Monthly Archives: May 2016

Crest ventures Ltd
Misc. Commercial Services
FV – Rs 10; 52wks H/L –63.35/31.70; TTQ – 21 K; CMP – Rs 63.35 (As On May 16th 2016; 13.00);                                  

Market Cap – Rs 110.04 Crs

Consolidated Financials and Valuations for FY16 (Amt in Rs Crs unless specified)

Consolidated Financials and Valuations for Q4 FY16  

 Valuation Parameters:

1. Long Term Debt to Equity – 0.23
2. ROE % – 15
3. Market Cap/Sales – 3.2

Crest Ventures Ltd is mainly engaged in Investing, Managing and Consulting. It is currently evaluating small investments in web-based business opportunities.

The company is also into the tours and travel business as Tamarind Tours Pvt.Ltd

Key Updates:

• The Company sold its investment in SAI to Systra – a French Government owned company, one of the largest companies in the world, in consultancy of metro and high speed rails. This reinforces the Company’s ability to invest in and build businesses which create value.
• The Company’s investment phase for building projects will reach completion by mid-2016 and will invest in building up the asset management business and they will also continue to invest in organisation building.
• The Company’s focus this year was completion of on–going projects, evaluating new projects and building CREST as a quality and premium brand. The Business Development team has been proactively scouting for projects in and around Mumbai and has been actively participating in the tender process for re-development projects.

Bulk Deals:

Overview:

• Crest Ventures Limited, formerly Sharyans Resources Limited, is an angel investment company with a diverse portfolio of investments across a broad range of industries. (The Ministry of Corporate Affairs, Registrar of Companies, Mumbai has vide Fresh Certificate of Incorporation pursuant to change of name dated September 01, 2014 approved the change of name of the Company from Sharyans Resources Limited to CREST VENTURES LIMITED.)
• The Company is involved in ongoing management and advising for most of its investments.
• It engages in ongoing financial review of its portfolio investments, annual strategic planning, financing, and management decisions and endeavors to provide the benefit of past experience to its entrepreneurs, and encourage inter-company relationships.
• The Company also consults and advises entrepreneurs in relation to investment, mergers and acquisitions, and strategic relationships.
• The Company Ventures is currently evaluating small investments in web-based business opportunities.
• The Company’s portfolio companies include real estate, web businesses, apparel, publishing and hardware.

The company’s current Portfolio Investment includes:

1. com – FreeLegalAid.com is a simple search engine for providing free legal resources. The site is built on an advertising model, and has grown significantly since its inception in 1997.
2. com – LetterPOP is an online newsletter creation tool with a powerful email marketing component.  Use LetterPOP to create amazing visual communications that you can send to your mailing list, manage your contacts, and much more!
3. Coastal Discount Realty – Coastal Discount Realty is an early stage web-based discount realty listing service servicing San Diego County. The business offers a flat fee MLS listing service, and ala carte real estate brokering services.
4. BIZ – FileOnline.BIZ is a self-help legal filing service that offers users a means to file incorporation documents in any state. The site also allows users to request a copyright filing or a trademark filing. Useful information and links are provided to enable users to “help themselves” using the site.
5. GetinBusiness! – GetinBusiness! is a resource center for small businesses, hosting the blog and podcast of Dana Robinson, entrepreneur, attorney and know-it-all.  Download Dana’s inexpensive “GetinBusiness Guides” and grab free business and legal advice.
6. Lexington Court Appartments – Lexington Court Apartments are in Downtown Phoenix, in the Roosevelt Arts District, surrounded by redeveloped properties. The apartments have been zoned for high rise, entitlements granted for redevelopment, and La Jolla Ventures plans to either develop the property with a development partner, or sell the property at an appreciated value.
7. Garfield Commons – Garfield Commons owns a 9 unit apartment complex that has received several grants for rehabilitation. The property has been through a City of Phoenix rehab construction grant, and was completed 2009.
8. Fieldcrest Investments – Fieldcrest Investments is a Lafayette, Louisiana real estate acquisition and development company. The company owns three parcels in Lafayette, and has completed a subdivision of 64 parcels on one lot that are currently under construction of low-priced single family homes.
9. Surya Rising – Surya Rising is the first app incubator to challenge its participants to launch an app within 90 days.  The participants bring their mobile apps and concepts to the company, where they are incubated and managed from inception to launch.  The company has 30 apps under development and in the iTunes app store.
10. ChristianAudio – ChristianAudio is the largest online publisher of Christian audio books. The company operates several publishing imprints, and sells audio books throughout the United States through retail book stores and other retail outlets. The company owns a proprietary “Audible style” downloadable audio book website where it offers its own products and third party products.
11. Esquivel Designs – Esquivel Designs is an Orange County based high end men’s shoe maker. George Esquivel, 2009 CFDA/Vogue Fashion Fund finalist, and shoe maker to rock stars and Hollywood elite, designs and manufactures bespoke footwear from its manufacturing plant in Southern California. The company has distribution in China through the Esquviel store in Beijing.  Find Esquivel shoes in Bergdorf Goodman NYC, Brown’s London, Net-a-porter.com and other fine stores.
12. Modern Cooperage – Modern Cooperage is a two year old manufacturer of patented wine barrel systems that provide a means to use a re-usable stainless barrel with the full exposure to oak staves.  Products are in testing with some of the largest wineries in the United States.
13. Cloud Canvas – loud Canvas is a browser application development platform, providing an array of browser based apps, as well as a platform for developers to deploy and monetize browser apps.  The CloudCanvas application platform allows 3rd party developers to build applications that run on other websites. By using CloudCanvas’s development platform, developers do not have to worry about cross-browser support (Firefox, Chrome and Internet Explorer), and can focus on the application (not on the back-end technology)

Non – Current Investments:

Classic Mall Development Co. (Crest Ltd holds 42.19% ) engages in Real Estate business in Chennai and now it operates as the subsidiary of  The Pheonix Mills Ltd. Sharyans Ltd has acquired stake in Classic Mall jointly with Kshitij Venture Capital fund.

(http://www.thehindubusinessline.com/companies/announcements/others/acquisition-of-stake-in-classic-mall-development-company-private-limited/article5019025.ece)

Classic Mall Development Co. is inolved in Real estate activities with own or leased property. [This class includes buying, selling, renting and operating of self-owned or leased real estate such as apartment building and dwellings, non-residential buildings, developing and subdividing real estate into lots etc. Also included are development and sale of land and cemetery lots, operating of apartment hotels and residential mobile home sites.

Management:

• Vasudeo Galkar – Chairman
• Vijay Choraria – Managing Director
• Vishal Mehta – CFO

The Equity Capital is @ Rs 17.37 Crs consisting of 173700000 equity Shares of FV Rs 10 currently held.

None Of the Promoter’s Holding is pledged.

Major Non-Promoter Holdings:

Consolidated Financial Trends (In Rs. Crs) :

During the year FY13 additional 2500000 equity shares were issued at face value of Rs.10 per share.

Radico Khaitan Ltd
Breweries & Distilleries
FV – Rs 2; 52wks H/L –130.9/78.10; TTQ – 6 K; CMP – Rs 89 (As On May 13th 2016; 11.00);                             

     Market Cap – Rs 1138.83 Crs

Consolidated Financials and Valuations for FY16 (Amt in Rs Crs unless specified)

Consolidated Financials and Valuations for Q4 FY16  

 Valuation Parameters:

1. Long Term Debt to Equity – 0.22
2. ROE % – 8.5
3. Market Cap/Sales – 0.7

The company has roped in celebrity Hrithik Roshan as its brand ambassador.

Key Updates:

• In the IMFL segment, more than 20% of the company’s volumes come from prestige and above products, which is a high margin business, and the balance volumes come from regular and others brands.
• Since the last eight years, the company’s prestige and above brands’ volume has reported a CAGR of ~23% and their share in the product mix has increased from 7.9% in FY2009 to 24% in FY2016.
• RKL has a strong sales and distribution network with a presence in retail and offtrade outlets in the relevant segments in different parts of India. Currently, the company is selling its products through over 45,000 retail outlets and over 5,000 on-premise outlets.
• The company exports to about 60 countries worldwide and has made a good presence in the international markets.

Bulk Deals:

During the quarter the Karnataka government gave a price increase (`35/case) to the company which would be effective from July 1, 2016 and would contribute towards margin improvement. Further, the government of Uttar Pradesh has reduced the excise duty on Indian made foreign liquor (IMFL) by 20-25% with effect from April 1, 2016, which is expected to result in an increase in IMFL sales volume in the state going forward.

These policy actions should significantly benefit the company as the two states account for ~20% of its volumes.

Overview:

• Radico Khaitan Ltd is an spirits company engaged in the manufacture of liquor.
• The company has three distilleries and one JV with total capacity of 150mn litres and 33 bottling units spread across the country.
• The company is one of the largest providers of branded IMFL to the Canteen Stores Department (CSD), which has significant entry barriers.
• RKL’s brands include After Dark Whisky, Magic Moments Vodka, Morpheus Brandy, Contessa Rum, Old Admiral Brandy and 8 PM.
• Its liquor business also includes rectified spirit and country liquor. Its alcohol products include rectified spirit, silent spirit, cane juice spirit, malt spirit, grain spirit and ethanol.
• The company’s PET division produces a range of PET bottles and jars for industries such as pharmaceutical, cosmetics, home and personal care, edible oil and confectionery.

Management:

• Lalit Khaitan – CMD
• Abhishek Khaitan – CEO
• Dilip Banthiya – CFO

Major Non-Promoter Holdings:

Consolidated Financial Trends (In Rs. Crs) :

The company has not performed well in the last two years due to increasing raw material costs (ENA is a key raw material) and with it not receiving significant price hikes from various states.

The company reported a net profit of 14.8cr  on account of higher interest costs and taxes.

The company made repayment of 67.8 Crs during the year FY15.

(*ENA – Extra Neutral Alcohol)

Risks:

• Change in Legal Drinking Age.
• Change in Tax.
• Competition from International Markets and Forex rate Fluctuations.
• Changing Consumer Preferences.
• Increase in Raw Material Prices.

Orient Cement Ltd
Cement and Cement Products
FV – Re 1; 52wks H/L – 198/128; TTQ – 15000; CMP (May 12, 2016) – Rs 155;

Market Cap – Rs 3167 Crs

Standalone Financials and Valuations for FY16 (Amt in Rs Crs unless specified)

Valuation Parameters

1. EV/EBITDA: 24.25
2. EV/Share: Rs 217
3. EV/Sale: 2.94
4. Market Cap/ Sale: 2.09
5. Debt to Equity: 1.22
6. RoI: 6.1 %

• In September 2015, Orient Cement commissioned its new plant located near Chittapur, District Gulbarga, Karnataka and has an installed capacity of 3 million tonnes per annum (MTPA). The company now has a total capacity of 8 MT including the recently commissioned capacity in Karnataka. The company had invested Rs 2000 Crs in the Karnataka plant.
• It sells 60% of its cement production in Maharashtra and close to 40% in Telangana. Nearly 80% of its sales are in the trade segment with a focus on rural housing.
• Orient Cement has set a target of achieving 15Mt/yr production capacity by the end of 2020. The company is now looking at acquiring a few production plants with 2Mt/yr and 3Mt/yr production capacities in eastern India.

Recent Updates

• The Company’s fourth-quarter net profit fell 77% to Rs 19 Crs from Rs 85 Crs in the same period last year, largely due to a sharp fall in realisation. Overall realisation was down 17%to Rs 3228 per tonne.
• The ramp up of production at the new plant in Karnataka’s Gulbarga district is progressing well and helped achieve a volume growth of 40%.
• The capacity utilisation has touched 44% at new plant, while it was 86% at the old plant. Overall capacity utilisation stood at 74%. The company targets 60% capacity utilisation at new plant for the coming year and 86-88% for the old plants.
• For Q4 of FY 16, the company did a total volume of nearly 13.9 lakhs tonne. The company is targeting sales volume of 14.5-15 lakhs tonnes in coming quarters and also looking at higher usage of pet coke as cement plant stabilise.
• Given the Debt to equity at 1.2, the company is comfortable with it and has no plan to bring it down in current year.
• Remuneration paid to MD and CEO of the company for FY 16has exceeded the limit prescribed under section 197 read with the Schedule V of the Companies Act.
• Aiming for 14.5-15 lakh tonne sales: Orient Cement

Bulk Deals

Block Deals

Overview:

• The company started its operations in 1982 and is engaged in the manufacture and sale of cement.
• The Company’s manufacturing facilities are located at Devapur in Telangana and Jalgaon in Maharashtra.
• The Company’s products include Birla A1 Premium Cement, Birla A1 Premium Cement-OPC 53 Grade and Birla A1 Premium Cement-OPC 43 Grade. The Company’s Greenfield cement plant, located near Chittapur, District Gulbarga, Karnataka, has an installed capacity of approximately three million tons per annum (MTPA).
• The Company is part of the CK Birla Group, which operates in three industry clusters, including technology and automotive, home and building, and healthcare and education.
• The Company operates through a network of over 40 offices.
• Orient Cement operates largely in rural and semi-urban markets in Telangana and Maharashtra. Its target customer is the independent house builder in these markets. Therefore, dependence on the organised real-estate sector is small.

Management:

• Mr C K Birla is the Chairman
• Mr Desh Deepak Khetrapal is the MD and the CEO

Major Non – Promoter Holdings:

Standalone Financial Trends ~ Amt in Rs Crs

• The costs related to the commissioning/stabilisation of the new integrated unit at Chittapur (Karnataka) has affected the firm’s operating and net profit numbers in the last two quarters of FY16.
• Increase in long term borrowing in FY 15 was to finance the new plant at Karnataka.

AYM Syntex Ltd
Textiles
FV – Rs 10; 52wks H/L – 163.5/39.55; TTQ – 5620; CMP (May 12, 2016) – Rs 103.8;
Market Cap – Rs 407 Crs

Standalone Financials and Valuations for FY16 (Amt in Rs Crs unless specified)

Valuation Parameters

1. EV/EBITDA: 4.97
2. EV/Share: Rs 134
3. EV/Sale: 0.66
4. Market Cap/ Sale: 0.51
5. Debt to Equity: 0.86
6. RoI: 24.74 %
   

Bulk Deals

Insider Trades

https://www.valueresearchonline.com/stocks/snapshot.asp?code=4442

• VLS Capital held 1.36% stake in the company until September 2015.

Welspun Group is in process of carving out the yarn-spinning business, AYM Syntex, which will be managed by cofounder Rajesh Mandawewala’s elder son Abhishek. Rajesh Mandawewala, group managing director, is in the process of purchasing partner and Chairman BK Goenka’s stake in AYM Syntex. The arrangement shall lead to no change in the current promoter shareholding pattern of the group. Abhishek Mandawewala took over as a whole time director in August 2015. ~ Succession Planning: Welspun Group to hive off yarn-spinning business for next generation

Recent Updates

• The company has received approval to do capex up to Rs 75 Crs for de-bottlenecking and building infrastructure such as warehouse for next five years road map. The same has been approved by the Board of Directors on May 6, 2016. ~ AYM Syntex gets nod for capital expenditure worth Rs 75 crore

Overview:

• AYM Syntex Limited, formerly Welspun Syntex Limited is a manufacturer and exporter of polyester texturized filament yarn and nylon filament yarn.
• The Company operates through Synthetic Yarn segment.
• The Company’s plants are located at Silvassa and Palghar in Thane, India. The Company’s product categories include bulk continuous filament yarn (BCF), polyester partially oriented yarn (POY), polyester fully drawn yarns (FDY), polyester mono filament yarns (PMFY), polyester filament yarn (PFY), polyester draw texturized yarn (DTY/PTY), air textured yarns (PATY) and specialty polyester filament yarns (SPFY).
• Its POY category consists of products, including full dull raw white poy, semi dull raw white poy, bright raw white poy, super bright raw white poy, dope dyed black poy, dope dyed bright poy and bright cationic poy.
• The Company’s PMFY category consists of products, including SEMI DULL Raw White, Bright Trilobal and Dope Dyed.
• The Company is in the process of doubling capacity of BCF yarn, increasing capacity of texturized yarn, and mother yarn.

Welspun consolidating infra business, Apollo Global to get 12% of Welspun Projects 

Welspun to merge investment firms to unlock value, raise funds

Management:

• Mr B A Kale is the Executive Director and the CEO.
• Mr Abhishek Mandawewala is the Whole Time Director

 Shareholding Pattern as on March 31, 2016

The Equity Capital is @Rs 39.24 Crs consisting of 39239568 Equity Shares of FV Rs 10 currently held as under

None of the promoter’s holding is pledged

Share Price Trend

 Standalone Financial Trends ~ Amt in Rs Crs

• Networth grew at a CAGR of 17.43% over the last six years while Total sales grew at a CAGR of 8% over the same period. PAT has grown at a CAGR of 24.32% in the same period.
• *The Company had allotted 16000000 6% Optionally Convertible Cumulative Preference Shares of Rs 10 each at par to Krishiraj Trading Limited, promoter of the Company, which is to be converted into Equity Shares at any time within 18 months from the date of allotment @ Rs. 10.26 per share. The above shares were converted into 15594541 Equity shares at Rs. 10.26 per share on March 22, 2013. The paid up equity share capital thus increased from Rs 23.64 Crs in FY 12 to Rs 39.24 Crs in FY 13.
• **Turnover of the Company reduced due to reduction in price of raw materials and finished goods following slash in price of crude oil. Concentration on high margin products, development of new products and production of BCF yarn coupled with reduction in prices of raw materials following slash in price of crude oil has increased profitabilityof the Company.

7. K.M. Sugar Mills Ltd
   Plastic Products
   FV – Rs 2; 52wks H/L –7.7/1.65; TTQ – 21 K; CMP – Rs 6.80 (As On May 11th 2016; 10:30) ;

Market Cap – Rs 62.56 Crs

Standalone Financials and Valuations for 9Months FY16 (Amt in Rs.Crs unless specified)

Standalone Financials and Valuations for FY15 (Amt in Rs Crs unless specified)

Overview:

• M. Sugar Mills Ltd. is an India-based company, engaged in the manufacturing of sugar.
• The Company operates in sugar division, distillery division and power division. The Company manufactures white crystal sugar, which is used for human consumption and in the industries, such as food, beverage and soft drinks.
• It manufactures and sells three grades of sugar, such as L 31, M 31 and S 31.
• Its sugar manufacturing facility is in Faizabad district of Uttar Pradesh.
• It has its own distillery unit of capacity 45 KLPD and manufactures rectified spirit, Ethanol and extra neutral alcohol (ENA) at its facility at Motinagar, Faizabad.
• The Company’s Bio Compost unit manufactures bio fertilizer which is marketed in the name of Moti Super. The Bio fertilizer is manufactured by utilizing the by-product of sugar unit, such as Press Mud and the by-product of distillery division, such as spent wash along with culture.

Industry Updates:

• India is the second largest producer of sugar in the world and its production’s share in 2014-15 was 16%.
• The Government hiked the import duty on sugar 40% from 15% to curb inflow of cheaper sweetener, a move that could see a rise in sugar prices.
• notifies export subsidy of Rs. 4,000/- per ton for raw sugar.

Management:

• L. K. Jhunjhunwala – Chairman
• Aditya Jhunjhunwala – MD

Products:

• Sugar

The company manufactures and sells three grades of Sugar in jute bags as well as in PP bags. On the basis of quality and size products are as under:

1. L 31
2. M 31
3. M 30
4. S 31
5. S 30

• Distillery

KMSML manufactures Rectified Spirit, Ethanol and Extra Neutral Alcohol (ENA) at its facility at Motinagar, Faizabad. Out of total production of rectified spirit 85% is grade-I quality and 15% is Grade-II.

1. Grade-I rectified spirit
2. Grade-II rectified spirit
3. Extra Neutral Alcohol
4. Fuel Grade Ethanol

• Clean Power
• The company has its own baggased based co-gen Power plant with the capacity of 25 MW in Motinagar, Faizabad, Uttar Pradesh.
• The company supply the power to the Uttar Pradesh Power Corporation Limited (UPPCL).
• Bio-Manure
• The Bio Compost unit manufactures bio fertilizer which is marketed in the name of ‘Moti Super’. The Bio Fertilizer is manufactured by utilizing the by-product of sugar unit, i.e. Press Mud and the e by-product of Distillery division, i.e. spent wash along with culture.
• The Bio Fertilizer is manufactured in our own plant with a process called ‘Triochem process, which takes around 45 days for converting press mud into bio-compost
• Country Liquor
• The company also entered into the business bottling of alcohol and set-up the bottling plant in Bapudham Motihari, Bihar.
• The unit supplies the country liquor in Pet Bottles of 200 ML with the capacity of 4 lacs Bottles per day. The country liquor is supplied to the Bihar State Beverage Corporation Limited (BSBCL) in the districts East Champaran and West Champaran.

Major Non-Promoter Holdings:

Standalone Financial Trends (In Rs.Crs):

The figures are of 18 months as of 31^st March 2015 and others year ended 31th September.

Krebs Biochemicals & Industries Ltd
Pharmaceuticals
FV – Rs 10; 52wks H/L –165/76.90; TTQ – 2 K; CMP – Rs 103 (As On May 5th 2016; 11:00) ;

Market Cap – Rs 127.87 Crs

Standalone Financials and Valuations for 9Months FY16 (Amt in Rs.Crs unless specified)

Standalone Financials and Valuations for FY15 (Amt in Rs Crs unless specified)

IPCA Labs picked up 23 Lacs shares (26%) in Krebs Biochemicals ltd through an open offer at Rs.54/- per share.

(http://www.thehindubusinessline.com/markets/ipca-labs-to-pick-up-26-stake-in-krebs-bio/article6891198.ece)

The successful completion of USFDA (United States of Food and Drug administration) audit and its approval for Unit-I is an added advantage for the Company to attract good customers.

The company didn’t record turnover during the period on account of closure of both the manufacturing plants due to power shortage in Andhra Pradesh.

Reserves of the company decreased from Rs.6 Crs to Rs.14 Crs due to increased losses during the year.

Overview:

• Krebs Biochemicals and Industries Ltd is an India-based company engaged in the business of manufacture of active pharmaceutical ingredients.
• The Company is producing a number of pain killers, anti-asthmatic and anti-human immunodeficiency virus (HIV) drugs under contract manufacturing.
• The Company offers Simvastatin and Lovastatin as anti-cholesterols, and Ephedrine and Pseudo ephedrine as anti-asthmatic.
• The Company’s products under development include Adenine as an intermediate for Tenofovir Anti HIV; Atorvastatin Intermediates as Anti Cholesterols; Phenylephrine for Cough and cold, and Orlistat against obesity.

The Company has two manufacturing facilities one at Regadichelaka, Nellore and another one at Kothapalli Village, Kasimkota Mandal, Vishakapatnam, both in India.

The company has entered in to an agreement with M/s Edelweiss Asset Reconstruction Co. Ltd. for repayment of the assigned debt by Exim Bank in instalments commencing from June, 2015.

Industry Updates:

• Global Pharmaceutical Industry is estimated now to be US $ 1 trillion and is growing at a rate of 4-5% per annum. Pharmaceutical industry is facing many challenges and uncertainties.
• A number of Big Generics based Pharmaceutical companies have emerged in India over the past decade and are driving the growth in the Pharmaceutical sector in India.
• India’s own requirement of pharmaceuticals is seeing a steady and significantly higher than world average growth. This is the very reason large Pharma companies are eyeing the Indian market and trying to grab a slice of the pie by way of acquisitions and large marketing outlays.

Management:

• Dr. R. T. Ravi – Chairman
• Mr. Avinash Ravi – MD

Major Non-Promoter Holdings:

Standalone Financial Trends (In Rs.Crs):

The numbers are of 6 months ended FY15 and 15 months for FY14 (Sept 14) and same for FY13.

Only FY11 and FY12 are 12 months ended.

The Company announced to consider and allot 650000 equity shares and 680000 warrants convertible to Equity shares of Rs.10 each on preferential basis.