PUNJAB COMMUNICATION Good PSU Stock To Hold

Punjab Communication (Puncom) is probably one of the only PSU companies which is debt free since 1995. Punjab Govt holds a 71.21% stake, it is a complete telecom solution provider – manufacturing and providing services. The company is concentrating mainly in the domestic telecom market and is supplying telecom equipment and services to customers such as BSNL, Indian Railways, State Electricity Boards, VSNL, ONGC, GAIL, Power Grid Corp. The company is also into making telecom equipments for the defence sector.
Puncom posted a smart net profit of Rs.1.99 crore for Q1FY10, which was over 232% higher even on a YoY. Net sales was at Rs.76.50 crore, up 16 times on a sequential basis but strangely 33% lower than Q1FY09. a tight lid on operating expenses helped. OPM was at 3.01% compared to 0.82% on a YoY while NPM rose to 2.6% v/s 0.52%.
Apart from being debt free, Puncom has free reserves of Rs.96.10 crore. Equity stands at Rs.12.02 crore.
Currently quoted at levels of Rs.21, there has always been a buzz around the stock that it might be a prime pick for PSU disinvestment. But even though nothing has come forth on this front, on its own, this PSU looks good at the current rate,thanks