The company has returned to profitability in FY10/11Q3. The demand seems to be improving while pricing is also seems to be favourable (as indicated by higher GP margins). The construction sector boom is likely to further improve profitability. The share price which was stagnant over the last 6 months.
FY10/11Q3 results were very impressive and has brought the P/E less than the market P/E, although JKH historically traded at a premium. The share has declined over 20% from the peak
recorded few months ago. The price is likely to appreciate once the foreign and institutional investors enter the market aggressively.
An exceptional growth in profit is expected in FY10/11 in view of the growth in demand from increased construction activity and relatively low raw material prices. The growth momentum is
likely to continue over the next 3 years. The bio mass power plant seems to have reduced the electricity cost.
Hemas Power (HPWR)
Profits have increased exceptionally in FY10/11H1. Both hydro and thermal sectors have improved performance. The newly acquired mini-hydro company and heavy rainfall have contributed
to the hydro sector performance while the lower maintenance (overhaul) costs have contributed for the improvement in thermal sector.