Noida Toll Bridge: Gaining momentum

ANALYSTS' CORNER

Brics Securities recommends a Buy on Noida Toll Bridge. The report states that debt restructuring and refinancing at a lower rate have reduced fixed interest costs.

Implementation of Mayur Vihar Link project would see traffic increasing to 10,000 vehicles per day. Approval of the development rights of land adjoining the bridge could prove to be a major cash driver.

The company is expected to break-even at net profit level in FY07E and any incremental revenues would directly add to the bottom-line. But the two parallel bridges, viz. Nizamuddin Bridge and Okhla Barrage, free to use, continue to pose competition.

The company is in possession of 100 acres land adjoining the bridge, which can be developed with the permission of the regulatory authority.

Talbros: Forging ahead

Brics Securities' research report states that Talbros Automotive Components intends to complete development of land and building construction for commercial production of forged components by June 2006. It proposes to enter the industry through hammer forging and upset forging business.

Approximately 65 per cent of its commercial production will be supplied to QH Talbros at market rates that were being paid to outsiders and the balance shall be exported.

This strategy essentially insulates the company from the fragmented nature of the industry that lends itself to thin margins and competitive pressures. The report expects the margin to improve.

Besides, the government thrust on infrastructure development coupled with demand from aerospace and defence sector, bodes well for the forged component industry at a macro level.

The company recently came up with an IPO with the objective of setting up the 9000 mt per year forging unit, getting into a JV and expansion of the existing gasket manufacturing facility.

Marico: Expanding reach

Enam Securities, in its research report on Marico, states that the company is emerging as a dominant player with significant market share in categories such as coconut oil, hair oil, anti-lice treatment and refined vegetable oil.

Innovation led growth in franchise of new products and businesses continues to be the key competitive advantage. The company has notched a sustained revenue growth up from Rs 280 crore in FY95 to Rs 1020 crore in FY05 (a CAGR of 15 per cent).

Moreover, the revenue generated from new products has increased from two per cent in FY02 to 19 per cent in FY05. The company's entry into the aesthetic services via Kaya Skin Care clinics and global ayurvedic products via Sundari LLC are still in the investment phase and hence yet to contribute to the bottomline.