Leverage

Group 9Shridhar TapariaShreya MathurMonysh BandeallyDattatraya BhandarkarVineet Tripathi

Use of Leverage calculations

• Degree of combined leverage is calculated by combining the operational leverage and the financial leverage together, it assist us in establishing the total risk a particular business has.

• Operating Leverage calculates the operating risk or business risk of the firm

• Financial Leverage calculates the financial risk of the firm. • Together when collective, both the financial and the operating

leverage ratios can deliver an idea of how much risk per share are involved.

Company analysis• National Buildings Construction Corporation Limited provides project management

consultancy, real estate development, and EPC contract services in India and internationally

• Its Project Management and Consultancy Services segment offers services for various civil construction projects, including residential, office’, commercial and educational institutions, and border fencing projects, as well as infrastructure projects, such as roads, water supply systems, storm water systems, and water storage solutions

• The company’s Civil Infrastructure for Power Sector segment provides engineering and construction services; design and execution of civil and structural works for power projects; and cooling towers and chimneys for the power sector

• Its Real Estate Development segment primarily undertakes residential and commercial projects. This segment has land reserves of approximately 145.25 acres located in Delhi, Khekhra, Gurgaon, Patna, Alwar, Kochi, Kolkata, Faridabad, Ghaziabad, Meerut, and Bhubaneswar

Leverage CalculationsFor the Fiscal Period Ending 12 months

Mar-31-2009A12 months

Mar-31-2010A12 months

Mar-31-2011A12 months

Mar-31-2012A12 months

Mar-31-2013A           

Total Revenue 20,256.5 28,606.6 31,267.7 34,293.2 31,868.2

Growth Over Prior Year 13.3% 41.2% 9.3% 9.7% (7.1%)

           

Gross Profit 3,059.2 2,645.4 3,023.7 3,461.2 3,734.4

Growth Over Prior Year 15.1% (13.5%) 14.3% 14.5% 7.9%

           

EBIT 1,501.7 927.7 1,301.6 1,485.2 1,612.2

Growth Over Prior Year 7.4% (38.2%) 40.3% 14.1% 8.6%

           

Earnings from Cont. Ops. 1,621.9 1,187.5 1,403.4 1,901.7 2,075.0

Growth Over Prior Year 8.0% (26.8%) 18.2% 35.5% 9.1%

           

Net Income 1,621.9 1,187.5 1,403.4 1,901.7 2,075.0

Growth Over Prior Year 8.0% (26.8%) 18.2% 35.5% 9.1%

           

No of Outstanding shares 120.0 120.0 120.0 120.0 120.0

           

Diluted EPS Excl. Extra Items 13.52 9.9 11.69 15.85 17.29

Growth Over Prior Year (41.6%) (26.8%) 18.2% 35.5% 9.1%

           

Degree Of Operating Leverage  0.56 (0.93) 4.33 1.46 (1.21)

           Degree of Financial Leverage (5.61) 0.7 0.45 2.52 1.07

           Degree of Combined Leverage (3.13) (0.65) 1.95 3.67 (1.29)

           

           

Comparison of NBCC with SensexNBCC

SENSEX

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Company Analysis

Adani Ports & Special Economic Zone (APSEZ) - a part of India’s leading infrastructure conglomerate the Adani Group - is India’s largest  multi-port operator. APSEZ is the only private sector port operator with presence across six ports in India. The company’s aim is to increase annual cargo handling capacity from 91 million MT in 2013 to 200 million MT by 2020.

APSEZ has an effective capacity to handle 185 million tonnes of cargo per annum – the largest amongst all operational ports in India. APSEZ handled 64 million tonnes of cargo in the financial year 2011-12. The port operation In India started with Mundra and at present APSEZ has presence in Mundra, Dahej, Hazira, Goa, Visakhapatnam & Kandla.

APSEZ has also started operation in Australia, In May 2011, the Adani Group purchased a 99-year lease of the existing operational Terminal 1 at Abbot Point Coal Terminal from the Queensland Government. Adani is planning to expand the capacity of the port, which is near Bowen, through development of Terminal 0. Adani is also one of two preferred proponents for developing Dudgeon Point, near Mackay

Leverage CalculationsKey Financials of APSEZ

Figures in crores Mar '09 Mar '10 Mar '11 Mar '12 Mar '13

12 mths 12 mths 12 mths 12 mths 12 mths

Total Income 1,137.59 1,395.39 1,886.58 2,483.66 3,361.05

Growth for the Period 22.66% 35.20% 31.65% 35.33%

Operating Profit 764.1 964.02 1,311.51 1,759.07 2,470.23

Growth for the Period 26.16% 36.05% 34.13% 40.43%

PBDIT 873.81 1,128.80 1,354.55 1,709.73 2,673.47

Growth for the period 29.18% 20.00% 26.22% 56.37%

Shares in issue (lakhs) 4,006.79 4,006.79 20,033.94 20,033.94 20,033.94

Growth for the period 0 400% 0 0

Earning Per Share (Rs) 11.51 17.49 4.92 5.88 8.76

Growth for the period 51.95% -71.87% 19.51% 48.98%

Degree of Operating Leverage 1.29 0.57 0.83 1.60

Degree of Financial Leverage 1.78 (3.59) 0.74 0.87

Degree of Combined Leverage 2.29 (2.04) 0.62 1.39

Comparison of Adani Port with SensexAdani Port

SENSEX

Company analysis• Jaypee Infratech Ltd is an Indian infrastructure development company. The

company is a part of the Jaypee Group. They are engaged in the development of the Yamuna Expressway and related real estate projects.

• Company was incorporated under the Companies Act on April 5, 2007 and received the certificate for commencement of business on April 27, 2007 from the RoC. Our Company has not changed its name since its incorporation.

• The company also has the right to develop 25 million square metres (approximately 6,175 acres) of land along the Yamuna Expressway at five locations for residential, commercial, amusement, industrial and institutional purposes. The company holds the Concession from the YEA to develop, operate and maintain the Yamuna Expressway in the state of Uttar Pradesh, connecting Noida and Agra.

Leverage CalculationsKey Financials of Jaypee Infratech Ltd

Figures in crores Mar '09 Mar '10 Mar '11 Mar '12 Mar '13

12 mths 12 mths 12 mths 12 mths 12 mths

Total Sales 554.54 640.65 2778.7 3155.9 3274.3

Growth for the Period 15.53% 333.73% 13.57% 3.75%

Operating Profit 315.86 592.09 1813.63 1649.18 850.26

Growth for the Period 87.45% 206.31% -9.07% -48.44%

PBDIT 317.57 604.29 1833.56 1662.21 868.11

Growth for the period 90.29% 203.42% -9.35% -47.77%

Shares in issue (lakhs) 9660 12260 13889.33 13889.33 13889.33

Growth for the period 26.92% 13% 0.00% 0.00%

Earning Per Share (Rs) 2.76 3.98 10.33 9.29 5

Growth for the period 44.20% 159.55% -10.07% -46.18%

Degree of Operating Leverage 5.81 0.61 (0.69) (12.73)

Degree of Financial Leverage 0.49 0.78 1.08 0.97

Degree of Combined Leverage 2.85 0.48 (0.74) (12.31)

Comparison of Jaypee Infra with SensexJaypee Infra

SENSEX

Stock Price Comparison over the year

Feb-07-2013

Feb-14-2013

Feb-21-2013

Feb-28-2013

Mar-07-2013

Mar-14-2013

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NBCCAdani PortJeepay Infra

Month & Year

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Revenue Comparison

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NBCCAdani PortJeepay InfraRe

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EPS Comparison

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NBCCAdani PortJeepay Infra

EPS

EBIT Comparison

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NBCCAdani PortJeepay Infra

EBIT

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