Swelect Energy ltd

Swelect Energy Ltd:

Mkt Cap : 328cr

CMP: 325

FV:10

Book Value: Rs703--> Tangible Book Value excluding Intangible Assets Rs 560/-

Altman Z Score: 2.5-- Debt per share is Rs 40/- & Interest Coverage is around 4times.

Graham Number: Rs590/-

Consolidated	2018 in cr	2017 in cr
Solar Product n EPC Revenue	313	282
Amex Alloys (Foundry) Revenue	86	71
Solar Product n EPC  Net Profit	10.29	6.89
Amex Alloys (Foundry) Net Profit	.53	-1.81

	Assets	Liabilities	Working Cap
Solar	450cr	236cr	214cr
Foundry	93.5cr	11.25cr	50.98cr
Assets not deployed	450cr

Swelect Energy ltd--> Key Milestones:

Year 2012-> Numeric Power System  Sold it's UPS business to Legrand  France for Rs 837cr/-

HHV Solar integrated with Swelect Energy ltd

Year 2013, The 49 per cent equity in HHV Solar has been bought for a consideration of Rs 22 crore.

Year 2014, The remaining 51% Equity in HHV Solar was bought for consideration of Rs 27 crore.

Year 2014-2017:  

HHV Solar Technologies Ltd expanded PV modules mfg capacity to 100MV.

Ministry of New & Renewable Energy Channel Partner with SP1A Rating An ESCO empanelled company by BEE.

Successfully executed 4 MW Solar Power Generating plant EPC for Kovai Medical Centre and Hospital (KMCH) Limited.

In Trichy District, 10MW Solar Power Generating plant for SECI with a 25 years PPA.

Expanded Product base to 2 way Invertors, Solar Motor Pump, Solar Power Street Lights.

HHV's Certifications:

IMS certified-ISO 9001:2008 ,ISO 14001:2004 + Cor.1:2009, BS OHSAS 18001:2007.

IEC 61215/61730, 61701, UL 1703, CEC, MCS-BRE UK, MNRE.

Detailed Profile of the company's Solar division is as follows: http://www.hhvsolar.com/sites/default/files/HHV-Profile.pdf

Expansion in U.S:

http://www.wnct.com/news/mccrory-swelect-energy-systems-to-bring-155-jobs-to-halifax-county/1091559044

What I like is all Subsidiaries are 100% ownership of co.

Co would be in key advantage to export Solar panels to US after Chinese Trade war with U.S.

Snapshot from Co's Annual Report 2017.

Financials of Co:

Snapshots from Financial Reports of Co:

MF Investment

Key Advantages:

1. Company has been emerging has strategic EPC partner for Govt Projects with PSU such as NTPC.Where land is expensive and water bodies controlled by Govt Agencies. Swelect can emerge as strong contender with it's expertise.

https://economictimes.indiatimes.com/industry/energy/power/ntpc-installs-indias-largest-floating-solar-pv-plant-in-kerala/articleshow/57577004.cms

2. Company has strong fundamentals and enough cash to fuel growth in this sector where GOI's focus has been upmost to focus on renewable energy with World bank loans at 1-2% Interest rates.

3. India is aiming for 100GWs in Solar by 2020 which =100,000 MWs. Twice the current installed capacity.

https://www.hindustantimes.com/india-news/ray-of-hope-india-s-solar-dreams-are-big-and-bright-are-they-realistic/story-isWYOyx46jGxCRgMrIs8bO.html

4. Usage of solar panels has expanded beyond simple water heater on roof top. Solar pumps, Solar power ventilation, Solar for Outdoor lightning etc. Swelect has ventured into solar street lights and Solar Water pumps.

5. Smart Micro Grid system which 2 way connectivity will be driving force for Homes to Install Solar power. In countries like US, power charges are different at different times. Usually Homes sell their solar generated power generated during  the day time to and buy it back from grid at night time and thereby earning on their solar roof top installtion.

https://www.livemint.com/Technology/zL0gQgEdnrQ0PmI1I6NloO/Making-a-smart-energy-grid-work-for-India.html

6. Company has been steadily expanding it's presence throughout the country via exhibitions and dealer networks.

https://www.facebook.com/exhibit8ventures/posts/1356921847745663

7. Quality management and less inter promoter dealings is one of fundamental plus point to invest in this company.

 Key Drawbacks:

1. Flip Flop in GOI policy or change in Govt.

2. Slow expansion of company in U.S. and Singapore.

3. Significant chinese competition in solar panels products in India.

 Disclaimer: This is not a BUY of SELL call. This just few facts and opinion based for small Investors.