Kotak Securities has maintained 'Reduce' on Alstom T&D India with target price of Rs 187 as against the current market price (CMP) of Rs 203 in its report dated Nov. 16, 2012.
The company's profit missed our expectations by a wide mark. The company clarified that revenues have slowed down as clients especially private utilities are facing issues like land acquisition and cash crunch. The company is responding by controlling its despatches to such projects lest having cash stuck in slow- moving projects.
While order intake has been healthy, the business outlook is yet to improve materially. Pricing continues to be under pressure.
The company had announced an open offer for the balance 26% public share outstanding at a price of Rs 187. Due to certain technicalities, the tendering date has been postponed. Due to the ongoing open offer proceedings, the stock may remain range-bound and move depending upon the announcements related to the open offer.
It value the company at 27x FY14 in line to the trading multiples for Siemens and ABB. It maintained Reduce on the stock.
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