XL Telecom & Energy Ltd - 130.00 Rs

XL Telecom & Energy Limited (XLTEL) was originally incorporated as a private limited company in 1985 to manufacture and deal in cable splices, manufacturers of protection equipment and allied accessories for electronic telephone exchanges and other establishments. Subsequently in 1990 it got converted into public limited company and today it is one of the fastest growing telecom equipment manufacturing companies having interest in energy sector as well. It has broadly divided its business into following three strategic business units:

Telecom Division
CDMA Handsets & Fixed Wireless Phone: XLTEL is the first Indian company to setup a manufacturing facility for CDMA mobile handsets in India, as an independent company. It has currently established only “ASSEMBLY” facility for manufacture of mobile phones in partnership with KYOCERA Inc of USA and has a capacity of about 35 Lakh handsets per annum. It is supplying multiple models to all CDMA Operators like BSNL, MTNL, TATA and Reliance. Similarly it has established partnership with AXESSTEL of US for Fixed Wireless Phones with BSNL as its main customer.

Switch Mode Power System : Under technology transfer from SMPS de Austria XLTEL manufactures and offers a full range of SPMS needed by telecom operator in their exchanges as well as BTS stations in the mobile segment
Outside Plant Accessories: Company has been a supplier of joining kits, optic fibres accessories, fusion splicers etc for over two decades and enjoys nearly 40% market share in joining kit business. Its plant at Hyderabad with a capacity of 20,00,000 Heat shrink sleeve & 5,00,000 cable jointing kits is setup in technical collaboration with Corning Inc.

Outside Plant Accessories: Company has been a supplier of joining kits, optic fibres accessories, fusion splicers etc for over two decades and enjoys nearly 40% market share in joining kit business. Its plant at Hyderabad with a capacity of 20,00,000 Heat shrink sleeve & 5,00,000 cable jointing kits is setup in technical collaboration with Corning Inc.

Solar Photo Voltaic Systems Division
Importantly, company has over 15 year's experience of manufacturing Solar Photovoltaic systems and makes modules of various capacities ranging from 5Wp to 280Wp catering to domestic and international customer requirements. To cater the rising demand, company has recently ramped up its manufacturing capacity to enable production of 24MW of crystalline modules and is further enhancing to 60MW per annum in near future.

Ethanol Division
XLTEL also has an ethanol fuel facility at Nanded in Maharashtra with a production capacity of impressive 1.5 lakh litres per day. The plant has been inspected and cleared technically by oil companies both in terms of capacity evaluation and the quality of the product being produced.

In Dec 2006, XLTEL, erstwhile XL Telecom raised nearly 59 cr thru IPO route @ 150 per shares for expanding the module making capacity of SPV cells, setting up facilities for surface mounting technology (SMT) lines to produce motherboards used in mobile phones, repayment of term loans to IDBI and to fund long-term working capital requirement for fixed wireless phone business. For FY07 ending June 2007 company is estimated to report a topline of 525 cr and bottomline of 20 cr i.e. EPS of 14 Rs on equity of 14.50 cr. Being in a high growth sector of manufacturing mobile handsets and solar photo voltaic system along with capacity expansion, it can end FY08 with sales of 600 cr and profit of 26 cr. This translates into FY08 EPS of 18 Rs. At a reasonable discounting by 12x times, share price can once again test 220 levels in 9~12 months.