Vindhya Telelinks ltd


(Gothamcapital) #22

Like you said,there are no free cash flows.Difficult to put money in such stocks .


(sambandham82) #23

The company holds Birla corp, universal cable and mutual fund investments which is worth 2300 cr. At 70% discount, its value is 690 cr.

If we value EPC business at 12 P/E at an EPS of 83 (FY2018), it worth another 1000 cr.

Hence 690+1000 = 1690 cr. But market cap of VTL is 1180 cr.


(pbd) #24

Today it rallied 20%. Is it a pre-result rally? Q1 results will be reported tomorrow.


(sambandham82) #25

It may be due to its subsidiary, Birla Corp reporting yesterday a 94% increase in PAT.
Anyway VTL is undervalued as it holds investment worth 2300 Cr in Birla corp.


(nikhilbora) #26

Vindhya Telelink has come up with very good results. Whether growth sustainable?


(pbd) #27

Their annual report is extremely upbeat and they are playing big on surge in OFC demand in this country.
And forgetting everything, it’s still trading at P/BV < 1.


(Tarak) #28

Vindhya Telelinks has appreciated by almost 30% in last 3 months. Is it then a possible multi bagger?

I doubt, reasons:
a. It’s part of MP Birla group. They used to do well some 100 years back. The group companies growth seem jaded and tired now.
b. Cash FLow is negative as per AR 2017.

Even though it might have appreciated by 30% in last 3 months but it doesn’t qualify to be a probable multibagger.

So Vindhya Telelinks may spurt by 30% in 3 months, but it can’t continue to keep creating wealth for it’s shareholders. Views invited.


(pbd) #29

I thought this is the Annual Report (AR): http://www.vtlrewa.com/pdf/Annual-Report-2017-18-VTL.pdf
AR for 2018 will be released next year, right?


(Tarak) #30

@pbd Thanks for correcting me- there was a mistake from my side.

I am going to update the post.


(pbd) #31

No one has mentioned it yet. Crisil released their rating report. Highlights from their rating rationale write-up:

Strengths:

  1. Company has a strong market position in the optic fibre cables (OFC) industry, and is among the top three players in India.
  2. The group has strong order book, diversified revenue, and a healthy financial risk profile.
  3. Their EPC segment undertakes turnkey projects for them and has set up distribution lines for state power distribution companies.
  4. The EPC division grew by 14% fiscal-on-fiscal in 2018
  5. The cables division grew by 78%.

Risks:

  1. Large working capital requirement.
  2. Vulnerability of its profitability to volatility in raw material prices and foreign exchange rates.
  3. Exposure to risks related to the tender-based nature of the business.

Comments on financials:

+---------------------------------+----------+--------+--------+
|           Particulars           |   Unit   |  2018  |  2017  |
+---------------------------------+----------+--------+--------+
| Revenue                         | Rs crore | 1351.3 | 1026.5 |
| Profit After Tax (PAT)          | Rs crore |  153.4 |  170.0 |
| PAT Margin                      | %        |   11.3 |   16.5 |
| Adjusted debt/adjusted networth | Ratio    |   0.87 |   0.69 |
| Interest coverage               | Ratio    |   3.75 |   3.76 |
+---------------------------------+----------+--------+--------+

Revenue is expected to improve over the medium term on account of healthy demand prospects in the OFC and EPC segments. The group had orders of Rs 4,131.44 crore as on June 30, 2018.

Thanks.

courtesy: screener.in