INTERNATIONAL TRAVEL HOUSE -- ITHL

INTERNATIONAL TRAVEL HOUSE   BSE CODE 500213

Cmp 272 market cap 217 crores

Book value 92

ITHL commenced its operations in 1981 and has a full bouquet of travel services.  It is a part of the ITC group which owns around 61% stake in the company.

The client group of ITHL includes NDTV, Siemens, Citibank,HCL, ABN, Samsung, Essel Group,3M among others.

The services offered include corporate travel, car rentals, destination management, World Class Holidays, Conference management, Incentive group travel and foreign exchange.  The company owns a fleet of 900 cars which also includes outsourced ones.

ITHL has been appointed General Sales Agent of Globus/Cosmos, which is a leading Coach/Integrated travel company in the world with Holiday Programmes in US, Canada, Africa, Europe.  The company expects to leverage on this relationship to develop outbound leisure business.

The company is also focussing on Medical Tourism as one of its growth drivers.   It is now  also concentrating on Confernces and Exhibition business.  Travel Insurance also offers a good growth avenue.

MICE --- Meeting, Incentive, Conference and Exhibition tourism has picked up pace in recent years and the company is focussing on this segment.

FINANCIALS

YEAR	05	06	07	08	09	10	HY 11
SALES	47	60	74	79	104	108	68
NP	4.6	7	10.2	10.5	8.2	11.3	8.17

The company has shown steady growth in terms of sales and profits except for the hiccup in 09 due to global turmoil.

First Half for FY 11 has been excellent with company showing Sales of 68 crores against 46 cr for H1FY 10 and net profits of 8.17 crores vs 3.94 crores. Second half is usually better so the company should show net profits of around 18 crores which on an equity base of around 7.99 crores gives an EPS of around 22 which at cmp of around 272 gives a PE of around  12.4 which for an ITC promoted company with good growth prospects looks attractive.  ITHL is practically a debtfree company.

ITHL is a smaller player as compared to Cox and Kings and Thomas Cook but looking at strong parentage of ITC and recent developments, if the company manages to continue the growth shown in recent quarters, there might be a case for a rerating.

SREE SAKTHI PAPER LTD-- GROWTH CUM DIVIDEND PLAY

SREE SAKTHI PAPER LTD.  Bse code 532701

CMP 26-27  MARKET CAP 42 CRORES  BOOK VALUE AROUND 22

PROMOTER HOLDING AROUND 52%, NO PLEDGING.

PRODUCTS

The company is involved in manufacture of paper and paper boards . It is the largest kraft paper producer in south India.  Capacity is 1 lac ton per annum. 

Its corrugation division converts 300 MT of paper into corrugated cartons annually which is used as packaging material by the liquor, tea, cashew, sea food, latex, rubber industries.

FY 10 PROGRESS AND RESULTS

During FY 10, the production increased from 68692 MT to 71926 MT and capacity utilisation increased from 81 to 85%.  During FY 10, expansion  cum modernisation plan resulted in manufacture of high quality paper at its duplex board unit to cater to the needs to high end segment.  The debtor days reduced from 58 in FY 09 TO 49 in FY 10.  .  EBIDTA margin improved from  9.1 to 11.1 and NET PROFIT MARGIN improved from 2.4 to 3.3. During FY 10, debt has been brought down from 32 to 29 crores. As on Sep 2010 it was around 30.6 crores.

EXPANSION/MODERNISATION

Its Kraft paper Unit I has been modernised and capacity upgraded to 80 tpd by adding more dryers and installing second wire. Installation of second wire at Kraft paper unit Iwas completed in July 2010 and Third Wire at Kraft Paper Unit II was installed in October 2010 and hence full benefits will be felt in Dec qtr results and beyond.  These measures will help the company to address the demand of high end segment which has a huge demand.

CAPTIVE POWER PLANT is being set up by the company with 25 ton High pressure boiler and 2 MW back pressure turbine. Boiler and back pressure turbine are slated to be operational by end of this fiscal.  This is a part of captive  power generation which will cater to the steam requirement and will meet 30-40% of power requirement of the company.

CARBON CREDITS  -- The company’s project titled METHANE RECOVERY FROM WASTE WATER generated at Paper manufacturing unit in Kerala was recognised under CDM of UNFCC  in Oct 09 and the estimated emission reduction will be around 3923 metric tones of CO2.  The project is in progress and is likely to earn income from carbon credits as and when the formalities are completed.

HYDROPOWER PROJECTS  -- The company is involved in setting up three small Hydropower projects in collobaration with the govt of Kerala.

RESULTS

YEAR	MAR 06	MAR 07	MAR 08	MAR 09	MAR 10	HY SEP 10
SALES	64	68	116	144	147	87
NP	1.7	2	3.02	3.3	4.64	3.5
EPS	1.04	1.22	1.84	2.02	2.83	2.13*

Sep 2010 half yearly EPS is not annualised.  For full year if company manages to achieve EPS of 4 or higher, dividend is expected to go up also and dividend yield which is currently very attractive will be even more so.

INVESTMENT THEME:

The company is slated to complete most of its expansion projects during FY 2010-2011 and some of the benefits of sales and profit growth can be seen in the results of first half of FY 11.  The second half is also likely to be equally good for the company.  Full impact of expansion and modernisation will be felt during FY 12.  Hence company is currently at an inflection point.

DIVIDEND

Company had declared Dividend of Rs 1 for fy 07, 1.5 for FY 08,  1.5 for FY 09 and Rs 1.8 per share during FY 10 (which included two interim dividends of 90 paise each).  At current market price of around 26-27, the dividend yield turns out to be around 7%  which provides a good margin of safety to the investors.   There is a board meeting on Nov 22 to consider interim dividend for FY 11. I expect the total dividend payout for FY 11 to increase in line with increase in profits.