Electrotherm India - Rs.99.00

(Code No: 526608) In 1986, Electrotherm India Ltd (EIL) was promoted by technocrat Mukesh Bhandari to manufacture crucial induction furnaces for the Steel Industry. Since then, it has become a trusted name in the foundry and steel industry providing unmatched technological leadership. EIL caters to Ferrous & Non-Ferrous foundries and the metal melting industry by manufacturing Medium Frequency Induction Melting Furnaces, Metal Refining Converter, Induction Ladle Refining Furnace, Induction Heating/Hardening Equipments, Submerged Arc Furnace and a host of allied products. It has the distinction of manufacturing 3 tonnes to 20 tonnes Medium Frequency Induction Melting Furnaces for the first time in the country. The company is renowned for providing sophisticated technologies and offers customised metallurgical turnkey solutions irrespective of its nature, size and geographical boundaries. Apart from being a leading player in domestic market only next to ABB, EIL has exported its products to Ethiopia, Ghana, Greece, Kenya, Mauritius, Myanmar, Sri Lanka, South Africa, Tanzania, Zimbabwe, Middle East and East African countries. As of today, EIL has over 800 installations.

EIL's full-fledged state-of-the-art manufacturing and testing facilities are spread over an expansive area of 70,000 sq.mtrs at Palodia on the outskirts of Ahmedabad. It has a well equipped machine / assembly shop fitted with the latest CNC machines and a host of special purpose machines for better precision in machining and overall quality of its products. Besides, the company can boast of having the largest group of Metallurgical Engineers compared to any Metallurgical equipment manufacturer in India. Its R&D department’s pursuit for newer and better solutions has led to the development of sophisticated, rugged, efficient, cost-effective and user friendly equipment for the metallurgical industry for which EIL was conferred 21 prestigious national awards. For better service, the company has a widespread Sales & Service network with more than 30 offices in India alongwith offices at Australia, Bangladesh, Brazil, Russia etc.

The rising demand of steel worldwide has led to capacity expansion by all the major steel producers, which augurs very well for EIL and has eventually led to a strong order book position. Apart from this, to cash on the steel boom, EIL has recently set up a cast iron manufacturing facility in the Kutch District of Gujarat with an installed capacity of 70,000 TPA. This unit started commercial production a couple of months back only and will add substantially to the company’s topline and bottomline in coming quarters. In the near future, the company intends to set up a cast iron pipe manufacturing facility and by mid 2006 plans to set up a sponge iron plant.

For the nine months ending 31st Dec 2004, its Net Sales tripled to Rs.103.50 cr. and NP zoomed to Rs.7 cr. compared to 0.32 cr. last year. For the full year FY05, it can report NP of Rs.10 cr., which works out to an EPS of Rs.21 on its current equity of Rs.4.80 cr. For future growth and to meet its huge expansion plans, it may raise money by issuing equity shares and through debt, which will give returns over a period of time. Hence, long-term investors are recommended to buy this scrip with expectation of 100% return in 18~24 months.