Saturday, May 15, 2010

VELJAN DENISON Ltd - An unknown Gem

As in the case of Tasty Bite one year back ,some companies are
silent performers overlooked by investors and analysts community.
When such a company identified by some strong hands it will move
like rocket and multiplied in few trading sessions. Veljan Denison
seems to be such a company ,unknown to most of the investors.
Veljan is formerly known as Denison Hydraulics . This Company
is located at Hyderabad and promoted by Sri. V C Janardan Rao.
Mr Rao,is a qualified and experienced Engineer with
specialization in the area of Fluid Power.Weljan has promoted
with technical and financial assistance of Abex Corporation,
USA .In 1987 parent company ie, Abex corporation transferred
their interest in the Hydraulic Division to M/s. AB Hagglund & Soner
of Sweden and since then the Hydraulic Division came to be know
as Hagglunds Denison worldwide .This Swedish company is still
holding 13% shares in Veljan through Incentive Fastighet A B.
Indian promoter is holding 73.10% stake .This makes the total
promoter holding is 86.1% in this tiny capital company with total
capital of just 1.8 crore.This low equity base may be a reason
for the overlooking of investors towards this wonderful company.
Later the name of Indian company changed to Veljan Denison to
reflect the interest of Indian promoter too .

Denison is a well known name in hydraulic Industry. Its products span across Hydraulic Valves,Cylinders,Vane pumps and Pneumatic equipments.In reality this small company is the only one listed player offering a product list of more than 200 products related with hydraulic and pneumatic sectors.We may have another listed players like Kirloskar pneumatic,Atlas Copco,Yuken India,Dynamatic technologies ..etc making these type of products .But none of this single company offering this much products under single fold.Company is producing these products from its three manufacturing units in an around Hyderabad.Veljan has its own in-house R & D for product development , enhancement and expansion of product range.Growth of company’s products are closely related with the growth in industrialization. After a not so good year due to recession ,now company is returned to strong growth path.Company’s Financial year ending is in September.Last FY ,Veljan posted a turnover of Rs.41 crore net profit of Rs.4.46 Cr.and an EPS of Rs.26/- .After this bad performance of last year now in half year March itself company already posted an EPS of Rs.20/-. In march qtr itself Veljan posted an EPS of Rs.11/- v/s Rs.3/- in last year same qtr.In September full year it is expected to post an EPS more than Rs.50/-.Notable point is that ,company’s performance is improving steadily in each year(except last year).Company also increasing dividend payout and last year paid 50%on FV 10 shares.Its share price is now ruling around Rs. 375.Five year high is Rs.1044/ - touched in 2007 and lowest is Rs.160/- in last bear phase of 2009.Even from current level this may surprise,which is now trading at a P/E of 7 to the expected full year EPS v/s industrial average P/E of 30.


  1. Excellent post buddy.......sincerely appreciate your ability to find Hidden gems consistently.




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