GV Films - Studio Cities

GV films, a leading media company, today said it would build 'studio cities' in 23 tier-two cities in south India in the next three years. Each costing Rs 20 to 40 crores, it would have five screens, shopping malls and food courts, S Venkataramani, Vice President, G V Films, told a press conference.

The first one, which is completed, would be opened soon at Thanjavur, he said.

Total cost of the project would be around Rs 700 crore and funding would be done through internal generation, he said

The company had won the prestigious Seoul Drama award, considered to be the Oscar for television serial, for its three dimension television sop 'Mayavi', the first to be won by an Indian company, he said.

It was selected from over 130 entries, he said.

The company planned to dub the serial in other Indian and foreign languages, he said adding that it was negotiating with foreign producers for joint production of animated TV serials.

Rana sugars - Ethanol Plant

Rana Sugars Ltd, part of the Chandigarh-headquartered Rana Group, has plans to set up an ethanol unit in Moradabad (Uttar Pradesh) at a cost of Rs 80 crore. The proposed unit will have a production capacity of 180 kilo litres per day of ethanol.

 

The plant will also have the facility for co-generation of 6 Mw of power, which will be sold to the state electricity board. The project will be funded through debt, internal accruals and the Centre’s sugar development fund.

 

“We are going to infuse fresh capital of Rs 80 crore into the proposed project in Moradabad district, on the premises of the sugar mill there. Work on this project is likely to start by October and will take 13-14 months to complete,” said Rana Inder Pratap Singh, the company director.

 

The setting up of the ethanol plant will make the plant a complete integrated unit. The company will sell the ethanol to oil companies. “According to the government regulations, once the company starts commercial production of ethanol, it is bound to sell to oil companies at the rate set by the central government,” he added.

 

Recently, the company’s new sugar unit at Moradabad, which has a crushing capacity of 5,000 tonnes of sugarcane per day and facilities for co-generation of 20 Mw, of power has started commercial production. In addition to this, the company’s second new unit, which has a crushing capacity 5,000 tonnes of sugarcane per day at Rampur district (Uttar Pradesh), will be operational by October 2007.

 

“The company hopes to achieve a turnover of Rs 500 crore by the end of this financial year, as the two new sugar mill at Moradabad and Rampur district will be operational,” he said. Last financial year, the company’s turnover was Rs 200 crore.

 

The group has also diversified into textiles, informatics and infrastructure. In last financial year, the turnover of the group was Rs 330 crore and this year it hopes to have a turnover of Rs 650 crore.

 

The group also plans to enter real estate and is looking at developing a housing project in Mohali with an investment of Rs 150 crore.

 

“Once we get all the necessary clearances from the state government, we will start construction,” Singh said.

Rana Sugars - New Capacity

Looking at the good returns from the power segment, Amritsar-based Rana Sugars Ltd, a part of the Rana Group, is enhancing its co-generation power capacity from 20 Mw to 30 Mw, with an investment of Rs 40.8 crore.

 

The existing unit is an integrated sugar plant with a capacity to crush 5,000 tonne of sugarcane per day and facilities for the co-generation of 20 Mw, situated in Buttar Sevian village, Amritsar.

 

At present, out of its total installed co-generation power capacity of 20 Mw, the company is selling about 10 Mw of surplus power to the Punjab State Electricity Board (PSEB). The rest is used for its own consumption.

 

Therefore, the company is now enhancing its installed co-generation power capacity from 20 Mw to 30 Mw, out of which the company would be selling power capacity about 19.60 Mw of surplus power to PSEB.

 

Speaking to Business Standard, Rana Sugars Ltd General Manager (Finance) Manoj Gupta said, “The project would require a capital investment of Rs. 40.80 crore and would be funded through cash accrual and term loan from the banks and likely to be commissioned by October.”

 

Last year, the company set up a distillery unit with a capacity to produce 60 kilolitres per day, with an initial investment of around Rs 39 crore at Patti, Amritsar.

 

The company is utilising molasses, a by-product of its sugar and grain products, for the manufacture of rectified spirit, ethanol and potable alcohol.

 

The company imported machinery from China, in which 50 per cent of wash and impurities is evaporated and the remaining is burnt in boilers, without polluting the environment, making it a pollution free unit.

 

The setting up of the distillery enabled the company to fully integrate its operations. Its existing sugar plant at Amritsar produces 200 tonne of molasses per day.

 

Also, the company’s is setting up two sugar units at Moradabad and Shahbad, both in Uttar Pradesh, with a capital investment of Rs 418 crore. The proposed units will be integrated units each with a capacity to crush 5,000 tonne of sugarcane per day and facilities for co-generation of 20 Mw of power.

 

While the Shahbad unit has started the new plant at Moradabad (Uttar Pradesh) would be operational by October. Besides the sugar industry, the group has diversified into textiles, informatics and infrastructure.

GV Films - 8000 English Movies

In the biggest library buyout in the Indian entertainment space, GV Films is effecting a $43.56-million (Rs 175 crore) acquisition of around 8,000 Hollywood titles from Pinewood Films, an investment arm of a UK based distributor. 

On April 30, GV raised $40 million through GDRs listed on the Luxembourg exchange to fund the acquisition. The process was managed by Zurich-based Bremer Bugmann Seiler Capital Partners AG and Bank of New York. 

A company official said the deal has been confirmed, while verification of the tittles were currently on. The company, which has produced some of the biggest blockbusters in the South Indian film industry, said the deal covered the worldwide Internet, DVD and cinema rights, which featured Hollywood titles from the 1940s to the late 1970s. 

Some of the notable titles in the library include Sherlock Holmes And The Secret Weapon (1943), Attack Of The Monster (1969), Murder On Flight 502 (1975), Clashes Of The Ninja (1986), Ghost (1963) and Murder With Music (1941). 

It is believed that the impending acquisition would strengthen GV’s nascent webcasting business, which already has rights for 6000 Indian tittles. The first listed domestic entertainment company is betting big on its webcasting business along with the Studio City project, which involves setting up of multiplex, retail gallery and budget hotel across 23 locations, to bounce back from a difficult phase following the death of its original promoter some years back. 

GV has mainly been a production and distribution entity with Tamil blockbusters directed by Manirathnam—Nayagan, Anjali and Dalapathi—to its credit. The company also forayed into television production with a 3D offering Mayavi currently airing on Jaya TV .Earlier this year, GV announced Bollywood foray after roping in Anees Bamzai.

Teledata - Multibagger or Loser?

Teledata Informatics Ltd has announced that, it plans to split the Company into three separate entities, focusing on specific businesses. The demerged entities will be Teledata Marine Solutions Ltd, Teledata Technology Solutions Ltd and Teledata Informatics Ltd (the Company). The scheme has been filed with the Chennai High Court for its approval. The process is expected to be completed in three to four months time, and the shares of the de-merged entities are expected to be listed by April, 2007.

The 3 demerged entities have a gamut of activities ranging from Logistics Software Products and solutions, Marine software solutions, Port management & LPG distribution, Marine Insurance Services, ERP, Education, Communication and Agro Biotech. Teledata Informatics the stock in focus has the following subsidaries

•  Hyper Sascom Ltd
  
•  Teledata Education Management Systems Ltd
  
•  Insoft Systems Pte Ltd
  
•  iMax Networks Ltd
  
•  Voicetec International
  
•  Kryptos Networks Pvt Ltd

In a new development today, Teledata Informatics invested USD 105 million in Singapore headquartered eSys Technologies. Teledata Informatics Ltd announced that the Company had strategically invested USD 105 million to acquire majority stake in Singapore headquartered IT Distribution major and PC maker eSys Technologies Pte Ltd. The investment will enable the Company capitalize on the synergy between the Company and eSys which would help accelerate the business levels with tremendous prospect.

Now before the demerger takes place if one would buy 100 shares of Teledata Infomatics @ Rs. 58. It would result in 100 shares of Teledata Infomatics , 50 shares of TD Marines and 50 shares of TD Technology. For FY 08 expected EPS of Teledata Infomatics is Rs. 12 , of TD Marine Rs. 30 and of TD Technology is Rs. 20. Even at P/E of 5.0 the share appears to be a multibagger. Buy is definetly recommended.

Clutch Auto - Long Term Unique Story

Long-term investors can use the current dip in the market to build up positions in Clutch Auto. The company is India’s largest manufacturer of automotive clutches with the know-how to manufacture the full range of clutch plates and assembles for commercial vehicles (CVs) and heavy-duty applications. 

In the past, the company suffered a bad patch due cash-flow problems and high-cost debt burden. It also took time to master the clutch technology. But the worst is over now. The company is likely to be a major gainer due to an over 30% YoY growth in CV sales and auto component outsourcing from India. 

Technology development: Globally, clutch manufacturing is a proprietary technology controlled by a handful of companies in Japan, West Europe and North America. Clutch Auto has joined this elite club and is the biggest supplier to CV and farm equipment manufacturers in India. 

Due to its efforts in re-engineering and R&D, the company has filed 18 patents in India and 11 in the US for its in-house innovations in clutch technology. Having access to its own technology gives the company an advantage over its domestic competitors, which depend on their foreign JV partners for technology. This not only reduces their time-to-market, but also makes their products costlier, as they have to pay royalty and technical fees to their foreign partners. 

The low-cost manufacturing base in India gives Clutch Auto a competitive edge over global majors like Eaton Corporation, Luk, Valeo, Exedy Corp and ZF Friedrichshafen. At present, exports account for around 30% of the company’s net sales, with North America being its biggest market. 

Low-cost expansion: Having consolidated its operations, the company is now working on a three-year capacity expansion (capex) plan to triple its production capacity to 4 million units of clutch plates and clutch assemblies by FY10, from around 1.4 million units currently. 

Expansion is being done at a relatively modest cost of Rs 30 crore — almost a third of its FY06 gross block of Rs 87 crore. The company says basic infrastructure and common facilities are already in place. It merely has to invest in some balancing and finishing equipment to raise its capacity. 

With operating margins at 16% during April-December ’06 and set to improve further, capex will be funded via internal accruals, thus protecting the company’s bottomline from an increase in interest rates. 

The capex is part of its plan to triple its revenues to Rs 650 crore by the end of financial year ’09-10, against the estimated Rs 210 crore at the end of March ’07. During the same period, contribution of exports in its revenues will rise to 50% from around one-third at present. 

To control its raw material cost, the company recently acquired the assets of Gurukripa Founders & Engineers (GKF), a promoters’ concern. GKF is engaged in the production of castings used in clutch manufacturing. This acquisition will give the company a better control over its input costs. It is now in the process of augmenting it capacity to 1,200 tonnes per month from 750 tonnes. 

Financial restructuring: The company has implemented a debt-restructuring plan, under which, it pre-paid a part of its loan by raising equity and refinancing the balance with low-cost term loans. This resulted in a significant turnaround in Clutch Auto’s financial ratios. 

From a high of 4.9 during FY04, its debt-to-equity ratio declined to 1.3 during FY06 and is expected to improve further to 0.8 during FY07. Interest coverage during the period improved from 2 in FY04 to 5.4 in the first nine months ’06-07. This has significantly strengthened the company’s balance sheet, making it less vulnerable to any downturn in the industry’s fortune and rise in interest rates. 

Financials: In the first nine-months of FY07, Clutch Auto’s net profit jumped 42% YoY to Rs 12.2 crore, while its operating profit grew 35% YoY to Rs 21.7 crore. Its bottomline growth was led by a 39% YoY growth in net sales to Rs 139 crore and savings on account of slower growth in interest payment and depreciation allowance. 

While the former grew 35% YoY, the latter grew a mere 4.3% YoY. The only dampener was raw material cost, which zoomed 49% YoY. 

Valuations: At the current market price of around Rs 108, the stock is valued at around 3.6 times its FY08 estimated EPS of Rs 30. This is extremely cheap and provides significant upside potential for investors with a 12-18-month horizon.