Monday, March 26, 2012

SCHNEIDER ELECTRIC INFRASTRUCTURE LTD - WILL IT MOVE TO THE BIG LEAGUE ?






Schneider Electric Infrastructure , an associate company of the French Energy management conglomerate  Schneider Electric is  a newly listed  stock in our stock exchanges.This company originated by the  Areva T&D’s global take over by the Alstom-Schneider consortium and subsequent de -merger of Transmission business to Alstom and  distribution business  to Schneider.The global takeover happened in 2010 at a cost of EUR 2.29 billion.Later the high voltage business allotted to Alstom and Medium and low voltage business allotted to Schneider to align with their global status.The Indian business of erstwhile Areva T&D also shared in the same manner here.In the initial stage its name was  SMARTGRID AUTOMATION DISTRIBUTION AND SWITCHGEAR LIMITED and changed its to Schneider Electric Infrastructure Limited in December 2011. Its ultimate parent company Schneider Electric is one of the world's largest manufacturers of equipment for electrical power distribution, industrial control and automation.Its nearest rival is ABB , but if we take the growth in Asia region business Schneider outpaces  with a 21%sales growth compared to 5% of ABB. Even in other parameters too Schneider showing better prospects as in the case of operational  margins for low voltage business where its is 20.5 % for Schneider and 16% for ABB (Asian business) .At present Schneider’s revenue share from Asian region is about 37% and it is growing very fast mainly due to some aggressive acquisitions made in last few years. In India , parent company made some big ticket acquisitions in recent past which includes Conzerv Systems, Meher Capacitors, Zicom's electronic security systems integration business(Rs.225 Cr),Uniflair India, APW President Systems( Rs.70 Cr approx.),Digilink(Rs.500 Cr) and Luminous ( Rs.1400 Cr)..etc.These figures clearly indicates their commitments to India . Coming back to the business of the listed entity ,it is in MV/LV Distribution business which includes Protection relays , control panels and other accessories.Even if there is some slowness in power generation and distribution policies by government in recent times , we all know there is huge scope remaining and it is inevitable in a country like India.I believe , with superior technology ,aggressive marketing strategies and vast experience Schneider having big opportunity in India for their Distribution business going forward.For the nine month ended December 2011  Schneider Electric Infrastructure posted a turnover of Rs.1054 Cr and a net profit of Rs.33Cr .In the latest December quarter alone it  posted a sales of Rs.409 Cr and a net profit of Rs.18 Cr .Margins are not great  at present but it is expecting to improve after the full control  of Schneider in the management .SEIL listed last week and this FV Rs.2 stock is currently trading around Rs.70/- .I feels the major selling happening in these days are from some Institutional share holders. As a matter of policy ,generally some funds/institutions are not interested to hold de-merged pieces and this may be an offloading because of this reason. I strongly believe whenever this supply ends this stock will move to the next level  and may turn as a dark horse in coming years.Risk takers may enter in it @CMP of Rs.69.60/- and hold for long term.With effect from,  April 3, 2012 this will come out of ' T ' group and shifted to 'B' Group.

* Since it is a newly listed stock ,only limited information is available now
* Disc: I have vested interest in SEIL


67 comments :

  1. Sir, plz suggest me what's your view on BHEL and NMDC???

    ReplyDelete
  2. Hi Valuepick,
    But is it one of Schneider's Indian subsidaries OR its Schneider's only Indian subsidary under which all Indian operations will be consolidated.
    If its only "MV/LV Distribution business which includes Protection relays , control panels and other accessories" then is 1600cr mkt cap not expensive

    Regards
    Sameer

    ReplyDelete
    Replies
    1. As I have mentioned above Schneider have many other cos in India all of them are unlisted except APW which is also going to de-list.I except either the LV/MV business will be consolidated in this one or get a de-listing offer going forward.

      Delete
  3. Dear VP,

    Can i buy cochin minerals at this rate (192/-)

    Regards,
    PGB

    ReplyDelete
    Replies
    1. Dear PGB

      My buy recommendation on CMRL was @ Rs.78/- and now above Rs.190/- it is a HOLD for me.

      Delete
  4. Dear ValuePick sir
    The Ahlcon Par. is trading with Upper Circuit limit from last 1 week. Is there any way to buy?????

    Regards,
    Anurag

    ReplyDelete
  5. Dear Anurag

    My recommendation was a BUY on Ahlcon @ Rs.64/-.Now it is @ Rs.411/- .One should consider the risk reward ratio and own risk profile when we buy a stock after a sharp run up.So I am neutral @ CMP.

    ReplyDelete
  6. Dear VP Sir,

    Now Mannapuram finance is lowering every day due to recent RBI restrictions. I saw your article on Mannapuram - what is your opinion on investing at CMP 29.90/-on this company. Do you think risk involved to buy at presnt price.Pls suggest,
    regards,
    M Phani

    ReplyDelete
    Replies
    1. Dear Phani

      Competition from banks may heat up ,they are also offering 60 % of the market value.

      Delete
  7. Dear valuepick sir,

    COnsidering your experience of wealth created by Indian arms of MNCs, how do you perceive Schneider?

    A case in point is colgate, its hardly covered by analysts and has a phenomenal return record..

    or can it go the kodak and cadburys way? I mean can schneider wrap up the biz and go? What is their motivation to list in India

    ReplyDelete
    Replies
    1. Since the de listing rules are different now , I don't think people will loose anything at this rate even if it happen so.

      Delete
  8. Dear Sir,
    Your views on Warren Tea at CMP Rs409/ please.

    Thanks
    Supriya

    ReplyDelete
    Replies
    1. If we consider only the business behind it , it is overvalued.

      Delete
  9. Good entry point for avt natural at 360?

    ReplyDelete
    Replies
    1. I feels FV split to Rs.1/- is unnecessary , so no BUY reco @ 360/-

      Delete
  10. Dear Valuepick,

    Whats your take on Mudra Lifestyle and Parekh Aluminum. In Mudra, considering the recent change in management (now more than a year), do you think it is a good long term bet?

    ReplyDelete
    Replies
    1. Dear Amit

      In the case of Mudra , it is better to wait till a clarity emerges on the CDR proposal. Not tracking Parekh Aluminex.

      Delete
  11. Valuepic, did u see the article in mint on EPC industries..would u buy at CMP..any update on rights issue

    ReplyDelete
    Replies
    1. Hope , rights will happen in two months. Still a BUY for long term.

      Delete
  12. dear vp
    i hope u will guide me with this question, i m buying all the recommendations that u are posting in ur blog...can i continue doing so?

    ReplyDelete
    Replies
    1. No Never.You should do your own home work and convinced

      Delete
  13. Vinati Organics good ?

    ReplyDelete
  14. Hi Sir,

    Do you track Tilak Nagar industries. In recent 2weeks they have acquired 5 unlisted companies .As per the management these acquisition will reduce the raw material cost for the company.

    The same story was also witness in another sugar & alcohol company "picadilly Agro". Last year company acquired few unlisted players and management gave the same reason as given by Tilak nagar industries. But soon after that Piccadilly agro crashed from 47 level to 15 levels and is currently trading at 18+.

    If possible Can you please throw some light here.

    thanks
    Deepak

    ReplyDelete
    Replies
    1. Backward integration is not bad , but taking over some construction and infra companies ??

      Delete
  15. Hi Valuepickji,

    Can I buy Aries Agro at CMP (75) which is way below your recommended Price. What to expect from this stock in coming two years?

    regards,

    Hema

    ReplyDelete
    Replies
    1. Industry having good potential , but unfortunately it is not moving ..

      Delete
  16. Dear Valuepick
    Your opinion on opto circuit.

    ReplyDelete
    Replies
    1. Hi Do you think schneider is a delisting candidate moving forward? since they are also delisting apw? your views..

      Delete
  17. Dear VP,

    Your comment on Narmada Gelatin at CMP. There is a buld deal in this stock.

    Regards,
    Anurag

    ReplyDelete
  18. Do you suggest Fortis Healthcare or GRANULES INDIA LTD or both for 2-3 years ?

    ReplyDelete
    Replies
    1. Dear Prasad
      Both may outperform in two year time frame.

      Delete
  19. Dear VP,

    Whats your view on the SML Isuzu, Wimplast etc stocks that you have recommended way back and i have been invested in these stocks since then.

    Can v have a sort of post-mortam of your earlier picks just to keep the followers informed of the current situations of the companies if time allows you.

    Regards

    NR

    ReplyDelete
    Replies
    1. Dear NR
      Even if the suggestion is good ,it is not practical due to time constraint.Will try to inform if there is any significant negative factors occurred after the recommendation.Expecting some home work from the investors too.

      Delete
  20. Dear Sir
    I greatly value the recommendations posted by you. Also, most of them are in-line with my research and expectations.

    In one of your posting regarding recommendations for building an entire portfolio you had recommended YES BANK. I would like to know if it is still a BUY at CMP of 367.30 ?

    Your efforts behind the research before the postings are greatly valued.

    Thanks a lot.
    Swapnil

    ReplyDelete
    Replies
    1. Dear Friend

      Yes bank is good , but a BUY below Rs.300 ensures much safety.If you have a long term view and high risk appetite may go for it even now.

      Delete
  21. Dear VPj,
    Greetings.....Could you give your opinion on the rights issue of Neuland?

    ReplyDelete
    Replies
    1. Dear Thillai

      Go for it ,reduction in debt will improve its financials going forward.If not interested to put additional money just sell the proportional qty and apply for rights

      Delete
  22. Dear Sir,
    can I Buy ARSS Infra at this price.

    RAVI

    ReplyDelete
  23. SCHNIEDER IS BLASTING.
    CONGRATS FOR THE RECOMMNEDATION AND CONGRATS TO THE PEOPLE WHO BOUGHT IT.
    WHAT IS THE LONG TERM TARGET FOR THIS SCIP SIR.

    ReplyDelete
    Replies
    1. There is lot of possibilities for this company including merger,de-listing etc..going forward.If willing to take risk HOLD it otherwise book at least partial profit ,already 20% profit in one week.

      Delete
  24. Thanks

    There is lot of chances ahead for this company including merger,de-listing etc...If you have high risk appetite hold it otherwise book at least partial profit, almost 20 % profit is already there in one week.

    ReplyDelete
  25. Sir,

    Is Schneider electric still a buy at current levels?

    Thank you in anticipation.

    Regards,
    Abhi

    ReplyDelete
    Replies
    1. Already moved more than 20% in few days ,margin of safety is less now.

      Delete
  26. Valueji,
    whats your take on Sanghvi Movers as it a proxy for Infra space. Do you think it can be bot at current levels for a year or 2.

    ReplyDelete
  27. I am not planning to take partial profit in this stock the schneider. I am planning to book profit in IVRCl and invest more in schneider. thanks Value pick for such a good recommendation.

    how to know when such companies are getting listed???

    ReplyDelete
  28. sir can i enter neuland at cmp? whn is the rigts issue coming up sir..

    ReplyDelete
    Replies
    1. ok.. so is it worth entering in @ cmp..
      thanx for your reply..

      Delete
  29. Sir, i have bought schnieder @85 whether it will touch 120 next week

    ReplyDelete
    Replies
    1. Not a prophet to predict stock movement on a daily or weekly basis.

      Delete
    2. I wish blogspot had a like button.

      Delete
  30. great value pick, your recommedations are fantastic

    ReplyDelete
  31. Your post on Schneider Electric has been lifted straight by copycat Stocks Guru.
    Valuepick ji pls keep up the goodwork, it only goes to prove that, imitation is the best form of flattery.

    ReplyDelete
  32. Sir, i have bought schnieder @65 whether it will touch 150
    Long term whats your target.Schneider Electric 67/- blockdeal same group or another ?

    ReplyDelete
    Replies
    1. Part of the deal between Areva-Alstom/Schneider

      Delete
  33. Hi ValuePick Sir,
    What is the reason for Schneider to delist itself, just one month since it got listed. will the stock price come down or will go down to what it was listed.Will the investors lose ?

    Thanks & Regards

    ReplyDelete
    Replies
    1. Yesterday there was a concall.On the basis of feedback from this ,no chance for a delisting in near future and the management wants to grow as a listed entity itself.

      Delete
  34. sir i had bought wockardt at 400 last year and now its 710 with lots of hold recommendations. sir your suggestion to book profit or hold wanted sir

    ReplyDelete
  35. sir your advice need on Wockardt bought at 400 last yr. now its 710 with lots of hold and buy recommendations.pls advise

    ReplyDelete
  36. Schnieder Indian or MNC at Present Energy Grid which group Belongs ?

    ReplyDelete
  37. It is a global energy company like the Siemens. German headquartered.

    ReplyDelete

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