Kabra Extrusion - Rs.65.00

Incorporated in 1982, this Kolsite group company from the Capital Goods sector manufactures Plastic Extrusion Machinery to manufacture a wide range of Plastic Pipes i.e. PVC, HDPE, LDPE, PP, Composite Pipes etc. Demand for pipes is growing due to the thrust on agriculture, water management, telecommunication and other infrastructure areas. Its clientele include Reliance, GAIL, Finolex, Supreme Industries, Garware Polyester, Nirma, Jain Irrigation, Flex, Sintex etc.

Its manufacturing facility is at Daman spread over an area of 4,00,000 sq. ft. equipped with state-of-the-art special purpose CNC machines for in-house machining The most critical components of the extrusion machines like screws, barrels, dies, spirals, thrust bearing housings, etc. are manufactured in-house. The company has collaboration with Battenfeld Extrusiontechnik GmbH of Germany, a part of SMS Plastics Technology, which is the world's largest manufacturer of plastic extrusion machinery. The company's in-house R&D having decades of engineering experience and advanced designing software has enabled it to regularly introduce the latest products.

FY04 was very good for the company as sales doubled to Rs. 80 cr. and NP increased by 131 per cent to Rs.7.70 cr. The company shared the good time with shareholders by declaring 1:1 bonus and giving 35 per cent dividend on expanded equity. Q1FY05 was quite flat with NP of Rs. 1.5 cr. on revenue of Rs.13 cr. Considering its leadership position in the industry and the large potential in domestic as well as export markets, it is expected to post sales of Rs.90 cr. and NP of around Rs.10 cr. leading to an EPS of Rs.15 on its small equity of Rs.6.86 cr. At CMP of Rs.65, it is quoting at P/E of just 4.5 and investors can expect 50 per cent appreciation in 12 months time.