Please refer to important disclosures at the end of this report
1
Techno Electric & Engineering Company Ltd. (TEECL) is a leading provider o
f
high quality engineering, procurement and construction services to India’s core
sector industries both in the public and private domain. The management
expects Power Grid Corp. of India (PGCIL’s) annual capex outlay on transmission
to be around `250bn and SEBs to spend `500bn over the next five years. TEECL
is well positioned to lead India into the new age of rapid infrastructure
development. The increased pace of orders will ensure growth for all T&D
players. The company believes moderate cash balance will help reap benefits
when the industry led by SEBs eventually moves to a BOT model. Management
expects the tendering activity was high but the awarding activity especially at SEB
level had slowed down post demonetization and hence order intake has been
muted but as the things are getting normalized, it will again get back to same
levels in the coming quarters. Led by strong T&D execution and steady margins
the company might see a positive impact on its financials. The company has
shown improvement in working capital cycle from 99days in FY15 to 82days in
FY16 which is a positive sign for the company. The company has been
maintaining a healthy dividend payout of 24.53% and also reported healthy RoE
of 17.3% of TTM earnings. The steady improvement in operational and financial
performance of the company witnessed during the recent past, illustrated by the
consistent revenue growth, better margins, reduced working capital cycle and
liquidity position of the company makes it financially strong company. Hence
Buy.
BUY
CMP `371
Stock Info
Sector
Beta
Bloomberg Code
Shareholding Pattern (%)
Promoters 58.0
MF / Banks / Indian Fls 15.3
FII / NRIs / OCBs 8.6
Indian Public / Others 18.2
Abs. (%) 3m 1yr 3yr
Sensex 3.0 16.6 39.7
TEECL 21.6 58.1 520.5
.
52 Week High / Low 378/209
Avg. Daily Volume 12,973
Capital Goods
Market Cap (
`
cr) 4,239
2
BSE Sensex 28,241
Nifty 8,741
Face Value (
`
)
Reuters Code TEEC.BO
0.4
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
Techno Electric & Engineering Co.
Others | Capital Goods
February 06, 2017
Techno Electric & Engineering Co. | Capital Goods
February 06, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Techno Electric & Engineering Co.
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
p
eriod
)
: Reduce
(
-5% to -15%
)
Sell
(
< -15
)