Hotchips - SIEMENS & NAGARJUNA CONSTRUCTION

SIEMENS  BSE Code: 500550   Volume: 26000   CMP: Rs 808.35

With strong order inflows during the year, Siemens presently has an all-time high order book. The order backlog at the end of Sept ’10 stood at Rs 13500 crore. Order inflow for the current year is registered at Rs 12000 crore. Order book to sales presently stands at 1.5 times. In the current year, the company received two mega orders, namely, Qatar Transmission and Torrent Power repeat order. With PGCIL’s FPO in place, we expect higher capital expenditure by the company, and hence, all key transmission players are expected to benefit. Siemens is one of the key players in the medium and high-end voltage transformer segment. With increasing interest in the renewable market in India, Siemens has entered the Indian market. Siemens intends to invest Euro 70 million in the first phase for the Baroda project, to set up a 250 MW manufacturing capacity. The stock can be looked at for medium to long-term perspective.

NAGARJUNA CONSTRUCTION   BSE Code: 500294  Volume: 34000  CMP: Rs  140.20

Nagarjuna Construction Company (NCC), an important diversified construction player has a presence in building & housing, water & environment, irrigation, transportation and electrical. Its order book has growed from Rs 7300 crore in FY07 to Rs 16075 crore as of 30th Sep 2010. Its rder book to sales ratio is 2.92 times, which gives revenue visibility of more than two years. Currently, NCC has 2 annuity and 3 toll road projects. Out of the its 5 road BOT projects, 2 (Brindavan Infra and Bangalore Elevated) are operational and remaining 3 are likely to be operational by the end of FY11. NCC has emerged the lowest bidder for 4 laning the 163.5 km stretch of Ranchi-Rargaon-Jamshedpur section of NH-33 in Jharkhand worth Rs 15 bn on BOT annuity basis under NHDP phase-III project. The stock can be looked at for medium to long-term perspective.