Shyam Telecom re-listed at Rs 72.60 on the Bombay Stock Exchange on Monday morning. It used to be a liquid stock and last traded around the Rs 60 mark. N Kumbhat, Director of Shyam Telecom explains the capital restructuring, which has happened and the form in which Shyam Telecom has comes back into the market on Monday.
Kumbat informs that Shyam Telelink likely to be listed by mid-December. According to him, EPS for FY07 for the current business is seen at Rs 6. He further adds that the company will make cash profits in FY07.
Excerpts from CNBC-TV18's exclusive interview with N Kumbhat:
Tell us about Shyam Telelink and when that gets listed because a lot of people or your shareholders today are more interested in the services part of it, so when does it come in?
We have already moved in to stock exchanges for giving clearances and the moment we get it, I think we will have to approach Sebi for assumption under Section 19.
Since the company's public holding will be 19% and since it is an infrastructure company, we expect that Sebi will give us assumption to get it listed.
Roughly when do you expect that to happen?
Hopefully, it should be in middle of next month.
Explain to your shareholders, what would be the revenues of the residual business of the current stock, Shyam Telecom, which is listing today and on the new equity of around odd 11 crore, what could be a reasonable earning per share to expect this year from the current business?
As far as half yearly results are published, we have earning of Rs 2.80 paisa on a reduced equity and we expect it to be Rs 6 by the end of the year.
Where is the business heading of the entity that will list today in terms of an orderbook or what do you see as revenue outlook?
So far, manufacturing business was a tender driven business
In the first six months, we have supplied material worth Rs 138 crore against last whole year's topline of Rs 129 crore. So there has been 7% growth in the six months period and we hope to achieve 100% growth in the current financial year.
How profitable is Shyam Telelink at this time? Does it still have significant amount of debt on its books?
Shyam Telelink was cash neutral during financial year March 2006. In the current year, it will make cash profit. Incidentally, I would like to tell you that this is the only single circle company, which still has positive net worth.
Shyam Telecom seems to work on very thin margins, you do Rs 140 crore on sales and barely record a profit. Do you see that improving because these are very thin margins that you are operating on?
The EBITDA has been Rs 9 crore on a turnover of Rs 138 crore. So we see EPS is Rs 2.80, which will go upto Rs 6 by the year end. Our product repeater and in-building solutions are well accepted by all mobile operators throughout the country and we have got FCC (Federal Communications Commission) and Europe clearances for marketing these products in Europe and America.
Do you have any capex plans for either entities at this point. What could be the size of that?
We have already invested adequate money in Shyam Telecom to achieve a turnover in the current year for roughly between Rs 275-300 crore. We do not have to invest much capital equipments in that company.
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