Uniproducts India - Rs.54.00

Incorporated in 1982, Uniproducts India Ltd (UIL) is a pioneer in the manufacture of non-woven fabrics setting up the first fully integrated non-woven plant in technical collaboration with Uniproducts, Canada Inc. It was also the first to introduce wall-to-wall carpet, manufacture microdot fusible interlining and manufacture moulded carpets, NVH components and heatshields for automobiles. Presently, its product portfolio is segmented into three divisions viz: automotive, flooring and interlining. Under the Flooring Division it deals in tufted boardroom carpet and wooden laminate flooring which it markets under the brand name ‘Sheerwood’ laminates. Its Interlining division makes fusible as well as non-fusible interlining using chemical bond and thermobond technique and sells under the brand name as ‘Unitex’. But the major revenue driver for the company, which constitutes more than 80% of sales, is its Automotive Division wherein it manufactures as many as 190 different components of carpets, trims, NVH parts and heat shields for practically all major automobile manufacturers in India.

UIL has two manufacturing units, one near Rewari in Haryana and the other one at Noida near Delhi. Both its units are ISO / TS 16946 certified whereas its Rewari unit also holds ISO: 14000 certification. For manufacture of heat shield components, the company has a technical collaboration with Rieter Automotive Systems of Switzerland, which is among the world's largest and most reputed companies in this field. Last year, the company formed a joint venture with Juken Technology Ltd, Singapore, for production of mould fabrication and plastic injections components. Besides, it has already commenced production of state-of-the-art line from Dilo Systems, Germany, for the manufacture of high quality needle punch roof-lining and random velour fabrics. The company is a vendor to virtually all automakers like Fiat, Tata Motors, Maruti, Ashok Leyland, Honda, M&M, Toyota, and GM etc. apart from international auto ancillary biggies like Lear Corporation and Antolin group. Ford, UK, has also approved UIL for the supply of carpets and interlining for cars being manufactured in Great Britain.

According to estimates, the domestic automobile industry is expected to touch an annual sale of 20,00,000 cars by 2010, which will be a big opportunity for the company. Besides, India is going to become a major outsourcing hub for auto components manufacturing. Given its strength in innovation, engineering and product development. UIL is well- placed to benefit from this opportunity. Moreover, the company has aggressive expansion plans for which it is raising around Rs.18 cr. via 1:1 right issue @ Rs.40 per share. Considering all these factors, it may report sales of Rs.120 cr. and NP of Rs.3.50 cr. for FY07, which leads to an EPS of Rs.8 on its current equity of Rs.4.50 cr. With a gross block of Rs.65 cr., cash EPS of Rs.18 and book value of Rs.60, the scrip is trading fairly cheap at Rs.55 having a market cap of only Rs.25 cr. Although the forthcoming right issue will dilute its equity, but the impact of its expansion will be visible in FY08. So only long-term investors with patience are advised to take exposure in this scrip. Share price can easily double in 2 years.