I am eyeing SEL for some time. The price is merely in early 20s and the earnings for last 6 years have ranged from 4 above upto 6! and the earnings for last year came in at a whooping 13 plus! the EPS for 1st quarter already neared 2. The book value is close to Rs 70 now and its trading at a heaving discount to its BV! Although their gas turbines were closed for more than 3900 hours(166 days assuming 24 hour run) they still managed to post such great result. I have taken an entry lately and I think its available at good bargain. The only problem however is of circular debt in power sector but that is same for all. Also it has very low volumes but we all know that can change once the share comes in limelight!
So its a BUY from my side. I would also like VALUE Bhai, POKER bhai, OULMAN bhai and QADIR bhai to give their input on this scrip!
I have looked into it
FY 2012 sales increased considerably and subsequently eps as well.
9M 2012 eps was 2.83 which jumped to 13.17 in FY 12.
Now in Q1 2013, it has again posted eps of 1.90.
Cash dividend payout has decreased from 2 to 1 over the past 2 years.
Some things to look for are power purchase agreement, expected cash flows in future and dividend paying capability.
The power companies are fixed income kind of stocks with limited growth and dividend yield. In this case, the yield is on the lower side when compared to NPL, NCPL & PKGP.
If dividend and eps are expected to increase, then we can expect market price to also appreciate.
Otherwise, it will stay where it is.
To me it seemed huge jump in Q4 2012 eps was a some kind of one off effect.