Sunidhi Securities is bullish on Shilpi Cable Technologies (SCTL) and has recommended buy rating on the stock with a target of Rs 25 in its August 30, 2012 research report.
“SCTL was formerly known as Rosenberger Shilpi Cable Technologies, has a massive monthly production capacity of 1200 Kms. spread on a considerable area of 10 acres with a work area of 3.5 acres this capacity is expected to rise two-fold in future. SCTL came out with an IPO of 81 lakh shares at a premium of Rs59 aggregating Rs55.9 crore in March 2011 for expansion project entailing setting up of new capacity for 20,000 kms of cables and wires along with 80,000 Nos of cable assembles at the existing manufacturing unit in Alwar, Rajasthan. However, SCTL has so far invested Rs17.4 crore towards Capex and Advances for the expansion plan, made investment in subsidiary for Rs5 crore and spent Rs2.1 crore on Issue expenses. The balance public issue proceeds have been used in working capital pending utilisation in the objects of the issue.”
“Product Portfolio includes RF Cables of various sizes for the telecom sector, Low Voltage Power cables and Cable Accessories. These products are used in telecom towers. In mobile towers, feeders are the cables used as a high frequency transmission medium to carry high-frequency or broadband signals between antenna and its base station. These feeder cables are vital for site's optimal performance. Starting from Civil Survey & Site Identification, the company involves in all activities including Site Acquisition, Municipal Clearances, Civil Works, Tower & Shelter Erection, Electrical Works, Project Management and other Engineering, Procurement & Construction related activities.”
“SCTL uses advanced 'Physical Foaming' along with ‘Triple Layer Extrusion' for achieving higher foaming percentage. Increased foaming percentage in Radio Frequency Corrugated Feeder Cables reduces the chances of communication loss while the cable is in use. The austere Quality Control process followed by the company ensures that each inch of finished cable going out of the production facilities is thoroughly checked by the latest testing equipment guarantying the best product quality to the clients.”
“In India, SCTL has been focusing on the increasing distribution network and product basket. With large population, increasing urbanization and disposable income, the industry in which SCTL operates provide sustainable growth on a longer term basis. At the CMP of Rs19.3, the share is trading at a P/E of 1.8 xs on FY13E and 1.4x on FY14E. We maintain buy with a target price of Rs25 in the medium-toshort term,” says Sunidhi Securities research report.
Bodies Corporate holding more than 50% in Indian cos
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