Friday, May 20, 2011

APW PRESIDENT SYSTEMS - A DARK HORSE IN MAKING ?












APW President Systems is a mid size IT  Infrastructure company manufacturing standard and customized enclosure systems.Other than IT,company's products are used in sectors like Telecom and Electronics.Company having three manufacturing facilities in India located at Pune,Bangalore and Puducherry.Company's main products includes Server Rack's ,Networking Racks,Industrial Cabinets,Street Side Enclosures..etc.Company also exporting its products to various countries includes USA ,UK ,Australia ,Middle East countries..etc. APW manufacturing these products in Standard size and Customized form.APW entered various technical and marketing alliances with various foreign companies like Avocent Corporation,United Technologies,Vette Corp...etc.Company's products have good prospects considering
Indias untapped rural market for IT infrastructure ,Power..etc.                                                       
                                                                             In a landmark development which may change the entire fortune of the company ,recently French major Schneider Electric bought 75 % of APW Presidents systems from its Indian Promoters and through open offer. This deal happened @ Rs 195/- per share. Even if Schneider Electric made aggressive acquisitions in India in last few years - which includes part of the security solutions business of Zicom Electronics and Digilink business of  Smartlink Networks - acquisition of APW is the only buyout of a listed company . In all other cases Schneider bought only the assets of listed companies and not the company in full.There may be even a chance of integration of these companies in future .In such a case , either a de-listing offer for APW or a merger of other companies with APW can be expected. Even if such an integration not happened , Digilink's requirements for enclosures may be sourced from APW , being both companies are owned by the same parent. The money power ,managerial expertise and large share of business of Schneider  will surely benefit APW going forward.The old management including MD steps down and new nominees of Schneider appointed this week in APW.Company posted a loss in December qtr and back to black in latest March qtr. I think ,the loss posted in December was the effect of a balance sheet cleaning just before changing hands. Open offer by Schneider was @ Rs.195/- and and its share price moved from Rs.135/- to Rs.195/- on the news of Schneider's acquisition . Now it corrected to Rs.140- 145 level.Considering the strength of the MNC  parent  and its aggressive growth plans , APW President Systems may turn as a dark horse, provided that the parent company is not doing any foul play to de-list it at cheaper rate. Chances are very rare for such a play considering the reputation of Schneider. CMP is around  Rs. 145/-



11 comments :

  1. DEAR SIR,
    REQUEST TO ANSWER MY QUESTION POSITIVELY AS ALWAYS YOU DO.

    SHOULD WE KEEP BOOKING PROFIT OR WAIT FOR SOME YEARS PER SCRIPT AND THEN TO BOOK PROFIT? AT A LONG TERM, WHICH WAY WILL BE BENEFICIAL????

    AS WE KNOW, UR SCRIPT ARE WORTH TO HOLD.
    PLZ GUIDE SIR, DUE TO UR EXPERIENCE.

    -URS SINCERELY-
    KMD

    ReplyDelete
  2. DEAR KMD

    I THINK TWO INVESTORS ARE NOT ALIKE .EACH AND EVERYONE HAVE THEIR OWN STYLE AND EXPECTATIONS. SO NOT EASY TO GENERALISE.IF YOU ASK ABOUT MY OWN METHOD, I AM SELLING A SCRIP IF I FEELS THE GROWTH OF A COMPANY ENDS OR THE PREVAILING MARKET PRICE IS REFLECTING A PRICE WHICH CAN'T BE JUSTIFIED WITH THE GROWTH IN A REASONABLE TIME IN FUTURE.SHORT TERM MARKET SENTIMENT IS NOT A FACTOR AFFECTING DECISIONS.

    ReplyDelete
  3. Kindly give your view on event that the company initially decided to take 55% from existing promoters and 20% from minority holders. But subsequently they took all 75% from promoters .... what this may imply?

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  4. Earlier Schneider announced that if they didn't get the stipulated 20% through open offer they will acquire the balance shares from promoters itself to make it 75%

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  5. DEAR SIR
    THERE IS A GROWTH STORY IN AGRO-FOOD PROCESSING-MFG.-TREADING BUSINESS IN INDIA. BUT I M LITTLE CONFUSE ABOUT POCHIRAJU IND. POCHIRAJU IS PROFIT MAKING, WELL ESTABLISHED, LOW DEBT COMPANY. I HAVE SHARES ALSO. BUT I HAVE NO PROFIT IN IT. WHEN I BUT IT, I THINK IT AS MULTIBAGER. I EARN MUCH FROM YOUR PICKS. AND I ALSO READ ABOUT THE VIEWS ON AGRO-FOOD BUSSINESS OF YOU. PLZ TELL ME THAT THERE IS ANY THING WRONG IN POCHIRAJU?

    ReplyDelete
  6. Hi Valuepick...I really like your recommendations...would like to bring to your notice some other interesting stocks.

    What do u think about these shares:
    Gemini communication
    Himalya international
    PSL
    Lakshmi energy and foods
    taneja aerospace

    ReplyDelete
  7. Value sir,
    Do you track Easun Reyrolle? Seems like a good bet and fundamentals at current levels.

    Pls let us know.

    ReplyDelete
  8. Schneider would surely have plans to delist the company. Even HP plays foul with Mphasis.

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  9. I am bit skeptical about the management of Pochiraju

    ReplyDelete
  10. PSL and Taneja having potential not tracking the rest

    ReplyDelete
  11. what about Easun Reyrolle. Any idea?

    ReplyDelete

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