Alstom T&D can test Rs 200: SP Tulsian

Tulsian told CNBC-TV18, "Alstom T&D India is a leading transmission solution provider. They are largely catering to the medium and high voltage transmission projects and they are making practically all the products whether you take the power transformer, switch gears, power control or the relay equipments and all that and many of the products have been made by the company in this last twelve months for the first time in the country."

He further added, "They have eight manufacturing plants. In fact, this company is the old Areva T&D from where the distribution business has been hived off and now the transmission, the company is purely focusing on the transmission business with Alstom as the promoter is having 73.5% stake."

"The company has already posted their twelve months results in fact they have extended their financial year ending, which used to be earlier on December now they have extended it to 15 months, so this time it will be ending on March 31, 2012 for which the results are scheduled maybe in next couple of days."

"For twelve months ending December 31, 2011, the company posted topline of Rs 3,150 crore, PAT of about Rs 118 crore and that translates into an EPS of about Rs 5 for whole of 12 months but as I said that since this time financial year is of 15 months, we have to need to wait to see their Q4 results."

"The recently produced products, which the company has started manufacturing largely the power transformers of the 760 KV and 1,200 KV that has been giving them a very good profitability and that product has been introduced just in last two quarters or so and going forward if you see their product profile or their order book having got the major orders from all the companies whether you talk of the power producers or the transmission majors like Power Grid or maybe Lanco Infratech , Reliance , all the power generation companies and the transmission projects are giving orders to them and that is likely to increase their profit margins in the time to come.'

"For FY13 in fact I am quite hopeful that they should be able to post an EPS of close to about 7-7.5 which will be their EPS for 15 months of this financial year. So taking all this into consideration and post restructuring after hiving off the distribution business, the transmission is the main focus area on Alstom on which they have been focusing a lot going forward. So taking all this into consideration, I think this looks a very good and safe stock, downside seems very limited but if somebody can keep a view of about a year or so, can expect a price of about Rs 200 for the stock."

Disclosure: I have no personal holdings in the above stock.