SALASAR TECHNO ENGINEERING

SALASAR TECHNO ENGINEERING - (Telecom, Power, Railway, Solar) - A company with excellent business prospects and Pricing Power

PROMOTER STAKE- 74.98%
FV-10, EQUITY-13.29 cr
ROCE- 30.5%, ROE- 19.38%
PE- 18,EPS- 16, BOOK VALUE-110
CMP- Rs 300/-

Incorporated in 2006, headquarters at New Delhi, Within ten years, Salasar emerged as the country’s leading provider of steel and infrastructure solutions, with operations around the globe. It is among the leading manufacturers of Telecom Tower in India with more than 20,000 towers since inception. The Company has three state of the art manufacturing facility located in Hapur, Uttar Pradesh.

Area Of Work
Salasar Techno Engineering  provides customised steel fabrication, infrastructure solutions for telecommunication and transmission towers (engineering, designing, fabrication, galvanization and deployment). It  manufactures and provide utility poles to our customers for different uses such as high mast poles, lighting poles, smart city poles, stadium lighting poles, flag poles and monopoles for transmission line sector. It has also started executing railway track electrification.

Clients
Salasar's excellent execution capabilities have helped them gain the trust of their clients. This is pretty much evident from a strong repeat orders from existing clients.

Amalgamation of Salasar Stainless with Salasar Techno

BOD have approved the amalgamation of Salasar Stainless with Salasar Techno
Salasar Stainless Limited is a wholly owned subsidiary of Salasar Techno Engineering and  the activities of Salasar Stainless are similar to Salasar Techno and it is basically supporting Salasar Techno in meeting the requirements for towers galvanization and other fabrication work. Salasar Stainless supplies  rigid conduit pipes which has very high margin.

The consolidated entity shall provide strategic and competitive to achieve economies of scale, greater control due to integration. Further, it will bring in administration and operational rationalization and optimal utilization of resources.

Prospects Of 5G for Salasar

We will be needing millions of radiating points. However, with 15-25% connected sites, we are not going to reach there since operators alone can’t be connecting these many sites,” said BimalDayal, CEO at Indus Towers. 

“Atleast some 2 million more radiating points required to actually launch 5G. 5G is going to travel on a lowest band of the spectrum which is about 348 hertz. And to connect effectively 5G on that spectrum, one need towers closer to each other, so there will be lot of filling sites. So from the point of 5G, there is a huge opportunity which is difficult to predict and in fact the sky is the limit as far as my experience and my knowledge goes”. – Mr Sashank Agrawal, MD, Salasar Techno

The Modi government is aiming to make a passage for high-speed 5G services in tandem with the global timeline of 2020, and has set up a high-level 5G forum with a corpus of Rs 500 crore for research and development.

Salasar Techno will play a vital role in making 5G flourish.

Pending Order Book

Pricing Power
As the prices of steel and zinc go up, Company does not expect any hit in margins, as it is able to pass on the hikes to clients on regular/fixed term Basis.

Impact on Inventory due to increase in steel price

The company does not keep any inventory before hand. It manufactures as per the order requirement, so it is basically shielded from volatility of raw material prices. So, when any EPC player places an order its always at current prices. This shows that company has a good moat and is able to pass on any hike in prices to its clients, there by giving it a competetive advantage.

“Today, telecom is in high demand at the moment, so is the transmission, so is the railway, so is the poles. As of now, the infrastructure is booming and we have a good visibility of orders for next at least 1-1.5 years” - Mr Sashank Agrawal, MD, Salasar Techno