Tecpro Systems - Review

[sunil]

Angel Broking's Views on the IPO,

At the upper price band, Tecpro is projected to trade at a P/E and EV/EBDITA of 16.5x and 8.3x its FY2010 earnings, respectively. When compared with its immediate competitors, viz., Mcnally Bharat and TRF, the scrip is available at a discount of ~10-15% on FY2010 earnings. In addition, over the past five
years the company has grown at a scorching pace along with successfully entering the BoP-EPC segment. As and when Tecpro begins to accumulate and
execute larger size BoP projects going ahead, it will be able to command premium valuations on superior growth and profitability margins. The successful
execution of few BoP projects over the next couple of years may also result in Tecpro exploring the feasibility of taking up complete EPC for power plants (ie
BTG + BoP), which would place it in league with BGR Energy. We recommend a Subscribe view on the IPO.

[sunil]

Anand Rathi on the Public Issue,

The market prospects for material handling looks promising on infrastructure growth story as they are correlated to each other. This is alo reflected from the
company’s performance as its PAT has doubled in FY10 and looking at its order book visibility the company has good prospects going ahead. Comparing to its peers it looks fairly valued as therefore we recommend SUBSCRIBE.

[sunil]

KR Choksey has a SUBSCRIBE Recommendation for the IPO,

We believe that TSL’s presence in a significant part of value chain in power infrastructure, foray into complete BoP and EPC of thermal power plants, strong management team, sustainable demand and proven execution track record makes it a good investment opportunity. The company has been growing at a CAGR of 17% (FY06-FY10) in top line and CAGR of 20% in bottom line over the same period. Considering huge demand, best operating margins (15.5%) in MHE industry, attractive RoE (42.5%), capturing substantial portion of value chain in BoP nfrastruture, we believe that TSL deserves premium over its peers.
At higher band of ` 355, issue is priced at 14.5x on FY10 pre-issue EPS of ` 24.5 and 16.9x on FY10 post-issue EPS of ` 21. We recommend “SUBSCRIBE” to the intial public offer by TSL.