2010VP10 SPANCO

Spanco  BSE: 508976
(16.04.2010) CMP Rs. 85.25 Market Cap Rs. 239.25 cr Book Value Rs.116.98
TTM(4Qtr) SPS Rs 364 OPS Rs. 50 EPS Rs. 17

Spanco Ltd has informed BSE that the Board of Directors of the Company at its meeting held on April 23, 2009, inter alia, has transacted the following business:
1. Board has considered and approved the proposal of raising of funds / resources up to Rs 35 Crores by offering and issue of 100,00,000 (One Crore) equity shares of Rs 10/- each at a price of Rs 35 (inclusive Share premium of Rs 25/-) per share on preferential basis to Promoters / Foreign Venture Capital Investors / Foreign Institutional Investors, in terms of provisions of Chapter XIII of the SEBI (DIP) Guidelines, 2000.
2. The Board has approved the draft notice convening an Extra-Ordinary General Meeting of the Members of the Company on May 23, 2009 for seeking members` approval for the aforesaid preferential issue of Rs 35 Crores.

The increase in stake around 71 lakh shares during May June 2009 was made by Promotors(up 3.92%), Domestic Institutional Investors(up 19.8%) and Foreign Institutional Investors (up1.9%)investing Rs 35 crore at around Rs 40 a share.
The interesting thing here is that after the overhealming pick of shares the shares moved just 100% to Rs. 86 considering only hike in stake
The improvemement in margins 5% in 2009-10 from 3% in 2008-09
the increase of over 80% in turnover (2009-10 when compared to 2008-09)
the increase of over 225% in net profit & EPS (2009-10 when compared to 2008-09)
is never built up in the stock

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Target for 2010
Tot Revenue Rs 11950 million (up 79.7%)
Op Profit Rs 1560 million (97.6%)
Net Profit Rs 601 million (300%)
NPM 5.05%
Projected EPS 21.39 Book Value 133
at CMP 91.25 M cap is 256 Cr
PE 4.3x (eps of 2010)

the stock trades at P/BV of 0.686x nd Mc/Sal 0.21x
as against peer PE 18.9x P/BV 4x of nd Mc/Sal 3x
At Projected EPS of Rs 21 for 2009-10 the share trades at Rs 86 at PE of 4.1x and below its Book Value of 133
we may expect a price target of Rs 269 by Oct 2011 at PE of 16x eps of 21 for 2009-10 considering a payout of Rs 3 per share with a bonus of 4:1

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Distribution of shareholding of Spanco 31.12.2009 Particulars Nos Qty Shares %to Cap

Indian Promoter and Promoter Group 10 105.90lakh 37.73
Freign Institutional Investors 8 35.18lakh 12.54
Foreign Venture Capital Investors 2 55.86lakh 19.90
Bodies Corporate 310 36.85lakh 13.13
Individual shareholders LT 1 lakh 6,115 17.25lakh 6.15
Individual shareholders GT 1 lakh 36 16.68lakh 5.94
Any Others (Specify) 101 12.91lakh 4.60
Non Resident Indians 78 1.84lakh 0.66
Clearing Members 21 0.11lakh 0.04
Trusts 2 10.96lakh 3.91

Total 6,661 28,065,000 100.00

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Kapil Puri to Moneycontrol

Q: Where is the growth come in from and more importantly how is your Information & Communications Technologies (ICT) business doing because that is what the analysts on the street are more gung-ho about?
A: From last couple of years, we have been focusing primarily on the government account. In the government business, the cycle is little long for getting the project as well as the execution. If you compare, last year was bad year because of all global issues. We also became little defensive in choosing the projects, especially because of the liquidity issues as well as the stretched cycle for the government accounts.
Since we worked hard on the government accounts both vertically and horizontally in different segments – that is what the results are coming now. Primarily, the focus has been the central and the state government project and largely as you all are aware that last one year government has really pushed up buying, especially in the IT segment. So that has resulted in our company getting boost.

Q: Could you give us a quantum exactly that you have got from the Orissa government account currently and also are you expecting any more orders from that front?
A: The focus was in couple of state governments. Orissa, Maharashtra, Andhra Pradesh and Haryana had been there. Orissa we have backed not only state wise area network, we are also doing their horizontal connectivity. We have also got the state data centers. We are also very close to getting state data center in states for Rajasthan and Haryana.

Q: Could you quantify this for us? How much does this sum up to exactly?
A: Each state probably would turnout to be account of Rs 150-200 crore for us whereas the numbers are concerned and then it all depends how well we do horizontally. When I say horizontally, it is moving deep into the other state government accounts, other departments in the state.

Q: What is your current order book at?
A: Current order book is quite healthy and with around 70% growth, which we have done. For the next four-five quarters we will be able to maintain that.

Q: At Rs 150-200 crore?
A: No, I am talking about the growth year-on-year (YoY).

Q: Can you throw a figure in terms of what your order book is at as of date?
A: I don’t want to comment on the numbers at this stage but our results will continue to show 60-70% of growth