Simmonds Marshall - Rs.47.00

Simmonds Marshall Ltd (SML) was incorporated on April 16,1960 as a private limited company to manufacture Nylon insert self-locking Nut (Nyloc Nuts) and other special fasteners. It was promoted by the J. N. Marshall group in technical & financial collaboration with Firth Cleveland Fastenings Ltd (now known as Forest Fastners Ltd.) of U.K who were also the original investors of Nyloc. In 1986, the company went public and is now a listed company on the Bombay Stock Exchange. Today, SML is the market leader in Nyloc nuts and manufactures a wide range world class nuts like flange, cage, weld, cap, castle, couplings, u-nuts, wheel nuts etc. It caters to the automotive and industrial sectors and supplies to almost all major automobile manufacturers in India as OE suppliers. Furthermore, General Motors, Fiat, Honda, Caterpillar, Suzuki, Leyland, Dana, New Holland are some of the globally renowned companies that source their requirements from SML.

The company has been regularly augmenting its cold forming capacity and can produce over 500 million nuts per annum in a wide range from M4 to M48 diameter and equivalent imperial sizes. These nuts are manufactured either to American, British, Japanese, ISO or Indian Standards in a variety of thread forms and protective finishes. Moreover, it is fully equipped to supply a wide range of bolts ranging from M5 to M70 from its associate companies. It also has a cold forged automotive components division which is capable of cold forging small and shallow components for automobile manufacturers and their ancillaries. Its 320 tonnes Maypress can coin, extrude, upset, size, fine stamp, bend, draw, form and manufacture components for bearings, chains, bicycles and electrical equipment industries besides the automobile industry. The company also has a battery of multi-spindle automatic bar turning centres capable of producing related automotive components.
Since India is becoming an outsourcing hub for quality auto ancillary products and all major foreign automobile manufacturers are setting up operations in India, this represents a large potential to market the company's products.

This augurs well for the company as it is estimated to register a topline of Rs.21 cr. and bottomline of Rs.1.80 cr. for FY07, posting an EPS of Rs.9 on its tiny equity of Rs.2.10 cr. Incidentally, due to the sharp correction on the bourses, the scrip is hitting new lows giving a good opportunity to buy. Investors are recommended to buy it with a price target of Rs.75 (i.e. 50% appreciation) in a year’s time.