MULTIBAGGERS - SPML INFRA

As promised I am disclosing what I think will be a multifold return yielding stock in the years to come from CMP (current market price).
The name of the company is SPML INFRA (Formerly known as Subhash Projects and Marketing Limited.

Company website: http://spml.co.in/aboutus/profile.htm

1. 
   COMPANY OVERVIEW
   The Company operates in the field of water, power, environment, infrastructure, manufacturing and technology. The Company has four business segments: construction, wind power and others. Construction segment consists of execution of projects. Wind power segment consists of electricity generated from wind farms. Hydro power generation consists of electricity generated from hydel projects and buying energy from seller/surplus power producers, and selling to buyer/ deficit state utilities. Others consist of manufacturing of pipes, management of waste, other utility management and trading activities. The Company's subsidiaries include Neogal Power Company (P) Ltd, Awa Power Company (P) Ltd, Luni Power Company (P) Ltd, SPML Infrastructure Limited, IQU Power Company (P) Ltd and SPML Industries Limited.
   SPML Infra Limited (formerly Subhash Projects and Marketing Limited) is a leading Infrastructure Development company with over 30 years experience in the public as well as private sector. SPML was incorporated in 1981 and listed as a public limited company in August 1983. An ISO – 9001: 2000 certified company. It has offices in Kolkata, Delhi, Mumbai, Bangalore, Chennai, Jaipur, Patna and Guwahati.
   SPML is a single source solution provider for various multi disciplinary engineering and infrastructure services from conceptualization to maintenance in Water, Power, Environment and Infrastructure projects.
   Having established it’s leadership in the contracting business, SPML has proven business capabilities in the Water, Energy, Environment and Infrastructure domain, on a Public Private Partnership (PPP) & Build-Own-Operate-Transfer (BOOT) basis. SPML Group is developing infrastructure projects with projected investments worth Rs.150 Bn; USD 3.7 Bn.
   
   
   MAIN FORAYS OF THIS COMPANY
   
   1. WATER INFRASTRUCTURE
   
   
   We are all aware of the significance of water in our day to-day activities. There is alternate source for hydro-power (like biofuels, wind energy, solar energy) etc, but you cannot substitute the consumption of water in our daily life, be it for drinking, irrigation etc. It is only going to get more and more important in future. SPML provides turnkey water management solutions – Headworks to Distribution System – comprising aspects such as canals, irrigation network, hydrology, reservoirs - storage facilities and distribution; components such as intake water, weirs, pumping machinery, pipeline works, pipeline distribution networks and associated civil works They have gained commendable expertise in Portable water, water pumping stations, water treatment plans, Public water supplies, Effuent Treatment Plants, Sewage Treatment Plants etc.
   
   Their accomplishments are clearly mentioned in the following link http://spml.co.in/business/epc/water.htm (Go to Signature Projects section)
   
   2. POWER SBU
   
   It’s a known fact that INDIA is a power-hungry country and to satiate the needs all forms of power generation is given significant importance.
   
   Check http://spml.co.in/business/epc/power.htm and there is nothing much I need to explain.
   
   3. INFRASTRUCTURE SBU
   
   Check http://spml.co.in/business/epc/infra.htm for infrastructure details.
   
   I don’t think I should add anything more since our country expenditure for Infrastructure is a long-term story and this is one player which will benefit in great way.
   
   4. ENVIRONEMENT SBU
   
   Again more than me explaining anything this link will provide more detailed info
   
   http://spml.co.in/business/epc/environment.htm
   I feel this is the future since environmental issues will always be a major factor going forward especially so for developing nation like ours.
   
   5. OTHER BUSINESS
   
   THE COMPANY ALSO HAS FORAYED INTO MANUFACTURING AND MINING RECENTLY and I have seen their factory in Karnataka. I am quite impressed by their management and they seem to be open to any queries or suggestions.
   
   http://spml.co.in/business/others/manufacturing.htm
   
   http://spml.co.in/business/mining/mining.html
   
   6. TECHONOLOGIES
   
   http://spml.co.in/business/others/technology.htm
   
   Technology is their latest foray and as an example for this the electricity bill that we receive in Karnataka has their stamp on it (they cater to all electricity boards in Karnataka).
   
   
   COMPANY'S FINANCIAL RECORD SO FAR:
   
   Coming to the company’s financials, it has shown great and consistent profitability YOY and QOQ too.
   
   
   For more detailed earning report click here http://spml.co.in/mediaroom/press.htm or you can also check BSEINDIA.COM
   
   
   
   WHY I AM INTERESTED TO INVEST IN THIS COMPANY:
   
   The very fact that the company is sure winner in its segment and its competitive excellence has made me choose this stock among all other infra plays. Its growth on consolidated basis is expected to be 13-15% in FY11 given its strong order book and its execution efficiency, operating and net profit growth will also be much higher (expecting it to be around 28-30% and 40-50% respectively). The PAT margins will also be good going forward and the management expects revenue contribution from Water Management alone will increase to about 70-80% which again will improve operating and PAT margins since water management offers better margins than any other infra play (Ex: power). Strong Order book of above 45 billion (on consolidated basis) and many such live projects provides us a very good earning visibility for next 2-3 years atleast.
   
   I don’t want to compare with its peers like IVRCL etc mainly because SPML is unique as well as very diversified and even a peer comparision clearly reveals that its trading at lesser P/E than IVRCL, NAGARJUNA Constructions etc. Primarily this seems to be because of lack of brokerage coverage and neither this company is shown 24 x 7 on any channel unlike many of its peers.
   
   CONCLUSION:
   
   Since it is hidden from many major broker firms, it is good to accumulate with a longer frame in mind. Personally, I have started accumulating this scrip at every dips and will continue to do so for the next two quarters.
   
   I expect this to give at the least 5 times returns in the next 2 years frame and considering that the CMP is 274, I see it to break the 1000 levels by June 2012.
   
   Remember to hold on to this gem and add more if market provides any further opportunities before any major broker firm covers this.
   
   
   Always Remember RJ’s words:
   Look at the sources of Profits. What are the reasons that will give rise to Profits in the medium and long-term term.”
   Look at the factors and circumstances that will create an opportunity for business in the sector.
   If it’s cheap, buy it- Don’t pass up something cheap today in the hope that it will get cheaper tomorrow:
   
   JUST KEEP ON ADDING IN SMALL QUANTITIES IF YOU ARE A LOW-RISK TAKER INVESTOR AND OVER A PERIOD OF THREE YEARS DON’T FORGET TO THANK ME.
   
   ONE VERY STRONG POINT: THE REVENUES MIGHT BEAT EVERYBODY’S EXPECTATION ON THE HIGHER SIDE IN FY12 (reason is simple all its latest forays will be contributing significantly by then).
   
   THE LONGER YOU HOLD THIS COMPANY, THE MORE MULTI-FOLD BAGGER IT WILL BE.
   
   
   Disclaimer: Investment in equity shares has its own risks. Sincere efforts have been made to present the right
   investment perspective. Do your own research before you invest, not after investing. I can only guide/share but cannot guarantee 100% targets. It's up to the individual to take a call on what I suggest. As far as I am concerned, I will be investing in all/many of the stocks I recommend.