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You are here : IndiaNotes >> Research & Analysis >> Companies >> Salasar Techno Engineering Ltd. >> Research

Salasar Techno IPO: With decent fundamentals, valuation look reasonable; Subscribe

Hem Securities | 12 Jul, 2017  | Follow Author | Add to my Favourites 
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Company is a provider of customised steel fabrication and infrastructure solutions in India for Telecommunication Towers, Transmission Towers & Substation Structures and Solar Module Mounting Structures. The objective of Company is to supply customized, high-quality material to its impressive and evergrowing clientele. Co provide 360 degree solutions by carrying out engineering, designing, fabrication, galvanization and deployment. Co’s products include Telecommunication Towers, Power Transmission Line Towers, Smart Lighting Poles, Monopoles, Guard Rails, Substation Structures, Solar Module Mounting Structures and Customized Galvanized & Non-galvanized steel structures. Co’s services include providing complete engineering, procurement and control for projects such as Rural Electrification, Power Transmission Lines, and Solar Power Plants.


The objects of the issue is to meet working capital requirement worth of Rs 31.87 cr, general corporate purpose worth of Rs 2.5 Cr & meet issue expense worth of Rs 1.5 Cr.


Reasons to Subscribe:


Salasar has a strong customer profile and some of its major customers are Bharti Infratel Ltd, Indus Towers Ltd, Huawei Technologies Nepal Company Pvt Ltd, Reliance Jio Infocomm Ltd, Acme Cleantech solution Pvt Ltd, ATC Telecom Infrastructure Pvt Ltd, U.P. Power Transmission Corporation Ltd, Indus Towers Ltd, Prayatana Developers Pvt Ltd, Unitech Power Transmission Ltd, Today Green Energy Pvt Ltd, Viom Networks Ltd, Welspun Renewables Energy (P) Ltd etc.


Co’s Promoter and Managing Director, Mr. Alok Kumar has over 41 years of experience in trading, manufacturing and fabrication of iron & steel and Mr. Shalabh Agarwal, Promoter and Whole-Time Director of company, has over 18 years of experience in sugar industry and trading, manufacturing and fabrication of iron & steel.


Co’s order book of Rs. 5,761.16 million as of May 31, 2017, provides it with revenue visibility for the next financial year.


From a mere 44% capacity utilisation in FY 2012-13, co reached a level of 91% capacity utilisation in FY 201617. This necessitated co to increase its capacity further and therefore co successfully completed the expansion plan in its subsidiary by adding another 50000 MTPA galvanization plant.


Valuation


At price of Rs 108/share, co is bringing the issue at p/e multiple of 6.91 on post issue FY17 eps of Rs 15.62. With decent fundamentals, co’s valuation look reasonable at current level. Hence we recommend “Subscribe” on issue.

 


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About Hem Securities
The Hem Securities is one of the leading broking Network in India. It provides trading platform in all the leading exchanges namely - BSE, NSE, MCX , NCDEX & MCX-SX. Their mission is to build wealth for their investors by offering them best financial services through trading & investment strategies and honoring commitment with ethical & transparent business practices.

For more information please write in to [email protected]
Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.



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