Grauer & Weil, Pick of the week, Ennore Coke Q2 FY11 Results update.

Ennore coke Q2 FY11 results are good, when other expenditure of Rs. 14.36 crores are excluded the results are around 480% more than Q2FY10 results. In all aspects the Q2 FY11 results of the company are superb, please hold the scrip.

Grauer & Weil Company Management officially announced Commencement of Phase II of Mumbai Growel Mall in a phased manner. The Q2 FY11 results of the company are not comparable with Q2 of FY10 as in FY11 Q2 quarter the capital employed on Shoppertainment is 124.9 Crores, due to this the Profit of the company is below Q2 FY10 profits. Otherwise the results are quite good.

PICK OF THE WEEK : Grauer  & weil (India) limited: Report

GWIL is the 50 years old company in India manufacturing widest range of metal finishing chemicals. GWIL is producing more than 600 types of different chemicals for treating all types of metals. Every Quarter they are  coming up with new product so as enhance their customer base and market share.

The Companys plant at Jammu was completed and commercial production  started in June, 2009. Volumes are expected to improve in future. As it is situated in Jammu the manufacturing base enjoys the  fiscal benefits, which further improve the Companys  competitive edge.

Grauer & Weil (India) is expanding other chemical products capacity from 8,500 tpa to 15,000 tpa at Dadra Industrial Estate, Silvassa.

The company  had 10 acre surplus land at Kandavali Mumbai,Company decided not to sell  the land. Instead, develop it and lease the space.

With Growels 101  developing The Shopping Mall Shoppertainment  Project,  in Mumai Kandivali:

In First phase 125000 SQ FT was developed,

Out of it, 5000 s.f. is occupied by company itself, 67,000 s.f. is leased to Big Bazaar and 37,000 s.f. to Cinemax.  This space was leased at just Rs. 36/- per s.f. will come for renewal in 2010.

Second Phase of the Shopping Mall with 300000 Sq Ft has commenced Operations and is

expected to achieve full occupancy as per existing F.S.I, by December 2010.

Still around  3 Lakhs SQ FT is remaining and which is developing mall, proposed a IT Park, which will fetch more rental income.

1) Existing 1.25 lakh s.f. Currently this property is giving income of 5.50 cr. p.a.  As renewal of its rental is pending in this year, this year the rental income will be increased and more income will come.
2) 3 lakh s.f. of Phase-II when fully completed by this Dec,  should fetch annual lease rent of 20 crs.

  The income from both Phase I & II will be observed from FY Q2 onwards.

3) The  surplus land in Kandivali is used for construction from 2012 onwards. most probably an IT Park where double FSI is allowed already proposals are pending with the authorities.

When three phases of mall construction is finished, market value of entire built up space should be around  Rs 1750 crores

The 'Shoppertainment' complex developed by Growel 101 aims to become Mumbai ideal gateway for the entire family. It's unique features are:

World-class shopping and entertainment experience under one roof

Conceptualized & designed by International architects

Based on a distinctive architectural concept - captures the Italian, French and Spanish styles

An 'Open Mall' concept of connected plazas' and retail streets that provides a comprehensive shopping and entertainment experience

Lifestyle retailers, entertainment and food court, fine dining outlets and studio facilities

A complete family entertainment destination

Mall spread over 7,50,000 sq.ft area

Large parking space

Multi cuisine food court

Kids zone

Hypermarket

4 screen multiplex

GWIl has good surplus land bank and Commerical property at its chemical plant facilities in various locations of India as below:

Its manufacturing plants are as under:

·                         Dadra  Approx 8859 sq mtr

·                         Vapi  Approx 9801 sq mtr

·                         Barotiwala HP  Approx 14784 sq yards

·                         Jammu   60 Kanals

·                         Chembur Mumbai  3.5 acres.

the Management of the company settled the disputes with Sicom, Bank of Baroda and Canara Bank at the Poena bottling Limited plant, Poena bottling Limited is a subsidary of Grauer & Weil, where Grauer & Weil has 51% stake. It has 10 Acres land in Pune. where the magement decided to  develop the Pune property as an I.T. Park. Necessary plans have been filed with Pimpri and Chinchwad Municipal Corporation for their approvals. The company is hopeful to commence development of the I.T Park project during the course of the year.

 

The net  borrowings increased by Rs. 24.56 Million on account of loans to fund the Shoppertainment project. The long term Debt Equity ratio of the Company continues to be at a comfortable 0.59:1. The financial closure for the Mall Project has already achieved. But the debt will get on cleared every month due to income from rental of the mall.

At CMP , GWIL is available at extremely dirt cheap considering that company is market leader in Chemical biz and its Industrial Paint biz is also growing now. Both biz are profit-making and its Real-estate segment have HUGE value.  As company dont intend to sell surplus land or constructed space, GWIL is assured to get decent lease rent in future years to come, adding immensely to its bottomline.  Current market cap is just 185 crores although market value of constructed space on Kandivali land alone can be 1750 crores, As and when company decides to utilize its surplus land in Chembur and Pune, that will add still more to the Company market cap.

Scrip is available at a low price, Once the news about the II nd phase completion is officially announced by the management, the share price of GWIL can move sharply. As markets always react very early to the future developments of the company, We expect a Target of Rs. 120 in short to Medium term, and in the  long term this is going to a multibagger, which will  definitely multiply your money.