Roto Pumps - Fluid Engineering Company

Stock Opportunities
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The company manufactures & sells broadlythree categories of Pumps :-1. Progressive Cavity Pumps;2. Twin Screw Pumps3. Centrifugal Pumps. Roto pumps ltd manufactured pumps arespecializedand custom made and used in industries where fluid viscosity is high.These pumps are also used in waste water treatment,oil&gas,marine and sugar industries

http://www.rotopumps.com/products.html

INFRASTRUCTURE-Rotoâs integrated manufacturing plant in Noida and itâs plantin NSEZ are spread over 20,000 sq.mtrs.. The plants havesophisticated machine tools and testing facilities that ensureconsistent word class quality matching todayâs customerexpectations. All critical components are manufactured inhouseto ensure 100% quality conformance. The company hasstate-of-the-art R&D facility that translates concepts toPrototypes, and Prototype into final Products.Roto sells its products through a wide network of branches inIndia, own Warehouse cum Marketing offices at Australiaand U.K. and network of distributors spread across the globe.The continuous investments in precision measuringinstruments, state-of-the-art testing facilities and thededicated team of engineers are testimony to Rotoâscommitment to maintain and constantly upgrade the qualityof its products. The manufacturing units are certified forconformance to ISO 9001 Quality Surveillance System.
APPLICATION AREAS
The pumps manufactured by Roto are designed to handlewide variety of fluids ranging from water like fluids to highlyviscous, abrasive, corrosive media with high solid and gascontent. Roto has an extensive experience of handling over1100 types of fluids. Some of the application areas include:-
Agriculture & Irrigation â includes surface water andunderground water.
chemical&process industries â includes general chemicals,paints, adhesives, varnish, inks, paper, pulp, cellulose,vegetable oild, soaps & detergents, starch and Glucose, SugarIndustry and Oil & Petrochemical Industry.
Food, Beverages and Pharma Industry â includes Fruit &Vegetable processing, Dairy &Milk processing,Confectionary& Bakery, Cosmetics & Pharma, Meat & Fish Processing andBreweries, Wineries and Distilleries.Effluent & Sewage Treatment ,Mining,Construction Industry
EXPORT THRUST
The fact that the company derives roughly 56% ( fY 2011 )of the Salesrevenues through export sales is a testimony of the quality ofthe products and the companyâs commitment towardsadhering to delivery schedules.

FINANCIALS :-
CMP:-98 MARKET CAP-30 CR
The company has equity base of 3.09 cr and promoters holding 69.16 percent.
FY 12 FY 11 FY 10 FY 09 FY 08 FY 07
SALES 76 61.5 51.5 52 42 34
EXPORTS -- 35 27.4 30.4 24.5 15
DOMESTIC -- 26.5 24.1 21.6 17.7 18
PAT 7.27 5.38 4.15 3.31 3.03 2.04
OPM 19.2 18.28 17 14.5 15.5 13.2
NPM 9.5 8.7 8.06 6.32 7.17 6.01
EPS 23.5 17.4 13.4 10.69 9.81 6.06
DIVIDEND 25 25 20 20 20 15
BV 100 79 64.4 53.3 45 37.5
source : Annual report 2011
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hi omprakash,

looks like an interesting find.

valuationwise seems quite cheap.

I think it needs a closer look

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QY RES MAR 12 DEC 12 SEP 11 JUN 11 MAR 11
revenues 24.57 21.27 17.88 14.48 17.02
PBT 4.02 3.44 2.23 1.06 2.03
PAT 2.56 2.53 1.50 0.68 1.32
EPS 8.27 8.19 4.87 2.21 4.26
OPM 20.33 21.51 17.61 13.32 18.32
NPM 10.41 11.89 8.4 4.72 7.73

With 60 per of sales are from exports rupee depreciation enhances the margins.With theassumptionof 100 cr sales and 10-11 cr PAT,33-35 EPS its trading at 3 pe.I think from this price we can easily expect 100 per returns in one year time.

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Looks good on first look. It is a tiny company with market cap of 30 Cr. Product looks good. Customer base is diversified. Growth in topline & bottomline good. Div payouts good.

In the march 2011 audit report,

1). The disputed statutory dues aggregating to Rs. 57.42 lacs that have not been deposited on account of matters pending before appropriate authorities - income tax & excise.

2). Houselease of around31 lacs paid to the directorsof the company.

These are typicalpractices(risks) in the small companies.

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Omprakash,

I think with the generalised slowdown, projecting sales growth of around 100 crores might be too optimistic. Company did sales growth from 60 to 75 crores in fy 12. I guess we might go for estimates of around 90 crores with 20% growth unless we come across specific triggers for sales growth.

NPM have been in range of around 9% plus range since past two years. putting that into calculations, we get net profit in range of around 8.5 crores and with outstanding shares amounting to 0.3 crores, eps should be in the range of 28-29 per share.

Triggers for price appreciation could be PE rerating and or earnings surprise.

PE rerating I think can go up to 6-8 times considering the small cap status of the company. (unless we have a roaring small and midcap bull market)

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Company could be an interesting pick due to

  1. Very cheap valuations

  2. Good ethical n technocrat promoters

  3. Fairly old comapny

now the question is with how sustainable is exports growth,pricing power.entry barriers n how aggressive are the promoters to take the co to next level.

Those who are tracking the company please share the views.

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optimistic.

I accept that there is slowdown but under these conditions it’s sales had grown 37 % in Q3 12 and 50 % in Q4 12.I know that just two qy results are not enough to predict the things precisely.

http://www.efreshers.com/jobs/roto-pumps-opening-for-freshers.html Link: http://www.efreshers.com/jobs/roto-pumps-opening-for-freshers.html

**In this statement they mentioned that "**We have embarked on a fast track growth plan and would be registering over 30% growth in the current year".If we look at companies in this segment like WPIL they performing well.Along with these factors , rupee depreciation by almost 20% gives me confidence to make that projection of 100 cr sales and 10 cr net profit.

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Roto Pumps seems to be getting mauled post its q1 fy 13 results. On face of it results seem to be quite good. Anyone with any guesses why stock price is being hammered?

period q1 fy 13 q1 fy 12 q4 fy 12 fy 12 fy 11

sales 16.86 14.45 24.42 76 59

PBT 1.65 1.06 4.01 10.75 8.18

net profit 0.86 0.68 2.66 7.27 5.39

I guess there might be some comparision with q4 fy 12 instead of q1 fy 12 which might be responsible for the correction.

cmp around 88-89

fy 12 eps was around 23.

market cap 27.5 crores.

book value is 102.

dividend for fy 12 declared at 2.70 Rs per share.

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Hi Hitesh,

Roto pumps announces reasonably good results.Sales grown by 17 per and PBT grew by 55 per.On unexpected high tax provision 50 per PAT grew by 28 per.As you stated due to higher expectations andcomparisonwith mar quarter ,punters are putting pressure on stock.They are recruiting people and giving statements that they are going to achieve 30 per growth.On 25 cr sales they paid 4.5 cr as salaries and in Q1 also they paid more than that.At cmp it is very attractive.

http://www.naukri.com/jg/rotopumps/ Link: http://www.naukri.com/jg/rotopumps/

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Hi All,

As per the AR, the company is expecting a good growth in its business. However, major threat by Chinese products remains (mentioned in the AR). Has anybody done some research on its product line? Being a small company the AR is quite impressive!

-Jigar

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Hi,

Good results announced by roto pumps.

Sales up by 25 per from 17.8 cr to 23 cr

Pbt up by 50 per from 2.4cr to 3.6 cr

Net profit up by 20 per from 1.5 cr to 1.88 cr ( despite of high tax provision & forex loss)

On track to achieve my estimation of 100 cr sales.

Price zoomed up to 155 from 85-90 levels at the time of q1 results.

Invested from much lower levels.

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This company sure looks interesting. Need to identify what happened in FY12 that this company had a sudden boost on all operating parameters. And how sustainable is the growth going forward.

If anybody has the 2012 AR, please mail me to

rudrachowdhury/at/gmail/dot/com

Thanks :slight_smile:

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emailed

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Hi Ayush,

could you please send me as well?

prashanth.kulkarni/gmail/dot/com

emailed

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emailed

Ayushji n OPji

Mail to me as well at my gmail I’d. Roto to apni lucknow Kanpur side ko company which is doing well. You can surely find out more in terms of size of opportunity, promoters n competitive ability. There were unfortunate early demises of promoters if I Remeber correctly but new generation has coped well it seems.

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This value pick guy is recommending it since 2010.

http://value-picks.blogspot.in/search/label/roto%20pumps

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@Vivek: I don’t think the co is based out of UP. They seem to be based out of Mumbai.

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No They were based in Panki Indla area of kanpur n then they shifted to Noida.Seems to be a decent bet.

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Hi everyone

I am not good in details. Nor am i prolific in numbers.

Some Positives on Roto-

1). Can chinese assure quality. ( I have not gone through AR ). China is known for mass production.

2). Roto has wide distribution network with Marketing Office in Asia, Australia, Newzeland & South America.

Regional Office in Europe, North America & Africa.

3). Germany Address- Roto Pumpen GMBH

C/o Nehm-coll, Rechtsanwalte, Grafenberger Allee 277-287 40237, Dusseldorf, Germany

4). Intec Pumper Bergen AS

Straumeveien 20, 5152 bones, Norway ( May be they supply to someNorwegian company). Not sure.

Based on 3 & 4, quality of their products may be good.

5). Since they cater to many industries, a fall in prospects of few industries can be offset by other.

It will be of immense help, if others can list the negatives.

May be hunch or intuition, feel the stock is still undervalued.

At the same time since its in my portfolio,feel i am seeing only the positives

Regards

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Hi Team,

It was a great learning cycle for a person who has started the investing from 2006 year on-wards and had repeated attempts as investor and trader and learning from those repeated failures.Finally landed to valuepickr around Dec’13 to restart from scratch. Started with the set of books shared by Donald, Hitesh, and fellow team here and repeating the reading of all the books again. It is all together a great experience and learning by reading all the great posts and view points (sorry to give the intro theory here since planning to start with roto pumps as the investment story now).

  1. Started with screener.in to get the performance data for the set of growth stocks and analyzed the top 50 stocks where roto pump is generating ROE > 25% for last 10+ years and Sales growth of > 20% over 10+ years.

  2. It is covering all the industries but mainly mines, waste water management, and petro chemical where there is a good demand coming. It is from mundane company from mundane industry (But naming is related to it)

  3. P/E multiples are very low compared to industry average of 15+. KSP pumps are getting rewarded around 15 PE.

  4. Industry growth forecast study (snip is here: http://www.finwin.com/demo/index.cfm?tab=News&story_id=16924131&distributor=DTN,RTT,PRN,BW&showLatest=false)

“According to India Water Pumps Market Forecast & Opportunities, 2018 Indian water pump market revenues are expected to grow at the CAGR of around 13% during 2013-18.”

  1. It is having very good distributor setup to realize the better reaching the customer and good profit margin (>20%)

  2. Company is currently in the capacity expansion and expected to completed by this quarter. It is also allocating good facilitation to R&D (http://www.chemtech-online.com/CP/roto_jan13.html)

  3. This stock is having 70% promoter holding and very illiquidfor making position. And it is a micro cap and not covered in many research and reports so far (from few like:http://www.investmentguruindia.com/StockMarket/buy-roto-pumps-ltd-for-target-rs12700-firstcall-research)

So far this is my analysis and capturing. It will be great to get your views on the same and inputs since planning to start the accumulation of this stock.

Thanks again for your great time and supporting every one who’re part of this forum.

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