Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Reliance Infrastructure
Limited
Delhi Airport Metro Express:
The look, touch and feel
Quick Comment: We went on a tour of the Delhi Airport
Metro Express (DAME) project on July 1. The project
has been operational since February 23 this year. We
took stock of the operational readiness of the project and
the on-ground evidence of the health of the functional
revenue streams from the project. We believe the
project has progressed well with most of the core
infrastructure being in a high state of operational
readiness. We also believe that while the ridership is
increasing steadily and ad revenue is showing healthy
early signs, the F2012 earnings from the project will be
significantly lower than our estimates on the back of a
big shortfall in rental revenue. This is starting to trickle in,
with just 20% of the real estate leased out so far at the
New Delhi and Shivaji stations and the land parcel at
Dwarka remaining undeveloped. Increasing the rental
revenue, we believe, remains the most crucial
development challenge for the project.
Project Update: Four (New Delhi, Shivaji, Airport and
Dwarka) of the 6 stations planned are fully operational.
The Dhaula Kuan and Aerocity stations have clearances
pending and the company expects to open them by end
July. Currently four rakes are employed of the eight
procured. The trains run currently at 20 min intervals for
18 hours/day. The company intends to increase the
frequency to 15 min intervals and operate for 20
hours/day by end July. The current running speed of
trains is 105km/hr and will go up to 120km/hr once
oscillation trials are done. Baggage check-ins have
commenced at New Delhi and Shivaji for Kingfisher, Jet
and Indian Airlines. The project has achieved 99.41%
on-time operation of the trains so far. The project
employs 600 permanent and 600 contract employees. A
total of Rs 24.5 bn capex has been spent and no further
capex is anticipated as the current facility is good for up
to 0.2 mn passengers a day. The company expects to
achieve EBITDA break-even by F1Q13.
Ticketing Revenue: Ridership has been increasing at a
steady pace. The average ridership in June was 12,000
passengers per day. The company had an initial target of
14,000 passengers per day by December 2011. Now the
company expects the ridership to reach 30,000 per day by the
end of F2012. We estimate an average ridership of about
24,000 per day in F2012. The company expects ridership to get
a boost with the opening of the Dhaula Kuan and Aerocity
stations and increase in the frequency of the trains. The
company is currently offering promotional fares (See Exhibit 5).
They intend to continue offering the promotional fares until all
the stations become fully operational and even then will only
increase the fare in phases. The average ticket-price realized
in June was Rs 70, with 30-35% of the passengers opting for
the cheaper monthly passes.
Advertisement Revenue: The company has started to receive
revenue from product placements on their property. The three
regular product placement locations the company has
identified are in-train, on the platform and on billboards. In
addition to these, the company is also trying to secure
advertisements for locations like the outer body of trains, outer
façade of metro stations and pillars on the metro train route.
Advertisers’ initial response has been encouraging. Lufthansa
has signed a 5 month contract with the company for advertising
in-train at Rs 1.5 mn/month per rake. Pepsi also ran a
campaign for a month, advertising on the outer body of the
trains and paid the company Rs 2.5 mn per rake. The company
expects advertisement revenues to stabilize in 6-8 months.
The advertisements can be placed at all stations except the
Airport and the Aerocity stations.
Real Estate Revenue: Of the 112,547 sq feet of real estate
available at the New Delhi and Shivaji stations for leasing,
22,656 sq feet (20%) has been leased out. The revenue from
these should start coming in about 2 months from the signing of
the contracts. Rentals of up to Rs 500/sq feet have been
realized for some of these contracts. In addition to fixed rentals,
the company is also planning to lease out some property on a
revenue sharing basis. While the company is planning to rent
out the New Delhi property primarily to food and beverage
companies, the focus at the Shivaji station is to get high-end
retail outlets, given the proximity of the property to Connaught
Place. Some of the companies being approached for leasing
the rental property include W H Smith, Standard Chartered,
Reliance Money, Via Travels, Café Oz, California Pizza
Kitchen and KFC. The company also has a land parcel
available at the Dwarka depot, which the company will utilize in
the future. As per the company, the possible development
there could be a school or a shopping mall.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Reliance Infrastructure
Limited
Delhi Airport Metro Express:
The look, touch and feel
Quick Comment: We went on a tour of the Delhi Airport
Metro Express (DAME) project on July 1. The project
has been operational since February 23 this year. We
took stock of the operational readiness of the project and
the on-ground evidence of the health of the functional
revenue streams from the project. We believe the
project has progressed well with most of the core
infrastructure being in a high state of operational
readiness. We also believe that while the ridership is
increasing steadily and ad revenue is showing healthy
early signs, the F2012 earnings from the project will be
significantly lower than our estimates on the back of a
big shortfall in rental revenue. This is starting to trickle in,
with just 20% of the real estate leased out so far at the
New Delhi and Shivaji stations and the land parcel at
Dwarka remaining undeveloped. Increasing the rental
revenue, we believe, remains the most crucial
development challenge for the project.
Project Update: Four (New Delhi, Shivaji, Airport and
Dwarka) of the 6 stations planned are fully operational.
The Dhaula Kuan and Aerocity stations have clearances
pending and the company expects to open them by end
July. Currently four rakes are employed of the eight
procured. The trains run currently at 20 min intervals for
18 hours/day. The company intends to increase the
frequency to 15 min intervals and operate for 20
hours/day by end July. The current running speed of
trains is 105km/hr and will go up to 120km/hr once
oscillation trials are done. Baggage check-ins have
commenced at New Delhi and Shivaji for Kingfisher, Jet
and Indian Airlines. The project has achieved 99.41%
on-time operation of the trains so far. The project
employs 600 permanent and 600 contract employees. A
total of Rs 24.5 bn capex has been spent and no further
capex is anticipated as the current facility is good for up
to 0.2 mn passengers a day. The company expects to
achieve EBITDA break-even by F1Q13.
Ticketing Revenue: Ridership has been increasing at a
steady pace. The average ridership in June was 12,000
passengers per day. The company had an initial target of
14,000 passengers per day by December 2011. Now the
company expects the ridership to reach 30,000 per day by the
end of F2012. We estimate an average ridership of about
24,000 per day in F2012. The company expects ridership to get
a boost with the opening of the Dhaula Kuan and Aerocity
stations and increase in the frequency of the trains. The
company is currently offering promotional fares (See Exhibit 5).
They intend to continue offering the promotional fares until all
the stations become fully operational and even then will only
increase the fare in phases. The average ticket-price realized
in June was Rs 70, with 30-35% of the passengers opting for
the cheaper monthly passes.
Advertisement Revenue: The company has started to receive
revenue from product placements on their property. The three
regular product placement locations the company has
identified are in-train, on the platform and on billboards. In
addition to these, the company is also trying to secure
advertisements for locations like the outer body of trains, outer
façade of metro stations and pillars on the metro train route.
Advertisers’ initial response has been encouraging. Lufthansa
has signed a 5 month contract with the company for advertising
in-train at Rs 1.5 mn/month per rake. Pepsi also ran a
campaign for a month, advertising on the outer body of the
trains and paid the company Rs 2.5 mn per rake. The company
expects advertisement revenues to stabilize in 6-8 months.
The advertisements can be placed at all stations except the
Airport and the Aerocity stations.
Real Estate Revenue: Of the 112,547 sq feet of real estate
available at the New Delhi and Shivaji stations for leasing,
22,656 sq feet (20%) has been leased out. The revenue from
these should start coming in about 2 months from the signing of
the contracts. Rentals of up to Rs 500/sq feet have been
realized for some of these contracts. In addition to fixed rentals,
the company is also planning to lease out some property on a
revenue sharing basis. While the company is planning to rent
out the New Delhi property primarily to food and beverage
companies, the focus at the Shivaji station is to get high-end
retail outlets, given the proximity of the property to Connaught
Place. Some of the companies being approached for leasing
the rental property include W H Smith, Standard Chartered,
Reliance Money, Via Travels, Café Oz, California Pizza
Kitchen and KFC. The company also has a land parcel
available at the Dwarka depot, which the company will utilize in
the future. As per the company, the possible development
there could be a school or a shopping mall.
No comments:
Post a Comment