XL Telecom & Energy Ltd. (XLTEL) (Code: 532788) (Rs.68.90) has produced excellent Q1FY09 (June – September 2008) results posting 150% higher net profit of Rs.15 cr.
Incorporated in 1985, XLTEL, formerly XL Telecom, is a Hyderabad based company that operates through two divisions: Telecom and Energy. In December 2006, it came out with an IPO of 39,50,000 shares of Rs.10 each at Rs150 per share aggregating Rs.59 cr. for expansion.Its manufacturing facilities at Hyderabad in Andhra Pradesh and Nanded in Maharashtra have annual installed capacities of 500,000 units of cable jointing kits, 2,880 of SMPS plants, 65 MW solar modules, 3 million CDMA phones, and 150,000 litres of ethanol per day. XLTEL used to derive almost 80% sales from Telecom products and the balance 20% from its Energy Division, which comprises two segments – Ethanol and Solar Photovoltaic Systems (SPV). This has drastically come down to just 1.5% from 44% in FY08 (June-end) due to high margin concentration in the energy business.
XLTEL has set up a 120 MW solar photovoltaic cell manufacturing plant in the Rajiv Gandhi Nano Technology Park SEZ at a cost of Rs.360 cr., which is scheduled to commence its operations soon. It recently raised $40 million (Rs.160 cr.) through a FCCB issue to part fund the above project. The FCCBs are convertible after one year but before 5 years post issue. The balance funding of Rs.200 cr. is being financed by a Term Loan from IDBI at 11% p.a.
It has a 3-year exclusive distribution agreement with Forta Im Ex SL, Italy to deliver a minimum of 3 MW solar modules per annum to Europe and collaborations with Alfa Laval, Axesstel, Corning and Kyocera Wireless. During FY08 (June end), XLTEL posted 24% higher sales of Rs.650 cr. and earned 99% higher net profit of Rs.40 cr. yielding an EPS of Rs.21.4.
During Q1FY09, sales have further gone up by 70% to Rs.257 cr. and net profit up by 150% to Rs.15 cr. This net profit of Rs.15 cr. is arrived at after the notional provision of Rs.5.5 cr. towards foreign exchange fluctuation. The company’s equity capital is Rs.18.8 cr. and with reserves of Rs.269 cr., the book value of its share works out to Rs.154. The promoters hold 61% in the equity capital, foreign holding is 29.4%, institutions hold 4.4%, PCBs hold 1.5% leaving 3.7% with the investing public.
XLTEL is looking at establishing series of Solar Farms in Italy, southern France and other European countries generating about 300 MW over 3 years. The first of its solar farm has been established in Majorca, Spain, with an installed capacity of 1.6 MW at a capital outlay of Euro 9.5 millions (Rs.62.7 cr.). The company has submitted bids for three tenders to supply solar energy equipment worth Rs.640 cr. in Europe. XLTEL has received TUV Certification for quality assurance from Germany that will act as a major catalyst for exports to Europe. The company has signed a Power Purchase Agreement (PPA) for 25 years with a Spanish utility company. The project is expected to generate about Euro 19 million in revenues over its initial life with almost negligible maintenance costs.
It has signed a 5-year contract with LDK under which, LDK Solar will deliver approximately 300 MW of multi-crystalline silicon solar wafers to XLTEL over a 5-year period, commencing in Q1FY09 and extending through 2013. Looking at the growing global demand for Non-Conventional Energy Power Generation in the global market place, XLTEL, as a part of its strategy to be a serious player, has decided to embark on forward integration in the solar value chain by entering the EPC segment of solar farm establishment and into power generation using Solar Technologies.
Globally, the solar photovoltaic market is estimated at $16 billion and is expected to touch $65 billion by 2012, which provides ample opportunity for the growth of XLTEL. XLTEL is likely to achieve sales of Rs.1000 cr. for FY09 June year end. Net profit is likely to go up by 50% to Rs.60 cr., which would give an EPS of Rs.32. At the CMP of Rs.68.90, the share is trading at a P/E of just 2.1 on its estimated EPS of Rs.32 for FY09 and offers potential for further gain of about 40% in the medium-term. The 52-week high/ low of the share has been Rs.595/58.
Source: Internet (Moneytimes)
Incorporated in 1985, XLTEL, formerly XL Telecom, is a Hyderabad based company that operates through two divisions: Telecom and Energy. In December 2006, it came out with an IPO of 39,50,000 shares of Rs.10 each at Rs150 per share aggregating Rs.59 cr. for expansion.Its manufacturing facilities at Hyderabad in Andhra Pradesh and Nanded in Maharashtra have annual installed capacities of 500,000 units of cable jointing kits, 2,880 of SMPS plants, 65 MW solar modules, 3 million CDMA phones, and 150,000 litres of ethanol per day. XLTEL used to derive almost 80% sales from Telecom products and the balance 20% from its Energy Division, which comprises two segments – Ethanol and Solar Photovoltaic Systems (SPV). This has drastically come down to just 1.5% from 44% in FY08 (June-end) due to high margin concentration in the energy business.
XLTEL has set up a 120 MW solar photovoltaic cell manufacturing plant in the Rajiv Gandhi Nano Technology Park SEZ at a cost of Rs.360 cr., which is scheduled to commence its operations soon. It recently raised $40 million (Rs.160 cr.) through a FCCB issue to part fund the above project. The FCCBs are convertible after one year but before 5 years post issue. The balance funding of Rs.200 cr. is being financed by a Term Loan from IDBI at 11% p.a.
It has a 3-year exclusive distribution agreement with Forta Im Ex SL, Italy to deliver a minimum of 3 MW solar modules per annum to Europe and collaborations with Alfa Laval, Axesstel, Corning and Kyocera Wireless. During FY08 (June end), XLTEL posted 24% higher sales of Rs.650 cr. and earned 99% higher net profit of Rs.40 cr. yielding an EPS of Rs.21.4.
During Q1FY09, sales have further gone up by 70% to Rs.257 cr. and net profit up by 150% to Rs.15 cr. This net profit of Rs.15 cr. is arrived at after the notional provision of Rs.5.5 cr. towards foreign exchange fluctuation. The company’s equity capital is Rs.18.8 cr. and with reserves of Rs.269 cr., the book value of its share works out to Rs.154. The promoters hold 61% in the equity capital, foreign holding is 29.4%, institutions hold 4.4%, PCBs hold 1.5% leaving 3.7% with the investing public.
XLTEL is looking at establishing series of Solar Farms in Italy, southern France and other European countries generating about 300 MW over 3 years. The first of its solar farm has been established in Majorca, Spain, with an installed capacity of 1.6 MW at a capital outlay of Euro 9.5 millions (Rs.62.7 cr.). The company has submitted bids for three tenders to supply solar energy equipment worth Rs.640 cr. in Europe. XLTEL has received TUV Certification for quality assurance from Germany that will act as a major catalyst for exports to Europe. The company has signed a Power Purchase Agreement (PPA) for 25 years with a Spanish utility company. The project is expected to generate about Euro 19 million in revenues over its initial life with almost negligible maintenance costs.
It has signed a 5-year contract with LDK under which, LDK Solar will deliver approximately 300 MW of multi-crystalline silicon solar wafers to XLTEL over a 5-year period, commencing in Q1FY09 and extending through 2013. Looking at the growing global demand for Non-Conventional Energy Power Generation in the global market place, XLTEL, as a part of its strategy to be a serious player, has decided to embark on forward integration in the solar value chain by entering the EPC segment of solar farm establishment and into power generation using Solar Technologies.
Globally, the solar photovoltaic market is estimated at $16 billion and is expected to touch $65 billion by 2012, which provides ample opportunity for the growth of XLTEL. XLTEL is likely to achieve sales of Rs.1000 cr. for FY09 June year end. Net profit is likely to go up by 50% to Rs.60 cr., which would give an EPS of Rs.32. At the CMP of Rs.68.90, the share is trading at a P/E of just 2.1 on its estimated EPS of Rs.32 for FY09 and offers potential for further gain of about 40% in the medium-term. The 52-week high/ low of the share has been Rs.595/58.
Source: Internet (Moneytimes)
