GAREWARE WALLROPES
BSE: 509557 NSE: GARWALLROP CMP : 62.30 BOOK VALUE : 91.50
Garware-Wall Ropes Limited (GWRL) a Pune based company is engaged in the manufacture of synthetic cordage and nettings. It also provides range of products for fishing and aquaculture industries, as well as sports, fibre, industrial products and projects business.
It operates in two segments: Synthetic Cordage, and Fibre and Industrial Products & Projects segment. Its products include twines, ropes and yarns, nettings, woven fabric, metal gabions, machineries and parts. It offers a range of three and four strand hawser laid ropes for a variety of applications, such as fishing, shipping, ports, shipbuilding yards, stevedoring, defense, material handling, construction, electricity boards and various other industrial applications.
The company has maintained its dominant position in the domestic market and is building a strong brand image in overseas markets. Development of new and value added products is being undertaken with renewed vigor.
Demand for industrial and mooring ropes depends on overall economic growth of India which indeed is promising. Considering the large investments being made in the infrastructure development, a growing market has opened up for GWRL’s construction and environmental products.
GWRL is a small cap company having a Market cap of just Rs.142 crores. In FY2009-10, the company’s total revenues grew by just 1.67 per cent at Rs.453.68 crores over previous fiscal but PAT grew by 19.62 per cent at Rs.19.38 crores over FY2008-09. While profit margins are pretty low hovering around 3.6 to 6.5 per cent, the company does around 20 times business of its low Equity base of Rs.23.70 crores. ROE is 9.19 and ROCE is 11.98 per cent. P/BV is 0.60 and 52 week range is Rs.93.45- 55.
GWRL is a dividend paying company. The company paid a dividend of 25% in FY2010 and hopefully company should continue rewarding its shareholders appropriately as bottom line continues to grow over the years.
The company has maintained its dominant position in the domestic market and is building a strong brand image in overseas markets. Development of new and value added products is being undertaken with renewed vigor.
Demand for industrial and mooring ropes depends on overall economic growth of India which indeed is promising. Considering the large investments being made in the infrastructure development, a growing market has opened up for GWRL’s construction and environmental products.
GWRL is a small cap company having a Market cap of just Rs.142 crores. In FY2009-10, the company’s total revenues grew by just 1.67 per cent at Rs.453.68 crores over previous fiscal but PAT grew by 19.62 per cent at Rs.19.38 crores over FY2008-09. While profit margins are pretty low hovering around 3.6 to 6.5 per cent, the company does around 20 times business of its low Equity base of Rs.23.70 crores. ROE is 9.19 and ROCE is 11.98 per cent. P/BV is 0.60 and 52 week range is Rs.93.45- 55.
GWRL is a dividend paying company. The company paid a dividend of 25% in FY2010 and hopefully company should continue rewarding its shareholders appropriately as bottom line continues to grow over the years.
Conclusion : At Rs.59.75 the shares are trading at a PE of 6.18 which appears to be a reasonable valuation if we consider the strong brand image in it's niche segment.
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