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Techno Electric can test Rs 220: K Kotak
Kamlesh Kotak of Asian Markets Securities is of the view that Techno Electric and Engineering Company can test Rs 220. The company’s order book position is quite comfortable at 1.5 times FY07 revenues. The company from power generation, distribution and transmission plants is also looking at captive power plants of its own into biomass energy.
Kotak told CNBC-TV18, "Techno Electric has corrected sizably from its peak. This is again an interesting EPC company. It is also a debt-free, cash rich company having strong RoE and cash flow. The company's order book position is quite comfortable at 1.5 times FY07 revenues. The company from power generation, distribution and transmission plants is also looking at captive power plants of its own into biomass energy. It is also looking distribution management of the power utilities. The company is now venturing into a new arena in power and that is how it is in the entire gamut of power distribution and generation related EPC services."
He further added, "If you look at it from the financial front, the company has strong growth, having grown at 70% YoY last year. The company is expected to grow 25% YoY over the next three years. Based on our EPS target of around Rs 15-16 for FY10, even if you value it conservatively, the stock again has the potential to go up to Rs 220 level, and it is currently trading at Rs 160. So this is a very good investment for a long-term investor at least with a one-year horizon."
Disclosure: Analyst doesn't hold the above stock but would be recommending to his clients and they might be holding it in their investment portfolios.
