Saturday, April 28, 2012


Bharat Gears Ltd(BGL) is one of the largest Gear manufacturer in India.This company was originally promoted by Raunaq and company in 1971.Company is operating with three business divisions- Gears,Furnaces and Automotive components. Now BGL having two manufacturing facilities and planning to add one more in Maharastra. BGL’s total gear manufacturing capacity is divided as 6 lac units of Hypoid Ring Gear & Pinion ,10 Lac Differential Gears & Crosses and 22 lac  Transmission Gears .It is one of the major suppliers of gears to tractor industry with customers like Escorts,John Deere,M&M TAFE,Carraro..etc . In the non farm segments BGL’s customer list includes Ashok Leyland,Tata Motors,JCB,Toyota Kirloskar ..etc .In addition to gear business BGL also in heat-treating furnace systems with  technical collaboration of  AFC-Holcroft of USA. Out of the total sales ,about 90% is coming from Gear segment.Company supplying 80% of its gears to OEM’s and  selling the rest in replacement market.After a long period of slow growth now company is moving with pace.BGL already crossed the last full year profit figures in just 9 months of this FY even excluding other income.Normally fourth quarter figures are the best for the company .Based on the prediction  of normal monsoon for this year also tractor demand is expected to improve .This will positively impact company’s sales .In addition to this, benefits from the capacity expansion and  sales from new manufacturing facility will add to its bottom line in next few years.Increase in raw material cost is a factor to watch .Considering all these factors ,BGL is expected to post a Sales around Rs.430 Cr and a net profit of Rs.15 Cr in this FY.It may post an EPS around Rs.20/- .At current market price of Rs.80/- BGL is trading with a market capitalization of just 62 Cr which is very low for a market leader with turnover of more than Rs.400 cr. BUY BGL  at CMP of Rs.80/- which is trading both in NSE and BSE.

Tuesday, April 24, 2012


CG Igarshi Motors is originally promoted as a joint venture between Crompton Greaves Ltd., Igarashi Electric Works Ltd., Japan and International Components Corporation, USA.But now all these original promoters are out of the court and this company is presently owned by the promoters  of another BSE listed company HBL Power Systems through Agile Electric. Old promoters – Igarshi electric Works – holding just  17 % and re categorized as non promoters.This company is in the production of Permanent Magnet Micromotors and allied components.These type micro motors are used in automobiles, power tools,toys and other household appliances.Company is supplying its products to major customers like Bosch, Delphi, Visteon, Mikuni..etc. Company’s 45% sales is coming from USA,27% from Europe and 28% from Asia region.CGIM also having a joint venture with Bosch India to produce electric motors.With revival in US auto market ,company posted good performance in latest quarter .A favorable change in Rupee value is also helping to earn better margins  through exports.For the quarter ended March ,Company posted a turnover of Rs.74 Cr v/s Rs.52 Cr and a net profit of Rs.6.6 Cr v/s Rs.1 Cr . Chances of re-rating is there  from CMP of Rs. 50/-


  Granules India recommended as a BUY in last month @ Rs.79 /-( For old posting Click HERE ) ,today hits its 52 week high @ Rs.106 /- .      For the quarter ended March 2011,company posted a sales of Rs.188 Cr v/s Rs.120 Cr and a net profit of Rs.16 Cr v/s Rs.9 Cr (almost 85 % up) .Full benefit of its expansion will start to reflect from next year onwards.HOLD for long term.

Monday, April 23, 2012


With effect from April 27, Vulcan Engineers and EPC Industrie will be shifted to 'T' Group  and would attract a circuit filter of 5%. This decision will not make any material change in Company's fundamentals and only because of price movement .For more details about the Criteria of Group Change - Click HERE.

Saturday, April 21, 2012


EPC INDUSTRIE LTD is one of my recommendation @ Rs.61/- ( For Old Posing Click HERE) which is now trading at Rs.150/-.Now company declared the terms of much awaited Rights Issue as follows:

- Ratio: 3 (three) new Equity Shares for every 5 (Five) existing Equity Shares

- Issue price per Equity Share: Rs. 40/- per share

- Face value: Rs. 10/- per share

- Premium: Rs. 30/- per share

- Size of the issue: Rs. 41.43 Crore.

Subscribe the rights which is offered at substantial discount to current Market Price and HOLD this M& M group company  for further gains in long term

Thursday, April 19, 2012


Further to my BUY recommendation on Schneider Electric Infrastructure @ Rs.69/- (Current Price Rs.93.50), Click HERE for the latest investor presentation released by the company .

Disc: I have vested interest in SEIL

Wednesday, April 18, 2012


NATIONAL BUILDINGS CONSTRUCTION CORPORATION LTD. is a newly listed PSU company. operating in Project Management consultancy (PMC), Real estate development and Civil infrastructure.It is one of the rare listed companies concentrating in PMC.Almost 85% of its total turnover is from PMC which is a high margin business compared with the rest.Under the PMC segment , company is offering management and consultancy services for civil construction projects related with road,water,Hospitals ..etc.Company having proven experience in this field and many reputed names in their client list includes   Ministry of Defense, Ministry of Home Affairs  Ministry of External Affairs, MoUD, Ministry of Commerce and Industry, Ministry of Corporate Affairs, Ministry of Finance, Haryana Urban Infrastructure Development Board, IIT Roorkee, IIT Kharagpur, IIT Patna,BHEL,NTPC..etc. In real estate segment,company having 125 Acre land assets in prime locations across 10 states and 9 projects are under various stages of executions.Since it is a PSU under Ministry of Urban Development company is getting priority from Government undertakings which is big positive especially at a time of slow growth  in infrastructure sector.At present ,company having an order book of more than Rs.10000 Cr. It is a debt free company with a cash reserve of Rs.1360 Cr t as on March 2011. On the other hand ,there may be delay in receiving payments due to the over dependency on Government orders. In the last FY , company posted a turnover of Rs.3126 Cr and a net profit of Rs.140Cr.On the post issue equity ,last year EPS is Rs.12/-. Considering all these factors reasonable appreciation is possible from current level of Rs.95/-

Saturday, April 14, 2012


Auto industry is one of the fastest growing sector in India.Many foreign companies considering India as a main market as well as a production hub for their international operations.Auto component industry is also moving in tandem .Pune based Kalyani Forge is a well managed company manufacturing forged components for auto industry. It is manufacturing high quality close tolerance die forgings in a wide range from 0.1kg to10kgs.Company is making Engine Parts,Transmission parts, Steering Parts..etc Almost all major auto producers are in the customer list of Kalyani forge which includes Ashok Leyland,Tata Motors,M&M,TVS Motor Company,Hero Motocorp..etc.Company also supplying its products to international  customers like  RENAULT SAS, LOMBARDINI S.R.L, VCST DE MEXICO..etc .In recent times company is moving out of low margin products and concentrating in niche high margin forgings segment.Effect of this shift is visible in recent financial performance.Company is also planning to reduce its debt.For the nine month ended December 2011,Company posted a sales of Rs.206 Cr v/s Rs.168 Cr and a net profit of Rs.11.5 Cr v/s Rs.5 Cr .For the full year March 2012, company is expected to post an EPS above Rs.42 (last year Rs.18). Considering company’s future plans and the vast opportunity available in this segment ,trading at a P/E multiple of just 4 on expected full year EPS ,Kalyani forge is a good BUY at CMP of Rs.177/-. Stock is trading both in NSE and BSE.

Thursday, April 12, 2012


I have recommended a BUY on Granules India on 24 March 2012 @ Rs.79 ,which is currently trading @ Rs.86/- .Reiterating BUY at CMP.

For old posting Click HERE

Sunday, April 8, 2012


We have discussed about CLARIS LIFE SCIENCES earlier and mentioned that the history of its promoters ( related with Core Healthcare issue )as one of the big negative factor.During the last one year some positives happened for Claris. First one is the approval of the Medicines and Healthcare Product Regulatory Agency (MHRA-UK) which enables the company to relaunch its Bag Products in European Union. EU is the second largest market for injectable products.Its Ahmadabad facility is also expecting positive outcome from the recent inspection of USFDA.Both these approvals will help the company to improve its sales.Another factor is the possibility of a re-rating in Parenteral manufacturers after the acquisition of Ahlcon Parenterals by the German healthcare products major B Braun at a valuation of Rs.331 Cr which is at 23x its trailing EBITDA and over 57x its trailing net profit.Third point is the recent entry of some institutional investors and individual investors with repute ,in this company.Morgan Stanley recently bought 5 lac shares of Claris @ Rs.155.50/- and Shivanand Shankar Manekar bought 7 lac shares@Rs.140/-. If there is no negative surprise from recent  USFDA authoritie's visit  and good standard of corporate governance by the company may help it to re-rate in medium to long term .CMP is Rs.158/-

For old posting on this company,Click HERE


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