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Ptl enterprises

PTL Enterprises Ltd. (PTL), was incorporated as a company in 1959. It became an associate company of Apollo Tyres Ltd (ATL) in 1995, when Premier Tyres’ tyres and tubes manufacturing facility in Kalamassery, Kerala, was acquired by Apollo. This facility began commercial production in September 1962 and currently the plant is leased to Apollo tyres on long term basis. All production is done by Apollo Tyres. On a larger platform, PTL Enterprises is the holding company for Artemis Health Sciences.


PTL has a paid up capital of Rs 1324 lakhs, and is listed on National Stock Exchange, Cochin Stock Exchange and Bombay Stock Exchange. There are about 7000 shareholders of the Company.

PTL Enterprises is the holding company of Artemis Health Sciences Ltd. In 2007, a state-of-the art tertiary care hospital called Artemis Health Institute (AHI) was established in Gurgaon. The super specialities of AHI focus on Cardiovascular, Oncology, Orthopedics and Minimal Invasive Surgery in additional to others. Artemis offers to its patients, a technology-backed world –class healthcare delivered by leading medical professionals with certifications of international medical bodies.
Healthcare has become one of India`s largest sectors - both in terms of revenue and employment. The industry comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. The Indian healthcare industry is growing at a tremendous pace due to its strengthening coverage, services and increasing expenditure by public as well private players.

.The share of healthcare is set to rise to 2.5 per cent of GDP in the 12th Plan from 0.9 per cent in the 11th Plan. The plan focuses on providing universal healthcare, strengthening healthcare infrastructure, promoting R&D and enacting strong regulation for the healthcare sector.

Company has two segments

For its tyre unit company get rental of around 40 crs year .

While business in subsidiaries is in hospital business which has around 300 beds & it has plan to raise capacity to 500 beds.

Consolidated sales of company has risen from 77 crs in 2009 to 410 crs in 2015 which is very encouraging . at the same time net profit of company has risen sharply from 2.1 crs in 2010 to 33.53 crs in 2015 on equity of 13.24 crs

Total debts of company is reduced from from 181 crs to 115 in last two years

Interest expn reduced sharply further in current year 2nd qtr from 2.25 crs to 1.21 crs which indicate debts reduced further in current year.

The Company had taken 20.78 acres of land on 90 years lease w.e.f. 24.05.2007 at a premium of Rs 519.50 lacs and the premium with other capitalized cost is amortized over a period of 90 years. Monthly lease rental, lighting expenses, water charges etc. are debited as revenue expenditure.

The Company has leased out its plant to Apollo Tyres Ltd. The lease is extended for a period of 8 years up to March 31,2022 vide agreement dated May 1,2012.The lease rent , which is renewable annually as per the lease agreement at a rate to be mutually agreed, amounting to Rs 4,000 Lacs for the year,

Average ROCE of last five year if around 21.5 % while company is distributing regular dividend of 50 % for last 5 years .
Tyre project of company is situated at land of 21.36 acres out of which govt of Kerla took 1.5 acre for Cochi metro project & offered company 24 crs which management has not accepted as fair value might be higher this amount onced realised likely to reduce debts further.

Average p/e ratio of healthcare hospitals is around 45, while at eps of 5 thus PTL enterprise is trading around 17, while current year estimated eps likely to be 6.5

Technically stock need to sustain above 92 levels for upmove

SBI MUTUAL fund hold around 409120 shares in its schemes as on November 2015 compared 364866 in the month as on Sept 2015

From this year lease will be 50 cr per year till 2022.

Valuation looks very cheap.

If anybody knows more please share.

Negatives-Not yet found.

Disclosure- Bought small tracking quantity.

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Thanks for your co-operation. Being topic starter, you have responsibility to dig into the key risks. Hope you do so in the due time and update the same in the thread.

PE for FY 2015 comes to 45 and not 17. Above numbers taken from NSE. At PE of 45, It is not cheap on any parameter.

I think you are using standalone numbers. Hospital revenues are housed under a subsidiary

Please refer to consolidated numbers year ending march 2015.Company is giving yearly consolidated numbers.

One thing I noticed after some study that promoters tried to sell Hospital business at very cheap rate one year back.But proposal got cancelled due to shareholders oppose.

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A company of this type rarely gets valued well by the market as it is neither a tyre company nor a hospital. And the 2 businesses are very diverse in nature and have no synergies between them. So, to take a PE of say Apollo Hospitals and extrapolating that to a company like this may not be the right approach.

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Point is good but many companies who are having multi divisions with diversified business getting good valuations .In PTL case both divisions are having excellent ROE.I think this is not important that two divisions with no co relation but it is important that both divisions are excellent earnings.After all
good profits and balance sheet is necesary.

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some red flags:
An year back it was in news for planning to transfer the hospital business to promoter owned group for just 150 cr or so. But kerala govt which is share holder didnt vote for this move and it is stalled.
No increase in dividends though there is increase in profits.
I am not sure if it is minority share holder friendly and distribute the profits to them,

Can you tell us which land in owned and which land is taken on lease by Ptl Enterprise? Also when can we expect the completion of 500 beds by Artemis Hospital ?

Disclosure - Invested.

Company holds aroud 30 acres land in kochi.Rest digging more to know expansion plan at artemis hospital.I will communicate whenever I get some information.

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Medical business demerger meeting on 1 feb 2016 as per BSE.

As per BSE following updates----

PTL Enterprises Ltd has informed BSE that the Board of Directors of the Company at its meeting held on February 02, 2016, inter alia, has decided as follows:

1. Revaluation of immoveable assets of tyre undertaking of the Company at Kalamassery as on December 31, 2015. Based on independent professional valuation, the Company has revalued its land and building situated at Kalamassery, at Rs. 58,783.11 Lacs against Rs. 1,144.09 Lacs on the closure of business hours on December 31, 2015 and the increase due to this revaluation has been recognized as a Revaluation Reserve.

2. Approve the Scheme of Arrangement for Demerger of the Medicare and Healthcare Undertaking into Artemis Global Life Sciences Limited, a wholly owned subsidiary, subject to the sanction of the relevant High Courts and the approval of the creditors and shareholders of the Company under Sections 391-394 and other applicable provisions of the Companies Act, 1956 and applicable provisions of the Companies Act, 2013.

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Hi Lalit,

I checked this company recently. Went through the AR and had a talk with the CS also. He told the lease is going to be around 44cr (10% growth) only. He did not comment on the lease rentals after 2016. Where did you get the details of lease rental going 50cr this year. Can you please share the link/page so that I can discuss further with the CS.

Also, where did you get the info about the expansion of hospital beds from 300 to 500? Please share the link. I couldnt find it any where.

You are right, that both the businesses are giving good ROEs. But the dividend payout ratio is high which restricts future growth.Once the demerger happens, value unlocking will give good returns.

Also why are we forgetting the other subsidiary here - providing trained employees to educational institutes. Any update on growth in this business.??

Disc - Not yet invested.

Look at result quarter ending dec 2015. Standalone income is 12.5 cr for three months.They have renewed lease agreement where they will receive 50 cr rent per annum with effect from aug 2015.Agreement is valid upto 2022.As agreement renewd in august 2015 they will recv around 45.83 cr rent upto year ending march 2016.And I have no idea on expansion at hospitals.CS is not responding properly.Also they are not giving consolidated result on quarterly basis.

Disc-Invested for medium term.

Thanks Lalit. Yes thats the problem - they do not give consolidated figures on half yearly basis also.

So we get a bond in one company - fix lease rentals having OPM of 70%+ atleast till 2022 (6 years left).
And, a health care business (specialty hospital) growing good.

Any knowledge about the 3rd segment?
Where did you get the info about the expansion to 500 beds - since you mentioned that the expansion is on page.

Second hospital at Dwarka Delhi expanded but details not available.I will post once recvd.

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Checked randomly at dhwarka hospital - the receptionist told its old hospital opened in 2012. Expansion has to be with the number of beds in these two existing hospitals for which we have no clue. Also, I would like to stay away from companies not providing conso details half yearly/quarterly.

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