Vindhya Telelinks Ltd: Ringing gains
(BSE Code: 517015) (CMP: Rs.1853.95) (FV: Rs.10)
Incorporated in 1983 by the M.P. Birla group, Vindhya Telelinks Ltd (VTL) manufactures a wide variety of cables for the high-end market of specialized electrical cables and electron beam irradiated cross-linked cables. It was set up as a public private joint venture (JV) between Universal Cables Ltd and the Madhya Pradesh State Industrial Development Corp. It has three subsidiaries — August Agents Ltd, Insilco Agents Ltd and Laneseda Agents Ltd. It has JVs with (i) Birla Ericsson Optical Ltd to manufacture optical fibre cables (OFCs); (ii) Ericsson Cables AB, Sweden, to manufacture and sell telecommunication cables; and (iii) Visabeira Global SGPS, SA, Portugal for EPC services. Its clients in the cables segment include BSNL, MTNL, Bharti Airtel, Reliance Communications, NTPC, Indian Railways, the defence sector, SAIL, Tata Teleservices, etc. It is a preferred vendor of Bharti Airtel and Tata for Copper Telephone Cables and OFCs. It offers products to the Railways, Defence, Coalfields, SAIL and Atomic Energy, among others. It exports to Europe, the Middle East and SAARC countries such as Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka and Afghanistan. In a bid to forge ahead strongly into the future, VTL has put in place an EPC division that provides complete turnkey solutions including trenching, laying, jointing and installation of telecom cables. It offers complete turnkey services for engineering, design, supply, construction, installation, testing and commissioning for the Telecom and Power sectors besides gas pipeline projects and LED lighting solutions. Its EPC division contributes 75% to its total revenue. For FY18, VTL reported 10% lower consolidated PAT of Rs.153.4 crore on 35% higher sales of Rs.1342.6 crore and an EPS of Rs.129.5. For Q2FY19, it reported 160% higher PAT of Rs.55.7 crore on 93% higher sales of Rs.566.2 crore and an EPS of Rs.47. During H1FY19, it reported 123% higher PAT of Rs.89 crore on 65% higher sales of Rs.970.9 crore and an EPS of Rs.75. It paid 100% for FY18.
With an equity capital of Rs.11.84 crore and reserves of Rs.1876.9 crore, VTL’s consolidated share book value works out to Rs.1594. Its total debts were Rs.471 crore while cash, short-term loans, long-term loans given, etc. were Rs.258 crore. With net debt of Rs.213 crore, its net DER works out to 0.11:1.
VTL along with its subsidiaries holds substantial stake in group companies - Birla Corp and Universal Cables, the market value of which is currently ~Rs.1783 crore or Rs.2185/share. The promoters hold 43.54% of the equity capital, Mutual Funds hold 8.52% and DIIs hold 0.04%, which leaves 47.9% stake with the investing public. VTL has completed a substantial portion of its ~Rs.32.8 crore expansion-cum-diversification project at its existing copper cable facility in Rewa, where it will manufacture electron beam irradiated cross-linked cables including installation of electron beam accelerators of appropriate rated capacity.