Moser Baer may give short term gains at the current prices

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Moser Baer

Moser Baer manufactures optical discs
Moser Baer manufactures optical discs | Source

Short Term Gains Possible


Q1 results slightly better

Optical storage media company Moser Baer’s Q1 ending 30.06.11 is slightly better compared to Q4 ended 31.03.11. Revenue increased from Rs.458 crore to Rs.545 crore. Net loss was pruned from Rs.131 crore to Rs.92 crore. Operating profit margin rose from 2.33% to 9.86%. Net margin is in the red but it has improved. The shares of Moser Baer are traded in the stock markets at Rs.21.55 now. The company was hurt by the increase in the commodity prices. Cost of materials like silver, plastic, poly carbonate and fuel have increased. The company hopes to achieve a breakeven at the end of the current fiscal year. If we compare the results of Q1 with the corresponding period of the previous year, the company’s performance has come down. It posted a net loss of Rs.92 crore as against Rs.88 crore in the corresponding period of the previous year. There are indications of the company returning to profitability in another two to three quarters. Price increase on storage media products has been effected from June and this should get reflected in better results in Q2 ended September. Volumes of the company are also increasing due to better demand-supply scenario. The company has effected a 15-20 per cent price increase for its products in June and another 5-7 per cent increase in July.

Commissioning of solar project in Britain

Moser Baer Clean Energy had commissioned a 5 MW solar power project in Britain in partnership with HEP Capital at an investment of 15 million pound sterling (Rs.110 crore). It was commissioned at Trefullock in Southern England. The unit will generate five million units of clean energy every year. It is spread over 18 hectares. This is the first time an Indian company has acquired a solar power plant in Britain. Moser Baer has operating power plants in Italy, Germany and India apart from Britain. The company is also constructing several other power plants.

USB drive models

Moser Baer has introduced a new multipurpose 4 GB USB drive models. The models are water resistant and can be used to stir coffee also. The inaugural price is Rs.345 per piece. The USBs Ace, Nimble and Crescent make use of Chip-on-Board (COB) technology, weigh only 3 grams and possess data transfer speed of 15 mbps. They have a five year warranty and can be used in several operating systems like Linux, Macintosh and Windows 7. The company is confident of garnering further 3-5% of USB market in India. Moser Baer has a market share of 14% currently. The company is also in the process of launching higher capacity memory sticks. The company receives an annual turnover of Rs.200 crore from USB solid space media. Exports contribute 70% of the sales turnover of the company. The company’s chief competitors are Transcend, Kingston and SanDisk.

India’s largest maker of solar cells

Moser Baer is also India’s largest maker of solar cells. It has plans to commence India’s biggest solar power plant with capacity 30 MW in Gujarat soon. The plant directly converts sunlight into electricity using semiconductors. The project involves using thin film panels that are coated with a layer of semiconductor material to absorb sunlight. The thin film devices are supplied by First Solar Inc, world’s largest maker of thin film devices.

US partnership with Munro

Moser Baer announced fund raising of Rs.580 crore from Macquarie SBI Infrastructure Fund. The investors have acquired a minority stake in the company’s 2520 MW thermal power project in Anuppur in Madhya Pradesh State. The company has also a private company in its arm by name Moser Baer Projects Pvt Ltd. Another company Moser Baer Solar Ltd has entered into a partnership with Munro Distributing Company Inc of US for distributing its solar photovoltaic modules. The company anticipates revenue of $7-10 million from this partnership every year. The partnership covers residential and commercial segments. Munro has 11 locations in four States in USA. It will offer Moser Baer’s multi crystalline silicon solar modules and use them to design commercial turnkey solar PV systems for its customers. The US market is likely to witness a growth from 1 GW in 2010 to 3 GW in 2012. There was an increase of 16 GW of new solar PV installations in 2010 worldwide.

Building integrated PV technology in Hyderabad

Moser Baer Solar Ltd has commissioned a building-integrated PV technology led solar application in Hyderabad. It converts glass windows, front facades, exteriors and other building integrated applications into solar panels, which capture sunlight and convert them into the desired power. Moser Baer has used this technology for the first time. By avoiding conventional materials, Moser Baer has reduced the cost of PV. The Jubilee Hills shopping complex in Hyderabad has been converted into solar panels to erect a 1.8 kWp solar application by using this technology. These panels will generate electricity to produce power needed for the shopping complex.

Foray into web security

Moser Baer has forayed into information and web security segment where the company will offer indigenous solutions covering design, development and manufacturing. The new venture is an extension of Moser Baer’s solid state storage business. It will result in higher margin for the business and also complement the company’s existing standard storage products. Moser Baer has tied up with Giesecke & Devrient as technology partners to power the data security foray. Moser Baer will design and develop these solutions from its Noida facility. Initially, Moser Baer will have in its product portfolio end-to-end data security solutions namely ‘authentication keys’, licensing tokens’, ‘mobile solutions’, and ‘secure storage’. The solutions will be provided through normal software, microSD cards, SD cards and USB pen drives.

Partnership with US company

The Board of Moser Baer approved issue of Foreign Currency Convertible Bonds (FCCB) for $125 million. In the beginning of the year, Moser Baer Technologies Inc, a subsidiary of Moser Baer and Universal Display Corporation entered into a MoU technology licensing, material supply and technology assistance to support its efforts in OLED lighting. Universal Display Corporation is a Nasdaq listed company. The two companies received $4 million from US Department of Energy to design and build the first white OLED lighting pilot manufacturing facility in the US. According to the agreement, Moser Baer will licence the American company’s proprietary PHOLED and other OLED technologies and purchase its highly energy efficient PHOLED materials for white OLED panel manufacturing. The two companies will also collaborate to support Moser Baer’s manufacture of white PHOLED lighting products.

Buy the shares for short and medium term

Moser Baer has become the world’s second largest manufacturer of blank compact discs. The top place is held by Taiwan’s RITEK Corporation. Considering the technological strength of the company and the fact that its shares are being trades at low price right now, it can be acquired at the current price and at every decline for short and medium term holding for decent returns.

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