Buy Pitti Laminations; target of Rs 105: Sunidhi Securities

Sunidhi Securities is bullish on Pitti Laminations and has recommended buy rating on the stock with a target of Rs 105 in its April 11, 2012 research report.

"Incorporated in 1987, PLL is engaged in the manufacture of quality laminations and is one stop solution provider for critical sectors. It has blue chip clients in the list and the demand for its products is improving day after day as the user industries are on expansion mode. PLL's plants are located in Hyderabad, Andhra Pradesh, India and its factories are located in a 50 km radius of the city. PLL holds the coveted ISO 9002 certification by BVQI of U.K. The electrical laminations installed capacity is 25,000 tpa for the use in the rotating electrical machinery such as industrial motors, aeronautic wing control motors etc."

"During FY11, sales advanced by 68.5% to Rs255.6 crore and net profit by 2816% to Rs8.5 crore. OP and NP margin stood at 12.3% and 3.3%. EPS for FY11 stood at Rs9.0.  The DER as at FY11 stood at 1.4:1 whereas the value of the gross block at Rs100.0 crore.  During Q3FY12, sales rose 49.0% to Rs108.0 crore and net profit by 134.0% to Rs6.1 crore. (YoY). OPM and NPM stood at 15.0% and 5.7% compared to 11.9% and 3.6% respectively in Q3FY11. EPS for Q3FY12 stands at Rs5.7."

"PLL makes electrical laminations which are used in defence, power projects, and aerospace. Its products are in huge demand and most of the products are exported.  The fact that PPL offers wide range of products and provides "one stop solutions" and prompt deliveries to the critical sectors of the economy places it in an advantageous position and offers opportunities to move up the value chain in the years to come.  The ongoing expansion and backward integration give strong visibility to sales & profitability going forward.  At the CMP of Rs81, the share is trading at a P/E of 5x on FY12E and 3.8x on FY13E. We recommend BUY with a target price of Rs105 in the medium term," says Sunidhi Securities research report.  

Public holding more than 90% in Indian cos

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