Networth sees 40% upside in IMP Powers; puts a buy call
Networth Stock Broking has a 'buy' call on IMP Powers Ltd with a price target of Rs 240 in 12 months from its current price of Rs 172, an upside of 40 per cent.
By INDIATIMES NEWS NETWORK |
MUMBAI: Networth Stock Broking has a 'buy' call on IMP Powers Ltd with a price target of Rs 240 in 12 months from its current price of Rs 172, an upside of 40 per cent.
IMP Powers manufactures power utility equipments including entire range of power & distribution transformers, electrical & digital measuring instruments, testing equipments and test benches.
“IMP Powers net revenues and profits have grown at a compounded annual growth rate of 33.6 per cent over 2004-2006 (Apr-Mar). We expect IMP Powers to grow at a CAGR of 49.6 per cent for the next three years. At the current market price of Rs 172, it is trading at a price to earnings ratio of 11.7 times and 7.2 times its 2007-08 and 2008-09 estimated earnings per share of Rs 14.7 and Rs 24 respectively,” the report says.
“The company has a strong order book of Rs 130 crore as on date. With the potential of winning for the bids, the order book is estimated to cross Rs 200 crore in the coming quarters. The expanded capacity is expected to be fully operational by Q1FY09E. We expect ROE to stabilise at 21.8 per cent and 22.3 per cent in 2007-08 and 2008-09 estimated respectively,” it adds.
As regards with the industry, the report says: “In 2005-06, India faced an energy shortage of 8.3 per cent of total energy requirement and 12.3 per cent of peak demand requirement. To overcome this, government has planned additional capacity of 100,000MW by 2012, out of which 23,000 MW has already been added.”
Hence, 77,000 MW of power generation capacity will be added over next five years. As a thumb rule, for every 1 MW of capacity added requires of 7 MVA of transformation capacity. In case 80 per cent of the targeted capacity addition is achieved it translates into fresh demand of 4,31,200 MVA of transformer in next 5 years.”
IMP Powers has transformer manufacturing facility at Silvassa with an installed capacity of 3600MVA. It manufactures transformers ranging from 10MVA to 150MVA in 220KV class. Its meter manufacturing facility is based at Mumbai with an installed capacity of 2,14,400 meters. Company derives 96 per cent of revenues from its transformer division and rest from meters. It mainly supplies to SEBs and industrial users like EPC players. It also exports to number of countries contributing approximately 30% to the total revenues.
IMP Powers manufactures power utility equipments including entire range of power & distribution transformers, electrical & digital measuring instruments, testing equipments and test benches.
“IMP Powers net revenues and profits have grown at a compounded annual growth rate of 33.6 per cent over 2004-2006 (Apr-Mar). We expect IMP Powers to grow at a CAGR of 49.6 per cent for the next three years. At the current market price of Rs 172, it is trading at a price to earnings ratio of 11.7 times and 7.2 times its 2007-08 and 2008-09 estimated earnings per share of Rs 14.7 and Rs 24 respectively,” the report says.
“The company has a strong order book of Rs 130 crore as on date. With the potential of winning for the bids, the order book is estimated to cross Rs 200 crore in the coming quarters. The expanded capacity is expected to be fully operational by Q1FY09E. We expect ROE to stabilise at 21.8 per cent and 22.3 per cent in 2007-08 and 2008-09 estimated respectively,” it adds.
As regards with the industry, the report says: “In 2005-06, India faced an energy shortage of 8.3 per cent of total energy requirement and 12.3 per cent of peak demand requirement. To overcome this, government has planned additional capacity of 100,000MW by 2012, out of which 23,000 MW has already been added.”
Hence, 77,000 MW of power generation capacity will be added over next five years. As a thumb rule, for every 1 MW of capacity added requires of 7 MVA of transformation capacity. In case 80 per cent of the targeted capacity addition is achieved it translates into fresh demand of 4,31,200 MVA of transformer in next 5 years.”
ADVERTISEMENT
IMP Powers has transformer manufacturing facility at Silvassa with an installed capacity of 3600MVA. It manufactures transformers ranging from 10MVA to 150MVA in 220KV class. Its meter manufacturing facility is based at Mumbai with an installed capacity of 2,14,400 meters. Company derives 96 per cent of revenues from its transformer division and rest from meters. It mainly supplies to SEBs and industrial users like EPC players. It also exports to number of countries contributing approximately 30% to the total revenues.
Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
ADVERTISEMENT
