becoming a global entity in the arena.

With an all-round experience in generation, transmission and distribution of power, and a proven track record of implementing large power projects, Torrent Power is the most experienced private sector player in Gujarat

Company Insight

Torrent’s foray into power however were the acquisitions of two of the India’s oldest utilities – The Surat Electricity Company Ltd and The Ahmedabad Electricity Company Ltd.. Torrent turned them into first rate power utilities comparable with the best, in terms of operational efficiencies and reliability of power supply.

Torrent has a generation capacity of 1647.5 MW (500 MW operational,1147.5 MW under implementation) and distributes over 10 billion units of power to annually Ahmedabad, Gandhinagar and Surat – the industrial and commercial hubs of Gujarat

And for over 1.9 million customers spread over an area of 408 Sq Kms in these cities, Torrent Power has evolved into a lifeline that continues to empower their lives-Uninterrupted.

Business Outlook

Torrent Power is setting up a 1147.5 MW SUGEN CCPP near Surat in Gujarat. Torrent’s answer to the growing demand for power, this project would be one of the first Greenfield mega power projects to be setup with LNG as the fuel. LNG has been acknowledged as the most eco-friendly fuel and also offers the benefit of lower generation cost per unit.

Distribution Franchise business is one area which Torrent Power has been aggressively pursuing as part of its expansion plans. Torrent Power created history by entering into the country’s first distribution franchisee agreement with Maharashtra State Electricity Distribution Company Limited for Bhiwandi Circle in December 2006.

With ventures in power generation, transmission and distribution. Torrent is known for its reliability and efficiency and continues to deliver enhanced value though its technology upgradation and customer care initiatives.

-- Power Generation

Torrent Power has a generating capacity of 500 MW at Ahmedabad, comprising:

- 400 MW coal based thermal power station at Sabarmati
- 100 MW dual fuel based combined cycle power plant at Vatva

-- Transmission and Distribution

Torrent Power transmits and distributes more than 10 billion units of power to around 1.9 million customers in the cities of Ahmedabad, Gandhinagar and Surat, spanning an area of 408 Sq. Km. These cities are major industrial and commercial hubs of Gujarat State.

Sunday, August 3, 2008

Clariant Chemicals

Despite rising input costs, Clariant Chemicals managed to record a 44 per cent increase in net profits to Rs 41.7 crore for the six months ended June 2008 (year ending is December). Net sales were up 7 per cent at Rs 466 crore.

The company has been able to increase its profits as a result of its ability to increase product prices, prune costs and benefit from a leaner organisation.

In dyes and specialty chemicals, which account for 55 per cent of its sales, the company is focussing on technical textiles, a fast growing segment expected to register an annual growth of 14 per cent till 2015.

While the company's sales of textile chemicals last year was impacted due to rupee appreciation as its customers (textile exporters) realisations came down. Margins in the second largest segment (40 per cent of sales) - intermediates and colours - though more than doubled to 14.1 per cent in the first half.

Going forward, the company is planning to focus on promoting the wider usage of safer pigments (lead/chrome replacement) and the usage of fluro chemicals and coating based products in the technical textiles segment.

With rupee showing some signs of weakening in 2008, the same should also prove beneficial for Clariant. At Rs 230 and considering annualised CY08 earnings of Rs 17.14, the stock is attractively priced at 13.5 times.

Castrol India

It's More Than Just Oil. It's Liquid Engineering

Strong brands, technologically advanced products and customised offerings among others have helped Castrol’s sales and net profits grow at a CAGR of 13.4 per cent and 19.3 per cent in the last three years, even as volume growth has remained muted.

The muted volume growth is mainly due to a shift in consumer preference towards high-tech products, especially in the auto lubricants where Castrol enjoys a market share of 21 per cent.

For instance, companies like Tata Motors have changed oil drain specifications for their commercial vehicles (CVs) for engine oils (doubled to 36,000 kms) and lubricants (increased to 72,000 kms), thus reducing the frequency of changing these consumables.

While this means lower consumption, it also means increased use of technologically superior products that support longer running of vehicles and hence higher realisations for lubricant manufacturers.

Technological advances in passenger cars have also meant increased demand for high-tech products. This is positive for Castrol, which has access to its UK parent’s R&D.

The company has already entered into tie-ups with players like Volvo, Ford and Audi (cars) and Tata Motors (CVs), besides being the exclusive ‘first fill’ lubricant for Tata Motors’ Nano.

Going forward, with India adding a million cars and UVs and over six million two-wheelers every year, demand for automotive lubricants will remain healthy. Increasing spends towards infrastructure and industrial capex also point to robust demand for industrial lubricants.

While concern over the surge in base oil prices exists, Castrol has raised prices in the past to offset the increase. The cut in import duty by half to 5.13 per cent on base oil in June 2008 also provides respite.

Overall, Castrol’s revenues and profits are seen growing at 10-15 per cent annually over the next two years. At Rs 258.70, the stock trades at 12 times its CY09 (December ending) estimated earnings and can deliver 18-20 per cent in a year.

Friday, August 1, 2008


Company Profile :

ICSA, a Hyderabad-based solution provider in power distribution segment, supplies customized products for power utilities in the filed of energy management, energy audit and control, data acquisition system using GSM technology. ICSA offers products like intelligent automatic meter reading, distribution transformer monitoring system, agriculture load management etc.

ICSA has diversified into Oil & Gas sector, where it provides solutions for Checking pipeline spill offs, corrosion etc. It does EPC work for the distribution sector but is fast consolidating as a technology solution provider.

Quarterly Results :

ICSA’s Apr-Jun 2008-09 results were above the estimates, with revenue growing 13.8 per cent over Jan-Mar 2007-08, which is seasonally the strongest quarter. Revenue posted for the quarter is Rs 240 crore, EBIDTA at Rs 61.9 crore and PAT at Rs 40.4 crore.

Business Outlook :

ICSA’s order book at the beginning of the fiscal stood at Rs 900 crore and out of the order pipeline of Rs 1,350 crore, it has bagged order worth Rs 225 crore taking its order book to over Rs 1,000 crore. The current order book stands at 1.68X FY08 revenue.

ICSA has been awarded permission by the board of non- conventional energy development corporation of Andhra Pradesh to set up a 20 MW capacity wind power project in Anantpur, Andhra Pradesh and is in the process of setting up wind farm, later which it would enter into the power purchase agreement with DISCOM. However the brokerage has not accounted for capital expenditure for the said project as well as revenue and tax benefits accruing out of it, for their 2008-09 estimates.

ICSA has secured patent registration for two of its designs, automatic meter reading apparatus protector for pipeline for Oil & Gas.

Valuations :

The revised upward revenue estimates for 2008-09 by 15.62 per cent to Rs 1,155 crore.

At the market price of Rs 312 , ICSA is trading at 8x FY09E EPS of Rs 41.6.