Buy Kirloskar Pneumatic; tgt of Rs 547: Firstcall Research

“Kirloskar Pneumatic Company Ltd. (KPCL), part of the Kirloskar Group is a synonym for providing high end integrated solutions using Compression & Transmission Technologies. KPCL was incorporated in 1958. Its diversified solutions portfolio caters to the needs of industries like Petrochemicals, Power, Steel, Cement, Food & Beverage, Defense, Construction & Mining and many more. Kirloskar Pneumatic Company Ltd (KPCL) is one of the core group companies, an ISO 9001:2000, ISO 14001:2004, OHSAS 18001:2007 Company,. The company started its operations with the manufacture of Air Compressors and Pneumatic Tools. New product lines were then added, included Air Conditioning and Refrigeration systems, Marine HVACR, Process Gas systems and Hydraulic Power Transmission machinery. The company has also earned an enviable reputation for its Systems Engineering and Turnkey Project expertise.”

“Kirloskar Pneumatic Co. Ltd. has reported net profit of Rs 115.40 million for the quarter ended on December 31, 2011 as against Rs. 79.70 million in the same quarter last year, an increase of 44.79%. It has reported net sales of Rs 1364.00 million for the quarter ended on December 31, 2011 as against Rs 977.10 million in the same quarter last year, a rise of 39.60%. Total income grew by 39.73% to Rs 1393.50 million from Rs.997.30 million in the same quarter last year. During the quarter, it reported earnings of Rs 8.99 a share.”

“At the current market price of Rs.484.15, the stock is trading at 8.61 x FY12E and 7.41 x FY13E respectively. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs.56.21 and Rs.65.36 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 20% and 21% over 2010 to 2013E respectively. On the basis of EV/EBITDA, the stock trades at 5.41 x for FY12E and 4.71 x for FY13E. Price to Book Value of the stock is expected to be at 2.41 x and 1.82 x respectively for FY12E and FY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 547 for medium term investment,” says Firstcall Research report.  

Institutional holding more than 40% in Indian cos

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