BHARAT GEARS LTD - BUY

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.

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IGARASHI MOTORS INDIA LTD -BACK TO BETTER DAYS ?

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/-

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GRANULES INDIA - RESULT UPDATE

  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.

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VULCAN ENGINEERS / EPC INDUSTRIE - UPDATES

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.

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VULCAN ENGINEERS LTD - A POTENTIAL MULTIBAGGER

 

Be it Electricity or Petroleum products ,cost of energy resources are increasing year after year and this trend is expected to continue in future.So ‘Energy saving ‘ is the buzz word in corporate India especially in power/fuel intensive industries.On this back ground , companies working for implementing Eco friendly  energy saving technologies catching special attention. VULCAN ENGINEERS LIMITED(VEL) is a small company specializing  in design, engineering, construction and erection of kilns, process lines and furnaces for the steel industry.In India ,the size of steel industry is very large hence the scope too.Vulcan Engineering is originally incorporated in 1963,but its performance was poor mainly due to working capital deficiencies and its inability to move with technological changes.In 2010 this company was taken over by Italy based Terruzzi Fercalx Group (TFG) and now this foreign promoters holding 58% stake.In October 2011,company allotted another 13,10,000 Equity Shares of Rs. 10.00 each at a premium of Rs. 36.50 per equity share on preferential basis to SocietaItaliana Per le Imprese All' Estero - SIMEST SpA ('SIMEST') Italy which constitute 14% of the total equity.SIMEST is an agency formed by Italian goverment to promote italian business in foreign countries.The present promoter Terruzzi Group is in existence from 1897 and having many niche patented designs for  industries like Glass,Aircrafts,Steel,Pharmaceutical,Cement ,Food,Rubber ..etc and is well known for its energy efficient eco friendly designs and execution capabilities.TFG is also concentrating in Gasification technology which is for generating power out of waste.Under the old management , due to lack of sufficient working capital Vulcan Engineering executed the limited available orders through job work basis.But now under the new management company is working to set up its own fabrication facilities which is expected to ready by next 3-6 months.VEL is currently working on few projects for  Visakhapatnam Steel Plant and Neelachal Ispat.It is a fact that company  not reported any major order win in recent past . But the successful execution of the existing orders may turn as a testimony for the efficiency of new management and work as ‘reference projects’ for further order wins.Share price of VEL moved sharply after last quarter turnaround performance and now  trading around Rs.45/- which is close to last preferential offer price.If company can repeat at least the last quarter performance in March qtr ,it may move bit more and further order wins if any  may lift it to higher levels.Considering the potential of the industry ,foreign parents niche offerings and  vast experience, VULCAN ENGINEERS may turn as a multibagger in long term.CMP is Rs.44/-


Disc : I have vested interest in VEL

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EPC INDUSTRIE - RIGHTS ISSUE UPDATE

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

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SCHNEIDER ELECTRIC INFRASTURUCTURE LTD - UPDATE

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

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