Kolkata based electric equipment maker[Is mainly into manufacturing & Selling of transformers and related items] RTS Power Corporation Ltd has been buzzing on the bourses for quite some time on talks that an MNC might buyout the company. Some months earlier CNBC-TV18's research analyst, Nimesh Shah said that there is a speculation that Siemens might pick up a stake in the company. However, the management till date has remained silent on the issue. But the rumours started to brew again on this front, as the company came out with excellent results for the Q2FY-06-07.
Meanwhile the promoters' have increased their holding in the company.
R T S Power Corporation has disclosed a steady growth in net profits for the quarter ending in September, 2006. During the quarter, the company saw a 14.81% rise in profits from Rs. 10.40 million to Rs. 11.94 million.Sales for the quarter rose 55.88% to Rs. 233.07 million compared with the corresponding quarter, a year ago. Operating margins fell to 5.94% during the quarter, a fall of 352.12 basis points compared with the corresponding quarter. Net Margins, on the other hand, fell from 6.93% to 5.03% during the quarter. At the closing price of Rs. 90.50 on at the BSE, the company`s shares were valued at more than 8.4 times earnings on a trailing twelve month basis. The company has recently approved the allotment of 20 lakh fully convertible warrants to the promoter and to two independent investors with an option to the warrant holders to acquire, for every warrant, one fully paid-up equity share of Rs 10 each of the company for cash, at a price of Rs 96 per equity share of Rs 10 each of the company, in one or more tranches, before the expiry of 18 months from the date allotment of warrants, i.e. October 24, 2006.
A Final Dividend @ 5% or Rs 0.50 per share was declared, keeping in mind the overall performance of the Company and with positive future outlook, for the year ended March 31, 2006 on the paid-up Equity Share Capital of the Company.
Its peer group companies are BHEL, Suzlon Energy, ABB, Siemens, Crompton Greaves etc. Please compare its valuation with those and you will understand that the stock after the superb results for September, 2006 quarter, is looking attractive at this price.
The current EPS of the company is a whopping Rs.9.83[www.moneycontro.com]. Since power sector sector demands greater valuations, I expected it to cross Rs.200 by 31st March, 2007. Also if Siemens really takes a stake in the company the share price could reach much higher levels.
Keep holding Conart Engineers Ltd as it is one of the cheapest company available in the Construction Space. Have u seen any construction and engineering Profit making company available at the book value. This is what Conart Engineers Ltd scrip is....
My report on it will be ready by the end of this week. I think the stock has every potential to cross Rs.60 the way the Costruction Stocks are moving. There are rumours that a big player might enter the counter at this levels.
Keep watch on Gravity(I) Ltd and Chandra Prabhu International Ltd.--these stocks could spurt at any time. In case of Chandra Prabhu International Ltd if there is some official confirmation on the Joint venture with Australian Drilling and exploration company stock could shoot to much higher levels. There is another great news on Gravity(I) Ltd which I will be able to disclose at the end of this month, apart from the Real Estate, Hotel, Shopping Mall and Retailing story.
PBA Infrastructure is doing excellently well. I might recommend another stock in this week so please keep some cash.
WITH OIL PRICE GOING DOWN AND INDIA INC POSTING STRONG RESULTS I DO NOT FORSEE ANY CORRECTION ON THE BOURSES. Yesterday Mid and Small Cap counter came in for some profit booking but this is just a temporary phenomenon and is expected to bounce back today.
I am very busy these days with my normal business and hence the activitites of SumanSpeaks groupand this blog, might be hampered....Please bear with me. The things might be streamlined by next Monday.
Best wishes,
Suman Mukherjee
India.
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