Expect FY15 revenue growth at 12-15%: VIP

Travel and marriages are the two key factors that impact VIP  sales; and 2014 looks promising owing to a high number of marriage mahurats, says company chairman Dilip Piramal.

Speaking to CNBC-TV18's Sonia Shenoy and Latha Venkatesh, Piramal says about 40 percent of the company's profits are generated in the first quarter of the year due to more number of travel tours and marriages. He expects revenue growth at 12-15 percent this fiscal.

Also read: Contained costs in Q3; focus now on existing brands: VIP

On the possibility of a price hike, he adds that the company hikes product prices once a year, depending on the input costs. "As of now, things look steady," says Piramal.

Below is the edited transcript of the interview.

Sonia: Last time we spoke with you it was during your earnings and it was a very good set of numbers that the company had reported. Big beat on the margins as well because of the declining raw material cost. However, going forward can you just give us some triggers for the business both in terms of volume growth as well as in terms of margin growth that you foresee?

A: The two main drivers of our business are marriages and travel because we make luggages. In India, marriages are very large opportunities for products like ours. Marriages are ruled by auspicious dates, etc. Last year the season wasn't so great but this year, there are a lot of mahurats right up to June. So, April to June is the main season for marriages as well as for travel and hence our first quarters always are very strong quarters; the strongest quarter of the entire year.

This first quarter of calendar year 2014 is also very good so we see a very good run this year as well as in the whole of 2014-2015 because that sets a trend. If the first quarter is good, we make nearly as much as 40 percent of our profits in the first quarter. So, the outlook looks quite good. Travel is not as buoyant as the marriage season this year but travel should be good.

Latha: Would you say that you will maintain a 15 percent run rate in terms of revenue growth for the year, would it be 20 percent and how would EBITDA grow because last year or even last quarter the EBITDA growth was fairly sterling probably because of lower raw material costs. So, what kind of an EBITDA number can one look at for FY14 and FY15 more importantly?

A: We are keeping our fingers crossed because FY14 is nearly over now. However, for FY15 if we are able to maintain the figures that we did in the last quarter, we will be quite happy. I don't think we will be able to do 15 percent. That will be very good but I think about more like 12-13 percent is likely.

Our EBITDA and our net profit is virtually the same. The profit before tax and EBITDA is nearly the same because we hardly have any interest and our depreciation is also not all that high.

Latha: Would you say that you will maintain a 15 percent run rate in terms of revenue growth for the year, would it be 20 percent and how would EBITDA grow because last year or even last quarter the EBITDA growth was fairly sterling probably because of lower raw material costs. So, what kind of an EBITDA number can one look at for FY14 and FY15 more importantly?

A: We are keeping our fingers crossed because FY14 is nearly over now. However, for FY15, if we are able to maintain the figures that we did in the last quarter, we will be quite happy. I don't think we will be able to do 15 percent. That will be very good but I think about more like 12-13 percent is likely.

Our EBITDA and our net profit is virtually the same. The profit before tax and EBITDA is nearly the same because we hardly have any interest and our depreciation is also not all that high.

Latha: Will you maintain these 8 percent margins?

A: I think we should maintain that.

Latha: Are you noticing any kind of demand resistance for your higher costing products?

A: Surprisingly, it is not so. In the last quarter, we have had very good sales in all are categories; both in the higher as well as in the economy sections. I think that is because we have been bringing out very good products.

We have also been making efforts to see that the areas where we were traditionally not very strong like backpacks and all we are making efforts to bring out new products and new distribution also there. So, that should give us good sales growth. That has already contributed to our sales growth in the last two to three months.

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May hike Mundra utilization post CERC order: Tata Power

At a press conference, the firm's managing director Anil Sardana said customers would gain from the CERC compensatory tariff but added that cost of power for the producer still stood at Rs 4 per unit, or below the market price.

Tata Power  may increase the utilization at its Mundra plant from the current 80 percent after the Central Electricity Regulatory Commission ordered an increase in the tariff it charges to sell power.

Last week, the electricity regulator allowed for a 54 paise increase to Rs 2.90 per kWh after the company had raised concerns about the cost of coal imports rising steeply.

At a press conference, the firm's managing director Anil Sardana said customers would gain from the CERC compensatory tariff and added that cost of power for the producer still stood at Rs 4 per unit, or below the market price.

Talking about Tata Power's financials, Sardana said its interest cost burden had increased to Rs 250 crore per year because of foreign exchange variations.

At the end of March 2013, the company had a consolidated debt of Rs 36,655 crore, nearly three times its net worth of Rs 12,326 crore.

Tata Power stock price

On February 26, 2014, at 14:10 hrs Tata Power Company was quoting at Rs 79.90, down Rs 1.05, or 1.3 percent. The 52-week high of the share was Rs 102.45 and the 52-week low was Rs 68.25.

The company's trailing 12-month (TTM) EPS was at Rs 4.51 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 17.72. The latest book value of the company is Rs 51.67 per share. At current value, the price-to-book value of the company is 1.55.

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Polaris dismisses reports, says not for sale

US-based Fiserv is in talks to acquire Polaris , sources told CNBC-TV18 adding that due diligence is in final stage and valuation is being worked out.

With reference to the news item " US-based Fiserv in talks to acquire stake in Polaris ", Polaris Financial Technology  has clarified to BSE as under.

"During our 3rd Quarter results in January 2013, the Board of Directors authorised the Management Team to explore options that would provide an impetus to the company for the next stage of its growth. The context was around leveraging untapped potential in our growth engines i.e. Services, Products and the canvas of opportunities that are available to us as a leading Specialist in the global Financial Technology arena.

In line with the stringent Governance principles the company follows, stakeholders have been updated on progress. As announced, the major legs of the restructuring process have been completed last quarter in Q3 2014.

With its singular focus on Banking & Financial Technology for over 2 decades, Polaris has built very robust and comprehensive assets to spearhead transformational projects for the BFSI vertical.

The restructuring exercise has been misconstrued by a certain section of stakeholders with repeated mention of possible sale. Despite the company clarifications, these rumours continue to surface, impacting customer relationships, distracting Management and employees.

Polaris is not for sale. The company is poised to leverage its rich assets in banking and technology to accelerate growth of its two distinct businesses - Products (Intellect) business and IT Services business."

Polaris Tech stock price

On February 26, 2014, at 14:10 hrs Polaris Financial Technology was quoting at Rs 162.80, up Rs 18.35, or 12.70 percent. The 52-week high of the share was Rs 164.90 and the 52-week low was Rs 96.10.

The company's trailing 12-month (TTM) EPS was at Rs 12.13 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 13.42. The latest book value of the company is Rs 109.26 per share. At current value, the price-to-book value of the company is 1.49.

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Expect margins to rise atleast 200 bps in 2014-15: Jagran

Jagran Prakashan aims revenue growth of about 13-14 percent for FY15.

I expect around 2-3 percent bump maybe next year

RK Agarwal

CFO

Jagran Prakashan

RK Agarwal, CFO,  Jagran Prakashan expects improvement in ad growth in the range of about 12-13 percent for FY14. He, however, does not see margins improving in this quarter as compared to Q3 but expects them to do better by atleast 200 basis points in 2014-2015.

Jagran Prakashan aims revenue growth of about 13-14 percent for FY15.

Also Read: Elections may push up ad revenues in Q4: Zee Ent

Below is RK Agarwal's interview with Ekta Batra and Reema Tendulkar of CNBC-TV18.

Ekta: What incremental upside do you expect from elections in terms of print revenues coming for Jagran and would Q4 of this fiscal and Q1 of FY15 show an incremental upside on advertising revenues because of that?

A: General elections are beneficial for us, no doubt about that. As far as bump is concerned, I expect around 2-3 percent bump maybe next year.

Reema: In FY15 with this election increasing your ad revenues by about 2-3 percent, what could be the ad rate growth in FY15?

A: Current year, which is ending in next one month, is far better than previous year. We will improve our ad growth rate which is going to be in the range of about 12-13 percent for the current year.

Ekta: What about the margins? You did 24 percent in the previous quarter, how much better can you do in this quarter in particular?

A: In this particular quarter our margins may not be better than Q3. However, going forward, in 2014-2015 we expect margins to be better by at least 200 basis points.

Reema: What could be the revenue growth expectations for FY15?

A: Revenue growth should be in the range of about 13-14 percent.

JagranPrakashan stock price

On February 24, 2014, Jagran Prakashan closed at Rs 88.30, up Rs 0.95, or 1.09 percent. The 52-week high of the share was Rs 103.55 and the 52-week low was Rs 77.90.

The company's trailing 12-month (TTM) EPS was at Rs 6.43 per share as per the quarter ended December 2013. The stock's price-to-earnings (P/E) ratio was 13.73. The latest book value of the company is Rs 27.71 per share. At current value, the price-to-book value of the company is 3.19.

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ADAG to enhance investment in MP

ADAG Chairman Anil Ambani informed that the 4000 MW Sasan's UMPP set up at an investment of Rs 30,000 crore will be completed soon and the group plans to invest an additional Rs 15,000 crore in the project, sources said.

The Anil Dhirubhai Ambani Group (ADAG) will enhance its investment in Madhya Pradesh in the next few years taking the total investment to around Rs 50,000 crore. ADAG Chairman Anil Ambani who arrived here today for a breakfast meeting with Madhya Pradesh Chief Minister Shivraj Singh Chouhan at the latter's residence told him that his group has already invested Rs 30,000 crore in the state, official sources said.

He informed that the 4000 MW Sasan's UMPP set up at an investment of Rs 30,000 crore will be completed soon and the group plans to invest an additional Rs 15,000 crore in the project, sources said. He also said that his group would invest Rs 6,000 crore to set up a five metric tonne capacity cement plant in Maihar, besides a 4000 MW power plant in Chitrangi, investing Rs 2,000 crore, sources said. 

Madhya Pradesh Chief Secretary Anthony J C DeSa, Principal Secretary to the Chief Minister Manoj Shrivastava and Energy Secretary Mohammad Suleiman were present on the occasion. After nearly a 45-minute long meeting at the Chief Minister's residence, Anil Ambani left for the airport, the sources said. Meanwhile, Madhya Pradesh Energy Minister Rajendra Shukla congratulated the Sasan power project's management for generating power from 660 MW Unit-2, from January 28.

Madhya Pradesh will receive 233 MW of power from the project this year at a levelised tariff of Rs 1.19 per unit, an official release said. The Sasan UMPP is a coal-based power project with a total capacity of 3960 MW. PTI MAS BA PMS JMF

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Honda Amaze is 2014 CNBC TV-18 Overdrive Car of the Year

The Amaze is Honda's answer to the Maruti Swift Dzire. Designed while keeping Indian tastes and duty regulations in mind, the Amaze has ever since been spearheading Honda's revival in the Indian market.

Honda Amaze has edged the Ford EcoSport and the Hyundai Grand i10 to bag the 2014 CNBC TV-18 Overdrive Car of the Year Award.

The Amaze is Honda's answer to the Maruti Swift Dzire. Designed while keeping Indian tastes and duty regulations in mind, the Amaze has ever since been spearheading Honda's revival in the Indian market.

Also Read: Bajaj Auto introduces new four wheeler for personal use

The Amaze is also Honda's first diesel car in India. Its 100PS 1.5-litre i-DTEC engine is a marvel and has a smooth and linear power delivery.

It also has the highest fuel efficiency in its class. The petrol engine is the familiar 1.2 i-VTEC from the Brio and isn't short in performance either.

Class leading cabin space and an overall strong feature list makes the Amaze the 2014 CNBC TV-18 Overdrive Car of the Year.

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Mumbai’s marque properties see pick up in activity

Mumbai's property market, which has been reeling under pressure, saw a pick up in activity in the marque residential properties. The prime properties are up for grabs, with a starting price of Rs 50 crore, going all the way to Rs 120 crore.2013 was a year most real estate developers would want to forget.

Also Read: SC frees pvt forest land for realty deals; Oberoi in focus

One of the biggest casualties was the Mumbai property market. While prices may not have crashed the way they did in the 1990s, the realty sector was hit badly with a massive slowdown in sales. Developers so far have refrained from correcting prices and that has kept buyers at bay.

According to real estate rating agency Laisas Foras, the unsold inventory could take as long as 58 months to clear and that is the highest in over eight years. However, simultaneously a very interesting trend was spotted. Mumbai's high-end market is suddenly witnessing higher traction.

Marque residential properties in India's commercial capital are being sold and for a variety of reasons. Corporates and MNCs are cashing out of their guest houses and accommodation meant for top company honchos. This is due to the fact that most corporates are moving headquarters from South Mumbai to Bandra Kurla Complex (BKC) and other locations in the city like Andheri, Worli and Lower Parel.

For instance, Hindustan Unilever (HUL) decided to sell prime apartments in 2013. The iconic Cadbury House located in the heart of South Mumbai had also got a new owner in 2013. It was sold for a jaw dropping Rs 350 crore to a diamond merchant, Dilipkumar Lakhi.

High Networth Individuals (HNIs) have also decided to sell their prime properties. For instance, the famous Kamal Mahal at Carmichael Road. The property, in the past, had been the home of the Ambani's and the Godrej family. It is learnt that a 3-BHK here has been put on the block for Rs 65 crore. Mayur Mahal at Juhu Tara Road is also up for sale for a whopping Rs 120 crore.

It is believed Bollywood stars Priyanka Chopra and Hrithik Roshan are in the running to buy this property. Mayur Mahal has five bedrooms and is spread across 1,880 square meters.There are other high-end properties also that have recently gone up for sale -- a 3-BHK in Breach Candy for Rs 30 crore and a 6-BHK in Peddar Road for Rs 53 crore.

Monal Jalota, chief associate – International Project Marketing, Knight Frank India, said: "The trend we are by and large noticing in the Mumbai residential market is for high-end properties and it is both for disposition and acquisition. The trend for disposition or sale is generally with a large MNCs and corporates who had an existing portfolio of properties which now no longer seems feasible to them because usually these properties are used to house the expat employees or the senior management or overseas employees."

"Also, the head offices of most of these MNCs have now shifted base from Nariman Point or earlier popular areas to Central Mumbai, Lower Parel, Bandra, etc. So, there has been a gradual shift that we have seen in MNCs preferring to buy – dispose off their current assets and then reinvest in assets which are more feasible for them at this point," she added.

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Suburban developers will benefit from SC ruling: Jones Lang

Mumbai realty companies have been gaining ground as a Supreme Court order frees private forest land in the city for real estate projects . Most of these projects in the suburban areas of Vikhroli and Mulund have been stuck since 2006 when Brihanmumbai Municipal Corporation or BMC issued stop-work notices.

The new ruling will make way for more than 100 real estate projects. Anuj Puri, chairman and country head of Jones Lang LaSalle (JLL) spoke to CNBC-TV18's Menaka Doshi and Senthil Chengalvarayan on what is the picture like for these Mumbai realty companies going forward.

Below are the excerpts from the interview

Menaka: Adi Godrej said that this decision will have a favourable impact on 133 acres of Godrej land and we are told that this will also help overall realties, Mulund project which is about 3.3 million square feet estimated at sales of Rs 4,000 crore. These are the two big projects that will benefit from this decision. Would you like to add to that list or have we got it right?

A: There are several other developers who may not be listed but other suburban developers who have got many projects and many of the other unlisted developers had gone ahead and sold their projects and many of them were halfway under construction. So, it's great news for developers listed and for the developers who are not listed but have got the permission. It is even greater news for the investors or the home buyers, who had gone ahead and bought those apartments, made part payments and then suddenly in 2006, because of the stop in construction, they were stuck for seven years with having made part payment on those projects.

The euphoria is a lot more on the end users and the investors who had gone ahead and bought many of these apartments in these projects. They are delighted that the Supreme Court ruling has come as a result of which the builder will now be able to complete the construction.

Menaka: What kind of positive impact will this have at least on the listed companies and in terms of Oberoi Realty , we understand that this project should now contribute to about Rs 1200 crore to its net asset value ( NAV ). Have you done any number crunching on how this will help the company?

A: If you look at the pricing within Mulund, its anywhere between Rs 12,000-13,000 square foot, a project like Oberoi at a premium will be closer to Rs 13,000. If you were to multiply 3.3 million square foot times 13, is what the total revenue will come out of that project. There is a cost of construction and there is a land acquisition cost that has gone in.

The cost of construction will be about Rs 4,000 and so, the net profit will be about Rs 9,000 barring the land cost. Around Rs 9,000 times 3.3 is what the profit will be – this needs to be adjusted for the land cost. So, it is a highly profitable position where Oberoi currently is sitting, having got the permission from the Supreme Court.

Senthil: Godrej said that they have 133 acre in Godrej Boyce, which is an unlisted company but Godrej Properties will develop it and get 10 percent fee, any idea on 10 percent of how much will that 133 acre yield for Godrej Boyce?

A: The selling price in that area is but very difficult to find, what will be the total stock on 133 acre that will be constructed.

Senthil: Any ballpark?

A: It will be around Rs 16,000 to Rs 18,000 as a sale price times 10 percent and 2 percent of that is cost so it will be Rs 16,000 times 8 percent is what the net profit will be. The only variable to that is how much they would be able to construct. So, when I say Rs 16,000 that is per square foot. The question mark will be - what is the total size of the development that they will be able to develop at the site.

Senthil: What will this mean to prices in other parts of Mumbai and will that be bad news for listed companies that have ongoing projects in rest of Mumbai?

A: There will be a lot more supply that is going to come up. From an end user investor point of view, apart from those who have already invested in the scheme, will now get their own house equally and it is great because there is more supply that will come up and hence, the pressure on pricing will continue in the eastern suburb of Mumbai.

Listed companies that have projects there and if they were hoping that they will be able to increase the price, given that market had become very constraint, their assumption on that may be wrong and their ability to increase the prices will not be there because a huge amount of supply that is going to come up.

As I said, a good news from a consumer point of view but perhaps not so good news if you are a developer and you have already got a scheme going in the eastern suburbs that has been launched and the developer was thinking that he will start increasing the price given the supply constraint.

Menaka: Were there any listed companies on that bad news list?

A: Not as many listed companies in that area. Mumbai also doesn't have too many listed developers unlike Bangalore and Delhi, Mumbai is restricted on the number of listed companies in the real estate play.

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