Cranex Ltd : A Material Handling Company and a value buy

Introducing “Cranex Ltd “ a 43 year old BSE listed ultra small cap Crane Manufacturer :

Cmp : 7.30
Current Market Cap : 4 Crs
Current Turnover 21.6 Crs
Fy 15 Eps 0.7
Low Equity Capital of 60 Lac Shares
Promoter holding : 36% ( Promoters have been buying from open market continuously)
No Promoter Pledge
Promoters have lent 9 Crs over 6 years back without interest to the co which is shown as “Unsecured Loans”
Currently it is a non dividend paying company
Website : www,

Triggers :

Co has recently got an order for 42.64 Crs from Delhi Metro along with IFE Consortium with execution by 15.07.2017

Brief Profile of the Company

Cranex Limited is one of the leading manufacturers of EOT Cranes and Gantry Cranes in the country. They also provide after sales service and reconditioning services .Cranex has its manufacturing facility measuring about 4,200 square meters located at Sahibabad Industrial Area, about 14kms. from New Delhi.

It is to be noted that Cranex had gone under BIFR in 2005 and came out of the BIFR in 2012 .


The company was promoted in 1972 by Mr Suresh Chandra Agrawal and Mr Piyush Agrawal. They are both currently actively involved in the company management. At present the Board consists of 4 promoter directors and 4 independent directors.


Cranex supplies it’s products to several Government and Private sector industries.Clients in Government departments and companies include Bharat Heavy Electricals Ltd (BHEL), Railways, Delhi Metro, Indian Space Research Organisation (ISRO), Orissa Cement Ltd (OCL), National Thermal Power Corporation (NTPC).Cranex also supplies to the private sector and counts Alstom, Bennett Coleman, Jaso India, Durha Construction Pvt Ltd., Maruti Suzuki as it’s largest clients .

Disclosure : Invested under 1% of PF :

Lets use this thread to discuss more on this co and understand this co in more depth . Welcome anyone with more insights to contribute to this thread for the benefit of all .

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Cash from operation is negative for 3 years from past 5.

No dividend in last 15 years.

Promoter stake at 37%.

With the 4 CR MCap, If this company had any hope of making cash, promoters would have thrown an open offer and got the company delisted.


Shareholding Pattern as on 30th Sep 2015:
Promoters : 36.93 % ( Last Qtr it was 36.66 % )
( Promoters have purchased 15625 Shares from Open Market in July-Sep Period )
Shareholders holding over 1% :
Hitesh Javeri 2.65% ( Small Cap Investor )
Harsha Javeri 2.33%
Anil Kumar Jain 1.7%
Public Shareholding 63.07 % ( Fallen from 63.34% in June )
Appears that Promoters are buying from open market using “creeping acquisition route” .
Results expected on November 14th 2015

Range of Equipment manufactured by Cranex include
1.EOT Cranes (Electric Overhead Travelling Cranes)
2.HOT Cranes (Hydraulic Overhead Travelling Cranes)
3.Goliath Cranes,(A heavy but portable crane, usually about 50-ton capacity, used for jobs requiring heavy lifting and for shop fabrication involving heavy steel)
4.JIB Cranes (A crane having a swinging jib, as opposed to an overhead traveling crane, which does not.A cantilevered boom or horizontal beam with hoist and trolley capable of picking up loads in all or part of a radius around the column to which it is attached )
6.Electric hoists
The products are tailor made suiting specific project needs.The company has a technical collaboration with Kuhezug Fordertechnik GmbH of Germany.

Cranex is today at a stage where most negatives are in the price.That said one must adhere to allocation rules since in such ultra small caps the unknowns can be debilitating.Which is why i will advise a 1% type of exposure .More than capital erosion risk the risk one must factor in is more of opportunity cost.

Triggers and events to watch out for

Operational Triggers

  1. Composition of Services is just 4% of revenue . Improvement here can
    dis-proportionately improve PAT . Typically this must be 60-40

  2. We need to see how the Delhi Metro order gets executed.If properly
    executed this can be a game changer for this company

  3. At some stage (i believe when promoters have at least 51% or more
    stake ) this co will have to consider paying dividends ( at least
    1-2 years away i think ) which can lead to immediate re-rating.

Non operational Triggers

  1. We need to observe how promoters intend to take control of this co
    considering that m’cap is just about 4 crs whereas promoters have
    lent their personal money of under 9 crs that too over 6 years back
    with no interest (This was done to take the co out of BIFR in 2009
    period ).In the past they have considered allotting sweat /
    preferred equity and then dropped that plan.Since creeping
    acquisition has its limits (5% pa cap & difficulty in getting
    delivery as 65% holding with general public ) we have to consider
    probability of preferential equity shares allotment to promoters
    thro’ warrants .
  • Que : why should i look at Cranex when i have so many other "sure
    shot " 20% cagr opportunities ? Ans : In Cranex we are betting on
    non linear lumpy growth which if it works out will give us much
    bigger upside with limited downside risk.Conservative capital
    allocation of < 1% gives us the flexibility to “buy,ignore and watch
    ” this opportunity.

    Que : Do you know or trust the management ? Can you give some
    pointers ? Ans : No I do not . I have not seen any red flags yet .
    However low ROE,low stake,and low npm makes me cautious in committing
    not more than 1%.

    Que : Have you sold or added to your holdings more post your initial
    original post ? Ans : Added small portion - Will update the day i
    sell .

    Que : Whats your timeline for holding ? Ans : At this point of
    writing wish to give them 2 years till Sep 2017

    Que : How to get more info about the co ? Ans : AGM is the best bet
    . Otherwise specific ques can be addressed either in this board or
    better still one can write to the md/cfo thro’ investor relations
    email id available in their website.

    Que : Do you think mgmt will share information if i ask ? Ans : Cant
    say but my gut is that they will not share much as their priority
    would be to hike their stake.

    Que : Whats your current strategy for this stock ? Ans : My current
    plan is to sell half of my holdings at a certain price so as to make
    the remaining half zero cost and then let it ride.

    Que : Are you a "materials handling " sector expert ? Ans : No . I am
    a specific expertise .As good (or as bad) as anyone else.

    Que : Is this stock suitable for concentrated PFs ? Ans : I dont
    think so . I will advise this for those who want to take a lottery
    type bet with very limited downside as part of diversified

As per below link Cranex Ltd owns 10000 sq mt land in Sahidabad Industrial Area
14 kms from Connaught Place NewDelhi .

Those from Delhi can confirm but when i search 99acres i get indicative rates ranging from Rs.30000 - Rs.60000 per sq mt . At lower end of 30000 this translates to land value of 30 Crs ( Co m’cap 4 Crs ) . Book value of this land in the annual report for March 2014 is just Rs.1835000.

Link of 99 acres which i accessed is given below for ref .

This is only an academic exercise since the land is where the factory is.But its an attempt to measure value.

I have been holding the company from IPO days and had high expectations from the management but hopes have been unanswered till now.Product range,Technical collaboration all looks good but management seems to be the problem in capitalising the opportunities.Even during growth times of industrial activity they were far behind in increasing market share.


thanks praveen706 you must have enormous insights to this co since you are holding from 1985 ipo ? I am unable to get info on why they dropped the plan to allot pref shares to promoters earlier do you know ? I also am trying to see why javeris are holding stake here for many years or so can you share any info if you are aware.Pl share whats your expectation for the future from this co too it will help .

Results are out . Sales up 22% from 3.38 Cr of Q2 LY to 4.11 Crs this year.Co seems to be investing for the metro project scheduled for completion by Sep 2017 .EPS 0.1 vs 0.14 .

  1. Long term Borrowings increased to 14.17 Cr in Sep vs 7.72 Cr in Mar.
  2. Short term Borrowings increased to 5.48 Cr in Sep vs 1.65 Cr in Mar
  3. Trade Payables has decreased to 3.39 Cr in Sep vs 11.85 Cr in Mar
  4. Inventory moved up to 10.48 Cr in Sep vs 7.24 Cr in Mar
  5. Drs has come down to 11.14 Cr in Sep vs 13.44 Cr in Mar
  6. Cash in hand 4.7 Cr in Sep vs 8 Lac in March

Balance Sheet Size at 28 Crs (Rs.46 per share ) . Cash in hand equals current m’cap ! Land with current market value between 30-60 crs not priced in.

In spirit of full disclosure : Today i have sold out of my positions in this stock.Reason:a)in need of funds b) realization that marginal positions does not move the needle but give dispropotionate stress c)investment based on hope and not earnings

thesis has not changed.Promoters are buying whatever qty being offered for sale.Good Bye Cranex Ltd it was nice knowing you.Learnt something new made some little profit too.


Did you have a look on qtrly results? Promoters seems to have incr shareholding again.

Price has moved positively eventhough mkt has fallen

Not tracking sandeep so many much better ducks in this market

I still feel you should have kept nominal amount invested in this stock as you were first one to spot this cos and way good research

Disc - invested

By the way any other micro cap can u suggest?

Installed capacity as per AR has increased from 50 to 180 while actual production is just 32. Further promoter holding also increasing qtr on qtr…

Good Q4 results and promoters have increased their holding this qtr too…

Good results to expect. Profit margin of company is increasing. With execution of Delhi metro project in coming quarters, significant increase in topline and bottomline is expected.