RESEARCH Alstom Projects India Ltd. Buy Key Indicators as on 17/07/2012 Closing Price (Rs.) EPS (Rs.) P/E BV per Share (Rs.) PB Mkt Cap (Rs. Crore) Beta Mkt Cap/Sales Mkt Cap/PBIDTA Mkt Cap/PBDT Mkt Cap/PAT Mkt Cap/Cash Profit PBDITA Rs. in Cr Face Value Shares Outstanding in Rs cr Equity Share capital in Rs cr Share holding (%) Promoters Public FIIs Others SOURCE:CMIE 385 24.95 15.39 103.19 3.74 2592.29 1.22 1.05 8.59 8.62 15.45 11.84 301.44 10 6.72 67.2 Mar-12 68.46 12.28 3.05 16.21 Investment Highlights: Sales and EBIDTA margins doubled in 5 years from Mar 2007 to Mar 2012. Debt Free Status and healthy Bank balance of around 227.2cr in 2012 makes the company available at a PE of 14.09 excluding Bank balance. Dividend of Rs.10 per share from last 4 years and gives Dividend yield of Strong parent company support of France based Alstom (F) group which operates in Power generation and Rail Transport infrastructure. Power deficiency in India and the Current order book provides visibility of earnings in future. Despite adverse investment climate Company continues to bag orders and addd to its existing orderr book of 5282cr. Bags 84crores worth order from NALCO & RINL as on 2 nd May 2012. Bags Rs. 530cr contract from BHEL as on 5 th July 2012. Pg. 1
Sales have grown at CAGR of 33.13% & EBIDTA has increased at CAGR of 26.17%. Ebidta Margins ex OI are lowest in 3 years but may not be comparable due to amalgamation of APIL& AHIL. The company has healthy cash and bank balance and negligible borrowings. Dividend yield of Promoter s holdings increased from 66.48% to 68.46% in Sept 11 as a result of amalgamation. Investment Rationale: Sales doubled in 5 years: It has been observed that the company has increased its sales tremendously by about 102% from March 2007 to Mar 2012. The sales had almost doubled in just 5 years. Alstom India ltd Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Net Sales 1221.5 1559.35 2300.79 2064.53 1818.92 2474.69 EBIDTA 155.9 146.82 245.18 290.26 303.01 301.78 Other Income ( OI) 35 36.17 38.97 18.03 40.82 60.3 Ebidta margin % 12.76 9.41 10.65 14.05 16.65 12.19 Ebdit exc OI 120.9 110.65 206.21 272.23 262.19 241.48 Ebidta margin exc OI % 9.89 7.09 8.96 13.18 14.41 9.75 Pat 111.4 76.51 138.11 167.48 169.22 167.96 Pat margin % 9.11 4.90 6.00 8.11 9.30 6.78 Pat exc OI 76.4 40.34 99.14 149.45 128.4 107.66 Pat margin exc OI % 6.25 2.58 4.31 7.23 7.05 4.35 Debt free status: The Company has healthy cash and bank balance and negligible borrowings. Hence by looking at the cash and bank balance we can say that the company is available around 2365.09cr with a PE ratio of around 14.09. Alstom India Ltd (Rs. Cr) Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Borrowings 2.25 1.69 98.81 16.88 21.34 Nil Cash & Bank Balance 284.26 394.67 365.9 598.06 736.06 227.2 Dividend of Rs.10 per share from last four years and gives dividend yield of Strong Parent company support: Alstom India Ltd is part of France based Alstom (F) Group which operates in power generation and rail transport infrastructure and has presence in nearly 70 countries. Close to 25% of the world's power production capacity depends on Alstom technology and services. Promoter s holdings increased from 66.48% to 68.46% in Sept 11 as a result of amalgamation of APIL with AHIL. Alstom India Ltd (%) Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Promoters 66.48 66.48 68.46 68.46 68.46 Pg. 2
Outlook for the sector & Order book as per FY 2012 provides visibility of earnings for more than 2 years. Delhi Metro Rail has awarded Alstom a contract of 48.7cr to supply train control system to Jaipur metro in India. Outlook: India is the fifth largest producer of electricity preceded by Russia, Japan, US and China. India is ranked 150 in per capita terms. Annual per capita electricity consumption is 650-700 kwh in India, which is one fourth of the world s average. Given the very low per capita consumption it is foreseen that the demand for electricity will continue to stay and grow further. As per annual Report FY 2012 order book stands at 5282 cr and further addition of orders from NALCO, RINL & from BHEL of Rs. 84cr & 530cr respectively provides visibility of earnings of more than two years. Other Business: Delhi Metro Rail Corporation (DMRC) has awarded Alstom a contract of 48.7cr to supply the Urbalis train control system to Corridor 2 of the new Jaipur metro in India. The contract includes the design, manufacture and supply, installation, testing and commissioning of the complete train control, traffic management and signaling systems for Corridor 2 (EW-A section) of Phase I of Jaipur metro. Areas of concern: Fuel constraint for Thermal (Coal & Gas) and statutory clearances for Hydro projects. If government inaction continues for a prolonged period in the power sector it may affect the company s profitability as more than 95% of the revenue comes from projects and only 5% comes from service. Expression (Rs. Cr) 2012 2011 Revenue from operations 19028.2 16086.1 Project revenue % 95.92 94.41 Service revenue % 3.82 5.36 Company Profile: Incorporated in 1992, Alstom India Ltd is part of France based Alstom (F) Group which operates in power generation and rail transport infrastructure and has presence in nearly 70 countries. It became Alstom Projects India Limited in 2002 after amalgamating Alstom Transport Limited, Alstom Systems Limited & Alstom Power Boilers Limited with Alstom Power India Limited. The name was changed to Alstom India Ltd. on 6 June 2012. It acts as an equipment supplier, Engineering Procurement & construction contractor, and products/services supplier for central & state public sector utilities or independent power producers. The production plants are located in Coimbatore (Tamil Nadu), Durgapur (West Bengal), Shahabad (Karnataka), and Vadodara (Gujrat). Alstom Power designs, manufactures, supplies and services state-of-the-art products and systems for the power generation sector and industrial markets. Alstom paves the way in renewable energy solutions through its strong position in the hydropower market and its recent entry into the wind power market. Pg. 3
Segmentwise Performance: Alstom is majority into Power sector around 96.86 % and it is also in Transport 3.14%.The company is looking to expand its Transport sector. 3% Sales Power 97% Transport Quarterly Results (Consolidated) (Rs. Cr) Source:CMIE Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Total income 383.71 791.29 303.46 610.77 490.72 1,131.97 Net sales 371.65 778.89 287.18 600.68 479.34 1,123.86 Other income 12.06 12.4 16.28 10.09 9.54 8.11 Extra ordinary income 1.84 Change in stock 43.78 75.35 16.45 44.2 37.15 57.75 Total Expenses 411.6 631.48 280.71 626.39 531.72 936.85 Cons. raw material 245.19 395.29 111.96 400.51 270.22 573.87 Salaries & wages 83.23 100.11 93.6 112.69 109.46 126.84 Other expenses 63.51 79.94 59.99 87.41 139.95 154.29 Extra ordinary expenses PBDIT 35.56 140.6 21.46 54.36 8.24 219.22 Depreciation 11.77 14.26 12.14 12.06 12.09 14.77 Interest PBT 23.79 126.34 9.32 42.3 3.85 204.45 Tax 7.9 41.88 3.02 13.72 67.08 PAT 15.89 84.46 6.3 28.58 3.85 137.37 Pg. 4
As seen from the Monthly chart along side after a fall from levels of 900 in October 2010, stock has made a confirm base in the range of 300-400. Cmp 385 makes the company available in the base range. BUY ADVISED. From NAYAN M. VALA SECURITIES PVT.LTD.RESEARCH By Dushant Y Hedau Disclaimer: The informationn contained herein is confidential and is intended solely for the addressee(s). Any unauthorized access; use, reproduction, disclosure or dissemination is prohibited. This information does not constitute or form part of and should not be construed as, any offer for sale or subscription of or any invitation to offer to buy or subscribe for any securities. The information and opinions on which this communication is based have been complied or arrived at from sources believed to be reliable and in good faith, but no epresentation or warranty, express or implied, is made as to their accuracy, correctness and are subject to change without notice. NAYAN M. VALAA SECURITIES PVT.LTD. and/ or its clients may have positions in or options on the securities mentioned in this report or any related investments, may affect transactions or may buy, sell or offer to buy or sell such securities or any related investments. Recipient/s should not consider this report as only a single factor in making their investment decision. Neither NAYAN M. VALA SECURITIES PVT..LTD. nor any of its affiliates shall assume any legal liability or responsibility for any incorrect, misleading or altered informationn contained herein. MEMBER: NATIONAL STOCK EXCHANGE OF INDIA LTD MEMBER: BOMBAY STOCK EXCHANGE LTD MEMBER: THE CALCUTTA STOCK EXCHANGE ASSOCIATION LTD MEMBER: MCX-SX CODE NO. 13511 CODE NO. 6222 CODE NO. 506 CODE NO.38300 NAYAN M. VALA SECURITIES PVT.LTD. 403-404, Cosmos Court, Above Waman Hari Pethe Jewellers Tel: Fax. E-Mail: (+91-22) 2610 5973 / 2610 5974 +91-22-- 2612 4310 research@nayanmvala.com S. V. Road, Vile-Parle (West), Website: Mumbai 400056. INDIA Pg. 5