BHAGWATI AUTOCAST LTD - BETTER DAYS AHEAD

Bhagwati autocast is a cast iron product manufacturer
located in Ahmedabad . Company having an annual
capacity of 18000 Metric ton and it is supplying
to industries like Automotive, Engineering, Hydraulic
and compressor making.Its customers includes Escorts,
Mahindra Tractors ,Punjab Tractors,Swaraj Engines and
Swaraj Mazda from auto related sectors and Vickers systems
and Bosch Rexroth from Hydraulic sector and HMT, Kirloskar
oil engines,Siemens from engineering sector …etc.
In FY 2010 company posted a turnover of Rs.52 Crore
and a net profit of 2.3 Cr.On its small equity of just
2.9 Crore company posted an EPS of Rs.8/- .All of the
sectors consuming its products are showing good
growth now, which is expected to help the company to
post even better result in current financial year.
Company is currently trading at Rs.34/- with a P/E multiple
of just 4 to last year EPS which is at the lower end .

HARITHA SEATING SYSTEMS -BUY

Almost all well managed companies from auto

ancillary space are reaping the benefits of

the booming auto sales .Haritha Seating Systems

is such a company which is based in Chennai.

This company belongs to the well known TVS Group

and promoted by Sundaram Clayton Ltd. Harita makes

seats for two-wheelers, commercial vehicles, tractors

and buses.  It is also in the field of poly urethane

products businesses to different segments of the

auto industry . Harita Seating Systems has manufacturing

facilities in Hosur, Ranjangaon near Pune and at Nalagarh

in Himachal Pradesh. It was earlier known as Haritha

Grammer and had a joint venture with Grammer AG of

Germany till 2002.In 2002 company pulls out of joint

venture and its name changed to Haritha Seating Systems.

Company has another joint venture with German based

Fehrer for making two wheeler seats ,which is known as

Harita Fehrer Ltd.Company’s client list consists of auto

majors like Tata Motors, Ashok Leyland, Mahindra & Mahindra,

Tafe, John Deere, New Holland, TMTL, Escorts, Caterpillar,

BEML, Telcon, L & T Komatsu and  Volvo.Company also suppliers

seats to body builders Jaico, SM Kannappa, ACGL, Amar Coaches,

IRIZAR TVS, Veera Vahana, HNS Coaches, Damodar coach,

Bharat Coach etc. Last year company posted a turnover

of Rs.223 Cr and a net loss of Rs.71 lakhs . It is notable

that company posted decent result in last qtr of previous

financial year with a profit of 2.39 Cr. Belongs to TVS

group which has good pedigree in auto ancillary space

Harita is expected to post even better numbers in the

current year.Risk takers can BUY at CMP of Rs.99/-

STERLING TOOLS -IMPROVING BUSINESS

Sterling Tools is one of the largest suppliers

of fasteners to the OEM ‘s in automobile industry.
Company’s products list includes hub/wheel bolts, hub nuts,
wheel studs,suspension bolts, propeller shaft bolts/nuts,
centre bolts,track shoe bolts/nuts, rivets and two
wheeler spindles.Apart from OEM supply company also
having a wide marketing network for selling its products
to non OEM customers.Sterling has four plants ,one each
at Faridabad,Ballabhgarh, Prithla and uttaranchal.Company
 is also exporting its products to major automakers in U.S.,
UK,and Europe.Company has recently signed an agreement
with Netherland based Fabory B.V for setting

up a plant in India for non automotive 

fastners.This is a 50:50 joint venture with this giant
which having presence in 16 countries worldwide.
Last year company’s performance was poor due to
sluggish demand in auto and related sectors.

With the revival in demand, now company 

is again returned to high growth phase. In last FY
company posted a turnover of 151 crore and a net
profit of 1.7 crore.For the nine month

ended in this FY, company already 

posted a turnover of 123 crore and a net profit
of Rs.7.6 crore and expected to post an EPS of Rs.18/- for
the full year.Company has a  very liberal dividend history and
already declared  30% interim dividend

in this FY.In 2005 company declared

a bonus in 1:1 ratio. Currently it is trading around Rs.97/-
A good BUY on dips.