Sunday, March 21, 2010

Stock Idea: Yuken India

Long-term investors can consider accumulating Yuken India (Code: 522108) (Rs.154.60) as it is back on track since the last two quarters. Earlier, the rising metal prices had spiralled up its raw material cost that led to a significant reduction in its profit margin. But now things have improved and the company is again recording 11-12% operating margin. Accordingly, its share price has also doubled but deserves still better valuation and has considerable scope for appreciation. It is a reputed manufacturer of power saving hydraulic pumps & valves that are very popular in the heavy engineering industry. As an effective means of automation, it finds extensive use in various key sectors like machine tools, material handling equipment, construction machinery, drill rigs, automobiles, defence, steel, power & cement plants, plastic machinery etc. Besides, it also manufactures complete hydraulic power units as per customer specifications, cylinders, parison controllers, actuators, accumulators and power packs. To cater the rising demand, the company has doubled its hydraulic casting products capacity to 2400 TPA and is further augmenting it to 6000 TPA within the next couple of years. Besides, it has made a tie-up with Hydrocontrols SPA, Italy, to produce and market state-of-the-art mobile control valves especially for agriculture, construction, earth moving and lifting machineries. On the back of the sharp revival in construction and industrial activities, Yuken is expected to fare well in coming quarters. In fact, despite reporting a net loss for Q1FY10, it is estimated to post a net profit of Rs.5 cr. on sales of Rs.105 cr. for FY10. This translates into EPS of Rs.17 on its tiny equity of Rs.3 cr. For FY11, it has the potential to report an EPS of Rs.22-24.

Source: Internet (Moneytimes)

No comments:


The information in this publication is provided by is intended for use for Readers & Traders . Every effort is made to provide accurate information, but cannot guarantee the accuracy of the information or of the market analysis. This is a newsletter and is for informational purposes only. It is not a solicitation or offer to buy or sell futures. There is a high risk of loss in trading futures. You should not trade with money that you cannot afford to lose. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this newsletter. The past performance of any trading system or methodology is not necessarily indicative of future results.

free counter