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!!! W E L C O M E !!!
In INDIA, people generally relate to stock market as “EASY MONEY” or “SATTA BAZAAR”. For them it’s purely a GAME or matter of sheer LUCK and nothing more than that. But seldom do they know, by following certain PRINCIPLES and taking INFORMED decision, this same platform has the power to take them from rags to riches. No doubt, it has a certain amount of RISK attached to it. But every business or investment has it. What more, the Finance Ministry has already made the long term capital gain as TAX FREE whereas the short term capital gain is taxed at merely 10%. On the economic front, India’s GDP is growing and is expected to grow at scorching pace of more than 8%. Unfortunately, even today our market is being ruled and dominated by FIRANGI’s money. But I can see, the day is not far when our general PUBLIC will change its perception and start putting MOST of their savings in equities as an ** Investment **.
Remember, "K N O W L E D G E" and "P A T I E N C E" are the key to success.
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SAARTHI

Sensex (LIVE- Intraday)

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Wednesday, August 6, 2008

Krone Communications Ltd - Rs 110.00


Incorporated in 1988, Krone Communication Ltd (KCL) belongs to the world renowned ADC Krone group - which has sales, manufacturing and development offices in more than 35 countries and sells into more than 150 countries. In 2004, ADC group (USA) took over the Krone group (Germany) and today ADC Krone group is one of the leading international players in communication networks as it designs and manufactures global network infrastructure products and services. These infrastructure solutions are the foundation of every network to enhance the speed, bandwidth and quality of Internet/data, video, and voice transmissions. Fibre and copper connectivity components designed for wireline, wireless, broadcast, enterprise, and cable networks serve as the critical junction and connection points that tie networks together and link sophisticated electronics to each other. Its digital cross connects, fibre termination and outside plant equipment, small-form-factor connectors, fibre and copper management systems, remote test and monitoring products, and structured cabling solutions enable network technicians to organise, connect, manage, and test assets for maximum network performance.

KCL, being part of the group is engaged in the same business but catering 100% to Indian clients. Its manufacturing plant is located in Peenya, Bangalore where about hundred product lines of ADC Krone's networking and telecom equipment are manufactured. Apart from these, KCL also enjoys the privilege of marketing parent company’s various innovative and patented products like OmniReachTM, Fibre-to-the-Premises solutions, FibreGuide® Raceway, Ethernet Distribution Frames, RF Worx Signal Management Platforms, DSX1/3, PowerWorx® Fuse Panels etc. It also provides solutions for the Enterprise market segment. Its new TrueNet® structured cabling system is an integrated portfolio of industry-leading enterprise network solutions. This system combines proven cable, connectivity, and cable management solutions for fibre, 10 Gigabit Ethernet over UTP copper, and Category 6/5e from the data centre to the desktop. In addition, the company enables wireless carriers to get more from their networks with its Digivance RF Transport solutions. Digivance allows wireless service providers to enhance their networks by extending coverage and distributing capacity where it is needed in a cost-effective manner. Wireline offerings include LoopStarTM line-powered Wi-Fi solutions that provide a low-cost and easy-to-deploy approach in building a network of Wi-Fi hotspots. In addition, the new LoopStar 800 SONET access system for business services and the SG-1 Service Gateway that enables the delivery of value-added, revenue-generating, IP-based services are the latest additions to the Wireline product portfolio.

Due to constant decline in wireline segment, KCL has been concentrating on wireless segment and is always looking forward to introduce more ADC’s wireless product like coverage & capacity solutions and core fiber solutions for the wireless market. Notably, KCL has a very strong clientele including biggies like Rcom, Tata Tele, Bharti Tele,Siemens, HFCL, Lucent, TCS, Alcatel, Cognizant, Ericson, Neyveli Lignite, Hexaware etc. On the financial front KCL has its year ending in the month of October and for FY07 it registered 15% rise in sales and NP both to Rs 93 cr and Rs 8 cr respectively thereby posting a healthy EPS of Rs 17 on small equity of Rs 4.60 cr. It has an impeccable record on uninterrupted dividend payment since last 15 years. In 2005, the ADC group came out with statuary open offer to acquire 23% stake at Rs 92, but didn’t get any response from shareholders as prevailing price at that time was Rs 130 on the bourses. In the current fiscal for the six month ending April 2008, its sales has declined by 15% to Rs 37.50 cr but PAT has improved by 15% to Rs 3 cr despite huge volatility in raw material price like copper and plastic. Accordingly, it may clock a turnover of Rs 90 cr and net profit of Rs 8.50 cr for FY09 which translates into EPS of Rs 18. Hence this debt free MNC is trading fairly cheap at market cap of merely 50 cr, discounting its current year’s estimated earnings by merely 6x times. Secondly with 62% stake, there is also a possibility that parent company may come out with buy back at higher price and try to delist the company. Long term investors can buy it at current price with a price target of around Rs 175 (i.e. 60% appreciation) in 15~18 months.


Posted by S A A R T H I at Wednesday, August 06, 2008

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