Final Project for Marketing Puneet

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    Table of contents:

    Executive Summary 2

    Company profile3

    Business overview3

    Competitor analysis4

    Financial structure6

    y Balance sheet

    y Cash flow statement

    y Financial Ratios

    Weighted Average Cost of Capital

    Project analysis

    Risk and Risk Management

    Net Present Value

    Quarterly Project Report Format

    EXECUTIVE SUMMARY-

    This assignment deals with the company Reliance infrastructure Limited financial

    information. There is a complete description of the balance sheet and the financial ratios

    to analyze the financial structure of the company. Weighted Average Cost of Capital is

    also calculated to show the financial position of the company. This coursework also

    contains the project analyzes on one of the project of company. I, as a manager have

    gathered the financial information of the project by its financial information analysis by

    calculating Net Present Value (NPV) and also have described the methods to deal with

    the risk the project. This coursework also contains the format of the quarterly report

    prepared by me which has to be send to the company. For the analysis of the project,certain assumptions have made which are clearly mentioned. The coursework is solely

    completed by self.

    Answer 1

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    Reliance Infrastructure Ltd

    BSE: 500390 | NSE: RELINFRA | ISIN: INE036A01016

    Market Cap: [Rs.Cr.] 27,814 | Face Value: [Rs.] 10

    Industry: Power Generation And Supply

    Company Profile

    R-Infra, originally named Bombay Suburban Electric Supply Limited (BSES), was incorporated in the year 1929.The company has been in the power distribution business for nearly eight decades and today, it is a fully integratedutility engaged in the generation, transmission and distribution of electricity. R-Infra generates 941 MW ofelectricity through its power stations located in Maharashtra, Andhra Pradesh, Kerala, Karnataka and Goa, anddistributes power in the Mumbai and Delhi areas spanning over 1,24,300 sq. kms.R-Infra has also emerged as a leading player in India in the Engineering, Procurement and Construction (EPC)segment of the power sector. The company has also forayed into the infrastructure business and has undertaken thedevelopment of the Mumbai and Delhi metro rail projects and various road projects of the National HighwaysAuthority of India.

    Business Overview

    Power Business EPC Business Infrastructure

    businessGenerationTransmissionDistributionTrading

    Power sectorRoad sector

    RoadsMetrosAirportReal Estate

    Competitor analysis

    Top infrastructure companies of India

    1. HCC Infrastructure: HCC Infrastructure Ltd. is a wholly owned subsidiary of

    HCC Ltd with infrastructure projects in the transportation (viz, roads, bridges,ports, airports). Mainly operating through the public-private partnershiproute, this player has huge scope. Over US $250 billion needs to be imbibedthrough varied investments in the infrastructure sector in the next five years.

    2. Maytas Infra Limited: This leading player in the infrastructure segment hasmore than 20 years of experience in infrastructure development, constructionand project management.

    3. Patel Engineering: This Indian Infrastructure Company has handled buildingBridges to dams to highways and varied other infrastructure projects.

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    4. Reliance Infrastructure: It is India's largest private sector power utilityEnterprise and has been the pioneer in the Indian infrastructure sector.

    5. Punj Lloyd: This Company is a diversified conglomerate, which has forayedinto aviation, defence, real estate and marine. With integrated design, andManagement services for infrastructure projects like roads, highways,

    Flyovers, bridges, elevated railroads, metro rail, underground tunnels,Seaports and airport terminals, this company has stood up the test of time.

    6. GMRInfrastructure: With interests in the Airports, Energy, Highways andUrban infrastructure (including SEZ) sector, GMR Group has been the pioneerin the core infrastructure areas.

    Answer 2

    The financial structure of the company is being compared with other three companies of the same field.

    Company

    P/E

    (x)

    P/S

    (x)

    P/BV

    (x)

    EV/EBITDA

    (x)

    EV/Sales

    (x)

    ROE

    (%)

    ROCE

    (%)

    EPS

    FY10EFY11EFY10EFY11E FY10EFY11E FY10EFY11E FY10EFY11E FY10E FY10E FY10E

    Reliance 23.219.1

    2.5 2.1 2.6 2.3 25.0 19.9 2.9 2.3 11.4% 8.7% 21.3%

    Power Grid 25.7NA NTPC Ltd. 17.117.6Tata Power 21.313.3

    5.5 NA3.4 3.11.5 1.3

    2.5 NA2.6 2.52.5 1.9

    13.0 NA12.8 12.213.2 8.4

    10.5 NA4.1 3.52.4 1.9

    9.7%15.6%12.0%

    8.711.36.8

    NA8.4%6.8%

    BALANCE SHEET OF THE RELIANCEINFRASTRUCTURE LIMITED--------- in Rs. Cr. -------------------

    RelianceInfra

    NTPC Power Grid Corp Reliance Powe

    Mar '09 Mar '09 Mar '09 Mar '09

    Sources Of Funds

    Total Share Capital 226.07 8,245.50 4,208.84 2,396.80

    Equity Share Capital 226.07 8,245.50 4,208.84 2,396.80

    Share Application Money 783.49 0.00 0.00 0.00

    Preference Share Capital 0.00 0.00 0.00 0.00

    Reserves 10,308.14 50,749.40 9,325.14 11,396.01

    Revaluation Reserves 589.74 0.00 0.00 0.00

    Networth 11,907.44 58,994.90 13,533.98 1

    Secured Loans 1,848.33 8,969.60 25,288.25 0.00

    Unsecured Loans 5,483.85 25,598.20 3,177.18 0.00

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    Total Debt 7,332.18 34,567.80 28,465.43 0.00

    Total Liabilities 19,239.62 93,562.70 41,999.41 13,792.81

    RelianceInfra

    NTPC Power Grid Corp Reliance Powe

    Mar '09 Mar '09 Mar '09 Mar '09

    Application Of FundsGross Block 6,922.69 62,353.00 40,319.33 78.18

    Less: Accum. Depreciation 3,582.52 29,415.30 9,190.89 1.58

    Net Block 3,340.17 32,937.70 31,128.44 76.6

    Capital Work in Progress 564.42 26,404.90 13,286.00 55.84

    Investments 12,147.10 13,983.50 1,592.83 6,282.71

    Inventories 440.68 3,243.40 297.57 0.00

    Sundry Debtors 1,523.33 3,584.20 1,373.56 0.00

    Cash and Bank Balance 249.97 271.80 53.06 14.37

    Total Current Assets 2,213.98 7,099.40 1,724.19 14.37

    Loans and Advances 6,757.39 7,826.10 2,928.01 7,407.58

    Fixed Deposits 1.04 15,999.80 2,375.82 0.06

    Total CA, Loans & Advances 8,972.41 30,925.30 7,028.02 7,422.01

    Deffered Credit 0.00 0.00 0.00 0.00

    Current Liabilities 5,018.23 7,439.20 8,851.56 43.05

    Provisions 766.25 3,249.50 2,189.82 1.30

    Total CL & Provisions 5,784.48 10,688.70 11,041.38 44.35

    Net Current Assets 3,187.93 20,236.60 -4,013.36 7,377.66

    Miscellaneous Expenses 0.00 0.00 5.50 0.00

    Total Assets 19,239.62 93,562.70 41,999.41 13,792.81

    Contingent Liabilities 3,934.79 66,083.20 16,590.93 8.13

    Book Value (Rs) 465.97 71.55 32.16 57.55

    Profit & Loss account ------------------- in Rs. Cr. -------------------

    RelianceInfra

    NTPC Power Grid Corp Reliance Powe

    Mar '09 Mar '09 Mar '09 Mar '09

    Income

    Sales Turnover 9,640.16 42,196.80 6,579.81 0.00Excise Duty 0.00 221.60 0.00 0.00

    Net Sales 9,640.16 41,975.20 6,579.81 0.00

    Other Income 1,281.19 3,012.80 496.99 334.72

    Stock Adjustments 0.00 0.00 0.00 0.00

    Total Income 10,921.35 44,988.00 7,076.80 334.72

    Expenditure

    Raw Materials 4,272.53 31.00 0.02 0.00

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    Power & Fuel Cost 1,166.78 27,292.30 55.16 0.00

    Employee Cost 536.62 2,897.60 899.86 20.76

    Other Manufacturing Expenses 2,142.17 940.00 107.04 0.00

    Selling and Admin Expenses 391.62 473.20 222.73 45.62

    Miscellaneous Expenses 696.04 394.90 106.58 9.89

    Preoperative Exp Capitalised 0.00 -637.40 -913.16 0.00

    Total Expenses 9,205.76 31,391.60 478.23 76.27

    RelianceInfra

    NTPC Power Grid Corp Reliance Powe

    Mar '09 Mar '09 Mar '09 Mar '09

    Operating Profit 434.40 10,583.60 6,101.58 -76.27

    PBDIT 1,715.59 13,596.40 6,598.57 258.45

    Interest 330.50 1,737.00 3,199.94 1.77

    PBDT 1,385.09 11,859.40 3,398.63 256.68

    Depreciation 244.88 2,364.50 1,093.97 0.20

    Other Written Off 0.00 3.60 1.83 0.00

    Profit Before Tax 1,140.21 9,491.30 2,302.83 256.48

    Extra-ordinary items 127.41 1,305.20 -230.69 0.00

    PBT (Post Extra-ord Items) 1,267.62 10,796.50 2,072.14 256.48

    Tax 126.89 2,554.70 377.63 7.57

    Reported Net Profit 1,138.88 8,201.30 1,690.61 248.90

    Total Value Addition 4,933.23 31,360.60 478.21 76.27

    Preference Dividend 0.00 0.00 0.00 0.00

    Equity Dividend 157.69 2,968.30 505.08 0.00

    Corporate Dividend Tax 26.80 501.70 85.84 0.00

    Per share data (annualised)

    Shares in issue (lakhs) 2,260.70 82,454.64 42,088.41 23,968.00

    Earning Per Share (Rs) 50.38 9.95 4.02 1.04

    Equity Dividend (%) 70.00 36.00 12.00 0.00

    Book Value (Rs) 465.97 71.55 32.16 57.55

    Cash flow statement

    ------------------- in Rs. Cr. -------------------

    Tata Power Reliance Infra Power Grid Corp Reliance PowerMar '09 Mar '09 Mar '09 Mar '09

    Net Profit Before Tax 12 mths 12 mths 12 mths 12 mths

    Net Cash From Operating Activities 1116.68 1193.43 2228.57 256.47

    Net Cash (used in)/fromInvesting Activities

    648.61 892.64 6641.09 -166.75

    Net Cash (used in)/from Financing Activities -2220.52 -992.67 -9156.75 2527.52

    Net (decrease)/increase In Cash and CashEquivalents

    1588.71 263.16 3078.95 -2707.51