Stock Idea - Areva T&D.

>> Monday, September 8, 2008

Scrip: - Areva T&D
CMP: - 1624
BSE Code: - 522275
Market Cap: - 7767.26
52 Week H/L: - 3280.00 - 1199.00

Summary: -
Areva T & D India Ltd. is an India-based company engaged in the business of power transmission and distribution. The Company’s products and systems serve to transmit and distribute electricity, as well as operate networks through information management. Areva T & D India Ltd. is present at all stages of the supply power chain, from the generator to the end user, backed by a services portfolio. The Company has a presence in more than 30 countries.

Business: -

Areva has many ‘firsts’ to its credit, thus gaining market leadership in a number of products; The company commissioned India’s first Extra High Voltage substation of 765 kV for NTPC in 2007. It built the largest power generating transformer for Reliance Energy in the same year. It is also a market leader in GIS (Gas Insulated Switchgear) substation. GIS are much more compact as they occupy significantly lesser space compared to AIS (Air Insulted Switchgear). Given the demand for space in the country, the company quickly capitalised on this need especially in urban substations. Areva is also expanding capacities for the high voltage transformers and GIS switchgears to cater to the growing market and retain leadership position.

Expansion: -
Areva plans to double its capacity over the next two years with Rs 700 crore investments in Greenfield projects. The expansion move appears timely as the company, apart from catering to local demand, has also started receiving outsourced orders from its parent.

Key Financials: -
At EPS of 45.25 the company is trading 35(PE) times of its CMP.
PE looks attractive at 35.
With a huge market cap of
7767.26and adding 700 cr. of its expansion will add 10% to the stocks value.

N Deal: -
The company already makes nuclear reactors and rotors. Its parent company is a world leader in conventional nuclear projects. It makes turbines for nuclear power stations. It supplies steam turbines to over 30% of nuke power stations globally.

Key Positive: -
The N Deal I think is one of the best reason for the stock to shoot up.
A dividend paying stock.
Annual profits up 10% and so is the quarterly profit.

Happy Investing.
Check Stock Quote Here.

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