Accurate Transformers Ltd. (Code: 530513) (Rs.76.50) manufactures power and distribution transformers ranging from 1 MVA to 40 MVA - in up to 220 KV class and plans to manufacture higher capacity power transformers of 160 MVA in the near future. It also has expertise to carry out rural electrification projects that involve setting up electricity distribution in remote areas including laying of lines, poles and substations. As per the management, the company is working at very low capacity utilisation due to high working capital requirement and shortage of funds. Commanding a gross block of Rs.11 cr., the company has 5 manufacturing plants with an installed transformer production capacity of 8000 MVA, of which 3000 MVA is out Haridwar in Dehradun, which is relatively new and enjoys income tax and excise exemptions. For FY09, its sales improved by 10% to Rs.195 cr. but net profit was flat at Rs.7 cr. leading to an EPS of Rs.24 on its tiny equity of Rs.3 cr. For Q1FY10 also, it recorded 10% rise in sales and net profit at Rs.27 cr. and Rs.1.10 cr. respectively. Ironically, the company seems to have borrowed funds at high interest rates resulting in substantial interest cost that eats up over 50% of its operating profit. Accordingly, for FY10 it may clock a turnover of Rs.210 cr. with net profit of Rs.8.5 0cr. i.e. an EPS of Rs.29 on its current equity. Buy for short-term gains.
Source: Internet (Moneytimes)
No comments:
Post a Comment