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The stock of A2Z Maintenance & Engineering Services crashed 72 per cent in the last one year. This engineering procurement and construction services company, which operates in the power distribution space, has seen its stock slide since its listing in December 2010. High asking price during the IPO and presence in multiple unrelated businesses dragged the stock price post listing.
A2Z started off as a facility management services provider and then moved in to installing power distribution lines and sub-stations.
With the power distribution space in the country languishing, thanks to slower power generation, this sector has been de-rated by the market. A2Z too, appears to have been given a similar treatment. At the current market price, it trades at 7.6 times its consolidated trailing earnings, down from about 30-31 times at the time of its IPO. Its order book, at Rs 1,397 crore in the power space, is 1.1 times its consolidated FY-11 sales.
A2Z allocated majority of the IPO proceeds for its biomass plants totalling 60 MW. The company has, since its IPO, signed power purchase agreements for these projects. But the projects have been facing delays. Sales for the quarter ended September 2011 stood Rs 204 crore and net profits at Rs 8.4 crore.
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