Profitable infrastructure companies are crying, 'different'. A rare breed, as these companies claim to be, they say that they are still being treated as a pack, in spite of not being in as much trouble.
One of them is JSW Energy, which posted profits for the fourth quarter after good sequential quarterly performance in the last few quarters. The company which had its share of tough times before the turnaround, was helped by softened global coal prices. The power producer buys on the spot internationally, making them susceptible to the vagaries of global dynamics.
This quarter, things are different. They have even declared a dividend. “But, the stock markets are still treating us as a part of infrastructure sector which has been under the cloud,” said their Vice chairman, N K Jain.
He has a point. Not many companies claim to be as profitable. Recently, GVK posted a net loss for the quarter, due to disappointing 'power business'. GVK also owns and operates two major airports in the country. While many woes are because of power businesses, pure power companies are facing the brunt of lack of interest from investors.
Apart from gas-based power projects drying up, lack of coal supply for domestic coal-based projects among other worries have failed to life the spirits of stock markets. As policy level problems still persist, many companies have frozen their expansion plans.
Some claim that freezing plans is a good signal to investors. “Right now if you do not have projects on your balance sheet, your investors will be very happy. Such is the case. One time they would pay money for announcing projects. Today, if you announce that you won a big project, the share price would be down,” quipped Jalan.
The investors have not taken RInfra's signal as well. The company last year, went ahead and did a share buyback, hoping to allay investor fears over the sector. It was to demonstrate the confidence that promoters have in the company, hence hoping invetsors would comply. That turned out to be a pipe dream as well. This too, Jalan blames on the 'overall' view on infrastructure sector.
“Till the time we are able to create differentiation, that we do not have lemon projects, and do not have other kinds of risks that others have and have regular cash flows. Analysts and buyers might understand and we might see some traction,” Jalan hopes.
One of them is JSW Energy, which posted profits for the fourth quarter after good sequential quarterly performance in the last few quarters. The company which had its share of tough times before the turnaround, was helped by softened global coal prices. The power producer buys on the spot internationally, making them susceptible to the vagaries of global dynamics.
This quarter, things are different. They have even declared a dividend. “But, the stock markets are still treating us as a part of infrastructure sector which has been under the cloud,” said their Vice chairman, N K Jain.
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Reliance Infrastructure is yet another company which declared a dividend. “It is just that the infra sector is in a very difficult area. People just feel that there is nothing happening and they are punishing every company. They are not appreciating different infra companies,” lamanted Lalit Jalan, chief executive of the company.
He has a point. Not many companies claim to be as profitable. Recently, GVK posted a net loss for the quarter, due to disappointing 'power business'. GVK also owns and operates two major airports in the country. While many woes are because of power businesses, pure power companies are facing the brunt of lack of interest from investors.
Apart from gas-based power projects drying up, lack of coal supply for domestic coal-based projects among other worries have failed to life the spirits of stock markets. As policy level problems still persist, many companies have frozen their expansion plans.
Some claim that freezing plans is a good signal to investors. “Right now if you do not have projects on your balance sheet, your investors will be very happy. Such is the case. One time they would pay money for announcing projects. Today, if you announce that you won a big project, the share price would be down,” quipped Jalan.
The investors have not taken RInfra's signal as well. The company last year, went ahead and did a share buyback, hoping to allay investor fears over the sector. It was to demonstrate the confidence that promoters have in the company, hence hoping invetsors would comply. That turned out to be a pipe dream as well. This too, Jalan blames on the 'overall' view on infrastructure sector.
“Till the time we are able to create differentiation, that we do not have lemon projects, and do not have other kinds of risks that others have and have regular cash flows. Analysts and buyers might understand and we might see some traction,” Jalan hopes.