Technofab Engineering

Hello Donald Sir n friends,

I recently had a look at this small-sized EPC company named Technofab Engineering, and had a chance to meet the management in a very brief interaction too.

would like to share whatever feedback and inputs I have, and would like to know everyone elseâs views.

Despite the EPC business going through a tough phase in last 12 months or so, this company (albeit a micro-cap) seems to have been able to maintain its margins (over 8% PAT margin), whereas its peers such as Mcnally Bharat, Techno Electric, KEC International have had much lower margins.

The company has an outstanding order book of around 1100 crores, which they say is likely to be executable over next 20-22 months. The management seemed to suggest that the company is not keen to shore up its revenues by compromising on margins.In short, they do not believe in under-cutting (competitive bidding for projects), as also over-leveraging.

Over the last one year when the domestic scenario was not so bright, the company has diversified into global shores, particularly in the African region, and has secured larger size orders compared to its erstwhile order tick size. Going forward, it looks forward to bid for higher size orders. In order to bid for bigger contracts and meet pre-qualification criteria, the company has entered into strategic tie-ups with European players, and is open to such tieups in future. The management suggested that margins on international orders/contracts were superior. It has a fair balance of domestic and international orders.

One big plus point which makes this stock appealing is its debt-free status and some 20 crore cash in books. Current M-CAP is around 161 crores as on date. Their office in Faridabad is on a 1-acre land, which the company says is valued at around 40-50 crore.

For the current year (FY12), the company has guided for 390 crore sales and around 31-32 crores PAT. For 2012-13, company is looking at 20-25% growth in both topline and bottomline.

Seems an attractive bet at CMP of Rs. 150 odd. Dividend payout at 15% is likely to improve going forward.

As per exchange (BSE/NSE data), the promoters seems to be gradually accumulating their own shares. This may be for 2 reasons, 1) if they consider their share to be attractive (this was indicated in the conversation with their management), 2) to circumvent any takeover by third party, since promoter stake is around 41% currently.

Gammon India group holds around 20% in the company. Birla Sunlife Insurance holds a little less than 5% stake.

The company seems an interesting pick in its space. Would request members to share their views. Please also throw light on the future of BOP/EPC players in the country.


Atul Sethia

1 Like

Hi Atul,

Yes, this co does look very interesting on the nos. Any idea as to why Gammon is a major shareholder?

Thanks & Regards,


Hi Atul

Thanks for your note on Technofab Engineering.

It certainly looks a promising prospect to investigate, as Ayush mentions numbers look good. In a difficult environment, growth track seems to be accelerating, without compromising on margins.

When did you meet Management? Did you manage to query the Management on the upswing in performance in difficult conditions? What are the sources of this gorwth, and sustainability,etc.

A comparative study with other EPC players should add lot of perspective.

We should give this a good look! Will revert with more.



Hi Atul,

Can you update on main competition for Technofab? Deos this list cover most competitors??

Power projects : Sunil Hitech, Tecpro system, Thermax, Petron Engineering, McNally Bharat

Water projects : IVRCL, Pratibha Industries, Triveni Eng, Ramky

Oil & Gas projects : Petron Engineering, L&T, Hindustan Dorr-Oliver


Recent CRISIL Report on Technofab Engineering, throws more light.

Aditya Birla Money report on Technofab

Ventura Report on Technofab

Queries of Donald Sir:-

  1. Met the management in late Feb this year.

  2. Reason for upswing/sustenance: As stated by the management - domestic scenario in terms of order execution/tenders being released was slow, so they tried to focus on global projects. If u company’s annual report of 2010-11, overseas orders was only around 20-22% at that point. Whereas as per a recent concall of Feb 2012 (there are 3 recent concalls of august 2011, nov 2011 and feb 12 -available on capitaline database), overseas order book was around 50-52%. Overseas orders (particularly those from pvt sector and those funded by ADB/world bank ) have better margins as stated by the management.

  3. They have various competitors in different sub-segments. The ones stated by the management include IVRCL, L&T, Mcnally Bharat, KEC Int., Techno Electric - listed space. (Unlisted include VEM, Hyd based Megha Engineering )


I am not clear as to reasons for Gammon’s stake, as to whether it is strategic or otherwise. All included (Karuna Rajan +Gammon ) holds around 20% stake. I think we can raise this as a query.

I feel if we can have a list of queries, we can send an email to the corporate relations person.

PS: Last few days I have been seeing lot of orders being released to companies like Tecpro, Mcnally, and some other players in this space. There is buzz in the Infra space after IVRCL coming into news. I have also seen interest in companies like Tecpro and Supreme Infra by foreign funds (going by the bulk deals)

The one concern I have (there are positives and negatives both attached to it) is that the management is not keen to do low margin business. The VP (Corp Relations) clearly told me they dont want to do low margin projects. However, he also stated that they are facing competition from smaller players who are bidding aggressively, as a result of which they have a low strike rate of 10-12% in getting the tender.

Should one take this as a POSITIVE or a NEGATIVE, keeping in mind the domestic scenario?



One point which we should try to focus on is the medium term prospect of the EPC/BOP space in the medium term.

Can Technofab also be a takeover candidate, considering the poor management holding of around 40%.



i looked into the shareholding pattern and found than gammonIndiais holding this 20% from the date of listing. its seems like they had invested in this company before the IPO.

This HDFC Sec IPO Note on Technofab clarifies the Gammon India stake question.

Gammon India Limited (GIL) acquired a 15.7% stake in TEL in FY07, and theassociation has benefited TEL by enabling it to bid for and secure projects for which it was not previously eligible due to net worthand/or revenue criteria.

Technofab Engineeering
BSE Code- 533216
P/E- 5
Equity-10.49 cr.
Promotersa stake-41.36%
Mkt. Cap- 156 cr.

Technofab Engineering (TEL) is engaged in the business of providing engineering, procurement and construction (EPC) services on turnkey basis. The company undertakes execution of a wide range of balance-of-plant (BoP) and electro-mechanical projects in the power, oil & gas, water & wastewater treatment and other industrial & infrastructure sectors in both India as well as international markets. TEL currently executes projects in 15 states in India as well as Kenya, Ethiopia and Fiji. Incorporated in 1971, the company has evolved from a piping, valves and pressure vessels fabricator to an EPC company undertaking turnkey packages relating to low pressure piping systems, fuel oil handling systems and fire protection systems, and eventually executing comprehensive electromechanical packages involving all engineering disciplines: mechanical, electrical, control and instrumentation, environmental and civil. TEL had come with an IPO in June 2010 at Rs 240 per share.

TEL, which had largely targeted individual BoP packages required by customers in the steel, metallurgical and power sectors in the initial years, has gradually evolved to undertake comprehensive turnkey projects in liquid waste and effluent treatment, raw and seawater intake systems and pumping stations, rural electrification works comprising transmission mains and distribution lines, rehabilitation and up gradation of city water & sewage treatment plants in the latter years. The company has strong relationship and worked with leading engineering consultants such as Development Consultants (DCPL), Desein, FITCHNER Consulting Engineers (India), Mecon, Tata Consulting Engineers, Engineers India, M.N. Dastur, L&T, Sargent & Lundy, Uhde India.

For the nine months ended Dec. 2011, TEL has posted net profit of Rs 21.48 cr.(up 42.5%)on net sales of Rs 242.97 cr. (up 46.5%). For the year ended March 2011, TEL had posted net profit of Rs 26 cr. on net sales of Rs 290 cr. On a equity of 10.49 cr.(Promotersa stake-41.36%, FII/DII/HNI stake-39.22%), the EPS stood at Rs 24.78 and the dividend declared was 15%. TEL has about 40 years of experience in the EPC business and has good track record in projects execution as well as ability to move up the value chain. The confidence of the user industry in the company’s ability to handle large project has been vindicated with quite few large orders coming as well as steady growth in rise of order ticket size for the company. Unexecuted order book end March 2011 was Rs 700 cr., about 2.4 times its FY11 revenues providing strong revenue visibility. TEL is aiming at an orderbook of 2.5 times trailing revenues to sustain 30-40% growth.

Gammon India (GIL) holds about 10% stake and accounts for 20% of current order backlog of the company including one large road construction contract worth Rs 103.32 cr., which is the largest ticket size contract for the company. GIL, which forayed into the power equipment business with acquisition in boilers, turbines and balance of plant equipments might see synergic fit for electro mechanical EPC for water and fuel oil systems. The company may not only get subcontracts from Gammon India, but may also qualify for large ticket orders in association with Gammon India. At current market price of Rs 149, the stock trades at about 6 times its FY11 per share earnings(Rs 24.78) and at about 5 times FY12E earnings(Rs 30).**Investors with medium-long-term perspective can consider buying the company’s stock in a phased manner, linked to market dips for decent returns of 50%-60% over the next 8-12 months.
Sanjay Chhabria is an equity analyst and investment consultant based at Raipur (Chhattisgarh). At the time of writing this, he doesnat have any position in the stocks mentioned above. He is bringing a weekly Investment newsletter aMarket-Viewa since April 2001 to help small(retail) investors take an informed investment decision. He invites Readers to send him email to get free 1 week trial offer of aMarket aViewa. He also appears on CNBC TV 18(Mid cap radar). He welcomes comments, feedback & investor queries at

Asomewhat dated Interview of CMD, Technofab at India Infoline around IPO time. Gives us quickly some background on the company.

Mr. Avinash C. Gupta, CMD, Technofab Engineering Ltd.

Hemant P. Maradia / 11:11 , Jun 24, 2010


Mr. Avinash C. Gupta, CMD, Technofab Engineering Ltd.(TEL) has 49 years of experience in the engineering industry. He holds a Bachelor of Science degree from the Punjab University. Mr. Gupta has been associated with the engineering industry since 1960 and over the years he has acquired experience in the planning and execution of electro-mechanical contracts of a varied nature in the areas of power, refineries, fertilizer, steel, ports, etc. Mr. Gupta has spearheaded the company and provided directions for growth, thereby establishing it to be amongst the leading engineering companies in the country today.

nullTechnofab Engineering Ltd.(TEL)is engaged in the business of providing Engineering Procurement and Construction (EPC) services, and executing a wide range of Balance-of-Plant (BoP) and electro-mechanical projects on a complete turnkey basis. It takes up individual turnkey packages relating to Low Pressure Piping Systems, Fuel Oil Handling Systems and Fire Protection Systems. It eventually executes comprehensive electro-mechanical packages involving all engineering disciplines viz. mechanical, electrical, control and instrumentation, environmental and civil. TEL provides EPC services to domestic and overseas markets across a number of industrial and infrastructure sectors which includes Conventional Power, Nuclear Power, Oil & Gas, Water & Waste Water Treatment, Electrical Distribution, Rural Electrification and other infrastructure sectors. Apart from India, the company has presence in international markets like Ethiopia, Kenya and Fiji.

In an exclusive interaction withHemant P. MaradiaofIIFLahead of the companyâs proposed IPO, Mr. Gupta says, "We have grown at a CAGR of over 35% in the past five years. We will of course look to maintain this momentum."

How much money are you raising from the IPO? How do you plan to use the same?
We are looking to hit the markets with our IPO in the second half of June. We are planning to raise Rs300mn for long-term working capital requirements and another Rs210mn for procurement, storage and maintenance of construction equipment. We are also planning to spend Rs54mn on setting up a proper training center. Then of course there are general corporate expenses. All these should add up to anywhere between Rs690-720mn.

What kind of opportunities do you foresee in the infrastructure space? What are your key strengths?
We broadly get our business from sectors like Power, Water and Oil & Gas. We do various electro-mechanical and turnkey projects. Investments coming up in each one of these sectors are pretty large. The opportunities are huge.

We have grown at a CAGR of over 35% in the past five years. We will of course look to maintain this momentum.

At the management level are Board is very strong. We have two whole-time Directors besides four other independent directors.

We have grown slowly and steadily. We have delivered our projects. We have established a very good track record. We have made profits in all but one year since our inception.

Sure there are a lot of new players who have grown faster than us but we have also seen a lot of players of the 1970s that no longer exist.

Our confidence comes from our track record and our management. We have a business model that has worked well over the years, particularly in the last few years.

We have always been cautious. We have never had an over-leveraged balance sheet.

Our distinguishing factor is our project management skills.

Also, we are focusing on multiple areas of infrastructure projects. We are into piping systems, fuel oil handling systems, fire protection systems, water systems, etc.

Over the years, we have been involved in a slew of power and industrial projects in the country. We must have been involved in setting up at least 40,000 MW of power capacity in the country.

Any new area(s) of infrastructure that you wish to enter?
Infrastructure is a big market in India and we are always looking for new opportunities. At any point in time, we are evaluating which new area we can enter. Water desalination is one such area. That is going to be a big market in future. We have formed tie-ups as we do not have an expertise in this particular area. We have bid for a couple of projects and we hope to attain some success in it sooner rather than later.

Another area we are looking at keenly is Mechanical Electrical and Plumbing (MEP) jobs in commercial establishments. We have the capability to execute such projects, but in our country the concept of awarding separate contracts for civil construction and MEP has not taken off. This is a common practice in other parts of the world.

In all the new areas that we are looking to tap in the future, we will not any tie-ups, barring water desalination.

Could you give us a break up of order book between public and private firms?
Today if you look at our order book, one-fifth comes from Indian private companies; another one-fifth comes from international customers and the balance 60% comes from the Indian government.

But, this mix keeps varying.

What is the order book mix in terms of various sectors?
This also keeps changing year after year. For eg, in one particular year 50% of our business came from the Oil & Gas sector. Water sectorâs contribution to our total revenue was nil five years ago. Last year, it touched 40%. Conventional power used to account for 100% of our business. Right now it is around 20-25%. Nuclear power is also around 20-25%.

We are not dependent on one particular sector, or one particular customer, or one area of activity or one geography.

What is the order book currently?
The unexecuted portion of the order book stood at around Rs5.33bn as of March 31, 2010. The timeline to complete these projects varies from 6-24 months. But, 18 months would be the average time for executing our projects. We have 41 outstanding bids worth Rs22bn. Out of these, we are the L1 bidder in five projects valued at Rs4bn.

What is the outlook going ahead?
The outlook is good. Lot of investments is taking place in India, both by corporates and the governments. Two big challenges going ahead will be inflation and currency.

Arenât you dependent on select customers?
The way you look at data is important. Prima facie it gives an impression that we are dependent on a few clients. NPCIL and Rashtriya Ispat were among the top five customers last year in terms of revenue but they gave us four different jobs.

Today no customer accounts for more than 20% of our order book. For eg, NPCILâs contribution is only about 10%.

Four other customers are below 10% in terms of contribution to the order book.

Do your contracts have any cost escalation clause?
Roughly 70-75% of contracts do not have any provision for cost escalation. But most jobs funded by multilateral agencies do have provision for cost escalation.

What is the debt-equity ratio?
Our debt-equity ratio is around 0.38.

Which are the new overseas markets that you are betting on?
Up until now, we have been focusing on the African continent. We have a presence in countries like Kenya, Zambia, Tanzania, Ghana and Ethiopia. We have bid for projects in other parts of Africa. We have recently taken up job in Fiji. But our focus continues to be the African region. We might look at countries in the erstwhile CSIR countries in the coming years.

What is the contribution of overseas business in topline?
In one year when we bagged a big job in Ghana, the contribution of the overseas operations was about 40%. Right now it is around 10-20%. Last year (FY10), the contribution of overseas operations was 15%. This year (FY11) it will be higher again.

Technofab finds a place in ET’s list of 20 “Fastest Growing Small Companies 2011”, published on Oct 31, 2011.

Mayur Uniquoters also finds mention :slight_smile:

Key competitors for TechnoFab Engineering

a Power segment: Sunil Hitech, Tecpro system, Thermax, Petron Engineering, McNally Bharat

a Water segment : IVRCL, Pratibha Industries, , Triveni Eng, Ramky

a Oil & Gas segment: Petron Engineering, L&T, Hindustan Dorr-Oliver

CRISIL report on Technofab Mar 2012

The CRISIL Report makes things a lot easier for us, especially the critical Peer comparisons. Excerpts from the Report

Comparable financial performance vis--vis peers

We have analysed and compared Technofab with other similar EPC players on five importantparameters which we believe are the most important while analysing the EPC companies.

These are i) order book, ii) working capital, iii) debt-equity and iv) order book diversificationand capabilities in various segments. Compared to its comparable peers, Technofab hashealthy order book-to-sales ratio of 2.8x vs. an average of 2.1x for peers. The company alsohas lower gearing of 0.1x and working capital days of 105 (including loans and advances) inFY11. We present below the detailed comparison.

Company Capabilities and order book diversification OB/sales (x) Working capital D/E (x)

TTM days* (FY11) (FY11)
Comparable Players

Technofab Power, water, oil & gas, Industry Infra 2.8 105 0.1
Sunil Hitech Power 2.2 240 1.2
Tecpro Systems Power 2 176 1.1
Hindustan Dorr-Oliver Power and water 1.7 140 1.1
Similar Players

Pratibha Industries Water, roads, urban infra 4.8 156 0.9
IVRCL Infra Water , oil & gas, power, urban infra 4.6 168 1.4
Simplex Infrastructure Power transmission, urban infra, industrial 2.9 114 1.5
Era Infra Power , roads, industrial infra and urban infra 1.8 246 1.9
MBL Infra Roads, railways and urban infra 2.1 146 1
*Including loans and advances

Source: Company, CRISIL Research

Need to do a quick check myself of these numbers across peers, but at first glance if these are correct, I really like the low debt and low working capital req vis-a-vis peers.

The company’s largest orders are now 100 Cr+ as opposed to 30-40 Cr+ in the last couple of years, as the company is trying to take on complete Balance of Plant (BOP) projects and move up the chain. This will inevitabily mean higher working capital requirements. It may need larger investments in Capital equipment leading to higher depreciation. Larger and more complex challenges than before, but nothing that the Management cannot execute (given their cautious approach as evidenced so far).

The diversity of Industries it caters to is a very big plus again, vis a vis similar peers.

Very Interesting to pursue this company. Atul Sethia, thanks for pointing it out, at an interesting point of time:)

Q3 Conference Call details - Technofab Engineering

Analyst Meet / AGM 03-Feb-12 null
Conference Call
Technofab Engineering
Targets to be Rs 1000 crore company in FY2014-15
Technofab Engineering held a conference call on Feb 3, 2012. In the conference call the company was represented by Arjun Gupta, Director and Arun Kotcha, Vice President.

Key takeaways of conference call

Sales was higher by 69% to Rs 96.57 crore but the growth at EBITDA was restricted to 53% (to Rs 13.59 crore) as EBITDA margin stood contracted to 14.1% compared to 15.5% in the corresponding previous period. Eventually the net profit was higher by 60% to Rs 8.62 crore facilitated by lower tax incidence.

Order intake in Q3FY12 is Rs 200 crore out of which overseas orders were Rs 150 crore and domestic orders were Rs 50 crore.

Order backlog as end of Dec 31, 2011 was 1024 crore and of which overseas orders accounts for about 51-52%. Of the L1 orders of Rs 100 crore which was part of order book about Rs 64 crore was received in Jan 2012.

Revenue recognition from Mozambique and Bangladesh orders will start from Q4FY12 only with former starting in Jan 2012 and latter in Feb 2012.

Average ticket size of orders in the book is Rs 45 crore and Rs 160 crore is the largest ticket size order booked so far. The company is bidding for orders with a ticket size of Rs 500 crore as well.

Revenue target for FY12 is Rs 380 crore plus and hopeful of achieving it.

Mozambique order execution is picking up.

The company is not envisaging any investment in construction equipment for bangaladesh orders as the company to take on local contractor.

The company proposed to acquire two companies i.e. Clear Water Ltd and Arihant Flour Mill Private Limited. While the acquisition of Clear water fell through the company has acquired Arihant for Rs 6 crore. The Arihant acquisition is purely for its land at NeemRana, where the company want to set up maintenance and storage facility for construction equipment.

The target is to be Rs 1000 crore company by FY2014-15.

The company is moving cautiously and selectively with focus on overseas markets as order finalisation has slowed down/delayed in Indian market. With handful of states in election mode water project finalisation suffered. Beginning April 2012 it anticipate a activity in power BoP segment to pick up with large NTPC bulk tenders getting finalised. Enquiries have worsened offlate in current fiscal.

The company has completed 70% of the IndiaBulls Power order worth Rs 70 crore. The company's work is related to phase I and only phase II is put on hold or execution slowed down.

Q2 Conference Call details - Technofab Engineering

Analyst Meet / AGM 03-Nov-11 null
Conference Call
Technofab Engineering
Expects 35% growth in revenue and revised down PAT margin by 50 bps to 8.5%
Technofab Engineering held a conference call on Nov 3, 3011. In the conference call the company was represented by its top management.

Key takeaways of conference call

Sales for the quarter was higher by 28% to Rs 93.82 crore and EBITDA was higher by 19% to Rs 12.20 crore with EBITDA margin down by 110 bps to 13%. But the PAT was higher by 17% to Rs 7.59 crore even as the PAT margin contracted by 80 bps to 8.1%.

Order book stands at Rs 1010 crore and the company is L1 in orders worth Rs 490 crore. Of the total order backlog about 40% is overseas orders.

Of the L1 orders comprise four orders of which 2 are public utility orders from power sector, one private sector order a combined cycle power project base on diesel sets and the last one is overseas order which a water project.

Of the order booking target of Rs 750 crore for current fiscal the company has already booked orders worth Rs 490 crore. Of the order intake of Rs 490 crore, about Rs 350 crore is overseas order.

Average ticket size as of now Rs 40-45 crore. Of the Orders booked in current fiscal the average ticket size has gone up to 75 crore.

The current order book will be executed over 21 months.

Noticing slowdown in opportunity available as well as time taken for order finalisation lengthening.

Expects FY12 sales to be around Rs 390 crore (or a growth of about 35%yoy). The company expect slight squeeze in the margin and expects the PAT margin for current fiscal to be lower by 50 bps than earlier guided 9%. Thus the PAT margin for FY12 will be around 8.5%.

Q1 Conference Call details - Technofab Engineering.

I am surprised to see these are open links...simple Google search throws these up. Aren't these supposed to be paid products??

Analyst Meet / AGM 10-Aug-11 null
Conference Call
Technofab Engineering
Expects a PAT of Rs 32 crore in FY12
Technofab Engineering held a conference call on August 10, 2011 to discuss the performance of the company for the quarter ended June 2011.

Key takeaways of the conference call

Order book is Rs 900 crore. Order intake during the first 4 months of the current fiscal is Rs 326 crore. L1 orders are close to 100 crore. The company expects fresh orders of Rs 750-800 crore for current fiscal.

For FY12 the company expects a revenue of Rs 390 plus crore and a PAT of Rs 32 crore. The PAT margin of the company will be around 9% but the company expects some pressure on the PAT margin for the current fiscal but hopeful of maintaining it above 8%. The topline is expected to grow over 30%.

Normally Q1 business accounts for about 10-12% of full year business.

Overseas orders account for about 30% of the total order book especially in 4 countries Ghana, Kenya, Malavi and Ethiopia. Major chunk or Large part of overseas order is in Gana which is largely a O&G order and balance are all water orders spread in Kenya and Malavi etc

The company has no long-term debt.

Average Execution period is 18 to 21 months. Public sector order takes longer time compared to private orders.

The overall business environment looks lucrative in India and Africa. The pipeline order /order under bidding is about Rs 2000 crore. The emphasis is more on water sector. The slow down in economy has no immediate impact on the business though may be seen in 16 to 18 Months from now.

The competitive scenario is quite challenging with 15-18 bidders competing for an order. Adding to this fierce competitive environment, the company's strike rate is significantly lower at 12-15%.

Average job size of the order book is around Rs 30 crore. However the scope of the work, the ticket size has increased over the period and is now around Rs 100 cr.

Since individual electro-magnetic packages are brought together under one package that resulted in increase in ticket size. With ticket size increasing the general expenses or project management expenses, will be lower auguring well for the company.

Since the company has subcontracts and back to back contracts for materials and takes very less time in finalising such deals it is not overly perturbed by the spike in commodity prices.

The company plans to extend its business into road sector in Africa. However the company is not interested to get into road construction EPC jobs in India as of now.

Hey TCX,

This is great stuff. between you and donald and atul, you guys have dug up/covered almost everything that we need to know:))

I checked the numbers of peers and technofab. Purely from a numbers viewpoint, yes Technofab enjoys a superior profile, enjoys better margins and returns than most, and most importantly has negligible debt, low working capital. It is also growing both topline and bootomline faster than peers.

Most peers are while growing well, are facing mild to severe margin pressures leading to degrowth at PAT level or marginal growth. Technofab is a contrast in that way. It is much better on the returns and margins (opm & npm) front than most. Only Tecpro comes close in returns. Many of the slightly larger companies are enjoying much higher multiples.

Not sure what are the reasons for according a 5x PE to technopro when it is growing better, has better margin and returns profile, lower debt and working capital. Agreed overseas orderbook (50%) from Africa, fiji, bangladesh may be seen as countries with higher risk. But as the CRSIl report shows most of these overseas projects are funded by multil-lateral funding agencies, so credit risk is covered, project execution one can perhaps say can suddenly get stopped!!

The orderbook visibility for FY13 is also pretty robust, and again 40-50% will be overseas which augurs well for margins front and the slowing down in India govt projects as mentioned by the company.

looks to me what are very prudent moves by management to geographically diversify and what has really helped them is being held against the company?

I will go by one of Basant Maheshwari’s (equitydesk) adages. “I will anyday take a 30% grower, with 30% average RoCE, available at 5x”. This is good value!

I am buying!

Are you?

Technofab is a smaller player than most peers, but with good credentials.

Looks good to me too!

Can someone deliberately play the devil’s advocate - focus only on the negatives!

I am not good at this, but let’s start off thinking negative…

1). Project execution/stoppage risks in politically unstable countries (50% order book)

2). Domestic orders - 70% are fixed price contracts - no price escalation. vulnerable to commodity price hikes.

3). FY13 may be okay because of 1000 Cr orderbook, but FY14 is vulnerable -management mentions slowing down ordr intake, longer finalistion times in Q3 concall

4). The lower working capital profile will not remain - bound to go up with higher order sizes, higher depreciation

guys, please contribute