AREVA - LOOKS POSITIVE

Areva-Set To Expand Capacity, Projects A Positive Outlook

Belying slow-down fears Areva T&D India will be shortly commissioning three new facilities in India. Involving an investment of Rs 700 crore, these facilities are coming up at Padappai and Hosur in Tamil Nadu and Vadodra in Gujarat by March 2009. With the expansions in place Areva would be able to double its Revenues over the next three years.

Investors would note that even with all expansions proposed in the XIth plan, the average power deficiency in the country will exceed 10 per cent and in certain States and Cities it could be as high as 16 per cent. With Government under-taking most Transmission and Grid Expansion, the possibility of order slow down seems negligible.

Despite the foggy economic scenario there was no slow down in tenders in the utilities side of the business, though load in distribution transformers could be hit due to the downturn in the infrastructure sector, the power transformer business would continue its growth trajectory. There are indications that the T&D industry, which was roughly growing at 20 per cent, may maintain its growth rate.

Areva T& D has an order book that exceeds at least one year of Revenues, thereby provding earnings visibility. The company, even during this slow down has not witnessed any major deferments that could disturb its revenue stream.
AS Hameed

Visit http://equityadvise.blogspot.com for Detailed indepth Stock Analysis by Me.
The blogger is not responsible for any loss arising on account of transactions done on the basis of recommendations/opinions published here. You are advised to consult your Advisor before taking any decision.