(Hattip Moneycontrol)
Category: Stock
This report is for informational purposes only.Not a recommendation to buy or sell
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Saas Bahu Saga playing out at Dhanbank
In an earlier post, I had mentioned how Bank MD’s show poor results immediately after taking over.This serves the dual purpose of starting with a clean slate and showing the predecessor in a poor light.
The same saga is repeating at Dhanlaxmi Bank where P G Jayakumar has taken over after the resignation of Amitabh Chaturvedi.
The latest results for FY2012 indicate a loss of 115 Crores as opposed to a profit of 26 Crores last year.
Ah well…
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The Suzlon Loan DNA
In an earlier post,I had indicated how the departure of the CFO indicated bearish times ahead for Suzlon.
Since then, the stock has tanked by around 20%.
Now, one of their most respected independent directors Ashish Dhawan has resigned from the company effective 25 May, 2012.
This month is crucial for Suzlon as their FCCB repayments are coming up in June 2012.It needs to repay around 360 Million $ by June 2012 and another 209 Million $ by Oct 2012.
In a press release to NSE, Suzlon has mentioned that it is renegotiating with the lenders to extend the maturity date by 45 days.It also expressed “confidence” that it will be able to repay its lenders via new borrowing arrangements.As such, its convertible bonds rallied after hitting a four month low.
Am reminded of an investor conference I attended a long time back.Somebody asked the promoter Mr.Tanti on why he named his company Suzlon.
He answered Suzlon is a combination of two words.
Suzlon=SujBhuj (Gujarati for Commonsense/Shrewdness) + Loan !!
So loans are part of the company’s DNA !!
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Voltas sinking deeper in Qatari quicksand
Voltas Ltd is the global airconditioning and engineering services provider for the TATA group.
For FY 12, their revenues were flattish-Rs.5175 Crores as compared to Rs.5177 Crores last year.
However their Net Profits took a huge hit-Rs.162 Crores as compared to Rs.352 Crores last year.
One big reason for falling profits despite flattish sales is an “Onerous Contract”
Voltas is executing around 1000 Crores of work for the Sidra Medical and Research Centre Hospital Project in Qatar.There have been significant upward revision in the estimated cost due to design changes and delay in execution.
As per their press release,
“There have been several impediments and constraints arising from delay in designs,frequent changes in architectural/interior layouts,ceiling height restrictions and abortive engineering /rework.Uncertainties exists on variations/additional revenue claims and costs to come till the completion of the project due to the complex nature of the ‘design and build’ project , changes in the design still made by the client and delay in completion of this project.”
Hmmm…is this corporate speak for “We don’t know when this nightmare will end and how much it will cost us !!”