About The Stock
The company has presence in energy solution provider, which continues to remain a growth area. However, in the time of crisis, market has started suspecting everything including financial results and FII stake. This implies confidence crisis, which is not encouraging anyone to go for investment in the stock.Taking a call on the results as well as sector, one can expect the company to continue to show better results, which needs to be positively received by the market.
Concern In the Counter
The concern has been with FII stake in the company, which is on a declining trend to 47.77% as at 30-09-08 against 50.40% as at 30-06-08. However, a positive for the company is conversion of its FCCB, as, out of FCCB of US $ 46 million, US $ 25 million were converted and US $ 21 million are remaining outstanding as at 30-09-08. Considering expected annual profit of over Rs.100 crores, for FY 09, the present outstanding FCCB of about Rs.100 crores is not an area of concern.However, market is expecting divestment of stake by FIIs and low promoters stake of about 18%, in the company, creates further weakness.
About The Financials
Results for quarter ending September 08, with total income rising by about 86% to Rs.279.61 crores from Rs.149.83 crores of corresponding quarter in the previous year. Even on sequential basis, growth in topline is by about 16%. Similar is the case with its bottom line, which rose by about 66% to Rs.48.03 crores from Rs.28.88 crores of Q2 FY 07. EPS for first half of the company is at Rs.20, which would be close to Rs.40 for FY 09. This results in a PE of close to 5 times, which makes the stock reasonably priced.
About The Stock
On 10-10-08 it had a new low of Rs.138 with high volatility with share bouncing back to Rs.232 on 14-10-08. Higher volatility is a risk factor so I do not recommend the investor to involve in this stock.
Disclaimer : I do not have any personal holding in this stock.