PATELS AIRTEMP
BSE CODE 517417 (scrip traded only on bse)
Cmp 96-97
Patels Airtemp manufactures critical products like heat exchangers, pressure vessels, industrial fans and blowers, and other products that find use in sectors like oil and gas, refineries, power, fertilisers, chemicals, cement and textiles. The company is also into HVAC business ( where the company undertakes turnkey projects and manufactures HVAC equipment, which is also expected to benefit from the retail boom).
FINANCIAL DETAILS
Current market cap around 50 crores. Equity 5.07 crores Debt as on March 10 was around 10 crores.
| Year | 04 | 05 | 06 | 07 | 08 | 09 | 10 | Q1 fy 11 |
| Sales | 16.6 | 31 | 34 | 47 | 62 | 68.4 | 72 | 16.6 |
| NP | 0.5 | 1.12 | 1.38 | 2.54 | 5.22 | 7.1 | 8.7 | 1.8 |
Order book of the company as on end of June qtr 2011 was around 68 crores.
ROCE HAS BEEN CONSISTENTLY ABOVE 40 SINCE MANY YEARS. MANAGEMENT KNOWS HOW TO GET THE MAXIMUM OUT OF CAPITAL.
THERE HAS BEEN NO EQUITY DILUTION SINCE MANY YEARS AND DEBT HAS BEEN WITHIN LIMITS AND FOR MARCH 10 DEBT WAS AROUND 10 CRORES.
FUTURE PROSPECTS:
THE COMPANY IS BETTING ON THE EXPANSION PROGRAMME OF IFFCO TO OBTAIN NEW ORDERS.
THE COMPANY IS BETTING ON THE EXPANSION PROGRAMME OF IFFCO TO OBTAIN NEW ORDERS.
SETTING UP OF ABOUT 300 NEW CNG STATIONS IN GUJARAT ALSO WILL PROVIDE NEW ORDERS
THE COMPANY HAS BEEN SPENDING CONSISTENTLY ON ENHANCING CAPACITY AND IMPORTING NEW MACHINERY.
COMPANY IS OPTIMISTIC ABOUT THE NUCLEAR SECTOR ORDERS.
PROMOTER HOLDING IS 37% PROMOTERS ARE CONSISTENTLY PURCHASING FROM MARKET THROUGH THEIR ARM THERMFLOW ENGINEERS.
POSITIVES:
1.CONSISTENT GROWTH
2.VERY LOW DEBT
3.CONSISTENT DIVIDEND PAYMENT SINCE 4-5 YEAR
5.VERY GOOD GROWTH PROSPECTS AS THE CAPEX CYCLE IS BACK ON TRACK
6.CHEAP VALUATIONS AND CONSISTENTLY GOOD RETURN RATIOS
NEGATIVES:
COMPANY IS A SMALL PLAYER AND HENCE RISKS ASSOCIATED WITH SMALL AND MICRO CAPS
PROMOTER HOLDING IS 37% PROMOTERS ARE CONSISTENTLY PURCHASING FROM MARKET THROUGH THEIR ARM THERMFLOW ENGINEERS.
POSITIVES:
1.CONSISTENT GROWTH
2.VERY LOW DEBT
3.CONSISTENT DIVIDEND PAYMENT SINCE 4-5 YEAR
5.VERY GOOD GROWTH PROSPECTS AS THE CAPEX CYCLE IS BACK ON TRACK
6.CHEAP VALUATIONS AND CONSISTENTLY GOOD RETURN RATIOS
NEGATIVES:
COMPANY IS A SMALL PLAYER AND HENCE RISKS ASSOCIATED WITH SMALL AND MICRO CAPS
SINCE PAST TWO YEARS, THE GROWTH HAS SLOWED DOWN AS COMPARED TO EARLIER SPECTACULAR GROWTH BUT STILL THE COMPANY EXPECTS TO GROW AT 20% CAGR WHILE MAINTAINING SIMILAR MARGINS.
POOR LIQUIDITY
TECHNICALS
The stock is in a sideways consolidation between 90-100 since long time with occasional spikes to 125 levels. Currently it is stuck in a range of around 90-105 and looks good for accumulation.
LINK TO EARLIER POST ON THEEQUITYDESK.COM WHEN I POSTED THE STOCK IN JULY 09
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