NU TEK INDIA LTD

Nu Tek India Ltd came out with a Public Issue in July 2008 at a price of 192.
The company is a Telecom infrastructure service provider offering infrastructure rollout solutions for both mobile and fixed telecommunications networks by offering services to Telecommunication Equipment Manufacturers, Telecom Operators and third party infrastructure leasing companies.
Among Telecom Equipment Manufacturers, the company clients are Nokia, Ericsson, Motorola and Nortel while amongst Telecom Operators are Tata Tele, R-Com, Bharati, Idea, Vodafone and Tata Communications. Presently, the company is executing works of Rs.137 crores for its various clients.
For FY 08 the total income of the company was at Rs.97 crores with EBITDA of Rs.32 crores, giving a margin of 33.66%. PBT was placed at Rs.30.29 crores while PAT was at Rs.21.27 crores, resulting in an EPS of Rs.15.50 on present equity base of Rs.13.76 crores. FY 08 the company has posted a growth of 50% in topline while 100% in bottomlines.
Due to rapid increase in telecom subscribers which are now at 308 million of which 269 million are wireless subscribers, service providers and equipment makers need to focus on network quality as a competitive necessity. As the company is an end to end solution provider with track record of over 12 years of project management for all type of customers with 1,083 permanent employees, enjoys a strong position in the
domestic market. The company now has estimated a capex of Rs.89 crores, of which, Rs.21 crores is for overseas acquisitions to enable the company to have overseas foothold. Also, Rs.44 crores is for capital expenditure. Though presently, the company is debt free but has Rs.50 crores, projects for Customers Under Progress and Rs.47 crores as Sundry Debtors. These are partly financed by current liabilities of
Rs.34 crores, which if curtailed, could improve the operating margins of the company, by procuring the materials at the competitive rates.

Due to huge growth potential of the telecom sector, the company should be able to have a CAGR of 40% in topline and bottomline for the next three years.

GROWING ORDER BOOK TO BOOST THE REVENUES : Nu Tek has a current order book of about 230 crores and has also recd a LOI of 700 crores from Indus Towers to be completed in about 4 years. It has also recd orders for deploying 150 sites in TN and 125 sites in Delhi. This robust order book provides visibility to the future earnings and promises steadiness in the Topline Growth.
GROWING TOPLINE AND ATTRACTIVE MARGINS:
The company has reported a 80.15% growth in PAT for Q2FY09 at Rs.9.71crs. On a equity base of 17.24 crores, Nu Tek reported an EPS of 5.63, without adding Turkey operations.
HDFC Securities expects the company to post an EPS of 22 for FY09 which means the company is quoting at a ridiclous PE of 2.3.
The Book Value of the Company stands at 93.7.
BUY

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