Eimco elecon chart shows flag breakout. comments on chart.
Coming to attractiveness on fundamentals,
Market cap of around 125 crores. Cash and equivalents at 70 crores ( Current investments 59 crores+non current investments 9 crores+cash 2 crores.)
Enterprise value comes to 55 crores.
Full year net profit for fy 12 was 20 crores. Half yearly net profit for h1 fy 13 is 11 crores.
On EV to net profit this looks very cheap and seems to factor in a no growth scenario currently.
Your analysis is perfect. As per Point and Figure charting,the stock made a double top at 190 and not the next resistance is at 240-45. Thereafter the stock will reach 265-75. Here is the attached link to the P&F Chart.
Excellent find. Should one buy at the 52 week high or wait for some pull back???
tony,
I think one could buy eimco at cmp and buy on any declines below 210.
point and figure chart still remains an enigma. I am reading the ebook and trying to get to terms with it.
Please read pages 23 to 39 again and again. That is the basis. Thereafter everything is simple to analyse. I now keep 40 charts manually and it just takes 10 mins to update them. If you need any clarification please do let me know.
Yes, this one seems to be a value pick at these levels.
Ayush
Disc: Have bot some in last few days
Purely on the basis of fundamentals, all ratios (OPM, NPM, ROCE, ROE)are heading south. The business has been constantly deteriorating over the past 5 years.
http://www.screener.in/company/?q=523708
Regarding investements, non-current are mostly in listed and un-listed shares, while current investments are mostly in liquid mutual funds - so makes it pretty safe. However, apart from the mispricing I don’t see a fundamentally sound story here.
Was looking at the shares held, it seems we can add another 30 Cr to the investments part.
|
Stock Name |
Shares Held |
CMP |
Book Value |
Market Value |
|
BoB |
700 |
762 |
0.60 |
5.33 |
|
Grasim |
1000 |
3339 |
10.84 |
33.39 |
|
Ultratech |
571 |
1999 |
0.00 |
11.41 |
|
Great offshore |
238 |
104 |
0.00 |
0.25 |
|
infosys |
1856 |
2435 |
11.18 |
45.19 |
|
M&M |
8800 |
960 |
8.95 |
84.48 |
|
RIL |
5100 |
801 |
18.10 |
40.85 |
|
Rel Infra |
390 |
486 |
2.77 |
1.90 |
|
SBI |
3500 |
2196 |
29.86 |
76.86 |
|
Tata Chem |
10000 |
333 |
11.29 |
33.30 |
|
TISCO |
11325 |
392 |
33.29 |
44.39 |
|
Tata Power |
50000 |
107 |
14.10 |
53.50 |
|
ITC |
3000 |
297 |
3.50 |
8.91 |
|
Bharti |
2655 |
333 |
11.50 |
8.84 |
|
Col-Pal |
500 |
1474 |
3.23 |
7.37 |
|
HUL |
1500 |
539 |
3.95 |
8.09 |
|
L&T |
500 |
1658 |
8.77 |
8.29 |
|
Siemens |
294 |
679 |
2.61 |
2.00 |
|
174.54 |
474.35 |
Sorry for the typo, read it as 3 Cr ( last two columns are in Rs Lakhs only). So effective EV is 126 Cr - 73 ( 59+12+2) = 53 Cr
Hi,
Read the AR and HY results. Some very interesting points.
The operating profit of the com has doubled in H-1 FY-13. The net profit for FY 12 mentioned earlier includes sale of surface mining drilling business. So there is huge increase in PM from 9% to 14% this FY!!!
Non-coal segment has a target contribution of 40% this year up from 20% last year. They have launched a product called AL 520 wheel loader which will cater to construction segment. I think this has clicked (looking at the OPM and results in H-1).
Once the coal mining issues get sorted out there will be good traction in sales.
Further digging required.
Cheers
Vinod
Eimco is an undervalued bet and along with chart formation is likely to give a quick upside.
the idea about the company came from an esteemed valuepickr member omprakash. thanks to omprakash for this idea.
@Rudra, yeah there hasn’t been anything much exciting here in past however some big changes seem to have taken place in the company over last 1 year.
Co has generated good amount of cash after the sellout (perhaps due to liquidation of inventory) and now the balance sheet looks quite strong. Plus there has been a good growth in H1FY13 (like vinod pointed out) and this calls for attention.
If they can maintain say 15-20% growth going forward, stock has lot of value.
Ayush
eimco flag seems to be flying well.
stock closes today at 230 levels.
Hi Hitesh,
I tried to buy the stock. I use ICICI DIRECT. It was not executing my trade. Do you know any reason???
May be because stock is in trade to trade. You might have to talk to the icicidirect guys for further instructions.
Hi,
Emco elecon results are out. Company has shown a decline in sales and profit compared to previous year q-3. OPM is at 4.66% compared to 5.5% for same quarter last year.
There is huge margin fluctuation from quarter to quarter. The OPM was 16% last quarter. Q-4 margins for last year was at 10% and sales was also highest compared to other quarters. We can expect Q-4 to contribute more to sales at higher OPM if similar strength in Q-4 continues.
So far the com has shown 66% growth in op profit for the 9 month period owing to overall superior margin. The sales growth for 9 months is 3% only.
The coal mining activity is expected to pickup. I see the mispricing increasing with the current sharp fall in the stock price.
Om Prakash and Ayush pls let us know your views on Eimco Eelecon.
Cheers
Vinod
Disc: Hold a trading position with small quantity.
Hi Vinod,
Historically Q3 is the lean quarter for Eimco and again Q4 is strongest of all Quarters(I observe this trend in last 8-9 years period) .I am hopeful of good Q4. As you said we are playing undervaluation here.So with the price correction it comes back to value zone and i think at 180 levels there will be good support .
Disc : Holding small position.
Thank You Om. Yes 170-180 will provide good margin of safety for a low allocation.
Cheers
Vinod
The results are quite weak and the whole thought process was undervaluation with growth. So if the co doesn’t make up in the next qtr, it would be better to exit. Will like to wait for Q4 or a better price till then.
Ayush
Is it a good buy at Cmp? Stock has come down from 240 levels and is consolidating in 145-155 range.
