Shree Ganesh Forgings Ltd - Rs 36.00
Established in 1982, Shree Ganesh Forging Ltd (SGFL) is one of the well known manufacturer and exporter of flanges, fittings and automotive components. It specializes in producing complete line of stainless steel, carbon steel and alloy steel forgings for industries like oil, gas, petrochemical, food, dairy industries, breweries, nuclear application, automobile industry, two wheeler industry, earth moving industry, tractor industry, defense, railway etc. Over the years it has developed special grades of stainless steel, duplex steel, special chrome molly, special alloy steel, carbon steel etc. SGFL boasts of making more than 2500 varieties of specialized items on piecemeal production and manufactures different variety of flanges and fittings such a weld neck, slip on blind, lap joint, threaded, socket weld, forged vales etc weighing from 0.5 kg to 1000 kg. Moreover it also manufactures hot forged components such as gears, shafts, crankshafts, crown wheels and pinions, propeller shaft components like sleeve yokes, flange yokes, universal joint crosses, connecting roads, steering knuckle arms etc. for four wheelers, two wheelers etc. Interestingly, it also has capabilities to supply vast range of steel forged finished products like eye, shank, single, double, and swivel hooks for the lifting industry.
SGFL’s manufacturing plant, located in the industrial belt of Pawane in Navi Mumbai is well equipped with facilities right from raw material & cutting section, die making, upset forging, ring rolling, heat treatment, shot blasting up to machining and testing. Ironically, company products has been qualified, approved and certified by numerous foreign agencies across the globe. Its product are well accepted in international market and being exported regularly to USA, Canada, U.K., Ireland, Europe (Germany, Netherlands, Belgium, Denmark, Spain, France, Greece, Austria, etc ) and Middle East markets. Offlate company has shifted its focus back on high value stainless steel products (vs the cheaper carbon steel products) and is trying to restore its exports to total sales ratio to the hitherto 70%. Meanwhile, in India, SGFL is preferred supplied to biggies like Alfa Laval, BEML, Greaves, L&T, Voltas, BARC, Kirloskar, KSB, Godrej, M&M etc. On the other hand, SGFL has implemented an expansion plan in late 2005 to double its forging capacities from 11000 MT to 22800 MT at the existing location by installing two new press lines - 2500 MT press and 4000 MT press with additions of 48 automated C.N.C robotic application Machines. The project is almost completed and is expected to start commercial production soon which will give a great fillip to its financials in FY09.
Besides to increase its global presence, last year SGFL acquired 100% stake in two European companies - Hertecant N V - a manufacturing concern located in Belgium and ELFE - a distribution company located in France from Outo Kumpu. This was the best deal and turning point for the company as it paid only Rs 23 cr for a company which generates sales to the tune of Rs 100 cr and PAT of roughly around Rs 10 cr. Further it has established a successful joint venture with Geldbach UK Ltd - a marketing arm which supports all of SGFL’s main customers. Accordingly on a consolidated basis, SGFL is estimated to clock a turnover of Rs 225 cr and profit of Rs 17 cr. This works out to an EPS of Rs 14 on current equity of Rs 12.50 cr. Unfortunately, scrip has corrected more than 75% from high of Rs 135 and is now available at an EV of less than Rs 125 cr. Despite input cost being volatile and rising, investors are strongly recommended to buy at current levels with a price target of Rs 75 (100% return) in 15~18 months.
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