Gandhi Special on strong footing of recovery: ICICIdirect

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ICICIdirect.com's report on Gandhi Special Tubes

"Gandhi Special Tubes (GST), is a manufacturer of small diameter (outer diameter 3-75 mm) seamless and welded steel tubes, which find application in automotive, hydraulics, refrigeration (condenser tubes) and other engineering services. In the automotive space, the company manufactures seamless steel tubes that are used as fuel injection tubes in the commercial vehicles (diesel) category. In the hydraulics space, the company manufactures seamless steel tubes, which are used in material handling equipment mainly used in mining & construction activity. GST’s topline growth has been subdued (3.2% CAGR in FY10-14) in the past on the back of a slowdown in the commercial vehicle (CV) and mining & construction space. GST clocked a topline of Rs 83.5 crore in FY14 with corresponding EBITDA at Rs 26.1 crore (EBITDA margins at 31.3%) and PAT at Rs 17.3 crore. The company’s presence in a niche segment coupled with low competitive intensity has aided superior EBITDA margins (30-40%) in the past. With the CV cycle on the cusp of a cyclical recovery and the expected revival in construction/mining activity, we believe GST is on a strong footing of recovery with increasing sales & profitability, going forward", says ICICIdirect.com research report.

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