Its a 'rocking' stock!
By S.P. Tulsian
· Kemrock Industries and Exports Ltd. manufactures Unsaturated Polyesters, Vinyl Esters, Epoxy and Phenolic Resins & GRP / FRP (Fibre Reinforced Plastic) products viz. Gratings, Piping Systems, Pultruded Shapes, Windmill Blade, Lighting Poles, Access Systems, Handrails & Ladders, Carbon Fibre, Rail Coach Interior & Exteriors, Cable Management Systems etc.
· The Company has its facility at Baroda and offers high-performance thermosetting resins for a wide range of speciality industrial applications, including Composites, Foundry and Coated Abrasives and market its products in India, Bangladesh, Sri Lanka, Bahrain, Saudi Arabia, Kuwait and UAE.
· The Company has recently entered into a 50 : 50 JV with Saertex GmbH of Germany, the world leader in non-crimp glass, Carbon and aramide fabrics and this JV will set up a plant to manufacture for various components for Indian and global aeronautical industry. The facilities will be located in Baroda and would be operational by mid 2010.
· The present equity of the company is at Rs. 11.01 crore with face value of Rs. 10 each, with promoter’s stake at 34.85% and 65.15% being held by the public.
· For FY 09, the total income of the company was placed at Rs. 374 crores with PAT at Rs. 31.82 crores, resulting in an EPS of Rs. 28.90 and cash EPS of Rs. 45.80. Book value of the share as at 31st March 09 was placed at Rs. 234.
· For June 09 quarter, the company has achieved a total income of Rs. 100 crores with PAT at Rs. 8.70 crores, resulting in an EPS of Rs. 7.90 and cash EPS of Rs. 12.65. The major contribution to the bottomline of the company has been coming from its FRP products while Resins, being a commodity nature products, contributes low. This increase in ratio of FRP products is likely to increase in the time to come.
· Products of the company find extensive use in various markets and applications including chemical, oil and gas, pharma, pulp and paper, water and waste waster, metals and mining, transportations, electricals and telecommunications, so all these sectors have good growth potentials and would result in good growth of the company’s products.
· Share is now ruling at Rs. 390 and rules at a PE of just 11 times. The new 50 : 50 JV will boost the profitability of the company further. Hence it can be bought now with an expected price of Rs. 500 in next 6 months. Even foreign investors were keen to take stake in the company and promoters have valued it at Rs. 600 per share.