BSEL Infrastructure - Rs.45.00

BSEL Infrastructure Realty Ltd. (BIRL) incorporated in 1995 as Bell South Enterprises Ltd. and subsequently renamed as BSEL Information System in 1998 changed its name to the present ‘BIRL’ in August’03 it. The company’s primary activity is infrastructure development as it has completely moved out of the software development/ programming business.Its first project i.e. BSEL Tech Park with saleable area of around 3,00,000 sq. ft. has been completed and is a huge success with 80% of the area already sold. Its other project, Hilton Centre consists of 22,000 sq. ft. of aesthetically designed; fully furnished office at prime location in CBD Belapur was also sold out. Besides, out of the 80,000 sq. ft. area acquired by the company from CIDCO in the International Infotech Park at Vashi, 60,000 sq. ft. has already been leased to.

The major revenue driver for BIRL will be its ongoing and future projects. In Gujarat, the company is setting up service apartments, a prime budget hotel, a food court with recreational facilities having a saleable area of 6,00,000 sq. ft., which is likely to be completed by June’07. It is also constructing a 3,50,000 sq. ft. shopping mall by the name ‘Beauty Palace’ in Nagpur of which around 70,000 sq. ft. will belong to the company. Its wholly-owned subsidiary is also developing residential, commercial, retail properties, townships etc in Dubai and has already acquired 1,00,000 sq. ft. area at Business Bay & Internet City in Jumeira. BIRL has also acquired 30-acre land at Bokhar near Panvel and Navi Mumbai SEZ where it plans to develop a mega city township. It has also participated in the tender for the allotment of a five storied BMC building at Tardeo for running a municipal retail market admeasuring around 40,000 sq. ft. apart from other luxury and lifestyle projects.

To fund its projects, the company raised above Rs.90 cr. a few months back through the GDR route and which got converted into Rs.2.27 cr. shares at around Rs.41. For FY06, its total revenue jumped by 135% to Rs.46 cr. whereas its net profit increased by 120% to Rs.22 cr. registering an EPS of around Rs.4 on its equity of Rs.59.30 cr. It reported stunning numbers for the June’06 quarter as well. Assuming the same track record, could end FY07 with a top-line of Rs.85 cr. and bottom-line of Rs.35 cr. i.e. an EPS of Rs.6. Considering the strong growth story, the ambitious projects on hand and its solid land bank, the share could touch Rs.75 (100% return) in 15-18 months. The company, however, is planning to raise further capital by way of FCCB, which will dilute its equity going forward and may change the fundamentals accordingly.