Kilburn Engineering - Rs.64.00

Incorporated in 1987, Kilburn Engineering Ltd. (KIL) is an associate company of Williamson Magor Ltd., which is one of the 20 large industrial groups operating in India. The company specialises in process design, engineering, manufacture, installation and commissioning of turnkey plants/systems for petrochemicals, chemicals, fertilizers, refineries, oil & gas, food processing, etc. It is also engaged in designing, manufacturing, marketing, field erection and commissioning of industrial drying system, oil field and air handling equipment. KIL is well-known in the field of industrial drying, its core strength being ‘Heat and Mass Transfer Systems’. Besides, it has expertise in chemical engineering and chemical treatment process and also deals in fabrication equipments like heat exchangers, evaporators, reactors etc.

KIL has a modern and well-equipped workshop equipped with machining, fabrication, testing and allied facilities and has a technical collaboration with Nara Machinery Co of Japan and Carrier Vibrating Equipment of USA. It has been awarded ISO-9001: 2000 Quality System Certification by M/S. Det Norske Veritas (DNV) of the Netherlands and has been accredited by the RVA. The company exports equipments to over 25 countries worldwide including Japan, Italy, USA, France, China, Taiwan and Malaysia etc. In the domestic market GAIL, HLL, IPCL, Gujarat Alkalies, GNFC, L&T, DCM Shriram, Nirma, HPCL are among its reputed clients. This year, it started supplying new Phase V Tea Dryer to Kenya Tea Development Authority. KIL has also designed and developed equipment for the rice mill industry to diversify its product range. It has also successfully negotiated to export Paddle dryers to M/s. Komline Sanderson, USA. Few months back, it supplied dryers to Ivory Coast in Africa for processing of desiccated coconut. It is also focusing on the food processing industry, which has a huge growth potential. KIL is putting more thrust on exports and intends to take it to 40% of total sales from the current 25%. In short, it has a very healthy order book position, which includes repeat orders from world-class companies.

Under the rehabilitation scheme sanctioned by the BIFR, KIL has got various fiscal reliefs, benefits and concessions from the lenders/bankers due to which it turned around last fiscal ending Sept 04. In February 2004, it sold off a property in Baroda for a one-time settlement with financial institutions and paid off Rs.16 cr. It has brought down its debt from Rs.87 cr. to Rs.24 cr. and expects to wipe out all its carry forward losses by 2006~07. Recently, the company issued Right shares to raise funds for its working capital requirement. In future, it may also re-locate its Mumbai factory in Bhandup, and sell this prime property and improve its operating efficiency using the funds generated. For the six months ending March 2005, its turnover has more than doubled to Rs.25 cr. and NP stood at Rs.3.75 cr. compared to Net Loss of Rs.5.70 cr. For full FY05, it may report sales of Rs.55 cr. and NP of Rs.8 cr. resulting in an EPS of Rs.12 on it current equity of Rs.6.75 cr. Diluted EPS on its expanded equity may amount to Rs.8. For FY06, it can post an EPS of Rs.14 on the expanded equity. For investors, it is a very good bet from the engineering sector and they can expect a price target of Rs.150 in 15 months.