Investing on Vision

Investing on vision means investing on the basis of long term targets set by the company’s management in terms of revenues or profits.

Pantaloon Retail: Revenues of 30,000 crs by FY12

Punj Llyod: $5bn turnover by FY14

Voltas: Rs.10,000 crs revenues by FY11

Gail: Revenues of Rs.50,000 crs by FY12

Jindal Saw: Revenues of 8,600 crs by 2012

Jindal Drilling & Industries: Rs 2000 crs revenues by 2010.

Bharati Shipyard: Turnover of Rs.2500crs by FY12

Sesa Goa: Among top 4-5 mining companies in the world in 10 years.

Educomp Solutions: $1bn revenues by FY13 (Against Rs 262crs in FY08)

Subhiksha (might get listed next year): Rs 20,000 crs turnover by 2011 (Closed FY08 with Rs 2300crs)

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6 responses to “Investing on Vision

  1. What would be the expected net profit margins for Pantaloon Retail and Voltas?
    Pantaloon’s margins of late haven’t been great.

  2. Pantaloon will declare their FY08 results on 20th September,I wont speculate since the date is nearby. The company has been working on efficiencies, I expect their operating margins will improve by 100 basis points in FY09 due to their increased focus on fashion sales,also they have raised food prices by some 5-6%. High debt is a concern though.Hopefully, inflation will come down to higher single digit by Q1 of CY09 and thus interest rates by Q2 CY09.

    Voltas has given a NPM guidance of 10% by FY11 so it can only improve going forward. Margins will depend on commodities prices and rupee-dollar movement.

  3. Thanks for your quick reply.
    An NPM of 10% for Voltas would mean Rs 1000 cr in net profit.
    That should give it a market cap of roughly Rs 25000-30000 cr, or even more.
    Do you agree with Kishore Biyani’s target to make Pantaloon a Rs 100000-crore company by 2015?

  4. I guess 10% margins is possible at the EBIT level. Also, 2500crs of 10k crs guidance will come from acquisitions which have not been made till now.

    Per capita income should increase substantially to achieve 1 lakh cr turnover. I dont think its possible by 2015.Maybe 2018 or later.

  5. Actually I was talking about Pantaloon’s market cap and not sales.
    Don’t you think Voltas being a prominent exporter is exposed to exchange rate fluctuations and also to how other economies perform?

  6. Kishore Biyani never said anything about market cap.It was Prof.Mankekar who mentioned in KB’s autobiography.

    Concerns for Voltas is slowdown of residential and commercial real estate and depreciating rupee in the Indian context. Much of the orders for Voltas comes from Middle East whose economy will continue to boom till the crude is above $60.

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