Techno electric engg ltd


(Rudra Chowdhury) #41

Hi Hiteshji,

Post correction it is again back at the 180 levels. Are you still holding this ? What is your view on this ? I am looking to add any suitable opportunity in the renewable energy space.


(Hitesh Patel) #42

rudra,

I had booked profits in 50% holding at around 210 and am holding the rest still. intend to keep holding it as I have confidence in the management and the theme of wind energy.

Stock seems to be getting good support around 179-180. I also intend to load up again once I see signs of short term correction finishing.


(Ayush Mittal) #43

Hi,

One concern which may come up for cos in this space is the prices of renewable energy certificate. I read somewhere that the prices have been correcting for these certificates and this should be a key monitorable.

Ayush


(Hitesh Patel) #44

Floor price for REC has been fixed at Rs 1500.

**Techno earlier sold RECs at a lucrative price of somewhere above 2500 and is currently sitting on around 1.95 lac REC which will be sold sometime in h2 fy 13. This at a base price of around 1500 per REC should yield around 30 crores in h2 fy 13. That should jack up the second half performance as well. **

From the fiscal fy 14, company would have annuity revenues of 54 crores from the Jhajjar KT transco plus around 6 cr annual revenues as maintenance fees. So for next ten years this 60 cr revenues seems assured without too much recurring expense.

And mind you company has already done 110 cr net profits in first half. Personally I think based on h1 fy 13 numbers, and projected revenues from REC and little bit of help from the transmission portfolio and EPC division should help company in posting fy 13 net profits in excess of 150 crores.

Report of elara capital projects fy 13 NP at 120 cr and fy 14 NP at 129 cr.

While edelweiss projects fy 13 NP at 172 crores and fy 14 NP at 226 cr. There seems wide disparity between these numbers.

So at cmp I think risk reward is favorable for getting into techno because I think at cmp not a lot of expectations are built for fy 13 and chances of positive surprise are higher.

Another trigger is some kind of partnership or stake sale in the wind energy portfolio (IFC Washington already holds a stake in their wind energy portfolio) and proceeds from this is likely to be used to add to wind energy assets in line with company projections of adding around 150 MW of wind energy assets per year.


(Roopesh Kohad) #45

The stock is on upswing for last 2-3 sessions with huge volumes. Last session it went upto 9% and today also same story. There don’t seem to any apparent news/announcements, nor any block/bulk deals. Does anyone have any clue?

Hiteshbhai?

regards,

Roopesh


(Hitesh Patel) #46

roopesh,

Not too much idea about the cause of upmove but there are huge volumes with the upmove. somebody seems to be lapping up the stock big time.


(Hitesh Patel) #47

techno electric has come out with reasonably good third quarter results.

period q3 fy 13 q3 fy 12 9Mfy 13 9M fy 12

sales 149 169 547 602

NP 25.3 23.3 136 115

9M EPS for fy 13 (not annualised) is at 23.44 per share.

In segmental results the thing to note is that energy segment (read wind energy) sales were 37.6 crores for the quarter against 24.8 cr for q3 fy 12.

segmental profits for energy segment shows profits of 19.43 crores against 6.83 cr for q3 fy 12. (these are not net profit figures but profits before tax etc)

the epc segment has been lagging behind. With the energy segment going great guns, any uptick in EPC segment will drive profits on a strong trajectory.

It seems to be a good bet in the renewable energy/epc segment.


(Excel Monkey) #48

Orient green rallies from rupees 11 levels to 14 levels on news of promoters coming with an open offer to buy 26% stake


(Chintan) #49

Hitesh bhai,

You mentioned after Sep 12 results that co. was sitting on 1.95 lac RECs. Are there any updates on this? Where did you get this information? I guess they werenot sold till Dec.

Regards,

Chintan.


(Hitesh Patel) #50

chintan,

the REC details were given in edelweiss update on the results on company website.


(Chintan) #51

Techno Electricâs JV inaugurates its 400/220/132 KV powertransmission system in Haryana.

Excerpts:

Jhajjar (Haryana), 04 March 2013: Jhajjar KT Transco Pvt Ltd (JKTPL), a Joint VentureSpecial Purpose Vehicle between Kalpataru Power Transmission Ltd and Techno Electricand Engineering Company Ltd, inaugurated its power transmission substation at Jhajjar inHaryana.

JKTPL was awarded the project to build a 400 KV intraâstate Power transmission system byHaryana Vidyut Prasaran Nigam Limited (HVPNL) in May 2010. The 400 KV Transmissionnetwork comprises of Double Circuit Quad Moose Line extending from Jharli to Kabulpur,Rohtak (35 KM) and Kabulpur to Dipalpur, Sonepat (64 KM) with 2 No. SubâStations of400/220/132 KV of 24 Bays each at Rohtak and Sonepat. The Transmission Network isdesigned to facilitate evacuation of 2,400 MW of power and is in operation since March2012. The project of this magnitude and complexity was completed in a record time of lessthan 15 months of financial closure, which is a record not only in the state of Haryana butalso in the country.

The project is a PublicâPrivate Partnership project with the Haryana Government initiativeand the first ever transmission project to get Viability Gap Funding (VGF) support from theCentral Government. A VGF scheme, extended by the Government of India, is to aid PPPprojects in infrastructure space to make them commercially viable. The stateâofâtheâartproject is the first ever project developed in the country that has been constructed on agreen concept.

The Rs 444 crore project has been financed through a mix of debt and equity. Debt at Rs276 crore and the combined equity of Rs 76 crore was put in by both joint venturepartners. The grant of Rs 92 crore has been extended by the Central Government. Theproject will ensure a sustainable income flow of Rs 4.5 crore* to the company as a unitarycharge payable per month.

  • It’s not clear to me whether this 4.5 crore is for the JV or for Techno. From what they’ve written I would infer it’s for Techno; but revenues of 108 cr. on 444 cr. investment seem too much?

(Chintan) #52

Ok, their October Investor presentation mentions:

“Techno did EPC and will do Operations & Maintenance work for Rs 45 mn per year for the sub-station part of the project.”

So guess this 4.5 cr will contribute directly to topline of Techno.

Excerpt from Feb report by Edelweiss:

“Based on our recent managementinteraction we understand that the company is now looking at addingincremental wind capacity via the organic route; thus, capacity addition islikely to shift ahead by ~12â18 months.”

This could in fact be good for long-term investors as the debt would remain at manageable levels. Also note that there would be some debt added on the books due to the power transmission JV.


(Chintan) #53

This stock has been hitting new 52 week lows since last few days.

Meanwhile, they are in the process of finalizing deal for next round of wind farm capex. They have also received orders worth Rs. 400 crore in this quarter (Jan-Mar) and expect orders worth another Rs 200-300 crore in the next 1-2 months for the EPC business.

http://www.moneycontrol.com/news/business/techno-electric-plans-big-wind-energy-expansionfy14_841914.html

Valuation seems to be very comfortable. P/E < 6, Div. Yield = 2%. What do other valuepickrs think? How much more could it fall? Hitesh bhai, what level would you start accumulating? I’ve bought at 170 and 156. Thinking of accumulating more once the carnage stops in the broader market (rather when I feel it has stopped).


(Hitesh Patel) #54

interesting bit of news chintan. I think cmp of 150 odd looks good to add. Once any definitive news of stake sale in wind energy business happens there could be a sharp spike up.

valuationwise also its at attractive levels.


(rajeev shah) #55

Value of RECs have fallen substantially in the intl market


(Hardtoget) #56

http://reconnectenergy.com/blog/2013/02/rec-trading-report-february-2013/

came across this article, might help understand the fall in prices of REC in India

also some more feed for thought on the REC policy

http://climatepolicyinitiative.org/2013/02/11/in-india-renewable-energy-certificates-are-missing-the-target/

rgds


(Amey Desai) #57

@ Hiteshbhai

at CMP what kind of pick is Techno Electric?

1] Short Term undervaluation

2] Medium to Long Term steady compounder

3] A potential multibagger

The reason I am asking this is because the ROE & ROCE are 26%, 20%,18% and 20%, 30%, 14% respectively for Mar-10,11 & 12 and secured loans have doubled in 2 years.

with the trailing figures available for 9months nos. the company could very well post sales of 775Cr and 260Cr in operating profits

they are investing heavily into windfarm assets which in 24-36 month timeline should be generating good amount of cash


(Amey Desai) #58

hi all,

any view on the above? Techno has moved around 10% potentially because of dividend announcements


(Chintan) #59

The announcement doesn’t mention the dividend amount (if any). Could this be based on some insider information about the results?


(Chintan) #60

Sorry,

The volumes are low - doesn’t suggest insider trading.