GRAUER AND WEIL -- ?HIDDEN VALUE

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Topic: GRAUER AND WEIL -- ?HIDDEN VALUE

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Rehan
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Joined: 19/Sep/2009
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Posts: 286

Posted: 04/Apr/2010 at 9:13am

Originally posted by excel_monkey

Originally posted by Rehan

This one looks interesting. If no more debt is required for the mall expansion business , then this business itself should start giving approx 15 Rs EPS ( 5-6 crores X 6.5 = 30-35 Crores/ 22 (Equity) = approx 15). Adding tho this existing EPS of 10 , total turns out to be 25 Rs. Major part of the income will be from lease which is a very safe and secured income which should give it much higher PE. Current price of 67 is discounting this EPS by around 2.7 times.

Any flaw with this work out ????

A lot could go wrong
the mall could not succeed because of competition from the likes of Oberoi Mall which is located close by and is already a successful mall

photophobic I have no idea about their chemicals business

I agree a lot can go wrong in any business. Competition if at all can only cause a dent in the lease rates . I think the organised retail push in India may help keep the rates stable if not higher. Even if there is a good mall nearby , I dont think it can create such a big problem . It may work out in its favor as well. It certainly will depend on how it is managed and the ambience they provide for the customers.

Going by the current rentals is what I said the stock looks attractive .

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Market Maniac
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Joined: 22/May/2010
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Posted: 23/May/2010 at 3:37pm

Brothers please note - G&W is taking a lot of debt to construct the mall. It will have to service it @ 12% (or even more)

Now commercial lease rental yields are <4%

So there is a negative carry. Actually the other business will end up paying for it.

I dont think there is any dispute that the Promoters are incompetent and insincere. Bombay paints was in BIFR.

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excel_monkey
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Posted: 23/May/2010 at 6:36pm

Originally posted by Market Maniac

Brothers please note - G&W is taking a lot of debt to construct the mall. It will have to service it @ 12% (or even more)

Now commercial lease rental yields are <4%

So there is a negative carry. Actually the other business will end up paying for it.

I dont think there is any dispute that the Promoters are incompetent and insincere. Bombay paints was in BIFR.

The 12% they will pay would be on the construction cost (borrowed amount) where as the rental yield is calculated on the estimated market value which would be a lot higher (as the land is free) than the construction cost

hence it should be positive on net level

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Jaishrikrishna
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Location: India
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Posted: 23/May/2010 at 6:46pm

yes, they have taken debt for construction of the mall, Here is the latest right from the spot, They have rented all the space to corporate brands, and the mall will be starting any time soon, they have made a tie up with the bank from where they have taken the loan, what they have done is initially say for atleast 1.5 to 2 yrs, part of the deposit and rent will directly deposited in the loan account, so that means there will be no stress on the balance sheet, indirectly we will not find any income from operations, and if there will be it will go to the bank, the actual story or say income or cash flow will generate only after a period of 2 yrs, but for that one has to be patient, this is what i have learnt till now, will update more after meeting the management staff.

Don't Buy and Hold, Buy and Homework / Fish see the bait,but not the hook; Men see the profit, but not the peril.

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excel_monkey
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Posted: 23/May/2010 at 4:35am

Originally posted by Jaishrikrishna

yes, they have taken debt for construction of the mall, Here is the latest right from the spot, They have rented all the space to corporate brands, and the mall will be starting any time soon, they have made a tie up with the bank from where they have taken the loan, what they have done is initially say for atleast 1.5 to 2 yrs, part of the deposit and rent will directly deposited in the loan account, so that means there will be no stress on the balance sheet, indirectly we will not find any income from operations, and if there will be it will go to the bank, the actual story or say income or cash flow will generate only after a period of 2 yrs, but for that one has to be patient, this is what i have learnt till now, will update more after meeting the management staff.

Jaishrikrishna
thanks for the info
what kind of income they are expecting to generate from the mall?

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Jaishrikrishna
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Joined: 06/Sep/2008
Location: India
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Posts: 1132

Posted: 24/May/2010 at 5:39pm

Growels mall at kandivali - east ,floor wise details /sq ft for ground + 3floors

(MIND U THIS SURVEY IS ONLY FOR PHASE II, AND PHASE III WILL START LATER IN NOVEMBER WHICH AS MENTIONED BY SALES HEAD THAT THEY HAVE GIVEN IT TO SHOPPERS STOP, THEY HAVE STARTED GIVING POSSESSIONS IN CURRENT PHASE AND THE MALL WILL START ANY TIME SOON FULL FLEGED.)

Ground , first, second are for retails and third is food court and ampi theatre

Agreements confirmed and fitouts have started by Pantaloons, Mcdonalds,Dominoz,Reliance jewels, Reliance foot prints,Linc Pens,Spykar,Madamme, Enrich,Croma,Celio,Mochie,UCB,Kwality Dairy,Esbeda,Tanishq,Hidesign,Provogue,Peter England,Roxton,Reebok,Planet Sports,Fab india,Bibas,Jashn,Evok,Ashmima,Global desi, Al kabab, China town, Golden Chariot, sayonara, Time Zone, Origin.

I got hold of the maps floor wise so chalked out the following:

As per what they said that the rents / sq.ft are different for each floors.

LEVELS	FLOOR	RATE/SQ.Ft
0	GROUND	125
1	FIRST	110
2	SECOND	100
3	THIRD	80

Not believing in them we will take a conservative side that is 75 Rs PER SQ/FT.

LEVELS	FLOOR	RATE/SQ.FT.	AREA / SQ.FT.	Nett Amount
0	GROUND	75	110670	8300250
1	FIRST	75	75680	5676000
2	SECOND	75	74451	5583825
3	THIRD	75	44970	3372750
				22932825

This is the monthly Rent we can expect 22932825.

This is the annual Rent we can expect 275193900

Once the Phase III is complete, The additional income will get generated.

I hope this due diligence is upto satisfaction.

RGDS,

JAISHRIKRISHNA.

Edited by Jaishrikrishna - 28/May/2010 at 4:12pm

Don't Buy and Hold, Buy and Homework / Fish see the bait,but not the hook; Men see the profit, but not the peril.

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excel_monkey
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Joined: 17/Nov/2009
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Posted: 25/May/2010 at 9:07pm

excellent work Jaishrikrishna
Guys like you maintain the quality of TED

Edited by excel_monkey - 25/May/2010 at 12:40pm

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Jaishrikrishna
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Joined: 06/Sep/2008
Location: India
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Posts: 1132

Posted: 28/May/2010 at 4:10pm

Grauer & Weil India net profit declines 68.91% in the March 2010 quarter

Sales rise 27.73% to Rs 67.99 crore

Net profit of Grauer & Weil India declined 68.91% to Rs 1.34 crore in the quarter ended March 2010 as against Rs 4.31 crore during the previous quarter ended March 2009. Sales rose 27.73% to Rs 67.99 crore in the quarter ended March 2010 as against Rs 53.23 crore during the previous quarter ended March 2009.

For the unaudited full year, net profit rose 27.84% to Rs 16.07 crore in the year ended March 2010 as against Rs 12.57 crore during the previous year ended March 2009. Sales rose 13.01% to Rs 246.96 crore in the year ended March 2010 as against Rs 218.53 crore during the previous year ended March 2009.

Particulars	Quarter Ended			Year Ended
	Mar. 2010	Mar. 2009	% Var.	Mar. 2010	Mar. 2009	% Var.
Sales	67.99	53.23	28	246.96	218.53	13
OPM %	12.10	10.95	11	14.16	11.66	21
PBDT	6.10	3.71	64	25.93	17.53	48
PBT	4.93	2.61	89	21.68	13.49	61
NP	1.34	4.31	-69	16.07	12.57	28

LOOKING AT THE FINANCIAL RATIOS OF F.Y.09, THE CO. HAS AROUND 67/- OF FREE RESERVES PER SHARE, ALSO THE PROMOTERS HOLDING HAS GONE UP, THANKS TO THE MERGER OF BOMBAY PAINTS.

LOOKING AT SEGMENT WISE REVENUES AND P/L , THE FIGURES ARE AS FOLLOWS:

CHEMICALS: 182 CRS V/S 157 CRS. OP.PROFIT UP FROM 27.64 CRS TO 34.83 CRS.

ENGINEERING: 14.24 CRS V/S 21.94 CRS. OP. LOSS DOWN FROM -2.71 CRS TO -1.11 CRS.

SHOPPERTAINMENT : 5.62 CRS V/S 5.44 CRS. OP PROFIT UP FROM 2.77 CRS TO 3.13 CRS.

PAINTS: 46.46 CRS V/S 39.63 CRS. OP. PROFIT UP FROM 2.35 CRS TO 3.95 CRS.

INTEREST OUT GO WAS: 9.44 CRS V/S 8.65 CRS.

IT WILL BE REALLY INTERESTING TO SEE THIS YEAR’S A.R. AND WHAT DOES THE MANAGEMENT SAYS.

Don't Buy and Hold, Buy and Homework / Fish see the bait,but not the hook; Men see the profit, but not the peril.

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