Transmission Industry

1
INVESTMENT INTERRMEDIATES LTD.

An ISO 9001:2008 Certified Company
SECTOR REPORT
Transmission Line EPC

21 Mar, 2011
We believe investments in Transmission and Distribution (T&D) infrastructure will drive growth for companies with a strong
presence in these segments. We initiate coverage on KEC International Limited (KEC) and Jyoti Structures Limited (JSL). We
recommend a BUY on KEC with a price target of ` 89 and BUY on JSL with a price target of ` 110.
Investment Thesis
Power Demand is estimated to grow at 7.8% between 2010 and 2015 on back of GDP growth of 8% to 8.5% over next five
years. In line with the power requirement of the country, 95 GW of power capacity is expected to be added in the next five years,
considering only 33 GW additions over the previous five years.
As sequential transmission lines addition is required in line with the generation capacity additions, significant transmission lines
and substations addition are expected over the next five years. In addition, lower investments in T&D infrastructure over the years,
has necessitated strengthening of the existing networks.
Thus to strengthen the existing system and evacuation of power from new power plants, target of 95,283 circuit kms (ckm) of
transmission lines is planned for the 11th plan and 155,000 ckm to 180,000 ckm during the 12th plan. Growth in transmission
systems will include not just the physical growth in the transmission network but also the introduction of higher transmission
voltages for bulk power transmission, with the aim of limiting transmission losses.
Over the next five years (2010-15E), investments worth ` 3.4 trillion are expected to be made in T&D as compared to ` 1.64
trillion made during 2005-10. This presents significant opportunity for players in transmission line EPC segment.
We initiate coverage on KEC International Limited (KEC) and Jyoti Structures Limited (JSL).
KEC: At CMP of ` 72, KEC is trading at a P/E of 8.6x its FY11E earnings, 7.8x its FY12E and 7.3 its FY13E earnings. Considering
GOI focus on T&D, KECs strong presence in domestic market, robust order backlog and acquisition of SAE towers which allow
KEC to tap US market, we assign a P/E multiple of 9x to its FY13E earnings and recommend a BUY on the stock with a price
target of ` 89.
JSL: At CMP of `78, JSL is trading at a P/E of 7.9x its FY11E earnings, 6.9x its FY12E and 6.4 its FY13E earnings. Considering
GOI focus on T&D, JSLs presence in domestic market and strong order backlog, we assign a P/E multiple of 9x to its FY13E
earnings and recommend a BUY on the stock with a price target of ` 110.
Analyst
Chinmay S. Gandre
research@acm.co.in
Tel: (022) 2858 3407
ACMIIL
SECTOR REPORT

Transmission Industry
A T&D system comprises transmission lines, substations, switching stations,
transformers and distribution lines. The transmission segment plays a key role in
transmitting power to various distribution entities across the country. A T&D system is
organized in a grid, which interconnects various generating stations and load centers.
This ensures uninterrupted power supply to a load center, even if there is a failure at
the local generating station or a maintenance shutdown.
In India, the T&D system is a three-tier structure comprising distribution networks,
state grids and regional grids. Distribution networks and state grids are primarily
owned and operated by the respective SEBs. Most inter-state transmission links are
owned and operated by PGCIL, with some jointly owned by the SEBs concerned. In
addition, PGCIL owns and operates a number of inter-regional transmission lines to
facilitate the transfer of power from a surplus region to one with deficit.
The transmission system in India operates at several voltage levels:
Extra high voltage (EHV): 765 Kv, 400 Kv and 220 Kv
High voltage: 132 Kv and 66 Kv
Medium voltage: 33 Kv, 11 Kv, 6.6 Kv and 3.3 Kv
Low voltage: 1.1 Kv, 220 volts and below
The total length of transmission lines in the country has increased to 7.28 million
ckm in 2007-08 vs 3.6 million ckm in 1998-99.
Transmission Lines (ckm)
Year
HVDC
800 Kv
400 Kv
230/220
Kv
132/110/90
Kv
78/66 Kv
33/22/20
Kv
15/11 Kv
6.6/3.3/2.2
Kv
Distribution
lines
Total
1998-99
1,672
36,122
85,141
105,744
41,044
263,165
1,634,840
4,494
3,568,189
5,710,411
1999-00
1,672
37,636
86,963
107,522
41,646
269,963
1,660,453
4,431
3,525,121
5,735,407
2000-01
3,176
38,004
92,470
110,110
43,169
274,103
1,711,619
4,562
3,570,347
5,847,560
2001-02
4,104
40,887
97,238
118,180
43,849
288,226
1,753,331
4,737
3,679,596
6,030,148
2002-03
5,876
51,785
99,779
120,958
43,202
302,981
1,936,689
4,558
3,985,909
6,551,737
2003-04
5,876
53,616
101,667
121,925
43,297
283,240
1,869,371
6,362
3,859,504
6,344,858
2004-05
6,841
563
57,185
104,758
124,344
45,884
299,639
1,971,722
6,431
3,953,456
6,570,823
2005-06
6,841
563
57,840
108,261
129,465
47,231
309,708
2,047,460
6,474
4,064,516
6,778,359
2006-07
6,841
563
58,018
111,572
132,124
49,462
314,538
2,085,897
6,431
4,149,923
6,939,529
2007-08
6,428
1,692
65,175
115,452
138,137
49,945
335,351
2,231,698
6,519
4,328,549
7,278,946
Source: CEA, CRISIL
GOI thrust on power sector

Power Demand is estimated to grow at 7.8% between 2010 and 2015 on back of GDP
growth of 8% to 8.5% over next five years. In line with the power requirement of
the country 95 GW of power capacity is expected to be added in the next five years,
considering only 33 GW additions over the previous five years.
Capacity additions forecast
MW
Central
2010-11 P
2011-12 P
2012-13 P
2013-14 P
2014-15 P
3,690
5,736
5,262
3,021
3,705
Total
21,414
State
3,112
2,800
3,510
3,103
2,648
15,173
Private
4,285
6,397
7,620
12,675
14,545
45,522
11,087
14,933
16,392
18,799
20,898
82,109
2,362
2,722
2,351
2,673
2,865
12,973
13,449
17,655
18,743
21,472
23,763
95,082
Total
Captive
Total (including
captive)
Source: CRISIL
ACMIIL
SECTOR REPORT

Capacity addition is expected to translate to an investment of ` 9.3 trillion in power

sector. Sequential transmission lines addition is required in line with the generation
capacity additions to enable seamless flow of power. With Government focus on
reducing T&D losses, investments in T&D are expected to be significantly higher
compared to the previous outlays. Investments worth ` 3.4 trillion are expected over
the next 5 years vs 1.64 trillion made during 2005-10.
Capacity additions forecast
` billion
200910 E
Generation-Utilities
201011 P
647.7
201112 P
201213 P
767.4
884.5
993.6
201314 P
201415 P
1,131.2
1,290.8
Total (2010-11
to 2014-15)
5,067.4
Generation-Captives
100.2
112.2
124.9
145.4
169.3
197.1
749.0
Total T&D
431.0
499.5
579.4
672.7
781.6
908.8
3,442.0
1,178.9
1,379.1
1,588.8
1,811.7
2,082.1
2,396.7
9,258.5
2010 to 15P
CAGR growth
Total Investments
Source: CRISIL
Investments in
2000 to 05
2005 to 10
CAGR growth
2005 to10
T&D ` Bn
814
1,638
2010 to15
15%
3,442
16%
Source: CRISIL
Significant transmission lines addition & Up gradation of existing lines

Traditionally, the government has focus on investments in power generation to
alleviate the power shortage in the country. In the process, the T&D segment has
remained neglected and attracted significantly less investments in the comparison to
generation. Investments ratio between generation and T&D in India has historically
been 2:1 against an ideal investment ratio of 1:1. To strengthen the existing system
and evacuation of power from new power plants expected during the 11th and the
12th plan, significant transmission lines and substation additions is planned. Target
of 95,283 circuit kms (ckm) of transmission lines is planned for the 11th plan and
155,000 to 180,000 ckm during the 12th plan.
Transmission
lines (ckm)
Existing by
10th plan
Target Additions
for the 11thplan
Existing capacity
as of Sept 2010
Total by
March 2012
Target additions
in12thplan
765 kV
2,184
5,428
3,829
7,612
25,000 to
30,000
HVDC 500 kV
5,872
1,606
NA
7,478
30,000
3,600
NA
3,600
5,000
400 kV
75,722
49,278
100,910
125,000
50,000
220 kV
114,629
35,371
130,788
150,000
40,000
Total
198,407
95,283
NA
293,690
150,000
to155,000
HVDC 800/600
kV
Source: CEA
Substation MVA/MW
HVDC terminal capacity
765 kV
400 kV
Existing by
10thplan
Additions
11thplan
Total by March
2012
Estimated additions
in12th plan
8,200
6,000
14,200
16,000 to 22,000
53,000
53,000
1,10,000
92,942
52,058
145,000
80,000
230/220 kV
156,497
73,503
230,000
95,000
Total
257,639
184,561
442,200
301,000 to 307,000
Source: CEA
ACMIIL
SECTOR REPORT

Growth in transmission systems will include not just the physical growth in the
transmission network but also the introduction of higher transmission voltages for bulk
power transmission, with the aim of limiting transmission losses. The up gradation
and replacement of existing transmission lines to higher voltage would increase the
demand for transmission towers.
Development of inter-regional transmission corridors
To facilitate transfer of power from surplus regions to deficit regions and evacuation
of power from central sector generation projects and Ultra Mega Power projects
(UMPPs), both 11th and 12th plan are focused on strengthening and developing the
national and inter-regional transmission corridors. In line Power Grid Corporation
of India Limited (PGCIL) has invested ` 254.4 billion till FY10 and has planned
capital outlay of ` 295.6 billion for FY11 and FY12. On May 31st 2010 the Central
electricity regulatory commission (CERC) approved PGCIL to proceed with the
execution of 9 high capacity power transmission corridors (HCPTCs) that will help
transport electricity to the main load centers from 48 new IPP plants located in
coal belt, coastal areas or hydroelectricity-rich areas in the Northeast region. The
government has approved ` 580 billion for the same. Thus, inter-regional transmission
capacity is expected to increase from 13,450 MW to 38,050 MW by 2012 and to
75,150 MW by 2017
Inter-Regional
By 10th plan
Capacity - MW
East South
Additions 11th
By 11th Plan
plan
3,130
Additions in
By 12th Plan
12th Plan
500
3,630
4,200
7,830
East North
3,430
8,700
12,130
5,900
18,030
East West
1,790
4,700
6,490
10,500
16,990
East-North East
1,260
1,600
2,860
2,860
North West
2,120
2,100
4,220
10,200
14,420
West-South
1,720
1,000
2,720
6,300
9,020
6,000
6,000
6,000
13,450
24,600
38,050
37,100
75,150
North East /East

North/West
TOTAL
Source: CEA
Key policies like Accelerated Power Development Reform Programme & Rajiv
Gandhi Grameen Vidyutikaran Yojana (RGGVY) to encourage investments in T&D.
GOI formulated the Accelerated Power Development Reform Programme (APDRP)
under which states are given loans, grants and incentives for upgrading and
modernizing their sub-transmission and distribution (below 33 Kv or 66 Kv networks).
The union government in April 2005 with the objective to provide electricity to all
villages and habitations initiated the Rajiv Gandhi Grameen Vidyutikaran Yojana
(RGGVY). On a countrywide basis, about 67 per cent of the total project cost of
RGGVY schemes amounting to ` 154 billion has been released till December 2009.
Both these initiatives are expected to encourage investments in the transmission sector.
Opportunities in Global markets

Significant investments in T&D are expected to be made over 2010-15 across the
globe. Total Investments worth USD 158 billion are expected made in Middle East,
Africa and North America.
ACMIIL
SECTOR REPORT

Source: Source: ABS Energy research, Accenture research, Company
Peer Analysis
Capacities
Jyoti Structures Ltd, KEC International and Kalpataru Power are dominant players
in the industry. KEC is the largest player with an annual capacity of 1.51 million MT
followed by Jyoti Structures and Kalpataru. Apart from their own capacities, these
players also outsource towers from qualified vendors.
In 000 MT
Jyoti
KEC
Kalpataru
FY07
FY08
FY09
FY10
Capacity
76
96
110
110
Production
61
74
85
119
Capacity
58
113
151
151
Production
51
93
107
109
Third party outsourced
36
34
32
32
Purchased
10
24
39
35
Capacity
84
108
108
108
Production
78
80
80
102
NA
13
20
Third party outsourced
Note: For JSL production numbers includes production outsourced to various parties.Source: ACMIIL Research
Geographical presence
JSL is predominantly a domestic player, with ~78% of the revenues coming from
domestic market. On the other hand, KEC and Kalpataru are diversified with greater
presence in the international markets. Approximately 56% of KECs revenue comes
from international market like Africa, Middle East and Central Asia, while exports
constitute ~43% of Kalpatarus sales.
Particulars
Exports as a % of total sales (FY10)
KEC
Jyoti
55.8%
Kalpataru
22.1%
43.2%
Source: ACMIIL Research, Company
ACMIIL
SECTOR REPORT

Financial analysis
` Mn
Jyoti
Net Sales - FY10
KEC
Kalpataru
21,297.7
39,063.9
25,960.4
Sales CAGR FY07-10
29.9%
24.2%
19.4%
OPM - FY10
10.7
10.4
12.8
NPM - FY10
3.9
4.8
6.6
PAT CAGR FY07-10

Capital Employed - FY10
14.9%
21.7%
2.2%
8,778.6
16,199.5
16,064.6
0.8
1.0
0.6
RONW - FY10
D/E - FY10
17.0
24.0
17.3
ROCE - FY10
24.7
23.4
20.5
Players have registered healthy sales growth on back of investments in

the T&D segment.
Players enjoys operating margins in the range of 10% to 12%
Being a working capital intensive business, players are leveraged with

D/E up to 1x.
In general, players enjoy healthy return ratios of 17% and above.
Order backlog
Players have strong order backlog giving revenue visibility for next 18 to 22 months
Order backlog
2.5
100
1.9
2.0
1.6
1.8
1.5
80
` Bn
60
1.0
41
0.5
0.0
40
80
KEC
Order back log Q3 FY11( RHS)
Jyoti
50
Kalpataru
20
0
Order book to TTM sales (LHS)
ACMIIL
SECTOR REPORT

BUY
Key Data
(`)
CMP
72
Target Price
89
Key Data
Bloomberg Code
KECI IN
Reuters Code
KECL.BO
BSE Code
532714
NSE Code
KEC
Face Value (`)
Market Cap. (` mn)

52 Week Low (`)
Avg. Daily Volume (6m)
KEC International Limited (KEC), incorporated in 1945 is one of the leading players
in the power transmission EPC business in India and international markets. KEC
undertakes designing, manufacturing and construction of turnkey high-voltage power
transmission line projects. It also engages in projects related to power distribution
network, railway electrification, sub-stations and optical fiber cable installations. The
company has presence across geographies, with revenues from international market
constituting 55% of the total revenues in FY10. In the international markets, KEC is
primarily present in the Middle East, Africa and Central Asia.
123
KECs business can be broadly divided into transmission, distribution, cables and
railways.
71
9M FY11 - Sales Break up
18120
52 Week High (`)
KEC International Limited
154,870
Shareholding Pattern (%)

Promoters
41.7
FII
5.0
DII
38.1
Others
15.2
Total
(` mn)
Revenues
Operating Profits
OPM (%)
100.0
FY11E
FY12E
FY13E
47,067.7
54,236.0
58,578.3
4,824.4
5,553.2
5,922.3
10.3
10.2
10.1
2,151.3
2,379.2
2,533.5
PAT Margin (%)
4.6
4.4
4.3
EPS (`)
8.4
9.3
9.9
PAT
SAE Towers
6%
Cables
10%
Distribution
10%
Telecom and
railway
3%
Transmission
71%
Source: Company
Power Transmission segment

KEC has over 60 years of experience in executing turnkey transmission lines projects.
It offers complete solutions that include tower design, tower testing, manufacturing
and onsite construction up to capacity of 800 Kv transmissions lines. The company
has three manufacturing facilities located in India at Jaipur, Nagpur and Jabalpur
having a total capacity of 151,000 MT. It also has close association with five value
added partners manufacturing facilities who provide exclusive capacity to KEC of
more than 60,000 MTs per annum.
In `000 MT
Sales
FY07
FY08
FY09
FY10
103.3
160.0
182.6
186.9
50.8
92.8
107.1
108.8
Purchases
9.8
23.6
39.0
35.3
Outsourced
35.6
34.1
31.8
32.3
58
113
151
151
Production
Capacity
Source: Company
The company also has 4 tower testing stations, capable of testing towers of up to
1200 Kv transmission line.
ACMIIL
SECTOR REPORT

Power Distribution segment

KEC has successfully executed substation, distribution and rural electrification
projects in India and overseas. For substations it has a strategic alliance with Power
Engineers Inc., USA. The company is pre qualified for all the types of substations up
to 400 kV. The rural electrification business has electrified 7,500 Villages.
Cables segment RPG Cables

RPG Cables merged with KEC from March 2010. The segment manufactures a range
of control & power cables that are critical to the distribution network of power utilities
and for industrial expansion. (Annexure: Product & service range)
Railways segment
The segment undertakes civil infrastructure including earthwork, bridges, tunnels
and station building along with track laying and signaling work. It has electrified
5,000 track kms. The company is pre-qualified for all the railway construction related
activities
SAE Towers (Wholly owned subsidiary w.e.f Sept 2010)

KEC acquired 100% stake in SAE Towers for a total consideration of USD 95 million.
Headquartered in Texas, SAE Towers manufactures of steel lattice transmission
towers. SAE has a total annual production capacity of 100,000 MT located at
Monterrey, Mexico (35,000 MT) and Belo Horizonte, Brazil (65,000 MT). SAE
supplies towers to United States, Canada, Brazil, Mexico and the rest of Latin America.
Currently, SAE is operating at 65%to 70% utilizations levels. The company has an
annual turnover of USD 137 million (2010). Order backlog as of Q3 FY11 stands
at ` 7.2billion.
Order book
As of Q3 FY11 KECs standalone order backlog stands at ` 73 billion, which is1.8x
TTM sales. International orders constitute 49% of the total order book, while the rest
51% constitute of domestic orders. International orders primarily constitute of orders
from Middle East, Africa, Central Asia and America.
Particulars - ` Mn
Middle East
and Africa
Transmission
11,910.0
Distribution
Central
America
Asia
7,740.0
Asia
Domestic
Total
23,280.0
50,790.0
69.9
Pacific
7,620.0
240.0
7,400.0
15,370.0
21.2
Cables
7,970.0
1,830.0
1,830.0
2.5
E-BOP
400.0
400.0
0.6
Telecom
380.0
380.0
0.5
Railways
Total
%
3,900.0
3,900.0
5.4
11,910.0
15,710.0
7,620.0
240.0
37,190.0
72,670.0
100.0
16.4
21.6
10.5
0.3
51.2
100.0
Source: Company
ACMIIL
SECTOR REPORT

Key Positives
KECs Strong presence in Indian markets
Although KEC has presence in various regions across the globe the company is a
dominant player in the Indian markets also with a market share of ~18% to 19%.
The company has a strong track record and has expertise in 765 Kv, 500 Kv and
400Kv transmission lines. KEC also has the capability to construct substations of
up to 400 kV, making it a total turnkey EPC contractor for power transmission lines.
Domestic Market Share
Kalpataru
16% to 17%
Others
47% to 48%
Jyoti Structures
17% to 18 %
KEC
18% to 19%
Source: ACMIIL Research
Acquisition of SAE Towers to increase presence in the US markets and to

drive revenues and profitability
SAE Towers is the market leader in the US, Mexico and Brazil with a market
share of over 40%. With acquisition of SAE, KEC can leverage on SAE to build
relationship with power utilities in these regions and also use its (SAEs) facilities
as back up facilities to expand its presence in these markets. Post acquisition, KEC
(India) exposure to these markets has increased to ~11%, which earlier used be less
than 2%. Recently, KEC (India) won a major order ` 7.35 billion from Canada; for
this order majority of the supplies would be made from India. However, incase of
any logistical related issue, SAE Tower facility would serve as a back up.
SAE Towers also earns higher operating margins in range of 13% to 14%, which
is expected to drive profitability.
Strong Order backlog
Current stand alone order backlog stands at ` 73 billion. In addition SAE Towers
has an order backlog of ` 7 billion, which takes the total consolidated order backlog
to ` 80 billion. Order inflows have been strong in recent quarters, the company
received order in excess of ` 40 billion during 9 M FY11. Both domestic as well
as international market has contributed to the growth in the companys order book.
Order backlog sandalone
Consolidatd order book break up
75
73
70
70.00
60.00
64.63
65
` Bn
80.00
50.00
40.00
60.51
60
57.07
55.43
55
51.63
30.00
56.5
20.00
51.55
10.00
50
0.00
45
Q4 FY09
Q1 FY10
Q2 FY10
Q3 FY10
Q4 FY10
Q1 FY11
Q2 FY11
Q3 FY11
Q4 FY10
Transmission Line
Q1 FY11
Q2 FY11
Railway and Telecom
Cables
Q3 FY11
SAE Tower
Source: Company
ACMIIL
SECTOR REPORT

Key Concerns
Working capital intensive business
The T&D business is working capital intensive in nature and the requirement is
primarily funded through short-term loans. Working capital loans required stood
at ~30% of sales. Thus, working capital management is crucial and increase in
working capital requirement has a direct impact on interest cost and thereby the
profitability of the company.
Uncovered risk related to raw material prices
Domestic transmission line EPC contracts include a price variation clause for
adjusting changes in raw material prices. However international contracts are
based on fixed price. Steel, aluminum and zinc are the main raw materials for
construction of a transmission line. Steel and aluminum, constitute about 15 %
of the operational costs each, and zinc constitutes around 2-3%. To neutralize the
effect of fluctuations in raw material prices KEC generally enters into hedging
of aluminum through forward contracts. For supply of steel, KEC enters into
advance contracts with vendors for 5-6 months, for reducing risks involved with
its price changes. However, steel is not fully covered, keeping the risk open for
the company to that extent. Currently ~ 35% of the total order backlog (primarily
export orders) is not subject to price variation clause.
Foreign currency risk:
KEC has presence in more than 40 countries. Revenues from international markets
constitute approximately 55% of total revenues. The company tries to match
receipts with payments. However, foreign exchange risk is not fully covered.
Competition
Apart from the established dominant player approximately 45 others EPC
contractors participated in PGCIL tenders in 2010. Participation by such players
has significantly increased competition and has resulted in increased pricing
pressure in the industry.
Operating profit margins

16.0
14.8
14.0
12.5
12.0
12.8
11.8
12.6
11.6
11.4
10.0
8.0
10.4
8.8
6.0
4.0
2.0
0.0
FY08
FY09
KEC
Jyoti
FY10
Kalpataru
Operating margins of all the three major players have dropped in range of 100 to 200
bps as compared to FY08.
ACMIIL
10

SECTOR REPORT
BOOT
The company is participating in the bids for BOOT projects. These projects
requiring high investments would be developed in 70:30 debt/equity ratio. In
case the company emerges as a successful bidder for the project, it will convert
the company from current pure product & solutions provider (EPC contractor) to
services-cum-solutions provider (Owner cum EPC contractor). The clear picture
related to financial requirements, profitability in view of SEBs being the client
and augmented man power requirements can emerge only after winning of a
particular project.
Foray into new verticals
KEC is foraying into new verticals like railway infrastructure. Indian Railways
(IR) is a monopsony market, which limit bargaining power of KEC. In addition,
as company is trying to create its space in this vertical, margins are also expected
to be subdued, which will have an impact on consolidated margins.
SWOT Analysis
Strength
Weakness
KECs strong track record and execution
capabilities.
Strong presence in domestic market with market
Foreign currency Risk

Uncovered risk related to raw material prices
share of 18% to 19%

Strong order backlog of ` 80 billion, gives revenue
visibility for next 18 to 22 months.
Opportunity
Threats
Capacity addition planned for the 11th and Competition from domestic EPC contractors has
12th plan would lead to significant addition of
transmission lines.
led to increased pricing pressure in the industry.

Unrest in middle East
Up gradation of existing T&D network

Policies like RGGVY and APDRP to encourage
investment in T&D.
Acquisition of SAE towers provides opportunities
to tap US markets
Financials
KECs net sales have increased at a CAGR of 24% from ` 20,406.3 million in FY07
to ` 39,072.3 million in FY10 on back of investments in T&D. We expect net sales
to grow at CAGR of 15% to ` 58,578.3 million in FY13E.
Operating margins dropped from 12% in FY07 to 10.4% in FY10 on account of
increased pricing pressure in the industry. We expect marginal fall in operating profits
margins as we expect SAE towers which earns operating margins in range of 13%
to 14% to partly arrest fall in margins on account of increased pricing pressure in
domestic industry. We expect the company to register OPM of 10.3%, 10.2% and
10.1% in FY11E, FY12E and FY13E respectively.
ACMIIL
11
SECTOR REPORT

Valuation and Recommendation

At CMP of ` 72, KEC is trading at a P/E of 8.6x its FY11E earnings, 7.8x its FY12E
and 7.3 its FY13E earnings. Considering GOI focus on T&D, KECs strong presence
in domestic market, robust order backlog and acquisition of SAE towers which allow
KEC to tap US market, we assign a P/E multiple of 9x to its FY13E earnings and
recommend a BUY on the stock with a price target of ` 89.
15 PE
Close Price
12 PE
10 PE
10/3/2011
10/3/2010
7/3/2010
1/3/2009
4/3/2010
7/3/2009
10/3/2009
1/3/2009
4/3/2009
10/3/2008
4/3/2008
7/3/2008
1/3/2008
10/3/2007
4/3/2007
7/3/2007
1/3/2007
7/3/2006
10/3/2006
200
180
160
140
120
100
80
60
40
20
0
4/3/2006
One year forward P/E Chart
8 PE
Jyoti Strcutures
10/3/2010
7/3/2010
4/3/2010
1/3/2009
10/3/2009
4/3/2009
KEC International
7/3/2009
1/3/2009
10/3/2008
7/3/2008
4/3/2008
1/3/2008
10/3/2007
4/3/2007
7/3/2007
1/3/2007
7/3/2006
10/3/2006
4/3/2006
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
10/3/2011
Peer Valuation One year forward PE Chart
Kalapatau Power
ACMIIL
12
SECTOR REPORT

Financials
Profit & Loss Account
Particulars
` Mn
FY07
FY08
FY09
FY10
FY11E
FY12E
FY13E
Net Sales
20,406.3
28,144.7
34,273.9
39,063.9
47,067.7
54,236.0
58,578.3
Total Expenditure
17,887.8
24,601.5
31,278.1
35,013.7
42,243.2
48,682.8
52,656.0
Operating Profit
2,518.5
3,543.2
3,010.3
4,058.6
4,824.4
5,553.2
5,922.3
6.9
2.5
5.9
9.9
10.0
10.0
10.0
2,525.4
3,545.7
3,016.2
4,068.5
4,834.4
5,563.2
5,932.3
334.4
250.7
230.0
270.2
403.6
483.1
508.3
2,191.1
3,295.1
2,786.2
3,798.3
4,430.8
5,080.1
5,424.0
592.5
676.5
999.7
864.7
1,121.2
1,419.8
1,526.3
1,598.6
2,618.5
1,786.5
2,933.6
3,309.6
3,660.3
3,897.7
552.2
896.9
618.4
1,037.0
1,158.4
1,281.1
1,364.2
1,046.4
Other Income
EBIDTA
Depreciation
EBIT
Interest
PBT
Taxes
PAT
1,721.6
1,168.1
1,896.6
2,151.3
2,379.2
2,533.5
Growth in sales (%)
37.9
21.8
14.0
20.5
15.2
8.0
Growth in Operating profits (%)
40.7
-15.0
34.8
18.9
15.1
6.6
Growth in PAT (%)
64.5
-32.2
61.6
14.0
10.6
6.5
12.3
12.6
8.8
10.4
10.3
10.2
10.1
5.1
6.1
3.4
4.8
4.6
4.4
4.3
OPM (%)
Net Profit Margin (%)
Balance Sheet
Particulars
` Mn
FY07
FY08
FY09
FY10
FY11E
FY12E
FY13E
Sources of Funds
Share Capital
376.9
493.4
493.4
514.2
514.2
514.2
514.2
Reserves and Surplus
2,343.1
4,458.3
5,087.4
7,356.8
8,911.6
10,694.3
12,631.4
Total Shareholders Funds
2,719.9
4,951.7
5,580.9
7,870.9
9,425.7
11,208.5
13,145.5
Total Loan Funds
3,864.2
5,917.7
6,218.2
7,867.4
14,185.5
15,020.2
15,963.7
334.8
446.8
298.2
461.1
461.1
461.1
461.1
6,918.9
11,316.2
12,097.3
16,199.5
24,072.3
26,689.7
29,570.3
4,676.3
5,213.0
6,319.6
8,357.4
11,370.3
13,420.3
14,120.3
600.0
898.5
1,247.8
1,570.1
1,973.7
2,456.8
2,965.2
4,076.2
4,314.4
5,071.8
6,787.4
9,396.5
10,963.4
11,155.1
22.9
189.0
543.3
412.8
450.0
100.0
100.0
Net Deferred Tax Liability

Total Capital Employed
Application of Funds
Gross Block
Less: Accumulated Depreciation
Net Block
Capital Work in Progress
Goodwill on consolidation
Investments
Net Current Assets
Deferred Tax Assets
Total Assets
0.0
0.0
0.0
0.0
2,756.6
2,756.6
2,756.6
205.9
4.6
0.0
0.0
0.0
0.0
0.0
2,569.4
6,561.8
6,482.2
8,999.3
11,469.2
12,869.7
15,558.6
44.5
246.4
0.0
0.0
0.0
0.0
0.0
6,918.9
11,316.2
12,097.3
16,199.5
24,072.3
26,689.7
29,570.3
ACMIIL
13
SECTOR REPORT

Cash flow Statement
` Mn
Particulars
FY07
PBT
FY08
FY09
1,598.6
2,618.5
Depreciation
334.4
Interest
603.2
FY10
FY11E
FY12E
3,309.6
FY13E
1,786.5
2,933.6
3,660.3
3,897.7
250.7
230.0
270.2
403.6
483.1
508.3
680.6
1,016.7
944.7
1,121.2
1,419.8
1,526.3
Add
Profit before working capital changes
2,389.4
3,618.1
3,396.7
3,644.2
4,834.4
5,563.2
5,932.3
-2,213.4
-2,669.4
1,010.0
-2,519.4
-2,442.4
-1,626.6
-2,071.9
Less Taxes
-394.6
-905.4
-624.5
-778.2
-1,158.4
-1,281.1
-1,364.2
Net Cash flow from operating activities
-218.5
43.4
3,767.2
346.6
1,233.7
2,655.5
2,496.2
Net Cash flow in investment activities
-98.2
-317.8
-1,380.6
-508.5
-5,806.6
-1,700.0
-700.0
Net Cash flow from financing activities
-99.2
556.4
-1,687.4
-678.3
4,600.4
-1,181.6
-1,179.2
-416.0
282.0
699.1
-840.2
27.5
-226.1
617.0
629.9
213.9
689.9
1,409.9
699.3
726.8
500.7
Working capital changes
Net increase /(decrease) in cash

Op. balance of cash and cash equivalents
Add: cash balance of jointly controlled operation
0.0
0.0
20.8
0.0
0.0
0.0
0.0
Add: cash balance acquired under the scheme
0.0
184.5
0.0
129.6
0.0
0.0
0.0
213.9
680.4
1,409.9
699.3
726.8
500.7
1,117.7
Cl. balance of cash and cash equivalents

Ratios
Particulars
FY07
FY08
FY09
FY10
FY11E
FY12E
FY13E
Profitability Ratios
OPM (%)
12.3
12.6
8.8
10.4
10.3
10.2
10.1
5.1
6.1
3.4
4.8
4.6
4.4
4.3
RONW (%)
38.5
34.8
20.9
24.0
22.8
21.2
19.3
ROCE (%)
31.7
29.1
23.0
23.4
18.4
19.0
18.3
5.6
7.0
4.7
7.3
8.4
9.3
9.9
PAT Margin (%)
Per Share Ratios

EPS (Rs.)
CEPS (Rs.)
5.4
7.7
5.4
8.4
9.9
11.1
11.8
14.4
20.1
22.6
30.6
25.9
32.9
40.4
P/E (x)
9.8
8.6
7.8
7.3
P/CEPS (x)
8.5
7.2
6.5
6.1
P/BV (x)
2.4
2.8
2.2
1.8
Debt/Equity
1.4
1.2
1.1
1.0
1.5
1.3
1.2
Current Ratio
1.3
1.5
1.3
1.5
1.5
1.5
1.6
Adj BV Per Share (`)

Valuation Ratios
Capital Structure Ratios
Turnover Ratios
Debtors turnover ratio
2.3
2.0
1.8
2.0
1.9
1.9
1.9
Inventory turnover ratio
13.6
13.7
15.2
15.6
15.2
15.2
15.2
5.0
6.5
6.8
5.8
5.0
4.9
5.3
Fixed Asset Turnover

Source: ACMIIL Research,
ACMIIL
14
SECTOR REPORT

BUY
Key Data
(`)
CMP
78
Target Price
110
Key Data
Bloomberg Code
JYS IN
Reuters Code
JYTS.BO
BSE Code
513250
NSE Code
JYOTISTRUC
Face Value (`)
Jyoti Structures Limited

Jyoti Structures Limited (JSL), incorporated in 1974, is a turnkey solutions provider
in transmission & distribution segment. Over the past 3 decades it has successfully
executed over 600 projects. The company is primarily focused on domestic market,
with revenues from domestic market constituting 78% of total revenues.
JSLs business can be broadly divided into transmission lines, substation and rural
electrification projects.
Market Cap. (` mn)
6390
52 Week High (`)
178
52 Week Low (`)
77
Avg. Daily Volume (6m)
Power
Geneation
Station
377,835
High Voltage Transmission Line
Shareholding Pattern (%)

27.61
FII
11.01
DII
29.88
Others
31.5
Total
(` mn)
Operating Profits
OPM (%)
100.0
FY11E
FY12E
FY13E
24,211.9
26,456.0
29,117.1
2,552.1
2,683.7
2,976.4
10.5
10.1
10.2
992.4
1,141.8
1,229.7
PAT Margin (%)
4.1
4.3
4.2
EPS (`)
9.9
11.3
12.2
PAT
Distribution Line
Transfer of Power from Generating Station to Cinsumer
Transmission lines
JSL has over 30 years of experience in executing turnkey projects in the field of extra
high voltage (EHV) transmission lines. It offers complete solutions that include tower
design, tower testing, manufacturing and onsite construction up to capacity of 800
Kv HVAC or 500 Kv HVDC. The company also has its own testing facilities that
can test towers up to 1,200 Kv. It has its manufacturing facilities located in Nasik
(Annual Capacity: 68,000 MT) and Raipur (Annual Capacity: 42,000 MT). In FY10,
transmission lines contributed 70% to its total revenues.
Transmission Towers
140
120
120
100
100
000 MT
Promoters
Revenues
Consumer
Substation
JSL: EPC Contractor for Transmission

Distribution Lines and Substation
80
80
60
60
40
40
20
20
0
FY06
FY07
FY08
Capacity
Production
FY09
FY10
Utilisation
Source: Company
Substations
JSL has undertaken projects ranging from the augmentation of existing substations
to development of new substations. It has capabilities to construct substations up to
400 Kv and has successfully completed 559 bays. Substations contributed 15% to
total revenues in FY10.
Distributions/ Rural electrification
JSL has electrified over 2,361 villages and provides connections to over 450,000
households. Currently electrification of 4,447 villages is in progress. This segment
contributed 15% to total revenues in FY10.
ACMIIL
15
SECTOR REPORT

Order book
As of Q3FY11 JSLs order backlog stands at ` 41 billion (~200,000 MT), which is
2x TTM sales. Domestic orders constitute 82% of the total order book, while exports
constitute the remaining 18%. Clients wise, SEBs together constitute 58% of the total
order book followed by PGCIL (26%) and private players constituting the remaining
16%. Segment wise transmission line constitutes 80% of the total order backlog
followed by rural electrification (15%) and substations (5%).
Order Book Break Up
Order Book Break Up
5%
18%
15%
82%
80%
Transmission
Rural
Substation
Domestic
Export
Source: Company
Foreign Operations
To expand its presence in the Gulf, JSL has a formed joint venture company named
Gulf Jyoti International LLC (GJIL) with Gulf Investment Corporation. JSL stake
in the JV is 30%. GJIL has its facilities located in Dubai with an annual capacity of
50,000 MT. As of Q3 FY11, GJILs order book stands at ~` 10 billion. JSL has also
formed a subsidiary, Jyoti Structures Africa (Pty) Ltd. in South Africa, in 2007 to
participate in local transmission markets.
Apart from Gulf and African region the company also plans to foray in the US
market. It is planning to set up a facility in USA that will manufacture steel towers.
The company plans to invest USD 12 million for the same.
ACMIIL
16
SECTOR REPORT

Key Positives
JSLs strong presence in domestic T&D segment
JSL is one of the dominant player in the industry with a domestic market share of
~17 to 18%. The company has a strong track record having successfully completed
24,568 ckm transmission line and designed/tested towers up to a capacity of 800
kV HVAC or 500 kV HVDC for various utilities. JSL also has the capability to
construct substations of up to 400 kV, making it a total turnkey EPC contractor for
power transmission lines.
Domestic Market Share
Kalpataru
16% to 17%
Others
47% to 48%
Jyoti Structures
17% to 18 %
KEC
18% to 19%
Strong Order backlog

JSL order backlog has increased from ` 36.06 billion in FY09 to ` 41 billion in Q3
FY11. Current order backlog is 1.9x TTM sales and gives revenue visibility till FY13.
Order inflows have improved in last four quarters, with company registering order
inflows worth ` 7,000 million in Q3 FY11.
Order Inflow
9000
39.59
35.1
40.3
41.5
41.06
42.5
8000
41.5
7000
38.69
6000
36.06
` Mn
36.16
5000
4000
3000
2000
1000
11
FY
Q3
Y1
10
Y1
Q2
F
Q1
F
10
FY
10
FY
FY
Q4
Q3
10
09
09
FY
Q2
Q1
FY
Q4
09
FY
09
FY
FY
Q3
Q2
Q1
11
11
FY
Q3
11
FY
Q2
FY
10
Q1
10
FY
Q4
0
Y1
FY
Q3
10
FY
09
FY
09
FY
Q2
F
Q1
Q4
FY
09
Q3
Q1
FY
09
45
43
41
39
37 35.6
35
33
31
29
27
25
Q2
` Bn
Order Back Log
Source: Company
Margins immune from fluctuations in raw material prices

Most of the domestic projects have a variable price clause, which provides cushion
against fluctuations in the prices of major raw materials such as steel and zinc. With
the domestic business accounting ~ 81% of the companys order book, margins are
largely immune to fluctuations in raw material prices.
ACMIIL
17
SECTOR REPORT

Key Concerns
The T&D business is working capital intensive in nature and the requirement is
primarily funded through short-term loans. In FY10, working capital loans required
stood at 28% to 30% of sales. Thus, working capital management is crucial and
increase in working capital requirement has a direct impact on interest cost and
thereby the profitability of the company.
Competition
Apart from the established dominant player approximately 45 others EPC contractors
participated in PGCIL tenders. Participation by such players has significantly increased
competition and has resulted in increased pricing pressure in the industry.
Operating profit margins

16.0
14.8
14.0
12.0
10.0
12.8
11.8
12.5
11.6
12.6
11.4
10.4
8.0
8.8
6.0
4.0
2.0
0.0
FY08
FY09
KEC
FY10
Jyoti
Kalpataru
Operating margins of all the three major players have dropped in range of 100 to 200
bps as compared to FY08.
BOOT
The company is participating in the bids for BOOT projects. These projects requiring
high investments would be developed in 70:30 debt/equity ratio. In case the company
emerges as a successful bidder for the project, it will convert the company from current
pure solutions provider (EPC contractor) to services-cum-solutions provider (Owner
cum EPC contractor). The clear picture related to financial requirements, profitability
in view of SEBs being the client and augmented man power requirements can emerge
only after winning of a particular project.
SWOT Analysis
Strength
Weakness
JSLs strong track record and execution capabilities.
Strong presence in domestic market with market share of

17% to 18%
Strong order backlog of ` 41 billion, gives revenue visibility
for next 18 to 22months.
Opportunity
Threats
Capacity addition planned for the 11th and 12th plan would
Competition from domestic EPC

contractors has led to increased
lead to significant addition of transmission lines.
pricing pressure in the industry.
Up gradation of existing T&D network

Policies like RGGVY and APDRP to encourage investment
in T&D.
ACMIIL
18
SECTOR REPORT

Financials
JSLs net sales have increased at a CAGR of ~30% from ` 9,724 million in FY07 to
` 21,297.7 million in FY10 on back of investments in T&D. We expect net sales to
grow at CAGR of 11% to ` 29,117.1 million in FY13E.
Operating margins dropped from 13% in FY07 to 10.7% in FY10 on account of
increased pricing pressure in the industry. We expect OPM to further drop to 10.2%
in FY13E.
Rights Issue
The company issued Non Convertible Debentures (NCDs) with Detachable Warrants
on rights basis.
Details of the issue
Issue:
10,261,243, 7% NCD of face value `120 each with 20,522,486 detachable

warrants
Size of the issue
` 1231.4 million (excluding conversion of warrants)
Total Issue Size
` 3,694.05 million (assuming full conversion of warrants)
Issue Price/ Face value per ` 120

NCD
Warrant Exercise Price
` 120
Rights Entitlement
1 NCD with 2 detachable warrants for every 8 equity shares held
Redemption period for NCDs
NCD shall be redeem after 15 months
Warrant Exercise Period
Warrants can be exercised within 18 months from the Date of Allotment during
the periods set out below:
August 15, 2011 to September 15, 2011 (both days inclusive),
February 15, 2012 to March 15, 2012 (both days inclusive),
June 15, 2012 to end of 18th month from the Date ofAllotment.
Additional Subscription by the
Promoter and Promoter Group have right to subscribe to their entitlement
Promoter
in this Issue, including by subscribing for renunciation, if any, made by

any other Shareholder. The Promoter and the Promoter Group may apply
for additional NCDs with detachable Warrants in the Issue, to the extent of
any unsubscribe portion of the Issue, such that the total subscription by our
Promoter and Promoter Group (including their Rights Entitlement) shall not
exceed 90% of the Issue size.
NCD Allotted
9,346, 310 ( ` 1121.56 million)
Warrants Allotted
18,692,620 ( 2 warrants for every 1 NCD issued)
Source: Company
We have considered conversion of allotted warrants into equity shares in our financials.
Hence, we have increased share capital to ` 201.4 million.
ACMIIL
19
SECTOR REPORT

Valuation and Recommendation

At CMP of `78, JSL is trading at a P/E of 7.9x its FY11E earnings, 6.9x its FY12E
and 6.4 its FY13E earnings. Considering GOI focus on T&D, JSLs presence in
domestic market and strong order backlog, we assign a P/E multiple of 9x to its
FY13E earnings and recommend a BUY on the stock with a price target of ` 110.
One year forward P/E Chart

350
300
250
200
150
100
12 PE
12/1/10
8/1/10
4/1/10
12/1/09
8/1/09
4/1/09
12/1/08
8/1/08
15 PE
8 PE
Close Price
4/1/08
12/1/07
8/1/07
4/1/07
12/1/06
8/1/06
4/1/06
12/1/05
8/1/05
4/1/05
50
10 PE
Jyoti Strcutures
10/3/2010
7/3/2010
4/3/2010
1/3/2009
10/3/2009
4/3/2009
KEC International
7/3/2009
1/3/2009
10/3/2008
7/3/2008
4/3/2008
1/3/2008
10/3/2007
7/3/2007
4/3/2007
1/3/2007
10/3/2006
7/3/2006
4/3/2006
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
10/3/2011
Peer Valuation One year forward PE Chart
Kalapatau Power
ACMIIL
20
SECTOR REPORT

Financials
Profit & Loss Account
Particulars
` Mn
FY07
FY08
FY09
FY10
FY11E
FY12E
FY13E
Net Sales
9,723.8
13,738.3
18,393.6
21,297.7
24,211.9
26,456.0
29,117.1
Total Expenditure
8,460.8
11,980.3
16,318.4
19,011.1
21,659.8
23,772.3
26,140.8
Operating Profit
1,263.0
1,758.0
2,075.2
2,286.6
2,552.1
2,683.7
2,976.4
8.2
15.2
56.4
63.5
60.0
60.0
60.0
1,271.2
1,773.2
2,131.6
2,350.0
2,612.1
2,743.7
3,036.4
59.4
72.0
99.4
178.4
201.4
220.2
269.0
Other Income
EBIDTA
Depreciation
EBIT
1,211.8
1,701.2
2,032.3
2,171.7
2,410.7
2,523.5
2,767.4
Interest
329.3
467.3
687.8
795.7
835.5
711.2
815.6
PBT
882.5
1,233.9
1,344.5
1,376.0
1,575.3
1,812.3
1,951.9
Taxes
327.9
488.7
493.4
533.0
582.8
670.6
722.2
PAT
554.7
745.2
851.1
843.0
992.4
1,141.8
1,229.7
4.7
45.6
0.2
9.1
0.0
0.0
0.0
549.9
Less: Excess / (Short) Provision of Taxes for earlier years

PAT
699.6
851.0
833.9
992.4
1,141.8
1,229.7
Growth in sales (%)
41.3
33.9
15.8
13.7
9.3
10.1
Growth in Operating profits (%)
39.2
18.0
10.2
11.6
5.2
10.9
Growth in PAT (%)
27.2
21.6
-2.0
19.0
15.1
7.7
OPM (%)
13.0
12.8
11.3
10.7
10.5
10.1
10.2
NPM (%)
5.7
5.1
4.6
3.9
4.1
4.3
4.2
Balance Sheet
Particulars
` Mn
FY07
FY08
FY09
FY10
FY11E
FY12E
FY13E
Sources of Funds
Share Capital
161.4
162.4
163.3
164.0
201.4
201.4
201.4
Reserves and Surplus
2,543.7
3,217.5
4,024.8
4,747.3
5,506.1
8,620.0
9,616.0
Total Shareholders Funds
2,705.1
3,379.8
4,188.1
4,911.3
5,707.5
8,821.4
9,817.4
Total Loan Funds
1,607.5
2,249.0
3,125.1
3,689.7
3,947.0
1,659.3
2,026.1
55.1
67.9
91.0
177.5
177.5
177.5
177.5
Net Deferred Tax Liability

Miority interest
0.0
0.0
0.5
0.0
0.0
0.0
0.0
4,367.8
5,696.7
7,404.7
8,778.6
9,832.1
10,658.2
12,021.1
Gross Block
979.8
1,140.6
1,901.1
2,438.1
2,685.4
2,935.4
3,735.4
Less: Accumulated Depreciation
385.6
456.2
550.5
687.8
889.2
1,109.3
1,378.3
Net Block
594.1
684.4
1,350.6
1,750.4
1,796.3
1,826.1
2,357.2
Total Capital Employed

Application of Funds
Capital Work in Progress

Investments
Net Current Assets
Misc Exp
Total Assets
11.2
15.0
51.8
27.3
30.0
380.0
30.0
121.0
95.6
166.6
166.6
166.6
166.6
166.6
3,617.6
4,884.1
5,823.6
6,834.3
7,839.2
8,285.5
9,467.3
23.9
17.5
12.1
0.0
0.0
0.0
0.0
4,367.8
5,696.7
7,404.7
8,778.6
9,832.1
10,658.2
12,021.1
ACMIIL
21
SECTOR REPORT

Cash flow Statement

Particulars
PBT
` Mn
FY07
FY08
882.5
FY09
1,233.9
FY10
FY11E
FY12E
FY13E
1,344.5
1,376.0
1,575.3
1,812.3
1,951.9
Add
Depreciation
Interest
Profit before working capital changes
59.4
72.0
99.6
178.6
201.4
220.2
269.0
329.3
467.3
687.7
795.7
835.5
711.2
815.6
1,354.3
1,824.5
2,167.6
2,299.8
2,612.1
2,743.7
3,036.4
-1,399.0
-1,198.1
-1,005.8
-81.5
-1,068.8
-651.5
-825.0
Less Taxes
-334.8
-487.0
-653.3
-489.7
-582.8
-670.6
-722.2
Net Cash flow from operating activities
-384.2
93.9
508.5
1,728.6
960.4
1,421.6
1,489.2
Net Cash flow in investment activities
-173.0
-164.3
-378.8
-1,265.9
-250.0
-600.0
-450.0
Net Cash flow from financing activities
611.1
117.2
121.2
-311.4
-811.8
-989.4
-682.4
Net increase /(decrease) in cash
53.9
46.8
250.9
151.3
-101.3
-167.8
356.9
Op. balance of cash and cash equivalents
39.3
93.2
140.0
390.9
542.2
440.9
273.1
Cl. balance of cash and cash equivalents
93.2
140.0
390.9
542.2
440.9
273.1
629.9
Working capital changes
Ratios
Particulars
FY07
FY08
FY09
FY10
FY11E
FY12E
FY13E
Profitability Ratios
OPM (%)
13.0
12.8
11.3
10.7
10.5
10.1
10.2
5.7
5.1
4.6
3.9
4.1
4.3
4.2
RONW (%)
20.3
20.7
20.3
17.0
17.4
12.9
12.5
ROCE (%)
27.7
29.9
27.4
24.7
24.5
23.7
23.0
6.7
8.5
10.4
10.2
9.9
11.3
12.2
PAT Margin (%)
Per Share Ratios

EPS (`.)
CEPS (`.)
7.5
10.0
11.6
12.5
11.9
13.5
14.9
33.5
41.6
51.3
59.9
56.7
87.6
97.5
P/E (x)
7.7
7.9
6.9
6.4
P/CEPS (x)
6.3
6.6
5.8
5.2
P/BV (x)
1.3
1.4
0.9
0.8
Debt/Equity
0.6
0.7
0.7
0.8
0.7
0.2
0.2
Current Ratio
2.3
2.5
2.1
2.0
2.0
2.0
2.0
BV Per Share (`)

Valuation Ratios
Capital Structure Ratios
Turnover Ratios
Debtors turnover ratio
2.1
2.2
2.6
2.5
2.5
2.5
2.5
Inventory turnover ratio
11.9
17.3
12.0
8.6
8.5
8.5
8.5
Fixed Asset Turnover
16.4
20.1
13.6
12.2
13.5
14.5
12.4
ACMIIL
22
SECTOR REPORT

Annexure KECs product range power cables

Products
LV : up to 1.1 kV
MV : 3.3 kV to 33 kV.
EHV: 45 kV to 132 kV
LT & HT Aerial Bunched Cables
TELECOM CABLES -PIJF Copper Cables
Optic Fiber Cables
SPECIALITY CABLES - Fire Survival Cables
Instrumentation Cables
Signaling Cables
House Wires
Turnkey contracts
Total Cabling Solutions
Turnkey Installation Services
Jointing, Testing and Commissioning
Technical Services for Cable Selection
Annexure KECs Order details

Date
INR Mn
20/01/2011
3,390
20/01/2011
400
3/1/2011
9,420
3/1/2011
380
Order type
Country
765 Kv line -PGCIL
India
BOP - NMDC
India
Substations order
Kazakhstan
PGCIL - Substation order
India
India
27/12/2010
3,130
765 Kv line -RRVPN
27/12/2011
2460
Transmission Tower order (received by SAE Towers)
27/12/2011
1,300
27/12/2011
970
765 Kv Line - PGCIL
India
765 Kv Line
SA
27/12/2011
970
Railway
India
27/12/2011
1,350
Telecom cables order
India
3/10/2010
7,350
High voltage transmission line towers
Canada
3/10/2010
1,580
Transmission Line
Nigeria
3/10/2010
1,350
3/10/2010
950
Transmission Line - PGCIL
India
Transmission Line
India
3/10/2010
1,120
Railway
India
3/10/2010
1,760
LT, HT, EHV Cables order
India
5/8/2010
920
400 Kv - Substation - PGCIL
India
5/8/2010
620
220 kV substation
5/8/2010
510
400 kV transmission line - Bina Power supply
5/8/2010
450
Transmission line
UAE
30/07/2010
570
Railways - civil construction, signaling, track laying and electrification
India
30/07/2010
300
Bhutan
India
Railways - electrification
Malaysia
Transmission Line - 400 /500 Kv
Georgia
8/7/2010
3,260
8/7/2010
660
Transmission Line
Zambia
8/7/2010
420
Transmission Line
Philippines
8/7/2010
1,230
LT, HT, EHV Cables order
India
ACMIIL
23

SECTOR REPORT
Annexure Jyotis : projects under execution
Transmission Lines
Name of the Projects
North EastNorth/Western Interconnector-I 800kV HVDC Tangla-Kokrajhar-Barabisa section of Biswanath Chariyali-
Expected Datesof Completion

Feb-13
Agra transmission line for Power Grid Corporation of India Limited, India. Total length of the line is 211 Kms.
Mundra-Mohindergarh Transmission Line 500kV HVDC Mundra-Mohindergarh transmission line for Adani Power
Feb-11
Limited, India. Total length of all the lines is 1,000 Kms.

Western Region Strengthening Scheme-II 400kV transmission lines project in Maharashtra and Gujarat for Reliance
Jul-11
Energy Limited, India. Total length of all the lines is 1,500 Kms.
400kV Alamathy-Sunguvarchatram Transmission Line 400 kV multi circuit transmission line from Alamathy
Apr-11
substation to Sunguvarchatram substation for Tamil Nadu Electricity Board, India. Total length of all the line is 49 Kms.
`North East-Northern/Western InterconnectorI 400kV double circuit lower Subhansiri-Biswanath Chariyali
Oct-11
transmission line for Power Grid Corporation of India Limited, India. Total length of the line is 170 Kms.
U P Power Transmission Corporation Ltd. 765kV single circuit Anpara D-Jhusi, 765kV single circuit Anpara C-Anpara
Feb-12
D Interconnector and shifting of 765kV single circuit Anpara B-Unnao to Anpara C for U P Power Transmission
Corporation Limited, India. Total length of the line is 202 Kms.
Bhutan Power Corporation Ltd. 400kV double circuit Punatsangchhu I to Sunkosh transmission line under (Package-A
Jul-14
& B) for Bhutan Power Corporation Limited, Bhutan. Total length of the line is 210 Kms.
Substations
Amargarh & Alusteng Substations at Jammu 220/132kV substations at Amargarh & Alusteng for Jammu Kashmir

Mar-11
Power Development Department, India.

Switchyard Package for Bongaigaon Thermal Power Project 400kV Switchyard Package for Bongaigaon Thermal
Dec-11
Power Project in Assam for National Thermal Power Corporation Limited, India.
Substation Package S1 for Wanpoh Substation under NRSS-XVI 400/220kV Wanpoh (New) Substation and
Dec-12
Extension of 400kV Kishenpur Substation under Northern Region System Strengthening Scheme-XVI for Power
Grid Corporation of India Limited, India.
Rural Electrification
Nashik & Pune District Rural electrification works under Infrastructure Plan (Phase-II) in Nashik and Pune Zones

May-11
for Maharashtra State Electricity Transmission Company Limited, India.

Pali, Barmer, Malkangiri, Balasore and Sarguja Districts Rural electrification works in Pali, Barmer and Sarguja
Apr-11
districts (Chhattisgarh) for Power Grid Corporation of India Limited, India.

Gumla, Simdega and Chatra Districts Rural electrification works in Jharkhand for Damodar Valley Corporation, India.
20-Mar
ACMIIL
24
SECTOR REPORT

Notes:
Institutional Sales:
Ravindra Nath, Tel: +91 22 2858 3400
Kirti Bagri, Tel: +91 22 2858 3731
K.Subramanyam, Tel: +91 22 2858 3739
Email: instsales@acm.co.in
Institutional Dealing:
Email: instdealing@acm.co.in
Disclaimer:
This report is based on information that we consider reliable, but we do not represent that it is accurate or complete and it should not be relied upon such. ACMIIL or
any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information
contained in the report. ACMIIL and/or Promoters of ACMIIL and/or the relatives of promoters and/or employees of ACMIIL may have interest/position, financial or
otherwise in the securities mentioned in this report. To enhance transparency we have incorporated a Disclosure of Interest Statement in this document. This should
however not be treated as endorsement of the views expressed in the report
Disclosure of Interest
KEC International Limited
Jyoti Structures Limited
1. Analyst ownership of the stock
NO
NO
2. Broking Relationship with the company covered
NO
NO
3. Investment Banking relationship with the company covered
NO
NO
4. Discretionary Portfolio Management Services
NO
NO
This document has been prepared by the Research Desk of Asit C Mehta Investment Interrmediates Ltd. and is meant for use of the recipient only and is not for
circulation. This document is not to be reported or copied or made available to others. It should not be considered as an offer to sell or a solicitation to buy any security.
The information contained herein is from sources believed reliable. We do not represent that it is accurate or complete and it should not be relied upon as such. We
may from time to time have positions in and buy and sell securities referred to herein.
SEBI Regn No: BSE INB 010607233 (Cash); INF 010607233 (F&O), NSE INB 230607239 (Cash); INF 230607239 (F&O)
ACMIIL
25

Transmission Industry

Hochgeladen von

Dokumentinformationen

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Transmission Industry

Hochgeladen von

Copyright:

Verfügbare Formate

1

INVESTMENT INTERRMEDIATES LTD.

Transmission Line EPC

INVESTMENT INTERRMEDIATES LTD.

Source: CEA, CRISIL

GOI thrust on power sector

Transmission Line EPC

INVESTMENT INTERRMEDIATES LTD.

Capacity addition is expected to translate to an investment of ` 9.3 trillion in power

Significant transmission lines addition & Up gradation of existing lines

Transmission Line EPC

INVESTMENT INTERRMEDIATES LTD.

North East /East

Opportunities in Global markets

Transmission Line EPC

INVESTMENT INTERRMEDIATES LTD.

Source: Source: ABS Energy research, Accenture research, Company

Third party outsourced

Third party outsourced

Source: ACMIIL Research, Company

Transmission Line EPC

INVESTMENT INTERRMEDIATES LTD.

Net Sales - FY10

Sales CAGR FY07-10

PAT CAGR FY07-10

Source: ACMIIL Research, Company

Players have registered healthy sales growth on back of investments in

Players enjoys operating margins in the range of 10% to 12%

Being a working capital intensive business, players are leveraged with

In general, players enjoy healthy return ratios of 17% and above.

Order book to TTM sales (LHS)

Source: ACMIIL Research, Company

Transmission Line EPC

INVESTMENT INTERRMEDIATES LTD.

Face Value (`)

Market Cap. (` mn)

9M FY11 - Sales Break up

52 Week High (`)

KEC International Limited

Shareholding Pattern (%)

PAT Margin (%)

Power Transmission segment

Transmission Line EPC

INVESTMENT INTERRMEDIATES LTD.

Power Distribution segment

Cables segment RPG Cables

SAE Towers (Wholly owned subsidiary w.e.f Sept 2010)

Transmission Line EPC

INVESTMENT INTERRMEDIATES LTD.

Source: ACMIIL Research

Acquisition of SAE Towers to increase presence in the US markets and to

Consolidatd order book break up

Railway and Telecom

Transmission Line EPC

INVESTMENT INTERRMEDIATES LTD.

Operating profit margins

Source: ACMIIL Research, Company

Transmission Line EPC

INVESTMENT INTERRMEDIATES LTD.

KECs strong track record and execution

Working capital intensive business

Foreign currency Risk

share of 18% to 19%

led to increased pricing pressure in the industry.