Recommendation:Buy MIC Electronics for delivery upto 6-9 months. Expected Upside :More than 100% from CMP 384
Date : 25/07/2007
Business Background :- The company is mainly in LED (Light Emitting Diode) display business and have a status of monopoly in INDIA in this business.The company also caters to telecommunication industry and also make revenues from IT business.It's main focus is on LED business and also have huge expansion plan in this industry.
Future Prospects :- The company is expected to grow significantly from here in the future.The company is expected to gain from increasing expenditure for advertisements by Indian corporates,reality shows,increasing retail sector-shopping mall which also uses LED for display, the increased expenditure in the infrastructure to install digital screen for display.
The company is also looking to increase exports to USA which accounts for 45% of total global LED market,due to which it has bought out an US company InfoSTEP for Rs 20cr for 50.5 % stake in the company in a share swap deal.Company will increase its precense in USA by InfoSTEP.
The company is also in the process of developing Theme Parks in Delhi, Mumbai, Bangalore, Vishakhapatnam,Hyderabad to show events,films on digital screens.Upcoming Asian Games in New Delhi will give a boost to digital screen display in India.
Valuation :- The company has posted a net profit of Rs 18cr for the Q4 ended 30 June 2007 & revenues of Rs 123cr, net profit figure is infact equals the total for the previous three quaters for the Financial year.The EPS for the quater ended 300 June 2007 comes out to be at Rs 9.32.Company is likely to grow more than at a CAGR of 60%,but taking a safe bet if the company posts CAGR of 20%,then atleast the company should give more than 100% returns in nex 6-9 months.
There are no listed peer in India, but a US listed company Daktronics,trades at a P/E of 24,while MIC Electronics currently trades at a P/E of 10.5 which makes it as one of the best buy on CMP.
Disclaimer:-This information should not constitute or form any part of any offer or invitation to subscribe for, underwrite or otherwise acquire, or any solicitation of any offer to purchase or subscribe for, securities in India or any other jurisdiction. This Service is not intended to be any form of an investment advertisement or advice.
Although precautions have been made in publishing the content NARSINGH EQUITY does not take any responsibility of correctness,adequecy,accuracy of the matter.Investing in any securites,or other instrument is on your own risk and neither NARSINGH EQUITY nor its any of the associate members are liable to any loss accumulated by investor by investing on the basis of data available on www.narsinghequity.com,it's newsletters,SMS-based tips,etc. investment advice by us.We do not give any guarantee for definite amount of profit on any investments and you should consult your financial advisor before investments.You are solely responsible for your investments and loss or profit whatsoever.
Disclosure:-We hold a small stake in the company,and it is safe to assume that our clients.family member could have invested interest in the stock.
