Had done a note on Godfrey Phillips earlier
Some developments have taken place since then:
1) Rabale , Navi Mumbai plant is now completely operational. The plant is built on a 44,000 sq metres ( approx 11 acre ) plot with a 21,500 sq metre factory buildingThe plant has been built on a high technology platform with maximum automation. The Technology tripod incorporates three major new technologies. These correspond to the three main areas of production: the primary manufacturing which prepares the cured tobacco leaf for production, the secondary manufacturing which involves cigarette making and packing, and the warehouse and despatch area. The plant won’t require more than 100 workers.
2) 236 unionized staff and workmen attached to its plant at Andheri, Mumbai, opted for the VRS announced by the company. The financial outlay on this account amounted to Rs. 35 crores approx and has been accounted for in the June 2013 P&L. Further, the production facilities at its plant at Andheri, Mumbai have been largely re-located to the new plant at Rabale.
3) Registered office has been shifted from Andheri to Lalbaug, Mumbai
4) The company has been accounting for exchange loss on its Forex loan on a consistent basis and we may see some more of that in the current quarter too.
5) June quarter saw a good scale up in revenue though profitability was affected due to VRS & forex loss provisionManagement pedigree is mediocre at best . Notwithstanding the same, going ahead the benefits from geographical expansion and right sizing should be substantial. EV is about 2800 cr @ cmp of Rs.2700.
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