Lloyd Electric & Engg. (Rs. 24)
BSE Code : 517518
Market Cap : Rs. 75 Cr.
TTM EPS : Rs. 15
Pmt Stake : 32 %
52W H/L : Rs. 222/21
P/E Ratio : 1.6x
Dividend : 10%
Incorporated in 1988, Lloyd Electric and Engineering Ltd (LEEL) was primarily setup as a backward integrated unit of Fedders Lloyd Corp, the leading group company to manufacture coils for air conditioners. Since then it specializes in the custom design and manufacture of heating and cooling coils including 'U' bend and return bend tubes for heat exchanger coils, system tubing, header line etc and sheet metal items for air-conditioning and refrigeration applications. Over the year it has emerged as India's largest manufacturer of evaporator and condenser (E&C) coils with around 60% market share. With the increase in disposable income, change in lifestyle and drastic fall in prices, demand for air conditioners both in retail & institutional segment is rising at healthy pace. Financially, to fund its growth plan LEEL has issued 50 lakh convertible warrants @ Rs 225 per warrant. Accordingly on a standalone basis it may clock a turnover of Rs 650 cr and NP of Rs 30 for FY09 leading to an EPS of Rs 10 on current equity of Rs 31 cr. As company hasn't made the Luvata quarterly result public, its difficult to say whether consolidated nos are better or worst against standalone. And since marketmen expect the Luvata acquisition to be a drag on LEEL's financial its share price has been hammered down mercilessly to 10% from a high of Rs 220 in Jan'08. Although, in short term LEEL may take a hit of higher interest cost due to Luvata acquisition but in long term it will prove beneficial for the company. Investors are strongly recommended to buy at current levels as it can turn out to be a Multibagger if held for 3~4 years.
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