wiseman

Folks,

I'm sure this may not be the best place to talk about Parsvnath's performance. But I thought a quick analysis of teh company may give you some pointers about why they are doing what they are ...

As compared to the last quarter of last year (Mar 2008), their turnover has declined about 86% from 540 Crores to 76 Crores. Their Net profit has declined 87.5% from 109 to 13.50 Crores.

Even on a quarter to quarter basis turnover has declined around 18% but Net Profit has increased modestly by around 8.20 Crores.

There are two notable points to be made. Interest has shot up even as turnover has declined hugely. This is because of the large debt component of around 3500 Crores. On the side of safety, they have a Net Worth of 1920 Crores, so the company is not about to go under.

I also saw a TV rerport today that management claims this latest june quarter is showing much higher turnover over the last March'09 quarter. We shall see.

The other important point is that while tax rates being paid was around 30% last year, now they are actually having a negative tax incidence. This boosts profit after tax a little and paints a little rosier picture.

All-in-all, the EPS is likely to come down from Rs.22 per share last year (and price hit a peak of Rs.598 per share) to current year of Rs.6.12 (and price hit a bottom of Rs.31 per share). Next year we should see an EPS of around Rs.4 and current price of Rs.8 5 discounts earnings by 21 times - a little rich valuation under current circumstances.

As I have been saying again and again, the markets saw this 85%+ decline in turnover and profits and hammered the stock by 95% a good 6 months earlier than the data came out. This is how Stock Markets always behave!!!

Please note that, in my opinion, there is no real danger of the company going bust although you may continue to see short-term cashflow issues and project delays.

My two bits.

cheers