IMP Powers Ltd - Rs 48.00

Established in 1961, IMP Power Ltd (IMP) is engaged in manufacturing of entire range of power & distribution transformers, electrical & digital measuring instruments, testing equipments, test benches etc. It specializes in HV & EHV power, distribution, special Purpose, furnace, thyristor duty transformers & reactors ranging from 10 KVA to 150 MVA upto 220 kV class which is a very wide range and meets all requirements of customers under one roof. Being one of the oldest players and pioneers in the power equipment segment, it boasts of having a rich experience of nearly 5 decades. It has vendor approval from almost all the State Electricity Boards, major turnkey EPC contractors, big corporate houses and even from few international majors as well. IMP has been supplying its transformers to PSU like MSEB, RRVPNL, APTRANSCO, GEB, MPEB, BEST, NTPC, Power Grid etc and to leading private players including L&T, BHEL, Reliance, Crompton Greaves, IVRCL, Jyoti Structures, Siemens, ABB, Kalpataru, NTPC, KEC, Nagarjuna, Tata Power and many more. It has also been exporting its products to various countries such as U.K., Africa, New Zealand, Australia, Malaysia Cameroon, Dubai, Kenya, Nigeria, Ghana, Sri Lanka, Jordan, Nepal, Bangladesh etc for quite some time. However due to robust domestic demand, it derived only 6% revenue thru export in FY08. In short, it is among the few companies catering to all three sectors i.e. public, private & exports.

IMP has two factories – one at Mumbai & other at Silvassa. Till now, its 5 acre Silvassa facility was having a total installed capacity of 3600 MVA but only couple of months ago company has completed the expansion thereby taking the production capacity to 7000 MVA. This expansion has propelled IMP into one of the top 10 EHV and Power Transformers manufacturing companies in India. Importantly, IMP is the only transformer company in India in the zero sales tax zone enjoying 15 years (till 2012) sales tax holiday for its Silvassa unit. Secondly, it has got itself backward integrated through manufacturing of OLTC & RTCC in house thereby emerging as one of the lowest cost manufacturer of transformers. These are one of the critical components for manufacture of transformers. On the other hand, company has also upgraded its Kandivali plant to manufacture complete range of analog meters such as ammeter, voltmeter frequency meter, dynamometer type watt meter, power factor meter, phase sequence indicator, KVA Meter etc. in addition to high end meters like maximum demand indicator, trivector meter, multifunctional and kWh meters. It has recently launched 96 sq mm size electronic counter & digital display energy meters with pulse output as well as with communication ports which are in huge demand in market. Besides it has also developed a new family of products i.e. Transducers which will be launched shortly.

As a result of the Indian Government's huge plan to generate and distribute power, and also to substantially reduce T & D Losses in the next decade, the demand for transformers will be buoyant in the next decade. It is estimated that additional demand for transformers would be around 150,000 MVA per annum. In addition, another 20,000 MVA is expected from replacement market. Thirdly with growing transformer market in South Africa, Middle East and Europe, export of energy efficient transformer, which have low losses and low noise levels is also growing at a healthy pace. With the sharp fall in copper prices, realization price per transformer has also fallen proportionately. For year ending June 2008, IMP registered 30% rise in sales to Rs 134 cr and 25% increase in PAT to Rs 9.40 cr thereby posting an EPS of Rs 14. To fund its expansion plan, company has issued 11.80 lakh compulsorily convertible preference shares to be converted into equity by March 2009 @ Rs 161 per share. At the same time it also issued 7 lakh warrants (@ Rs 161/- only) out of which 4.50 lakh warrants are yet to be converted. On the back of excellent performance for Q1FY09, company can clock a turnover of Rs 200 cr and net profit of Rs 11.50 for FY09. This works out to an EPS of Rs 14 on diluted equity of Rs 18.20 cr. Investors are recommended to buy at current levels as share price can easily appreciate 50% within a year.

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