Here are the Brokerage Reviews of TD Power Systems Ltd,
KR Choksey has the following Recommendation ,
TD Power Systems Ltd (TDPS), incorporated in 1999, is raising around Rs 227 crore from the market through IPO which opens on August 24, 2011. TDPS is the market leader in the steam and hydro generators market in India with market share of ~80% and 60% respectively. Net revenues have grown at 19% CAGR over FY07-FY11 while earnings grew at 37% CAGR. TDPS has been able to improve its operating margins consistently from 7% in FY07 to 10.4% in FY11. Current order book of Rs 1,095 crore provides revenue visibility for more than a year (1.2x on FY11 revenues) where EPC contributes around 48% to total backlog. TDPS is an attractive engineering player with strong RoE (~30%), high margins (10%) and market leadership position but the issue seem to be expensive on valuation in current macro environment. Hence we recommend AVOID to the issue.
Unicon Securities Says,
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.
SMC Analyst, Sumit Kukreja says,
The company has a well diversified portfolio of products in the power equipment manufacturing business. The company also has EPC segment as the emerging business segment. However, the scale of operations of the company is quite small compared to its rd peers and the company is heavily dependent upon 3 party technology providers. The issue seems to be priced fairly and investors with a long term horizon may consider the issue.
