Experts/Company

Poll Result

Experts view

R S Iyer

(KR Choksey)

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This is an opportunity issue as the market is doing well. If one feels that the market remains good for next 2-3 months, then one can apply for the issue for listing gains and not for holding purpose. But if the market gets setback of 1000-2000 points in near term then the stock may not list above issue price or not even at par.

SP Tulsian

(Investment Advisor)

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Manaksia is a multi-product multi-divisional company with 15 manufacturing units in India and 3 abroad with 2 in Nigeria and one in Ghana. The company is into metal products, packaging products, mosquito coils and engineering and other goods. The financial performance of the company has been robust and consistent for the last over five years with good growth having posted by the company, over the years.

The company should be able to post an EPS in excess of Rs 20 for FY 08, considering the present trend of working.

Post issue, paid-up equity of the company would rise from Rs 10.80 crore to Rs 13.90 crore, which is definitely low, compared to the volume and profitability of the company, which is likely to be Rs 1,000 crore and Rs 100 crore plus, respectively.

The present product mix of the company is about 72% in Metals of which 25% is for Ferrous and 47% for non-Ferrous, especially Aluminium. Packaging contributes about 14% while 9% is from Mosquito Coil. In its Aluminium Alloy business, the company has 60% raw material input as scrap while 40% as primary metal which give better conversion margin to the company. Due to this, raw material constitutes about 53% of manufactured product sales, which is considered quite low by any standards, thus giving good profit margins to the company.

The company with its metal management skills is able to manufacture advanced metal packaging products like ROPP Caps, Crowns, Metal Containers, Mosquite Coil stands and are supplying to companies like Coke, Reckitt Benckiser, Shiva Distilleries etc. Due to huge demand of the existing clients and better margins, the focus of the company has been in this segment.

Considering the expected profitability of Rs 20 EPS for FY 08, share is being issued at a PE of about 8 times. Future expansion in the capacity of the company would improve the profitability. Consistent growth in the financial performance of the company, for the last five years, as also low equity base of Rs 13.90 crore are positive features of the issue.

Investment is advised in the issue, which would be profitable in the short and medium term.