Igarashi Motors Code: 517380 Rs.47
Igarashi Motors is one of the lesser tracked, hardly researched and barely recommended company but is a good turnaround story. Last fiscal, Agile Electric, a subsidiary of HBL Power System executed a share purchase agreement with Igarashi Electric Works, Japan – its erstwhile promoter, for the acquisition of its 35% stake at a
price of Rs.60.74 per share. Further through a preferential/open offer, Agile acquired 28% stake in the company thereby taking its total stake to 63%. Thus Igarashi Motors is now a step down subsidiary of HBL Power System, which currently manages and runs the company. Dr A.J. Prasad, CMD of HBL Power is on the board of the company and takes the key strategic decisions. However the Igarshi group, Japan, still holds 17% stake in the company as a non-promoter and continues to provide technical and strategic support. Igarshi Motors is primarily engaged in the business of assembling DC motors and actuation system for various automotive and non-automotive applications and manufacturing sub assemblies that go into a DC motor. The company has its manufacturing plant in Chennai with an installed capacity to produce 13 million electric micro motors as on 31 March 2011. During FY11, the company produced 11 million electric micro motors as against 8 million produced in FY10. Being 100% EOU, it derives 45% revenue from exports to USA, 25% from Europe and the balance 30% from Asian countries. Notably, the company has established a joint venture with Bosch GmbH in Chennai for developing, manufacturing and selling DC motors and systems for wipers, Heating, Ventilating, and Air Conditioning (HVAC), engine cooling and window lift applications for the Indian automotive market. In this JV,
it holds 26% stake as of date. Financially, the company did extremely well in FY11 and even in the current fiscal, it has registered 35% increase in sales to Rs.194 crore whereas net profit jumped up 55% to Rs.10 crore for the nine months ending 31 December 2011. It may end the current fiscal with profit of Rs.13.50 crore, which can shoot up to Rs.16-18 crore in FY13. At the current market cap of less than Rs.100 crore, it is trading extremely cheap, discounting FY13 EPS by merely 6 times.Although the scrip has appreciated by over 50% in last couple of months, investors can buy now and add more at declines.
price of Rs.60.74 per share. Further through a preferential/open offer, Agile acquired 28% stake in the company thereby taking its total stake to 63%. Thus Igarashi Motors is now a step down subsidiary of HBL Power System, which currently manages and runs the company. Dr A.J. Prasad, CMD of HBL Power is on the board of the company and takes the key strategic decisions. However the Igarshi group, Japan, still holds 17% stake in the company as a non-promoter and continues to provide technical and strategic support. Igarshi Motors is primarily engaged in the business of assembling DC motors and actuation system for various automotive and non-automotive applications and manufacturing sub assemblies that go into a DC motor. The company has its manufacturing plant in Chennai with an installed capacity to produce 13 million electric micro motors as on 31 March 2011. During FY11, the company produced 11 million electric micro motors as against 8 million produced in FY10. Being 100% EOU, it derives 45% revenue from exports to USA, 25% from Europe and the balance 30% from Asian countries. Notably, the company has established a joint venture with Bosch GmbH in Chennai for developing, manufacturing and selling DC motors and systems for wipers, Heating, Ventilating, and Air Conditioning (HVAC), engine cooling and window lift applications for the Indian automotive market. In this JV,
it holds 26% stake as of date. Financially, the company did extremely well in FY11 and even in the current fiscal, it has registered 35% increase in sales to Rs.194 crore whereas net profit jumped up 55% to Rs.10 crore for the nine months ending 31 December 2011. It may end the current fiscal with profit of Rs.13.50 crore, which can shoot up to Rs.16-18 crore in FY13. At the current market cap of less than Rs.100 crore, it is trading extremely cheap, discounting FY13 EPS by merely 6 times.Although the scrip has appreciated by over 50% in last couple of months, investors can buy now and add more at declines.
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ReplyDeleteCan igarishi motors be purchased at current price of 83 Rs.any idea abt changes effected by new promoters HBL power people n their track record n growth prospects for the co?
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