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!!! W E L C O M E !!!
In INDIA, people generally relate to stock market as “EASY MONEY” or “SATTA BAZAAR”. For them it’s purely a GAME or matter of sheer LUCK and nothing more than that. But seldom do they know, by following certain PRINCIPLES and taking INFORMED decision, this same platform has the power to take them from rags to riches. No doubt, it has a certain amount of RISK attached to it. But every business or investment has it. What more, the Finance Ministry has already made the long term capital gain as TAX FREE whereas the short term capital gain is taxed at merely 10%. On the economic front, India’s GDP is growing and is expected to grow at scorching pace of more than 8%. Unfortunately, even today our market is being ruled and dominated by FIRANGI’s money. But I can see, the day is not far when our general PUBLIC will change its perception and start putting MOST of their savings in equities as an ** Investment **.
Remember, "K N O W L E D G E" and "P A T I E N C E" are the key to success.
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SAARTHI

Sensex (LIVE- Intraday)

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Wednesday, April 2, 2008

Hind Rectifiers Ltd - Rs 130.00

Established in 1958, with the collaboration of Westinghouse, Brake & Signal, U.K. (who still holds 16% equity stake as on today), Hind Rectifiers Ltd (Hirect) has a rich experience in developing, designing, manufacturing and marketing power semiconductor, power electronic equipments and railway transportation equipments. Currently company derives 50% of its revenue from railways, 20% from power sector and the rest 30% from various industries like telecommunication, electronics, defence, aviation, R&D organizations, electro-chemical, steel, cement etc. Basically, its business is segmented into following four divisions:-

A. Equipment division: manufactures power supply equipments for R&D, Defence & Aviation, DC power system for electrochemical plants, rectifier for metal finishing, battery chargers and dischargers etc. It also offers specialised services such as customisation, automation and optimisation of controls and safety. Notably it has a technical tie-up with M/s Friem S.P.A., Italy in design & technology transfer of high current water cooled rectifier system for Electro-chemical applications.

B. Semi Conductor division: manufactures power diodes, power modules, thyristors & assemblies apart from supplying special devices and assemblies on request. To complement this, a full range of heatsink assemblies using IEC circuit configuration as well as custom design is also manufactured. These semi-conductors find use in industrial, military and transportation applications. Recently, company has signed a technical collaboration agreement with M/s. Infineon Technologies AG, Germany for manufacturing of IGBT based primeSTACK which will compliment its other products. These stacks will also be used for inhouse consumption for manufacture of equipments.

C. Railway Transportation division: manufactures transformer for rolling stock, auxiliary converter and inverter, track side DC substation equipment, rectifier for rolling stock etc. Out of 50% revenue from railways, 10% comes from locomotive transformers, 20% from rectifiers and rest 20% from invertors. Hirect has a technical collaboration with M/s Transtechnik, GmbH of Germany for design and development of inverter and auxiliary converters for traction application. In Collaboration with M/s. Nieke, Germany, company has upgraded its technology and infrastructure for manufacture of main transformer for AC/DC Dual Voltage EMU and BG AC EMU. It also has a tie-up with M/s Microelettrica Scientifica of ITALY for supply of resistors for railway application.

D. Trading division: Hirect has a separate small trading division under which it imports and markets semi-conductor fuses from BUSSMANN-Denmark, capacitors from ICAR-Italy and resistors from MICROELETTRICA SCIENTIFICA, Italy.

Hirect has two manufacturing plants spread across Mumbai and Nasik. Its Equipment division has an ISO 9001 & Semiconductor division has an ISO 9002 quality system. Although railway is its major customer, still it has a huge and reputed clientele including HLL, Indian Navy, Ordnance factory, ISRO, Bhabha Atomic, Hindustan Aeronautical, Nuclear Power Corp, BSNL, BHEL, BEML, Grasim, L&T, Tata Steel, Hind Zinc, Siemes, ABB, Crompton Greaves etc. The products are also exported to Australia, Bangladesh, Canada, Columbia, Italy, Malaysia, Middle East, Pakistan, South Africa, South Korea, Spain, Sri Lanka, Thailand, UK and USA.

Recently, Hirect has modernized all its plants in Mumbai and has setup green-field plants in tax free zone of Uttaranchal for manufacturing of equipment, semiconductor and the railway transportation system. Although this new plant is ready, still Hirect is completing the earlier orders from its old plant in Mumbai and Nagpur in order to get the Cenvat paid on raw material. However the new orders booked by the company will be manufactured at Uttranchal plant, hence the excise and income tax benefits will be visible from FY09. Based on the first three quarter nos, it may end FY08 with sales of Rs 95 cr and PAT of around Rs 11 cr i.e. EPS of Rs 15 on a very tiny equity of Rs 1.50 cr having a face value of Rs 2/- per share. But importantly, company is estimated to report an EPS of more than Rs 20 for FY09. So investors are strongly recommended to buy at current levels as at a fair discounting by 14x times share price can double in 12~15 months. Moreover company is in its 50th year of operation, hence chances of declaring a liberal bonus is also high.


Posted by S A A R T H I at Wednesday, April 02, 2008

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