Associated Profiles & Aluminium - Rs.40.35
Incorporated in 1987, Associated Profiles and Aluminium Ltd (APAL) belongs to the reputed and three decade old “ASSOCIATED” group which has expertise in manufacturing aluminium alloys ingots, aluminium door and window frames, designer aluminum grill, aluminium flooring, surface coating, structural glazing system and curtain wall system i.e. complete glass exterior for building structures. Infact one of the group company namely “Elesar Focchi” which has technical collaboration with ‘Focchi’ of Italy has a strong goodwill in the market with brands like Deco Frame, Deco-grille, Deco floor, Deco-tech, Elvisia and El-quadra. However APAL is engaged in manufacturing of only electrical grade wire rods which is eventually used by conductor manufacturers for distribution and transmission of electricity. Moreover these aluminium EC wire rods are also used for redrawing into wires/strips for manufacture of cables, conductors, transformer wires/strips and in various hardware or general engineering components. In short company’s fortune is dependent on growth of power ancillary industry which means ultimately on power sector.
APAL’s manufacturing facility namely ‘Hind Aluminum’ is located in industrial belt of Silvassa in Union territory of Dadra & Nagar Haveli. Incidentally company is the largest secondary producer of aluminum wire rods with the present capacity of 25000 tonnes for the melting of aluminium ingots, cold rolling and making of these wire rods. Due to higher margin, company is constantly exploring the possibilities of exporting its products and hence is keeping regular touch with various customers around the world. Although negligible presently, but in future export sales is expected to rise gradually. In the year 2005-06 APAL diversified into bauxite mining sector and is now doing full fledge mining activity in Village Mahadevia of Jamnagar district, Gujarat. Infact it has already made shipments of Bauxite ore to its customer in China. Besides, company has setup a Wind Turbine Generator project in Nandurbar district, Maharashtra with an annual installed capacity of 1250 KW. Few weeks back it has purchased another 1500 KW Wind Turbine Generator for Rs 9 cr which is located at Sangali district, Maharashtra. That means the revenue from its power generation business is expected to double in current fiscal. To conclude company has smartly de-risked its business by diversifying into mining as well as power generation.
Fundamentally as well as financially, APAL is on a strong footing with a professional backing by ASSOCIATED group. Ironically, company has a good track record of un-interrupted dividend payment since last 10 years. For the nine month ending Dec 2006, sales grew by 25% to 146 cr and NP increased by 40% to 4.70 cr. Accordingly, it may end FY07 with net sales of around 200 cr and PAT of around 6 cr which means EPS of 12 Rs on tiny equity of 5 cr. It already gave 12% dividend in March 2007. Hence scrip is available at a P/E ratio of 3x times against its FY07 earning. Considering the increase in revenue from mining and power business in coming years, APAL is estimated to clock a turnover of 220 cr and profit of 7 cr i.e. EPS of 14 Rs for FY08. Investors can buy at current levels as scrip has the potential to double in 12¬15 months
APAL’s manufacturing facility namely ‘Hind Aluminum’ is located in industrial belt of Silvassa in Union territory of Dadra & Nagar Haveli. Incidentally company is the largest secondary producer of aluminum wire rods with the present capacity of 25000 tonnes for the melting of aluminium ingots, cold rolling and making of these wire rods. Due to higher margin, company is constantly exploring the possibilities of exporting its products and hence is keeping regular touch with various customers around the world. Although negligible presently, but in future export sales is expected to rise gradually. In the year 2005-06 APAL diversified into bauxite mining sector and is now doing full fledge mining activity in Village Mahadevia of Jamnagar district, Gujarat. Infact it has already made shipments of Bauxite ore to its customer in China. Besides, company has setup a Wind Turbine Generator project in Nandurbar district, Maharashtra with an annual installed capacity of 1250 KW. Few weeks back it has purchased another 1500 KW Wind Turbine Generator for Rs 9 cr which is located at Sangali district, Maharashtra. That means the revenue from its power generation business is expected to double in current fiscal. To conclude company has smartly de-risked its business by diversifying into mining as well as power generation.
Fundamentally as well as financially, APAL is on a strong footing with a professional backing by ASSOCIATED group. Ironically, company has a good track record of un-interrupted dividend payment since last 10 years. For the nine month ending Dec 2006, sales grew by 25% to 146 cr and NP increased by 40% to 4.70 cr. Accordingly, it may end FY07 with net sales of around 200 cr and PAT of around 6 cr which means EPS of 12 Rs on tiny equity of 5 cr. It already gave 12% dividend in March 2007. Hence scrip is available at a P/E ratio of 3x times against its FY07 earning. Considering the increase in revenue from mining and power business in coming years, APAL is estimated to clock a turnover of 220 cr and profit of 7 cr i.e. EPS of 14 Rs for FY08. Investors can buy at current levels as scrip has the potential to double in 12¬15 months
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