Mobile Telecommunication - Rs.13.50

Incorporated in 1995, Mobile Telecommunication Ltd (MTL) is engaged in the business of telecom system development, manufacturing of electronic hardware, software development and trading in other products. In short, the company focuses on products and services related to the telecommunication infrastructure. It has gradually emerged as a reputed contract manufacturing service provider with its electronic manufacturing facility located at Nasik. It manufactures box assemblies as well as PCB assemblies and caters to clients from IT, Auto, Power, Medical and Telecommunications sector. In late 2005, however MTL diversified into the BPO business by acquiring the BPO facility of M/s Quantum eServices Pvt. Ltd.

Presently, MTL is focusing on three divisions – Internet technologies (VOIP & IP telephony), IT enabled services (International Call center) and manufacturing of telecom products (WLL handsets). The company is working on VOIP and IP Telephony technology and is in the process of establishing a network of Servers in USA, UK and India. Till such time as two-way telephony through Internet is allowed in India, MTL will be providing Voicemail through telephones. It is also setting up a subsidiary in USA to launch its services over there. On the BPO front, Quantum eServices has become a wholly owned subsidiary of MTL and has a 550-seater facility in the renowned Mindspace, Malad (W), Mumbai. The company is planning to enter into BPO space in a big way and the contract with one of the world's leading airline for its outsourcing requirement is underway. Thirdly, it is setting up a manufacturing plant for the production of WLL (Wireless in Local Loop) handsets based on corDECT technology. Notably MTL is the 5th licencee for this technology but has taken it solely for the export market.

Besides, MTL has got into APFC (Automatic Power Factor Controller) panels under the joint venture with Herodex Power Systems, who are one of the leading manufacturers of energy saving equipments related to industrial, commercial and power distribution applications. Hence the company has forayed into the energy - saving devices market and plans to enter into areas of light and energy saving products. With Herodex, the company is developing 'THAI CAP' APFC relays with the best technological features, which are definitely in a class apart from the other relays available in the market. Moreover, MTL is working towards a portal call Stdisdfree.com which will offer suite of services like PC-to-Phone, PC-to-PC, PC-to-Fax and voice mail, all integrated into one easy to use product. It has plans to launch the Automatic Meter reading system, which will collect the data automatically from meters and other devices via telecommunications at a remote central location of your choice. MTL also intends to enter the rapidly growing market of Wireless Brodband Services.

Although its future plans look very interesting, execution is the key to its growth. In spite of taking approval from the shareholders in November 2005 to raise around Rs.90 cr. through the FCCB/GDR route, nothing has been finalized till now. It was even decided to split the face value of shares to Re.1 but eventually it was dropped. For FY07, it may report a topline of Rs.23 cr. and bottomline of Rs.1.50 cr., which means an EPS of Rs.1.20 on its equity of Rs.11.90 cr. If things pan out well as per the company’s plans then for FY08 it can register total revenue of Rs.30 cr. with net profit of Rs.2.25 cr. i.e. an EPS of Rs.2. However, despite some promoter concerns, this company with a BPO facility of 550 seats is available extremely cheap at an Enterprise Value (EV) of Rs.20 cr. Long term investors can take an exposure as the scrip has bottomed out and can double in 6-9 months with operators support.