Accumulate RPG Transmission: Networth

391 Investors following RPG Transmissio. Share this News with them.

0

Like this story, share it with millions of investors on M3

Accumulate RPG Transmission: Networth

Broking house, Networth Stock Broking has recommended accumulate rating on RPG Transmission.

Post your opinion here

 

0

Tweet

Share on Tumblr

RPG Transmissio BSE | NSE 01/01/70 Are Mutual Funds betting on RPG Transmissio?

Broking house, Networth Stock Broking has recommended accumulate rating on RPG Transmission .

Networth Stock Broking report on RPG Transmission:

Company Profile

RPG Transmission (RPGTL), formerly known as SAE (India) was promoted by a subsidiary of ABB in 1951, is now under the management control of RPG Group. The company operates in four major business groups - power lines, sub-stations, steel towers and railway electrification. Till last year it has executed around 25,000 kms of Transmission Lines in varied terrains of not only Indian Territory but in the Countries like Thailand, Bangladesh, Nepal, Bhutan up to 800 k/V,500 kV HVDC, and 400 kV Multi circuit voltage level. RPGT has played a very significant role in Railway Track electrification in India under which it has executed around 40% (10000 TKM) railway electrification. Focused on domestic market front, the company undertaken several steps like Corporate Debt Restructuring, issue of fresh equity, improvement in working capital management, sale of investments, subcontracting of surplus capacity, which has led to increased profitability and higher sales.

Investment Rationale . Huge investment opportunities ahead

Powergrid Corporation of India (PGCIL) has announced major plan to add transmission network by 60,000 circuit km at the cost of Rs 80,000cr by 2009. It recently moved forward this target period by three years from earlier announced 2012.

Rs 4500 mn unexecuted order till Januaray,2007

In January, 2007 the company has secured two orders worth Rs 1930 mn. from Power Grid Corporation of India Ltd. With these orders the unexecuted order book, of the Company stands at around Rs 4500 mn. Going ahead the company is very much likely to get substantial orders from Power Grid Corporation as per the National Electricity Policy to have a national grid.

Robust performance in Q3FY07

 For 9 months ended December, 2006 the revenue surged by 93% to Rs2714.7mn. with a 310bps expansion in EBIDTA margin. In Q3FY07, revenue grew on YoY by 56.1%, during which period the EBIDTA margin has also expanded by 350bps. Steadily, such margins are catching up to the level achieved by peers like KEC International, Jyoti Structures etc who concentrate on export market. Due to deferred tax benefits availed last year, the comparison of at PBT level is relevant. PBT soared 265.6% to Rs241.3mn in 9MFY07.

Valuation

The stock trades at 16x the annualised 9MFY07 EPS of Rs.13.35. We recommend Accumulate" on the stock.