NETWORTH ON IMP POWER

Investment Rationale
➚ The company has a strong order book of Rs.1300Mn as on date.
With the potential of winning for the bids, the order book is
estimated to cross Rs.2000Mn in the coming quarters.
➚ The company is aggresively expanding its capacities in both
its segments. Transformers capacity is likely to be expanded
by 67% to 6000MVA and Meters by 47% to 314400 units. The
expanded capacity is expected to be fully operational by
Q1FY09E.
➚ Strong demand for transformers & rising exports shall help to
improve capacity utilization level to 55% in FY09E on expanded
capacity from the existing 40%.
➚ Increasing focus on Industrial customers like SIEMENS, L&T,
IVRCL and Reliance etc has helped IMP in reducing dependance
on SEBs from over 70% in FY04 to as low as 50% in FY07E is
positive as it reduces the working capital cycle.
➚ We expect ROE to stabilise at 21.8% and 22.3% in FY08E and
FY09E respectively.