Jubilant Industries Ltd. -- Research Note -- FY12e 850 cr. Revenues -- US$ 3 bn. Group Backing -- World Leadership in Operational Segments -- Views Invited -- Research Note, Annual Report & CSR Report Attached

[mahesh i. shah]

Views are invited on Jubilant Industries Ltd. [ NSE – JUBLINDS ; BSE – 533320 ], a US$ 3 bn. Jubilant Bhartia Group company which counts amongst its group successful companies like Indian-listed  Jubilant Foodworks,  Jubilant Lifesciences and AIM-listed  Jubilant Energy.

The most interesting aspect which compels us to invite fellow members' views with an aim to understand the company better is its valuation at just INR 220.24 cr. vis-a-vis FY12e revenues of  INR 854 cr. & FY13e revenues of  INR 1125 cr.. Such valuations, even when the company enjoys not only domestic but a world-leadership status in each of the operational segments makes the company hard to ignore for any serious fund manager. We have tried to deal with each and every aspect in our research note inluding the critical parameters of peers like  Pidilite,  Wacker Chemie (Germany),  Pantaloon,  Shoppers Stop, Aditya Birla Retail,  Reliance Retail,  Bharti Retail, etc.

Annual Report (2011) of the company as well as latest CSR Report ( as per GRI Standards – Audited by Ernst & Young) are attached alongwith the Research Note for reference.

Please feel free to share your candid views and get back to me in case of any query.

 

Rgds.

Mahesh

----------------------Glimpse Inside Research Note -------------------------

 

Why Jubilant Industries Ltd. deserves to be a part of one's core portfolio ? :

1. Clean & Credible Management led by Mr. Hari Bhartia [ current President of Confederation of Indian Industry (CII) ] and backing of a strong US$ 3 bn. Jubilant Bhartia Group ( promoters of Jubilant Foodworks, Jubilant Lifesciences & Jubilant Energy-AIM Listed ) are the first and foremost factors that go in favour of Jubilant Industries Ltd.

2. High Corporate Governance followed by the company, which is evident from the fact that it is one of the few top-notch Indian & MNC companies which has voluntarily chosen to publish comprehensive annual Corporate Sustainability Report (CSR) as per Global Reporting Initiative (GRI) standards and its CSR2011 has attained the highest rating A+ and is audited by Ernst & Young.

3. Leadership Position (not only domestic but a world-leadership ) in each of the Operational Segment is the other highlight of the company. Before going into its details lets briefly analyse company's positioning in each of the operational segment :

• 2^nd Largest Brand ( Jivanjor ) next to Pidilite's Fevicol in Indian Consumer Adhesives Segment

• 1^st position in India ( 90 % share ) and 3^rd position Globally in Food Polymer Segment (Solid PVA)

• 1^st Position in India & 3^rd Position Globally in Vinyl Pyridine Latex (VP Latex)

• 4^th Largest Brand (Ramban) in Indian SSP Fertilizer Segment

• 2^nd Largest Hypermarket Chain with 20 % marketshare in Bangalore

4. Revenues of Performance Polymer Segment (which includes Consumer Products-Jivanjor Brand, Food Polymer & Latex Business) has grown over last five years at a CAGR of 17.8 % backed by a 8.3 % CAGR in actual volumes. If we exclude here the low-margin Application Polymer business, which the company has disposed off in FY11, then, the actual volume and sales performance of Consumer Products, Food Polymer and Latex Business is really heartening and signals robust demand for company's products in each of the segment.

5. Now, we will go into slight detail of each of the operational segment of Jubilant Industries Ltd. starting with Consumer Products Segment.

6. Consumer Products Segment ( Jivanjor Brand ) contributed ~Rs. 120 cr. to FY11 revenues of the company. Under this segment, company manufactures and sells consumer & woodworking adhesives, footwear adhesives, epoxy sealants and wood finishes. Its Jivanjor Brand in adhesives segment, which, the company has built over last many years, has withstood the pressure from the likes of Pidilite and Huntsman and progressed to become 2^nd Largest Brand after Pidilite's Fevicol in Organised Indian Consumer Adhesives Market.

7. Company has renewed the thrust on R&D and considerably strengthened distributor network in last few months to aggressively penetrate further deep into the Indian Market so as to make Jivanjor an even stronger No.2 Brand and capture some marketshare out of the peers. A case in point here is its recent launch of its super premium category adhesive 'Lamino', which is first of its kind adhesive launched by any company in India designed specifically for laminates. Its recent launch in Delhi, Mumbai, Hyderabad, Chandigarh and other major towns of India met with tremendous positive response and this product is expected to contribute handsomely in second half of FY12.

8. To move to the second operational segment, viz., Food Polymers, under which company manufactures and is a global supplier of Solid PVA which is used to make gum base of chewing gum and bubble gum. It is the only manufacturer in India commanding ~ 90 % marketshare domestically and is the 3^rd largest supplier to global chewing gum and bubble gum industry.

9. It is worthwhile to note here that Gum Industry worldwide is highly concentrated with top 6 players accounting for ~85 % market. Jubilant counts amongst its international clients, Wrigley's, Perffetti and GumLink which together account for ~50 % of the world gum market.

10. Also, the Solid PVA market itself is a very concentrated one with top 4 manufacturers supplying 75 % of the global demand. Jubilant atpresent occupies 3^rd largest position in global Solid PVA suppliers list and with the recent doubling of capacity of its plant, the company is set to become the 2^nd largest Solid PVA manufacturer of the world after Wacker Chemie of Germany. Its entire expanded capacity is booked which augurs very well for the visibility of growth in this segment till FY15.

11. Third operational segment of the company is Latex under which it manufactures and is a global supplier of synthetic lattices like VP Latex, SBR Latex and NBR Latex. This segment contributed ~Rs. 80 cr. to FY11 revenues of the company. It is worthwhile to note here that Jubilant was amongst the first companies to introduce VP Latex in India and is currently occupying No.1 position domestically and No.3 position globally in VP Latex. Company has recently expanded its capacity of Latex manufacture by 15 % in FY11 considering high demand for its products and the increased capacity utilisation is expected to show benefit in current FY12.

12. Agri-Inputs is the fourth operational segment of the company which is dominated by 'Ramban' Brand. This segment contributed ~Rs. 261 cr. to FY11 revenues of the company. Here again the company's acumen of building strong brands becomes evident as its Ramban brand occupies the fourth largest SSP fertilizer brand position in India. SSP fertilizer industry, which got a fillip because of the new NBS policy of Indian Government, is expected to reap rich rewards because of SSP fertilizer's positioning in the entire complex fertilizer landscape. Favourable treatment in NBS policy has made SSP fertilizer the cheapest and most effective amongst the lot becuase of which SSP fertilizer consumption in India is projected to grow to 6 mn. MT by FY13 from current 3.5 mn. MT. This is the basic reason why major Urea producers like Chambal Fertilizer and Tata Chemicals have recently decided to set-up new plant and expand existing capacities for SSP manufacture to capitalise on the opportunity this sector has in store for coming few years.

13. With an expected annual industry growth of ~35 % (especially SSP Fertilizer) for coming two fiscals, Agri-Input segment of Jubilant is expected to be a steady cash generator as the company improves capacity utilisation based on higher demand. It is worthwhile to note here that when other major peers in this segment (SSP) like Liberty and Khaitan have choose to aggresively expand the capacity of their plants as also to set-up new plants in anticipation of demand, Jubilant has decided to play safe by only concentrating on improving utilisation of its existing capacities so that this segment remains steady cash generator to feed the exponential growth of Retail (Hypermarket), Food Polymer and Consumer Products (Jivanjor Brand) segments.

14. The last but most promising operational segment of the company viz., Retail (Mall cum Hypermarket) is the result of Jubilant Industries' recent acquisition of a group firm which runs a Hypermarket chain under brand 'Total' and has, as on date, ~8,25,000 sq.ft. under opration in 5 mall-cum-hypermarkets with another 1,12,000 sq.ft. getting operational by Decemember'2011 which will make it the 3^rd largest hypermarket chain of India and Largest (No.1) hypermarket chain of Bangalore in terms of area under operation. All the other hypermarket chains of India except (Pantaloon) including Hypercity (Shoppers Stop), Trent (Star Bazaar), Bharti Retail (EasyDay Market), Reliance Retail (Reliance Mart), Max Retail (SPAR Hypermarket), RPG group (Spencer Hyper) and Aditya Birla Retail (More) have less than 9,00,000 sq.ft. under operation as on date [ Refer Page 18 for all Hypermarket Chains details ]. Although, like-to-like comparision here is improper since the format of Jubilant (Total) is of mall-cium-hypermarket which no one else follows but, still, such a huge area of operation will bring in lot of cost efficiency and drive exponential growth from FY13 onwards.

15. FY11 revenues of Retail segment was Rs. 315 cr.

16. The most interesting aspect here, which speaks highly of the transparent and ethical practices followed by the management of Jubilant is evident from the fact that inspite of Retail division of the group currently being 100 % owned by the promoters of Jubilant Industries as also exuberant valuations at which listed retail companies are trading at present on the bourses where, even Hypercity (the only pure comparable peer) was acquired by Shoppers Stop at more than 0.5 times sales just last year, the company has decided to issue only 0.38 cr. (38.35 lacs) shares as consideration for 100 % acquisition of Retail business, which, at current market price of Jubilant Industries, works out to be only Rs. 71 cr.

17. To acquire such promising Retail business at just 0.2 times FY11 sales inspite of it having one of the largest areas under operation in India with a leadership position in Bangalore commanding 20 % marketshare, signifies a great deal of justice done with minority shareholders of Jubilant Industries for which the management deserves an applaud.

contd... further in Attached Research Note

[mahesh]

Hi ****,

Please find my take in bold.....

------------------------
Coming to the company Jubilant Inds, I think as mentioned by ****,
this will continue to trade based on SOTP valuation parameters which
usually always fall short of actual valuations.
----------------------------

As mentioned in my reply to ****, in SOTP valuation, significant
discount to peers is considered and its after that discout its
valuation look so attractive which are hard to ignore..


-----------------------
Regarding the merger of the mall division, I think one should add debt
of 160 crores along with the valuation of the 38 lac odd shares
allotted to the promoter group bcos the division being merged brought
in debt along with it.
---------------------------

Retail segment is not valued like this ****... If it was so then the
valuations commanded by retailors as mentioned in Research Note are
too low....We need to add huge debts of each of the retailors and then
the picture on mcap will be totally different....Also, just to make a
point and give a like-to-like comparision on debt front, Hypercity,
having almost double the debt Jubilant's retail division currently
has, was valued at 0.5 times sales for acquisition of 51 % stake by
Shoppers Stop...Also, even if we take your point that debt has to be
deducted from valuations, then also, by deducting 160 cr. debt from
315 cr. revenues gives us a figure of 155 cr. against the valuation
paid of 71 cr.



-----------------------
If you could put up individual operating margins of all the businesses
it will help in formation of a clearer picture.
------------------------

OPM figures for each of the division is not available, but yes, EBITDA
figures of agri division as well as combine CP, FP & Latex division
can be found in results...However, I will say this is not a
profitability story atpresent but a growth story and we need to look
at differently..



-----------------------
I dont think too many people have a clue about the various divisions u
highlighted and hence those in the know might have an edge in entering
this company.
------------------------

Yes you are right and that might be the reason for such undervaluation
of the company and the other being that those who have got demerged
shares from Jub.Life and have no interest in Jub.Ind. or a compulsion
not to hold a small-cap stock, might be selling it...



-----------------------
One thing negative about this company is its poor return ratios. This
might be due to it being a conglomerate.
-----------------

Not only due to this but you see **** FY12 will be the real first year
of operation as in FY11 it got demerged... We need to give management
a time of atleast two fiscals to build a company and stabilise the
business



-----------------------
On first look based on the prospects of the jivanjor and the food
additives brand, it looks attractive based on this report.
----------------------

Still **** you go through it in deep and pinch back in case of any
further queries..


Rgds.


Hi ****,

I differ with you....Retail segment, which has got a bad reputation
because of huge debts and therefore negative profitability is still
the fastest growing segment in India and currently is the fifth
largest in the world.....Out of the retail segment, Hypermarket format
is the most promising format and is growing handsomely.....Jubilant'
business model of Mall-cum-hypermarket is a decent one wherein company
gets benefited first by having low rentals for hypermarkets because of
huge space it contracts and earning steady income from mall units to
support the hypermarket business.....Hence, if Jubilant is able to
increase the hypermarkets no. to 10 w/o taking much additional debt,
what will actually happen is the listed co.'s shareholders will get
benefited hugely as the growth in topline will be exponentail and
therefore the valuation commanded by Jub.Ind. will rise
exponentially..

Yes promoters stake is raised by this move but we need to look at the
price they are paying for raising the stake.... Its 315 cr. revenues
retail business they are merging for just 0.38 cr. shares or in other
words, for a val. of 71 cr. they are giving a business worth atleast
150 cr. (0.5 times sales)... And this too at what stage, when their
two hypermarkets are ready to be launched in this fiscal with one
already launched...

Yes cash is diverted but to a productive use... If they would have
used the cash generated in the listed co. to give loans to the retail
venture then it would have been a cheating done with minority
shareholders but instead, what they are doing is they are merging the
entire business which gives an opp.to minority shareholders to
participate in future growth...what will actually happen is, from this
move, the 30-33 % tax which listed co. is paying to Govt. will get
reduced considerably to feed the retail business , which, when
profitable, because of huge reduction in backend costs, will take the
valuation of the company to greater hights...

Rgds.


------------------------
Dear Mahesh ji,

Pardon me from bringing up a naive question.

Why don't we consider the very low overall margins to determine the
valuation as we do for other businesses? Also, just get a feeling that
the trigger for any upside will be only from Retail venture as it
doesn't seem that the trigger will come from existing business.
-------------------------------

Hi ****,

The low overall margins that you are seeing till now was because of
extremely low margin Application Polymer business which is already
discontinued.... For remaining businesses the EBITDA margins should be
in the range of 11-13 % which although not exceptionally high but are
decent.....Raw material costs as well as currecy fluctuations might
dent margins occasionally while at the same time a ~15 % price
increase in end product of latex business should help maintain margins
of that segment and new premium products like Lamino in CP segment
might bring good margins in second half....

Triggers are in place for every business segment of Jubilant except
Latex to an extent but the thing is that the trigger from Retail
venture is so huge that other triggers are getting overlooked...

If you go deep into the research note you will find that even on core
business basis Jubilant is undervalued considerably and so the current
trigger is the undervaluation and the future trigger is the
exponential growth of retail business.

Its a rare value-cum-growth play provided everything is executed
perfectly.

Rgds.


On Sep 27, 9:04 am, "mahesh i. shah" <equityanalystinves...@gmail.com>
wrote:

> Views are invited on Jubilant Industries Ltd. [ NSE – JUBLINDS ; BSE –
> 533320 ], a US$ 3 bn. Jubilant Bhartia Group company which counts amongst

> its group successful companies like Indian-listed  *Jubilant
> Foodworks*,  *Jubilant
> Lifesciences* and AIM-listed  *Jubilant Energy*.

>
> The most interesting aspect which compels us to invite fellow members' views
> with an aim to understand the company better is its valuation at just INR

> 220.24 cr. vis-a-vis FY12e revenues of  *INR 854 cr.* & FY13e revenues of  *INR
> 1125 cr.*. Such valuations, even when the company enjoys not only *domestic
> but a world-leadership status* in each of the operational segments makes the

> company hard to ignore for any serious fund manager. We have tried to deal
> with each and every aspect in our research note inluding the critical
> parameters of peers like  Pidilite,  Wacker Chemie (Germany),
> Pantaloon,  Shoppers
> Stop, Aditya Birla Retail,  Reliance Retail,  Bharti Retail, etc.
>
> Annual Report (2011) of the company as well as latest CSR Report ( as per

> GRI Standards – *Audited by Ernst & Young*) are attached alongwith the

> Research Note for reference.
>
> Please feel free to share your candid views and get back to me in case of
> any query.
>
> Rgds.
> Mahesh
>
> ----------------------Glimpse Inside Research Note -------------------------
>
> Why Jubilant Industries Ltd. deserves to be a part of one's core portfolio ?
> :
>

>    1.
>
>    Clean & Credible Management led by Mr. Hari Bhartia [ *current President
>    of **Confederation of Indian Industry (CII)** ] and backing of a strong
>    US$ 3 bn. Jubilant Bhartia Group ( **promoters of Jubilant Foodworks,
>    Jubilant Lifesciences & Jubilant Energy-AIM Listed **) are the first and
>    foremost factors that go in favour of Jubilant Industries Ltd.*
>
>    1.
>
>    *High Corporate Governance followed by the company, which is evident from

>    the fact that it is one of the few top-notch Indian & MNC companies which
>    has voluntarily chosen to publish comprehensive annual Corporate

>    Sustainability Report (CSR) as per **Global Reporting Initiative
> (GRI)**standards and its CSR2011 has attained the
>    **highest rating A+** and is audited by Ernst & Young.*
>
>    1.
>
>    *Leadership Position (not only domestic but a **world-leadership **) in

>    each of the Operational Segment is the other highlight of the company.
>    Before going into its details lets briefly analyse company's positioning in

>    each of the operational segment :*
>
>    -
>
>    *2**nd** Largest Brand ****( Jivanjor ) next to **Pidilite's Fevicol** in
>    Indian Consumer Adhesives Segment*
>
>    -
>
>    *1**st** position** in **India** ( 90 % share ) and **3**rd** position
>    Globally** in Food Polymer Segment (Solid PVA)*
>
>    -
>
>    *1**st** Position** in India & **3**rd** Position** Globally in Vinyl
>    Pyridine Latex (VP Latex)*
>
>    -
>
>    *4**th** Largest Brand** (Ramban) in Indian SSP Fertilizer Segment*
>
>    -
>
>    *2**nd** Largest Hypermarket** Chain with 20 % marketshare in Bangalore*
>
>    1.
>
>    *Revenues of Performance Polymer Segment (which includes Consumer

>    Products-Jivanjor Brand, Food Polymer & Latex Business) has grown over last

>    five years at a **CAGR of 17.8 %** backed by a 8.3 % CAGR in actual

>    volumes. If we exclude here the low-margin Application Polymer business,
>    which the company has disposed off in FY11, then, the actual volume and
>    sales performance of Consumer Products, Food Polymer and Latex Business is
>    really heartening and signals robust demand for company's products in each

>    of the segment.*
>
>    1.
>
>    *Now, we will go into slight detail of each of the operational segment of
>    Jubilant Industries Ltd. starting with Consumer Products Segment.*
>
>    1.
>
>    *Consumer Products Segment ( **Jivanjor Brand** ) contributed **~Rs. 120
>    cr.** to FY11 revenues of the company. Under this segment, company

>    manufactures and sells consumer & woodworking adhesives, footwear adhesives,
>    epoxy sealants and wood finishes. Its Jivanjor Brand in adhesives segment,
>    which, the company has built over last many years, has withstood the

>    pressure from the likes of **Pidilite** and **Huntsman** and progressed
>    to become **2**nd** Largest Brand after Pidilite's Fevicol** in Organised
>    Indian Consumer Adhesives Market.*
>
>    1.
>
>    *Company has renewed the thrust on R&D and considerably strengthened

>    distributor network in last few months to aggressively penetrate further
>    deep into the Indian Market so as to make Jivanjor an even stronger No.2
>    Brand and capture some marketshare out of the peers. A case in point here is

>    its recent **launch of its super premium category adhesive** 'Lamino',

>    which is first of its kind adhesive launched by any company in India
>    designed specifically for laminates. Its recent launch in Delhi, Mumbai,
>    Hyderabad, Chandigarh and other major towns of India met with tremendous
>    positive response and this product is expected to contribute handsomely in

>    second half of FY12.*
>
>    1.
>
>    *To move to the second operational segment, viz., **Food Polymers**,

>    under which company manufactures and is a global supplier of Solid PVA which
>    is used to make gum base of chewing gum and bubble gum. It is the only

>    manufacturer in India commanding **~ 90 % **marketshare** domestically
>    and is the **3**rd** largest supplier** to global chewing gum and bubble
>    gum industry.*
>
>    1.
>
>    *It is worthwhile to note here that Gum Industry worldwide is highly

>    concentrated with top 6 players accounting for ~85 % market. Jubilant counts
>    amongst its international clients, Wrigley's, Perffetti and GumLink which

>    together account for **~50 % of the world gum market**.*
>
>    2.
>
>    *Also, the Solid PVA market itself is a very concentrated one with top 4

>    manufacturers supplying 75 % of the global demand. Jubilant atpresent

>    occupies 3**rd** largest position in global Solid PVA suppliers list and

>    with the recent doubling of capacity of its plant, the company is set to

>    **become the 2**nd** largest Solid PVA manufacturer of the world** after
>    Wacker Chemie of Germany. Its **entire expanded capacity is
> booked**which augurs very well for the visibility of growth in this
> segment till
>    FY15.*
>
>    1.
>
>    *Third operational segment of the company is **Latex** under which it

>    manufactures and is a global supplier of synthetic lattices like VP Latex,

>    SBR Latex and NBR Latex. This segment contributed **~Rs. 80 cr.** to FY11
>    revenues of the company. It is worthwhile to note here that **Jubilant
>    was amongst the first companies to introduce VP Latex in India** and is
>    currently occupying **No.1 position domestically** and **No.3 position
>    globally** in VP Latex. Company has recently expanded its capacity of

>    Latex manufacture by 15 % in FY11 considering high demand for its products
>    and the increased capacity utilisation is expected to show benefit in

>    current FY12.*
>
>    1.
>
>    *Agri-Inputs** is the fourth operational segment of the company which is
>    dominated by **'Ramban' Brand**. This segment contributed **~Rs. 261 cr.*
>    * to FY11 revenues of the company. Here again the company's acumen of
>    building strong brands becomes evident as its Ramban brand occupies the *
>    *fourth largest SSP fertilizer brand position in India**. SSP fertilizer

>    industry, which got a fillip because of the new NBS policy of Indian
>    Government, is expected to reap rich rewards because of SSP fertilizer's
>    positioning in the entire complex fertilizer landscape. Favourable treatment
>    in NBS policy has made SSP fertilizer the cheapest and most effective
>    amongst the lot becuase of which SSP fertilizer consumption in India is

>    projected to grow to **6 mn. MT by FY13 from current 3.5 mn. MT**. This

>    is the basic reason why major Urea producers like Chambal Fertilizer and
>    Tata Chemicals have recently decided to set-up new plant and expand existing

>    capacities for SSP manufacture to **capitalise on the opportunity this
>    sector has in store for coming few years**.*
>
>    1.
>
>    *With an expected annual industry growth of ~35 % (especially SSP

>    Fertilizer) for coming two fiscals, Agri-Input segment of Jubilant is
>    expected to be a steady cash generator as the company improves capacity
>    utilisation based on higher demand. It is worthwhile to note here that when
>    other major peers in this segment (SSP) like Liberty and Khaitan have choose
>    to aggresively expand the capacity of their plants as also to set-up new
>    plants in anticipation of demand, Jubilant has decided to play safe by only
>    concentrating on improving utilisation of its existing capacities so that

>    this segment remains steady cash generator to **feed the exponential

>    growth of Retail (Hypermarket), Food Polymer and Consumer Products (Jivanjor

>    Brand)** segments.*
>
>    1.
>
>    *The last but most promising operational segment of the company
> viz., **Retail
>    (Mall cum Hypermarket)** is the result of Jubilant Industries' recent

>    acquisition of a group firm which runs a Hypermarket chain under brand

>    'Total' and has, as on date, **~8,25,000** **sq.ft**. under opration in *
>    *5 mall-cum-hypermarkets** with another **1,12,000** **sq.ft.** getting
>    operational by Decemember'2011 which will make it the **3**rd** largest
>    hypermarket chain of India** and **Largest (No.1) hypermarket chain of
>    Bangalore** in terms of area under operation. All the other hypermarket
>    chains of India except (Pantaloon) including **Hypercity** (Shoppers
>    Stop), **Trent** (Star Bazaar), **Bharti Retail** (EasyDay Market),
> **Reliance
>    Retail** (Reliance Mart), **Max Retai**l (SPAR Hypermarket), **RPG group*
>    * (Spencer Hyper) and **Aditya Birla Retail** (More) have less than
>    9,00,000 sq.ft. under operation as on date **[ **Refer Page 18 for all
>    Hypermarket Chains details** ]**. Although, like-to-like comparision here

>    is improper since the format of Jubilant (Total) is of mall-cium-hypermarket
>    which no one else follows but, still, such a huge area of operation will
>    bring in lot of cost efficiency and drive exponential growth from FY13

>    onwards.*
>
>    1.
>
>    *FY11 revenues of Retail segment was **Rs. 315 cr.*
>
>    1.
>
>    *The most interesting aspect here, which speaks highly of the transparent

>    and ethical practices followed by the management of Jubilant is evident from
>    the fact that inspite of Retail division of the group currently being 100 %
>    owned by the promoters of Jubilant Industries as also exuberant valuations
>    at which listed retail companies are trading at present on the bourses
>    where, even Hypercity (the only pure comparable peer) was acquired by

>    Shoppers Stop at **more than 0.5 times sales** just last year, the

>    company has decided to issue only 0.38 cr. (38.35 lacs) shares as
>    consideration for 100 % acquisition of Retail business, which, at current

>    market price of Jubilant Industries, works out to be only **Rs. 71 cr.*
>
>    1.
>
>    *To **acquire such promising Retail business at just 0.2 times FY11 sales
>    ** inspite of it having one of the largest areas under operation in India

>    with a leadership position in Bangalore commanding 20 % marketshare,
>    signifies a great deal of justice done with minority shareholders of

>    Jubilant Industries for which the management deserves an applaud.*
>
> *contd... further in Attached Research Note*
>
>  JubInd_26Sep11_ResNote.pdf
> 687KViewDownload
>
>  JubInd_AR2011.pdf
> 1654KViewDownload

[mahesh]

Posting my candid Replies to many queries raised by knowledgable
financial fraternity members on Jubilant Industries in this and next
posts for ISG members' reference :
-----------------
Hi ****,

find my replies in bold..

----------------
What % of revenue comes from PVA?
---------------------
Its around 59 cr. and is mentioned in the research note..


-----------------
What is the PVA market share by volume or by sales (worldwide)?
--------------------
No specific data on this but top 4 companies occupy 75 % marketshare
and Jubilant is currently the 3rd largest in the world


------------------------
Excuse my ignorance - but what is SSP Fertilizer? And why is it better
than other conventional fertilizers? What is the respective market
shares of the companies in this space?
--------------------------

SSP stands for Single Super Phosphate.... Its a fertilizer with three
main components :

Phosphorous, Sulphur and Calcium

Role of Phosphorous :

Plant growth

Quality & yield improvement

Root development

Enhance crop maturation


Role of Sulphur :

Chlorophyll & Protein formation

Oil synthesis

Formation of enzymes and vitamins

Promotes nodulation in legumes for N-fixation

Increases crop yield by 15-25% in S deficient soils


Role of Calcium :

Plant cell elongation and stability

Improves lodging resistance

Removes acidity and restore soil health

Remove soil compaction


Why SSP has great prospects from Indian context :

India has acute Sulfur Malnutrition in soils leading to sluggish
Productivity


Sulfur demand of crops can be met by Using Fertilizers like
SingleSuper Phosphate


DAP is dependent of Global Phos Acid suppliers and availability
depends on global swings


SSP could easily meet P requirement while simultaneously supplying S,
Ca and micro–nutrients to Crops


SSP also helps to protect the soil from disintegration


SSP use in Sulphur deficient crops increases the crop yield by 15-25%



Marketshare of each company in SSP space :

Liberty - 22 %

Khaitan - 17 %

Rama - 16 %

Jubilant - 13 %

BEC fertilizer - 9 %

Coramendel - 5 %

Teesta - 5 %

Tata Chemical - 4.5 %

Jayshree - 4 %

Basant - 3.5 %



----------------
What is debt for the retail venture?
-------------------

Rs. 160 cr.



-------------------------
If you could add the growth potential of individual segments in the
next few years then it would help in the analysis.
---------------------------

As indicated in the note..... Agri business will be a steady cash
generator.... Food Polymer will scale up to double its current size by
FY13.... Latex will grow steadily.... Retail will grow exponentially
and should reach >500 cr. by FY13.



----------------------
Also, it seems that this company is more of a conglomerate, so it is
likely that it will continue to be valued at a discount to pure plays
in their segments. In today's market, cheap valuation is predominant
everywhere, so the opportunity cost of a new investment is very high.
---------------------

Yes you are right to an extent and if you closely look at the SOTP
valuation of the Research Note, I have considered considerable
discount to the current valuation commanded by peer in each of the
segment... Even after that discount, the present valuation at which
Jubilant Ind. is trading are mouth-watering valuations which gives
serious investors a great deal of opportunity...

In today's market cheap valuations are predominant everywhere but what
a serious long term investor has to look for amongst the cheap lot is
the management quality and its execution capability.... When we get a
great group like Jubilant Bhartia trading at such mouth-watering
valuation, its a great long term picking opportunity.

Rgds.


On Sep 27, 9:04 am, "mahesh i. shah" <equityanalystinves...@gmail.com>
wrote:

> Views are invited on Jubilant Industries Ltd. [ NSE – JUBLINDS ; BSE –
> 533320 ], a US$ 3 bn. Jubilant Bhartia Group company which counts amongst

> its group successful companies like Indian-listed  *Jubilant
> Foodworks*,  *Jubilant
> Lifesciences* and AIM-listed  *Jubilant Energy*.
>

> The most interesting aspect which compels us to invite fellow members' views
> with an aim to understand the company better is its valuation at just INR

> 220.24 cr. vis-a-vis FY12e revenues of  *INR 854 cr.* & FY13e revenues of  *INR
> 1125 cr.*. Such valuations, even when the company enjoys not only *domestic

> but a world-leadership status* in each of the operational segments makes the

> company hard to ignore for any serious fund manager. We have tried to deal
> with each and every aspect in our research note inluding the critical
> parameters of peers like  Pidilite,  Wacker Chemie (Germany),
> Pantaloon,  Shoppers
> Stop, Aditya Birla Retail,  Reliance Retail,  Bharti Retail, etc.
>
> Annual Report (2011) of the company as well as latest CSR Report ( as per

> GRI Standards – *Audited by Ernst & Young*) are attached alongwith the

> Research Note for reference.
>
> Please feel free to share your candid views and get back to me in case of
> any query.
>
> Rgds.
> Mahesh
>
> ----------------------Glimpse Inside Research Note -------------------------
>
> Why Jubilant Industries Ltd. deserves to be a part of one's core portfolio ?
> :
>

>    1.
>
>    Clean & Credible Management led by Mr. Hari Bhartia [ *current President

>    of **Confederation of Indian Industry (CII)** ] and backing of a strong
>    US$ 3 bn. Jubilant Bhartia Group ( **promoters of Jubilant Foodworks,
>    Jubilant Lifesciences & Jubilant Energy-AIM Listed **) are the first and
>    foremost factors that go in favour of Jubilant Industries Ltd.*
>
>    1.
>
>    *High Corporate Governance followed by the company, which is evident from

>    the fact that it is one of the few top-notch Indian & MNC companies which
>    has voluntarily chosen to publish comprehensive annual Corporate

>    Sustainability Report (CSR) as per **Global Reporting Initiative
> (GRI)**standards and its CSR2011 has attained the
>    **highest rating A+** and is audited by Ernst & Young.*
>
>    1.
>
>    *Leadership Position (not only domestic but a **world-leadership **) in

>    each of the Operational Segment is the other highlight of the company.
>    Before going into its details lets briefly analyse company's positioning in

>    each of the operational segment :*
>
>    -
>
>    *2**nd** Largest Brand ****( Jivanjor ) next to **Pidilite's Fevicol** in
>    Indian Consumer Adhesives Segment*
>
>    -
>
>    *1**st** position** in **India** ( 90 % share ) and **3**rd** position
>    Globally** in Food Polymer Segment (Solid PVA)*
>
>    -
>
>    *1**st** Position** in India & **3**rd** Position** Globally in Vinyl
>    Pyridine Latex (VP Latex)*
>
>    -
>
>    *4**th** Largest Brand** (Ramban) in Indian SSP Fertilizer Segment*
>
>    -
>

>    *2**nd** Largest Hypermarket** Chain with 20 % marketshare in Bangalore*
>
>    1.
>
>    *Revenues of Performance Polymer Segment (which includes Consumer

>    Products-Jivanjor Brand, Food Polymer & Latex Business) has grown over last

>    five years at a **CAGR of 17.8 %** backed by a 8.3 % CAGR in actual

>    volumes. If we exclude here the low-margin Application Polymer business,
>    which the company has disposed off in FY11, then, the actual volume and
>    sales performance of Consumer Products, Food Polymer and Latex Business is
>    really heartening and signals robust demand for company's products in each

>    of the segment.*
>
>    1.
>
>    *Now, we will go into slight detail of each of the operational segment of
>    Jubilant Industries Ltd. starting with Consumer Products Segment.*
>
>    1.
>
>    *Consumer Products Segment ( **Jivanjor Brand** ) contributed **~Rs. 120

>    cr.** to FY11 revenues of the company. Under this segment, company

>    manufactures and sells consumer & woodworking adhesives, footwear adhesives,
>    epoxy sealants and wood finishes. Its Jivanjor Brand in adhesives segment,
>    which, the company has built over last many years, has withstood the

>    pressure from the likes of **Pidilite** and **Huntsman** and progressed

>    to become **2**nd** Largest Brand after Pidilite's Fevicol** in Organised
>    Indian Consumer Adhesives Market.*
>
>    1.
>
>    *Company has renewed the thrust on R&D and considerably strengthened

>    distributor network in last few months to aggressively penetrate further
>    deep into the Indian Market so as to make Jivanjor an even stronger No.2
>    Brand and capture some marketshare out of the peers. A case in point here is

>    its recent **launch of its super premium category adhesive** 'Lamino',

>    which is first of its kind adhesive launched by any company in India
>    designed specifically for laminates. Its recent launch in Delhi, Mumbai,
>    Hyderabad, Chandigarh and other major towns of India met with tremendous
>    positive response and this product is expected to contribute handsomely in

>    second half of FY12.*
>
>    1.
>
>    *To move to the second operational segment, viz., **Food Polymers**,

>    under which company manufactures and is a global supplier of Solid PVA which
>    is used to make gum base of chewing gum and bubble gum. It is the only

>    manufacturer in India commanding **~ 90 % **marketshare** domestically

>    and is the **3**rd** largest supplier** to global chewing gum and bubble
>    gum industry.*
>
>    1.
>
>    *It is worthwhile to note here that Gum Industry worldwide is highly

>    concentrated with top 6 players accounting for ~85 % market. Jubilant counts
>    amongst its international clients, Wrigley's, Perffetti and GumLink which

>    together account for **~50 % of the world gum market**.*
>
>    2.
>
>    *Also, the Solid PVA market itself is a very concentrated one with top 4

>    manufacturers supplying 75 % of the global demand. Jubilant atpresent

>    occupies 3**rd** largest position in global Solid PVA suppliers list and

>    with the recent doubling of capacity of its plant, the company is set to

>    **become the 2**nd** largest Solid PVA manufacturer of the world** after
>    Wacker Chemie of Germany. Its **entire expanded capacity is

> booked**which augurs very well for the visibility of growth in this
> segment till
>    FY15.*
>
>    1.
>
>    *Third operational segment of the company is **Latex** under which it

>    manufactures and is a global supplier of synthetic lattices like VP Latex,

>    SBR Latex and NBR Latex. This segment contributed **~Rs. 80 cr.** to FY11
>    revenues of the company. It is worthwhile to note here that **Jubilant
>    was amongst the first companies to introduce VP Latex in India** and is
>    currently occupying **No.1 position domestically** and **No.3 position

>    globally** in VP Latex. Company has recently expanded its capacity of

>    Latex manufacture by 15 % in FY11 considering high demand for its products
>    and the increased capacity utilisation is expected to show benefit in

>    current FY12.*
>
>    1.
>
>    *Agri-Inputs** is the fourth operational segment of the company which is
>    dominated by **'Ramban' Brand**. This segment contributed **~Rs. 261 cr.*

>    * to FY11 revenues of the company. Here again the company's acumen of
>    building strong brands becomes evident as its Ramban brand occupies the *
>    *fourth largest SSP fertilizer brand position in India**. SSP fertilizer

>    industry, which got a fillip because of the new NBS policy of Indian
>    Government, is expected to reap rich rewards because of SSP fertilizer's
>    positioning in the entire complex fertilizer landscape. Favourable treatment
>    in NBS policy has made SSP fertilizer the cheapest and most effective
>    amongst the lot becuase of which SSP fertilizer consumption in India is

>    projected to grow to **6 mn. MT by FY13 from current 3.5 mn. MT**. This

>    is the basic reason why major Urea producers like Chambal Fertilizer and
>    Tata Chemicals have recently decided to set-up new plant and expand existing

>    capacities for SSP manufacture to **capitalise on the opportunity this
>    sector has in store for coming few years**.*
>
>    1.
>
>    *With an expected annual industry growth of ~35 % (especially SSP

>    Fertilizer) for coming two fiscals, Agri-Input segment of Jubilant is
>    expected to be a steady cash generator as the company improves capacity
>    utilisation based on higher demand. It is worthwhile to note here that when
>    other major peers in this segment (SSP) like Liberty and Khaitan have choose
>    to aggresively expand the capacity of their plants as also to set-up new
>    plants in anticipation of demand, Jubilant has decided to play safe by only
>    concentrating on improving utilisation of its existing capacities so that

>    this segment remains steady cash generator to **feed the exponential

>    growth of Retail (Hypermarket), Food Polymer and Consumer Products (Jivanjor

>    Brand)** segments.*
>
>    1.
>
>    *The last but most promising operational segment of the company
> viz., **Retail
>    (Mall cum Hypermarket)** is the result of Jubilant Industries' recent

>    acquisition of a group firm which runs a Hypermarket chain under brand

>    'Total' and has, as on date, **~8,25,000** **sq.ft**. under opration in *
>    *5 mall-cum-hypermarkets** with another **1,12,000** **sq.ft.** getting
>    operational by Decemember'2011 which will make it the **3**rd** largest
>    hypermarket chain of India** and **Largest (No.1) hypermarket chain of
>    Bangalore** in terms of area under operation. All the other hypermarket
>    chains of India except (Pantaloon) including **Hypercity** (Shoppers
>    Stop), **Trent** (Star Bazaar), **Bharti Retail** (EasyDay Market),
> **Reliance
>    Retail** (Reliance Mart), **Max Retai**l (SPAR Hypermarket), **RPG group*

>    * (Spencer Hyper) and **Aditya Birla Retail** (More) have less than
>    9,00,000 sq.ft. under operation as on date **[ **Refer Page 18 for all
>    Hypermarket Chains details** ]**. Although, like-to-like comparision here

>    is improper since the format of Jubilant (Total) is of mall-cium-hypermarket
>    which no one else follows but, still, such a huge area of operation will
>    bring in lot of cost efficiency and drive exponential growth from FY13

>    onwards.*
>
>    1.
>
>    *FY11 revenues of Retail segment was **Rs. 315 cr.*
>
>    1.
>

>    *The most interesting aspect here, which speaks highly of the transparent

>    and ethical practices followed by the management of Jubilant is evident from
>    the fact that inspite of Retail division of the group currently being 100 %
>    owned by the promoters of Jubilant Industries as also exuberant valuations
>    at which listed retail companies are trading at present on the bourses
>    where, even Hypercity (the only pure comparable peer) was acquired by

>    Shoppers Stop at **more than 0.5 times sales** just last year, the

>    company has decided to issue only 0.38 cr. (38.35 lacs) shares as
>    consideration for 100 % acquisition of Retail business, which, at current

>    market price of Jubilant Industries, works out to be only **Rs. 71 cr.*
>
>    1.
>

>    *To **acquire such promising Retail business at just 0.2 times FY11 sales
>    ** inspite of it having one of the largest areas under operation in India

>    with a leadership position in Bangalore commanding 20 % marketshare,
>    signifies a great deal of justice done with minority shareholders of

[mahesh]

Rgds.


On Sep 27, 9:04 am, "mahesh i. shah" <equityanalystinves...@gmail.com>
wrote:

> Views are invited on Jubilant Industries Ltd. [ NSE – JUBLINDS ; BSE –
> 533320 ], a US$ 3 bn. Jubilant Bhartia Group company which counts amongst

> its group successful companies like Indian-listed  *Jubilant
> Foodworks*,  *Jubilant
> Lifesciences* and AIM-listed  *Jubilant Energy*.
>

> The most interesting aspect which compels us to invite fellow members' views
> with an aim to understand the company better is its valuation at just INR

> 220.24 cr. vis-a-vis FY12e revenues of  *INR 854 cr.* & FY13e revenues of  *INR
> 1125 cr.*. Such valuations, even when the company enjoys not only *domestic

> but a world-leadership status* in each of the operational segments makes the

> company hard to ignore for any serious fund manager. We have tried to deal
> with each and every aspect in our research note inluding the critical
> parameters of peers like  Pidilite,  Wacker Chemie (Germany),
> Pantaloon,  Shoppers
> Stop, Aditya Birla Retail,  Reliance Retail,  Bharti Retail, etc.
>
> Annual Report (2011) of the company as well as latest CSR Report ( as per

> GRI Standards – *Audited by Ernst & Young*) are attached alongwith the

> Research Note for reference.
>
> Please feel free to share your candid views and get back to me in case of
> any query.
>
> Rgds.
> Mahesh
>
> ----------------------Glimpse Inside Research Note -------------------------
>
> Why Jubilant Industries Ltd. deserves to be a part of one's core portfolio ?
> :
>

>    1.
>
>    Clean & Credible Management led by Mr. Hari Bhartia [ *current President

>    of **Confederation of Indian Industry (CII)** ] and backing of a strong
>    US$ 3 bn. Jubilant Bhartia Group ( **promoters of Jubilant Foodworks,
>    Jubilant Lifesciences & Jubilant Energy-AIM Listed **) are the first and
>    foremost factors that go in favour of Jubilant Industries Ltd.*
>
>    1.
>
>    *High Corporate Governance followed by the company, which is evident from

>    the fact that it is one of the few top-notch Indian & MNC companies which
>    has voluntarily chosen to publish comprehensive annual Corporate

>    Sustainability Report (CSR) as per **Global Reporting Initiative
> (GRI)**standards and its CSR2011 has attained the
>    **highest rating A+** and is audited by Ernst & Young.*
>
>    1.
>
>    *Leadership Position (not only domestic but a **world-leadership **) in

>    each of the Operational Segment is the other highlight of the company.
>    Before going into its details lets briefly analyse company's positioning in

>    each of the operational segment :*
>
>    -
>
>    *2**nd** Largest Brand ****( Jivanjor ) next to **Pidilite's Fevicol** in
>    Indian Consumer Adhesives Segment*
>
>    -
>
>    *1**st** position** in **India** ( 90 % share ) and **3**rd** position
>    Globally** in Food Polymer Segment (Solid PVA)*
>
>    -
>
>    *1**st** Position** in India & **3**rd** Position** Globally in Vinyl
>    Pyridine Latex (VP Latex)*
>
>    -
>
>    *4**th** Largest Brand** (Ramban) in Indian SSP Fertilizer Segment*
>
>    -
>

>    *2**nd** Largest Hypermarket** Chain with 20 % marketshare in Bangalore*
>
>    1.
>
>    *Revenues of Performance Polymer Segment (which includes Consumer

>    Products-Jivanjor Brand, Food Polymer & Latex Business) has grown over last

>    five years at a **CAGR of 17.8 %** backed by a 8.3 % CAGR in actual

>    volumes. If we exclude here the low-margin Application Polymer business,
>    which the company has disposed off in FY11, then, the actual volume and
>    sales performance of Consumer Products, Food Polymer and Latex Business is
>    really heartening and signals robust demand for company's products in each

>    of the segment.*
>
>    1.
>
>    *Now, we will go into slight detail of each of the operational segment of
>    Jubilant Industries Ltd. starting with Consumer Products Segment.*
>
>    1.
>
>    *Consumer Products Segment ( **Jivanjor Brand** ) contributed **~Rs. 120

>    cr.** to FY11 revenues of the company. Under this segment, company

>    manufactures and sells consumer & woodworking adhesives, footwear adhesives,
>    epoxy sealants and wood finishes. Its Jivanjor Brand in adhesives segment,
>    which, the company has built over last many years, has withstood the

>    pressure from the likes of **Pidilite** and **Huntsman** and progressed

>    to become **2**nd** Largest Brand after Pidilite's Fevicol** in Organised
>    Indian Consumer Adhesives Market.*
>
>    1.
>
>    *Company has renewed the thrust on R&D and considerably strengthened

>    distributor network in last few months to aggressively penetrate further
>    deep into the Indian Market so as to make Jivanjor an even stronger No.2
>    Brand and capture some marketshare out of the peers. A case in point here is

>    its recent **launch of its super premium category adhesive** 'Lamino',

>    which is first of its kind adhesive launched by any company in India
>    designed specifically for laminates. Its recent launch in Delhi, Mumbai,
>    Hyderabad, Chandigarh and other major towns of India met with tremendous
>    positive response and this product is expected to contribute handsomely in

>    second half of FY12.*
>
>    1.
>
>    *To move to the second operational segment, viz., **Food Polymers**,

>    under which company manufactures and is a global supplier of Solid PVA which
>    is used to make gum base of chewing gum and bubble gum. It is the only

>    manufacturer in India commanding **~ 90 % **marketshare** domestically

>    and is the **3**rd** largest supplier** to global chewing gum and bubble
>    gum industry.*
>
>    1.
>
>    *It is worthwhile to note here that Gum Industry worldwide is highly

>    concentrated with top 6 players accounting for ~85 % market. Jubilant counts
>    amongst its international clients, Wrigley's, Perffetti and GumLink which

>    together account for **~50 % of the world gum market**.*
>
>    2.
>
>    *Also, the Solid PVA market itself is a very concentrated one with top 4

>    manufacturers supplying 75 % of the global demand. Jubilant atpresent

>    occupies 3**rd** largest position in global Solid PVA suppliers list and

>    with the recent doubling of capacity of its plant, the company is set to

>    **become the 2**nd** largest Solid PVA manufacturer of the world** after
>    Wacker Chemie of Germany. Its **entire expanded capacity is

> booked**which augurs very well for the visibility of growth in this
> segment till
>    FY15.*
>
>    1.
>
>    *Third operational segment of the company is **Latex** under which it

>    manufactures and is a global supplier of synthetic lattices like VP Latex,

>    SBR Latex and NBR Latex. This segment contributed **~Rs. 80 cr.** to FY11
>    revenues of the company. It is worthwhile to note here that **Jubilant
>    was amongst the first companies to introduce VP Latex in India** and is
>    currently occupying **No.1 position domestically** and **No.3 position

>    globally** in VP Latex. Company has recently expanded its capacity of

>    Latex manufacture by 15 % in FY11 considering high demand for its products
>    and the increased capacity utilisation is expected to show benefit in

>    current FY12.*
>
>    1.
>
>    *Agri-Inputs** is the fourth operational segment of the company which is
>    dominated by **'Ramban' Brand**. This segment contributed **~Rs. 261 cr.*

>    * to FY11 revenues of the company. Here again the company's acumen of
>    building strong brands becomes evident as its Ramban brand occupies the *
>    *fourth largest SSP fertilizer brand position in India**. SSP fertilizer

>    industry, which got a fillip because of the new NBS policy of Indian
>    Government, is expected to reap rich rewards because of SSP fertilizer's
>    positioning in the entire complex fertilizer landscape. Favourable treatment
>    in NBS policy has made SSP fertilizer the cheapest and most effective
>    amongst the lot becuase of which SSP fertilizer consumption in India is

>    projected to grow to **6 mn. MT by FY13 from current 3.5 mn. MT**. This

>    is the basic reason why major Urea producers like Chambal Fertilizer and
>    Tata Chemicals have recently decided to set-up new plant and expand existing

>    capacities for SSP manufacture to **capitalise on the opportunity this
>    sector has in store for coming few years**.*
>
>    1.
>
>    *With an expected annual industry growth of ~35 % (especially SSP

>    Fertilizer) for coming two fiscals, Agri-Input segment of Jubilant is
>    expected to be a steady cash generator as the company improves capacity
>    utilisation based on higher demand. It is worthwhile to note here that when
>    other major peers in this segment (SSP) like Liberty and Khaitan have choose
>    to aggresively expand the capacity of their plants as also to set-up new
>    plants in anticipation of demand, Jubilant has decided to play safe by only
>    concentrating on improving utilisation of its existing capacities so that

>    this segment remains steady cash generator to **feed the exponential

>    growth of Retail (Hypermarket), Food Polymer and Consumer Products (Jivanjor

>    Brand)** segments.*
>
>    1.
>
>    *The last but most promising operational segment of the company
> viz., **Retail
>    (Mall cum Hypermarket)** is the result of Jubilant Industries' recent

>    acquisition of a group firm which runs a Hypermarket chain under brand

>    'Total' and has, as on date, **~8,25,000** **sq.ft**. under opration in *
>    *5 mall-cum-hypermarkets** with another **1,12,000** **sq.ft.** getting
>    operational by Decemember'2011 which will make it the **3**rd** largest
>    hypermarket chain of India** and **Largest (No.1) hypermarket chain of
>    Bangalore** in terms of area under operation. All the other hypermarket
>    chains of India except (Pantaloon) including **Hypercity** (Shoppers
>    Stop), **Trent** (Star Bazaar), **Bharti Retail** (EasyDay Market),
> **Reliance
>    Retail** (Reliance Mart), **Max Retai**l (SPAR Hypermarket), **RPG group*

>    * (Spencer Hyper) and **Aditya Birla Retail** (More) have less than
>    9,00,000 sq.ft. under operation as on date **[ **Refer Page 18 for all
>    Hypermarket Chains details** ]**. Although, like-to-like comparision here

>    is improper since the format of Jubilant (Total) is of mall-cium-hypermarket
>    which no one else follows but, still, such a huge area of operation will
>    bring in lot of cost efficiency and drive exponential growth from FY13

>    onwards.*
>
>    1.
>
>    *FY11 revenues of Retail segment was **Rs. 315 cr.*
>
>    1.
>

>    *The most interesting aspect here, which speaks highly of the transparent

>    and ethical practices followed by the management of Jubilant is evident from
>    the fact that inspite of Retail division of the group currently being 100 %
>    owned by the promoters of Jubilant Industries as also exuberant valuations
>    at which listed retail companies are trading at present on the bourses
>    where, even Hypercity (the only pure comparable peer) was acquired by

>    Shoppers Stop at **more than 0.5 times sales** just last year, the

>    company has decided to issue only 0.38 cr. (38.35 lacs) shares as
>    consideration for 100 % acquisition of Retail business, which, at current

>    market price of Jubilant Industries, works out to be only **Rs. 71 cr.*
>
>    1.
>

>    *To **acquire such promising Retail business at just 0.2 times FY11 sales
>    ** inspite of it having one of the largest areas under operation in India

>    with a leadership position in Bangalore commanding 20 % marketshare,
>    signifies a great deal of justice done with minority shareholders of

[mahesh]

Hi ****,

Please find my replies in bold...


--------------------------------
1) It would be great If you can throw light on this business model in
terms of profitability and ratios after 2 years..i know it would be
premature to hazard any kind of guess as this is in nursery at this
point of time. But do you have any other company data similar to this
kind of business model...knowing pantaloon and shopper's stop is not
strictly similar so far as business model is concern.
------------------------------------------

****, the business model here is just scale, scale and scale... The
model is based on low-margin-high-volume business and for any company
adopting this format, scale is critical to drive profitability as its
only after a certain scale, PAT-level profitability is
possible...Although to compare figures of other peers is not proper,
still, if you want to study then Hypercity is the nearest peer you can
study who also adopts a similar business model but there mall-part is
absent... To give the latest numbers of Hypercity, on a topline of
~600 cr., it has attained store-level loss of 0.2 cr. and a EBITDA
loss of 30 cr. for FY11...

If you ask me to predict 2 years down the line for Jubilant Retail
division, I think by 2013 there should be 7-8 stores under operation
with topline of ~600 cr. and store-level breakeven...



-----------------------------------
2) what kind of capex or money infusion is required in order to
increase the total number of mall from 6 to 10 in say 2 years? will
the internal cash flow of 35Cr+ would be sufficient to fuel the growth
which management has envisaged for?
------------------------------

If you are asking specifically for new 4 stores planned to be opened,
then it should be in the range of 55-65 cr. but if you are asking
overall then you must put a 1.2-1.5 times turnover margin to gauge
overall investments required to operate; 1.5 at optimum scale and 1.2
at growing scale.... i.e. to simplify, if I am predicting a 600
cr.topline then the overall investments in the retail business at that
point of time should be in the range of 500 cr. since its a growing
scale phase and once the stores under operation are 10 and the scale
reaches 800-1000 cr. the investment at that point of time should be in
the range of 650 cr....

The point to note here is that at an expanded capital of 11.84 cr.
after the acquisition of retail business, it will already have 343 cr.
overall investments in retail business so fresh investment requirement
in next two years to reach 600 cr.scale in retail business should be
150-160 odd cr.

Now, your query as to whether the cash flow of present core businesses
will be sufficient to feed the scale... to an extent .. Yes.. But
overall No.... I will explain in detail.... already listed company has
cash and investments to the tune of 77 cr. as at FY11 with a expected
PAT of 30-35 cr. for current FY12... Hence, a judicious mix of debt
and equity infusion can easily be maintained considering the tiny
scale of equity of Jubilant at 11.84 cr.... There is high probability
that after the merger, Jubilant will go for an equity dilution to
raise atleast 100-150 cr. (although at much higher rate than the
present market rate) which will suffice to reach a scale of 1000 cr.
in Retail division with minimal debt...



-----------------------------------
3) I know they have huge capacity available in non retail
businesses.They may not need money to expand these businesses but what
about the management bandwidth which Jubilant needs to scale up
successfully from Bangalore to say Delhi or Mumbai(or in Bangalore
itself, I know i am jumping too far). My worry is, if one of these two
businesses retail or agri will not be taken care properly,then retail
business ( which is the "alpha" factor) will face major headwind in
terms of debt and may be in execution.
----------------------------------

First, current agri and polymer business is headed by ex-Havells vice
president Ananda Mukherjee with separate divisional heads of each
segment... for example Agri Business is headed by ex-Nagarjuna
Fertilizer GM Mr. Reddy, Food Polymer Business is headed by ex Coca
Cola GM Mr. Puneet Mathur, Latex business is headed by ex-Henkel Mr.
J.Rao while CP business is headed by ex-Indian Emulsion Mr.
Jayendran...

Retail business was till now headed by Mr. Dinesh Malpani but as per
reliable sources, I am told that he was removed before few months and
company is strengthening senior-level management team to achieve
scale to take retail business to next level...Mr. Shamit Bhartia, the
younger son of Mr. Shyam Bhartia is taking active interest in Retail
venture and this mall-cum-hypermarket business is his brain-child
only....

With Jubilant Bhartia Group I don't think management bandwidth should
be an issue as they have adopted similar professional management
formats for other companies like Jubilant Foodworks and Jubilant
Energy.


--------------------------------------
In some sense Jubilant is quite like PI Industries where the stability
of crams business is fuelling product/Brand business in turn reducing
the risk of the business somewhat. For PI it might be easier to do
because both businesses are in almost similar space and they do not
require different sets of expertise. While in case of Jubilant, Agri
and Retail are totally different fish which needs different kind of
expertise.
----------------------------------------

I will say it again here that to compare two companies in different
spaces is not proper, however, with PI there are two similarities if
you want to draw out-of-context... first Management Quality and second
Visibility of Growth... The third thing, regarding transparency, I
will rate Jubilant one notch higher than PI....

Two stories are totally different, with PI, the story was exponential
growth because of foundation management had built over last decade
while in Jubilant, the story is gross undervaluation vis-a-vis its
business segments, management quality and group....

Each company deserves its place in a portfolio and my experience and
analysis makes me believe that in current markets PI Ind. is still the
safest pick followed by Jubilant Industries and then Solar Industries.
All three companies form part of my core portfolio and my views have
to be taken with that regard.

Rgds.

Hi ****,

Find my replies in bold...

--------------------------------------
Are you talking about 55-65 cr/Mall or for all 4 malls put together?
-----------------------------------

55-65 cr. that i am talking about is approximate initial costs that
company will need to incur on all 4 mall-cum-hypermarkets...


----------------------------------
I did not get your equity dilution thing. Why JI would go for equity
dilution when it can meet all its capital requirement by internal
accrual?
------------------------------

As I told you before in my reply to your query before this post... for
retail, specifically hypermarket business, you need to consider
1.2-1.5 times turnover on the overall investments done.... hence, to
achieve scale which is critical for profitability, continuous
investments need to be incurred.... now, if we consider here the scale
of retail business of Jubilant at ~600 cr. in FY13, it will need an
additional investment of 160-175 cr. over and above the current
investments (343 cr.) that retail division presently has......this
investment has to be made in current FY12 or, --- if the court
approval gets delayed and merger happens in Q4FY12 ---- then in first
half FY13....

In addition to this, its existing businesses like Consumer Products
(Jivanjor Brand) as also Food Polymer (SPVA) will require further
investments as also in all probability, it will go for debottlenecking
of existing SSP fertilizer capacity in FY12-end or FY13 to cater to
the rising demand......

To sum-up, company has to put aside ~30-35 cr. for present core
businesses growth and so with the existing cash of listed entity it
can only meet the initial expenses as also working capital requirement
of retail business and has to infuse more funds to keep the cash
rolling and be in a comfortable position.....

This is perfectly logical financially as also operationally, as by
raising 150-200 cr. on an equity dilution of ~25-30 %, the company can
attain an overall scale of more than 1100 cr. by FY13 with reasonable
leverage (~200-250 cr.) that too on a tiny equity capital even after
the dilution....However, all these is quite far away as equity
dilution if any has to be at a much higher rate than the present
market rate.

Rgds.


On Sep 27, 9:04 am, "mahesh i. shah" <equityanalystinves...@gmail.com>
wrote:

> Views are invited on Jubilant Industries Ltd. [ NSE – JUBLINDS ; BSE –
> 533320 ], a US$ 3 bn. Jubilant Bhartia Group company which counts amongst

> its group successful companies like Indian-listed  *Jubilant
> Foodworks*,  *Jubilant
> Lifesciences* and AIM-listed  *Jubilant Energy*.
>

> The most interesting aspect which compels us to invite fellow members' views
> with an aim to understand the company better is its valuation at just INR

> 220.24 cr. vis-a-vis FY12e revenues of  *INR 854 cr.* & FY13e revenues of  *INR
> 1125 cr.*. Such valuations, even when the company enjoys not only *domestic

> but a world-leadership status* in each of the operational segments makes the

> company hard to ignore for any serious fund manager. We have tried to deal
> with each and every aspect in our research note inluding the critical
> parameters of peers like  Pidilite,  Wacker Chemie (Germany),
> Pantaloon,  Shoppers
> Stop, Aditya Birla Retail,  Reliance Retail,  Bharti Retail, etc.
>
> Annual Report (2011) of the company as well as latest CSR Report ( as per

> GRI Standards – *Audited by Ernst & Young*) are attached alongwith the

> Research Note for reference.
>
> Please feel free to share your candid views and get back to me in case of
> any query.
>
> Rgds.
> Mahesh
>
> ----------------------Glimpse Inside Research Note -------------------------
>
> Why Jubilant Industries Ltd. deserves to be a part of one's core portfolio ?
> :
>

>    1.
>
>    Clean & Credible Management led by Mr. Hari Bhartia [ *current President

>    of **Confederation of Indian Industry (CII)** ] and backing of a strong
>    US$ 3 bn. Jubilant Bhartia Group ( **promoters of Jubilant Foodworks,
>    Jubilant Lifesciences & Jubilant Energy-AIM Listed **) are the first and
>    foremost factors that go in favour of Jubilant Industries Ltd.*
>
>    1.
>
>    *High Corporate Governance followed by the company, which is evident from

>    the fact that it is one of the few top-notch Indian & MNC companies which
>    has voluntarily chosen to publish comprehensive annual Corporate

>    Sustainability Report (CSR) as per **Global Reporting Initiative
> (GRI)**standards and its CSR2011 has attained the
>    **highest rating A+** and is audited by Ernst & Young.*
>
>    1.
>
>    *Leadership Position (not only domestic but a **world-leadership **) in

>    each of the Operational Segment is the other highlight of the company.
>    Before going into its details lets briefly analyse company's positioning in

>    each of the operational segment :*
>
>    -
>
>    *2**nd** Largest Brand ****( Jivanjor ) next to **Pidilite's Fevicol** in
>    Indian Consumer Adhesives Segment*
>
>    -
>
>    *1**st** position** in **India** ( 90 % share ) and **3**rd** position
>    Globally** in Food Polymer Segment (Solid PVA)*
>
>    -
>
>    *1**st** Position** in India & **3**rd** Position** Globally in Vinyl
>    Pyridine Latex (VP Latex)*
>
>    -
>
>    *4**th** Largest Brand** (Ramban) in Indian SSP Fertilizer Segment*
>
>    -
>

>    *2**nd** Largest Hypermarket** Chain with 20 % marketshare in Bangalore*
>
>    1.
>
>    *Revenues of Performance Polymer Segment (which includes Consumer

>    Products-Jivanjor Brand, Food Polymer & Latex Business) has grown over last

>    five years at a **CAGR of 17.8 %** backed by a 8.3 % CAGR in actual

>    volumes. If we exclude here the low-margin Application Polymer business,
>    which the company has disposed off in FY11, then, the actual volume and
>    sales performance of Consumer Products, Food Polymer and Latex Business is
>    really heartening and signals robust demand for company's products in each

>    of the segment.*
>
>    1.
>
>    *Now, we will go into slight detail of each of the operational segment of
>    Jubilant Industries Ltd. starting with Consumer Products Segment.*
>
>    1.
>
>    *Consumer Products Segment ( **Jivanjor Brand** ) contributed **~Rs. 120

>    cr.** to FY11 revenues of the company. Under this segment, company

>    manufactures and sells consumer & woodworking adhesives, footwear adhesives,
>    epoxy sealants and wood finishes. Its Jivanjor Brand in adhesives segment,
>    which, the company has built over last many years, has withstood the

>    pressure from the likes of **Pidilite** and **Huntsman** and progressed

>    to become **2**nd** Largest Brand after Pidilite's Fevicol** in Organised
>    Indian Consumer Adhesives Market.*
>
>    1.
>
>    *Company has renewed the thrust on R&D and considerably strengthened

>    distributor network in last few months to aggressively penetrate further
>    deep into the Indian Market so as to make Jivanjor an even stronger No.2
>    Brand and capture some marketshare out of the peers. A case in point here is

>    its recent **launch of its super premium category adhesive** 'Lamino',

>    which is first of its kind adhesive launched by any company in India
>    designed specifically for laminates. Its recent launch in Delhi, Mumbai,
>    Hyderabad, Chandigarh and other major towns of India met with tremendous
>    positive response and this product is expected to contribute handsomely in

>    second half of FY12.*
>
>    1.
>
>    *To move to the second operational segment, viz., **Food Polymers**,

>    under which company manufactures and is a global supplier of Solid PVA which
>    is used to make gum base of chewing gum and bubble gum. It is the only

>    manufacturer in India commanding **~ 90 % **marketshare** domestically

>    and is the **3**rd** largest supplier** to global chewing gum and bubble
>    gum industry.*
>
>    1.
>
>    *It is worthwhile to note here that Gum Industry worldwide is highly

>    concentrated with top 6 players accounting for ~85 % market. Jubilant counts
>    amongst its international clients, Wrigley's, Perffetti and GumLink which

>    together account for **~50 % of the world gum market**.*
>
>    2.
>
>    *Also, the Solid PVA market itself is a very concentrated one with top 4

>    manufacturers supplying 75 % of the global demand. Jubilant atpresent

>    occupies 3**rd** largest position in global Solid PVA suppliers list and

>    with the recent doubling of capacity of its plant, the company is set to

>    **become the 2**nd** largest Solid PVA manufacturer of the world** after
>    Wacker Chemie of Germany. Its **entire expanded capacity is

> booked**which augurs very well for the visibility of growth in this
> segment till
>    FY15.*
>
>    1.
>
>    *Third operational segment of the company is **Latex** under which it

>    manufactures and is a global supplier of synthetic lattices like VP Latex,

>    SBR Latex and NBR Latex. This segment contributed **~Rs. 80 cr.** to FY11
>    revenues of the company. It is worthwhile to note here that **Jubilant
>    was amongst the first companies to introduce VP Latex in India** and is
>    currently occupying **No.1 position domestically** and **No.3 position

>    globally** in VP Latex. Company has recently expanded its capacity of

>    Latex manufacture by 15 % in FY11 considering high demand for its products
>    and the increased capacity utilisation is expected to show benefit in

>    current FY12.*
>
>    1.
>
>    *Agri-Inputs** is the fourth operational segment of the company which is
>    dominated by **'Ramban' Brand**. This segment contributed **~Rs. 261 cr.*

>    * to FY11 revenues of the company. Here again the company's acumen of
>    building strong brands becomes evident as its Ramban brand occupies the *
>    *fourth largest SSP fertilizer brand position in India**. SSP fertilizer

>    industry, which got a fillip because of the new NBS policy of Indian
>    Government, is expected to reap rich rewards because of SSP fertilizer's
>    positioning in the entire complex fertilizer landscape. Favourable treatment
>    in NBS policy has made SSP fertilizer the cheapest and most effective
>    amongst the lot becuase of which SSP fertilizer consumption in India is

>    projected to grow to **6 mn. MT by FY13 from current 3.5 mn. MT**. This

>    is the basic reason why major Urea producers like Chambal Fertilizer and
>    Tata Chemicals have recently decided to set-up new plant and expand existing

>    capacities for SSP manufacture to **capitalise on the opportunity this
>    sector has in store for coming few years**.*
>
>    1.
>
>    *With an expected annual industry growth of ~35 % (especially SSP

>    Fertilizer) for coming two fiscals, Agri-Input segment of Jubilant is
>    expected to be a steady cash generator as the company improves capacity
>    utilisation based on higher demand. It is worthwhile to note here that when
>    other major peers in this segment (SSP) like Liberty and Khaitan have choose
>    to aggresively expand the capacity of their plants as also to set-up new
>    plants in anticipation of demand, Jubilant has decided to play safe by only
>    concentrating on improving utilisation of its existing capacities so that

>    this segment remains steady cash generator to **feed the exponential

>    growth of Retail (Hypermarket), Food Polymer and Consumer Products (Jivanjor

>    Brand)** segments.*
>
>    1.
>
>    *The last but most promising operational segment of the company
> viz., **Retail
>    (Mall cum Hypermarket)** is the result of Jubilant Industries' recent

>    acquisition of a group firm which runs a Hypermarket chain under brand

>    'Total' and has, as on date, **~8,25,000** **sq.ft**. under opration in *
>    *5 mall-cum-hypermarkets** with another **1,12,000** **sq.ft.** getting
>    operational by Decemember'2011 which will make it the **3**rd** largest
>    hypermarket chain of India** and **Largest (No.1) hypermarket chain of
>    Bangalore** in terms of area under operation. All the other hypermarket
>    chains of India except (Pantaloon) including **Hypercity** (Shoppers
>    Stop), **Trent** (Star Bazaar), **Bharti Retail** (EasyDay Market),
> **Reliance
>    Retail** (Reliance Mart), **Max Retai**l (SPAR Hypermarket), **RPG group*

>    * (Spencer Hyper) and **Aditya Birla Retail** (More) have less than
>    9,00,000 sq.ft. under operation as on date **[ **Refer Page 18 for all
>    Hypermarket Chains details** ]**. Although, like-to-like comparision here

>    is improper since the format of Jubilant (Total) is of mall-cium-hypermarket
>    which no one else follows but, still, such a huge area of operation will
>    bring in lot of cost efficiency and drive exponential growth from FY13

>    onwards.*
>
>    1.
>
>    *FY11 revenues of Retail segment was **Rs. 315 cr.*
>
>    1.
>

>    *The most interesting aspect here, which speaks highly of the transparent

>    and ethical practices followed by the management of Jubilant is evident from
>    the fact that inspite of Retail division of the group currently being 100 %
>    owned by the promoters of Jubilant Industries as also exuberant valuations
>    at which listed retail companies are trading at present on the bourses
>    where, even Hypercity (the only pure comparable peer) was acquired by

>    Shoppers Stop at **more than 0.5 times sales** just last year, the

>    company has decided to issue only 0.38 cr. (38.35 lacs) shares as
>    consideration for 100 % acquisition of Retail business, which, at current

>    market price of Jubilant Industries, works out to be only **Rs. 71 cr.*
>
>    1.
>

>    *To **acquire such promising Retail business at just 0.2 times FY11 sales
>    ** inspite of it having one of the largest areas under operation in India

>    with a leadership position in Bangalore commanding 20 % marketshare,
>    signifies a great deal of justice done with minority shareholders of

[mahesh]

My Q2FY12 Estimate for Jubilant Industries (Consolidated) :





Total Revenue = INR 134 - 148 cr. (Q2FY11 – 138.36 cr.)



EBITDA = INR 12.1 – 13.8 (Q2FY11 – 15.6 cr.)







Breakup of Revenues – Segmentwise





Agri Input = INR 58-65 cr. (Q2FY11 – 68.6 cr.)



Performance Polymers (CP, Latex & Food Polymer) = INR 76-83 cr.
(Q2FY11 – 82.5 cr.)

> scale of equity ofJubilantat 11.84 cr.... There is high probability
> that after the merger,Jubilantwill go for an equity dilution to

> raise atleast 100-150 cr. (although at much higher rate than the
> present market rate) which will suffice to reach a scale of 1000 cr.
> in Retail division with minimal debt...
>
> -----------------------------------
> 3) I know they have huge capacity available in non retail
> businesses.They may not need money to expand these businesses but what

> about the management bandwidth whichJubilantneeds to scale up

> successfully from Bangalore to say Delhi or Mumbai(or in Bangalore
> itself, I know i am jumping too far). My worry is, if one of these two
> businesses retail or agri will not be taken care properly,then retail
> business ( which is the "alpha" factor) will face major headwind in
> terms of debt and may be in execution.
> ----------------------------------
>
> First, current agri and polymer business is headed by ex-Havells vice
> president Ananda Mukherjee with separate divisional heads of each
> segment... for example Agri Business is headed by ex-Nagarjuna
> Fertilizer GM Mr. Reddy, Food Polymer Business is headed by ex Coca
> Cola GM Mr. Puneet Mathur, Latex business is headed by ex-Henkel Mr.
> J.Rao while CP business is headed by ex-Indian Emulsion Mr.
> Jayendran...
>
> Retail business was till now headed by Mr. Dinesh Malpani but as per
> reliable sources, I am told that he was removed before few months and
> company is strengthening senior-level management team  to achieve
> scale to take retail business to next level...Mr. Shamit Bhartia, the
> younger son of Mr. Shyam Bhartia is taking active interest in Retail
> venture and this mall-cum-hypermarket business is his brain-child
> only....
>

> WithJubilantBhartia Group I don't think management bandwidth should

> be an issue as they have adopted similar professional management
> formats for other companies likeJubilantFoodworks andJubilant
> Energy.
>
> --------------------------------------

> In some senseJubilantis quite like PIIndustrieswhere the stability

> of crams business is fuelling product/Brand business  in turn reducing
> the risk of the business somewhat. For PI it might be easier to do
> because both businesses are in almost similar space and they do not

> require different sets of expertise. While in case ofJubilant, Agri

> and Retail are totally different fish which needs different kind of
> expertise.
> ----------------------------------------
>
> I will say it again here that to compare two companies in different
> spaces is not proper, however, with PI there are two similarities if
> you want to draw out-of-context... first Management Quality and second
> Visibility of Growth... The third thing, regarding transparency, I

> will rateJubilantone notch higher than PI....

>
> Two stories are totally different, with PI, the story was exponential
> growth because of foundation management had built over last decade

> while inJubilant, the story is gross undervaluation vis-a-vis its

> business segments, management quality and group....
>
> Each company deserves its place in a portfolio and my experience and
> analysis makes me believe that in current markets PI Ind. is still the
> safest pick followed byJubilantIndustriesand then SolarIndustries.
> All three companies form part of my core portfolio and my views have
> to be taken with that regard.
>
> Rgds.
>
> Hi ****,
>
> Find my replies in bold...
>
> --------------------------------------
> Are you talking about 55-65 cr/Mall or for all 4 malls put together?
> -----------------------------------
>
> 55-65 cr. that i am talking about is approximate initial costs that
> company will need to incur on all 4 mall-cum-hypermarkets...
>
> ----------------------------------
> I did not get your equity dilution thing. Why JI would go for equity
> dilution when it can meet all its capital requirement by internal
> accrual?
> ------------------------------
>
> As I told you before in my reply to your query before this post... for
> retail, specifically hypermarket business, you need to consider
> 1.2-1.5 times turnover on the overall investments done.... hence, to
> achieve scale which is critical for profitability, continuous
> investments need to be incurred.... now, if we consider here the scale

> of retail business ofJubilantat ~600 cr. in FY13, it will need an

> > Views are invited onJubilantIndustriesLtd. [ NSE – JUBLINDS ; BSE –
> > 533320 ], a US$ 3 bn.JubilantBhartia Group company which counts amongst

> > its group successful companies like Indian-listed  *Jubilant
> > Foodworks*,  *Jubilant
> > Lifesciences* and AIM-listed  *JubilantEnergy*.
>
> > The most interesting aspect which compels us to invite fellow members' views
> > with an aim to understand the company better is its valuation at just INR
> > 220.24 cr. vis-a-vis FY12e revenues of  *INR 854 cr.* & FY13e revenues of  *INR
> > 1125 cr.*. Such valuations, even when the company enjoys not only *domestic
> > but a world-leadership status* in each of the operational segments makes the
> > company hard to ignore for any serious fund manager. We have tried to deal
> > with each and every aspect in our research note inluding the critical
> > parameters of peers like  Pidilite,  Wacker Chemie (Germany),
> > Pantaloon,  Shoppers
> > Stop, Aditya Birla Retail,  Reliance Retail,  Bharti Retail, etc.
>
> > Annual Report (2011) of the company as well as latest CSR Report ( as per
> > GRI Standards – *Audited by Ernst &
>

> ...
>
> read more »- Hide quoted text -
>
> - Show quoted text -

[mahesh]

Board will meet on 2nd November 2011 to consider Q2FY12 results..

Rgds.


On Oct 11, 10:02 am, mahesh <equityanalystinves...@gmail.com> wrote:
> My Q2FY12 Estimate forJubilantIndustries(Consolidated) :

[mahesh]

Jubilant Industries today announced its Q2FY12 results.... Results
beat the upper range of our estimates by ~8 % ....



Total Revenue = INR 161.25 cr. (Our estimate – 134-148 cr.)



EBITDA = INR 14.83 cr. (Our estimate – 12.1 – 13.8 cr.)





Breakup of Revenues – Segmentwise





Agri Input = INR 73.15 cr. (Our estimate – 58-65 cr.)



Performance Polymers (CP, Latex & Food Polymer) = INR 87.27 cr. (Our
estimate – 76-83 cr.)



My Initial Take post Q2FY12 numbers :

Company's performance polymers business (which includes Consumer
Products, Food Polymer & Latex) is growing robustly while Agri-Input
segment is proving to be a steady cash generator as anticipated.....

Agri segment would have even performed excellently especially on
EBITDA front provided Govt.'s favourable ruling had come on subsidy
front which is still under consideration and decision is expected
shortly.... In case of favourable ruling, PAT for H1FY12 would
increase by ~9 cr. which will add to the robust cash generated by Agri
division.... It is worthwhile to note here that while majors like
Coromandel and Khaitan have published their Q2Fy12 results without
making provision for adverse ruling thereby including the revised
subsidy figures into the results, Jubilant has decided otherwise and
not included the revised subsidy figures into H1FY12 results
signifying great amount of transparency adopted in accounts....

The scheme of merger of retail division is already filed on 14th
September 2011 with Allahabad High Court and approval should be
received by December 2011....

For Q2FY12, Jubilant Industries has attained EPS of Rs. 12.46 while
for H1FY12 company has attained an EPS of Rs. 24.33....On full year
basis, company should easily attain an EPS of Rs. 40 + for FY12 which
means that at current market price of Rs. 190, its trading at a p/e
multiple of just 4.75, forget here the mcap-to-sales which is dismally
low at 0.26...

Balance Sheet is very strong with a debt-free status and cash of Rs.
39.25 cr. on books as at 30th September 2011 in addition to parked
money in liquid funds amounting to Rs. 13.18 cr. which simply means
Hard Cash & Cash Equivalents of Rs. 52.43 cr. on books as at the end
of H1FY12.....


With :
Rs. 66 per share as cash on books,

a 550 cr. revenue of core businesses which are themselves expected to
grow by minimum 20 % for atleast next 3 years

~Rs. 370 cr. + revenues generating Retail business to be merged with
the listed entity,

: make Jubilant Industries grossly undervalued stock on the bourses
and it can't trade for too long at a forward p/e of just 4.75 and a
mcap-to-sales of just 0.26..

Views Invited and feel free to ask any queries...

Rgds.

> > > WithJubilantBhartia Group I don'tthink management bandwidth should

[mahesh]

Link to Scheme of Merger -- Meeting on 2nd December 2011

http://www.bseindia.com/xml-data/corpfiling/AttachLive/Jubilant_Industries_Ltd_211111.pdf

Rgds.

On Nov 3, 8:42 am, mahesh <equityanalystinves...@gmail.com> wrote:
> JubilantIndustriestoday announced its Q2FY12 results.... Results

> beat the upper range of our estimates by ~8 % ....
>
> Total Revenue = INR 161.25 cr. (Our estimate – 134-148 cr.)
>
> EBITDA = INR 14.83 cr.  (Our estimate – 12.1 – 13.8 cr.)
>
> Breakup of Revenues – Segmentwise
>
> Agri Input = INR 73.15 cr. (Our estimate – 58-65 cr.)
>
> Performance Polymers (CP, Latex & Food Polymer) = INR 87.27 cr. (Our
> estimate – 76-83 cr.)
>
> My Initial Take post Q2FY12 numbers :
>
> Company's performance polymers business (which includes Consumer
> Products, Food Polymer & Latex) is growing robustly while Agri-Input
> segment is proving to be a steady cash generator as anticipated.....
>
> Agri segment would have even performed excellently especially on
> EBITDA front provided Govt.'s favourable ruling had come on subsidy
> front which is still under consideration and decision is expected
> shortly.... In case of favourable ruling, PAT for H1FY12 would
> increase by ~9 cr. which will add to the robust cash generated by Agri
> division.... It is worthwhile to note here that while majors like
> Coromandel and Khaitan have published their Q2Fy12 results without
> making provision for adverse ruling thereby including the revised

> subsidy figures into the results,Jubilanthas decided otherwise and

> not included the revised subsidy figures into H1FY12 results
> signifying great amount of transparency adopted in accounts....
>
> The scheme of merger of retail division is already filed on 14th
> September 2011 with Allahabad High Court and approval should be
> received by December 2011....
>

> For Q2FY12,JubilantIndustrieshas attained EPS of Rs. 12.46 while

> for H1FY12 company has attained an EPS of Rs. 24.33....On full year
> basis, company should easily attain an EPS of Rs. 40 + for FY12 which
> means that at current market price of Rs. 190, its trading at a p/e
> multiple of just 4.75, forget here the mcap-to-sales which is dismally
> low at 0.26...
>
> Balance Sheet is very strong with a debt-free status and cash of Rs.
> 39.25 cr. on books as at 30th September 2011 in addition to parked
> money in liquid funds amounting to Rs. 13.18 cr. which simply means
> Hard Cash & Cash Equivalents of Rs. 52.43 cr. on books as at the end
> of H1FY12.....
>
> With :
> Rs. 66 per share as cash on books,
>
> a 550 cr. revenue of core businesses which are themselves expected to
> grow by minimum 20 % for atleast next 3 years
>
> ~Rs. 370 cr. + revenues generating Retail business to be merged with
> the listed entity,
>

> : makeJubilantIndustriesgrossly undervalued stock on the bourses

[mahesh]

Listed Retail players become even more expensive on the back of
clearance of fdi in m.b.retail which makes the valuations of Jubilant
Industries even more compelling once merger is through next week..

Rgds.

On Nov 22, 12:16 pm, mahesh <equityanalystinves...@gmail.com> wrote:
> Link to Scheme of Merger -- Meeting on 2nd December 2011
>

> http://www.bseindia.com/xml-data/corpfiling/AttachLive/Jubilant_Indus...

[mahesh]

Almost all prominent listed cos. will attract foreign partner one way
or the other because its because of this only that they have expanded
so far by raising debt even while suffering losses.... This reform is
critical as India is a huge-huge market as far retail segment goes and
each of the serious global retailer can't afford to ignore Indian
market... Although nothing will happen immediately but within 2012
calender year one can expect many tie-ups and M&A in this segment...

Now, with regards to rising copetition, yes, it will rise and that too
to a considerable extent but existing smart players will not suffer
much because they will tie-up with one foreign partner or other in the
years to come in order to expand... Also, heavy competition is quite
far away say 4-5 years away before which each of the existing player
will have great run in terms of exponential growth in financials.....

If one just goes by hypermarket chains, which is the tried-and-tested
format worldwide and most suitable especially for India, there are not
more than 10 group chains operating in India at present and each of
these chains will attract fdi in one way or other......

Now, with rgds. to intent of Jubilant management to attract partner...
I am quoting following sentence from the press release issued by the
company at the time of announcement of merger..

"""To enable the company to attract a different set of investors,
strategic partners who can bring relevant experience for the growth of
this business """

Now, with rgds. to attractiveness of Jubilant as an attractive
candidate for JV, in a fast-growing city like Bangalore, Jubilant is
occupying 2nd largest position with 20 % marketshare and so no serious
foreign retailer can ignore this company....However, such tie-up will
be in which form that is to be seen as still its slight away as
Karnataka is a BJP-ruled state and so far only Narendra Modi of BJP-
ruled Gujarat has expressed intention to go ahead with fdi in m.b.
retail in his state....

I think the management will utilise this opportunity to expand and
have national presence as once profitability gets achieved by FY14,
the company had plans to expand into other cities with per city
investment of 450 cr... This plan could be preponed and A JV can be
formed for this as foreign partner can bring-in technology, expertise
and funds and Jubilant can replicate its tested mall-cum-hypermarket
model and execute it in each city.

All and all, although a JV is quite far away but the attractiveness of
Jubilant Industries as one of the most attractive and safe investment
opportunity has only increased by recent reform of the govt. and from
current levels downside is minimal but upsides are tremendous.

Feel free to get back to me in case of any query.

Rgds.

On Nov 22, 12:16 pm, mahesh <equityanalystinves...@gmail.com> wrote:

> Link to Scheme of Merger -- Meeting on 2nd December 2011
>

> http://www.bseindia.com/xml-data/corpfiling/AttachLive/Jubilant_Indus...

[mahesh]

Small fertiliser firms: Outlook is strong, but valuations still low


30 Dec, 2011, 04.32AM IST



The new Nutrient-Based Subsidy (NBS) policy of April 2010 has
significantly improved the prospects of single-super phosphate (SSP)
industry. Companies' valuations, however, remain low in the current
depressed market conditions.

As the NBS recognised sulphur as an important farm nutrient for
subsidy, the SSP became competitive against the heavily subsidised di-
ammonium phosphate (DAP). This boosted the SSP consumption in the
country 29.2% to 3.6 million tonne. As a result, the industry's
overall capacity utilisation jumped by 7 percentage points to 49.5%.

Apart from the higher volumes, even the margins improved substantially
for the industry, with players such as Rama Phosphate, Basant Agro and
Liberty Phosphate recording a double-digit margin for the first time.

Khaitan Chemicals, country's largest SSP producer, witnessed over 10-
percentage-point margin expansion at 15.1% Almost all companies posted
their highest-ever net profit in FY11. The combined net profit of the
six listed SSP players -Basant Agro Tech, Khaitan Chemicals and
Fertilizers, Liberty Phosphate, Rama Phosphate, Shiva Global Agro and
Teesta Agro - more than tripled to .`117 crore.

These companies continued their dream run in the first half of FY12 as
well, with Basant Agro, Liberty Phosphate and Teesta Agro posting a
profit growth between 16% and 50%.

The performance of Rama Phosphate was down due to slack in its soya
business while Khaitan Chemicals' was down due to forex losses.
Existing players are making fresh investments to take advantage of the
improved policy framework for SSP.

In FY11, the overall capacity inched up 1.7% to 7.9 mt. Leading player
Rama Phosphate has also disclosed plans to expand capacities at its
Udaipur, Indore and Pune plants.



Similarly, Basant Agro plans to expand the capacity of its SSP plant
to produce 1.25 lakh tonne per annum.

Although the industry's improved prospects were cheered by the stock
market in FY11, in the current depressed market conditions, the
industry's valuations have fallen below its earlier levels.

The combined price-toearnings ratio for the six players has fallen
from 3.1 in FY11 to 2.9 at present, which is below what it was in FY09
and FY10.

On Nov 25, 12:24 pm, mahesh <equityanalystinves...@gmail.com> wrote:
> Almost all prominent listed cos. will attract foreign partner one way
> or the other because its because of this only that they have expanded
> so far by raising debt even while suffering losses.... This reform is
> critical as India is a huge-huge market as far retail segment goes and
> each of the serious global retailer can't afford to ignore Indian
> market... Although nothing will happen immediately but within 2012
> calender year one can expect many tie-ups and M&A in this segment...
>
> Now, with regards to rising copetition, yes, it will rise and that too
> to a considerable extent but existing smart players will not suffer
> much because they will tie-up with one foreign partner or other in the
> years to come in order to expand... Also, heavy competition is quite
> far away say 4-5 years away before which each of the existing player
> will have great run in terms of exponential growth in financials.....
>
> If one just goes by hypermarket chains, which is the tried-and-tested
> format worldwide and most suitable especially for India, there are not
> more than 10 group chains operating in India at present and each of
> these chains will attract fdi in one way or other......
>

> Now, with rgds. to intent ofJubilantmanagement to attract partner...

> I am quoting following sentence from the press release issued by the
> company at the time of announcement of merger..
>
> """To enable the company to attract a different set of investors,
> strategic partners who can bring relevant experience for the growth of
> this business """
>

> Now, with rgds. to attractiveness ofJubilantas an attractive

> candidate for JV, in a fast-growing city like Bangalore,Jubilantis
> occupying 2nd largest position with 20 % marketshare and so no serious
> foreign retailer can ignore this company....However, such tie-up will
> be in which form that is to be seen as still its slight away as
> Karnataka is a BJP-ruled state and so far only Narendra Modi of BJP-
> ruled Gujarat has expressed intention to go ahead with fdi in m.b.
> retail in his state....
>
> I think the management will utilise this opportunity to expand and
> have national presence as once profitability gets achieved by FY14,
> the company had plans to expand into other cities with per city
> investment of 450 cr... This plan could be preponed and A JV can be
> formed for this as foreign partner can bring-in technology, expertise

> and funds andJubilantcan replicate its tested mall-cum-hypermarket

> model and execute it in each city.
>

> All and all, although a JV is quite far away but the attractiveness ofJubilantIndustriesas one of the most attractive and safe investment

[mahesh]

Jubilant Industries Ltd has informed BSE that The Hon'ble High Court
of Judicature at Allahabad vide its order dated January 16, 2012 has
sanctioned a Scheme of Arrangement amongst Enpro Oil Private Limited,
Jubilant Industries Limited and Jubilant Agri and Consumer Products
Limited.

The above said order has been filed in Form No. 21 with the office of
Registrar of Companies, Uttar Pradesh (ROC) by Jubilant Industries
Limited.

Therefore, the Scheme has become effective w.e.f. February 01, 2012.




On Dec 31 2011, 12:00 pm, mahesh <equityanalystinves...@gmail.com>
wrote:

[mahesh]

Retail Business Merger Finally Completed.... 27/02/2012 Record Date
fixed for Share Allotment



Jubilant Industries Ltd has informed BSE that pursuant to Clause 4.1
of Part C of Section II of the Scheme of
of arrangement among Enpro Oil Private Limited (EOPL), Jubilant
Industries Limited (JIL) and Jubilant Agri and Consumer Products
Limited (JACPL) and their respective shareholders and creditors
("Scheme"), the Board of Directors of EOPL, in consultation with the
Restructuring Committee of Board of Directors of JIL, has fixed
February 27, 2012 as the Demerger Record Date for allotment of fully
paid-up equity shares of face value Rs. 10 each of JIL to the
shareholders of EOPL as on the Demerger Record Date.

Subsequent to the Demerger Record date, the equity shareholders of
EOPL will be issued 10 (ten) equity shares of face value Rs. 10 each
credited as fully paid-up in JIL for every 22 equity shares of face
value Rs. 10 each held by them in EOPL, as on the Demerger Record
Date. Accordingly 38,35,348 new equity shares of face value Rs. 10
each will be issued and allotted by JIL.


On Feb 4, 4:27 pm, mahesh <equityanalystinves...@gmail.com> wrote:
> JubilantIndustries Ltd has informed BSE that The Hon'ble High Court

> of Judicature at Allahabad vide its order dated January 16, 2012 has

> sanctioned a Scheme of Arrangement amongst Enpro Oil Private Limited,JubilantIndustries Limited andJubilantAgri and Consumer Products

[mahesh]

Jubilant Industries Limited announces a price increase upto 10 % per
MT [Wet] or as contract allow , for its Encord Grades of VP & SBR
Latex , with effect from March 1st, 2012.

On Feb 27, 12:59 pm, mahesh <equityanalystinves...@gmail.com> wrote:
> Retail Business Merger Finally Completed.... 27/02/2012 Record Date
> fixed for Share Allotment
>

> JubilantIndustriesLtd has informed BSE that pursuant to Clause 4.1

> of Part C of Section II of the Scheme of

> of arrangement among Enpro Oil Private Limited (EOPL),JubilantIndustriesLimited (JIL) andJubilantAgri and Consumer Products

[mahesh]

Promoters buy 0.57 % equity from the open market at a rate of Rs.
252.50 per share. A strong signal of gross undervaluation of the
company on the bourses as well as promoters' belief and trust on the
growth prospects of the company - Jubilant Industries Ltd..

http://www.bseindia.com/xml-data/corpfiling/AttachHis/Jubilant_Industries_Ltd_060312_SAST.pdf



Rgds.


On Mar 6, 10:10 am, mahesh <equityanalystinves...@gmail.com> wrote:
> JubilantIndustriesLimited announces a price increase upto 10 % per

[mahesh]

Link to pdf of Q4FY12 as well as FY12 estimates http://www.scribd.com/doc/87613153

My Q4FY12 as well as FY12 estimates for Jubilant Industries Ltd :


( fig. In ` cr. )
Q4FY12

FY12e




Revenue


IP

ACP

Retail
50 - 54

76 - 82

110 - 118
198 - 202

396 - 402

415 - 430

Total
236 - 254
1009 - 1034



EBITDA


IP

ACP

Retail
5.5 – 5.8

6.8 – 7.5

(9) – (11)
21.5 - 23

43 - 45

(32) – (35)

Total
2.3 – 3.3
32.5 - 33

On Mar 7, 10:08 am, mahesh <equityanalystinves...@gmail.com> wrote:
> Promoters buy 0.57 % equity from the open market at a rate of Rs.
> 252.50 per share. A strong signal of gross undervaluation of the
> company on the bourses as well as promoters' belief and trust on the
> growth prospects of the company -JubilantIndustriesLtd..
>

> http://www.bseindia.com/xml-data/corpfiling/AttachHis/Jubilant_Indust...

[mahesh]

Agri segment has room for a positive surprise this qrtr. as based on
the recent data released, there seems to be great pick-up in SSP sales
in Feb-March...



Also, in the latest presentaion of Jubilant Bhartia Group, Jubilant
Industries is given a good prominence wherein its placed before
Jubilant Foodworks just next to flagship company Jubilant Life... The
Retail business is now included in Jubilant Industries and the company
has moved on to become Top 2 SPVA producer of the world.

Link to latest presentation -
http://www.jubilantbhartia.com/jubilant-bhartia-group/jubilant-group-presentation-march2012.pdf



Rgds.


On Apr 2, 10:22 am, mahesh <equityanalystinves...@gmail.com> wrote:
> Link to pdf of Q4FY12 as well as FY12 estimateshttp://www.scribd.com/doc/87613153

[mahesh]

Jubilant Industries Ltd has informed BSE that a meeting of the Board
of Directors of the Company will be held on May 09, 2012, inter alia,
to consider and approve the Audited Financial Results of the Company
for the year ended March 31, 2012 and recommendation of dividend, if
any.

On Apr 13, 11:46 am, mahesh <equityanalystinves...@gmail.com> wrote:
> Agri segment has room for a positive surprise this qrtr. as based on
> the recent data released, there seems to be great pick-up in SSP sales
> in Feb-March...
>

> Also, in the latest presentaion ofJubilantBhartia Group,JubilantIndustriesis given a good prominence wherein its placed beforeJubilantFoodworks just next to flagship companyJubilantLife... The
> Retail business is now included inJubilantIndustriesand the company

> has moved on to become Top 2 SPVA producer of the world.
>

> Link to latest presentation -http://www.jubilantbhartia.com/jubilant-bhartia-group/jubilant-group-...