Subscribe TD Power IPO: Unicon Wealth Research
TD Power System (TDP) is a manufacturer of motors and AC generators with capacities ranging from 1 - 52 MW. The company is planning to raise around Rs 227 crore via IPO.
- (1888PressRelease) August 26, 2011 - According to Unicon Wealth Research the company's size is very small compared to its peers both in the domestic and the international markets. Post issue, TDP's price band suggests a P/E range of 14.9x - 15.2x its FY11 EPS. On P/B front, the stock is priced at 2.0x - 2.1x its TTM Book Value per share. The research firm recommend subscribe on the stock.
Around 87 lakh shares are on offer and the price band is between Rs 256-261. The issue opens today and closes on August 26, 2011.
Unicon Wealth Research report on TD Power:
TD Power (TDP) is a manufacturer of motors and AC generators with capacities ranging from 1 - 52 MW. The company also executes Turbine Generator island projects for steam turbine power plants with output capacity up to 52 MW. TDP has also ventured into the business of EPC of Boiler-Turbine Generator island projects and the balance of plant portion for steam turbine power plants with output capacity from 52 to 150 MW.
Investment Rationale
Diversified Product Portfolio:
The company has a diverse product range which includes, steam turbine generators, horizontal hydro generators, vertical hydro generators, diesel engine generators, wind turbine generators, gas engine generators, gas turbine generators, high voltage motors and generators for Geo Thermal and Solar thermal applications. TDP's wide product portfolio provides it a strong competitive advantage, thereby allowing it to cater a broad customer base.
Technology Ownership, Relationships and In-House Design Expertise:
TDP has a well established track record of successfully absorbing new technologies for manufacturing generators and has entered into arrangements with int'nal power equipment manufacturers such as Siemens AG and Sicme Motori SrL. In 2007, it granted a limited license to G.E., USA to manufacture generators using its design for Brazilian market.
Project Execution Capabilities for Power Project Business:
From the inception the company has completed a total of 94 projects with an aggregate output capacity of 1910.50 MW which includes projects executed in India, Uganda, Kenya, Zambia and Philippines. The company has gained significant experience and has established a track record and reputation for efficient project management, execution and timely completion of projects.
State-of-the-Art Manufacturing Facilities and Cost Efficient Production:
TDP's two manufacturing units are equipped with advanced machines and tools and are ISO 9001:2008 compliant The company has been able to provide competitively priced products through cost efficient production and with the highest quality and technology standards which enables it to receive new business from its existing and new customers.
Concerns
Significant % of Sales Derived from Sale of Steam Turbine Generators _ Dependent on Technology Transfer Agreements
Outlook & Valuation
TDP's business model is well diversified in terms of power equipment manufacturing and EPC, which is an emerging business segment. It is the leader in the captive power segment below 50MW segment and has no direct peer in this space. However, the company's size is very small compared to its peers both in the domestic and the international markets.Post issue, TDP's price band suggests a P/E range of 14.9x - 15.2x its FY11 EPS. On P/B front, the stock is priced at 2.0x - 2.1x its TTM Book Value per share. We recommend Subscribe on the stock.
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