67% YoY growth in sales during the first quarter was primarily led by a good performance in the extra high voltage domain wherein the company has bagged several orders from public utilities and the private sector. The major ones amongst these were four 765kV substations from PGCIL, power transformers of 765 kV, ICTs, GTs and shunt reactors from Lanco Infratech and 500 MVA transformers from PGCIL.
Areva’s operating margins contracted by 3.9% YoY during 1QCY09. This was led by 8.8% spike in costs of raw materials (as percentage of sales) even as the company saw a decline in its employee costs and other expenditure as a percentage of sales.
On the back of a contraction in operating margins and higher extraordinary expenses (on account of restructuring and relocation costs), Areva’s net profits recorded a decline of 5% YoY during the quarter
At the current price of Rs 218, the stock is trading at a multiple of 17.9 times its trailing 12 months earnings. The company recently opened eight new factories at three greenfield sites in Gujarat and Tamil Nadu with significant investments in them. The same is in line with the company’s strategy to grow aggressively in the 765 kV extra high voltage segment. In the next 2-3 years, the company sees a significant increase in the deployment of extra high voltage equipment in India, and intends to capitalise on that opportunity...
Stock was recommended to SOKHI PAID MEMBERS at 190 levels...Still a SMART BUY for all you guys !!
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