Date:15/07/2005 URL: http://www.thehindubusinessline.com/2005/07/15/stories/2005071502451300.htm

Back Alstom Projects shines on strong order book

Our Bureau

Kolkata , July 14

ALSTOM Projects India Ltd ruled firm on the bourses on strong order book position. The stock closed at Rs 218.85, up 1.07 per cent, on the NSE with a traded quantity of 78,517 shares.

Forthcoming book-closure from July 19 to July 30 is also an additional driver for the stock.

The company has recommended a total dividend of 55 per cent including a one-time special dividend of 25 per cent for sale of its T&D business.

According to the management, APIL had an order backlog of Rs 922 crore as on March 31, 2005, which translated to about 14 months revenues. However, the company has started the new financial year (2005-06) by booking an order of Rs 746 crores for its portion of the 8x250 MW Subansiri Lower Hydro Electric Project in April 2005. This gave the company a record level of order backlog of about Rs 1,600 crore as of now. This is roughly 2 years revenue figure.

The company has undertaken an expansion plan for the establishment of the global hub for hydro plants and the plant engineering centre in Delhi. A new business unit for turbo-machinery has also been established. A joint venture between Alstom and NTPC has a mandate for the total renovation and modernisation (R&M) business in India and the SAARC countries for thermal power plants and thermal based utilities.

According to a fund manager, APIL's status as a debt free, cash strong (Rs 163 crore) company coupled with its leadership in power and transport businesses, makes it an attractive investment bet. The power sector forms a major part of Alstom's business operations in India, accounting for 59 per cent of its total revenue through its activities as an equipment supplier, engineering procurement and construction contractor and products/services supplier for central and state public sector utilities or independent power producers.

"As potential in the transport and power sectors in India has begun to be tapped, the growth prospect for the company appears bright. In the transport sector, in view of upcoming metro projects in Bangalore, Hyderabad, Ahmedabad and other major cities in the near future, improvement in orders for Alstom is also well anticipated," an analyst observed.

The transport sector sales in the country average over 10 million Euro annually, according to a company estimate.