HI-TECH GEARS - BUY

Hi-Tech Gears is one of the largest manufacturers of  auto components in India .Its product list includes Precision forging components,Engine Components and two wheeler parts.Company is a major supplier to Hero Motocorp,Honda Motors,Tata Motors,Caterpillar, Cummins..etc.It is also in export market and recorded a jump of 80% in exports in last financial year.Now company is developing some new products and also adding new markets like Brazil and U K. Company's management is share holder friendly and paying good dividend and issuing liberal bonus in regular interval.For the financial year ended March 2011 , Company posted a turnover of Rs.427 Cr and a net profit of Rs.35 cr .In the latest September quarter Sales were Rs.118 Cr and net profit were Rs.10 Cr .At current market price of Rs.121, Hi-Tech Gear is one of the safest bet from auto component sector.

JAY U-SHIN LTD - IMPROVING BUSINESS

Jay Ushin is  jointly  promoted by  JPM Group

and Japanese company  USHIN Ltd in 1986.

Currently the foreign promoter holding 26% in

its equity.It is one of the  major  suppliers of

auto parts like Lock Sets, Latches,

Switches & Body parts to

major OEM’s in India.Company’s customer list

includes Mahindra and Mahindra,

Tata Motors, Maruti  ,GM,Honda ..etc.  Its  plants

are located at Gurgaon, Manesar and Chennai . Indian

automobile industry is cyclical in nature and closely

related with the trends in interest rate

and spending habits . Generally  rural spending is mainly

depends on good monsoon which is favorable in this year.

This is expected to keep  the current uptrend in auto

demand for some more time. Companies like Jay Ushin

are also a beneficiary of increased demand ,since they

are supplying products to well known OEM’s. For the last

financial year Company posted a turnover of Rs.357 Cr ,

net profit of Rs.6.6 Cr  and an EPS of Rs.17/ .For the three

months ended June qtr company’s turnover was Rs.101 Cr

v/s Rs.79 Cr , net profit was Rs.2.2 Cr v/s 1.29 Cr and EPS

was Rs.5.8 v/s Rs.3.3.Company also declared a dividend

of 25%. It is expected to post better results in few more

quarters. Don’t forget that the scrip and the industry as a

whole moved a lot in recent past and any significant upward

change in interest rate may de-rail the growth of this sector.

Considering other companies from the same sector ,it seems

to be relatively cheaply valued .Only high risk takers can

consider in limited quantity. CMP is Rs.159/-