Upper Circuit hit today in one of my calls

The call was given on July 15th (see below email) to pick up the script at 100, which hit an upper circuit today. This is a good company and should figure in your long term portfolio, if you believe in India's power story.

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From: powerfulpicks@yahoogroups.co.in [mailto:powerfulpicks@yahoogroups.co.in] On Behalf Of powerfulpicks-owner@yahoogroups.co.in
Sent: Thursday, July 15, 2010 11:35 AM
To: powerfulpicks@yahoogroups.co.in
Subject: [powerfulpicks] BUY: Universal Cables (MP Birla Group Company) at 100 for TGT of 126 in 9 month

 

Universal Cables is a MP Birla Group Company; the company management has settled down after the searing feud in the last couple of years (remember Lodha-Priyamwada Birla story?). Lodha's son is an MBA from abroad and is a very capable executive and is currently in charge of the company. Power and infrastructure is going to be the investment theme for the next 2 years in India, electrical cable companies like Universal Cables, will stand to gain hugely.

Stock is showing signs of breaking free deep into the 3 figure price mark. With a low P/E and low P/BV ratio, the stock is still cheap.

Buy at and below 100 for a 9 month target of 126 (minimum gain of 26%).

UCL is a leader in the Indian Cable Industry. The cable division has a wide range of products including

·         Low Voltage, Medium Voltage and Extra High Voltage XLPE Power Cables up to 500 kV grade, PVC and Rubber Insulated Power Cables up to 11 kV grade

·         Control and Instrumentation Cables up to 1.1 kV for any number of Cores/Pairs and specialty

·         Rubber Cables for Trailing/Flexible standards to suit to customer requirements.

Its Cables and Capacitors are known by the Brand Name "UNISTAR".

Sensing the growing demand of Extra High Voltage Cables (220 kV and above) in India, owing to the focus on power transmission and generation, UCL ventured into this market segment some time and has adopted VCV process at its Satna Plant in technical collaboration with the World Leader in Cable technology, Furukawa Electric Co. Ltd., Japan. The technical collaboration covers Cable designing, Manufacturing, Laying, Jointing, Testing and Installation.

UCL has also tied-up with Viscas Corporation, Japan (Power Cable Alliance of Furukawa & Fujikura) for sourcing new generation cable jointing accessories for 220 kV and above.

Apart from manufacturing Electrical Cables for multifarious applications, UCL has a fully functional EPC Division to execute Turnkey Contracts for various Utilities/Projects. And thus UCL has now positioned itself as a complete solution provider for EHV Underground Power Cables Transmission System up to 500 kV, involving designing, manufacturing, laying, jointing and installation.

The 220 kV Cables prototype sample manufactured by UCL has been successfully Type Tested as a complete cable system at CPRI, Bangalore. This was the first successful 220 kV cables system Type Test in India. Thereafter, UCL has successfully executed orders for 220 kV Cables.

Their Capacitor Division of the Company commenced operation in the year 1967 and manufactures world class All Poly Propylene (APP) Capacitors for AC applications. The Division was set up in collaboration with Toshiba, Japan. In 1977, this Division entered into another technical collaboration with General Electric Company of USA for manufacture of Mixed Dielectric Capacitors and in 1985 for manufacture of All PP Dielectric Capacitors. The product range includes Low & High Voltage Capacitors (415 VAC to 220 KVAC), APFC Panels, Medium Frequency Water Cooled Capacitors for Induction Furnace Application, Surge Protective Capacitors, Tuned and Detuned Filter Capacitors, DC Capacitors. This Division also provides services like Automatic PF Correction Systems, Harmonic Analysis and PF Studies. And today their Capacitor Division is rated as one of the leading manufacturers of All PP Power Capacitors in LT & HT Range in the country.