Srikalahasthi Pipes Bags Orders Worth Rs 1053 Crore

South-India based Srikalahasthi Pipes (SPL), formerly known as Lanco Industries (LIL), has surged around 8.7 per cent in today’s trade to hit Rs 275 on the BSE after the company has bagged orders of Rs 1,053 crore during the month of December, 2015 for supply of ductile iron (DI) pipes.

“Out of this Rs 1,053 crore, Rs 891 crore orders are for Drinking Water Supply Project (popularly known as “Telangana Water Grid”),” Srikalahasthi Pipes said in a statement. These orders are mainly from major Infrastructure companies which include L&T, NCC, Megha Engineering and Infrastructures, Indian Hume Pipes, KLSR Infratech amongst others.

As per the press release, the supplies for this project will start from the end of December 2015 and will be completed by end of March 2017. Considering the increased capacity of 285,000 tonnes per annum during 2016-17, the company is confident of executing orders in time.

Mr Rathi, director of the company, while briefing about Telangana Water Grid, informed that total estimated cost of is Rs, 37,000 crores and it is first of its kind in the country in terms of area it covers and the fund it needs. The Telangana Governent has released Rs 6000 crores in the current year budget. Further a loan of Rs. 15,000 crores from HUDCO, Rs 2,000 crores from NABARD and Rs 3,000 crores from various banks are tied up.

SPL commands 13 per cent market share in the DI pipes segment at pan-India level, its focused markets i.e. south and west zone (Andhra Pradesh, Telangana, Karnataka, Kerala, Tamil Nada, Maharashtra and Goa) where SPL’s market share is as high as around 75 per cent.

 Institutions holding increased from 0.83 per cent as on December 31, 2014 to 3.84 per cent as on September 30, 2015. Currently, the stock is trading at Rs 270.80, an increase of 7 per cent from the previous close.  At CMP, the stock is trading at 8.75 times its TTM earning per share of Rs 30.95.