Beat the street - Fundamental Analysis

NEYVELI LIGNITE CORPORATION LIMITED

Business Profile Neyveli Lignite Corporation Limited (NLC) is engaged in lignite excavation and power generation using lignite excavated. It is diversifying to use coal for power generation and is ready to set up coal- fired power station in Uttar Pradesh, Odisha, Madhya Pradesh and Jharkhand. The Company is having three lignite mines named as Mine I, Mine II and Mine IA. Raw lignite is sold to small scale industries to use it as fuel in their production activities. Investment Rationale
The company is planning to set up 2,000 Mega Watts

(MW) coal-based power plant in Odisha in association with any of the three public sector units, Odisha Hydro Power Corporation, Odisha Power Transmission Corporation and Grid Corporation of Odisha Limited, with an investment of `10,000 crore. It has got the approval from the Government of India to set up a 1,980-MW coal-based power plant in Kanpur Nagar district of Uttar Pradesh with an investment of `9,900 crore. NLC will set up the proposed plant in association with the Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited. NLC presently has power projects worth 6,500 MW under formulation stage. The company is planning to acquire coal fields in foreign countries such as Australia, South Africa. The NLC would not go for exploration and setting up of new mines because it would be a timec o n s u m i n g a f f a i r. F o r e x p e d i t i n g t h e

implementation of the ongoing power projects and those in the pipeline the company also proposes to procure equipment from foreign suppliers and indigenous companies that would obtain the materials from abroad. Company's Unit-I of 250 MW Thermal Power Station-II Expansion in Neyveli using lignite as fuel would begin commercial production by June 2012. The work on the erection of the unit-II of 250 MW is in full swing. It also plans to establish a power plant with a capacity of 1,000 MW to replace the 45-year old 600-MW plant at Tuticorin in Tamil Nadu. The project will entail an investment of about `5,000 crore and the old power plant will stop operations by 2015. It plans to commission the 2X125-MW plant at Barsinagar by the end of 2012, the unit would receive lignite from Haldia and Palana in Rajasthan.

VALUE PARAMETERS
Current Mkt.Price (`) Face Value (`) 52 Week High/Low M.Cap (` Cr.) EPS (`) P/E Ratio (times) P/B Ratio (times) Dividend Yield (%) Stock Exchange 81.45 10.00 108.60 / 67.65 13664.95 8.30 9.81 1.22 2.82 BSE

% OF SHARE HOLDING

Stock Chart
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Jun Jul Aug Sep Oct Nov Dec 2011 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2012 Feb Mar Apr May

185 180 175 170 165 160 155 150 145 140 135 130 125 120 115 110 105 100 95 90 85 80 75 70 65 60 8000 7000 6000 5000 4000 3000 2000 1000 x100

` in cr

Particulars Net Sales Expenditure PBDIT PBDT PAT

QE Dec11 QE Dec10 Var.(%)

1000.13 869.21 758.11 242.02 215.9 96.07 18.11 20.34 7.96 49.91 54.92 92.51 1045.99 818.47 362.81 334.47 184.94

TTM 5334.72 4232.11 2931.39 2403.33 2222.35 1392.57

Total Income 1181.28

GUJARAT FLUOROCHEMICALS LIMITED

Business Profile Gujarat Fluorochemicals Limited (GFL) is a part of the $2 billion INOX Group of Companies GFL was incorporated in 1987 and promoted by INOX Leasing and Finance Ltd. It is a publicly listed company in the business of Organic Chemicals. It primarily manufactures Chlorofluorocarbons, Hydro fluorocarbons, Hydrofluoric Acid and Polytetrafluoroethylene (PTFE) (Teflon). Today GFL is India's largest manufacturer of refrigerants and has a technical collaboration with Atofina (now Pennawalt) US, a Fortune 100 company. Investment Rationale
The company has formed a JV with Gujarat Mineral

Development Corp (GMDC) and Navin Fluorine International to commence a fluorspar project for supplying acid grade fluorspar and metallurgical grade fluorspar to Gujarat Fluorochemicals. The JV will form a separate entity, where GFL will hold 25 percent equity. GFL has commissioned its 50-megawatt (mw) wind power project at Chotila in Surendranagar district of Gujarat. Inox Wind, a subsidiary of the company, has manufactured the wind turbine generators, on which the project is based. With this, the Company's total installed capacity of wind energy generation is 54 mw. GFL's products are marketed under the REFRON brand and are popularly known by this brand name in the overseas markets. Its products are widely used in refrigerators, air-conditioners, as propellants for aerosols and as blowing agent for Polyurethane Foam production. GFL is also exploring various other avenues including

expansion plans for its manufacturing facilities and is currently negotiating with various global entities for technical know to expand its product range. GFL is the largest producer of HCFC22 (Chlorodifluoro-methane) in India. Around 50% of HCFC22 production is captively consumed by the company for production of PTFE, and the balance 50% has been sold. HCFC22 is expected to witness a growth of more than 5% per annum globally, largely due to growth in PTFE demand. The outlook of the Chemical Complex at Dahej is quite positive, with increasing volumes due to higher capacities and improved PTFE realizations due to better product quality and increasing global prices. The company has been able to maintain a healthy growth rate over the past few years. Net profit of the company rose 550.76% to `218.98 crore in the quarter ended December 2011 as against `33.65 crore during the previous quarter ended December 2010. Sales rose 168.68% to `582.33 crore in the quarter ended December 2011 as against `216.74 crore during the previous quarter ended December 2010. Stock Chart
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Jun Jul Aug Sep Oct Nov Dec 2011 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2012 Feb Mar Apr May

VALUE PARAMETERS
Current Mkt.Price (`) Face Value (`) 52 Week High/Low M.Cap (` Cr.) EPS (`) P/E Ratio (times) P/B Ratio (times) Dividend Yield (%) Stock Exchange 455.75 1.00 561.00 / 316.00 5008.69 64.19 7.10 2.87 0.77 BSE

% OF SHARE HOLDING

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x100

` in cr

Particulars Total Income Net Sales Expenditure PBDIT PBDT PAT

QE Dec'11 QEDec'10 Var.(%)

592.42 582.33 268.33 324.09 313.05 218.98 240.27 216.74 162.90 77.37 68.11 33.65

TTM

146.60 2127.21 168.70 2090.37 64.70 1043.15 318.90 1084.06 359.60 1044.84 550.80 705.46

1000

Above calls are recommended with a time horizon of 1 year.