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Areva secures orders worth `40cr
Areva T&D (Areva) has won a contract from Reliance Power for turnkey design and
construction of 220kV substation. The order valued at `40cr is for the proposed 350MW
Doorsar Solar Power Plant in Rajasthan. This plant is India’s largest solar power project.
The turnkey contract involves design and construction of the substation, including
transformers, control, protection, monitoring systems and civil works of the plant. This
order falls in the base-order category, and we expect the company to witness base/low
value orders as a bigger portion of order inflows for the current quarter. This will
categorically lead to a dip in order backlog growth, thereby raising concerns on future
visibility. In addition, we believe the near-term outlook will be challenging – ordering
activity in the T&D space is likely to be muted given the overall malaise in the T&D space.
The stock currently trades at rich valuations of 27.9x and 19.7x CY2011E and CY2012E
EPS, respectively. Given fewer triggers, the stock seems to be fairly valued and upside from
the current level seems limited. Hence, we continue to remain Neutral on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Areva secures orders worth `40cr
Areva T&D (Areva) has won a contract from Reliance Power for turnkey design and
construction of 220kV substation. The order valued at `40cr is for the proposed 350MW
Doorsar Solar Power Plant in Rajasthan. This plant is India’s largest solar power project.
The turnkey contract involves design and construction of the substation, including
transformers, control, protection, monitoring systems and civil works of the plant. This
order falls in the base-order category, and we expect the company to witness base/low
value orders as a bigger portion of order inflows for the current quarter. This will
categorically lead to a dip in order backlog growth, thereby raising concerns on future
visibility. In addition, we believe the near-term outlook will be challenging – ordering
activity in the T&D space is likely to be muted given the overall malaise in the T&D space.
The stock currently trades at rich valuations of 27.9x and 19.7x CY2011E and CY2012E
EPS, respectively. Given fewer triggers, the stock seems to be fairly valued and upside from
the current level seems limited. Hence, we continue to remain Neutral on the stock.
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