SPEL Semiconductor Ltd has informed BSE that the Register of Members & Share Transfer Books of the Company will remain closed from July 24, 2009 to July 31, 2009 (both days inclusive) for the purpose of 24th Annual General Meeting (AGM) of the Company to be held on July 31, 2009.
This stock is in Trade-To-Trade segment and this is the reason for this dull movement. Also, correctly, this company being the first in this business, is not able to expand by getting more business.
Company looks stable from data. Book value has improved to 17.50. They are able to maintain the EPS even though no dividend has been given till date. Looks promising in future. I think right time to accumulate this till this is in Trade-To-Trade segment.
No harm in having 3% of you money in to this stock if you have over all investment of 10 lakhs. So 10 lakhs 3% is 30 K and this gives toy around 2200 shares. Gamble!!
SPEL Semiconductor- Govts., 200 million $ initiative may help the company
Finally it seems that govt. has braced up itself for the home made processor, dubbed as "India Microprocessor". As per the announcement made by the govt., the processor design facility would be housed in a government-owned company, proposed to be called Zerone Corporation, with an initial investment of around $200 million. So, this initiative could kick-start the much-needed high-tech manufacturing in India.
A very important constituent of chip-making technology is its assembling and testing. These two processes, are an integral part of chip-manufacturing, and keeping that in mind, the first company that comes to mind is SPEL Semiconductor.
Unlike US and China, India still does not have chip-making technology. One of the reasons behind it, is lack of clarity on Semiconductor policy. The global giants do not like uncertainty, and avoid setting up their units in countries, with unclear and unfavourable policies.
The reason behind India not being able to achieve double digit growth, is lack of inner motivation amongst the citizens and also lackluster policies of govt. The difference between China and India is so evident from the power generation capacities of the two countries. While China is able to add 1,00,000 MW power generation capacity every year, whereas India is not even able to achieve the target of 78,000 MW in 5 years.
Coming back to chip-making technology, finally it seems that govt. has braced up itself for the home made processor, dubbed as "India Microprocessor". As per the announcement made by the govt., the processor design facility would be housed in a government-owned company, proposed to be called Zerone Corporation, with an initial investment of around $200 million. So, this initiative could kick-start the much-needed high-tech manufacturing in India.
A very important constituent of chip-making technology is its assembling and testing. These two processes, are an integral part of chip-manufacturing, and keeping that in mind, the first company that comes to mind is SPEL Semiconductor.
India is one of the fastest growing market for micro chips. The micro-chip market is estimated to touch a whooping $ 315 billion mark by 2015. So, with govt. setting up a facility, there may be an increase in opportunities for SPEL semiconductors ltd., as it provides the core facilities of packaging and testing.
SPEL semiconductor limited is India`s first semiconductor IC assembly and test facility. The company does reliability tests, failure analysis, packaging of chips etc. Testing a chip is a prerequisite before releasing any Integrated circuit product to the market by the chip manufacturers. All the chips that are developed, are passed through various tests, during their entire development cycle, and after the complete testing, they are packaged in a way, so that they serve the right purpose.
Till now, SPEL semiconductor had been serving the global clients, and is basically into providing services for outsourced work. As always, India is a preferred destination in terms of outsourcing, on account of economically viable services provided by the companies here. But, outsourcing of Semiconductor Assembly & Test services, is still very minuscule in comparison to IT outsourcing.
Now, with govt. taking an initiative with an initial investment of around $ 200 million for establishing an Indian Microprocessor unit, SPEL semiconductor can benefit from it. This year it recorded revenues of Rs 81 Cr, with operating profit of Rs 21 Cr. For the last two years, its depreciation charge has increased on account of its expansion into new plants. The company is aptly leveraged with a debt/equity ratio of 0.5. As of now, the company operates as a 100% export oriented unit, but the company may exempt its upcoming new plants from that status, in order to serve domestic industry.
Only concern about SPEL is that, it provides Corporate Guarantee for the loans borrowed by M/s Natronix Semiconductor Technology Ltd upto Rs 60 Crores, as the operations of Natronix are complementary to SPEL`s business. So, one never knows, that when an unknown liability may crop up, if the company defaults on its loan payment. Overall, Investors can expect a moderate return from this company.
Results to be declared on 31st July evening....good earnings expected...current book value is 17.50 Share price can easily go upto 18 in a few trading session.
| NIFTY 
