Garnet Construction

MEDIUM PRICED LAND DEVELOPER SHARES TO WATCH: In the recent market crash the shares of most of the land developing cos have come down due to some of the budgetary provisions. As the market has discounted most of the adverse features of them this is the right time to prick up some medium priced co shares.

GARNET CONSTRUCTION :( BSE, 526727. Rs.55.30): The shares were trading around Rs.103.80 in Jan 07 came crashing down to Rs.42 in Feb 07 in the market crash. Now once again informed circles are picking up this share and the volumes have zoomed over 2 lakh in a session.

Garnet is decade-old professionally managed real estate property developer, has entered into an exclusive global marketing alliance with the Sternon Group (Dubai-based real estate developers, builders and promoters) to market its residential and commercial projects to prospective buyers around the world. Mr. Arun Kumar Kedia (Director, Garnet Construction Ltd.) and Ms. Ludmila Sclifos (C.E.O., Sternon Group) jointly announced the first-of-its-kind strategic alliance wherein the Indian developer will leverage a global partner to market its quality projects to the rest of the world. This is the first such exclusive marketing alliance initiative for the Sternon Group in the Indian sub-continent.

Garnet Construction has entered into an exclusive global marketing alliance with the Sternon Group, a Dubai-based real estate developers, builders, to market its residential and commercial projects to prospective buyers around the world.

The Sternon Group will have the exclusive rights to market the company's mega residential and it will invest $ 3-4 million in this project. The Magic Hills residential project offers plots, row houses and bungalows. The project also comprises the information technology commercial development portion and educational institution portion. The projects cover 400 acres at the Mumbai-Pune express highway near Panvel in Navi Mumbai, ‘

Magic Hills’: spanning across 400 acres at the Mumbai-Pune Express Highway near Panvel in Navi Mumbai. The project is valued at Rs 1,200 crore with the residential portion (250 acres) accounting for Rs 900 crore. The ‘Magic Hills’ residential project offers plots, row houses and bungalows. The project also comprises the information technology commercial development portion (75 acres) and educational institution portion (75 acres). This one-of-its-kind township, which combines classic traditions and modern lifestyle, comprises all the modern amenities including recreational, retailing and educational facilities.

The Sternon Group will invest up to US$ 3-4 million in this project. The Sternon Group, which has offices in the United States (U.S.), the United Kingdom (U.K.), the Middle East and India, will market the ‘Magic Hills’ project as an ideal home for investors, holiday-seekers and Non-Resident Indian families.

Garnet has a land bank of around 470 acres. Other real estate projects being developed are in Khopoli and Lonavala. In Khopoli, the company plans to develop a township with 6mn sq.ft of residential space on 200-acres, 1.5mn sq.ft of office space in a 100-acre IT Park, and an educational institution on 100-acres. The entire project will be delivered in 2011. In Lonavala, Garnet plans to develop 131 bungalows by end of 2007. Over a hundred of these are already sold

Garnet Construction Ltd. has recently announced that it has decided to raise US$ 60 million by way of foreign currency convertible bonds or through preferential basis or through private placement among qualified institutional buyers or through any other permissible mode available with the Company. The Company expects to post a topline of Rs 35 crore in FY07 and a Profit After Tax of Rs 7.5 crore. The current paid up capital is a mere Rs.5.4 Cr. For the nine months ended December 31, 2006, the Company had posted Net Sales of Rs 22.20 crore (unaudited financial results) Garnet Construction has posted a net profit of Rs 2.09 crore in December 2006 quarter compared with Rs 0.06 crore in December 2005 quarter. Net sales rose to Rs 9.25 crore from Rs 0.68 crore

The company has announced that its sales for FY08 would be about Rs 125 crore up from Rs 35 crore it would have in FY07 and its NP margin being 20%, the profit for FY08 should be about Rs 25 crore which on an equity of Rs 8 crore would give an EPS of RS 30’

Market whispers indicate that the management will try their best to place the equity to a foreign buyer at a price of Rs.140 per share. On this hope earlier too the shares ran up to Rs.104 and this history is likely to be repeated in this counter,