Last updated: June 17, 2019
Topic: BusinessEnergy
Sample donated:

Birla Power Solutions Ltd. is an India-based company. The Company is engaged in the production of portable gensets, kilovolt-ampere ( KVA ) generators, and multipurpose engines, pump sets, sprayers, inverters, power tillers and weave energy. The Company is besides engaged in trading of imported gensets and electrical points. The Company operates in three concern sections: power and allied merchandises, electrical contraptions and others. The power and allied merchandises section is engaged in the fabrication of portable generators, engines, pumps, inverters and trading of allied merchandises. The electrical contraptions section includes trading of electrical contraptions and assorted constituents. The others section include the air current factory energy coevals.

One twelvemonth Stock- monetary value history

Market cap/ Price Volume Data

Volume

876,213

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

Previous Close

`2.35

Day ‘s H/L

`2.37 – 2.31

Week H/L

`2.43 -2.31

Month H/L

`2.84 – 2.31

52 wk H/L

`4.68 – 2.21

Market Cap

( ` Cr ) 167.08

Shares Outstanding

717,138,560

Closely Held Shares

56,884,320

Tax return on stock for different keeping period

30 DAYS RETURN %

-1.69 Loss

90 DAYS RETURN %

-23.61 Loss

180 DAYS RETURN %

-31.67 Loss

365 DAYS RETURN %

-37.70 Loss

Economic Analysis:

2010 has been peculiarly impressive for the Indian markets. The NIFTY touched a Jan high of 5281.8 on January 6, 2010. Since so, the markets have corrected 8.6 % and are presently merchandising at 5367 on the NIFTY.

The Indian markets have farther downside if we look at a 1-2 month clip skyline. Therefore, if looking at some long term investing, one should personally wait for some more clip before taking any fresh exposure to the markets.

The Indian markets are still merchandising at a PE of near to 21. This is higher than the mean PE the Indian markets have traded in the last 10 old ages. Besides, the Indian markets have gone up over 100 % from its March 2009 depressions. After such a steep rise, a rectification of even 20-25 % ca n’t be ruled out. This would be healthy for the markets in footings of attractive more money as ratings once more start looking carnival.

The Central Bank in China has been doing attempts to command the recognition growing as there is a high chance of plus bubbles and runaway rising prices in China. Infact, one can state that the Chinese belongings market is already in a bubble phase. Therefore, there is a high chance of aggressive policy action to command recognition growing and this can decelerate down China ‘s growing significantly. Any such event will trip a crisp sell off by the FII ‘s in the emerging markets. Hence, the Indian economic system might make good and the stock markets tank or right significantly.

There is no uncertainty that the Indian economic system is coming back to a robust growing flight. At the same clip, rising prices is besides going a greater concern. The nutrient rising prices has shown no marks of easing and the WPI rising prices is besides traveling up at a robust gait. It would non be surprising to see farther action by the RBI comparatively shortly. This might move as a negative trigger for the markets.

Sectors to Avoid

Industrial Commodities – will be negatively impacted if there is a crisp lag in China

Real Estate – Evaluations still look expensive and involvement rate hardening can negatively impact growing

Crude Oil Exploration – The China lag factor might impact geographic expedition Companies as petroleum corrects

Industry Analysis

India ‘s vivacious economic system needs duplicate betterments in the substructure. Power sector will play of import function in the economic development and therefore necessitate focussed attending. But due to planetary economic crisis India electrical equipment half annual growing registered in 2008-09 is down to 8.57 per centum from 14.6 per centum of the old fiscal twelvemonth ( 2007-08 ) . However, India posted a positive growing compared with planetary growing where the growing has been negative a autumn of 2.2 per centum in 2008 compared to 2007.

India has taken figure of legislative and policy enterprises to hasten power sector development such as Rajiv Gandhi Gramin Vidyutikaran Yogna ( RGGVY ) . All these enterprises provide tonss of investing chances to FIIs and other investors. The power sector reforms if implemented as scheduled will make big concern for power sector equipment makers and service suppliers. In India electrical sector export in the past 3 old ages ( 2004-05 to 2007-08 ) has grown with much higher CAGR of 57.28 per centum compared to 32.25 per centum for the period of 1995-96 to 2007-08. We can anticipate a uninterrupted handsome growing for this sector for at least following five old ages and it is expected to traverse INR 400 Billion by 2013.

Stockss in Electric Equipment Sector

% RETURN DAYS:

30

90

180

365

INDO ASIAN FUSEGEAR

84.50

84.99

106.02

230.12

JRC INDUSTRIES

40.62

23.18

126.13

182.43

Switch TECHNOLOGIES GUNTHER

29.46

38.53

25.00

36.15

SHILCHAR ELECTRONICS

23.13

25.05

22.56

48.35

HONDA SIEL POWER PRODUCTS

19.31

28.00

58.30

211.19

Due to fiscal crisis planetary electrical equipment market has fallen by 2.02 per centum in 2008 compared to old twelvemonth 2007.

In 2008 Power Cables and Switchgear together controls 60 per centum of the market portion in planetary electrical equipment market.

India electrical sector exports have grown with a 40 per centum in 2007-08 to compared old twelvemonth 2006-07.

Due to economic lag India electrical sector has shown a diminution of 6.04 per centum points for the semiannual 2008-09 compared to half-year 2007-08.

Despite India electrical sector negative growing Voltage transformers and Power transformers has shown a growing of 28.6 and 25.7 per centum severally for the twelvemonth 2008-09 compared to 2007-08.

Company Analysis

The company financials are as below,

Return Ratios

Property

Value

Date

PE ratio

129.24

29/07/10

EPS `

0.02

Mar, 10

Gross saless ( `crore )

56.22

Mar, 10

Face Value ( ` )

1

Net net income border ( % )

1.78

Mar, 09

Last dividend ( % )

3

14/10/08

Tax return on mean equity

2.15

Mar, 09

Swot

Strength

Strong trade name acknowledgment

Internet gross revenues

Turning international presence

Superior research and development section

Strong fiscal returns

Strong sense of civilization in the working environment

Successful experience being competitory

Effective Leadership

Cost leading

Esteemed Client Base

Customer Loyalty

Diversified Business

Product invention capablenesss

Technological excellence.

Good corporate image

Failing

Complexity of operation

Drawn-out processing concatenation

Opportunity

Growth of nucleus sector industries

Rapid integrating with planetary economic system

Booming building concern in Asia

Turning e-commerce ‘s concern.

Increasing urbanisation

Menace

Entry of planetary participants

Take over possibilities

Political menaces

The impact of foreign currency fluctuation and involvement rates.

Loss of gross revenues to replacements

Porter ‘s five forces

Rivalry amongst rivals

High Competition

INDO ASIAN FUSEGEAR, JRC INDUSTRIES, SWITCHING TECHNOLOGIES GUNTHER, SHILCHAR ELECTRONICS, HONDA SIEL POWER PRODUCT

Menace of entrants

FDI policy non favorable for international participants,

International participants looking to plunder in the market

Dickering power of provider

The unorganised sector has dominant place

Established participants, enjoy trade name differentiation

Dickering power of purchasers

Consumers are monetary value sensitive, Availability of more pick

Menace of replacements

Unorganized retail

Dividend

Year

Calendar month

Dividend ( % )

2008

Oct

3

2007

Aug

6

2006

Mar

8

2004

Dec

6

2003

Jul

14

2002

Jun

14

2001

Jul

12

2000

Aug

11

1999

Jul

11

Recommendation

START PRICE

2.32

TARGET PRICE

3.00

Target Date

24/08/2010

Hazard

Low

Recommend purchasing of portions as monetary value rectification is expected to till 3.00 by 24th August.

Birla Power Solutions Ltd

Recommendation

Buy

Start Price

2.32

Last Monetary value

2.33

Return %

Gain0.431

Mentions:

hypertext transfer protocol: //www.birlapower.com/corporate_profile.html

hypertext transfer protocol: //www.cafestocks.com/pickDetails-id-7621-tips-Birla % 20Power % 20Solutions.htm

hypertext transfer protocol: //money.rediff.com/companies/birla-power-solutions-ltd/13120001