STOCK WATCH
For the latest March’09 Genus power (100.00) reported 30% growth in revenue to Rs 246 cr but PAT fell by 20% to Rs 20 cr on the back of higher interest cost. However for the entire FY09 it managed to clock 6% rise in bottomline to Rs 51 cr on 25% higher sales of Rs 586 cr. Thus it posted an annual EPS of Rs 35 on current equity of Rs 14.80 cr. Importantly company is having an impressive order book position of more than Rs 1000 cr which is almost double its FY09 revenue. Moreover it has participated in tenders of more than worth Rs.1683 cr, out of which it is already 'L-1' bidder in tenders worth Rs.262 cr. Company is amongst the leading integrated metering solutions' providers and the pioneer in implementing AMR (Automatic Meter Reader) technology. It has diversified into engineering construction and currently derives more than 50% from EPC power T&D projects where it provides absolute solutions for power transmission & distribution system. As a step forward, company has also launched IT enabled distribution transformer metering system, feeder monitoring and management system, smart street light management system with value added software application for providing end to end solutions for energy management. But at declines.
IMP Power (60.00) has come out with flying colors for the March quarter. Sales increased by 35% to Rs 53 cr and PAT grew by 30% to Rs 4 cr leading to an EPS of Rs almost Rs 6 for the single quarter. Accordingly it recorded 30% and 10% growth in topline as well bottomline to Rs 139 cr and 9.5 respectively for the nine months March’09. Importantly company has an healthy order book position of approx Rs 125 cr to be executed in next 6 months. Company is engaged in manufacturing of entire range of power & distribution transformers, electrical & digital measuring instruments, testing equipments etc. It has vendor approval from almost all the State Electricity Boards, major turnkey EPC contractors and the only transformer company in India to be in zero sales tax zone enjoying 15 year sales tax holiday which shall continue till year 2012. Secondly, it has achieved backward integration through manufacturing of OLTC & RTCC in house thereby emerging as one of the lowest cost manufacturer of transformers. To cater to the rising demand and increase its market share, company has recently doubled its production capacity from 3600 MVA to 7000 MVA. With this company now list among the top 10 EHV and power transformers manufacturing companies in India. Besides last fiscal, company has also upgraded its Kandivali plant to manufacture complete range of analog meters in addition to high end meters like maximum demand indicator, trivector Meter, multifunctional and kWh Meters. For FY09 ending June’09 it may report sales of Rs 200 cr and NP of Rs 13 cr i.e. EPS of Rs 19 on current equity. A screaming buy.
Recently Transformer & Rectifiers (186.00) reported flat nos for the March’09 quarter. Sales grew by 25% to Rs 133 cr but PAT remained flat at Rs 13 cr due to lower operating margin. But for the full year ending March 2009 its sales jumped up 40% to Rs 425 cr whereas PAT shot up 35% to Rs 44 cr. This translates into EPS of Rs 34 on current equity of Rs 12.90 cr. Thus the scrip is trading at a PE ratio of merely 5.5x times. Company has announced 40% dividend against 20% last year. It is one of the few manufacturers in the country manufacturing the entire range of transformers namely power generation, transmission and distribution transformers, industrial transformers such as furnace transformers, and special transformers such as mobile substation, rectifiers, testing transformers etc. Infact, it is among the largest manufacturer of furnace transformers in India. With an installed capacity of 7200 MVA it has the capability to manufacture transformer upto 160 MVA in 245 kV class. To cash on the boom in power sector, company is setting up a Greenfield plant in Moraiya, near Ahmedabad with an installed capacity of 16,000MVA. The new plant, expected to be operational shortly would be capable of manufacturing transformers upto 756kV class. Interestingly, out of Rs 139 raised thru IPO company has utilized only 95 cr till date and balance Rs 44 cr is still lying in the bank. Investors can safely accumulate this scrip as it will start reporting substantial growth from FY10, as new plant will begin operations by then.
Retail investors are simply selling Bartronics (85.00) as company reported 90% fall in NP to Rs 2 cr against 16.50 cr in the corresponding period last year. But actually it has reported good set of nos. On a standalone basis its sales as well as operating profit shot up 60% to Rs 115 cr & 42 cr respectively. But due to higher interest and depreciation cost it reported flat PBT to Rs 23 cr. Now again company made extraordinarily high tax provision in this single quarter which led to sharp decline in NP. For the entire FY09 it registered 100% growth in revenue to Rs 375 cr and 45% increase in PAT to Rs 47.50 i.e. EPS of Rs 16 on standalone basis. But importantly it has performed much better on a consolidated basis as it clocked a turnover of Rs 583 cr and PAT of Rs 75 cr for FY09 leading to an EPS of Rs 26 on current equity of Rs 29 cr. Hence scrip is trading at a PE ratio of around 3x times which is low for a company which enjoys 90% market share in smart card and 95% in RFID segments. It offers all Automatic Identification and Data Capture (AIDC) solutions and is the only company to offer end-to-end AIDC solution. Having over 1600 clients including blue chip companies, its smart card capacity has been booked for the next two years. Worth a punt at current levels.
