PAE LTD - Rs.14.00

PAE Ltd was incorporated on 13th July 1950 at Mumbai as a wholly owned subsidiary of The Premier Automobiles Ltd (PAL), primarily to manufacture steering wheels, dashboards, bumpers, seats etc., trading and marketing automotive products, servicing of cars and fitting of air conditioners in automobiles. But consequent to the public issue of equity shares in February 1990, the company ceased to be a subsidiary of PAL. It was earlier know as Premier Auto Electric Ltd but subsequently it changed its name to PAE Ltd. in 2003. Today, it is one of India's largest and most professionally managed Marketing & Distribution company in the automotive component industry. PAE’s product range basically consists of two divisions i.e. Power division and component division.

Under Power Division, it deals in various automotive batteries for two wheelers, four wheelers, LCVs etc and is an authorized distributor for Exide batteries. It also markets big industrial batteries for railways, telephone exchanges etc. It has launched a huge range of Inverters and UPS which have excellent growth potentials. Under its Component Division, PAE represents renowned and respected names from the Indian auto components industry almost all ISO certified. This division is engaged in marketing and distribution of wide range of small and big auto components of well known manufacturers like Gabriel, Ceekay, Finolex, Enfield, Acdelco etc. Apart from being a distributor for MICO, it also markets oil & lubricants from ESSO. Being a five decade old company, PAE has a strategically located and enviable network of 31 branches and 10,000 dealers with a total strength of more than 200 employees. To increase the market share of its products, garage campaigns and dealer meets are organized. Company has also organizes training camps for mechanics and electricians to impart them know-how on the latest products & technologies. It also carries out regular and systematic studies of the market, dealer potential and improvement in the current market reach.

For PAE, building on trust is a tradition that ensures perennial supply of genuine spares and excellent after sales service at all times. Higher household income reduced Duty, easier finance; lower interest rates have motivated consumers to purchase new vehicles, which has resulted in an increased demand for its products. Moreover, due to change in its focus to more profitable products, its profit-margins have improved. For the nine month ending 31 Dec 2005, its OPM has tripled to 1.50% from 0.50% earlier. For the full year FY06, it may report sales of Rs.140 cr. and NP Rs.1.35 cr. i.e. EPS of Rs.1.40 on its current equity of Rs.9.50 cr. For FY07, it can report an EPS of Rs.2. Its promoters Premier Ltd holds 41% of stake and its current book value stands at Rs.33. Being a small company with a very low NPM, the company enjoys a market cap of only Rs.13 cr. Interestingly in 1994, the company had allotted shares to MF’s @ 125 and with its 52W high of Rs.32 and low of Rs.12, it seems a relatively safer bet in the currently overheated market.