The Hindu Business Line : Surana Tele zooms on BSNL order hopes

THE stock of Surana Telecom Ltd has been making waves on the bourses even though the counter remains in the trade-to-trade segment. It eased by 4.62 per cent on Monday, but during October so far, the stock has recorded a gain of around 43 per cent in terms of closing prices.

After announcement of its July-September quarter results on October 18, the stock registered its 52-week high on the BSE at Rs 70.50 on October 19. This is in sharp contrast to its 52-week low of Rs 14.75, barely four months ago on June 23 last.

A section of market players is understood to be betting on the stock expecting the company to bag an order for 2.67 lakh CDMA fixed wireless telephone sets from BSNL shortly. The results of the BSNL's open bidding for 10.5 lakh such sets are expected to be made known by next week. According to market sources, there is strong possibility of the company finishing as L3 or L2 bidder after the technical evaluation is over.

As per the tender terms, L3 and L2 bidders are supposed to get an order for 25 per cent of the total number of sets.

Mr Narinder Surana, Managing Director, confirmed that after evaluation of the financial bid, the company's bid, jointly with LG, was placed on the fourth place, but declined to comment on the probable final outcome after the technical evaluation.

In the last two years, Surana Telecom-LG partnership had bagged major orders from BSNL, which helped Surana to post sparkling bottomline growth.

In the quarter to September 30, 2004, the company recorded an 859.89 per cent jump in PAT over the corresponding period last fiscal. The first half EPS in 2004-05 has shot up to Rs 4.68 from Rs 1.17 as on September 30, 2003.

According to market analyst Mr Mathew Easow of matheweasow.com, the EPS is expected to touch Rs 10 by the end of this fiscal. The Rs 30-crore expansion project for manufacturing cum assembling of telecom sets including SMPS battery chargers is set to further increase sales and profits in the second half, Mr Easow felt.

The debt-free Hyderabad-based Surana Telecom transformed itself from being a telecom cable company with interest in jelly filled and optic fibre cables to telephone handset assembler and equipment manufacturer.

Its big breakthrough was orders worth Rs 116 crore from BSNL and MTNL for the supply of CDMA-based fixed wireless telephones in the fourth quarter of the last financial year. It commenced the execution of another BSNL order worth Rs 70 crore from July 2004 onwards, Mr Gaurav Dua of Anagram Stockbroking pointed out.

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