BGR Energy Systems
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
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=3220
Printed Date: 21/Apr/2025 at 4:38pm
Topic: BGR Energy Systems
Posted By: rdyn
Subject: BGR Energy Systems
Date Posted: 26/Mar/2011 at 8:44pm
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BGR Energy Systems
BGR Energy Systems was originally incorporated in 1985, as a joint venture between GEA Energietechnik GmbH, Germany and Promoter, Mr. B.G.Raghupathy, to produce and sell On-line Condenser Tube Cleaning Systems, Debris Filters and Rubber Cleaning Balls used in Thermal and Nuclear Power Plants. In 1993 Mr. B.G.Raghupathy and members of his family became the sole shareholders of the Company and began to expand a range of product and services range in the Power and Oil & Gas industries. On June 28, 2007 it changed name from GEA Energy System (India) Limited, to BGR Energy Systems Limited. BGR Energy carries on business in two segments, the Supply of systems and Equipment and Turnkey Engineering project contracting. In the systems and equipment business, the company design, engineer, manufacture, sell and service a range of systems and equipment for the Power, Oil & Gas, Refinery, Petrochemical and Process Industries. In the Turnkey Engineering project contracting business, the company engineer, manufacture, procure, construct and commission projects in the Power and Oil & Gas sector, wherein we take Turnkey responsibility to supply of a range of equipment and services, including the civil works required for a project and other work as may be required under the contract for such project. Order book as of Aug 2008 is close to 11000 crores, and BGR is actively trying to enter EPC space competing with the likes of BHEL. Recently it outbid BHEL in the RRVUNL 2x600 MW Kalisindh EPC project. It got listed Jan 3rd 2008. The issue price was fixed at Rs 480 per share.It was heavily oversubscribed 120 times according to NSE sources. The net proceeds of the issue was to augment long term working capital requirements, expand production capacity by establishing additional manufacturing facilities in India, China and the Middle East and fund expenditure for general corporate purposes. Currently it has manufacturing facility in Panjetty, TamilNadu and also manufactures some oil&gas equipment and finned tubes, which are used in Heat exchanger through its subsidiary Progen. CMP 477.65 Market Cap 3445.49 EPS (TTM) 46.33 P/E 10.31 P/C 10.02 Book Value 97.50 Price/Book 4.90 Div(%) 70.00% Div Yield(%) 1.47 Market Lot 1.00 Face Value 10.00 Industry P/E 15.40 Promoter holding 81.15% Please share your thoughts ------------- My aim is to read each and every post on TED! |
Replies:
Posted By: Ravenrage
Date Posted: 26/Mar/2011 at 9:07pm
Governance issues 
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Posted By: dinsrtt
Date Posted: 20/May/2011 at 2:36pm
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Ravenrage could you please elaborate? |
Posted By: Noodle
Date Posted: 20/May/2011 at 5:11pm
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Burnt my hands very badly in the IPO... pre Jan 21st 2008 massacre IPO mania... Avoid! |
Posted By: Rishant007
Date Posted: 20/May/2011 at 1:36am
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I am a buyer at cmp. Its a good company with good execution capabilities. They are forming a JV with Hitachi for boilers which will come on stream by end of next year. The order book is strong and more orders to follow. I have bought at 500 levels and planning to add more. |
Posted By: respondvignesh
Date Posted: 26/Aug/2011 at 6:26pm
| It has grown at a CAGR of 56% in the past 4 years. Looks attractive at this price. Is the right time to buy? Experts and veterans, plz give in ur thoughts about BGR. :) |
Posted By: rapidriser
Date Posted: 26/Aug/2011 at 10:29am
No one can tell you the right time to buy. I think this is a good company and in a sector which has to expand by an order of magnitude if India has to achieve anything close to its potential. However, looking at the present negative market sentiments in this sector, you have to ask yourself if you are ready to ride a particularly scary financial roller coaster. ------------- When all else is lost, the future still remains. - Christian Nestell Bovée |
Posted By: Rishant007
Date Posted: 13/Sep/2011 at 3:10am
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Its a good company with lot of potential. but due to bear sentiments in power sector and change of govt in chennai, its impatching. I think market is worried ab order book impact as they were close to earlier govt.
But I don't thing company survives on these kind of scenario. It can impact for a short term not in long run. So better to wait and see how much it can fall but its a good company to stick to for longer horizon
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Posted By: rdyn
Date Posted: 13/Sep/2011 at 9:37am
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The Safari that wasn't.
BGR Energy and rest of the capital goods industry has been hit by a double whammy of slowdown in orders owing to regulatory/statutory hurdles and significant rise in competition on entry of new private players and Chinese/Korean vendors. As the company is running out of orders to execute, with only two EPC and three BoP orders on hand, its share price plunged 60%, as against 15% Bloomberg consensus FY13 EPS downgrade, over the past one year. http://www.etintelligence.com/etig_root/productsandservices/companies/equityresearchreports/pdf/2011/Sep/BGREnergy1-060911.pdf - http://www.etintelligence.com/etig_root/productsandservices/companies/equityresearchreports/pdf/2011/Sep/BGREnergy1-060911.pdf ------------- My aim is to read each and every post on TED! |
Posted By: smartcat
Date Posted: 14/Sep/2011 at 2:23pm
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I sold First Leasing and bought BGR Energy! I'm hoping BGR Energy would be the next-next-L&T (We all know Punj Loyd is supposed to be the next L&T :)
Falling order book size doesn't bother me much. Who knows what will happen in the next 2 quarters? They might bag orders worth Rs. 3,000 crores, and the brokerages will be back to upgrading their target price. |
Posted By: rapidriser
Date Posted: 14/Sep/2011 at 3:31pm
I think this is going to be a long wait during which this stock may fall even further. The power sector seems to be in the grip of a huge amount of uncertainty due to problems with coal supply, land acquisition, insolvent SEBs and pollution clearances. I entered it between Rs.450-375 levels during its downward journey from its high of nearly Rs.800. But so far I have been proven wrong in my expectations of limited downside.  ------------- When all else is lost, the future still remains. - Christian Nestell Bovée |
Posted By: nannu_68
Date Posted: 14/Sep/2011 at 7:13pm
Did it pass your stringent filters  ------------- nannu |
Posted By: smartcat
Date Posted: 15/Sep/2011 at 3:11pm
But eventually the sun will rise. That's why I have such huge conviction in this stock (1% weightage in my portfolio.. hee hee!)
Slipped through quite easily. 
This is very freaky. I think they might have just won a Rs. 3,500 cr order http://www.moneycontrol.com/news/buzzingstocks/bgr-energy-lowest-bidder-for-ntpcs-800-mw-tender_586594.html - http://www.moneycontrol.com/news/buzzingstocks/bgr-energy-lowest-bidder-for-ntpcs-800-mw-tender_586594.html |
Posted By: hit2710
Date Posted: 15/Sep/2011 at 3:37pm
What about the dividend yield of bgr? how much is it? ------------- 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. |
Posted By: smartcat
Date Posted: 15/Sep/2011 at 7:19pm
| It's around 3% (Rs. 10 per share in FY11) |
Posted By: KetanAdmirer
Date Posted: 15/Sep/2011 at 8:06pm
Sirji... Great Guess of Rs.3000 crores... In fact, it is Rs.3500 crores... Wah wah... ------------- Cheers Anand |
Posted By: shontou
Date Posted: 19/Sep/2011 at 9:47pm
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Press Meet
BGR Energy NTPC bulk order will be catered to by mix of imports from Japan and manufactured locally BGR Energy held a press meet on Sep 16, 2011 on the company emerging L1 for steam turbine generation package in the 9X800 MW bulk tender of NTPC. The meeting was addressed by B G Raghupathy, Chairman & Managing Director of the company along with his top management team. Key takeaways of the meet The company has emerged as the L1 for all nine units of super critical steam generators in 9X800 MW bulk tendering of NTPC, competing against other qualifiers i.e. BHEL, L&T Mitsubishi, Bharat Forge-Alstom and JSW Toshiba. But as per the tender conditions NTPC will award either five or four units of supercritical steam turbines generators to the L1 bidder depending on the two projects the L1 chooses. Of the four sites for which the bulk tender is called by NTPC are 2X800 MW Lara STPS in Chattisgarh, 2X800 MW Darlipali STPS in Orissa, 2X800 MW Gajmara STPS and 3X800 MW Kudgi STPS. The choice of sites to be made in consultation with NTPC and the company is likely to go for Kudgi and Gajmara STPS projects as they have better connectivity to sea ports. So the company will end up supplying 5 units and the balance will be equally shared by JSW Toshiba, the L2 and BHEL, being public sector company as required by the Govt norms. Normally NTPC will release LoA within 3 months time of opening of price bid and hence the company expects Letter of Award in another 1-3 months. The value of contract for this STG island project is about Rs 3600 crore. The per MW cost of turbine order works out to Rs 94 lakh and it may go up to Rs 1 crore per MW after factoring in other adjustment factors. Of the total order value about 45% is of turbine balance of plant and balance is for supply of five numbers of turbine and generators. Commissioning of first turbine has to be made with in 42 months from date of LoA and next turbine would be two months thereafter. The contract provides for price variation clause and foreign exchange variation clause. Since the first shop of JV turbine manufacturing unit is expected to commence operation only by Jan 2013, majority of the turbines for NTPC contracts are expected to come only from Hitachi Japan. First two turbines are expected to be completely imported from Hitachi, Japan but for the latter ones a mix of imports from Hitachi, Japan and components manufactured by JV company i.e. BGR Turbines Company will be used. BGR energy is expected to contribute with systems manufactured by it along with the turbine island BoP part. Of the 45% of turbine island BoP, the bought out component will be about 20%. The bought out items will be such as pumps etc. Contribution to revenue by this large NTPC order is expected only by end of FY13 or 20 months from date of LoA. Current Demand supply scenario is the reason for aggressive bidding. If the demand supply scenario improves with order for every one the price might get stabilised. The turbine facility to have a workshop spread over 12 lakh sft and boiler facility about 7 lakh sft. The capacity of the JV companies for boiler and turbine will be about 5000 MW each. The cost of boiler unit is Rs 1400 crore and that of turbine unit is Rs 3000 crore. As of now the order has been placed for long lead machines and site levelling has commenced on the land acquired. The acquisition of balance land required is under progress. The company expects the RJVUNL order to materialize in Oct 2011. As far as the Orissa order is concerned the price bids are expected to be submitted by Oct 2011. Order book excluding the bulk NTPC order is Rs 6500 crore and including that it swells little over Rs 10000 crore. ------------- 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? |
Posted By: SimpleInv
Date Posted: 31/Oct/2011 at 10:16pm
| Any update on BGR energy tax evasion case? |
Posted By: shontou
Date Posted: 16/Nov/2011 at 8:12am
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Conference Call
BGR Energy Systems Sales for FY12 will be Rs 4850 crore BGR Energy Systems held a conference call on Nov 15, 2011. In the conference call, the company was represented by Sankaralingam, MD and the top management of the company. Key takeaways of the call Revenue for the quarter was lower by 32% to Rs 771.51 crore. But the operating margin expanded by 260 bps to 14.3% which has minimized the damage of lower sales growth at operating profits level with operating profit degrew by 17% to Rs 110.20 crore. However strained largely by higher interest cost the PBT was down by 35% to Rs 76.06 crore and the PAT was eventually lower by 34% to Rs51.35 crore gained by 150 bps fall in tax rate to 32.5% on yoy basis. Capital goods contributed about Rs 91 crore to topline compared to about Rs 55 crore in the corresponding previous period. Revenue mix in terms of EPC: BoP for the quarter stood at 55% for EPC and 45% for BoP. Fall in revenue for the quarter was largely on account of delay in material inspection and clearance on the client side as well as approval issues in Engineering & Design. This forced majority of the revenue to slip to Q3FY12/H2FY12. Better margin is on account of change in revenue/product mix. The contribution of high margin BoP and capital goods supply were higher for the quarter compared to corresponding previous period where the share of EPC is dominant. Greater contribution from BoP projects of Chandrapur and Malwa has boosted the margin. Order book as end of Sep 2011 stood at Rs 7270 crore of which capital goods order amounting Rs 1120 crore. Expects to close the current fiscal with a revenue of Rs 4850 crore. EBITDA margin of 12-13% and PAT margin of 6.5% is to be sustained. Having clocked a revenue of about Rs 1500 crore in H1FY12 the company expects a revenue of about Rs 3350 crore in H2FY12 and of which about Rs 1000-1300 crore to happen in Q3FY12 and about Rs 2000 crore in Q4FY12. Debt is up only on account of higher receivables. The Drs days are about 150 days. Some payments are struck with certification issues and are being sorted out. Similarly the retention money as end of Sep 2011 stood at Rs 1300 crore (Rs 1000 crore as end of March 2011) and of which that pertain to completed project is about Rs 300 crore with balance being towards on going projects. The company expects the retention money from completed projects such as Kakatiya and Vijayawada to come in by March 2012 or Q1FY13 facilitating cut in Working Capital cycle. Currently the WC cycle is more than the normal 90-120 days due to receivables getting delayed. Investment commitment in Hitachi JV is about Rs 250 crore for FY12 and of which the company has invested about Rs 205 crore so far. FY12-13 commitment is about another Rs 300 crore. Mettur project is in commissioning phase. As far as Kalisindh is concerned, synchronization of unit 1 is by March 2012 and second unit by Sep 2012. As far as kothakudam project the TG set test is on. The company has recognized about 95% of the revenue in Kakatiya, about 90% in mettur, Malwa about 30%. Expects LoA from NTPC for 5X900 TG sets by November/Dec 2011. Orissa Order under tendering is about Rs 6000 crore together for both BTG package as well as BoP package. ------------- 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? |