Areva T&D India - 4QFY13 results - Kotak

- Broad numbers are largely in-line though profits are a tad ahead of estimates due to lower tax outgo.

- However, profits could have been substantially higher had the company not taken a Rs 200 mn charge on account of bad debts.

- The company has concluded an open offer for the balance 26% public share outstanding at a price of Rs 187. Post completion of offer, the present shareholding of parent entities in the company stands increased to 80.3% from 73.4% earlier.

- Alstom T&D is relatively better placed as compared to Siemens and ABB in terms of localization of technology, indigenisation of equipments and traction in order backlog.

- Valuations are rich at 24.1x FY14E earnings. We value the company at 26x FY14 in line to the trading multiples for Siemens and ABB. Thus target price works out to Rs 179 (unchanged).

Source : Equity Bulls

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