An EXIT To Wealth

Open offers and buybacks give a lot of scope for investors to make healthy profits if they are alert and aware of the pitfalls. But investors need to carry out their own research on the company before taking the right call. ET Intelligence Group’s Ramkrishna Kashelkar tells you how to go about it

IT will be impossible to find an investor on Dalal Street who hasn’t heard of the terms ‘open offer’ and ‘buyback’. For many, these corporate actions mean a surge in share prices and quick profits. In fact, stocks do tend to go up in most cases when an ‘open offer’ or ‘buyback’ programme is announced offering a lucrative exit opportunity to the shareholders. However, when deciding on how best to respond to them, many investors are often confused. Companies, in need of funds, raise money through qualified institutional placements (QIPs), rights issues and preferential allotments. On the other hand, cash-rich companies, utilise excess cash to consolidate their holding through open offers, buyback and delisting. These special situations offer a lot of scope for making healthy profits if an investor is alert and aware of the pitfalls.

OPEN OFFER:
Open offers have always been a preferred option for promoters and corporate acquirers and raiders to increase their stake in their firms. The Securities and Exchange Board of India’s (Sebi) ‘Substantial Acquisitions and Takeover Code’ also mandates a stakeholder to launch an open offer in certain cases. (See box: Codes Decoded)

BUYBACK:
Like dividends, buybacks are also regarded as an important mechanism through which a company rewards its shareholders. Unlike open offers, which are most often triggered by the Sebi’s guidelines, buybacks are voluntary decision by the company. Hence, it becomes necessary to check out the trigger for the company to go for a buyback.

WHY A BUYBACK?
Reasons to go for a share buyback are varied. Not all of them are published, though. A smart investor will go beyond the printed words and figures to find out if there is much more to material developments than what the company has disclosed.

Best use of capital:

A company management’s goal is to maximise shareholders’ value. If the management is unable to find lucrative enough options to deploy its funds, it is better to return the cash to shareholders. Huge unutilised cash balances tend to dampen the ratios of return on capital employed (ROCE), thereby indicating an inefficient use of capital.

Tax efficient way of returning wealth to shareholders:

Due to differential tax rates on dividend distribution and capital gains, buyback offers can be used as a tax efficient way of returning wealth to shareholders. For instance, Piramal Healthcare chose the buyback route to reward its shareholders after it sold a part of its business to Abbott Laboratories in May 2010. The company has agreed to buyback 20% of its equity at 600 each, which was at a 16% premium to the market price on the day of the announcement.

To support the share price:

An overall weak market outlook can bring down the stock price substantially.

Reaping A Rare Harvest
In such a scenario, a management may decide to support the share price with a buyback to boost investor confidence. For example, after its three buyback programmes during FY09 and FY10, Anil Ambani controlled Reliance Infrastructure has again come out with a buyback offer in February 2011 citing ‘Send a strong signal to the capital markets on the perceived under-valuation of the Company’s share price’, as one of the objectives.

To fight the impact of equity dilution:

A share buyback reduces the number of shares in circulation and hence is a great measure to fight equity dilution caused by events such as employee stock ownership plans (ESOPs) or bond conversion.

Increase promoters’ stake:

A buyback offer could be unveiled with a view to enable the promoter group to increase their stake in the company. Since the shares bought back are extinguished, those who are not participating in the offer will see their stake in the company’s overall equity going up.

The Price Detector
When it comes to open offers, the Sebi has issued guidelines to determine the minimum price at which the open offer can be made. However, there is no upper limit. According to the Sebi rules, the highest between the average prices of the past 26 weeks and the past two weeks should be considered as the minimum price for an open offer.
Buybacks are generally voluntary on the part of the company and, hence, there is no mandate on its minimum or maximum price. However, only when the company plans to delist its shares, a ‘floor price’ has to be discovered in line with the Sebi’s guidelines.
A reverse book-building process follows where retail shareholders can tender shares at any price higher than the floor price. The price at which maximum number of equity shares are tendered becomes the ‘Discovered Price’. For example, in case of a recent delisting offer by Nirma the floor price was 218, however, the final ‘discovered price’ for delisting was 19% higher at 260.
However, when it comes to how high an open offer or buyback price should go, it is the acquirer’s need and financial ability that play a key role.
For example, when JSW Steel acquired controlling stake in Ispat Industries for 2157 crore, the open offer on 23rd December 2010 came at a price which was at 13% discount to the prevailing price of Ispat. However, during February 2010 when the takeover battle for Fame India was in full swing, the open offer by Reliance MediaWorks came at a premium of nearly 64% to the then prevailing offer by Inox.
This is also true even in the case of buybacks. For instance, after the failed delisting offers by MNC subsidiaries such as Goodyear and BOC India, the delisting offer by another MNC subsidiary Atlas Copco has launched an attractive offer. The promoters indicated their willingness to buy shares at 58% premium to the discovered price of 1426. This enabled the company attract the required number of shares for delisting.

The Action Plan
An open offer or a buyback can be an exciting but temporary opportunity to make profit for investors. However, investors need to take an informed decision based on the intentions of the acquirer, the offer price and the company’s future prospects.
At the same time, keep in mind the fact that once the window of opportunity closes, the share price is likely to go back to its pre-offer levels. For example, the shares of BOC India or Goodyear fell 30-40% from their peaks on failure of their delisting offers. Similarly, the shares of Pioneer Distilleries plummeted over 50% after the open offer by United Spirits at 101 per share ended.
It is, therefore, important for investors to carry out a fundamental research on the company to identify its current fair value and expected fair value a year down the line. If the fair value in near future is likely to cross the offer price, one should hold onto his investments. It shouldn’t, therefore, come as a surprise that in four out of six open offers, which are currently on, ET Intelligence Group is recommending investors to hold onto their investments.
Another alternative for investors is to sell in the open market when the stock prices surge on news. An avid investor can actually fare much better by selling out in the market before the offer closes and covering back once the prices fall after the offer closes.

A Pitfall To Avoid
Investors must resist temptation to play the arbitrage game by buying in the open market after an open offer announcement and selling in the offer. This is risky since investors may get stuck up with a portion of their holdings, which will be worth much less in the market post-offer.
Even after an open offer is announced, the market price of the scrip tends to remain somewhat below the offer price, which one may regard as arbitrage opportunity. However, since the offer is for a limited number of shares, after the offer closes investors are likely to find themselves with a portion of their holding not accepted by the acquirer. If the market price crashes post-offer, the gains made in the offer are likely to get diluted or even negated.
For example, in case of the 2008 Ranbaxy’s acquisition by Japanese Dai-ichi Sankyo, the market price on the date of open offer didn’t reappear for nearly 28 months. If an investor had tried to buy in the open market on open offer news, she would be stuck up for long with a part of her holdings below cost. .

Conclusion
The special opportunities offered by the ‘open offers’ and ‘buybacks’ are too attractive to miss. Investors need to do their homework, resist the temptation to trade and try to estimate how things will pan out a year later to take the best call. Often, holding onto his investment, rather than taking a quick exit, could turn out to be the best strategy for an investor.

THE DISTINCTIVE FEATURES

BUYBACK
• DONE BY the company itself
• GENERALLY, the number of shares reduce after a buyback
• BUYBACK can be through open market operations or through the tender route
• BUYBACKS, are voluntary on the part of the company
• THERE is a maximum limit or ceiling up to which a company can raise its equity through buybacks during a year

OPEN OFFER
• DONE BY promoters or any other third party other than the company
• OPEN OFFERS, don't result in change in the number of outstanding shares
• OPEN OFFERS are typically through the tender route only
• IN MOST instances, open offers are mandatory rather than voluntary
• THERE is a minimum limit of 20% with no maximum limit in case of open offers

Chennai Petroleum: The Fairest Of Them All

Chennai Petroleum’s current valuations and future prospects make it a promising investment opportunity in the domestic refining sector
PUBLIC SECTOR refinery companies are witnessing a revival in investor interest following a global trend of rising refining margins. During the recent rally, most of these companies touched their 52-week peaks. Among these, standalone refineries look more attractive than integrated companies.
Standalone refiners have petroleum-refining facilities and rely on the integrated players to market and sell their products in the domestic retail market. Integrated refiners such as IndianOil (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) have refining, as well as retail marketing channels.
Due to government regulation on retail prices of major petroleum products, integrated refiners suffer from under-recoveries arising out of sales of these products. On the other hand, standalone refiners no longer need to share these under-recoveries with their integrated counterparts and this makes them more attractive in the oil refining sector.
Mangalore Refinery and Petrochemicals (MRPL), Chennai Petroleum (CPCL) and Bongaigaon Refinery and Petrochemicals (BRPL) are the listed players in the standalone refining space. To help readers find the right pick in this segment, IG did a comparative analysis of the three companies.
MRPL:Located on the western coast, MRPL, an ONGC subsidiary, is the largest among the three with a refining capacity of 12 million tonnes per annum (mtpa). The MRPL scrip has gained nearly 70% in the past one month alone. At the current stock price, MRPL’s enterprise value as a multiple of its operating profit (EV/EBIDTA) is much higher than that of the other two refiners. Also, its refining capacity is valued way higher (m-cap/refining capacity). The refinery is operating at high utilisation rates, recording nearly 106% throughput during the first half of FY08. For future growth, MRPL is expanding its capacity to 15 mtpa by ’10. Given a healthy operating performance and promising future ahead, the MRPL scrip has already run up substantially and the current valuations appear to be on the higher side compared to its peers.
BRPL: BRPL, the smallest in the lot, is IOC’s subsidiary. It has gained over 40% on the bourses during the past one month. At the current price, its stock attracts the lowest P/E compared to the P/Es of other two refineries.
As BRPL operates in the North-East, it enjoys excise duty exemption, which has enabled it to report consistently higher operating margins compared to the others. BRPL’s return on capital employed (RoCE) has also been substantially higher and it enjoys a de-leveraged balance sheet. Considering the last dividend of Rs 3.5 per share, the dividend yield works out to a neat 3.5% — the highest among its peers.
However, BRPL faces problems regarding sourcing crude oil and it has not been able to utilise its capacities fully. Another problem — and a major one — is that, BRPL is set to merge with IOC at an exchange ratio of four IOC shares for every 37 BRPL shares. This limits the upside in the scrip. In fact, at the current price of IOC shares, BRPL shareholders stand to lose around Rs 30 per share.
CPCL: CPCL has so far been a laggard on the bourses, gaining just around 24% during the past one month. Its fundamentals are healthy and its expansion plans will drive future growth. The company’s low equity base means that any profitability growth brings in a more than proportionate jump in its share price.
CPCL’s current valuations appear cheap on various parameters. Both the key valuation multiples — m-cap/net sales and EV/EBIDTA — are at the lower end compared to the other two refineries. Similarly, its refining capacity is valued very cheap.
The company’s performance has been robust historically and it has drawn up plans for future profit growth. Recently, the company commissioned a 17.6-mw capacity wind power project, which is eligible for carbon credits. CPCL is also expanding its refining capacity to 12 mtpa from the current 10.5 mtpa. The company has been continuously investing in improving its energy efficiency, as well as its product mix, which will help it to improve its margins, going forward. Relatively cheap valuations make this company an ideal choice of investment. Investors with a 12-month horizon can consider investing in it.

Jain Irrigation Systems: NURTURING HOPES

The recent dip in Jain Irrigation’s valuations appears temporary, offering long-term investors a good entry opportunity

A dampened December 2010 quarter, doubts over its new initiatives and removal from the MSCI index have brought down Jain Irrigation’s valuations recently. Globally, high food prices and the government’s focus on improving farm productivity mean the company’s future growth prospects remain intact. Long-term investors should seize the opportunity to buy into this scrip, particularly when it is available cum-bonus.

BUSINESS: From being a PVC pipes maker, Jalgaon, Maharashtra-based Jain Irrigation Systems (JISL) has come a long way to emerge as India’s leader in micro-irrigation equipment with around 50% market share.
Today, the company is totally focused on Indian farmers and produces tissue culture plants, hybrid seeds, greenhouses, solar water heaters and lanterns, among others. It has also emerged a leading processor of mangoes and onions.
In FY10, nearly 48% of its revenues came from micro-irrigation systems, 38% from PVC pipes and sheets and 14% from fruit pulps and dehydrated onions. The company’s micro-irrigation business is dependent on the government’s subsidy scheme under which more than 50% of the cost for setting up a micro-irrigation system is borne by the government. However, delays in government disbursals have resulted in bloating the company’s working capital and higher interest burden over the past few years.

GROWTH DRIVERS: The 4% annual growth target for agriculture in the Eleventh Plan period as well as high food prices have driven the government’s focus on various financial assistance schemes towards boosting productivity of the Indian agriculture. Even today, nearly half of arable land in India is rainfed. In June 2010, the government upgraded its erstwhile micro-irrigation scheme (MIS) to a National Mission on Micro Irrigation, which is expected to boost the convergence of micro irrigation activities under various other government programmes such as National Food Security Mission (NFSM), Integrated Scheme of Oilseeds, Pulses, Oil Palm & Maize (ISOPOM) etc for increasing water use efficiency, crop productivity and farmers income.
The Union Budget for FY12 also increased allocation for Rashtriya Krishi Vikas Yojana (RKVY) by 16%, which included a 15% rise in allocation for micro-irrigation to 1,150 crore. Similarly, the Budget has planned for 27% jump in farm credit at 4,75,000 crore during FY12. It also increased the interest subvention to 3% reducing the farmers’ effective cost of debt to just 4%. All these schemes are set to maintain robust demand for micro-irrigation projects in the country in the coming years.
The company is trying hard to bring down its debt burden and lower the impact of interest costs, which ate away nearly 28% of its gross profit in 12-month period ended December 2010. It is planning a $150-million preferential equity issue and setting up an NBFC, which can finance farmers for buying micro irrigation equipment in future. Apart from repaying debt and funding NBFC, a part of the amount raised will also be invested in boosting its solar equipment business. The company’s success in bringing down its debt will boost its profits in future.

FINANCIALS: The company’s net sales have grown at a cumulative annualised growth rate (CAGR) of 24.6% in the past five years, while the profit grew at 37.5%. In the December 2010 quarter, the company’s operating performance weakened due to delayed rains. The company booked 38.9 crore of VAT refunds during the quarter, in accordance with an Industrial Promotion Scheme of the state government.
The company’s debt stood at 2,200 crore as at the end December 2010 or a debt-equity ratio of 1.5. The company has a history of healthy cashflows. Its board has proposed a bonus issue of shares with differential voting rights in 1:20 proportion.

VALUATION: The scrip is currently trading at a price-toearnings multiple of 23.5, which is lower on a historical perspective. The scrip traded at an average P/E of 34.6 during 2010, at 31.9 during 2009 and at 25.6, 29.1 and 24.7 in the preceding three years. In view of the company’s continued bright growth prospects, the valuations appear attractive.

Rich Valuation May Limit Guj Gas Flare-up

The stock is now trading at 19.8 times its earnings for 12-month period in 2010

The scrip of Gujarat Gas gained 17.8% in just three trading sessions, after announcing excellent numbers for the December quarter and a hefty . 12 per share dividend. The inspiring performance was fuelled by higher gas volumes as well as increased sales price that boosted margins. However, rich valuations are expected to limit further upside in the scrip in near term.
The company’s gas volumes grew 13% to 309 million metric standard cubic meters (MMSCM) in the December 2010 quarter from 274 mmscm in year-ago period. Nearly 83% of these sales were to industrial large consumers while CNG and domestic users of natural gas made up the rest 17%.
The company, which had to resort to expensive imported LNG in the September quarter, saw its cost of raw material dropping substantially in December as the disrupted supply from the Panna Mukta Tapti (PMT) fields was restored. The cost per cubic meter in the September quarter stood at . 12.1, which dropped to . 10.9 in December 2010.
The selling price, however, was higher in December at . 16.5 per SCM compared with . 15.8 in September and . 13.8 in year-ago period. This substantially boosted the company’s operating margins, which stood at 25.1% against 19.9% in the year-ago period. The company posted a 77% jump in net profit to . 82 crore with 33% higher net sales during the December quarter to . 504.3 crore.
The company’s growth strategy is, however, mainly focused on intensive growth in its existing area of operation and extending only to immediately adjacent areas. For example, in the recent round of bidding conducted by PNGRB for seven cities, Gujarat Gas bid only for the Bhavnagar region.
It has signed a 39-month supply contract with a parent group company for sourcing 0.5 million tone of LNG per annum to meet the growing demand of natural gas in the areas it operates. As the incremental growth starts coming from the regassified LNG, the company is expected to face margin pressure.
The company remains a cash-rich debtfree company, which ended the year 2010 with . 540 crore of cash. The . 12 per share dividend that the company announced for the year will mean an outflow of around . 180 crore, which will leave the company with resources worth . 360 crore for investing in future growth. Thanks to the run-up in the past three sessions, the scrip is now trading at 19.8 times its earnings for the 12 months of 2010. The dividend yield works out to 3%. In spite of the excellent performance, the valuations appear rich, limiting further upside in the stock.

Boiling Oil May Spoil Race

The movement in crude oil prices will play a crucial role in deciding the direction of the Indian stock market says Ramkrishna Kashelkar

INDIAN stocks were battered as the civil strife in the Middle East sent global crude oil prices soaring. A minor recovery was seen since then. However, the future of Indian equities will remain clouded unless oil prices ease significantly. The anti-government protests and the civil war that broke out in Libya, which happens to be an OPEC member country with 1.58 million barrels per day (mbpd) oil production in January 2011, has forced several oil producers in the country to close the taps. Official estimates put the loss of production at somewhere between 500,000 and 750,000 barrels per day, while the actual number could be as high as 1.2 mbpd. The success of uprisings in Tunisia and Egypt has brought about a general unrest in other countries in the Middle East and North Africa. This has created a general fear about a similar situation in other countries, choking off the world's oil supply in the near future.

WORLD IN SHORTAGE
At present the global petroleum industry is well geared to absorb this unexpected fall in oil production caused by problems in Libya. International Energy Agency (IEA), for example, mentioned, “collectively, the IEA members have 1.6 billion barrels of emergency oil stocks at their disposal, or in aggregate 145 days of import cover for IEA members.” Founded in response to the oil crisis of 1973, IEA has 28 industrially advanced countries as its members.Similarly, the 12-member countries of Organisation of Petroleum Exporting Countries (OPEC) together hold a spare capacity of 5.19 mbpd, which can come on stream on short notice. Overall, the markets remain well supplied and there are indications that the demand-supply mismatch of the last quarter of 2010 is not likely to continue. The US, for which the latest data is available, saw 11 million barrels addition to inventories during January 2011.

RISK TO GLOBAL ECONOMY
High crude oil prices, if the trend continues, pose a significant risk to global economic recovery. According to IMF’s estimates, the global economy grew by 4.8% in 2010 and is expected to grow at 4.3% in 2011. However, the fiscal health of the world’s leading economies, be it the US, the UK, European Union or Japan, remains fragile. High oil prices can increase overall production costs, leading to inflationary pressures, which can derail the recovery process. International Energy Agency has warned of this danger repeatedly in the past with the help of ‘oil burden’ concept. Oil burden is defined as nominal oil expenditure divided by nominal GDP. “A sensitivity analysis for 2011, holding GDP and oil demand constant, indicates that, at current prices of around $90 per barrel on WTI, global oil burden is rapidly approaching the 2008 ‘recession threshold’,” wrote IEA in its monthly update published on February 10. Since then, WTI prices have scaled up beyond $100.

INDIA’S WOES
Despite being a major energy importer, India lacks any structured policy towards ensuring energy security in the times of crisis. Unlike countries like the US, China or Japan, India has not built any significant capacity to store strategic reserves. The country’s three such projects are substantially way off the schedule. India’s net petroleum imports stood at 122.9 million tonne in FY10, which cost $58 billion. During the first 11 months of FY11, the country's net petroleum imports stood at 102.2 million tonne or around $70 billion. This doubled India’s current account deficit in the first half of FY11 to $27.9 billion and is likely to reach 3% of GDP for FY11 from 2.8% last year. This means the country is increasingly dependent on foreign capital inflows to maintain the strength of its currency. A reversal in capital flows, particularly in the portfolio investments, could end up weakening the rupee. On top of this, the problem of fiscal deficit is set to worsen as the government tries to act as a shock absorber between the market gyrations and the domestic consumers. For FY11 alone, the oil sector’s under-recoveries are expected to be around 1,00,000 crore, which
is likely to push government’s oil subsidy bill beyond 40,000 crore. If the current situation continues, each spurt in oil prices is bound to make global investors jittery on the rupee’s strength and future of India’s public finances. The future movement in crude oil prices, therefore, will play a crucial role in deciding the direction of Indian stock markets.

CONCLUSION
One cannot deny the fact that it is rising demand that is leading to higher crude oil prices over a period of time. However, at times the movement in oil prices turns out to be erratic. The spurt in oil prices of 2007-08 proved too sharp for many economies to absorb, which resulted in a global economic recession in 2009. A clear danger looms large that a similar scenario could play out in 2011 also. Whichever way you look at the developing scenario, the outlook for Indian equities doesn't appear encouraging.

JAIN IRRIGATION: Stalled Fund Flow Takes a Heavy Toll

The stock has slumped on delayed subsidy payments, but looks attractive now as the company has moved to contain the fallout

Jain Irrigation's woes are not over yet as the sharp fall in its December 2011 quarter profits showed. However, its efforts to curb the rise in receivables are showing some results. Besides, initiatives such as a thrust on exports, setting up of an NBFC etc will enable it to get back on track in another couple of quarters. The worst seems to be over for the stock. 

BUSINESS India's biggest micro-irrigation systems (MIS) maker has been in trouble for the last couple of quarters as its receivables shot up on delays in government's subsidy payments. MIS, which make up nearly half of Jain Irrigation's revenues, are eligible for capital subsidy from the central government. However, with the government delaying payments, Jain Irrigation's working capital cycle has stretched to unmanageable levels.
Its outstanding debtors doubled between March 2010 and September 2011 increasing working capital investments by 60%. The company lost more than half its value on the bourses in 2011 for its inability to curb receivables.

GROWTH DRIVERS The December quarter results reveal that the company is going slow on sales of MIS to protect its balance sheet. Its MIS sales grew just 10.5% in the December quarter. This reduced its net working capital cycle by 12 days to 178 days in the December quarter. The company's PVC pipes business is doing quite well. It grew 36% y-o-y in the latest quarter thanks to healthy retail demand and exports to Africa. The company is also focusing on exports to drive its growth. It is targeting exports of $100 million in FY13 from just around $15 million in FY12. Next year it will also see its international subsidiaries contributing.
The company has approached RBI for a licence to operate a non-banking financial company (NBFC) - something that can address its working capital issue. The company hopes to obtain the licence within six months. 

FINANCIALS The company's profitability in the last two quarters was hit by mark-to-market losses on its $157-million outstanding loans. The losses stood at 59.3 crore in the September quarter and 71.1 crore in the December quarter. However, these mainly remain non-cash adjustments. The main source of pain was the interest cost, which at 250.6 crore for the nine months ended December 2011 was up 58% against the year-ago period. The net profit in the same period almost halved to 95.2 crore. 

VALUATIONS The company recently issued bonus shares with differential voting rights (DVR) in the ratio of 1:20. On an expanded equity base it is trading at a P/E of 21.3. However, sans the forex losses its profits in coming quarters will get a boost.

CASTROL INDIA:Growth On, Rising Oil Prices the Only Worry

Lubricants maker Castrol India has had another year of robust growth. Its net profit grew 28.7% in 2010, on the back of an 18% growth in sales. Amid rising oil prices, the company managed its costs well to improve the operating margins to a historical high. With strong investment in brand-building, rising oil prices could possibly be the only concern for its future growth.
Castrol’s operating profit margin at 26.7% for 2010 was better than the 25% in 2009 and, in fact, the best-ever in its history. This was made possible by a 7.8% reduction in staff cost and 3% dip in other expenses. The company has been trying to shift demand for its high-efficiency synthetic oil-based lubricants, which boosted margins. After years of stagnancy, it registered a 7% growth in volume in 2010 mainly due to an increase in the number of automobiles on the roads.
Nearly a quarter of the company’s revenues come from agricultural applications such as tractors. This has resulted in some seasonality in its sales. Its June quarter typically witnesses higher revenues, profits as well as margins. The company has been trying to lower the cost of raw materials. Earlier, the costs were 60% of net sales on an average; they were brought down to below 50% in 2009. In 2010, the costs inched up to 50.5% of net sales due to the rising oil prices.
The expense on brand-building and advertising remains the second-largest cost for the company. In 2010, it spent . 162 crore on advertising, up 8.6% from the previous year. Recently, the company entered into a fiveyear sponsorship deal with the International Cricket Council, tying up as its Official Performance Partner. This is not expected to push up the company’s advertising budget significantly. The company ended the year with a cash pile of . 619 crore, 17.8% more than in last December. Its annual capex remains at just around . 25-30 crore, and considering its final dividend of . 8 per share, which will use up another . 225 crore, the company will be left with over . 300 crore of unutilised cash.
The scrip is trading at a priceto-earnings multiple of 20.6.
The company expects decent volume and revenue growth in 2011. It is poised to maintain its steady growth in future, too.