Sandesh Ltd. - A Rare Cash-Rich


(indirachitra) #41

As per the updates it looks 198 cr worth of debentures inclusive of the interest accrued has been converted into Equity capital I think 2014/15 it was 125 cr this year 2016 an additional 50 cr plus interest my assumption is all the debentures are converted now the question arises we know as per balance sheet of Apple woods they are sitting on assets worth more than 1500 cr in which 800 cr is inventory alone but the total project cost was originally nearly 3000 cr it is a total 128 acre property in sp ring road. This year the real estate has turned profitable.
Now the big question is assuming 6680 as per share price that works to nearly 300 cr on the asset side of Sandesh how much return by way of dividend will accrue to the Sandesh ltd will prove to game changer. The benefit to Sandesh ltd from this investment has to come from dividends.
Now we can be comfortable that the asset is around 370 cr and current asset around 100 cr in mf and 120 cr in cash gives nearly around 600 cr which is good asset support to the book value and now we can think of 2 times the book value for m.cap.


(Gaurav Agarwal) #42

Sourced from the website the properties of Applewood are

  1. 372 villas - Semillion + Sidalcea + Santolina

  2. 1004 Apt - Sorrel

  3. 250 Apt - Sonnet

  4. One lac sq ft - Galleria (Mall, Theatre etc)

  5. Six lac sq ft - Corporate office Space


Now we need to find the present market value of these assets.


(Ravindra Mutyala) #43

Share capital reduced from 8.65cr in 2007 to 8.53 in 2010 and then to 7.57 in 2013.
Is this due to buy back of equity shares?


(Gaurav Agarwal) #44

@mmvravindra

Looks so, I could find this news item on moneycontrol.

Sandesh has informed regarding with respect to offer for Buyback of up to 9.60k equity shares of FV of Rs 10 each. The Buyback committee in its meeting held on Jan 16, 2013 has fixed the record date on Feb 01, 2013 for the purpose of determining the entitlement and the names of the Shareholders, who are eligible to participate in the buyback.


(Ravindra Mutyala) #45

Buying back at low valuation is good decision for long term share holder value creation.
Other media stocks like Hindustan media, HT media etc. are also trading at near 10PE. May be this sector is under looked due to less growth rate in top line, but never converged operating leverage will cause increased net profits year on year.

Disc: No holding


(Gaurav Agarwal) #46

Topline growth for Sandesh has been 8-9% but bottomline is growing at very healthy pace. FY15 saw bottomline growth of 24% whereas in FY16 growth was 40%.

It is also a very strong brand in Gujarat and commands premium in the market. Someone from Gujarat can vouch for me.

Only concern was the money given to Applewood Estate, which is now converted into equity. Now Sandesh owns 21% of Applewood Estate. How that will be profitable for shareholders of Sandesh remains to be seen?


(Ravindra Mutyala) #47

Problem with media (publishing) sector is that there is no scope of incremental returns on incremental capital. So obviously company has to look for other ways to deploy the cash and M/s Sandesh chosen to invest in Applewood real estate company.


(amit anam) #48

Found this AR for 2016 hidden in Investor Relation tab on bottom right of the website :slight_smile:

http://sandesh.com/ir/AR%2015-16_The%20Sandesh%20Limited.pdf

Amit Anam


(Rohan) #49

Sourced from property websites:
Rates are ~2-3 Cr / villa - 700 Cr and 15-20 Lakh/ apartment. - ~ 200 Cr
Commercial rentals are around 60-70 psqft >> Implying price of ~ Rs.5-6k / sqft (*7 lakh sft) - ~400 Cr

Conservatively overall value is around 1200 Cr . Out of this some of the money ~ 260 Cr already realized

Sandesh’s stake (@21%) ~ 200 Cr which will be realized over say 2 years . PV is ~ 160 Cr which is less than what they paid for the ~13 % stake conversion of (FCCD + accrued interest). So definitely no upside from real estate (actually negative) unless rates move up in that area which looks unlikely

Where is the mention of Rs.3000 Cr project cost?

Disc: Invested at lower levels


(Gaurav Agarwal) #50

Hi @rr1980 I do not remember, if I have mentioned 3000cr anywhere?

But I can say you have done super conservative valuation here.

Sorrel which are majority of apt - 1004 no. starts at 40 lakh. Taking average cost of all apt at 20 Lack can introduce substantial error in your calculation.


Similarly Semillion villas starts at 4.79cr.

Therefore we need to re-work the figures to come close to real valuation.


(prakash123) #51

Gentlemen there is no point in valuing the real estate division what is now important is whether the 300 cr investment will fetch some returns in the form of dividends to Sandesh led or not previous year for 89 cr turnover apple woods Pvt ltd declared a 12 cr profit but no dividend this fy they are saying the turnover is 260 cr we don’t know what kind of profit or dividend will accrue I am going only for the media company valuavation this fy the media along with ooh should be able to give an ebita of 100 and an profit of 70 cr so media company m.cap should be around 700 /750 cr present enterprise value is at CMP OF 875 will work out to 550 cr so we can expect the price to be around 1100/1200 for media alone we can take the real estate investment as asset back up for the book value of the company. With very low floating stock the price escalation can happen very fast hope that a good June qtr result and an good dividend in fy 17 from Apple woods will improve the fundamentals and valuation further this is a long term view and we can hold it with that perspective in mind rather than worrying about the real estate portion the real estate portions should be looked from the angle of asset back up for the book value and the ROCE should be calculated from media profit only. Hence froth from fy 17 the other operating revenue part from the interest on the debentures will not be there and hence only the dividend from Apple woods estate could make that 300 cr worthy for the parent company we have wait and watch.


(amit anam) #52

June Quarter Result : Intimationresults30062016.pdf (1.3 MB)


(adrian007) #53

June qtr 100 cr revenue 37 cr ebita and 24 cr net profit 32 eps qoq growth is 25% in profit the operating cash flow this year is 145 cr cash on books is 120 cr debt is 15 cr fy 17 400 cr ebita 150 cr and net profit of 100 cr eps of 133 and book value of 750/775 available at an enterprise value of 550 cr and EVEBITA of less than 5 now what kind of PE the market will give for such a strong fundamentals I don’t know but still it is ignored even after a good dividend this year. Hope now it will be rerated


(KUMARESH ) #54

got this reply from the cs when enquires about the investment in applewoods estate
Dear Sir,

The disclosure to the stock exchanges was made in accordance with the extant regulations and the prescribed format. The details of the investments, as required in accordance with the applicable provisions, made by the Company have been provided in its financial statement. The Board of Directors considering various financial aspects declared the interim Dividend for the F.Y. 2015-2016 @50% (Rs.5 per Equity share of Rs. 10/- each). Few of investors in Applewoods Estate P. Ltd. were willing to sell FCCDs carrying coupon rate of 15.50% p.a. Your Company found coupon rate attractive and purchased these FCCDs from investors. Thereafter, the Company has not invested / purchased on YOY basis in FCCDs of Applewoods Estate P. Ltd. Further, the Company has no plan to invest in Applewoods Estate P. Ltd. in the near future. FCCDs of Applewoods Estate P. Ltd. were compulsorily convertible into equity shares of Applewoods Estate P. Ltd. Hence, on account of conversion of FCCDs into equity shares at a fair value determined by an independent Chartered Accountant, the stake of the Company into Applewoods Estate P. Ltd. has increased and as per the provisions of the Companies Act, Applewoods Estate P. Ltd. has become an Associate Company. Applewoods Estate P. Ltd. is developing an integrated residential Township in the City of Ahmedabad, which is well planned and designed. This Township is spread over ~one hundred twenty eight Acres of land on a prime location on the S.P. Ring Road, Ahmedabad. Hence, the Company believes that the value of its investment in Applewoods Estate P. Ltd. will be enhanced and it will also be beneficial to all the shareholders including minority shareholders of the Company.

Trust this clarifies,

Let’s Achieve,
| Dhaval Pandya | Company Secretary | THE SANDESH LIMITED | Address: “Sandesh Bhavan”, Lad Society Road, B/h. Vastrapur Gam, P. O. Bodakdev, Ahmedabad – 380 054 (Gujarat-India)

Disclaimer:
The message is intended for the address only and may contain privileged/confidential information. If you are not the intended receiver, any disclosure, copying to any person or any action taken or omitted to be taken in reliance on this e-mail, is prohibited and may be unlawful. You must therefore delete this email. Internet communication may not be secure or error free and may contain viruses. They may subject to possible data corruption, accidental or on purpose. The views expressed in this email are solely of the sender and may not be the views of Sandesh as a Company.
From: MrRavikum [email protected]
Date: 8 September 2016 at 6:19:15 AM IST
To: [email protected]
Cc: [email protected]
Subject: Advance intimation for investors query regarding investment

Mr.dhaval Pandya
Respected sir, please refer to my earlier email in this regard even after repeated reminders I have not got any reply from your good office and once again kindly request you to provide some information to my email.

Sir as per your recent disclosure you have informed the exchange that you have acquired the shares of apple woods estate Pvt ltd by way of conversion of the FCCB at a rate of approx Rs 6800 per share.

As a minority share holder of your esteemed organisation I have earlier requested for some clarification in this regard which you have not provided till date.
As per companies act 186 you are supposed to provide the details of the investment made and also the particulars of the investment and some detail about the company in which investment are made.
You have provided about the turnover of the company Apple woods estate Pvt ltd but whereas no details is available about its balance sheet or profit loss statement or even the dividend policy of the company.
Based on the conversion rate the market capitalisation of the Pvt ltd company works out to nearly 1300/1200 cr.
For a minority share holder can you please give some information as regards what kind benefit this will have on the parent company Sandesh ltd. will Sandesh ltd Yoy go on investing its fund in this real estate company were in the promoters have a huge interest.
Sir I once again humbly request you to give some additional information in this matter and or else I would also like to have inform in advance that would be raising this point in your forthcoming AGM.
With regards
R.kumaresh


(aadhar.aggarwal) #55

Any views on recent annual report which got published?


(abhishek.iitkgp) #56

Hi…Can anyone please explain why Sandesh has a very poor Modified C Score of 5 as per Valueresearch?


(kaustubhkale) #57

ICICI Direct’s one pager on Sandesh IDirectInstinct_Sandesh.pdf (773.7 KB)


(sambandham82) #58

Any view on revenue degrowth from 371 Cr in FY16 to 362 Cr in FY17, specifically in Q4 where it dropped from 95 Cr in Q4FY16 to 83 Cr in Q4FY17. Is there a earnings call every quarter from management ?


(Thor) #59

Anyone has any update on the status or revenue realization of Applewood properties on SP Ring Road. Given, they have converted the debt to equity, what is the status of the investment?

I am just worried about under utilization of funds, anyone who is aware of anything on this front, can you just inform all of us.


(kdjolly) #60

Owing to this development, should I consider Sandesh as a "not to consider " company? There is nothing on this topic since last month.