GVK Power & Infra Reco Price Rs. 50.60 CMP: Rs.30.45 (Loss 39.

82%)

GVK has reported good consolidated results for the year ending 31st March 08, with
total income of Rs.532 crores on which PAT was placed at Rs.135.47 crores
resulting in an EPS of rupee 1.04 on face value of rupee one.

GVK Power & Infrastructure: a diversified infrastructure player

GVK Power & Infrastructure is a holding company having interests in Energy, Road,
Airport and SEZ projects.The company is having 37% interest in Mumbai
International Airport Ltd. (MIAL) developing Mumbai Airport on build-own-operate
basis with an initial concession term of 30 years, which is extendable by another
30 years at the option of MIAL subject to certain terms and conditions. The
project is extendable beyond 60 years subject to mutual agreement.

MIAL will pay 38.7% of its revenue generated from Mumbai Airport to Ministry of
Civil Aviation. The airport will have Aero-related and Non-Aeronautical revenues.
Presently, airports caters to 22.25 million passengers and handles 4.80 lakh
tonnes of Cargo annually, which would rise to 40 million passengers and 1 million
Cargo with the upgradation of the infrastructure which would happen by 2012. MIAL
plans to build state of the art 3 km and 6 lane expressway from Western Express
Highway directory to the airport terminal.

Mumbai Airport is presently located on 1,875 acres of land and as per the
concession agreement 10% of this can get developed. Presently, 91 acres of land is
available vacant for development while 147 acres of land is encroached. Also, of
the 102 acres land occupied by Government/AAI colonies, 40 acres would be
available to MIAL for development.
MIAL in October 07, entered into an agreement with HDIL for development of 276
acres of land at the Airport including land under Slum Rehabilitation Scheme, in
which, FSI has been recently raised to 4. This development would be carried out in
four phases to be completed in 48 months and HDIL is said to have identified the
land in the vicinity for slum resettlement.

The entire development would be of about 50 million sq. feet of which after giving
about 300 sq. ft. each to about 80,000 slum dwellers, an areas of 25 million sq.
ft. would be available for sale/leases/rentals.

GVK is having 6 lane, 90 km. Toll based road project at Jaipur � Kisangarh of the
Golden Quadrilateral project with concession period of 20 years, starting from
April 03 to March 23, including the construction period.

GVK is executing 2,200 MW power projects, of which 437 MW gas based (100% stake)
464 MW gas based (with 51% stake) 700 MW Hydel with 100% stake and 600 MW coal
based with captive mines of coal with 100% stake.

GVK is developing 3,000 acres SEZ at Perambalur in Tamil Nadu, through its WoS GVK
Infratech Pvt. Ltd., to cater to Textiles/Garments, Leather, Engineering, Pharma,
Power, IT/ITeS, Iron & Steel, Fertilisers, Chemicals, Petrochemicals,
Floriculture, Horticulture, Electronics, Communications etc.

GVK had recently restructured its business and brought ownership of all the
business in itself with 37% stake in Mumbai Airport, 100% stake in Road, 100%
stake in SEZ, 100% stake in Coal based power project with coal mining, 100% stake
in Hydel Power, 100% stake in 437 MW gas based power project and 51% in 464 MW gas
based power project, thus consolidating its infrastructure assets under GVK Power
& Infrastructure.

GVK has reported good consolidated results for the year ending 31st March 08, with
total income of Rs.532 crores on which PAT was placed at Rs.135.47 crores
resulting in an EPS of rupee 1.04 on face value of rupee one.

Present equity of the company is Rs 140.58 crores, with face value of rupee 1,
which is held to the extent of 60.94% by the promoters, 30.28% by FIIS and OCBs,
5.89% by banks, mutual funds and 2.89% by the public. One could understand the
confidence of the promoters and overseas investors into the company and less than
3% is the effective public float.

Share is presently ruling at Rs 50.60, which translates into a market

capitalization of just Rs 7,000 crores for the company while Mumbai Airport land
available for development is valued at about Rs 50,000 crores, 37% share of this
gets valued at Rs 18,000 crores. Other interests of Airport, Power, Road can be
valued at over Rs 20,000 crores.

Share is an excellent bet at Rs 50.60, which has good potential to give an

annualized return of 40% over the next 4 � 5 years, with virtually no downward
risk.

Disclaimer: The writer may be deemed to be concerned or interested in the

recommendation as he and his clients are invested in this scrip.