Wednesday, February 18, 2009

Investment Pick: Patel Airtemp

Patels Airtemp (Rs. 35.00)


BSE Code : 517417

Market Cap : Rs. 18 Cr.

TTM EPS : Rs. 13

Pmt Stake : 36 %

52W H/L : Rs. 81/25

P/E Ratio : 2.7x

Dividend : 15 %


Incorporated in 1973, Patels Airtemp (India) Ltd (PAL) is one of the leading designers, manufacturers and suppliers of the complete range of heat exchangers such as shell & tube type, finned tube type and air cooled heat exchangers, pressure vessels, columns & air-conditioning and refrigeration equipments like coils, exhaust air units, fan coils, fans & blowers, condensers & chillers etc. It also makes Dow therm condensers, inter coolers & after coolers, oil coolers, air heaters, HP & LP feed water heaters, LPG bullets etc. All these industrial process plant equipments are supplied to leading industrial sectors like power projects, refineries, fertilizers, cements, steel, aluminum, automobile, petrochemicals, engineering, pharmaceuticals, textiles, paper, chemical etc. Importantly, the company

Also undertakes turnkey projects in the highly specialized and related area of Humidification, Ventilation and Air-Conditioning i.e. HVAC. Its expertise in HVAC project includes industrial air conditioning, pharmaceutical plant air conditioning, textile humidification, and pressurization and ventilation systems, evaporative

Cooling systems etc. Besides, it also undertakes project work for air-conditioning multiplexes, offices, educational institutions, halls, theaters, hospital etc.

Importantly, in the past PAL has successfully executed several orders of Nuclear Power Corporation of India.

Hence it is expected to good orders from NPCIL in future due to signing of the Indo-US nuclear deal. Currently it boasts of having unexecuted order in hand to the tune of Rs 50 cr including Rs 16 cr order bagged from Essar Oil in Sept 2008. Recently, company reported good set of nos for the Dec'08 quarter, as it registered 30% rise in sales as well as NP to Rs 13 cr & 1.75 cr respectively. Even for nine months, the sales have increased by 35% Rs 49 cr whereas it saw a 40% jump in NP to Rs 5.20 cr thereby posting an EPS of Rs 10 till date. Accordingly it may end FY09 with sales of Rs 60 cr and PAT of Rs 6 cr leading to an EPS of Rs 12 on equity of Rs 5 cr. It may maintain its 15% dividend which gives a yield of 5% at CMP. For FY10 it can report a topline of Rs 75 cr and bottomline of Rs 7.50 cr i.e EPS of Rs 15 on current equity. Although it's a small company with a gross block of less than Rs 15 cr but the share price can easily double within 9~12 months. Investors are recommended to buy at current levels.

Source: Internet (SmartInvestment)

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