Conducting profits

PENNY WISE

FY07 FY08E FY09E Sales1514.001906.002382.50 OPM%6.606.406.40 Net profit52.3059.1073.90 RoCE (%)24.8028.0028.00 M-cap/sales (x)0.500.400.30 EPS (Rs)16.2018.3022.90 PE (x)18.5016.4013.10  The aluminium conductor business contributes about 50 per cent of its total income. These are special wires used in transmission of power from power plants to sub-stations and beyond. Its clients include most of the transmission and distribution companies like Power Grid (largest client) and private players like KEC International, Jyoti Structures and Kalpataru Power.  For Apar, this business has grown at nearly 40 per cent a year for the past three years. The company expects a similar growth on the back of better outlook in the domestic market and its strengthening position globally.  In the international market, Apar is active mainly in the developing countries of Africa, Asia and CIS and to some extent in the US and Europe. Of its current order book of Rs 700 crore (excluding Rs 250 crore in pipeline as the lowest bidder), about 50 per cent is from the international markets. As a growth strategy, Apar will increase its market share abroad and at the same time explore other new markets.  Besides the growth coming in from international markets, the company will also focus on the ongoing capex in the domestic power sector.
  

POWER PROXY
	Scenario 1	Scenario 2
Power generation (MW)	78000	78000
Achievement (%)	100%	70%
Exp. on new capacity	2,96,400	2,07,480
T&D Expenditure	1,77,840	1,24,488
Conductor required (XI Plan)	32011.2	22407.84
Conductor required (Yearly)	6402.24	4481.568
Note: Rs crore, Industry estimates, expenditure on new capacity is estimated at Rs 3.8 crore/MW, T&D spend is 60% of new capacity investments, conductor required is 18% of T&D expenditure.