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Torrent Cables (TCL) formerly Mahendra Electricals was promoted by Shri J C Patel in collaboration with Johnson & Phillips of U.K. (now known as Delta Crompton Cables Ltd U.K.) was incorporated on 26th November 1960.
After the takeover of the same by the Torrent Group in July 1989, the Company with active support of John Royle of USA started commercial production of XLPE cables from September 1991 and successfully turned it around.
During 2007-08, as per the reverse merger plan, TCL was amalgamated with a loss making Torrent Gujarat Biotech, a group company of the Torrent Group effectively July 1, 2006. The equity was reduced and consolidated to `8.6 crore. The name was later changed/restored to Torrent Cables on 11th October 2008.
Plant & Products:
TCL's manufacturing facilities are located at Nadiad near Ahmedabad. Its products range includes, HT (high tension) cables (3.3 kv to 33 kv); LT (low tension) XLPE cables/LT PVC power as well as control cables; Rubber insulated cables and Specialty Cables like Railway-signaling cables mining &trailing cables. TCL also manufactures customized cables to meet client's specific needs.
Promoters:
TCL is promoted by the $1 billion Torrent Group headed by Rohit C Mehta. Torrent Group is a multifaceted and dynamic group dedicated to transforming life by serving two of its most critical needs - pharma and power.
Torrent Pharmaceuticals, the flagship company of the Torrent Group, has operations spread in more than 50 countries with over 1000 product registrations globally. In the power sector, Torrent Power remains the most experienced private sector player in the state of Gujarat (India).
User Industries:
TCL supplies its products to the industries like petrochemicals, metal, fertilizers & chemicals, FMCG industry, railways & ports, IT and engineering industries, cement & construction, aerospace, defence and energy sector.
Torrent Cables (TCL) formerly Mahendra Electricals was promoted by Shri J C Patel in collaboration with Johnson & Phillips of U.K. (now known as Delta Crompton Cables Ltd U.K.) was incorporated on 26th November 1960.
After the takeover of the same by the Torrent Group in July 1989, the Company with active support of John Royle of USA started commercial production of XLPE cables from September 1991 and successfully turned it around.
During 2007-08, as per the reverse merger plan, TCL was amalgamated with a loss making Torrent Gujarat Biotech, a group company of the Torrent Group effectively July 1, 2006. The equity was reduced and consolidated to `8.6 crore. The name was later changed/restored to Torrent Cables on 11th October 2008.
Plant & Products:
TCL's manufacturing facilities are located at Nadiad near Ahmedabad. Its products range includes, HT (high tension) cables (3.3 kv to 33 kv); LT (low tension) XLPE cables/LT PVC power as well as control cables; Rubber insulated cables and Specialty Cables like Railway-signaling cables mining &trailing cables. TCL also manufactures customized cables to meet client's specific needs.
Promoters:
TCL is promoted by the $1 billion Torrent Group headed by Rohit C Mehta. Torrent Group is a multifaceted and dynamic group dedicated to transforming life by serving two of its most critical needs - pharma and power.
Torrent Pharmaceuticals, the flagship company of the Torrent Group, has operations spread in more than 50 countries with over 1000 product registrations globally. In the power sector, Torrent Power remains the most experienced private sector player in the state of Gujarat (India).
User Industries:
TCL supplies its products to the industries like petrochemicals, metal, fertilizers & chemicals, FMCG industry, railways & ports, IT and engineering industries, cement & construction, aerospace, defence and energy sector.
Valuation & Recommendation
The power sector has undergone a lot of changes since the introduction of new Electricity Act 2003. With APDRP (Accelerated Power Development Reforms Programme) in place and privatization of SEBs likely, the distribution sector will undergo rapid changes, thereby initiating the need to curb T&D loses and hence increasing the demand for insulated power cables in the country.
The Power Ministry has set a target for adding 76,000 MW of electricity capacity in the 12th Plan (2012-17) and 93,000 MW in the 13th Five-Year Plan (2017-2022). According to a report by KPMG and CII, India's energy sector will require an investment of around US$ 120 billion-150 billion over the next five years.
Investment in 12th plan in infrastructure will to go upto `50-lakh crore; half of this is expected from private sector proposed to allow External Commercial Borrowings (ECB) to part finance Rupee debt of existing power projects.
The proposals to provide low cost funds to some stressed infrastructure sectors, withholding tax on interest payments on external borrowings (ECBs) is being reduced from 20% to 5% for 3 years, customs relief to power, coal and railways sectors etc are industry positives and would enhance the demand of cables going forward.
Again, bulk of the planned spend is directed towards roads, ports, power and urban infrastructure segments. This would create bright prospects for the cable industry.
TCL expects its expansion to be completed by Q4FY12, which would take its turn over to `300 crore in FY12. Net profit is expected to be `17.4 crore, which would give an EPS of `20.2.
At the CMP of `95, the share is trading at a P/E of 4.7x on FY12E. We recommend BUY with a target price of `125 at which the share will trade at a P/E of 6.2.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Torrent Cables (TCL) formerly Mahendra Electricals was promoted by Shri J C Patel in collaboration with Johnson & Phillips of U.K. (now known as Delta Crompton Cables Ltd U.K.) was incorporated on 26th November 1960.
After the takeover of the same by the Torrent Group in July 1989, the Company with active support of John Royle of USA started commercial production of XLPE cables from September 1991 and successfully turned it around.
During 2007-08, as per the reverse merger plan, TCL was amalgamated with a loss making Torrent Gujarat Biotech, a group company of the Torrent Group effectively July 1, 2006. The equity was reduced and consolidated to `8.6 crore. The name was later changed/restored to Torrent Cables on 11th October 2008.
Plant & Products:
TCL's manufacturing facilities are located at Nadiad near Ahmedabad. Its products range includes, HT (high tension) cables (3.3 kv to 33 kv); LT (low tension) XLPE cables/LT PVC power as well as control cables; Rubber insulated cables and Specialty Cables like Railway-signaling cables mining &trailing cables. TCL also manufactures customized cables to meet client's specific needs.
Promoters:
TCL is promoted by the $1 billion Torrent Group headed by Rohit C Mehta. Torrent Group is a multifaceted and dynamic group dedicated to transforming life by serving two of its most critical needs - pharma and power.
Torrent Pharmaceuticals, the flagship company of the Torrent Group, has operations spread in more than 50 countries with over 1000 product registrations globally. In the power sector, Torrent Power remains the most experienced private sector player in the state of Gujarat (India).
User Industries:
TCL supplies its products to the industries like petrochemicals, metal, fertilizers & chemicals, FMCG industry, railways & ports, IT and engineering industries, cement & construction, aerospace, defence and energy sector.
Torrent Cables (TCL) formerly Mahendra Electricals was promoted by Shri J C Patel in collaboration with Johnson & Phillips of U.K. (now known as Delta Crompton Cables Ltd U.K.) was incorporated on 26th November 1960.
After the takeover of the same by the Torrent Group in July 1989, the Company with active support of John Royle of USA started commercial production of XLPE cables from September 1991 and successfully turned it around.
During 2007-08, as per the reverse merger plan, TCL was amalgamated with a loss making Torrent Gujarat Biotech, a group company of the Torrent Group effectively July 1, 2006. The equity was reduced and consolidated to `8.6 crore. The name was later changed/restored to Torrent Cables on 11th October 2008.
Plant & Products:
TCL's manufacturing facilities are located at Nadiad near Ahmedabad. Its products range includes, HT (high tension) cables (3.3 kv to 33 kv); LT (low tension) XLPE cables/LT PVC power as well as control cables; Rubber insulated cables and Specialty Cables like Railway-signaling cables mining &trailing cables. TCL also manufactures customized cables to meet client's specific needs.
Promoters:
TCL is promoted by the $1 billion Torrent Group headed by Rohit C Mehta. Torrent Group is a multifaceted and dynamic group dedicated to transforming life by serving two of its most critical needs - pharma and power.
Torrent Pharmaceuticals, the flagship company of the Torrent Group, has operations spread in more than 50 countries with over 1000 product registrations globally. In the power sector, Torrent Power remains the most experienced private sector player in the state of Gujarat (India).
User Industries:
TCL supplies its products to the industries like petrochemicals, metal, fertilizers & chemicals, FMCG industry, railways & ports, IT and engineering industries, cement & construction, aerospace, defence and energy sector.
Valuation & Recommendation
The power sector has undergone a lot of changes since the introduction of new Electricity Act 2003. With APDRP (Accelerated Power Development Reforms Programme) in place and privatization of SEBs likely, the distribution sector will undergo rapid changes, thereby initiating the need to curb T&D loses and hence increasing the demand for insulated power cables in the country.
The Power Ministry has set a target for adding 76,000 MW of electricity capacity in the 12th Plan (2012-17) and 93,000 MW in the 13th Five-Year Plan (2017-2022). According to a report by KPMG and CII, India's energy sector will require an investment of around US$ 120 billion-150 billion over the next five years.
Investment in 12th plan in infrastructure will to go upto `50-lakh crore; half of this is expected from private sector proposed to allow External Commercial Borrowings (ECB) to part finance Rupee debt of existing power projects.
The proposals to provide low cost funds to some stressed infrastructure sectors, withholding tax on interest payments on external borrowings (ECBs) is being reduced from 20% to 5% for 3 years, customs relief to power, coal and railways sectors etc are industry positives and would enhance the demand of cables going forward.
Again, bulk of the planned spend is directed towards roads, ports, power and urban infrastructure segments. This would create bright prospects for the cable industry.
TCL expects its expansion to be completed by Q4FY12, which would take its turn over to `300 crore in FY12. Net profit is expected to be `17.4 crore, which would give an EPS of `20.2.
At the CMP of `95, the share is trading at a P/E of 4.7x on FY12E. We recommend BUY with a target price of `125 at which the share will trade at a P/E of 6.2.
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