GILLANDERS ARBUTHNOT & CO.LTD. - BUY

Even  this company operating in India for the past 77 years ,this may be a strange name for many of you.This company originally promoted by  Mr. F. M. Gillanders and Mr. G. C. Arbuthnot and later taken over by Kolkata  based Kothari Group.Albert David Ltd is another listed company from this business group  .GAL is a diversified company with operations mainly in sectors like Tea,Engineering,Textiles,Chemicals,Property and Trading.Company owns 10 Tea estates with approximate area of 6000 hectares mainly in Assam.In addition to selling  bulk tea , company selling tea in retail packets under two brands – Mayur and KPI. GAL’s engineering division- Modern India Construction Company ‘MICCO’ executing turnkey contracts for designing and execution of  Building & Technological Structures, Tankages, Piping, Blast Furnace, Re-Heating Furnace, Industrial Furnaces, Cold Rolling Mills, Continuous Casting Machine, Gas holders, Coke Oven Battery projects, Raw Material Handling etc. Company is a preferred contractor of big steel companies like Tata Steel,Bhushan,SAILl..etc.Even in this tough times, recently GAL 's engineering division received orders worth Rs.133 Cr from Tata Steel and Bhushan. Textile division manufacturing cotton and synthetic yarn from two of its factories located at Kolkata and Ludhiyana.Total operating  1200000 Spindles in both these units together and selling the products both in local and export market. Company also operating a 6.5MW biomass based Power Plant in Punjab .

Chemical division of GAL manufacturing Lead oxide and it is one of the  largest manufacturers of Lead Oxides and Stabilizers for PVC Industry in India with a capacity of 17,655 Metric Tons.Company’s trading division importing and distributing various type of industrial products  includes Paints,Construction chemicals,Abrasives ,Painting equipments..etc. After a bad performance in last year company back to robust growth in first half of this FY .GAL reported a net  profit of Rs.21 Cr in the first half itself v/s a small profit of just Rs.1.5 Cr in same period last year.HY EPS is Rs.10/- .Due to softening cotton prices and increasing tea prices company is expected to benefit further .Management is liberal in profit distribution and distributed 50 % each in 2009 and 2010 .45% in 2011 and 5 % in last year even there is a loss.In 2010 company declared a bonus too.Recommending a BUY on GILLANDERS ARBUTHNOT & CO.LTD @ CMP of Rs.76 /- .Stock is listed both in NSE and BSE