Techno Electric Engg -- Powering ahead
Printed From: The Equity Desk
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Forum Name: Stock Synopsis
Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=2568
Printed Date: 21/Apr/2025 at 4:28pm
Topic: Techno Electric Engg -- Powering ahead
Posted By: hit2710
Subject: Techno Electric Engg -- Powering ahead
Date 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)
YEAR MAR05 MAR06 MAR07 MAR08 MAR09 H1FY10
SALES 112 250 352 430 486 272
NP 5 12 28 50 63 48
EPS 1.9 2.6 5 8.7 11 8.5
ROE has been above 25%
ROAE is above 30% since past 5 years.
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.
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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.
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Replies:
Posted By: joslinjose9
Date Posted: 12/Dec/2009 at 8:54pm
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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.
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fear of lord is the beginning of wisdom
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Posted By: hit2710
Date 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.
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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.
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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.
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Posted By: hit2710
Date Posted: 12/Dec/2009 at 9:34pm
Originally posted by joslinjose9
what ur taget for a 6 month period.do u thin
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Technically immediate target looks like 210-220 after breakout from triangular consolidation.
Fundamentally, it could fetch pe valuations of around 15 on expected eps of 17 within six months and hence targets would be around 250 or thereabouts.
Longer term I expect it to cross 300-350 but it all depends on general markets to some extent.
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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.
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Posted By: hit2710
Date Posted: 12/Dec/2009 at 9:48pm
As per annual reports, the public holding is around 5% bcos almost 35% (out of the 40% others) is held by private corporate bodies.
So in effect floating stock is low at around 5% and so any fund/fii buying could really add sails to the stock.
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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.
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Posted By: hit2710
Date 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.
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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.
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Posted By: EquityInv
Date 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?]
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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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Posted By: joslinjose9
Date Posted: 13/Dec/2009 at 3:54pm
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hi hit,
thanks for ur reply and i will add more if it come downwards.
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fear of lord is the beginning of wisdom
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Posted By: dkarthick
Date Posted: 16/Dec/2009 at 12:28pm
http://www.moneycontrol.com/news/business/no-open-offer-plans-for-ghcl-yet-pramod-jain_431202.html - http://www.moneycontrol.com/news/business/no-open-offer-plans-for-ghcl-yet-pramod-jain_431202.html
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Posted By: hit2710
Date Posted: 18/Feb/2010 at 10:48pm
Q3 results update:
Standalone sales up from 123 crores to 151 crores (y-o-y)
NP up from 13 to 26 crores.
9months consolidated sales 482 crores
9months consolidated NP 92.74 crores
EPS for 9M(not annualised) 16.24
Interest for 9M paid at around 15 crores and hence debt has increaased.
From power generation (under segmental results) sales was 59 crores and profits(?ebit) was 32 crores
Based on current showing in 9 months the company could post eps in excess of 20 for full yr on consolidated results.
Seems to be very enthusing set of results and the same is reflected in share prices. stock consolidating around 210-220 after posting a recent high of 238.
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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.
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Posted By: hit2710
Date Posted: 07/Apr/2010 at 2:07pm
Originally posted by hit2710
Technically immediate target looks like 210-220 after breakout from triangular consolidation.
Fundamentally, it could fetch pe valuations of around 15 on expected eps of 17 within six months and hence targets would be around 250 or thereabouts.
Longer term I expect it to cross 300-350 but it all depends on general markets to some extent. |
Without too much fanfare and brokerage attention, this stock has managed to cross 250 and currently at around 257-258. Longer term targets mentioned earlier look possible.
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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.
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Posted By: hit2710
Date Posted: 30/Apr/2010 at 8:25pm
TECHNO ELECTRIC FY 10 CONSOLIDATED RESULTS.
SALES 697 CRORES
NET PROFITS 120 CRORES
EPS FOR FY 10 21.
Good growth shown by the company. cmp around 275. At a pe of around 13, stock seems a good buy on declines.
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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.
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Posted By: kmp_saij
Date Posted: 06/Jun/2011 at 12:28pm
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Hitesh bhai,
what is ur view on techno electric and engg now? it made a high of 444 and now hovering around 230-240.
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Own whatever’s feared, shun whatever’s beloved.
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Posted By: hit2710
Date Posted: 15/Nov/2011 at 7:44pm
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TECHNOELECTRIC ENGINEERING LTD. Cmp 220 (Market cap around 1260 crores).
Techno Electric Engg Co is involved in the following business segments.
1. EPC Turnkey projects ranging from complete power generation plants to system packages of plants tailored to complement larger systems supplied by others.
Electrical systems across Generation, transmission and distribution upto 765 KV.
Tailored power systems for industries such as aluminium, petrochem etc.
Order book of the segment as on sep 11 was 1200 crores.
2. Renewable energy – operates around 110 MW wind energy assets and plans to expand further. Plans to enter bio mass, solar and hydro energy sectors. Company has plans to reach a capacity of 499 MW by fy 13 and 1250 MW capacity in Wind energy by 2017. As per the company announcement on bse recently the company’s capacity now stands at 196 MW as on Oct 11. The company intends to increase the capacity by around 150-200 MW annually.
3. Transmission – Won a 25 year (extendable by 10 years) concession in consortium with Kalpataru Power for transmission link at Jhajjar Haryana.
FINANCIALS
EQUITY 11.4 CRORES (FACE VALUE OF EACH SHARE Re 2)
Book value 80
Debt as on sep 11 is at 693 crores. Cash and bank balances around 68 crores
LAST FEW YEARS RESULTS
|
Year |
05 |
06 |
07 |
08 |
09 |
10 |
11 |
H1fy11 |
H1fy12 |
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Sales |
112 |
250 |
352 |
430 |
486 |
702 |
715 |
366 |
427 |
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NP |
5 |
12 |
28 |
50 |
63 |
116 |
112 |
69 |
83 |
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Eps |
1.9 |
2.6 |
5 |
8.7 |
11 |
20.7 |
19.8 |
12.14 |
14.56 |
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ROE has been around 25%
ROAE is above 30% since past 5 years.
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PROMOTER HOLDING 55%
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
With scarcity in the availability of coal and higher crude prices, alternative energy sources like wind energy might assume more importance.
Profits from the wind power segment are likely to accelerate growth in profits. Gross profit from energy segment for half year ended sep 11 was at 39 crores (out of gross profit of 77 crores) as against 27 crores (out of total gross profits of 60 crores) for half year ended sep 10.
NEGATIVES:
While the company has been showing steady growth in the EPC business the growth in the wind energy business needs to be monitored. The transmission project also expected to start from dec 11.
Debt has been gradually increasing because of investment into wind power assets.
Looking at the fundamentals, the stock could be a good investment opportunity on declines.
INVESTMENT THEME
The broad investment theme in Techno Electric Co is aimed at investing in a company that is present in the EPC segment, and is planning to expand into a sunrise sector of wind energy. Along with EPC segment, the transmission project is likely to provide sustained cash flow to the company and the company is using these cash flows to augment its wind and other alternative energy assets which are likely to generate good returns in the future.
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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.
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Posted By: shontou
Date Posted: 16/Nov/2011 at 8:14am
Conference Call
Techno Electric & Engineering Company
Expect to close FY12 with a order book of Rs 1200 crore
Techno Electric & Engineering Company (TEECL) held a conference call on Nov 15, 2011. In the conference call the company was represented by Pradeep Lohia, President Finance and Ankit Gupta, Managemetn Executive.
Key takeaways of the conference call
TEECL ¡®s Consolidated net sales registered a rise of 17.1% to Rs 242.16 crore. The operating profit (EBIDTA) surged by 39.21% at Rs 84.82 crore with EBITDA margins grew by 550 basis points to 35.0% (vs. 29.5%) and the net profit for the quarter was up by 17.52% to Rs 52.39 crore.
Energy sales for the quarter ended Sep 2011 is about Rs 54.43 crore (up 53.6% yoy) and that of EPC (construction) is Rs 187.73 crore (up 9.6%yoy). The segment profit of power for the quarter was up by 43.5% to Rs 39.86 crore. And that of EPC construction was up by 20.5% to Rs 30.73 crore with its segment margin jumped by 150 bps to 16.48%.
The rise in revenue, margin and profit was mainly driven by commissioning of new wind power generating capacity. Simran Wind Project, a subsidiary of TEECL, successfully completed commissioning of part 1 of Phase I comprising of 101.4 MW wind generation project during Q2FY12.
Energy/power sales in Q2FY12 was about 137.5 million units (with about 40 million units each from the 45 MW and 50 MW units and about 70 million units from new farm) compared to a generation of 109.41 million units in Q2FY11.
Energy revenue break ¨C Sale of REC for the quarter worth Rs 13.16 crore and balance are from sale of power. The income out of generation based incentive (GBI) amounting Rs 4.33 crore is accounted as part of other operating income.
EPC order book of 1200 crore and of which Generation and transmission orders is about Rs 1000 crore and balance are distribution etc . Expect to close current fiscal with an order book of Rs 1200 crore.
Generation from 45 MW farm is 70 million generated for half & for quarter it is about 40 million; from 50 MW farm it is about 82 mln units for half and about 40-41 million units for the quarter; and for 100 MW farm the generation is about 95 million for the half with maximum part of the generation has come in Q2FY12 only as the farm commissioned only in fag end of Q1FY12. About 80-85% of generation of 95 million units is in Q2FY12.
The Jhajjar (Haryana) BOT transmission project (bagged in Consortium) will get commissioned by Dec 2011. The progress on the project is on schedule.
Debtors days as far as TNEB is concerned is about 6-7 months. The scenario may change in a period of 6 months. As far as new capacity is concerned only about 50% is exposed to TNEB and balance are dependent on REC etc.
About 101 MW is registered for REC. The company expected to commission balance 12 MW by Jan 2012.
Till date the company has accumulated GBI of Rs 4 crore
The company has sold about 7464 RECs at a price of Rs 2300/REC and another 10687 RECs at a price of Rs 2700/RECs. RECs generated is about Rs 66925 @1500/REC.
Target 15% growth on yoy basis every year going forward
With the rising concern on cost & availability of fossil fuel, the non©\conventional energy sector is going to see more focus going ahead. With every rise in APPC cost to DISCOMs, tariff for the power generated through non©\conventional means is also set to rise and thus would make this sector more rewarding and shall attract more investments.
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Every day, self-proclaimed stock market "experts" tell us why the market just went up or down, as if they really knew. So where were they yesterday?
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Posted By: Rishant007
Date Posted: 18/Nov/2011 at 10:05pm
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Hiteshbhai,
I see that you had recommended this stock way back in 2009.. I have recently joined the group and I see few days back you had again put the Techno information..
Am I correct to understand that you recommending the stock again at 200 levels for next couple of years?
Pls correct me if wrong
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Posted By: hit2710
Date Posted: 18/Nov/2011 at 10:48pm
Originally posted by Rishant007
Hiteshbhai,
I see that you had recommended this stock way back in 2009.. I have recently joined the group and I see few days back you had again put the Techno information..
Am I correct to understand that you recommending the stock again at 200 levels for next couple of years?
Pls correct me if wrong |
I think now the company is into all three fields namely transmission and distribution(project expected to be commissioned in dec 11), generation -- wind power, and EPC which has always remained its bread and butter business and should gain from management intention to participate in more T&D projects bcos the EPC work would come to techno only.
And if the company walks the talk then it could be a big wind energy force to reckon with.
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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.
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Posted By: prudentinvestor
Date Posted: 18/Nov/2011 at 12:01pm
I had earlier invested in the larger sector leader ( for EPC and T&D) - Kalpataru Power which also has a healthy order book and caters to orders from Power Grid and other companies.
The fundamentals for the sector are a bit shaky at this moment, with rising input prices, execution delays etc.
For Techno, the big boost should come from Wind Power. The company is on track to commission its Phase I of wind power expansion by Q2FY12
and Phase II of 100 MW by 2012.
Given the current scenario I would rather take a wait and watch approach and invest in smaller proportions, if at all.
As Lynch says, the best stocks may be the ones you already own.
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"All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don’t work out..” - Peter Lynch
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