Patels Airtemp - Rs.34.00

Incorporated in 1973, Patels Airtemp (India) Ltd (PAL) is one of the leading designers, manufacturers and suppliers of the complete range of heat exchangers such as shell & tube type, finned tube type and air cooled heat exchangers, pressure vessels, columns & air-conditioning and refrigeration equipments like coils, air handling units, fan coils, fans & blowers, condensers & chillers etc. All these industrial process plant equipments are supplied to leading industrial sectors like power projects, refineries, fertilizers, cements, petrochemicals, engineering, pharmaceuticals, textiles, chemical etc. Importantly, the company also undertakes turnkey projects in the highly specialized and related area of Humidification, Ventilation and Air-Conditioning i.e. HVAC. Its expertise in HVAC project includes industrial air conditioning, pharmaceutical plant air conditioning, textile humidification, pressurization and ventilation systems, evaporative cooling systems etc. Besides, it also undertakes project work for air-conditioning multiplexes, offices, educational institutions, halls, theaters, hospital etc.

PAL has two manufacturing units in Gujarat – one at Mehsana and another at Ahmedabad. It has technical collaboration with M/s. TEK FINS Inc., USA, for design and manufacture of air-cooled heat exchangers. To support its turnkey HVAC projects, the company has even backward integrated its facility to manufacture package air conditioners, ductable air-conditioners, split air-conditioners, window air-conditioners etc. to cater to the domestic industrial segments. Importantly, all the products that it manufactures in the plant are designed in-house using the most advanced software. The company is accredited by the American Society of Mechanical Engineers (ASME) and the National Board of Boilers & Pressure Vessels. It maintains quality standards to satisfy third party inspections from leading agencies such as Lloyds, EIL, BVIS, IBR, CCOE, PDIL, LINDE, H&G, Technimont ICB, UHDE, CHEMTAX, BAXCOUNSEL etc. For updating its heat transfer technology, it has also become member of HTRI (Heat Transfer Research Inc., USA). It caters to a very huge clientele including leading companies from across the industry and is an approved supplier for most of them. Although miniscule, it also exports equipments to Indonesia, Srilanka, UAE, Jordan UK, Ukraine etc.

Due to strong industrial growth and the fast growing economy, this engineering fabrication company is doing extremely well. For the first nine months ending 31st December 2006, its sales and net profit have increased by 50% and 60% respectively. It is expected to end FY07 with a topline of Rs.45 cr. with bottomline of around Rs.2.35 cr. This works out to an EPS of Rs.5 on its equity of Rs.5.07 cr. For FY08, it can easily register 20% growth which means an EPS of Rs.6. This fast growing engineering company is trading fairly cheap at a P/E multiple of less than 6 and is available at a market cap of merely Rs.17 cr. Investors are strongly recommended to buy this scrip at current levels with a price target of Rs.50 i.e. 50% appreciation in 9-12 months.