Diamond Power Infrastructure

Hello friends, I wish to know about future of Diamond Power. I am holding this stock since June 2014. I bought around Rs. 120.00. It went upto 140, then slowly came down to the current level. I have given some details about the company (Copy paste from Money control & Economic Times) Seek your advise, whether to hold or switch over to some other Infra stocks.

CURRENT MARKET PRICE RS. 39.60

EQUITY (RS CR) 58.14

MARKET CAP (RS CR) 213.84

BOOK VALUE (RS) 172.12

INDUSTRY P/E 26.12

TOTAL DEBT (RS CR) 1272.48

2014 DIVIDEND 10%

LAST BONUS IN 2013 @ 1:3


About Diamond Power Infrastructure Ltd


Diamond Power Infrastructure Ltd., incorporated in the year 1992, is a Small Cap company (having a market cap of Rs213.84Cr.) operating in Cables sector.

Diamond Power Infrastructure Ltd. key Products/Revenue Segments include Cables which contributed Rs 1485.74 Cr to Sales Value (45.11% of Total Sales), All Aluminium Alloy Conductors (AAAC) which contributed Rs 738.91 Cr to Sales Value (22.43% of Total Sales), Transmission Line Towers which contributed Rs 541.17 Cr to Sales Value (16.43% of Total Sales), Transformers which contributed Rs 527.41 Cr to Sales Value (16.01% of Total Sales), for the year ending 31-Mar-2014.

For the quarter ended 31-Mar-2015, the company has reported a Standalone sales of Rs. 360.59 Cr., down -36.79% from last quarter Sales of Rs. 570.46 Cr. and down -69.43% from last year same quarter Sales of Rs. 1179.40 Cr. Company has reported net profit after tax of Rs. -184.39 Cr. in latest quarter.


Year 2012
The company received of orders aggregating 35 kms for Extra High Voltage Cables for ratings of 66.132 & 220 kv.

Receives order for supply of 108 Power Transformers aggregating Rs. 48.3 Crores Type Tests Power Transformers and commences production for Power Transformers.

Inauguration of Ultra High Voltage Laboratory".

Diamond Power Infra sets up cable testing lab at Vadadala

Diamond Power acquires strategic stake in Power and Control panel maker

Year 2013

Diamond Power Infrastructure approves Allotment of Bonus Shares in the ratio of 1:3 . Diamond Power Infrastructure recommended Dividend of Rs. 1 (One Rupee) per equity share of Rs. 10/ each (@ 10%).

Year 2014

Diamond Power Receive Accredition for its Testing Facilities from NABL.India". Diamond Power Infrastructure has bagged an order worth Rs 68.17 crore for supply of Transmission Towers. Diamond Power Team produced India’s first 400 KV, 2000 sqmm power cable, joining the club of a very few manufacturers in the world.


Year 2015


Article was published on March 2, 2015 in Business Line

Officials from the Central Excise Department on Monday arrested Amit Bhatnagar, managing director of BSE-listed Diamond Power Infrastructure on charges of alleged excise evasion. Officials of the Vadodara region of Directorate General of Central Excise Intelligence produced Bhatnagar in a Vadodara Court to seek his remand on Monday.

After being produced in the Lal Court in Vadodara by the Excise officials, Amit Bhatnagar was granted bail.

https://www.thehindubusinessline.com/companies/diamond-power-md-arrested/article6952146.ece



Article was published on March 3, 2015 in Business Line

With reference to the News Item appearing in newspaper dated March 03, 2015, regarding "Diamond Power MD arrested", Diamond Power Infrastructure Ltd has Clarified to BSE that :

"We wishes to inform to our stakeholders that the Company has not received any such Demand Notice, letter or any correspondence for the said matter from the Department of Central Excise for evasion of duty, CENVAT or any other matter relating to Tax.

Further, Managing Director of the Company was detained by the Department of Central Excise without issuance of any such Notice and was released on the Bail of Rs. 25000/-.
We would like to ensure to our esteemed stakeholders that there is no any evasion of duty whatsoever it may be on the part of the Company and the case is subjudice, hence, any further comment will not be appropriate and we have full faith in Indian Judiciary."

https://www.thehindubusinessline.co...ers/clarifies-on-news-item/article6954791.ece

Recent Export order

Received an Export Order for Supply Cables worth USD 14.5 MN for Iraq".The order is for supply of 4600 kms of Aerial Bunch Cables to Iraq.

 

I think the stock is beaten down because of poor results (loss making last year) and issues with promoters getting arrested for fraud etc. There are better companies out there which can give you returns in the similar space with better management. Since you are losing almost 66% from your holding, I would say hold it or average it. Then exit on a rally.

 

Look at the total debt of the company versus its market cap. You can clearly make out that anything they would earn would go into servicing interest payments. Even if you put aside the quality of management for a second you could still see that unless the company does some restructuring with its debt it would continue to suffer from interest costs. If the quantity bought by you is small, I would suggest you booking a loss and exiting. Else I also agree with @dineshkapoor27 that you could average it and then sell it on a rally.

 

Diamond Power infrastructure is a good and well known company ,amit bhatnagar diamond power infrastructure md is a nobel man and he is good in his works and social working also and atmosphere of company is also cool.