Mid-cap mantra: Strong base, new biz to give a boost to Kavveri Telecom

Bangalore-based Kavveri Telecom has been posting robust numbers for the past several quarters. With strong growth drivers and inorganic expansion being its major focus area going ahead, the company is likely to grow at a similar pace.

Kavveri Telecom is a manufacturer and exporter of wireless subsystem communication products such as antennas and radio frequency ( RF) components, providing end-to-end wireless solutions.

During the first nine months of FY12, Kavveri has posted a consolidated revenue of 303 crore, 19% higher than that in FY11, and a 14% rise in profit at Rs 39 crore. The management expects to clock similar growth in the coming quarters as well. The stock has gained close to 24% in the past nine months against a 6% fall in Sensex.

Kavveri operates in margin accretive in-building solutions business through its subsidiary Kavveri Telecom Infrastructure.

With more and more telecom operators opting for this model, Kavveri is likely to benefit. Also, Kavveri manufactures a variety of antennas and RF products for defence, space and ground-to-air propagation systems.

While defence and space markets are expected to be the key growth drivers going ahead, growing demand for wireless equipment is also likely to benefit Kavveri.

Besides, the contract manufacturing business helps Kavveri generate revenues at a fixed pace.

Furthermore, the company's inorganic growth strategy has helped it expand its business in developed markets such as North America and Europe.