WIRES AND FABRIKS - An Unnoticed Player

Wires and Fabriks (SA) is an unknown and unnoticed
company among investor fraternity over a long
period of time.This company is established at Jaipur
in 1963.Company’s product list includes Industrial
Synthetic Fabrics, EDM Wire, Wirecloth,
Conveyor Belting, Dryer Screens, Bronze Wire Cloth,
Paper Making Chemicals, Paper Machine Clothing ..etc.
Company is working with a technical collaboration with
Hutter and Schantz of Austria.Wires and Fabriks is the
first ISO 9002 certified wire cloth manufacturer from
Asia and exporting its products to more than 25
countries. A major portion of company’s income coming
from paper industry which is growing at a good pace.
Company is the first one introduced double layer
forming fabricks in India .Company is growing at a
steady pace in last many years.At present company is
going through an expansion cum modernization programme
which is expected to improve its performance going
forward.Since the open market purchase of promoters
led to a mandatory open offer ,in the last financial year
company came out with an open offer at Rs.71/-.

In FY 2009 ,company posted a turnover of Rs.66 Cr and
a net profit of 3.46 cr with an EPS of Rs.11.30/-.
Effect of growing demand and expanded capacity
will be reflected in the financials going forward. At CMP of
Rs.110/- WIRES AND FABRIKS(SA) is a decent long term pick

WORTH READING

COURTESY - ECONOMIC TIMES
-----------------------------------------

It is that time of the year when investors start receiving the most
critical communication tool from the company, namely the
annual report. An annual report provides a summary of how
a company has performed in the year that went by, and how
it is likely to perform in the forthcoming year.

For companies, it is mandatory to send a hard copy of the
annual report to each and every shareholder. While a lot of
shareholders merely keep annual reports aside or throw them
away with old newspapers, there are important cues which
savvy investors pick.

In fact, for the general public, the annual report is the only
financial document that they get to see. Hence, for existing
shareholder, it could be the best source of information to
determine the financial health of a company and to learn about
any problems or opportunities in the business environment.

Here are some important things that you could look for
in a balance sheet.
Balance sheets can be designed in any shape and size. Also, there is
no mandatory rule which specifies the quality of paper to be used
in an annual report.

Hence, while some companies come up with a plain vanilla annual
report with simple fonts, simple colours and pay little attention to
page layouts and displays, there are companies which use
high-quality paper, take special efforts to design it and ensure
that the annual report is really presentable to their shareholders.

“How the annual report looks and feels conveys its image and
speaks volumes about the ability of a company to market itself
in the corporate world. Quality of paper used in the annual report,
many a time, is proportionate or signifies how well the company
is doing,” said Alok Churiwala, managing director, Churiwala Securities.

Sending the annual report by courier or speed post, as compared to
ordinary post, could denote how important an investor is for the company.

Management discussion and analysis
------------------------------------------
This section is of prime importance for research analysts as well
as fund managers. It gives you an overview of the previous year
of operations and how the company performed.

Besides this, most importantly, the management shares its
vision for the coming year, updates on projects which are
in the pipeline and thoughts on future projects. However, investors
should keep in mind that unlike the numbers, this section is unaudited.

“Management discussion and analysis is very important to me in
case of multinational companies, where there is less communication
by way of conference calls or analyst meets during the year,” said
Anand Shah, head (equities), Canara Robeco Mutual Fund.
This section gives you important clues as to the direction in which
a company is thinking, how they think the year ahead is going to be
for the industry and how the company will fare.

Financial statements and strength of balance sheet
-----------------------------------------------------
Shareholders like to look at the income statement as it denotes
how the company is performing in its business, how much profit
the company is making and what is it earning from its core
operations. Portfolio managers and analysts are concerned
about the strength of the balance sheet.

“I look at things like inter-group loans, investments, cash and debt
position in the balance sheet prior to making an investment decision,”
said Vaibhav Sanghvi, director (funds management), Ambit Capital.

There are things like auditors qualification, or one-off expenditure
which raise a red flag and need to be considered further by analysts.
Then, there are things like cash flow statement which is sacrosanct
for most analysts.

SUKHJIT STARCH AND CHEMICALS - BUY

Sukhjit starch and chemicals is one of the largest

manufacturer of starch and starch derivatives in 

India. Company has four units one each in Punjab,

Andhhra Pradesh,West Bengal and Himachal. 

Company’s products are widely used in industries

like Confectionery, Bakery ,Preserved food,

Baby foods,Ice creams..etc. All of these

industries are closely related with direct

consumer spending. Company is a preferred

supplier of well known firms like Wrigley

India Ltd., Dabur India Ltd., Perfetti

India Ltd.,Godrej,  Parle, and  Cadbury.

Citing the vast scope in consumer industries,

company is now planning to start another

Greenfield plant near the existing site at

West Bengal with a capital outlay of Rs.50 Cr.

Entire amount for the expansion will be funded

through term loans and internal accruals.

For the last financial year company posted a

turnover of Rs.259 Cr and a net profit of

Rs.15 Cr with an EPS of Rs.20/-. Sukhjit also

declared a dividend of 60% for its Rs.10/-

FV shares.It is expected to perform even

better in coming years. Open market purchase of

shares by promoters are also a positive factor.

A decent medium to long term BUY at current level

of Rs.169/- which is at a price earning multiple

of 8.5. Keep an eye on maize prices which is the

raw material of the company and prone to

wild fluctuations  due to monsoon effect. 

GENUS POWER INFRASTRUCTURE -BUY

Jaipur based Genus Power Infrastructure is one
of the largest company making energy meters
in India.It also engaged in Power Distribution
Management Projects, Hybrid microcircuits, Inverters,
Batteries, Home UPS and Online UPS.Genus is the first
company introduced pre-paid energy meters
in India ,having lot of potential in future.
Till FY 2009 company posted very good performance .
In March 2009 company posted a profit of Rs.48 Cr
(excluding extra ordinary item).But in October 2009 ,
there was a fire in Indian Oil depot
in Jaipur - very close to the factory of Genus-broke
out and its factory damaged seriously which led to
production disturbance for few months. This unfortunate
event badly affect the performance of Genus in just
previous FY 2010 ,where company posted a profit
of Rs.15 Cr. But now ,company started production from
its new unit at Haridwar from the beginning of this
financial year. Currently company having an order book
around Rs.900/- Cr which gives good visibility for
earnings in near future. Considering the changed
situation and government thrust in rural
electrification ,there is good future for Genus
Power Infrastructure.Currently it is quoting
around Rs.210/- ,a decent BUY.

No need to throw stones

After my posting on ORCHID CHEMICALS ,I have received few mails stating that Orchid is a company like Satyam Computer and its promoter Mr Raghavendra Rao is similar to Mr Raju of Satyam.I have a different opinion on it and it is a continuation of my earlier post on Orchid Chemicals.
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I think Mr. Raghavendra Rao does not committed any fraud.

When we recollect the past, Mr Rao was a first generation

entrepreneur with lot of idea but without deep pockets.

Since he doesn’t have enough money ,he forced to dilute

equity in favor of others (mainly for various FII’s )  and also

raised fund through FCCB’s. Using these funds company

created top class facilities for manufacturing. After these fund

raising exercise Mr.Rao’s stake in percentage terms come

down drastically in the company.

In order to increase his share holding in

the company Mr Rao wants to purchase shares from open

market .For this purpose he pledged his existing shares with

India bulls and Religare and bought money from them  for

market purchase of shares of his own company  .

Unfortunately at this time the subprime crisis worsened and

one of the share holder BSMA forced to offload their entire

stake in the open market. Such a huge sell off led to a sharp

drop in its share price which led to margin calls by India Bulls

and Religare , Mr Rao could not meet his obligation and even

forced to sell already bought shares .All these unfortunate events

led to a sharp fall in share price of Orchid from Rs.240/- level to

just Rs.56/- in 2009.On the other hand ,in the past two years

due to unfavorable volatility in exchange value of rupee company

also suffered loss in foreign exchange and FCCB   front .To save his

company,Rao had no other option than selling part of  his company

itself for escaping from debt trap.That’s why he sold the  injectable
business to ‘HOSPIRA’ last

year .But he didn’t took the amount personally and the entire amount

came to the company itself .Company realized an amount close

to 1900 Cr  and used Rs.1400 Cr out of it for repayment of loan

.Balance amount is with the company for further acquisitions and

repayment of  FCCB . It take the first move in this direction by

acquiring US-based generic marketing company Karalex Pharma

in this month. Orchid also declared a dividend of 100% for this FY.

Sell off of  the  injectables business is expected to result a revenue

loss of  $ 90 mn for Orchid ,but I strongly believes that Orchid will

compensate it through it new products and by increasing the volume

of existing products in two year time. Moreover  Mr Rao already

indicated that he is going to increase the promoter stake through

creeping acquisition and which is already visible in latest share

holding pattern. This is the real story , and I believes that it is

entirely different from ‘Satyam Saga’ . So there is no reason for

comparing both these companies and throwing stones to a

promoter like Mr.Raghavendra Rao. Some unfortunate things

happened in the past and Mr Rao may have learned valuable

lessons from past happenings and in my opinion he is capable of 

steering the company to new heights.

When there was a crash in share prices ,both Ranbaxy and

Serum Institute of India (a Poonawala Group Company) bought

huge quantity shares of Orchid  from the open market  itself is a

testimony for the quality of the company and its products.

So I believes that if there is any problems like the previous one

occurred due to higher  percentage of pledged shares  there will

be many takers for this 1300 Cr company .In nutshell Orchid is a

‘Class ‘company  for investment  if you have sufficient patience

with a three year target of  Rs.400/-.

SIMRAN FARMS -Ltd

So far I have recommended Simran farms twice ,first through MMB @ RS.14/- and again through this blog @ Rs.30/- Currently it is quoting around Rs.43/- .Considering the steady growth company shown in past few years and expected the same trend going forward ,I still feels that there is some more steam left in this counter .

You can access past two write ups from the following links

1) Simran Farms -MMB
2) Simran Farms -Blog

ORCHID CHEMICALS AND PHARMACEUTICALS Ltd -BUY

Orchid Chemicals and Pharmaceuticals is a 1300 + Cr pharma company based in
Chennai promoted by  Mr.K Raghavendra Rao
Orchid is the largest manufacturer of
Cephalosporin in India and one of the top
five in the world.Company has strong presence
in API and formulation segment.It is very strong
in R&D and has a special R&D wing in the name
of Orchid Research Laboratories with more than
130 scientists.Orchid's plants are approved by
various foreign agencies like US FDA and the
company is one of the largest exporter from India.
Last year was a disaster for orchid mainly
because of its huge debt burden and foreign
currency loss.Inorder to de-leverage ,company last
year sold its generic injectable finished dosage
business to 'HOSPIRA' and repaid loans worth
Rs.1400 Cr using part of this realisation .
Using part of the balance fund ,Orchid recently
aquired a company named Karalex Pharma .
This aquisition will be a boost for its marketing
efforts in US over next few years.company's bad times
are almost over and it is expected to post better
perfomance in the years to come.Orchid is expected
to post a turnover of Rs.1270 Cr and a net
profit of Rs.85 + Crore in current financial year .
Company recently declared a dividend
of Rs.10/- each (100%) too.  Moreover after the reduction in debt
Orchid is a perfect takeover target due to its large size ,
quality of operations ,well established R&D and comparatively
low promoter stake At current market price of Rs.161 /- ,
Orchid is a decent BUY.

NOT ON CONCURRENT INDIA INFRASTRUCTURE BUT ON SMALL AND MIDCAPS.

Nowadays my mail box flooded with mails requesting to express

opinion on Concurrent India Infrastructure Ltd after recent

developments in the company. I really wonder ,how a small

company which changed its name and line of business recently

getting this much attention from investment fraternity.

On the other side I am really afraid because of my past experience

about over publicised companies in the past .

Anyway I would like to express my view on mid-small caps

generally and not on any company specifically.

1)      I strongly believes that , It is the commitment of any

good  management to come out with an explanation about facts

to its share holders,if there is any strong allegations about any company.

2)      If any company spending much time and energy  for publicity

and announcement ,such companies should be treated with caution.

If any company is working really well and growing steadily

investors will eventually find it out  and it will get deserved

valuation in long term – promoters should concentrate in

business rather than publicity .

3)If any company announcing business deals only  with unknown
counter

parties and parties outside the country ,such companies should be 

treated care fully. In the case of deals with companies outside the home

country , it is not very easy to verify the facts ,which increase the chance

of  foul play. Especially, if the company is very small and no previous

credentials of large project execution ,it is not very easy to get large

contracts anywhere.

4)      If any company announcing only the beginning of various

projects and silent on its completion , it is difficult to swallow such

claims as such

5)      If a company or promoter group  lost its glory due to  serious

allegations and no effective efforts from promoters to clarify their side ,

such company’s will underperform even if they declare excellent results later.

This is because  investors will sceptical  about the results ,

whether it is genuine or fabricated.

PS. :Study the history of companies like Teledata ,Compact disc ..etc.

6)    In a bull market  Small and midcaps are moving not only because

 of fundamentals , anything possible if the parties behind any company

is smart enough and their pockets are deep ,but such up move  may

not last longer.

7) IT IS STOCK MARKET - EVEN SMART GUYS  MAY BE CHEATED BY SMARTER ONES AND BOTH BY SMARTEST ONES.

 

This is my general view on small and mid cap investing and not specific to any company.

LOKESH MACHINES LTD

Lokesh Machines Ltd is a Hyderabad based company in
Machine tools Industry .Company is a major
producer of CNC machines for Automobile
industry.Lokesh came out with an IPO @ Rs.140
in 2006 . Company performed well till the beginning
of bad times in automobile industry. After a long time,
new capex plans by auto majors are expected to bring
good business for the company in near future. Signs of a
revival in financials are visible in last qtr of the
previous financial year itself. Company posted a
turnover of Rs.96 Cr and a net profit of Rs.4 Cr
in last year . Currently it is trading around Rs 49.5.
Risk takers can BUY for medium term

An Article by Yamal Vyas of Indiainvestment.com -Worth Reading

 This Article is taken from the latest issue of 'Dalal Street' magazine . I think an average Indian retail investor should read this before investing in mid-small cap stocks .

Times Of Turbulence

----------------------------------

The volatility continues. After a

period of relative calm in April,

the month of May was quite

eventful. And the high volatility con-

tinues with full force in June. This can

be seen from the daily price movements

which have been very high in May and

June. The measure that we took is

simple. If the difference between high

and low levels of Nifty on a trading

day was more than 100 points, the day

was considered to have high volatility.

In April, such days were only four. In

May, the number of volatile days rose

almost threefold to 11, and in the first

ten days of June, there have been four

volatile days already.

As a result of this, the small day

traders have been at the receiving end.

Such volatility would generally provide

a good chance for day traders in theory,

but in practice, the reverse is true. The

big players are always one step ahead of

the smaller players and this fact shows

up more clearly in volatile times. Even

for short-term traders, the times have

been trying. The prices of a few ran-

domly selected stocks such as Gujarat

Ambuja, Ashok Leyland and Gujarat

State Petronet reveal that the prices on

May 3 and Jun 10 do not seem to have

changed. There may be a few other

stocks which would have moved up,

but overall the volatility has not been

good for the retail investors.

The lesson to be learnt from this

is that for the retail investors, the best

time is when there is one way move-

ment in the market. For example,

between October 2007 and January

2008, the market was moving only

one way i.e. up and the retail inves-

tors across the board must be having a

good memory of that period. A simi-

lar situation prevailed between March

2009 and July 2009, but the number

of beneficiaries of this straight rise in

stock prices was much lower because

that period was the turnaround of the

market after a 14month bear phase.

So what does the retail investor do

in the intervening period? Well, he has

only one better option than wait for 2-

3 years before the last phase of any bull

market. He or she should invest for tak-

ing delivery. Period. That could be very

difficult for the brigade who has grown

up only on a daily diet of futures and

options. But let me assure you that it is

the way to go for the retail investors in

the future. There are many advantages

of buy and hold. The longer you hold,

the better are your chances of decreas-

ing any loss. Conversely, the possibility

of coming out with profit goes up.

Further, the most important thing is

that in the long run, the fundamental

always catch up. If you buy and hold a

particular company's stock and if the

company performs well consistently,

there is no way the stock will not rise.

One only needs patience to benefit

from this fact. Many recent entrants

to the market have never got around

being comfortable with the policy of

buy and hold. One of the reasons is

the spread of the electronic media and

internet. These two are so dominant

in our thought process that if we are

a close follower of either of these, the

news and data overkill will lead you to

buy and sell rather than buy and hold.

There are reasons why everyone

from your broker to your TV chan-

nel will recommend a hundred stocks

within a short time. The brokers stand

to earn their brokerage and the chan-

nels their viewership. How many peo-

ple will watch a TV channel which rec-

ommends a few stocks day in and day

out? And any investment grade stock

will remain good every day. The only

thing is, you will not like it if the TV

channel recommends the same stock

every day for a month. You would like

to have some variety.

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/-

CENLUB INDUSTRIES -KEEP WATCHING

Cenlub Industries is one of the India’s largest manufacturer of

Central lubricating systems. Company is manufacturing central

lubricating systems for machines used in industries like sugar ,

power, steel ,cement and also for Railways ,trucks,and Excavators.

All well known names in these sectors are customers of Cenlub.

Company is in the final stage of the commercialization of the wheel Flange

lubrication system for locomotives ,which is expected to bring big

business for company from railways. Since there is rapid growth in

industrialization in India ,company’s products having bright future

. Even if it is a small company at present ,it is a niche one having

decent potential .For the full year ended March 2010 company posted

a turnover of Rs.18 Cr and a net profit of Rs.1.8 Cr which translates

into an EPS of Rs.2.9/-. Promoters are heavily buying from the

open market .One may add Cenlub which is currently trading around Rs.20/-

RISHI LASER CUTTING -BUY

Earlier I have recommended this scrip on April 4 ,2010 @ Rs.58/- .Now It is trading at around Rs.52/- ie,10% below. As expected ,company performed well in last qtr and back to black in full year basis.Rishi Laser is expected to perform even better in current financial year ,hence I am repeating this.Old report is re-producing below.
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Rishi Laser is one of the largest listed player from the metal
fabrication sector in India. It has operations in five states
with 13 units with most modern facilities like CNC Laser
Cutting Machines, Horizontal Milling/Boaring Machines,
CNC 5- Axis 3D Lazer Machine,Moving Column Milling
Centre ..etc. Company’s growth is closely associated
with the growth in infrastructure sector. Its main
customers are from sectors like Power, Automotive,
Telecommunication , Railway .etc. Major companies like
L&T ,Ingersoll Rand are the customers of Rishi and it also
processing orders from abroad. Last year company started
two units- one in Bangalore and other in Savli.To cater
the demand from Railway related sectors company started
a new unit in Pune too.At present ,almost all sectors
using the service of Rishi Laser returned to growth path.
So the company is ready to reap the benefits of the boom
in these sectors. Last year company posted a loss of 1.5
crore on a sale of 115 crore.For the nine month ended
December 2009 Rishi laser posted 88 crore sales and
almost nil profit /loss . Company is expected to return to
black on full year basis and post better results in next FY.
Currently it is quoting at 58/-

ATUL AUTO - SHINING IN A CROWD

Atul Auto Ltd is one of the fast growing Diesel Three wheeler

manufacturers in India located at Rajcot, in Saurashtra .

Late Mr. Jagjivanbhai Karsanbhai Chandra of ATUL GROUP

was pioneered in the concept “CHADKA”, an affordable mode

of transportation for common man in India. Company's  Rajcot

plant having production capacity of 24000 vehicle per annum in

single shift basis.In 2009, Atul has introduced its all-new rear

engine three-wheeler, under the brand name ATUL GEM, which is

one of the best selling three wheelers in India presently.

Atul GEM is a  reliable vehicle, which gives a fuel economy

of 35 kmpl and has a payload capacity of 585 Kg.

Recently  Company expanded its operations into

6-seater Auto Rickshaws, Pick-Up Vans and Chassis of

Passenger Vehicles.Atul planning  to develop more

innovative, environment-friendly and practical automobile

vehicles considering changes in market trends.These includes

CNG and LNG operated vehicles,  4- wheeler one tunner LCVs ..etc

For sourcing engines for its CNG / LNG vehicles, company

already signed an agreement with  Lombardini.

In 2010 company is planning an additional capex of Rs.20 Cr

to expand its production capacity to 36000 units per year.

Company aggressively expanded its marketing network in South India

last year and result of the same clearly visible in recent financial

performance. Company  has registered a phenomenon financial

performance for the financial year 2009-10 with company’s net profits

zooming up by around 1000% from Rs.46 lakh to Rs.4.54 

crore over the year ended March 2009. On an equity capital

of Rs 6.08 crore, EPS stood at Rs. 7.76. The company has  recommended

a final dividend of Rs 2 per share for the year ended March 2010.

In a segment where cut throat competition is prevailing, by fighting with biggies

like Piaggio,Bajaj,Mahindra ..etc ,ATUL is coming out as a winner mainly

because of the quality of vehicle offered at reasonable price, well planned

marketing strategy and overall commitment of management.
                                                          At the prevailing market price

of Rs. 71/- this stock is available at below 10 prices to earnings ratio.

Considering the company’s well accepted vehicle, strong distribution

net work, dividend pay-out track record and its ambitious plans to

enter 4 wheeler and CNG and LNG running vehicles, one may look into it 

with a long term view

Ahlcon Parenterals (India) Ltd - BUY

Ahlcon Parenterals (India) Ltd is a New Delhi
based manufacturer of Pharmaceutical Intravenous
Fluids and Opthalmics Eye/Ear Drops. Company has
an installed capacity of 32 million bottles per
annum for LVP (Large Volume Parenterals), 144 million
units for SVP and 60 million vials of Eye drops
and Injections. Company is in the process of adding
more capacity for both of these products.
Various government initiatives and  increasing awareness
of general public assures sustained growth in Health
care sector.Last year company performed exceedingly
well and management is expressing confidence about
the days ahead..Company is also planning to diversify
into CRAM (Contract Research and manufacturing )segment.
Another company from the same group is Ahluwalia Contracts.
For the FY 2010 company posted a turnover around Rs.50 Cr
and a net profit of Rs.7 crore and an EPS of Rs.9/-
Company also declared a dividend of 15 % .
At CMP of Rs 64/- ,one may BUY for decent
appreciation in medium term.

SIMRAN FARMS Ltd

Simran farms is an Indore based company engaged
in Poultry Industry.For the past four years company
is performing very well. March 2010 turnover is more
than 136 crore and NP is 3.4 crore. On an equity base
of just 3.8 Crore company posted an EPS of Rs.9/- .
Currently it is trading at a price of Rs.30 with
a P/E multiple close to 3.Considering the growth
prospects of the industry, company`s pace of growth and
its plans to consolidate the business of companies under
the same management into a single fold and re-rating of
stocks like Venkys India and Srinivasa hatcheries in
recent past , it is a stock to watch at CMP of Rs.30/-

IGARASHI MOTORS - TURN AROUND PERFOMANCE.

Igarashi Motors is originally promoted jointly by Crompton

Greaves and Igarashi Electric work of Japan as CG Igarashi

Motors .Later the foreign company bought the entire stake

from CG and changed name to the present one(Igarashi Motors).

Company manufactures DC micro motors that find application in

industries like  automobile, power tools, toys , domestic

appliances and office equipments. Most of its income

coming from automobile sector.Company’s plant is located in

Chennai.In automobile sector its products are used for engine

management, exhaust and braking systems.Due to huge foreign

exchange loss and bad shape of automobile industry ,company

posted dismal performance in last year. After that ,now the

company take various steps like loan restructuring ,selling

of some low margin business , re negotiation of product price

with customers ..etc. As a result of all these efforts

company back to profitability in

last qtr of the previous FY with a sale of 45 Cr and a NP of

4 Cr in that qtr.Since the company streamline its products and

customers to avoid loss making business ,its turnover was low

in last qtr. Company’s efforts seems to be paying off especially

at a time of global recovery in auto sector. Historically company

enjoying very high P/E since its listing.Considering

all these points it is a scrip to watch.

Currently it is trading around Rs.60/-