ALSTOM India Ltd

Stock Opportunities Untested - but worth a good look
1

BSE Anouncement as below :-

http://www.bseindia.com/xml-data/corpfiling/AttachHis/ALSTOM_India_Ltd_221214.pdf

Falling commodity prices along with cost control measures implemented by the company to boost bottomline of the company, which can be seen in Sept quarter result.

Good performance to continue going forward, looking at manufacturing push by the government, plus good demand likely from power and energy sector.

After GE takeover, AIL to become GE India, only listed GE company outside of USA. Company to get benefit of GE product portfolio & technology going forward.

This company should trade at higher.

CMP is 635.

Please share your views.

Amit Anam

2

Hi,

I am quite liking this company. The RoE profile of the company is outstanding. The source of which is the technology moat company has. If one reads the AR we can see almost monopoly in the technology the supply.

Only concern is growth, which can get revived if the sector turns.

Regards,

PS- holding it at recent levels.

3

ALSTOM India Ltd (CMP 650 Face Value Rs 10) :

Alstom, a global leader in energy generation, transmission and rail infrastructure, has gained an enviable reputation through the quality of its products and services. We are committed to customer satisfaction by continuously improving our products and setting the benchmark for innovative and environmentally conscious technologies. In India, Alstom offers full range of products and services for power generation, transport and transmission sector.

In the power sector, Alstom is a leader in clean technologies for all types of fuel including gas, coal, hydro, nuclear, solar, wind, etc. It offers a comprehensive range of power generation solutions - from integrated power plant to associated services including plant modernisation, maintenance and operational support.

A promoter of sustainable mobility, the Transport sector is the only multi specialist constructor in the railway sector covering everything from rolling stock and maintenance to signalling and infrastructures.

The Grid sector offers products, power electronics, automation and turnkey solutions, alongside a full range of services, to its customers across high, extra high and ultra-high voltages (66 kV to 765 kV/1200 kV). It designs and manufactures equipment and engineered turnkey solutions to manage power grids and transmit electricity from the power plant to the large end-user, be it a distribution utility or an industrial process or production facility.

At the heart of the development of Smart Grid, Alstom Grid in India offers fully localised products, services and integrated energy management solutions across the full energy value chain - from power generation, through transmission and distribution grids and to the large end user. It offers products and Services by Range, Market, Engineered Solutions and Smart Grid.

While quarterly sales have shown volatility between 450 cr to 700 cr for the last 10 quarters, operating profit has improved from 12 cr to 58 cr from Jun 12 to Sep 14.

In the same period other income doubled from 19 to 38 crore, while EBIDT tripled from 32 cr to 97 cr., tax expenses rose from 6 cr to 41 cr.

Net profit rose from 13 cr to 86 crore, more than 7 times in last 10 quarters. Giving EPS of 12.8 in SEP 14 quarter, which was 1.92 in JUN 12.

The company has technology MOAT, which places it as a top notch player in Power Sector.

This debt free company has a good ROE of 25.94%, and ROCE of 22.11% for the last 3 years, which will only improve due to fall in input price and revival of power sector.

We expect company to post EPS of Rs 60 for FY16, which discounts CMP of Rs 650 at just 11 times 1 year forward earning, Going forward we expect stock price to touch 1200 in next 12 months discounting its current price to earning of 20 times at which all MNC companies trades at.

This is mainly due to Falling commodity prices along with cost control measures implemented by the company resulted in robust bottomline of the company, which can be seen in Sept quarter result.

Company maintains healthy dividend payout of 32.68%, which will double Dividend per share from current Rs 10 to Rs 20.

Good performance to continue going forward, looking at manufacturing push by the government, plus good demand likely from power and energy sector added with demand from Railway Sector, as announced by PM Modi, as company is multi specialist constructor in Railway sector, covering everything from rolling stock and maintenance to signaling & infrastructure.

After GE takeover, AIL to become GE India, only listed GE company outside of USA. Company to get benefit of GE product portfolio & technology going forward.

(Via paid service site)

1 Like
4

http://economictimes.indiatimes.com/news/economy/policy/rs-1-lakh-crore-orders-soon-for-power-mining-equipment-piyush-goyal/articleshow/45829981.cms

Rs 1 lakh-crore orders soon for power, mining equipment: Piyush Goyal

Read more at:
http://economictimes.indiatimes.com/articleshow/45829981.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

5

Hi,

I have been trying to understand whether the re-allocation process of coal blocks (which begins in February) will have any bearing on Alstom. Is this likely to drive the growth in the top-line of the business going forward?
Please could you share your views?

Many thanks.

Abhineet Joshi

6

Hi Abhineet,

Overall power sector looks good with falling input prices, such as coal, copper, crude, etc.

Stock is going strong for the last couple of days, result announcement is tomorrow.

All the best

Amit

7

Hi Amit,

Thanks for reply. And yes, have been following Alstom now and invested in it as well. Would you mind sharing the report (or website) from where you got the above information? I am interested - just out of academic curiosity. No problem if it is not easily available.

Thanks.

Abhineet

8

Alstom India came out with its q3 results today.

Revenues have fallen from 533 to 390 crores.

net profit of 14.9 cr against a loss of 7.58 cr y-on-y.

As mentioned in the footnotes, these results have to be seen in view of discontinuation of business sold off.

Plus the main theme here is corporate action where GE is acquiring the energy business of Alstom worldwide whereas post this development, the cash rich Alstom (global) would focus totally on transportation business.

9

PM MODI - OBAMA INKS NUCLEAR DEAL

This deal will be very much positive for indian as well as american companies which serves whole spectrum of Power Sector

1 company we can think of is ALSTOM INDIA LTD , post takeover of Worldwide energy business of ALSTOM globally by GE of America, Alstom India is likely to get access to whole lot of product and services portfolio of GE of USA, especially After clearance of nuclear deal by PM Modi and President Obama.

Below is the link of GE HITACHI already producing close to 45 GW of Nuclear power worldwide.

https://nuclear.gepower.com/

Also find listed below whole lot of service and product portfolio of GE of USA, the benefit of which Alstom India will get post takeover by GE

Critical Power

AC/DC Power Supplies

Automatic Transfer Switches

Critical Power Distribution

Custom Capabilities

DC Power Services

Distribution

Inverters

Isolated DC/DC Converters

Large Power Plants

Management Software

Medium Power Plants

Non-Isolated DC/DC Converters

Paralleling Switchgear

Power Quality Services

Retrofit Power Solutions

Small Power Plants

Surge Protective Devices

UPS Global Services

UPS - Single Phase

UPS â Three Phase

Power Project Consulting Services

Global Power Projects Overview

Power Systems Stabilizers

Sub-Synchronous Torsional Interaction Analysis and Risk Mitigation

Grid Code Testing

Renewables Application Issues

Torsional Stress Relay

Energy Management

Automation & Process Control

Controls

Critical Power

Drives

Electrical Distribution

Geospatial Systems

High Voltage Equipment

Industrial Communications

Monitoring & Diagnostics

Motors and Generators

Power Conversion

Protection & Control

Smart Metering

Substation Automation

Utility Operation Systems

Industrial Solutions

Aftermarket

Arc Flash Solutions

Busway

Circuit Breakers

Contactors

Conversion Kits and Trip Units

Critical Power

Drives

EV Charging

Lighting Control

Load Centers

Metering

Modular Metering

Motor Control Centers

Panelboards

Power Equipment Buildings

Push Buttons & Pilot Devices

Relays & Timers - Control

Services

Solenoids & Limit Switches

Starters

Surge Suppression

Switchboards

Switches & Disconnects

Switchgear

Terminal Blocks

Transformers

Power & Water

Controls and Automation for Heavy Duty Power Generation

Controls and Automation for Water

Gas Engines â Gas Compression

Gas Engines â Distributed Power - Power Generation

Gas Turbines â Aeroderivative

Gas Turbines â Heavy Duty & Combined Cycle â Power Generation

Gasification

Generators

Nuclear Energy

Solar Power

Steam Turbines

Water Treatment

Wind Turbines

Power Conversion

Brilliance LV Drive

Compact Pods

Cylindrical High Speed Rotors

Diesel and Gas Engine Driven Generators

Direct Drive Wind Turbine Generators

Doubly Fed Induction Wind Turbine Generators

Dynamic SVC Drives

Flameproof Induction Motors

Gas and Steam Turbine Driven Generators

High Performance Controller (HPCi)

High Speed Motors

Hydro Generators

HV Wound Rotor Induction Motors

Incident Reporting

IEEE 841 X$D Ultra

Laminated Salient Pole Rotors

Large Pods

Large Slow Speed Marine Motors

Low Voltage Induction Motors

LV7000 Low Voltage Drive

LV8000 Drive

MV & HV Cage Induction Motors

MV & HV TEFC Induction Motors

MV3000 LV Drive

MV4 Drives

MV7000 Drives

NEMA Premium Efficient X$D Ultra

Power Electronic Controller (PECe)

ProCrane LV Drive

ProMarine LV Drive

ProWind LV Drive

Remote Support & Diagnostics

SD 7000 â LCI Drives

Small DC Motors

SEMIPOL MV Drive

Solid Salient Pole Rotors

VDM 25000 MV Drive

Wind Pitch Motors

Power Economics

Power Economics Overview

Electricity Market Design, Assessment, and Analysis

Sustainability, Climate Change, and Energy Policy Analysis

Transmission and Generation Asset Valuation and Project Pro-Formas

Demand-Side Resource/Demand Response Evaluation and Analysis

Power Systems Operation & Planning

Power Systems Operation & Planning Overview

Secure Islanding of Power Plants - System Stability Analysis

Reactive Power Adequacy

T&D Long-range Planning

Equipment, Switchgear and Arrester Application

DSTAR - Distribution R&D for Today’s Utility Environment

Distribution Automation and Smart Grid Analysis

Industrial Protection and Control Application, Fast Load-Shed Schemes

Distributed Generation Impact Studies

Utility IT & Grid Modernization Projects

Power Systems Software Products

Software Products Overview

PSLF

PSLF Training

MAPS

MARS

DSTAR Software Tool

Software

Aviation

Healthcare

Manufacturing

Mining

Oil & Gas

Power Distribution

Power Generation

Predixâ Platform for Industrial Internet

Rail

Water

Wind

Transportation

All Services

Diesel Marine Power

Diesel Stationary Power

Drilling Motors

Energy Storage

Locomotives

Railway Signaling, Control & Communication

Software

SOURCE : www.ge.com/products

10

Alstom has two listed entities :

Alstom India

Alstom T&D India

After the acquisition - both the entities will be merged?

11

Somenath Paul,

I think Alstom India had two divisions viz rail transportation and energy.

Now worldwide, the energy business of Alstom SA France has been bought (in principle) by GE. So according to announcement by Alstom France, it will be left with rail transportation business and loads of cash.

How this affects Indian Alstom India, needs to be seen. My guess would be either of two scenario

first is GE buys out energy division of alstom india in a cash deal

other second alternative is energy division is spun off and taken over by GE whereas Alstom India retains the transportation division.

Either option should be interesting to follow closely.

disc: invested

PS : If anyone has better understanding of the enfolding scenario, please provide the details.

12

Link: https://nuclear.gepower.com/

GE is in India from more than a century and has a significant presence already in many of the sectors. Why would it move business from its existing entities to a newly acquired listed entity? Or in other words, why would GE India let Alstom India take advantage of its parent’s portfolio and end up having to go through the various procedures involved with listed entities and then have to share it with minority investors to add?

13

I guess market reacted on this news:

Even if merger does not happen, wouldn’t Alstom benefits from Govt’s thrust on Power generation and Transportation?

14

The timeline for any merger or other corporate activity to happen in alstom india (with the earlier announced deal between alstom france and GE provided the deal goes thru at international level) is likely to be the first six months of this financial year.

Stock price seems to be exhibiting unusual strength amidst all the market carnage. Would be intersting to see how this corporate action pans out.

I tried getting answer from management thru email but only got a list of announcements made by the company and its parent in france and the time frame as q1 or q2 of fy 16.

15

AGM addressed by Mr. Patrick Ledermann Vice Chairman & MD.Highlights by Capital Mkt

The company has an order book position of about Rs 5170 crore as on Mar’15 as compared to about Rs 5460 crore as on Mar’14. Lower order book is as a result of lower number of orders in Thermal, hydro and renewable power projects in India. The order book is nearly 2 times its sales. However the benchmark is not correct, as the company is operating at lower capacities and can generate much higher sales at given capacity.
About 90% of India’s 12th 5 year plan is based on super critical technology. Alstom India already has a localized base for implementation of super critical technology orders in Power sector.As per the management in this 5 year plan, India’s Thermal power is going to be dominated by ultra super critical technology. Alstom India has entire Boiler, Turbine and Generator technology ready in place to serve this upcoming market.
Alstom India provides EPC services to gas based power plants both in India and worldwide. Exports business of the services will be much higher in the coming years to come.The company also supplies coal mills to cater to grading requirements of different types of coals. While Indian market moved slowly in FY 2014, internationally, company was able to supply to many countries.
Alstom Parent has the capability and technology to manufacture the Turbines used in Nuclear Power projects. The Parent as and when, during the course of time, will install the manufacturing capabilities in Alstom India, in line with the Make in India concept.The company has reduced its exports in line with focusing more on domestic businesses. However, if the domestic market continues to remain sluggish then company will focus more on exports of services and products. It has all the technology and manufacturing base ready to meet the demand.
The company is hopeful of orders from SEB’s to kick start soon and capex on power generation side should start from H2 FY’16 onwards. Both Central and State government are working on improving the health of SEB’s and some concrete results should come in before Mar’16.
Overall, management is optimistic about increase in spending in power generation segment and increase in order book, as the year FY 2015-16 spans out further.

16

Anyone still tracking this company ?

19

The company is in lower circuit in the past three days after the meet with the institutional players. Why is the market pricing this company and what does the market know the retail investors are unaware of?

disc - invested

20

After meeting with company some one has started selling big. They are closing some division . I don’t track company. Is any body tracking it ?

21

Is Alstom India same as GE Power?
Also is the Alstom’s metro trains business part of GE Power?

22

Sorry I don’t track , I just entered at lower level and sold