Kavveri Telecom - Rs.54.45

Established in 1991, Kavveri Telecom Products Ltd. (KTPL) is primarily engaged in the manufacture of Radio Frequency (RF) products and Antennas for telecom, defence and space applications in India and abroad. In fact, it is the largest domestic manufacturer with a capacity to make over 200,000 high quality Antennas and 10,000 RF products per month. Besides it provides total turnkey solutions for coverage and capacity enhancement requirements for GSM & CDMA carriers in India. It offers solutions like Site/RF Survey, RF planning, designing & implementation, repeater based GSM & CDMA indoor as well as outdoor coverage solution and Microcell based indoor coverage solutions. It also manufactures solar modules & solar systems for various applications. Its customers comprise leading wireless equipment manufacturers like BEL, ITI, Motorola, Alcatel, Ericsson, Nokia, Siemens, ZTE, Worldspace etc. and GSM & CDMA carriers like Reliance, Tate Teleservices, Airtel, Hutch, Idea, Spice, Aircel, MTNL, BSNL etc. It was also chosen as a sole supplier to BEL for its requirement of solar modules.

KTPL has three well-equipped production plants in Bangalore, which produces diverse range of products including antennas, RF components (filters, combiners, splitters, couplers etc), cables & connectors, repeaters, fixed cellular terminals and solar products. It has forged strategic alliances with various industry leaders across the globe including Dekolink Wireless (Israel), Coiler Corp (Taiwan), Tatung (Taiwan), King Signals Corp (China), HFR Inc (South Korea) etc. Importantly, all the products manufactured are designed and developed by its in-house R&D center. Presently, it has two wholly-owned subsidiaries namely Eaicom India Pvt. Ltd., Mumbai and Kavveri Technologies Inc., Canada. To strengthen its position in the lucrative North American market, it acquired the TIL-TEK Antenna Division of Wi-Lan Inc., Canada, which manufacture high-quality antenna products for base stations of wireless telecom companies for US $2.5 mn. A few days back, it also acquired another Canadian company called DCI Digital Communications, which specializes in Radio Frequency Interference (RFI) products. Meanwhile, it has bagged about Rs.40 cr. order from Hutchison Essar Ltd. for In-Building Solutions (IBS) and for supply of its products for Base Stations. It has also reportedly bagged a Rs.20 cr. order from Idea.

Although the company is a dominant player in the telecom space, it has increased its share from the defence and space business too. For defence, its R & D division has recently developed GPS antenna for airborne applications, cylindrical beam switching antenna for tactical operations, vehicle mounted VHF & UHF sleeve monopole antennas etc. Moreover, the company is working on innovative designs & development of channelisers, digital instantaneous frequency measurement receivers, specialised filters and radomes, wideband Antennas for early warning system, power amplifiers and LNAs. Importantly, the company has already designed and developed various RF products and antennas for Wi-max and 3G technology that has huge potential. For the March’07 quarter, it reported mind-blowing numbers and ended FY07 with sales of Rs.50 cr. against Rs.35 cr. last and with net profit of Rs.5.95 cr. compared to Rs.2.65 cr. last year.
This translates into standalone EPS of Rs.6 on its equity of Rs.9.80 cr. For FY08, it may clock a total revenue of Rs.100 cr. with profit of Rs.9.50 cr. i.e. EPS of Rs.10. Even though the promoter holding is only 15%, investors are strongly recommended to buy at current levels as the share price can double in 12 months.