ROTO PUMPS - BUY

Company                  : ROTO PUMPS

BSE Code                  : 517500

Group/Index           : B

CMP                          : Rs.86/-

FV                              : 10

Recommendation    : BUY

Roto Pumps started its operations in 1968 as a producer of

progressive cavity pumps , whose demand met by import

till then.Company  also producing Twin Screw pumps and

Centrifugal pumps in its two most modern facilities located

at Noida.Roto distributing its products around the globe and

it has marketing offices in Australia and UK. Company also

having strong marketing network in India.Progressive

cavity pumps are used to pump liquids with high solid

content and flow needs to be controlled .These type of pumps

are generally used in industries like Beverages,Pharma,

Food processing,dairy, Effluent and sewage treatment

and mining etc.. Other type of pumps made by the

company are used in sectors like irrigation,agriculture..etc.

Half of its sales coming from export and this itself is a testimony

for the quality of Roto’s products. Roto is going through a

capacity expansion programme and the benefits of it will

reflect in the near future.Now company’s customers are

posting good business which

will help the company too.This is one of the cheaply

valued listed player in this sector compared with KSB ,WPIL,

Kirloskar Brothers,Sakthi Pumps ..etc . Roto has a tiny equity

base of 3 crore where promoters are holding almost 70%.

Last year company posted a turnover of Rs.52 crore and a net

profit of Rs.3.3  crore and an EPS of RS.10.7 . On a continuous

basis ,for the past four years company increasing its sales and net

profit. For the Nine month ended December 2010 ,Roto posted an

EPS of Rs.13/-  Roto has an uninterrupted dividend history for

the past five years and paid 20% each in last three years.

Currently it is trading around Rs.85,with a P/E multiple of  just

5 on the expected full  year EPS  of Rs.17 +