IMP Power - Rs.95.00

Establised in 1961, IMP Powers Ltd (IPL) was originally incorporated as Industrial Meters Ltd and is the flagship company of IMP-Mangalam Group. Incidentally, meters like three vectors Meter, Maximum Demand Indicator, Low Power Factor Meter etc. were introduced and developed for the first time in the country by IPL. Currently, the company manufactures the entire range of electrical measuring instruments, testing equipments, distribution & power transformers. It is well known for making quality AUTO EHV power distribution, special purpose, furnace, thyristor duty transformers and reactors. It’s a government recognized export house and an ISO 9001:2000 certified company by DNV. Its regularly exporting transformers to UK, New Zealand, Australia, Malaysia, Nigeria, Kenya, Ghana, Dubai, Sri Lanka, Jordan, Nepal, Bangladesh etc. and gets repeated orders from them. IPL transformers have won appreciation from all customers and are widely accepted by all the state electricity boards, railways, public & private sector undertakings.

It has two manufacturing facilities, one in Mumbai and another in Silvassa which can manufacture transformers from 10 KVA to 150 MVA. Its Silvassa unit is spread across 5 acres of land and has a total installed capacity of 3600 MVA per annum. Interestingly, it is the only transformer company in India to be in sales tax free zone. Computer Aided Design (CAD) programmes are used to determine various critical parameters in electrical designs and to arrive at optimized design solution much faster. IPL has a wide network of dealers comprising its agents & representatives all over the country to assist clients and render all kinds of commercial and engineering support while selecting transformers application-wise and render after sales service. In India, the company has supplied to Birlas, Tatas, KEC International, L&T, Nagarjuna Construction, BSES, DLF, Siemens, Thapar, ITC, Ispat, SAIL, NTPC, Defence, Railways etc and most of the SEBs across the country. Even transformer giants like ABB and Crompton Greaves Ltd. had placed orders for various distribution & power transformers.Post implementation of corporate debt restructuring (CDR) package, the company has turned around smartly and is now on a high growth trajectory. The transformers and electrical measuring instruments industry is likely to grow at a fast pace than the power sector as a whole.

With the implementation of the APDRP programme, the demand is likely to further move up. Besides, IPL is planning to enter into the most lucrative single phase transformer segment. Moreover, to consolidate is manufacturing capabilities, the company is planning to sell its 22,000 sq ft Kandivali land that may fetch around Rs.4 ~ 5 cr. to the company. For year ending June 2006, it may report sales of Rs.65 cr. and Net Profit of Rs.4 cr., which means an EPS of Rs.9 on its current equity of Rs.4.60 cr. But rising copper prices is a cause of concern for the company. For FY07, it may clock a turnover of Rs.90 cr. with NP of Rs.6 cr. i.e. an EPS of Rs.13. As the company is planning to raise capital, this will dilute its equity to some extent and the EPS will be little lower around Rs.10~11. Though it may not be a multibagger from the current level, investors can buy it at lower levels with a price target of Rs.150 in 15~18 months.