Scripscan: Elgi Equipments
cmp:53
Target:75
Traded in:NSE-BSE
Introduction:-ELGI Equipments is the market leader and Asia's largest manufacturer of air compressors and automobile service station equipment.It manufactures compressors with a range from 0.5 hp to 800 hp reciprocating compressors and rotary screw compressors.Product lines comprise of Rotary Compressors, Reciprocating Compressors, Centrifugal Compressors, Automotive Equipment and Diesel Engines. Product applications are in mining, defence, transport, pharmaceuticals, power, oil, railways, chemicals, textiles, printing to ship building, paper, electronics, telecommunications, medical, food & beverages and plastics.Elgi is a market leader in most of these categories.Elgi has strong ferrous castings vendor base which is the key input. This provides cost competitiveness. It has a technical and distribution tie-up with Snap-on International of US, the worlds largest manufacturing and marketing company in automotive service equipment. With increasing number of autos on Indian roads this segment will be a big trigger for demand. Competition comes from Ingersoll Rand, Atlas Copco and Kirloskar Pneumatic.
Initiatives:-Elgi Equipment is taking various restructuring initiatives to make the business more profitable.The company has sold off the loss-making diesel engine business in 06. Further, it has divested the automotive division into a wholly-owned subsidiary during the last quarter. This would enable it to focus on the core business and explore growth avenues for its subsidiary through other means.It has also entered a new business of providing engineering services and parts to global customers. The business generated a modest revenue of Rs 3.3 crore in FY07, but is expected to see good growth in the coming years.
Conclusion:-Elgi scrip is a Re 1 paid up stock.Considering the present scenario its very difficult to find companies which matches all sorts of criterias and gives hell lot of comfort.Elgi is one such overlooked company quoting at a cheap valuation of 5x 09 earnings.This is much better than its peers, which are trading at PE of more than 12-13 times there 09 earnings.The company has manufacturing locations in Coimbatore and Kurichy with 22 acres of land.If it decides to relocate and develop the land,that can be a huge trigger for the stock.Elgi is well set to tap the immense export opportunities and can be a great beneficary of the outsourcing boom.A safe bet to maximize your money over the med to longer term horizion.
Scripscan:- SAAG RR Infra Ltd
Code:-531374
Cmp:58
Story:-SAAG RR Infra Ltd is engaged in execution of infrastructure projects like water and sewer works and construction of specialised buildings (industrial, commercial and residential), roads and oil & gas pipeline construction and has positioned itself to take advantage of the growing demand in the oil & gas sector. The company has recently bagged a huge order of 288crs from ONGC for its charter hire of offshore modular workover rig 'SAAG Pacific' and for charter hire of offshore modular workover rig 'SAAG Saffron' to be executed over the next 3years.The company reported a revenue of about 45crs in all over fiscal 07.These order alone covers the sales by more than 6 times and gives a robust revenue visibility going foreward.The company has also has won projects from prestigious public sector and MNC clients including ISRO, NTPC, ICMR, BEML, HPCL, CMWSSB, B Braun Medical India and Degremont.The company is currently executing projects for puravankara projects,hiranandani realtors and mantri developers which are multi million dollar development projects in real estate.The company has been very aggresive in acquiring companies and if the sources are to be beleived then it has lined up few more major acquisitions in the coming few months.The company hasnt been an institutional fancy but there are news of research head of brokerages and mfs being in active talks with the management.Once gets covered may just go beyond reach.SAAG has been long overlooked in the bourses and virtually it never had a run over the last 3 years bull run.With these latest developments the company is sure to buzz a lot.A solid company to go for.
Scripscan:- Lakshmi Energy and Foods
Cmp:210
Traded in:NSE-BSE
Story:-Lakshmi Energy and Foods is engaged in the business of manufacturing and processing of rice.The company has recently started processing wheat with a fully integrated processing plant. To utilise husk, a byproduct, for the generation of power, bio-mass husk- and wheat-straw-based 105-MW power plants are to be set up over the next few years.The company hopes to export Rs 50 crore of rice this year and Rs 150 crore next year.It is also eligible for 1.40 lakh carbon credits and it hopes the revenue from this to be around Rs 10 crore per annum for 10 years beginning FY 2010.This company has come a long way and with the aggresive plans that its setting, one can only hope that its just the start for them.The company expects a top line growth of 30-40% and bottom line of 80-90% for the FY 2009.At rs 210 it merits an investment.
Regards,
ARUN
I can be reached at:- [email protected]
