Ricoh India - Rs.33.50

Ricoh India Ltd (RIL) was originally established as a joint venture with the RPG group as RPG Ricoh Ltd. in 1993. It was later re-incorporated as RIL with 76% ownership by Ricoh Company Ltd. (RCL), Japan, in 1998. RCL is a leading global player in the area of Imaging solutions like Digital Plain Paper Copiers, Colour Plain Paper Copiers, Fax machines, Thermal paper etc. Networking Input/Output systems like Multifunction Printers, Services and Software, Scanners, Networking System Solutions like PCs, Servers, Networking equipment, Networking software etc. In fact, the Ricoh Group currently enjoys the largest market share for plain paper copiers in Europe and Japan and is No.2 share in USA. Thus with its parent company’s strong products pricing and operational support, RIL is poised to grow exponentially in coming years.

RIL’s product range includes Colour Multifunction Printers, Black & White Multifunction Printers, Colour Laser Printers and Copy Printers. The Aficio range of products provides affordable adaptability to have printing, copying, scanning and fax capabilities in one machine. Its compact colour Laser printer takes care of fast colour printing requirements with a high-geared engine, almost instantaneous warm-up time and automatic duplex eliminating the need for two separate
devices. RIL has a nationwide presence with 15 branch offices, over 250 dealers, and employs over 900 people. With a market share of 25%, the company is well on its way to become the number 1 solutions provider in Document Management Systems. Interestingly, the company believes that there is a huge scope for office automation products in Tier II & III cities that still remains to be fully exploited. Hence it is also targeting cities like Ahmedabad, Lucknow, Vishakapatnam, Jaipur, Chandigarh, Pune, Hyderabad, Coimbatore etc.

The office automation industry in India has witnessed a transformation powered by technological advancement. Digital technology is advancing at an ever-increasing pace. More and more companies are now realising that the use of Multi Function products not only helps them to reduce cost but also helps in enhancing productivity. With the growing demand for digitalization, the office automation industry is expected to grow substantially in coming years and all this augurs well for the company. To consolidate its Indian operation, Gestetner India Ltd, a sister concern was merged with RIL a couple of years back which has resulted in a favourable impact on the overall performance of the company. For FY07, RIL is estimated to clock total revenue of Rs.185 cr. with net profit of Rs.12.50 cr., which works out to an EPS of more than Rs.3 on its equity of Rs.39.77 cr. For FY08, it may register around an EPS of Rs.4. Hence at a P/E multiple of less than 8 times against FY08 earnings. With a current market cap of merely Rs.125 cr. this MNC is available extremely cheap. Strong buying is recommended with a conservative price target of Rs.50 in a year’s time.