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India Equity Research Reports, IPO and Stock News
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We were joined by Mr. Bhagwan Makhijani - VP & CFO and Mr. Jayesh Patel
- Senior Manager (Finance), Diamond Power, who shared their outlook on
the company.
Key Highlights
n Management updated us on their capacity expansion plans in their existing products/
segments and status on their new products i.e. Extra High Voltage (EHV) cables and
transmission line tower (TLT)
n On the capacity expansion side, DPL would be expanding its conductor capacity by
1,50,000 MTPA and medium voltage cables segment at a cost of Rs6.7bn over FY12-
FY13E. This capex would be funded through debt worth Rs 3.5bn and balance through
internal accruals, rights issues, structured products, etc.
n DPL has ventured into 2 new verticals viz. EHV cables of capacities upto 2,500 kms
and TLT upto 4,000 MVA.
n In EHV, DPL has received orders worth Rs 1.3bn, which would be executed over
FY12E. It has tied-up with a Chinese company, Wanma, which is globally the second
largest company in the EHV space. Company expects EBIDTA margins of 18-19%
n In TLT, DPL has received orders worth Rs 1.1bn, revenues from which will start in
FY12E. Company expects 7-8% from TLT segment.
n DPL guided for debt:equity of 1:1 for FY12E. Its current debt stands at Rs 4.4bn.
n The order backlog is quite healthy at Rs 16.5bn or 1.2x its FY11 revenues, which would
drive growth in FY12E-FY13E.
n Company has guided that its consolidated revenues would grow to Rs 25bn in FY12E
from Rs 15bn in FY11 and EBIDTA margins would be 13-13.5% for FY12E.
Valuations
DPIL is emerging as a complete solution provider in T&D across the KV range with
commissioning of EHV cables and TLT facilities. Driven by the secular growth phase of the
industry, coupled with capacities ready for production across the value chain, we expect
strong traction in business, going forward. At the CMP of Rs 159/share, the stock is trading
at 5.1x FY11earnings, 6.3x FY11 EV/EBITDA and 1.1x FY11 book value. Key risks - higher
competition (especially from Chinese and Korean players) and therefore, reduction in
returns on capex.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
We were joined by Mr. Bhagwan Makhijani - VP & CFO and Mr. Jayesh Patel
- Senior Manager (Finance), Diamond Power, who shared their outlook on
the company.
Key Highlights
n Management updated us on their capacity expansion plans in their existing products/
segments and status on their new products i.e. Extra High Voltage (EHV) cables and
transmission line tower (TLT)
n On the capacity expansion side, DPL would be expanding its conductor capacity by
1,50,000 MTPA and medium voltage cables segment at a cost of Rs6.7bn over FY12-
FY13E. This capex would be funded through debt worth Rs 3.5bn and balance through
internal accruals, rights issues, structured products, etc.
n DPL has ventured into 2 new verticals viz. EHV cables of capacities upto 2,500 kms
and TLT upto 4,000 MVA.
n In EHV, DPL has received orders worth Rs 1.3bn, which would be executed over
FY12E. It has tied-up with a Chinese company, Wanma, which is globally the second
largest company in the EHV space. Company expects EBIDTA margins of 18-19%
n In TLT, DPL has received orders worth Rs 1.1bn, revenues from which will start in
FY12E. Company expects 7-8% from TLT segment.
n DPL guided for debt:equity of 1:1 for FY12E. Its current debt stands at Rs 4.4bn.
n The order backlog is quite healthy at Rs 16.5bn or 1.2x its FY11 revenues, which would
drive growth in FY12E-FY13E.
n Company has guided that its consolidated revenues would grow to Rs 25bn in FY12E
from Rs 15bn in FY11 and EBIDTA margins would be 13-13.5% for FY12E.
Valuations
DPIL is emerging as a complete solution provider in T&D across the KV range with
commissioning of EHV cables and TLT facilities. Driven by the secular growth phase of the
industry, coupled with capacities ready for production across the value chain, we expect
strong traction in business, going forward. At the CMP of Rs 159/share, the stock is trading
at 5.1x FY11earnings, 6.3x FY11 EV/EBITDA and 1.1x FY11 book value. Key risks - higher
competition (especially from Chinese and Korean players) and therefore, reduction in
returns on capex.
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