COMPANY OVERVIEW:
Veer Energy was established in 2006.Its objective is to play a major role in responding to the growing problem of climate change attributed to greenhouse gas emissions. Currently, Veer Energy wind farms in operation and construction represent a substantial reduction in carbon dioxide emissions annually.
The company is currently active in western region of India with approximately 55 MW in operation. Significant future growth is expected in both core and new markets, supported by a large development pipeline and Veer Energy's network of joint development ventures with world class local developers & contractors.
PRODUCT MIX:
PRODUCT | SALES(In crore) | %of Total |
| 1.Infrastructure Equipments | Rs12.14 crore | 58.77% |
| 2.Land | Rs4.41 crore | 21.35% |
| 3.Wind Turbine Generator | Rs2.6 crore | 12.58% |
| 4.Other Charges | Rs0.78 crore | 3.76% |
| 5.Steel Tubes | Rs0.67 crore | 3.24% |
| 6.Power Generation | Rs0.06 crore | 0.27% |
KEY Rational FOR INVESTMENT:
1. Veer Energy proposes to develop 200MW Wind Turbine Generator farm in the state of Gujarat.
2. Company major set up is being supplied to Southern Wind farm Ltd (ADAG Group Company).
3. Profit is expected to double in FY10.
4. It is a vertically integrated company.
5. Company is also good takeover candidate.
6. With growing concern over the global warming, the company is expected reap good benefit.
7. Wind farms are emission free energy source, providing clean and sustainable energy.
SHAREHOLDING PATTERN:
|
|
| NO.OF SHARES | %OF TOTAL | ||
| PROMOTER | 1796755 |
| 53.47% |
| |
| INSTITUTION | 0 |
|
|
| |
| GENERAL PUBLIC | 14962845 |
| 46.53% |
| |
| GRAND TOTAL | 16759600 |
| 100.00% |
| |
FINANCIAL:
|
|
| 31/03/07 | 31/03/08 | 31/03/09 |
| TOTAL INCOME | 8.9 | 31.17 | 20.7 | |
| EXPENDITURE | -7.79 | -27.86 | -16.99 | |
| PBDITA |
| 1.11 | 3.31 | 3.71 |
| DEPRECIATION | -0.01 | 0 | -0.11 | |
| PBIT |
| 1.1 | 3.31 | 3.6 |
| INTEREST |
| -0.06 | -0.57 | -0.56 |
| PBT |
| 1.04 | 2.74 | 3.04 |
| TAX |
| -0.29 | -1 | -0.93 |
| PAT |
| 0.75 | 1.74 | 2.11 |
Key Highlights:
CAGR IN TOTAL INCOME IS 52.5%.
CAGR IN PBDITA IS 82%.
CAGR IN NET PROFIT IS 68%.
RATIOS:
|
|
| 31/03/07 | 31/03/08 | 31/03/09 |
| EPS |
| 0.449102 | 1.041916 | 1.263473 |
| PBDITA MARGIN | 12.47191 | 10.61919 | 17.92271 | |
| NPM |
| 8.426966 | 5.582291 | 10.19324 |
| INTEREST COVER | 18.33333 | 5.807018 | 6.428571 | |
Key Highlights:
EPS has shown a robust growth over the period of three years. It has increased at CAGR of 68%.
PBDITA margin has also shown improvement from 12.47% to 17.9%.
NPM increased from 8.4% to 10%.
Interest cover however has declined from 18 to 6.
COMPARISION OF Q1FY2010 WITH Q1FY2009:
|
|
| Q1FY09 | %CHANGE | Q1FY10 | |
| TOTAL INCOME | 2.75 | -51% |
| 1.35 | |
| EXPENDITURE | -1.83 |
|
| -0.88 | |
| PBDITA |
| 0.92 | -49% |
| 0.47 |
| DEPRECIATION | 0 |
|
| 0 | |
| PBIT |
| 0.92 |
|
| 0.47 |
| INTEREST |
| -0.19 |
|
| -0.09 |
| PBT |
| 0.73 |
|
| 0.38 |
| TAX |
| 0 |
|
| 0 |
| PAT |
| 0.73 | -48% |
| 0.38 |
Key Highlights:
Total Income declined by 51%.
PBDITA moved down by 49%.
Net Profit down by 48%.
VALUATION:
At CMP of Rs22.35 the stock is trading at 10.3X to FY10 EPS. Seeing the robust growth in business we value the company at 15X. The fair value we arrive at is Rs37.5.
Outlook of the company is good. The sector is also seeing robust growth, so company will obviously benefit from it. Working with the name like ADAG adds to the credibility of the company.
CONCLUSION:
Investors with bit of risk appetite can take position on the counter. The risk reward ratio is favorable.
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