Electrosteel Castings Ltd

Current price BSE

20.90

Sector

Casting and Forging

No of shares

343.82 Million

52 week high

36.90

52 week low

14.52

BSE Sensex

28503.30

Nifty

8647.75

Average Volume BSE

82570

Average Volume NSE

303910

BSE Code

5000128

NSE Symbol

ELECTCAST

Company Overview

Electrosteel Castings Ltd is largest manufacturer of ductile iron (DI) spun pipes in India. The company is a water infrastructure company providing techno-economic solutions for water supply and sewerage systems. They are engaged in the business of manufacturing Ductile Iron Pipes and Fittings and Cast Iron Pipes. They also undertake turnkey solutions for water transportation and sewerage management, which include manufacturing DI Pipes, supplying and laying various types of pipes, operating the system and transferring to the owners. The company is headquartered at Kolkata and having their manufacturing facilities at Elavur in Tamilnadu, Khardah and Haldia in West Bengal. Electrosteel Castings Ltd was incorporated in the year 1955.

To meet the ever growing demand of its quality products and with Electrosteel acquired 46% stake in Lanco Industries Limited in March 2002, which is involved in manufacturing of DI Pipes, Pig Iron, Cement and Castings.

With respect to strengthening India's own infrastructure, Electrosteel ventured into the Steel Manufacturing industry through its promoted Company Electrosteel Steels Limited. An Integrated Steel Plant has been set up which is capable of producing 2.5 Million metric tonnes of Hot Metal, which is further processed into Pig Iron, Billets, TMT Bars, Wire Rods and Ductile Iron Pipes.

Presently, over 60% of its products are exported around the world and Electrosteel has its subsidiaries in eleven countries.

The current market capitalisation stands at Rs 788.87 crore. The company has reported a standalone sales of Rs 597.44 crore and a Net Profit of Rs 15.76 crore for the quarter ended Dec 2014.

Share Holding Pattern

Category

No. of Shares

Percentage

Promoters

189,224,372

53.01

General Public

75,319,327

21.10

Foreign - OCB

27,480,414

7.70

Financial Institutions

25,695,542

7.20

Other Companies

24,137,278

6.76

Foreign Institutions

7,425,814

2.08

NBFC and Mutual Funds

3,000,200

0.84

Foreign - NRI

2,294,332

0.64

Others

273,043

0.08

Financial Overview
  • Market Cap (Rs Cr) – 788.87

  • Company P/E – 8.16

  • Industry P/E – 27.16

  • Book Value (Rs) – 61.71%

  • Dividend (%) – 65%

  • EPS (TTM) – 2.72

  • Dividend Yield (%) – 2.94%

  • Face Value (Rs) - 1

Industry Overview

The global forgings industry is expected to grow at a CAGR of 9.42% over 2012-2016. One of the key factors of growth in this sector is the increasing demand from the automotive industry and international forgings being outsourced from Asia and Africa.

The industry has grown by 32.1% in dealer's market worldwide and 40.2% in value during2013, ensuring the profitability of the industry, globally. The deal value, which the forging industry achieved in 2012 was 203% higher than 2009, thereby widening the market. Asia dominated production in the realm of forging steel manufacture. In the overall business, there was a decline in the US and the European markets (Source: Global forging industry outlook, 2012-2016).

India's forgings industry currently operates at 60-70% of its operational efficiency. New technology and mass production could mean more efficiency and lower cost. As the demand for high quality heavy forged components rises in India, major industry players look for joint ventures and partnerships for capacity expansion and technology up-gradation. This creates opportunities for global players to establish or increase their presence in India.

The automobile industry in India has flourished at a healthy rate of 20% yoy from FY2006 to 2012, but has reported a slowdown with the current growth rate sliding under 8%.Over-dependence on the automobile sector could increase the risk for this industry. The12th Plan promises high growth for industry segments like power generation, petrochemicals and the ship building industries. This, in turn, is expected to generate a demand for heavy forged components. Based on this growth, demand for Indian forged components is predicted to rise up to4.9 million tons by 2015-16. To meet this demand forging companies have already started expanding their capacities through joint ventures. Inclusion of non-auto components in their product portfolio will help them capitalize on the growing demand in the non-auto forging segment

Dividend and Bonus History

Index and Company Price Movement Comparison

Balance Sheet

 

Mar '14

Mar '13

Mar '12

Mar '11

 Mar '10

Sources Of Funds

 

 

 

 

 

Total Share Capital

34.38

32.68

32.68

32.68

32.68

Equity Share Capital

34.38

32.68

32.68

32.68

32.68

Reserves

2,412.86

2,321.77

1,670.35

1,652.15

1,551.10

Networth

2,447.24

2,354.45

1,703.03

1,684.83

1,583.78

Secured Loans

2,167.69

1,875.09

1,284.84

1,240.57

1,129.74

Unsecured Loans

34.29

187.81

247.44

231.06

112.19

Total Debt

2,201.98

2,062.90

1,532.28

1,471.63

1,241.93

Total Liabilities

4,649.22

4,417.35

3,235.31

3,156.46

2,825.71

Application Of Funds

 

 

 

 

 

Gross Block

1,641.16

1,583.97

987.40

914.36

842.01

Less: Accum. Depreciation

546.53

489.47

431.92

376.31

317.38

Net Block

1,094.63

1,094.50

555.48

538.05

524.63

Capital Work in Progress

1,210.82

986.09

655.81

447.18

390.96

Investments

1,099.96

1,142.60

1,118.72

1,399.88

1,023.96

Inventories

556.80

451.74

552.94

519.80

356.73

Sundry Debtors

616.86

656.61

619.20

488.63

374.11

Cash and Bank Balance

228.84

320.44

156.47

15.04

10.36

Total Current Assets

1,402.50

1,428.79

1,328.61

1,023.47

741.20

Loans and Advances

600.09

333.98

412.72

209.29

239.42

Fixed Deposits

0.00

0.00

0.00

174.70

270.56

Total CA, Loans & Advances

2,002.59

1,762.77

1,741.33

1,407.46

1,251.18

Current Liabilities

687.44

490.70

711.88

504.35

248.35

Provisions

71.33

77.92

124.17

131.74

116.68

Total CL & Provisions

758.77

568.62

836.05

636.09

365.03

Net Current Assets

1,243.82

1,194.15

905.28

771.37

886.15

Total Assets

4,649.23

4,417.34

3,235.29

3,156.48

2,825.70

Contingent Liabilities

750.01

1,757.05

2,187.50

272.74

225.79

Book Value (Rs)

71.18

72.06

52.12

51.56

48.47

Profit and Loss Account

 

Mar '14

Mar '13

Mar '12

Mar '11

           Mar '10

Income

 

 

 

 

 

Sales Turnover

2,186.88

1,934.55

1,916.66

1,783.90

1,496.51

Excise Duty

0.00

0.00

0.00

41.68

38.43

Net Sales

2,186.88

1,934.55

1,916.66

1,742.22

1,458.08

Other Income

19.70

95.05

70.77

54.81

62.02

Stock Adjustments

29.64

-9.15

4.69

20.23

22.86

Total Income

2,236.22

2,020.45

1,992.12

1,817.26

1,542.96

Expenditure

 

 

 

 

 

Raw Materials

1,260.07

1,141.05

1,168.14

998.65

746.33

Power & Fuel Cost

158.15

148.46

142.12

126.41

105.16

Employee Cost

148.76

137.49

123.09

122.87

106.08

Other Manufacturing Expenses

0.00

0.00

0.00

17.65

21.89

Selling and Admin Expenses

0.00

0.00

0.00

162.42

132.49

Miscellaneous Expenses

344.48

308.14

381.28

45.29

54.84

Total Expenses

1,911.46

1,735.14

1,814.63

1,473.29

1,166.79

Operating Profit

305.06

190.26

106.72

289.16

314.15

PBDIT

324.76

285.31

177.49

343.97

376.17

Interest

135.82

111.24

100.65

78.60

46.40

PBDT

188.94

174.07

76.84

265.37

329.77

Depreciation

52.97

53.09

54.26

54.41

52.30

Profit Before Tax

135.97

120.98

22.58

210.96

277.47

Extra-ordinary items

0.00

0.00

0.00

3.92

28.41

PBT (Post Extra-ord Items)

135.97

120.98

22.58

214.88

305.88

Tax

35.41

23.75

-19.80

60.25

101.63

Reported Net Profit

100.56

97.23

42.38

154.64

206.29

Total Value Addition

651.40

594.09

646.48

474.64

420.46

Equity Dividend

22.35

16.34

16.34

40.84

40.84

Corporate Dividend Tax

3.80

2.78

2.65

6.63

6.78

Per share data (annualised)

 

 

 

 

 

Shares in issue (lakhs)

3,438.17

3,267.53

3,267.53

3,267.53

3,267.53

Earning Per Share (Rs)

2.92

2.98

1.30

4.73

6.31

Equity Dividend (%)

65.00

50.00

50.00

125.00

125.00

Important Ratios(YoY)
  • PBIT – 11.42 v/s 6.75

  • RoCE – 5.84 v/s 5.25

  • RoE – 4.10 v/s 5.29

  • Net Profit Margin – 4.55 v/s 4.79

  • Return on net worth – 4.10 v/s 4.12

  • D/E Ratio – 0.90 v/s 0.88

  • Interest Cover – 2.00 v/s 2.09

  • Current Ratio – 0.95 v/s 0.84

  • Reserves – 2412.89 cr v/s 2321.77 cr

  • PAT – 100.56 cr v/s 97.23 cr

  • Total assets – 4649.23 cr v/s 4417.34 cr

  • Net sales – 2186.88 cr v/s 1934.55 cr

  • Book Value – 77.18 v/s 72.06

Simple Moving Average

Days

BSE

NSE

30

18.27

18.09

50

18.17

18.08

150

21.44

21.48

200

24.15

24.17

Technical Indicators

Symbol

Value

Action

RSI(14)

55.983

Buy

STOCH(9,6)

39.429

Sell

STOCHRSI(14)

100.000

Overbought

MACD(12,26)

-1.280

Sell

ADX(14)

26.920

Buy

Williams %R

-20.482

Buy

CCI(14)

268.9266

Overbought

ATR(14)

2.1643

Less Volatility

Highs/Lows(14)

2.2393

Buy

Ultimate Oscillator

46.352

Sell

ROC

3.828

Buy

Bull/Bear Power(13)

6.5480

Buy

Investment Rationalize
  • Electrosteel Castings Ltd was able to sustain its revenue growth even in the adverse market situations. Reserves of the company stands at Rs.2447 Crores, which help the company in order internally finance its financial requirements.

  • The domestic demand of Ductile Iron pipes fittings and Cast Iron pipes are supposed to increase mainly due to major irrigation and water supply projects by the government.

  • Usage of cost effective manufacturing technology will add to the cost advantage of the company. Entry into South American and African markets as well as improving economic situation in European market will add to the companies revenue.

  • Advantage of first entry into market ie, Electrosteel Castings Ltd. is the first manufacturer of Ductile iron pipes in India.

  • Current market price of the stock is well below the book value of Rs.61. Which means the stock is available in discounted prices.

  • Growth forecast of the casting and forging industry and significant under performance of the company in the current market rally will add to the growth prospects of the company.

  • Electrosteel Castings Ltd is currently operates in very low capacity when it is compared with actual operational capacity, so increase in market demand will help the company to operate in optimum limits which in turn add on to sales.

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