Vind­hya Telelinks Ltd: Ring­ing gains

Money Times - - Expert Eye - By Vi­hari

(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.

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