Scripscan:BS Transcomm Ltd
Traded in:Nse-bse
Cmp:83
Target:107
Return:30%
Duration:3-5 months
Story:BS Transcomm is an established EPC player which manufactures towers, and apart from this offers value added solutions through innovative technology and alternative innovative solutions in the telecom and power equipment space. The company has the right strategy in place to capture the growing market of T&D and technology solutions in telecom and T&D space.Subsequent to the acquisition of SAPL, BS is also engaged in the designing, building, and deploying related technology products and solutions to the telecommunications infrastructure sector.The present capacity of tower manufacturing is 1,20,000 tons per annum. BS has in the last financial year done backward integration by setting up an integrated structural steel plant which is critical for the manufacturing of towers. The steel plant has a capacity of 90,000 tons which can be ramped up to 1,35,000 as the demand moves up.BS transcomm can be compared to the likes of jyoti structures,kec and sujana towers which quotes at a PE of 12-18.The differentiation between a BS and the rest is three fold. One BS has an integrated steel mill which gives BS an edge in terms of cost of steel which is a key raw material. Secondly the managed services offering helps in getting better margins for the overall business and thirdly the technology edge is provided by SAPL where they are able to leverage on their technology business and offer a suite of services on the telecom space be it remote managed, security, energy solutions etc.The Stock trades at 1.4x FY12E with earnings growth of 94% CAGR estimated over 2010-13E and is available at a discount of 80% to peers like KEC and Joyti Structure.I expect sales over FY10-13 to grow by 3x led by doubling capacity and growth in technology service business while improvement in interest cost and higher overall margins due to higher contribution from technology service business would result in increasing net profits from Rs 24 crore in FY10 to Rs 56 crore in FY11 and Rs 142 crore in FY12.At 83rs its a steal.
btw:Stock markets sometimes can ridiculously value a company which has been the case of BS transcomm.It can even go down from present levels as again in stock markets a scrip can get oversold for ages.So accumulate it slowly on every declines.Even from a longer term perspective this counter is worth betting on.A gem of a buy.
Traded in:Nse-bse
Cmp:83
Target:107
Return:30%
Duration:3-5 months
Story:BS Transcomm is an established EPC player which manufactures towers, and apart from this offers value added solutions through innovative technology and alternative innovative solutions in the telecom and power equipment space. The company has the right strategy in place to capture the growing market of T&D and technology solutions in telecom and T&D space.Subsequent to the acquisition of SAPL, BS is also engaged in the designing, building, and deploying related technology products and solutions to the telecommunications infrastructure sector.The present capacity of tower manufacturing is 1,20,000 tons per annum. BS has in the last financial year done backward integration by setting up an integrated structural steel plant which is critical for the manufacturing of towers. The steel plant has a capacity of 90,000 tons which can be ramped up to 1,35,000 as the demand moves up.BS transcomm can be compared to the likes of jyoti structures,kec and sujana towers which quotes at a PE of 12-18.The differentiation between a BS and the rest is three fold. One BS has an integrated steel mill which gives BS an edge in terms of cost of steel which is a key raw material. Secondly the managed services offering helps in getting better margins for the overall business and thirdly the technology edge is provided by SAPL where they are able to leverage on their technology business and offer a suite of services on the telecom space be it remote managed, security, energy solutions etc.The Stock trades at 1.4x FY12E with earnings growth of 94% CAGR estimated over 2010-13E and is available at a discount of 80% to peers like KEC and Joyti Structure.I expect sales over FY10-13 to grow by 3x led by doubling capacity and growth in technology service business while improvement in interest cost and higher overall margins due to higher contribution from technology service business would result in increasing net profits from Rs 24 crore in FY10 to Rs 56 crore in FY11 and Rs 142 crore in FY12.At 83rs its a steal.
btw:Stock markets sometimes can ridiculously value a company which has been the case of BS transcomm.It can even go down from present levels as again in stock markets a scrip can get oversold for ages.So accumulate it slowly on every declines.Even from a longer term perspective this counter is worth betting on.A gem of a buy.
