SCHNEIDER ELECTRIC INFRASTRUCTURE LTD - WILL IT MOVE TO THE BIG LEAGUE ?

Schneider Electric Infrastructure , an associate company of the French Energy management conglomerate  Schneider Electric is  a newly listed  stock in our stock exchanges.This company originated by the  Areva T&D’s global take over by the Alstom-Schneider consortium and subsequent de -merger of Transmission business to Alstom and  distribution business  to Schneider.The global takeover happened in 2010 at a cost of EUR 2.29 billion.Later the high voltage business allotted to Alstom and Medium and low voltage business allotted to Schneider to align with their global status.The Indian business of erstwhile Areva T&D also shared in the same manner here.In the initial stage its name was  SMARTGRID AUTOMATION DISTRIBUTION AND SWITCHGEAR LIMITED and changed its to Schneider Electric Infrastructure Limited in December 2011. Its ultimate parent company Schneider Electric is one of the world's largest manufacturers of equipment for electrical power distribution, industrial control and automation.Its nearest rival is ABB , but if we take the growth in Asia region business Schneider outpaces  with a 21%sales growth compared to 5% of ABB. Even in other parameters too Schneider showing better prospects as in the case of operational  margins for low voltage business where its is 20.5 % for Schneider and 16% for ABB (Asian business) .At present Schneider’s revenue share from Asian region is about 37% and it is growing very fast mainly due to some aggressive acquisitions made in last few years. In India , parent company made some big ticket acquisitions in recent past which includes Conzerv Systems, Meher Capacitors, Zicom's electronic security systems integration business(Rs.225 Cr),Uniflair India, APW President Systems( Rs.70 Cr approx.),Digilink(Rs.500 Cr) and Luminous ( Rs.1400 Cr)..etc.These figures clearly indicates their commitments to India . Coming back to the business of the listed entity ,it is in MV/LV Distribution business which includes Protection relays , control panels and other accessories.Even if there is some slowness in power generation and distribution policies by government in recent times , we all know there is huge scope remaining and it is inevitable in a country like India.I believe , with superior technology ,aggressive marketing strategies and vast experience Schneider having big opportunity in India for their Distribution business going forward.For the nine month ended December 2011  Schneider Electric Infrastructure posted a turnover of Rs.1054 Cr and a net profit of Rs.33Cr .In the latest December quarter alone it  posted a sales of Rs.409 Cr and a net profit of Rs.18 Cr .Margins are not great  at present but it is expecting to improve after the full control  of Schneider in the management .SEIL listed last week and this FV Rs.2 stock is currently trading around Rs.70/- .I feels the major selling happening in these days are from some Institutional share holders. As a matter of policy ,generally some funds/institutions are not interested to hold de-merged pieces and this may be an offloading because of this reason. I strongly believe whenever this supply ends this stock will move to the next level  and may turn as a dark horse in coming years.Risk takers may enter in it @CMP of Rs.69.60/- and hold for long term.With effect from,  April 3, 2012 this will come out of ' T ' group and shifted to 'B' Group.

* Since it is a newly listed stock ,only limited information is available now

* Disc: I have vested interest in SEIL

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/-