Patels Airtemp India Ltd - Rs 28.00

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, exhaust air units, fan coils, fans & blowers, condensers & chillers etc. It also makes Dow therm condensers, inter coolers & after coolers, oil coolers, air heaters, HP & LP feed water heaters, LPG bullets etc. All these industrial process plant equipments are supplied to leading industrial sectors like power projects, refineries, fertilizers, cements, steel, aluminium, automobile, petrochemicals, engineering, pharmaceuticals, textiles, paper, 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. Hence its products have the coveted ASME `U' Stamp authorization. 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 Germany, Italy, Indonesia, Srilanka, UAE, Jordan UK, Ukraine etc.

Importantly, in the past PAL has successfully executed several orders of Nuclear Power Corporation of India. Hence it is expected to good orders from NPCIL in future due to signing of the Indo-US nuclear deal. In other words the future growth potential for the company is tremendous. Meanwhile company has done exceedingly well in the current year on the back of strong order position. Currently it boasts of having unexecuted order in hand to the tune of Rs 50 cr including Rs 16 cr order bagged from Essar Oil in Sept 2008. Recently, company reported good set of nos for the Dec’08 quarter, as it registered 30% rise in sales as well as NP to Rs 13 cr & 1.75 cr respectively. Even for nine months, the sales have increased by 35% Rs 49 cr whereas it saw a 40% jump in NP to Rs 5.20 cr thereby posting an EPS of Rs 10 till date. Accordingly it may end FY09 with sales of Rs 60 cr and PAT of Rs 6 cr leading to an EPS of Rs 12 on equity of Rs 5 cr. It may maintain its 15% dividend which gives a yield of 5% at CMP. For FY10 it can report a topline of Rs 75 cr and bottomline of Rs 7.50 cr i.e EPS of Rs 15 on current equity. Although it’s a small company with a gross block of less than Rs 15 cr but the share price can easily double within 9~12 months. Investors are strongly recommended to buy at current levels.

Click here to download Report (PDF)