won't be converted to debt mostly, at 6.32% rate, the overall debt turns
out to be $98 million. Based on FY08 balance sheet, equity+reserves
would be around 370 crores and overall debt (with FCCB converted to
debt) would be around 640 crores. This is main reason that market is not
valuing the stock at 15-20 P/E. For FY09, EBIDTA is 95 crore and net
interest outgo is around 16 crore, so interest payment is comfortable.
Here are the trigger points for Sical:
1. Sical cargo logistics business is mainly into coal, iron ore,
fertilizers and cement transportation. Though coal and fertilizer
logistics were stable even during recession, iron ore and cement
logistics business got effected badly due to severe slowdown. Now with
economic and infrastructure projects revival, both iron and cement
logistics business will gain momentum.
2. Train logistics business (4 racks currently) should improve and they
may buy more racks based on economic revival.
3. Ennore Iron ore terminal project commencing operation in March 2010
is a very big trigger. Sical has assured customer for this terminal in
the form of MMTC.
4. Potential D/E ratio of 1.8 is a concern and they have to do either
QIP, rollover loans, restructure FCCB or buyback FCCB at discount.
5. IPO of Sical Infra assets.
6. Selloff of Sical Torino (the oil exploration PSV vessel) and/or Sical
Portofino (dregdging equipment). These would fetch them around 40-50
million dollars.
7. Lot of actions for Sical during Next FY (April 2010 to March 2011).
Unless another major crisis crops up in the world, the worst is behind
Sical.
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