A Final Report ON: Financial Analysis at Reliance Money

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d6e7472524742205
A FINAL
REPORT
8595a2007ce000200
ON
0900060031000061
6373704d53465400
0000004945432073
FINANCIAL
ANALYSIS AT
5247420000000000
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RELIANCE
MONEY
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0d32d48502020000
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By Saurabh
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0000000000000000
Sharma
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07BS-3882
Final report submitted in
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0000000000011637
partial fulfillment
of the requirements of
0727400000150000
MBA Program of
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47074000001f00000
0014626b70740000
0204000000147258
595a000002180000
AHMEDABAD
00146758595a0000
COMPANY GUIDE
022c000000146258
FACULTY GUIDE
Mr. 595a000002400000
hardik mathur
Prof. Suneel Arora
0014646d6e640000
Center manager (vastrapur branch)
025400000070646d
IBS Ahmedabad
Reliance
money,
Ahmedabad
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0088767565640000
034c000000867669
6577000003d40000
00246c756d690000
03f8000000146d656
ACKNOWLEDGEMENT
No significant achievement can be solo performance. It took many very

special people to enable it and support it. Here we would like to
acknowledge their precious co- operation and express our sincere
gratitude to them. This project has benefited from the generous
contributions of time of many individuals.
Supporting every project is an understanding and a helpful guide. I am
thankful to Mr.Hardik Mathur, who provided tremendous guidance to
us and was always supportive & helpful in solving our queries.
Our most sincere thanks to Prof. Suneel Arora, for his tremendous
support & encouragement & his added guidance which helped us
enhance the quality of our project & gave us the courage &
determination to open up new horizons towards the final completion of
our grand project.
I am also thankful to ICFAI business school for having given us an
opportunity of undertaking such an interesting & knowledge building
grand project as part of our curriculum for the course of PGDBM.
I am also like to express my gratitude towards equity expert of reliance
money Mr. Harshad whom I visited and all the people who have been
associated with this project, either directly or indirectly for sparing their
valuable time.
I am also thankful to the authors of several books linked with the
project.
Saurabh Sharma
Conten
t
1. Introduction to shipping
industry
2. Industry
structure
3. Classification by size and
segment
4. Shipping industry
characteristics
5. The Indian shipping
industry
6. Composition of shipping
industry
7. Shipping
policy
8. Ninth plan
target
9. Varun shipping industry a) History b)
Why Varun shipping only? c) Business of
Varun shipping d) Business strategies e)
Growth plan f) Dividend yield
performance of company g) Key concern
h) Financial overview i) Ratios j) Valuation
k) Recent development l) Future plans m)
Recommendation n) Methodology o)
Learning p) Limitations q) Bibliography
INTRODUCTION OF SHIPPING
INDUSTRY
The shipping industry is among the most competitive of international businesses, owing to its
cyclical nature. This cyclicality arises from the interplay of international trade volumes and
the supply of shipping tonnage. Since there is no opportunity cost for shipping services, which
cannot be stored like commodities, freight rates drop even if there is a marginal fall in
demand. This makes it a high-risk business for players as well as for investors.
Being a highly cyclical business, the timely acquisition of ships crucially determines the
viability of shipping operations. However, the amendment to Sec.51 of the Merchant Shipping
Act is likely to give domestic ship-owners the necessary flexibility to profitably time
acquisitions and disposals in the international market.
The shipping industry is divided into several categories all of which operate on wellestablished routes.
Liner services
Tramp shipping
Industrial services
Tanker operations
ffd8ffe000104a4649460001020100c800c80000ffe20c584943435f50524f46494c450
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00310000616373704d53465400000000494543207352474200000000000000000000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STRUCTURE: The international shipping industry involved in transportation of Cargoes, primarily
comprises of vessels operating in the wet-bulk, dry-bulk, liquefied gas, bulk chemical
and container sectors. Specialized vessels such as ferries, car carriers and heavy lift
ships are also involved in the transportation of passengers, automobiles and project
Cargoes. Offshore support vessels provide various services to the offshore Exploration
and production industry. Despite signs of slower economic growth in the US and China,
the latest View of the OECD's International Energy Agency is for a doubling of global
Oil demand growth in 2007 to 1.6 m-bpd. The EIA forecasts that OPEC will Raise output
by 1m-bpd in second half 2007. A strong demand and sea-borne trade in oil, bides well
for the tanker and offshore markets. 50% of mid-size transport concerns from
ammonia shows growth in this segment also improve gradually. LPG consumption
Expected to
increase owing to growing penetration in rural areas mainly due to shift in consumption
from Kerosene to LPG. LPG is largely used as domestic fuel in India .Domestic LPG
consumption in India accounts for 80% of total demand. During 2006-07 to 2010-11
LPG demand is estimated to increase at a CAGR of 3.6% and overall penetration is
expected to increase at 4.3% from an estimated 41.7% of the total Household in 200607 to around 46% in 2012.
ffd8ffe000104a4649460001020100c800c8000
0ffe20c584943435f50524f46494c45000101000
00c484c696e6f021000006d6e74725247422058
595a2007ce0002000900060031000061637370
4d534654000000004945432073524742000000
0000000000000000000000f6d6000100000000
d32d4850202000000000000000000000000000
00000000000000000000000000000000000000
00000000000000000000000000000011637072
74000001500000003364657363000001840000
006c77747074000001f000000014626b707400
000204000000147258595a0000021800000014
6758595a0000022c000000146258595a000002
Indias overseas trade is projected
to grow at 20% & estimated to be 1 billion tonnes by
4000000014646d6e640000025400000070646d
6464000002c400000088767565640000034c00
2011. To maintain the current
share of 13.7%, an addition of over 15 million GT would
00008676696577000003d4000000246c756d69
require, 45% as of 1st October
2007 of the fleet being 20 years of age.
000003f8000000146d6561730000040c000000
2474656368000004300000000c725452430000
043c0000080c675452430000043c0000080c62
5452430000043c0000080c7465787400000000
436f7079726967687420286329203139393820
Key
4865776c6574742d5061636b61726420436f6d
70616e79000064657363000000000000001273
Supply: Determined by the addition
to shipping
capacity Demand: Closely related to
5247422049454336313936362d322e31000000
Points
00000000000000001273524742204945433631
3936362d322e31000000000000000000000000
growth in world trade. Barriers
to entry: Highly capital intensive and adequate cash flows
000000000000000000000000000000
required for funding working
capital requirements. Moreover, expertise and technical know-how are critical factors.
Bargaining power of suppliers: Diminishing with gradual increase in fleet supply and
intense global competition. Bargaining power of customers: High bargaining power as
competition is high in the industry. Competition: Competition is price based. However,
companies with younger fleet command a
premium.
CLASSIFICATION BY SIZE AND

The world shipping fleet comprises tankers, dry bulk carriers, container ships and specialized
vessels. The tanker fleet accounts for SEGMENT
33.32% of the total fleet, while dry bulk carriers
constitute 31.83% of the total in terms of mn. Gross registered tonnes (grt) which are the
volume of each vessels enclosed area. The average age of the world fleet is around 18 years.
The Greeks are the worlds largest ship-owners, owning 16% of the global fleet. Japan and
South Korea are the leading ship builders, with 40% and 29% respectively of the total
completed gross tonnage. Panama and Liberia are the largest ship registries for cargocarrying ships, with 18% of the world's fleet being registered in Panama.
The internationally accepted size classification of ships, along with the cargo capacity, is
given below in terms of the dead weight tonnage (dwt-a unit of carrying capacity including
cargo, fuel oil, stores, crew and passengers, usually measured in long tons of 2,240 pounds
or metric tons (tones) of 2,204.6 pounds (1,000 kilograms).
Tankers:
Aframax
80,000 to 110,000 dwt
Suezmax
130,000 to 160,000 dwt
VLCC (very large crude carriers)
250,000 to 300,000 dwt
ULCC (ultra large crude carriers)
over 300,000 dwt
Product tankers, LPG\LNG and chemical tankers carry a more specialized kind of liquid cargo.
There are the smaller GP size product tankers and the larger MR (medium range) size
product tankers.
GP Tankers
16,500- 24,999 dwt
MR Tankers (medium range)
25,000- 44,999 dwt
LR-1 Tankers (long range)
45,000- 79,999 dwt
LR-2 Tankers (long range)
80,000- 1,59,999 dwt
Hanydysize
Dry Bulk Carriers: These ships carry ores, coal, grain,
fertilisers, etc. They include:
20,000 to 30,000 dwt.
Handymax
35,000 to 45,000 dwt.

Panamax
60,000 to 70,000dwt.
Capesize
over 90,000 dwt.
cargo being containerized. Combination carriers carry steel products, cement, non-ferrous
metals, sugar, salt, etc.
SHIPPING INDUSTRY
CHARACTERISTICS
Importance to
Economy
Shipping plays an important role in the Indian economy. Approximately 95% of India's
international trade by volume and 70% by value are seaborne. India has 12 major and 185
minor/intermediate ports along its coast-line of around 7,517 kms. Shipping has a multiplier
effect on the economy & creates employment.
Although shipping plays a major role in facilitating the country's international trade (sea
borne trade accounts for 32% of the country's foreign trade), the same cannot be said for the
Indian shipping industry.
Indian shipping companies collectively owned about 704 vessels with 8.3 million gross
tonnage (GT) or around 13.75 million deadweight tonnage. India ranks 15th in the world by
flag of registry forming approximately 1.5% of the total world tonnage with a favorable
average age as compared to the world fleet. Contributing approximately 0.3% to the
country's GDP, share of the Indian shipping industry in India's sea borne trade has declined
from 40.7% in FY1988 to around 30-32% over the last few years. In terms of India's overseas
trade, the share of Indian shipping industry is only around 14% (comprising 5.6% for general
cargo, 8% for dry bulk, 27% for POL and products). The low share of India's shipping industry
in India's seaborne trade is largely on account of policies which have affected the industry's
competitiveness vis--vis foreign companies. Thus, although shipping as a service is of
tremendous importance, the Indian shipping industry has only moderate importance in the
country.
Cyclicalit
y
As international trade tends to be cyclical, demand for shipping services is also cyclical.
High cyclicality of the industry is reflected in volatile freight rates. The shipping industry is
generally
characterized
by a continuous
demand-supply
imbalance.
depends
on of the
In the general
cargo category,
container
vessels dominate
the trade, Demand
with more
than 65%
factors such as volume of trade, shifting global trade patterns, regional disparities,
oil price developments for
tankers, and regulatory interventions. Supply invariably follows demand, with growing
demand positively impacting freight rates and encouraging new shipbuilding activity. The
stock of vessels can be influenced by changes in scrapping of old vessels or changes in the
stream of new builds. The delivery of new vessels can be one or several years after the
order and as such time-lags in vessel deliveries influence market dynamics. In a scenario of
depressed freight rates, lower revenues can lead to the elimination of marginal players as
well as influence the scrapping of old ships.
Owing to highly cyclical demand and capital intensive nature of the business (ships can
cost anything between US$20-200 million depending upon size and specification), shipping
companies frequently buy and sell ships to adjust their asset and expense base
in light of expected demand conditions. Typically, ships are sold/ scrapped when
the companies stop recovering the variable costs. Prices of ships also tend to be
cyclical and timing of ship sale/purchase can be an important determinant of profitability.
Therefore, if effectively managed, ship buying and selling can neutralize the demand cycles
to some extent.
Sensitivity of Industry to Government
Policies
India's shipping industry is governed by the Ministry of Shipping, which encompasses
within its fold shipping and port sectors which include shipbuilding and ship repair, major
ports, national water-ways and inland water transport. Until recently, the Government had
not responded to the industry's demands for rationalization of the taxation structure.
However, this has changed with introduction of tonnage tax scheme. Government has
rationalized the fiscal regime for the industry by introducing the Tonnage Tax
system from FY2005, in order to provide
Indian shipping industry a level playing
field vis--vis international shipping companies91-98
and also facilitate the growth of
1998
Indian tonnage. This regime aligns the income tax incidence
on shipping in comes of
1999
Indian industry to levels applicable to most of the global
shipping tonnage. However,
2000
2001
permission to register ships in Flag of Convenience (FOC)
countries is still awaited. This
99-08
raises the costs for Indian shipping companies in relative terms and affects the industry's
competitive position adversely, which is reflected in its declining market share. However,
even so, the downside risk (arising out of adverse policy developments) on this front
appears limited.
Growth Potential/Outlook Global
GDP
Adv. economies
2.3
2.0
2.6
2.5
2.3
2.6
The growth potential of the shipping industry is directly dependent on growth in world
output, world trade, and world maritime trade. In 2005, world output increased 4.8%, as
compared with a growth of 5.3% in 2004.
World output is increase to 4.9% in 2006, and 4.7% in 2007; primarily driven by higher
growth in emerging economies. While output growth in emerging/developing countries is to
be 6.9% in 2006(7.2% in 2005), output growth in advanced economies is to be 3% in 2006
(2.7% in 2005). Over the period 1998-2007, world output is to expand 4.1% per annum.
%
During 2005, the volume of world trade increased 7.2%, as compared with a growth of
1988-97
10.7% in 2004. The increase in trade1998-2007
was driven by high oil and metals trade. World
seaborne trade increased 6.9% in 2004 to reach 27,635 billion ton-miles. Increased demand
for haulage of crude oil and oil products
2001resulted in ton-mileage for these commodities
2002 with 6.9% in 2003. For all dry cargoes, the tonincreasing by 6.2% in 2004, as compared
2003
mileage increased by 7.4% in 2004. In the tanker segment,
total world shipments of tanker
2004 20052007
cargoes increased 4.2% in 2004 (the latest year for which data
2006is available) to 2.32 billion
tons, as compared with growth of 3.6%
7.5 in 2003. . About 76.4% of the tanker trade was in
Volumeproducts. The share of tanker shipments in
crude oil, with the remainder in petroleum
7.20
overall world seaborne trade was 34.3% in 2004.
In the dry bulk segment, overall dry cargo
shipments increased 4.4% in 2004 to 4.44 billion tons, as compared with a growth of 6.9%
6.50
in 2003. The dry-bulk trades- iron ore, coal, grains, bauxite/alumina and rock phosphate--0.3
recorded a growth of 7.6% to 1.59 billion tonnes. 3.7
The remaining dry cargo trade increased at a slower rate of 2.7% to 2.86 billion tons. The
6.0
share of dry cargo shipments in world
seaborne trade was 65.7% of total goods loaded
10.7
during 2004.
7.2
8.0
Volume Exports
Growth in World Trade in
Goods
6.1
00010100000c484c696e6f021000006d6e74725247422058595a2007ce0002000900
Advanced economies
0600310000616373704d53465400000000494543207352474200000000000000000
7.2
00000000000f6d6000100000000d32d485020200000000000000000000000000000
5.2
0000000000000000000000000000000000000000000000000000000000000000001
-1.3
163707274000001500000003364657363000001840000006c77747074000001f000
2.3
000014626b707400000204000000147258595a00000218000000146758595a00000
3.4
Source: The World Bank
22c000000146258595a0000024000000014646d6e640000025400000070646d6464
8.5
000002c400000088767565640000034c0000008676696577000003d4000000246c7
5.1
6.6
56d69000003f8000000146d6561730000040c000000247465636800000430000000
0c725452430000043c0000080c675452430000043c0000080c625452430000043c00
Other emerging market
00080c7465787400000000436f70797269676874202863292031393938204865776
c6574742d5061636b61726420436f6d70616e790000646573630000000000000012
735247422049454336313936362d322e31000000000000000000000012735247422
049454336313936362d322e31000000000000000000000000000000000000000000
000000000000
and developing countries

FuelIndia
exporters
4.4 and
5
1.7
3.1 9.1 9.9
6 6.6
In shipping tonnage,
ranks sixth in Asia
7.6 fifteenth in the world merchant shipping
trade
5.3
10
India has a coastline of over 5,000 km.,
with about 150 working ports.
8.9
Nonfuel exporters
Imports
Advanced economies 7
10.2 3.1 2.8

8.9 12.1 16 12.5
7.4
11.4
14.4
10.8
10.1
5.9
-1.5
2.9
4.7
9.4
8.9
11.6 12
5.9
6.3
5.5
Other emerging market
and developing countries 7.4
12.4
Fuel exporters
10.3
8.9
1.3 9
Nonfuel exporters
12.8
9.5
15.3
8.9
3.5
6.6 11.5 16.6 12.1 12.9
8.9 6.4 14.4 19.4
1.4
6.1 12.6
16.2
17.1 10.7 12.3
Source: International Monetary Fund
The volume of world trade increased 7.2% in 2006, as compared with 10.7% in 2005, driven
primarily by growth in trade by developing economies. Data on world seaborne trade
indicates that World seaborne trade (goods loaded) in 2005 recorded another consecutive
annual increase, reaching a record high of 6.76 billion tons. The annual growth rate was
4.3% in 2005, as compared with 5.8% in 2004. Total maritime activities measured in tonmiles increased to 27,635 billion ton-miles in 2005, compared with 25,844 billion ton-miles
in 2004.
Over the last few years, the shipping industry has performed well on account for strong
demand for shipping and unusually low tonnage supply, both of which resulted in rise in
freight rates making for a classical upturn in the market. Demand for shipping is expected
to continue to be strong as demand for key cargo continues to be buoyant
THE INDIAN SHIPPING

INDUSTRY
At present, the Indian shipping industry
comprises 510 ships, of which 240 are overseas

fleet and 270 are coastal ships, including 70
offshore
support vessels, about 25 supply vessels for offshore

services and 12 dredgers. There were also 31
chartered vessels operating on bare-boat-chartercum-demise.
Nearly 94% of India's foreign trade, in terms of
volume, moves by sea. India's overseas trade has
been growing at an annualized rate of 6.8%.
Indian shipping companies have a high dependence
on international trade, with close to 95% of overseas
trade by volume and 77% by value moving by sea.
Crude oil and oil products, iron ore, coal grain and
steel are some of the major products transported
through sea.
The share of Indian flags in total Indian trade is a
mere 30%, with foreign flags accounting for 70% of
the trade.
India has 55 shipping companies, of which 19 deal
exclusively in coastal trade, and 29 in overseas trade,
while the remaining are in both.
A few major players dominate the Indian shipping
sector. While Shipping Corporation of India (SCI) and
Great Eastern has mixed fleets, Essar Shipping, which
focuses on the energy trade, has mainly tankers.
ffd8ffe000104a4649460001020100670
0670000ffe20c584943435f50524f46494
c4500010100000c484c696e6f02100000
6d6e74725247422058595a2007ce0002
0009000600310000616373704d534654
00000000494543207352474200000000
00000000000000000000f6d600010000
0000d32d485020200000000000000000
00000000000000000000000000000000
00000000000000000000000000000000
00000000000000116370727400000150
0000003364657363000001840000006c
77747074000001f000000014626b7074
00000204000000147258595a00000218
000000146758595a0000022c00000014
6258595a0000024000000014646d6e64
0000025400000070646d6464000002c4
00000088767565640000034c00000086
76696577000003d4000000246c756d69
000003f8000000146d6561730000040c
0000002474656368000004300000000c
725452430000043c0000080c67545243
0000043c0000080c625452430000043c
0000080c7465787400000000436f7079
72696768742028632920313939382048
65776c6574742d5061636b6172642043
6f6d70616e7900006465736300000000
00000012735247422049454336313936
362d322e310000000000000000000000
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2e310000000000000000000000000000
00000000000000000000000000
Particulars
No of Vessels
Tonnage capacity (mn tonnes)
Shipping Corporation of India
117
5
Great Eastern Shipping Co Ltd
64
1.59
Essar Shipping
39
1.5
Varun Shipping
13
0.28
Indian shipping companies have a high dependence on international
trade, with close to 95%
of overseas trade by volume and 77% by value moving by sea. Crude oil and oil products,
iron ore, coal grain and steel are some of the major products transported through sea. The
share of Indian flags in total Indian trade is a mere 30%, with foreign flags accounting for
70% of the trade.
Year
General Cargo
Dry Bulk
Cargo
Share of Indian Vessels in Indian Overseas Trade:
(%)
POL
Total
1985-86
20.7
22.8
75.2
34.9
1990-91
12.6
24.2
61.8
35.5
1995-96
10.4
14.5
53.3
27.8
1996-97
9.8
16.1
55.3
29.8
their importance. The index will, therefore, represent the average daily Time Charter
earnings for these ships. Time Charter is the contract for the hire of ships for a certain period
of time.
In the tanker segment, nearly all trip chartering is done on the basis of the Worldscale, which
is a method of calculating the payment for transportation of oil by tankers. The Worldscale is
a table giving the amount of dollars per tonne of oil for each of a number of standard routes.
(POL petroleum oil and lubricants) Source: INSA
In shipping tonnage, India ranks sixth in Shipping
Asia and fifteenth in the world merchant shipping
trade. The Ninth Five-Year Plan envisages policy
the expansion of the Indian fleet to 9 million grt
of the categories
of ships
entailingMost
an investment
of Rs 150
bn. viz. crude tanker, Product Tanker, Bulk Carriers etc.
have been brought under the Open General License (OGL) to facilitate acquisition at
competitive price;
At present, the Indian shipping industry comprises 510 ships, of which 240 are overseas fleet
and 270 are coastal ships, including 70 offshore support vessels, about 25 supply vessels for
offshore services and 12 dredgers. There were also 31 chartered vessels operating on bare Automatic approval is also available for acquisition by ship-owning Companies for
boat-chartercum-demise.
the categories which are not covered under O.G.L i.e. Barges, Tugs and Boats etc.;
Acquisition through Bare Boat Charter-Cum Demise method;

Composition of Indian
Fleet
Shipping Companies have been allowed to retain sale proceeds of their ships
abroad and utilize them for fresh acquisition;
The Shipping Companies

are now permitted to get their ships repaired in any
ffd8ffe000104a46494600010201006000600000ffe
shipyard without 20c584943435f50524f46494c4500010100000c484c
seeking prior approval from the Government;
696e6f021000006d6e74725247422058595a2007ce
00020009000600310000616373704d53465400000
Quarterly Block
Allocation scheme for repair of ships has been dispensed with;
00049454320735247420000000000000000000000
000000f6d6000100000000d32d4850202000000000
00000000000000000000000000000000000000000
Reserve Bank00000000000000000000000000000000000000000
of India releases foreign exchange for ship repair/dry docking and
00001163707274000001500000003364657363000
spares for imported
capital goods, without any value limit;
001840000006c77747074000001f000000014626b7
07400000204000000147258595a000002180000001
46758595a0000022c000000146258595a000002400
Freedom to Time
Charter out ships by Indian Shipping Companies;
0000014646d6e640000025400000070646d6464000
FREIGHT
002c400000088767565640000034c0000008676696
RATES
577000003d4000000246c756d69000003f80000001
100 percent investment by NRIs in shipping with full repatriation benefits;
46d6561730000040c0000002474656368000004300
Baltic Freight Index (BFI) is the leading indicator of spot dry bulk cargo rates. It is not a
000000c725452430000043c0000080c67545243000
shipping index, but an indicator
of the bulk cargo market put out by the Baltic Exchange. The
0043c0000080c625452430000043c0000080c74657
BFI is aweighted
average
representing
Panamax
(70%) and
(30%), based on 11
Automatic approval
for foreign direct
investment
uptoCapesize
74% in shipping;
87400000000436f707972696768742028632920313
international shipping routes
and three commodities (coal, iron ore and grain). The BFI is
93938204865776c6574742d5061636b61726420436
relevant for bigger ships; most Indian companies have smaller-sized vessels.
f6d70616e790000646573630000000000000012735
Facilities at par
with 100 per cent EOUs for ship repairs industry;
247422049454336313936362d322e3100000000000
A new index, the Baltic Handymax
Index (BHMI), was developed and published in October
0000000000012735247422049454336313936362d
2000, to reflect changing
market conditions. It will replace the Baltic Handy Index (BHI),
322e31000000000000000000000000000000000000
introduced
in 1997,
which
willaccount
cease to
at the end
of December.
The BHMIproducts
is based on a
Freight
charges
on
ofexist
movement
of fertilizers
and petroleum
000000000000000000
bulk carrier
of
45,500
tonnes
dwt,
and
comprises
six
typical
Time
Charter
routes,
weighted to
are allowed to be paid in convertible currency;
take account of
No permission is required for raising foreign exchange loans from abroad by

mortgaging the vessels with the lender;
Action has since been initiated to formulate a National Shipping Policy to provide
fiscal, financial, administrative and legislative measures for growth and development
of shipping in India.
Automatic approval is now

given for:
Acquisition of all categories of ships, except crude tankers and offshore supply vessels
(OSV), by private ship owning companies.
Sale of ships for further trading / scrapping to a company within India and abroad.
Acquisition of ship from an Indian shipyard; and
Acquisition for replacement tonnage.
Shipping companies are now free to time-charter Indian ships to foreign shipping
companies.
Shipping companies can acquire vessels through bare-boat-charter-cum-demise method.
The Quarterly Block Allocation Scheme for repair of ships has been dispensed with entirely
and the Reserve Bank of India now releases foreign exchange for ship repair / dry docking,
India'swithout
Trade any
in Goods
and spares for imported capital goods,
value limit.
Freight charges on account of movement of fertiliser and petroleum products are not
allowed to be paid in convertible currency on par with other
%commodities.
Shipping companies have been allowed to retain the sale proceeds of their ships abroad
and utilise them for fresh acquisition.
In order to attract foreign capital for acquisition of ships, the government has relaxed the
Particulars 2006
minimum percentage of share capital to be held by Indian citizens in an Indian company,
2000
from 60% to 49%.
2001
2002
2003
2004
2005
Value-US$ million 240,845
86,493
95,097
95,240
114,132
141,992
187,303
Exports
44,560
43,827
100,607
36,822
52,719
63,843
80,672
Imports
140,238
49,671
50,537
51,413
61,412
78,149
106,631Exports
10.8%
Growth28.6%
21.0% 14.4%
21.1%
0.2%
26.4%19.8%
24.7%24.4%
31.9%
Imports
17.2%
1.7%
1.7%
19.4%
27.3%
36.4%
31.5%
India's shipping fleet has expanded at a significant rate over the last few years, as detailed
below: Growth in India's Shipping Fleet
Total Ships
90 87 91
279 277 299
At end-
510 549 557 617 625 669

Oil tanker 106 107 108 105 115 126
Others
1999 2000 2001 2002 2003 2004

Of which dry cargo bulk 116 117 119
Dry Cargo Liner
123 127 129 143 146 153
165 198 201
GRT (thousands) 7,053
The 6,968
Ministry
of Commerce
has targeted
doubling
of export
share in
world2,820
trade 2,212
6,953
6,207
6,623 7,701
Of which
dry cargo
bulk 2,648
2,703
between2004-09. This would require exports also to at least double during next five years
2,053
2,068
Oil tanker 3,348 3,218 3,220 3,172 3,794
4,844
Dry Cargo
or a CAGR of at least 15%. In the past five years (FY2002-06), the growth rate has been
Liner
591will
488
467to
418
427 its Others
405 in
441
358
362if it
17.7%. The652
country
have
sustain
growth momentum
the440
next356
three
years
wants
to reach the target
of a 11,356
1.7% share
in world
exports
by 2008-09.
DWT-thousands
11,495
11,462
10,115
10,870
12,716
Of which dry
In volume
terms,
the data
FY2004
indicates
that India's
exports
increased
in
cargo
bulk 4,452
4,548
4,779upto
3,711
3,426
3,443
Oil tanker
5,750
5,548 6%
5,587
FY2004, and at a 5year CAGR of 13.9% between FY2000-04. The growth was primarily
5,539 6,644
8,483
Dry Cargo Liner
793 709 547 499 435 422
Others
because of significant increase in exports of mineral fuels, lubricants; chemicals; and
500
551 549 366
365
368
manufactured
goods
(primarily
metals and textiles).
India's imports in volume terms increased 20.9% in FY2004, and at a 5-year CAGR of
8.5% between FY2000-04. The growth was primarily because of significant increase in
exports of crude oil, beverages, and manufactured goods.
However, it needs to be mentioned that inspite of this expected upturn in world and
Indian trade in goods, market share of Indian shipping industry is expected to continue to
decline. As a result, long term growth potential appears limited.
The future growth of the Indian shipping industry is expected to be driven by various
factors. In the energy sector, addition to the refining capacity is already underway and
expected plans of further capacity expansion both in public and private sector could result in
potential market for tankers for crude oil imports. The use of liquefied natural gas (LNG) is
expected to progressively increase, with plans to step up the country's consumption of
natural gas from its current level of about 8% to 25% in the overall energy basket.
The import of LNG is therefore projected to be a critical area for growth. In the dry bulk
sector, India is a leading iron ore exporter, with domestic production slated to increase by
41% during 2002-07. India's iron ore exports in volume terms have increased by 17.2% over
FY2000-04. Along with the increased requirement of import of coking coal to cater to steel
industry's demand, the dry bulk sector is expected to benefit from increase in iron ore
exports and import of coal.
Extent of Competition
COMPETITIVE
FORCES
The Indian shipping industry's tonnage position at the beginning of the 10th Five Year Plan
(2002) was 6.97 million GT. The tonnage position improved to 7.70 million GT (or 12.72 million dwt)
with 669 vessels at end-2004.
Distribution of Indian Shipping Tonnage at
end-2004
Name of the Company
India Ltd. (SCI) 84
1,757,106
2,578,140
22.1
Surendra Overseas Ltd 6

483,848
33.5
106,126
Essar Shipping Co. Ltd. 39

178,722
2.3
104,932
Total 669
66,824
886,596
0.9
Others
11.5
Mercator Lines Limited 11

180,473
1.4 Radiant Shipping
1.4 West Asia Maritime Ltd. 4
Steamship 6
Shipping Corpn. of
Great Eastern Shipping 71
6.3 Varun Shipping Co. Ltd. 10
Sanmar Shipping
16.8
No. of ships GT % of GT
116,400
429
2.4
5
1.5 Chowgule
1,289,630
7,692,472 100.0
Ninth plan
Acquisition of 3.7 Million Gross Registered Tonnage (GRT) at an

target
estimated investment of Rs.15,000
Crores.
Acquisition of 0.265 Million GRT for Coastal Shipping at an investment of

Rs.1200 Crores.
Separate allotment of external commercial borrowings for Shipping

Sector to the extent of Rs.500 to 700 Million US $ per year.
9
Varun Shipping Company Limited (VSL) was incorporated in 1971. The company
entered into oil exploration support services with the acquisition of anchor handling and
towing supply vessels (AHTSV) in 1983. Further, the company entered into bulk cargo
shipping in 1993.
9
The company currently operates fleet of 20 vessels for seaborne transportation
of bulk cargoes mainly in the hydrocarbon sector including LPG, crude oil, petroleum
products and easy chemicals and also provides services in the offshore sector.
9 The company presently owns a fleet of 12 LPG carriers, 3 crude oil tankers, 1 product
tanker, and 4 offshore supply vessels. 9 The company had set up a subsidiary VSC
International Pvt. Ltd in Singapore in 1995.
Why Varun Shipping
only?
.
VARUN SHIPPING is operating at Cash Profit Margin of 32% shows that company
has strong profitability performance over a period of years.
.
VARUN SHIPPING, is operating at P/E of 3.85 vis--vis industry is operating at P/E of
6.25 shows that company has better prospects in future.
. Revenue growth is mainly driven by new vessels in the offshore segment. The company
has a dominant presence in the less-volatile LPG carrier segment with a market share of
80%. Its strong presence in the niche LPG carrier segment and the buoyant offshore
segment, along with a well established customer base that includes Indian public sector
undertakings and reputed international chatterers would provide visibility of
0c484c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d
5346540000000049454320735247420000000000000000000000000000f6d6000100000000d32
d4850202000000000000000000000000000000000000000000000000000000000000000000000
000000000000000000000000001163707274000001500000003364657363000001840000006c7
7747074000001f000000014626b707400000204000000147258595a0000021800000014675859
5a0000022c000000146258595a0000024000000014646d6e640000025400000070646d6464000
002c400000088767565640000034c0000008676696577000003d4000000246c756d69000003f80
00000146d6561730000040c0000002474656368000004300000000c725452430000043c000008
0c675452430000043c0000080c625452430000043c0000080c7465787400000000436f70797269
676874202863292031393938204865776c6574742d5061636b61726420436f6d70616e79000064
6573630000000000000012735247422049454336313936362d322e31000000000000000000000
012735247422049454336313936362d322e310000000000000000000000000000000000000000
00000000000000
Share holding pattern of the company suggests that FII/INSURANCE COMPANIES &
ffd8ffe000104a4649460001020100c800c80000ffe20c584943435f50524f46494c
MUTUAL
FUNDS are having around 42% stake, which indicates company has good
4500010100000c484c696e6f021000006d6e74725247422058595a2007ce00020
potentiality
for future to grow with strong profitability strengths.
009000600310000616373704d534654000000004945432073524742000000000
VARUN SHIPPING
0000000000000000000f6d6000100000000d32d48502020000000000000000000
0000000000000000000000000000000000000000000000000000000000000000
LIMITED
0000000000001163707274000001500000003364657363000001840000006c777
47074000001f000000014626b707400000204000000147258595a000002180000
Histor
00146758595a0000022c000000146258595a0000024000000014646d6e6400000
y:
25400000070646d6464000002c400000088767565640000034c00000086766965
77000003d4000000246c756d69000003f8000000146d6561730000040c0000002
474656368000004300000000c725452430000043c0000080c675452430000043c
0000080c625452430000043c0000080c7465787400000000436f7079726967687
4202863292031393938204865776c6574742d5061636b61726420436f6d70616e
790000646573630000000000000012735247422049454336313936362d322e310
00000000000000000000012735247422049454336313936362d322e3100000000
0000000000000000000000000000000000000000000000
ffd8ffe000104a4649460001020100c800c80000ffe20c584943435f
50524f46494c4500010100000c484c696e6f021000006d6e7472524
7422058595a2007ce00020009000600310000616373704d5346540
000000049454320735247420000000000000000000000000000f6d
6000100000000d32d4850202000000000000000000000000000000
000000000000000000000000000000000000000000000000000000
000000000001163707274000001500000003364657363000001840
000006c77747074000001f000000014626b7074000002040000001
47258595a00000218000000146758595a0000022c0000001462585
95a0000024000000014646d6e640000025400000070646d6464000
002c400000088767565640000034c0000008676696577000003d40
00000246c756d69000003f8000000146d6561730000040c0000002
474656368000004300000000c725452430000043c0000080c67545
2430000043c0000080c625452430000043c0000080c74657874000
Paid up
capital & Market Capitalization of the company shows that company in the growth
phase00000436f70797269676874202863292031393938204865776c657
with good future prospects & gradually increase in profitability.
4742d5061636b61726420436f6d70616e790000646573630000000
000000012735247422049454336313936362d322e3100000000000
0000000000012735247422049454336313936362d322e310000000
.
VARUN SHIPPING has also planned Capital Expansion of 400US$ millions for
00000000000000000000000000000000000000000000000
acquisition
of additional ships by the end of calendar year 2008.
.
Shipping business is totally depend on demand/supply for Export & Import of all
kinds of commodity, if we watch out the Export/Import demand in India continuously
increasing vis--vis it increases the profitability of all companies in shipping business.
VARUN SHIPPING is sitting with maximum market share in shipping business shows that
company has more & more potentiality to become a top shipping business company in
Industry.
Business of Varun
shipping
Varun Shipping is a mid-sized shipping company having a presence in LPG
transportation, crude transportation and offshore services segment.
It owns around 81% of LPG tonnage under Indian Flag. The LPG segment
accounted for almost 80% of its revenue in FY07, but this contribution fell to 67.3%
in the December '07 quarter.
This was because Varun Shipping added two vessels in the offshore services
segment and the contribution of this segment to the company's revenue increased to
19.2% in the December '07 quarter, compared to 1.9% during the corresponding
period in the previous year. This augurs well for the company's profitability as margins
in the offshore business are better than that in LPG transportation.

The pace of offshore exploration and production (E&P) activities for hydrocarbons
has
increased, both in India and abroad. This is due to rising oil prices, which make even
marginal oil fields attractive avenues of investment.
The contribution of the offshore segment in Varun Shipping's total revenues is

estimated to
cross 20% by the end of
FY09.
The company's management expects revenue from the LPG segment to grow at
3-4 % in
coming years.
The freight
rates in the
LPG business
are
lesstonnage is owned by three players, which results in cartelization.
world's
volatile than
that for crude
carriers, as
Business
67% of the
Strategy:
We aim to be a leading comprehensive hydrocarbon shipping company that provides shipping
solutions to our customers by leveraging on our leading position in the LPG sector and our
competitive strengths within the hydrocarbon sector.
The Indian hydrocarbon sector has grown in the past and we have established a presence and
built strong relationships with oil majors in this sector. We plan to continue to increase our
presence within the hydrocarbon sector.
Our vision is to expand our fleet to cater to the growing needs of our customers and benefit
from the expected growth in demand for hydrocarbon transportation, both in India and
abroad.
Our strategy is to assess the shipping requirements of our customers in the hydrocarbon
sector both in India and globally and position our Group to meet these requirements
effectively, efficiently and economically. We will plan to maintain our presence in India while
we seek to increase our presence in the global market.
We have identified the following plans to leverage on our competitive strengths to achieve
our strategies.
GROWTH
PLANS:.
LPG:-
ket with 81% market share. . Transported approx. 70% all PSU controlled LPG cargoes brought in to India during the period
ge in the global mid-size fully refrigerated LPG carrier fleet. 14.42% of the market share on cu. m basis for fully refrigerated
Varun Shipping Company Ltd has announced that the Company has acquired a
Very Large Gas Carrier (VLGC), MAHARSHI BHARDWAJ on June 18, 2007. The new vessel
has cargo carrying capacity of 76,644 cbm. This will be the largest LPG carrier in Indian
fleet. The Company is the first Indian shipping Company to acquire a VLGC.
Varun Shipping acquired a 2001 built anchor handling and towing supply vessel
(AHTS Vessel). The vessel has BHP of around 16,000 tonnes and Bollard pull in excess of
180 tonnes.
OPPURTUNITIES AND
THREATS:1As per Indian National Ship-owners Association (INSA) Annual Review 2006. Indian
Shipping transported approximately 13.7 per cent of total overseas sea-borne trade in
2004-2005 and the average age of the Indian fleet was approximately 17.9 years with
approximately 50 percent of the fleet being above 20 years of age. There exists therefore
an opportunity for the Indian shipping companies to acquire additional tonnage and
access the growing cargo base required to be imported/exported into/from India.
2Freight rate will be determined by balance between demand and supply. Global shipping
industry is currently having large order book of vessels in most sectors, leading to
increase supply of tonnage for global trade. Sustainability in freight rate may have
dependency on improved trade growth in emerging markets.
3In spite of introduction of the Tonnage Tax regime since April, 2004, the Indian
Shipping Industry, due to several other taxes, including service tax, withholding tax on
interest and fringe benefit tax is once again losing the level paying field vis--vis foreign
competitors.
4An additional area of concern for Indian Shipping companies had been the continuous
drift of qualified shipboard personnel to the foreign shipping companies due to the receipt
of tax free salaries from such companies. The shortage of quality manpower makes it
increasingly difficult to operate the Existing high priced assets to the demanding
standards of international chatterers and regulators.VARUN SHIPPING has taken delivery
of its third modern 2006 built double hull afrmax crude oil tanker in JAN.2007 having
capacity of approx. 105000 DWT, currently company is operating at 21 vessels.
2006-05
45
ffd8ffe000104a4649460001020100c800c80000ffe20c584943435f50524f46494c4500010100000c48
2004-03
16
4c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d5346540
000000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000
000000000000000000000000000000000000000000000000000000000000000000000000000000000
000000000001163707274000001500000003364657363000001840000006c77747074000001f00000
0014626b707400000204000000147258595a00000218000000146758595a0000022c0000001462585
ffd8ffe000104a4649460001020100c800c8000
95a0000024000000014646d6e640000025400000070646d6464000002c40000008876756564000003
0ffe20c584943435f50524f46494c45000101000
4c0000008676696577000003d4000000246c756d69000003f8000000146d6561730000040c0000002
00c484c696e6f021000006d6e74725247422058
474656368000004300000000c725452430000043c0000080c675452430000043c0000080c62545243
595a2007ce0002000900060031000061637370
0000043c0000080c7465787400000000436f70797269676874202863292031393938204865776c657
4d534654000000004945432073524742000000
4742d5061636b61726420436f6d70616e790000646573630000000000000012735247422049454336
0000000000000000000000f6d6000100000000
313936362d322e31000000000000000000000012735247422049454336313936362d322e310000000
d32d4850202000000000000000000000000000
00000000000000000000000000000000000000000000000
00000000000000000000000000000000000000
00000000000000000000000000000011637072
74000001500000003364657363000001840000
006c77747074000001f000000014626b7074000
00204000000147258595a00000218000000146
758595a0000022c000000146258595a0000024
KEY
000000014646d6e640000025400000070646d6
CONCERNS:464000002c400000088767565640000034c000
0008676696577000003d4000000246c756d690
.
Shipping industry being global
in nature is prone to several risks and Adversities
00003f8000000146d6561730000040c00000024
including international competition,
marine mishaps and Accidents, amendments in
74656368000004300000000c72545243000004
Government policies and regulations,
new Regulatory compliances, port state control,
3c0000080c675452430000043c0000080c6254
exchange rate fluctuations, Acts of
terrorism, wars, arrest of vessel by maritime
52430000043c0000080c746578740000000043
etc.Shipping owns 13 LPG carriers, of which, two are more than 30 years old
.claimants,
Varun
6f707972696768742028632920313939382048
and are due for replacement in the
next two years. Moreover, the company has four LPG
65776c6574742d5061636b61726420436f6d706
carriers and one product tanker which
are around 25 years old and these vessels need to
16e79000064657363000000000000001273524
be replaced in the next 4-5 years.7422049454336313936362d322e31000000000
.
Future cash flows internally
generated or raised externally, will have to be
00000000000001273524742204945433631393
deployed for maintaining the current
fleet size, as well as for expansion purposes.
6362d322e31000000000000000000000000000
.
Expansion is necessary to 000000000000000000000000000
gain a stronghold in the fast-growing offshore services
segment, and this will entail sound cash management by the company. The company's
PARTICULARS
top line growth in FY08 is attributable to high freight rates to a certain extent. Any
2007
downward movement in future will affect its revenue growth.
2008(E)
2009(E)
NET WORTH
FINANCIAL
723.80
OVERVIEW
977.13
1294.25
NET SALES
672.63
815.78
975.63
NET PROFIT
141.35
179.51
Dividend yield
performance of the
227.98
company
EPS
4c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d5346540
Year9.26
Dividend (%)
19.26
000000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000
22.56
000000000000000000000000000000000000000000000000000000000000000000000000000000000
P/E
000000000001163707274000001500000003364657363000001840000006c77747074000001f00000
5.64
0014626b707400000204000000147258595a00000218000000146758595a0000022c0000001462585
3.85
95a0000024000000014646d6e640000025400000070646d6464000002c40000008876756564000003
4c0000008676696577000003d4000000246c756d69000003f8000000146d6561730000040c0000002
INDUSTERY P/E
474656368000004300000000c725452430000043c0000080c675452430000043c0000080c62545243
0000043c0000080c7465787400000000436f70797269676874202863292031393938204865776c657
4742d5061636b61726420436f6d70616e790000646573630000000000000012735247422049454336
6.25
313936362d322e31000000000000000000000012735247422049454336313936362d322e310000000
6.25
00000000000000000000000000000000000000000000000

Net Sales for the quarter rose 0.52% to Rs 1913.35 million for the quarter
ended March, 2007 from Rs 1903.52 million for the quarter ended March, 2006.
Total income rose 0.81% to Rs 1919.86 million for the quarter ended March,
2007, from Rs 1904.48 million for the quarter ended March, 2006.
The earnings per share (EPS) of the company stood at Rs 2.60 in the
quarter ended March, 2007 .
The company's gross block increased from Rs 785 crore in FY04 to Rs 2,914
crore in FY07, which indicates its pace of expansion.
It is one of the most leveraged companies in the shipping industry; its

debt:equity ratio stood at 2.4:1 as on March '07.
At the same time, its interest coverage ratio (PBDIT/interest) stood at a

comfortable level of 4.9 for the nine months ended December '07.
Despite the company's aggressive expansion plan last year, its debt:equity ratio
is expected to remain at around 2.4:1 in March '08, as 7.2 million optionally fully
convertible warrants (OFCWs) were converted into equity shares in the current financial
Recently, the company said it plans to spend $400 million in '08 to further
year.
expand its fleet size, with a focus on the offshore sector. This capex will be funded
through a mix of internal accruals and debt.
The company's revenue growth during the past three quarters indicates that it
will have internally generated cash reserves in future to support its fleet expansion.
During the December '07 quarter, the company's revenues grew by 40.7%.
Operating profit (PBDIT) rose by 57% and margins also improved during the same period.
Operating margin is expected to increase further as revenue from the offshore

segment is likely to increase at a higher rate than the LPG segment in future.
Varun Shipping Company

Ltd
(Rs. In Crores)
0c484c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d
5346540000000049454320735247420000000000000000000000000000f6d6000100000000d32
d4850202000000000000000000000000000000000000000000000000000000000000000000000
000000000000000000000000001163707274000001500000003364657363000001840000006c7
7747074000001f000000014626b707400000204000000147258595a0000021800000014675859
5a0000022c000000146258595a0000024000000014646d6e640000025400000070646d6464000
002c400000088767565640000034c0000008676696577000003d4000000246c756d69000003f80
00000146d6561730000040c0000002474656368000004300000000c725452430000043c000008
0c675452430000043c0000080c625452430000043c0000080c7465787400000000436f70797269
676874202863292031393938204865776c6574742d5061636b61726420436f6d70616e7900006
46573630000000000000012735247422049454336313936362d322e3100000000000000000000
0012735247422049454336313936362d322e31000000000000000000000000000000000000000
Financial
000000000000000
s: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00010100000c484c696e6f021000006d6e74725247422058595a2007ce000200090
(Rs in Cr.)
00600310000616373704d534654000000004945432073524742000000000000000
0000000000000f6d6000100000000d32d4850202000000000000000000000000000
Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 Mar ' 03 SOURCES OF
000000000000000000000000000000000000000000000000000000000000000000
FUNDS Owner's Fund Equity Share Capital 142.74 117.17 111.25 72.52 72.49 Share
001163707274000001500000003364657363000001840000006c77747074000001f
Application Money 5.44 0.53 2.40 0.00 0.00 Preference Share Capital 0.00 0.00 4.00 8.00
000000014626b707400000204000000147258595a00000218000000146758595a0
12.00 Reserves & Surplus 581.06 357.57 224.64 145.01 125.31 Loan Funds Secured Loans
000022c000000146258595a0000024000000014646d6e640000025400000070646d
1,793.05 1,138.23 580.12 250.45 262.40 Unsecured Loans 0.00 0.00 0.10 9.88 11.80 Total
2,522.29 1,613.50 922.51 485.86 484.00
6464000002c400000088767565640000034c0000008676696577000003d40000002
46c756d69000003f8000000146d6561730000040c00000024746563680000043000
00000c725452430000043c0000080c675452430000043c0000080c6254524300000
43c0000080c7465787400000000436f707972696768742028632920313939382048
65776c6574742d5061636b61726420436f6d70616e7900006465736300000000000
00012735247422049454336313936362d322e31000000000000000000000012735
247422049454336313936362d322e3100000000000000000000000000000000000
USES OF FUNDS Fixed Assets Gross Block 2,925.30 2,218.90 1,151.43 757.64 764.22 Less :
0000000000000000000
Revaluation Reserve 0.00 0.00 0.00 0.00 0.00 Less : Accumulated Depreciation 481.38
458.60 329.02 342.20 328.36 Net Block 2,443.92 1,760.30 822.41 415.45 435.85 Capital
Work-in-progress 0.00 0.00 0.00 0.00 0.00
Investments 20.75 20.76 20.76 20.76 20.76

$$$ Net Current Assets Current Assets, Loans & Advances 144.25 105.74 155.02 98.38
81.82 Less : Current Liabilities & Provisions 86.64 273.31 75.68 48.71 54.44 Total Net
Current Assets 57.61 -167.57 79.34 49.67 27.39 Miscellaneous expenses not written 0.00
0.00 0.00 0.00 0.00 Total 2,522.28 1,613.49 922.51 485.88 484.00 Note : Book Value of
Unquoted Investments 20.75 20.76 20.76 20.76 20.76 Market Value of Quoted Investments
0.00 0.00 0.00 0.00 0.00 Contingent liabilities 458.32 15.09 161.99 4.15 0.00 Number of
Equity shares outstanding (Lakhs) 1,427.58 1,173.08 1,114.85 725.23 725.23
Source: Religareonline .com
Type
UnAudited
UnAudited
UnAudited3
UnAudited4
UnAudited5
Net Profit Margin (%)
20.96 28.07 20.91 12.18 4.91
Adjusted Return On Net Worth (%) 12.66 38.09 24.87 15.59 2.65
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
0000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000
Return On long Term Funds (%)
8.30 16.06 11.98 13.14 6.75
000000000000000000000000000000000000000000000000000000000000000000000000000000000
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
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0000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000
626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a00
100000c484c696e6f021000006d6e74725247422058595a2007ce00020009000600310000
LEVERAGE
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
000000000000000000000000000000000000000000000000000000000000000000000000000000000
00024000000014646d6e640000025400000070646d6464000002c400000088767565640000034c0000
RATIOS
0000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000
000000001163707274000001500000003364657363000001840000006c77747074000001f000000014
616373704d5346540000000049454320735247420000000000000000000000000000f6d6
008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
000000000000000000000000000000000000000000000000000000000000000000000000000000000
626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a00
Long Term Debt / Equity 2.48 2.40 1.74 1.18 1.31
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
000100000000d32d48502020000000000000000000000000000000000000000000000000
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000000001163707274000001500000003364657363000001840000006c77747074000001f000000014
00024000000014646d6e640000025400000070646d6464000002c400000088767565640000034c0000
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000000000000000000000000000000000000000000000011637072740000015000000033
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008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
000000000000000000000000000000000000000000000000000000000000000000000000000000000
Owners fund as % of total Source
28.75 29.43 36.50 44.77 40.86
64657363000001840000006c77747074000001f000000014626b70740000020400000014
636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
00024000000014646d6e640000025400000070646d6464000002c400000088767565640000034c0000
68000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c
000000001163707274000001500000003364657363000001840000006c77747074000001f000000014
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
0000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000
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008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
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0000000000000000000000000000000000000
000000000000000000000000000000000000000000000000000000000000000000000000000000000
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636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
646d6e640000025400000070646d6464000002c400000088767565640000034c00000086
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
00024000000014646d6e640000025400000070646d6464000002c400000088767565640000034c0000
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10100000c484c696e6f021000006d6e74725247422058595a2007ce0002000900060031
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
0000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000
008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
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626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a00
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0000000000000000000000000000000000000
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000000000000000000000000000000000000000000000000000000000000000000000000000000000
68000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c
74656368000004300000000c725452430000043c0000080c675452430000043c0000080c
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322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
000000001163707274000001500000003364657363000001840000006c77747074000001f000000014
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
00f6d6000100000000d32d4850202000000000000000000000000000000000000000000
625452430000043c0000080c7465787400000000436f7079726967687420286329203139
008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
0000000000000000000000000000000000000
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636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
Current Ratio (Inc. ST Loans)
1.66 0.38 2.05 1.58 0.83
0000000000000000000000000000000000000000000000000000011637072740000015
68000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c
3938204865776c6574742d5061636b61726420436f6d70616e7900006465736300000000
00024000000014646d6e640000025400000070646d6464000002c400000088767565640000034c0000
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
00000003364657363000001840000006c77747074000001f000000014626b7074000002
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
00000012735247422049454336313936362d322e31000000000000000000000012735247
0000000000000000000000000000000000000
Inventory Turnover Ratio
155.31 173.60 71.98 79.57 69.56
636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
04000000147258595a00000218000000146758595a0000022c000000146258595a0000
68000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c
422049454336313936362d322e3100000000000000000000000000000000000000000000
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
0000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000
024000000014646d6e640000025400000070646d6464000002c4000000887675656400
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
0000000000
PAYOUT
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
0000000000000000000000000000000000000
000000000000000000000000000000000000000000000000000000000000000000000000000000000
636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
00034c0000008676696577000003d4000000246c756d69000003f8000000146d6561730
RATIOS
0000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000
000000001163707274000001500000003364657363000001840000006c77747074000001f000000014
0100000c484c696e6f021000006d6e74725247422058595a2007ce000200090006003100
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
000040c0000002474656368000004300000000c725452430000043c0000080c67545243
000000000000000000000000000000000000000000000000000000000000000000000000000000000
626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a00
Dividend payout Ratio (Net Profit)
49.25 33.37 41.50 38.61 100.25
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
00616373704d5346540000000049454320735247420000000000000000000000000000f
0000000000000000000000000000000000000
0000043c0000080c625452430000043c0000080c7465787400000000436f70797269676
000000001163707274000001500000003364657363000001840000006c77747074000001f000000014
00024000000014646d6e640000025400000070646d6464000002c400000088767565640000034c0000
0000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000
6d6000100000000d32d4850202000000000000000000000000000000000000000000000
626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a00
008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
874202863292031393938204865776c6574742d5061636b61726420436f6d70616e7900
000000000000000000000000000000000000000000000000000000000000000000000000000000000
Earning Retention Ratio 24.08 66.70 59.87 60.87 -86.70
00000000000000000000000000000000000000000000000000116370727400000150000
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
Quarter ended result of Varun
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68000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c
000000001163707274000001500000003364657363000001840000006c77747074000001f000000014
00646573630000000000000012735247422049454336313936362d322e310000000000
0000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000
0003364657363000001840000006c77747074000001f000000014626b70740000020400
008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
shipping
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a00
00000000000012735247422049454336313936362d322e310000000000000000000000
000000000000000000000000000000000000000000000000000000000000000000000000000000000
68000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c
636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
0000147258595a00000218000000146758595a0000022c000000146258595a000002400
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
00024000000014646d6e640000025400000070646d6464000002c400000088767565640000034c0000
00000000000000000000000000000000
000000001163707274000001500000003364657363000001840000006c77747074000001f000000014
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
0000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000
008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
0000014646d6e640000025400000070646d6464000002c400000088767565640000034c
626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a00
636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
0000000000000000000000000000000000000
000000000000000000000000000000000000000000000000000000000000000000000000000000000
68000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c
0000008676696577000003d4000000246c756d69000003f8000000146d6561730000040
00024000000014646d6e640000025400000070646d6464000002c400000088767565640000034c0000
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
000000001163707274000001500000003364657363000001840000006c77747074000001f000000014
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
c0000002474656368000004300000000c725452430000043c0000080c67545243000004
008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
0000000000000000000000000000000000000
626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a00
636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
Financial Charges Coverage Ratio 3.37 5.13 7.24 4.70 3.52
68000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c
3c0000080c625452430000043c0000080c7465787400000000436f707972696768742028
Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 Mar ' 03
00024000000014646d6e640000025400000070646d6464000002c400000088767565640000034c0000
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
63292031393938204865776c6574742d5061636b61726420436f6d70616e79000064657
008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
0000000000000000000000000000000000000
636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
68000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c
3630000000000000012735247422049454336313936362d322e31000000000000000000
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
0000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
0000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000
000012735247422049454336313936362d322e310000000000000000000000000000000
0000000000000000000000000000000000000
000000000000000000000000000000000000000000000000000000000000000000000000000000000
636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
000000000000000000000000000000000000000000000000000000000000000000000000000000000
00000000000000000000000
Adjusted Cash EPS (Rs.) 18.03 26.47 13.51 12.08 7.88
000000001163707274000001500000003364657363000001840000006c77747074000001f000000014
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
000000001163707274000001500000003364657363000001840000006c77747074000001f000000014
626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a00
Selling Cost Component 0.34 1.01 1.19 1.56 1.73
0000000000000000000000000000000000000
626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a00
00024000000014646d6e640000025400000070646d6464000002c400000088767565640000034c0000
Reported
Cash EPS (Rs.) 21.51 26.44 13.26 12.14 8.51
00024000000014646d6e640000025400000070646d6464000002c400000088767565640000034c0000
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
Bonus Component In Equity Capital (%) 0.50 0.61 0.64 0.99 0.99
008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
0000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
68000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c
68000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c
Operating Profit Per Share (Rs.) 26.14 33.03 15.76 15.85 11.20
000000000000000000000000000000000000000000000000000000000000000000000000000000000
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c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
000000001163707274000001500000003364657363000001840000006c77747074000001f000000014
000000000000000000000000000000000000000000000000000000000000000000000000000000000
0000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000
636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a00
000000001163707274000001500000003364657363000001840000006c77747074000001f000000014
Book Value (Incl Rev Res) Per Share (Rs.) 50.70 40.47 30.13 30.00 27.27
000000000000000000000000000000000000000000000000000000000000000000000000000000000
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
VALUATION
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
00024000000014646d6e640000025400000070646d6464000002c400000088767565640000034c0000
626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a00
000000001163707274000001500000003364657363000001840000006c77747074000001f000000014
0000000000000000000000000000000000000
0000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000
S:ffd8ffe000104a4649460001020100c800c80000ffe20c584943435f50524f46494c4500010100000c484
0000000000000000000000000000000000000
008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
00024000000014646d6e640000025400000070646d6464000002c400000088767565640000034c0000
626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a00
Free
Reserves
Per
Share (Rs.)
30.84at 20.69
13.17
8.11 NET
9.25 SALES of the
000000000000000000000000000000000000000000000000000000000000000000000000000000000
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
.
NET
WORTH
of
the
company
is
growing
the rate
of 36%,
68000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c
008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
00024000000014646d6e640000025400000070646d6464000002c400000088767565640000034c0000
000000001163707274000001500000003364657363000001840000006c77747074000001f000000014
0000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
company is growing at the rate of 25% shows that company has strong growth
68000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c
008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a00
PROFITABILITY
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
000000000000000000000000000000000000000000000000000000000000000000000000000000000
636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
.potentiality
NETPROFIT
in future.
of the company is growing at the rate of 27%, EPS of the company is
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
68000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c
00024000000014646d6e640000025400000070646d6464000002c400000088767565640000034c0000
RATIOS
0000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000
c696e6f021000006d6e74725247422058595a2007ce00020009000600310000616373704d534654000
000000001163707274000001500000003364657363000001840000006c77747074000001f000000014
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
growing at the rate of 18% indicates profitability margin of the company may improve
636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
000000000000000000000000000000000000000000000000000000000000000000000000000000000
0000049454320735247420000000000000000000000000000f6d6000100000000d32d4850202000000
626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a00
0000000000000000000000000000000000000
Operating Margin (%) 55.47 60.25 45.17 39.26 35.27
gradually in future.
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
68000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c
000000001163707274000001500000003364657363000001840000006c77747074000001f000000014
000000000000000000000000000000000000000000000000000000000000000000000000000000000
00024000000014646d6e640000025400000070646d6464000002c400000088767565640000034c0000
0000000000000000000000000000000000000
.
RETURN
on NET WORTH of the company is 16%.
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a00
000000001163707274000001500000003364657363000001840000006c77747074000001f000000014
008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
0000000000000000000000000000000000000
636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
00024000000014646d6e640000025400000070646d6464000002c400000088767565640000034c0000
626b707400000204000000147258595a00000218000000146758595a0000022c000000146258595a00
68000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
00024000000014646d6e640000025400000070646d6464000002c400000088767565640000034c0000
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
0000000000000000000000000000000000000
68000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c
008676696577000003d4000000246c756d69000003f8000000146d6561730000040c00000024746563
636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
68000004300000000c725452430000043c0000080c675452430000043c0000080c625452430000043c
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
0000080c7465787400000000436f70797269676874202863292031393938204865776c6574742d5061
0000000000000000000000000000000000000
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
636b61726420436f6d70616e790000646573630000000000000012735247422049454336313936362d
0000000000000000000000000000000000000
322e31000000000000000000000012735247422049454336313936362d322e3100000000000000000
0000000000000000000000000000000000000
Ratio
s
.
Operating Cash Flows of the company in 2004, 122.20crs.from 148.68crs.in 2005
from 410.23crs.in 2006 from 323.02crs.in 2007 shows that there is decline in 2007 but
overall position of the company in operating cash flows are sustaining & improving over
next few years.
.
Ships & vessels of the company is continuously improving ,
YEARS
RS.IN CRORES
2004-05
1117.58
2005-06
2183.03
2006-07
2889.36
01-FEB-07: Varun Shipping acquired a 2001 built anchor handling and towing supply vessel
(AHTS Vessel). The vessel has BHP of around 16,000 tonnes and Bollard pull in excess of 180
tonnes.
28- MAR-08: Varun Shipping Co. Ltd. has announced ON Friday that the Company has taken
delivery of third Anchor Handling and Towing Supply Vessel (AHTS) with BHP of 16,085.
This is a specialised vessel which is used for deep sea oil exploration activity going on in
areas like North Sea, KG basin and Atlantic Ocean off the coasts of Nigeria, Brazil and
Mexico.
This vessel will be the most powerful AHTS vessel under Indian flag. With this acquisition,
the Company will be owning a diversified fleet of 21 vessels comprising of 12 LPG carriers,
3 double hull aframax crude tankers, 5 anchor handling towing and supply vessels and 1
product tanker. The acquisition was financed partly out of Company's internal resources
and partly out of long term loans from State Bank of India and Bank of India, London.
Recently, it also announced that it plans to spend an additional $400 million to buy new
ships and offshore vessels to augment its operations.
.
So, we can generate BUY signal because stock is currently valued aggressively
with the P/E of 3.85 vis--vis IndustryFuture
is growing at P/E of 6.25 shows that company may
have
better
prospects
in
future
to
grow
potentially
MAY HAVE sector.
EXPECTATION
TO
Plans
9
VSL is planning to acquire additional
tonnage.TARGET
in the hydrocarbon
The
ACHIEVE
AFTER
12
MONTHS.
company has already increased its gas carrying capacity from 145,567 cbm (cubic
meters) to the current capacity of 213,283 cbm.
9
Mumbai-based Varun Industries entered into an agreement with Unique
Services, Bangalore for exports of iron ore for a period of one year.
SHARE PRICE MOVEMENT WITH
SENSEX
9
Varun Industries is engaged in stainless steel manufacturing.
ffd8ffe000104a46494600010201005f005f0
000ffe20c584943435f50524f46494c450001
Comparison
between major players of
0100000c484c696e6f021000006d6e747252
India 47422058595a2007ce00020009000600310
Last traded
000616373704d5346540000000049454320
Varun shipping
82.45
73524742000000000000000000000000000
Time23
May, 16:02
Change
0f6d6000100000000d32d485020200000000
-2.55 (-3.00%)
00000000000000000000000000000000000
Volume
00000000000000000000000000000000000
463115
00000000000000000116370727400000150
Prev.
Close
0000003364657363000001840000006c777
47074000001f000000014626b70740000020
85
4000000147258595a000002180000001467
Day's H/L (Rs)
58595a0000022c000000146258595a00000
88.25 - 81.80
Beta value-0.55
24000000014646d6e640000025400000070
Mkt. Cap (Rs Cr)
646d6464000002c40000008876756564000
1236.75
0034c0000008676696577000003d4000000
52Wk H/L (Rs)
246c756d69000003f8000000146d65617300
00040c00000024746563680000043000000
110.50 - 54.00
Recent
00c725452430000043c0000080c675452430
Beta
Developments
000043c0000080c625452430000043c00000
0.55
20-JUN-07: Varun Shipping acquired
a very
large gas carrier (VLGC), `Maharshi Bhardwaj`
80c7465787400000000436f7079726967687
Particulars
4202863292031393938204865776c657474
on Jun. 18, 2007. The new vessel
bears the cargo carrying capacity of 76,644 cbm. This
will be the largest LPG carrier 2d5061636b61726420436f6d70616e790000
in the Indian fleet. Varun Shipping is the first Indian shipping
PE ratio
company to acquire a VLGC. 64657363000000000000001273524742204
5.48
9454336313936362d322e31000000000000
23/05/08
00000000001273524742204945433631393
6362d322e31000000000000000000000000
EPS (Rs)
000000000000000000000000000000
15.05
Mar, 08
Sales (Rs crore)
307.6
Face Value (Rs) Net

profit margin (%)
Last dividend (%)
Return on average
equity
Essar shipping
10
20.9 20
6Mar,
13/05/08
2Mar, 07
19.5
07
Time23 May, 15:59

Last traded 157.45 -4.05 (-2.51%) 65729
Change
VolumePrev.
161.5
Close Day's H/L
166.90 (Rs) Mkt. Cap
156.60
(Rs Cr) 52wk
6708.94
252.05 - 33.75
H/L (Rs) Beta
0.47
Particulars PE ratio EPS
(Rs) Sales (Rs crore) Face
Value (Rs) Net profit
margin (%) Return on
average equity
51.34 22/05/08
3.15
227.2 10
12.9
5.8
8Mar, 07
Mar, 07
4Mar, 07
Shipping Corporation of India

Time23 May, 15:59
Last traded 288.40 -1.80 (-0.62%)
107507
Change
VolumePrev.
290.2
Close Day's H/L
296.00 (Rs) Mkt. Cap
286.10
(Rs Cr) 52wk
8141.53
332.00 - 154.00
H/L (Rs)
PE ratio EPS (Rs)
Sales (Rs crore) Face
Value (Rs) Net profit
margin (%) Last
dividend (%) Return
on average equity
8.02 23/05/08 4Mar, 07

35.9 7Dec, 07
915.2 10
25.7 45
19.8
2Dec, 07
1Mar, 07
12/02/08
9Mar, 07
Great Eastern Shipping

Time23 May, 15:56
Last traded 498.50 Change -12.30 (-2.41%)
Volume 44082 Prev. Close 510.8 Day's H/L (Rs)
520.00 - 495.00 Mkt. Cap (Rs Cr) 7592.16 52wk
H/L (Rs) 572.00 - 253.00
PE ratio 5.59 23/05/08 EPS (Rs) 89.1 1Mar, 08 Sales (Rs crore)
737.9 8Mar, 08 Face Value (Rs) 10 Net profit margin (%) 41.8
6Mar, 07 Last bonus 1:5 29/09/92 Last dividend (%) 75
24/04/08 Return on average equity 28.7 9Mar, 07
Recommendation
1. Varun shipping is the safest and giving higher stability in its
revenue v/s peers
2.
Freight rates of the LPG are less volatile compared to other
hence its earnings would be relatively stable.
3.
Further expansion of fleets is also expected to enhance future
revenues and earnings of the company
4.
I believe VSLs expansion into offshore segment will
5.
improve its
Investors
could
margins
also expect a dividend. Also, VSL has been
consistently declaring dividends over the past many years.
6.
At the CMP of Rs87, the stock trades at 5.8x and 5.3x FY2009E and FY2010E
Earnings,
respectively
7.
I will give a recommendation to Buy the stock, 12-month
Target Price of Rs106, translating into 22% capital appreciation
from current levels.
Comparative Valuation
Company (USD mn)
Y/E Sales
EBIDTA
Net Profit
EPS
RoE
P/E
Margin (%) Margin (%)
(USD)
(%)
(x)
G E Shipping
Mar 664.6
48.3
36.7
1.60
20.9
8.0
Mercator Lines
Mar 512.5
33.5
20.2
0.38
22.8
7.4
SCI
Mar 717.4
24.9
16.5
0.42
8.3
15.0
Varun Shipping
Mar 221.1
59.4
25.6
0.38
21.4
5.8
Average
9.1
Methodology:
.
Secondary data through internet and various
books
Learnings
From the Project
9 How you analyze a particular sector and
company 9 How to do Fundamental analysis
From the Organization (as part of
selling)
9 Know about various financial products and how to sell them 9
Team building qualities and corporation with the employees and
other summer
internship
students 9 Method of selling (cold call,
making a remisers, franchise) 9 How to maintain
relationship with customer
Limitations
In the Project
Complete data was not available On
Different site different information is given
In the Organization (apart from project)
Selling limited to Ahmedabad only Language barrier
(problem in understanding and speaking gujarati) Time
limitation
BIBLIOGRAP
HY

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ffd8ffe000104a464

No significant achievement can be solo performance. It took many very

CLASSIFICATION BY SIZE AND

35,000 to 45,000 dwt.

over 90,000 dwt.

and developing countries

10.2 3.1 2.8

6.6 11.5 16.6 12.1 12.9

8.9 6.4 14.4 19.4

17.1 10.7 12.3

Source: International Monetary Fund

THE INDIAN SHIPPING

At present, the Indian shipping industry

comprises 510 ships, of which 240 are overseas

support vessels, about 25 supply vessels for offshore

Acquisition through Bare Boat Charter-Cum Demise method;

The Shipping Companies

No permission is required for raising foreign exchange loans from abroad by

Automatic approval is now

510 549 557 617 625 669

1999 2000 2001 2002 2003 2004

123 127 129 143 146 153

165 198 201

GRT (thousands) 7,053

Surendra Overseas Ltd 6

Essar Shipping Co. Ltd. 39

Mercator Lines Limited 11

1.4 Radiant Shipping

1.4 West Asia Maritime Ltd. 4

Great Eastern Shipping 71

6.3 Varun Shipping Co. Ltd. 10

Acquisition of 3.7 Million Gross Registered Tonnage (GRT) at an

Acquisition of 0.265 Million GRT for Coastal Shipping at an investment of

Separate allotment of external commercial borrowings for Shipping

Varun Shipping is a mid-sized shipping company having a presence in LPG

transportation, crude transportation and offshore services segment.

The contribution of the offshore segment in Varun Shipping's total revenues is

It is one of the most leveraged companies in the shipping industry; its

At the same time, its interest coverage ratio (PBDIT/interest) stood at a

Operating margin is expected to increase further as revenue from the offshore

Varun Shipping Company

Investments 20.75 20.76 20.76 20.76 20.76

Source: Religareonline .com

Net Profit Margin (%)

20.96 28.07 20.91 12.18 4.91

Face Value (Rs) Net

Time23 May, 15:59

Shipping Corporation of India

8.02 23/05/08 4Mar, 07

Great Eastern Shipping

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