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Topic: Techno Electric Engg -- Powering ahead Posted: 12/Dec/2009 at 7:05pm
TECHNOELECTRIC ENGINEERING LTD.
Cmp 167 (Market cap around 950 crores)
Techno Electric Engg Ltd has been one of the key EPC (equipment, procurement, and construction) contractors for Power Grid Corporation of India (PGCI) for air insulated sub stations. With the govt stressing on increased power generation, the addressable market of the company is likely to increase by almost three times the current market in the next 2-3 years.
FINANCIALS
EQUITY 11.4 CRORES (FACE VALUE OF EACH SHARE Re 2)
Debt as on March 09 was 42 crores and expected to be around 140 crores in FY 10.
PROMOTER HOLDING 55% FII 1% MF/FI 4% OTHERS 40%
DIVERSIFICATION
Company has taken up steps to produce power from Non-conventional Energy sources by setting up of Bio- Mass based Power Generating Units all over the country and had obtained licenses for 2 Nos. Units to set up 10/12 MW Bio-Mass based Power Plants, one in North Dinajpur District of West Bengal and the other in Rajgarh District of Madhya Pradesh. During the current year the Company has obtained 2 more licences to set up Biomass based power plants, one in West Bengal and the other in Rajasthan.
Recently the company has bought some windmills from Suzlon.
POSITIVES
Strong growth in the past and expected in future
Good capital utilisation reflecting the management’s vision
With a lot of emphasis on the power generation by govt, co will not be short of orders
Currently available at a forward pe (based on FY 10 EPS of 17) of around 10.
NEGATIVES:
Diworseification ?? into biomass power (may turn out to be a positive also)
TECHNICAL VIEW:
The stock made a high of 370 in Jan08 and along with the market fell down to form double bottom at 48 in Jan and march 09 and moved up to form high of 180 in June 09 and since then has been forming a contracting triangle pattern and since past 7-8 trading sessions has broken out of the pattern.
Looking at the fundamentals, the stock could be a good investment opportunity on declines.
Disclosure: As disclosed earlier in my portfolio thread, I am holding this company in my portfolio.
Edited by hit2710 - 12/Dec/2009 at 7:06pm
Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.
Joined: 15/Jun/2009
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Posted: 12/Dec/2009 at 9:30pm
Originally posted by joslinjose9
hi hit,
i bought some shares at 165 on friday.what ur taget for a 6 month period.do u think the company can deliver 30% eps growth for next 3 years.
Hi joslin,
I think the stock is likely to deliver around 20-30% profit growths for next 2-3 years.
I was especially impressed with the company's performance in midst of crisis in march 09.
I think the company is in a position of strength with its long term relationship with pgcil and now it has a lot of orders with private players like nalco, vedanta etc (details given in annual report available on company website), so it can pick and choose orders which it wants to execute.
Comparable company would be BGR energy.
Best part of the company is its capital utilisation in the face of high growth trajectory.
Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.
Joined: 15/Jun/2009
Location: India
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Posted: 12/Dec/2009 at 11:53pm
Announcement by company on bseindia on oct 26.
Techno Electric & Engineering Company Ltd has informed BSE that the Company had acquired controlling stake and management control in Super on September 03, 2009.
Techno is a leading provider of high quality engineering, procurement and construction services to India's core sector industries mainly focused to Power, Metallurgical and Petrochemicals, both in public and private domain.
At present, the Company holds 15,37,03,000 Equity Shares of Rs. 2/- each in Super constituting 99.98% of the total Issued Equity Share Capital of Super and also holds all 5,50,00,000 Preference Shares of Rs. 10/- Issued by Super. Accordingly, Super is a subsidiary of Techno. The balance 2,50,000 Equity Shares of Rs. 2/- each in Super are held by promoters and its associates of Techno.
Super is into the business of generating power through renewable energy sources (Wind Mills) in the State of Tamilnadu and Karnataka and selling power to the respective state electricity boards.
The Board of Directors at its meeting held on October 24, 2009, to unlock value and synergize operations has approved a Scheme of Merger:
The merger shall result into emergence of a strong consolidated entity to manage the business more advantageously, economically and efficiently to the benefit of all stakeholders.
In terms of the proposed Scheme:
- Techno will merge with Super,
- Techno shall cease to exist,
- Super would be converted into a Public Limited Company,
- Equity Shares of Super shall be listed on the stock exchanges,
- The existing paid up share capital (Equity & Preference) of Super, including shares held by Techno and its promoters along with its associates shall stand cancelled.
- Super will apply for change of its name to the present name of Techno, i.e., 'Techno Electric & Engineering Company Ltd'
The share exchange ratio as envisaged in the Scheme and approved by the Board is given below:
Under the terms of the proposed scheme, shareholders of Techno will receive 1 (one) New Equity Share of Rs. 2/- each credited as fully paid up of Super for every 1 (one) share held by them in Techno.
Consequent to cancellation of existing share capital of Super and issue and allotment of new Equity Shares in Super to the shareholders of Techno in the aforesaid ratio, the share capital and shareholding pattern of Super will be identical to that of Techno prior to its merger with Super. The appointed date for the merger is proposed to be April 01, 2009 or such other date as the Board and / or Shareholders of the Company may approve or the Hon'ble Court may direct.
The merger is subject to various approvals including the approval of Hon'ble High Court, approval of Shareholders and Creditors of respective Companies etc.
The valuation for the determination of the share swap ratio has been computed and arrived at by B. Chhawchharia & Co., Chartered Accountants, Kolkata. Khaitan & Co., Kolkata are the legal advisors to the scheme.
Seems merger happened without any equity dilution.
Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.
Joined: 21/Jul/2009
Location: United States
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Posts: 536
Posted: 12/Dec/2009 at 12:09pm
Originally posted by hit2710
Announcement by company on bseindia on oct 26.
Techno Electric & Engineering Company Ltd has informed BSE that the Company had acquired controlling stake and management control in Super on September 03, 2009.
Techno is a leading provider of high quality engineering, procurement and construction services to India's core sector industries mainly focused to Power, Metallurgical and Petrochemicals, both in public and private domain.
At present, the Company holds 15,37,03,000 Equity Shares of Rs. 2/- each in Super constituting 99.98% of the total Issued Equity Share Capital of Super and also holds all 5,50,00,000 Preference Shares of Rs. 10/- Issued by Super. Accordingly, Super is a subsidiary of Techno. The balance 2,50,000 Equity Shares of Rs. 2/- each in Super are held by promoters and its associates of Techno.
Super is into the business of generating power through renewable energy sources (Wind Mills) in the State of Tamilnadu and Karnataka and selling power to the respective state electricity boards.
The Board of Directors at its meeting held on October 24, 2009, to unlock value and synergize operations has approved a Scheme of Merger:
The merger shall result into emergence of a strong consolidated entity to manage the business more advantageously, economically and efficiently to the benefit of all stakeholders.
In terms of the proposed Scheme:
- Techno will merge with Super,
- Techno shall cease to exist,
- Super would be converted into a Public Limited Company,
- Equity Shares of Super shall be listed on the stock exchanges,
- The existing paid up share capital (Equity & Preference) of Super, including shares held by Techno and its promoters along with its associates shall stand cancelled.
- Super will apply for change of its name to the present name of Techno, i.e., 'Techno Electric & Engineering Company Ltd'
The share exchange ratio as envisaged in the Scheme and approved by the Board is given below:
Under the terms of the proposed scheme, shareholders of Techno will receive 1 (one) New Equity Share of Rs. 2/- each credited as fully paid up of Super for every 1 (one) share held by them in Techno.
Consequent to cancellation of existing share capital of Super and issue and allotment of new Equity Shares in Super to the shareholders of Techno in the aforesaid ratio, the share capital and shareholding pattern of Super will be identical to that of Techno prior to its merger with Super. The appointed date for the merger is proposed to be April 01, 2009 or such other date as the Board and / or Shareholders of the Company may approve or the Hon'ble Court may direct.
The merger is subject to various approvals including the approval of Hon'ble High Court, approval of Shareholders and Creditors of respective Companies etc.
The valuation for the determination of the share swap ratio has been computed and arrived at by B. Chhawchharia & Co., Chartered Accountants, Kolkata. Khaitan & Co., Kolkata are the legal advisors to the scheme.
Seems merger happened without any equity dilution.
Techno shown good growth since last couple of years with more focus on RoE/RoCE/balance sheets without any doubt.
Main concern is they will be investing minimum Rs.500 crores [100 MW] on recent acquisition Simran and Super Wind Projects from Mr. Tanti. I had quick discussion with management and they indicated they will be raising money as debt:equity in proportion of 60:40..
There's another concern with Simran/Super that they had debt on their books. If you go through annual report March'09 of Suzlon, it clearly indicates that combined debt of Simran/Super to Suzlon is around 130 crores. I tried to get answers from management regarding this and could not get any clarification from them.
It seems to me that management is going aggressive towards diversification [or diworsification?]
Edited by EquityInv - 12/Dec/2009 at 12:10pm
One of the best rules anybody can learn about investing is to do nothing, absolutely nothing, unless there is something to do – James Rogers
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