MRO-TEK: ANY TAKER?

 

This  is a Bangalore based company. Involved in manufacturing of networking and data related equipments.

Has approx same book value as the price Rs.47/-. Totally debt free.

Has bought back about 10% of equity in last few months.

 

Had some difficult time last year.

Result of this quarter is quite good and improved.

 

Some of the news and financials:

 

 

 

MRO-TEK net profit rises 61.25% in the September 2007 quarter
Wednesday, October 24, 2007     Net profit of MRO-TEK rose 61.25% to Rs 4.37 crore in the quarter ended September 2007 as against Rs 2.71 crore during the previous quarter ended September 2006. Sales rose 27.07% to Rs 33.66 crore in the quarter ended September 2007 as against Rs 26.49 crore during the previous quarter ended September 2006.

 

MRO-TEK Limited - Buy back
Wednesday, October 24, 2007 Mro-Tek Limited has informed the Exchange that: "Under the Scheme ofBuy-back of shares from the Open Market through the Stock Exchanges, until12 October 2007, the Company has bought-back a total of 17,55,554 equityshares of Rs.5 (Rupees Five) each, at a cost of Rs.8,24,99,979. Havingso exhausted the permitted and ear-marked amount of Rs.8,25,00,000,the Scheme was closed by the Company on 17 October 2007. The wholequantity of aforesaid 17,55,554 equity shares bought-back, have dulybeen received and, corporate action for extinguishment of the samehas duly been completed.

Consequent upon such extinguishment, theIssued and Paid-up Capital of the Company stands reduced fromRs.10,37,07,640 comprising of 2,07,41,528 equity shares of Rs.5 each,to Rs 9,49,29,870 comprising of 1,89,85,974 equity snares of Rs.5 each.

Compliance of other formalities as required and stipulated under theapplicable Regulation/s has now been initiated.

The full amount ofRs.8,24,99,979 defrayed on this account having been met exclusively by'Cash generated from Operations' during this six-month period, the Companycontinues to be DEBT-FREE".

 

 

 

 

 

Quarter ended Year to Date Year ended 200709 (3)  200609 (3)  % Var  200709 (6)  200609 (6)  %Var  200703 (12)  200603 (12)  % Var   Sales 33.66  26.49  27.07  57.86  49.21  17.58  110.75  139.79  -20.77   Other Income 2.07  1.72  20.35  3.18  2.64  20.45  4.90  4.24  15.57   PBIDT 6.63  4.51  47.01  10.26  8.26  24.21  18.13  28.92  -37.31   Interest 0.09  0.06  50.00  0.15  0.13  15.38  0.31  0.86  -63.95   PBDT 6.54  4.45  46.97  10.11  8.13  24.35  17.82  28.06  -36.49   Depreciation 0.65  0.77  -15.58  1.28  1.51  -15.23  2.97  3.64  -18.41   PBT 5.89  3.68  60.05  8.83  6.62  33.38  14.85  24.42  -39.19   TAX 1.52  0.97  56.70  2.24  1.79  25.14  4.35  7.00  -37.86   PAT 4.37  2.71  61.25  6.59  4.83  36.44  10.50  17.56  -40.21   Equity 10.37  10.22  1.47  10.37  10.22  1.47  10.37  10.22  1.47

 

 

Key operating ratios Year end Mar 07 Mar 06 Mar 05 Mar 04 Mar 03 EPS(Rs) 4.76 8.28 1.85 1.59 1.48 Book value(Rs) 44.45 41.17 35.14 34.48 33.80 CEPS(Rs) 6.19 10.06 3.84 2.23 2.03 NPM(%) 9.49 11.75 7.91 4.33 3.46 OPM(%) 16.14 19.35 16.38 8.19 7.04 ROCE(%) 19.04 29.85 19.52 9.55 7.20 ROE(%) 13.17 22.52 13.59 6.65 4.72 Debt/equity - 0.09 0.15 0.13 0.13 Interest cover 54.16 29.40 55.10 22.64 6.52

 

Valuation ratios (Price Rs 47.75 ,Market Cap Rs 91.87 cr, as on 26 Oct 2007)     Year end Mar 07 Mar 06 Mar 05 Mar 04 Mar 03 P/E 11.03 9.67 19.00 7.81 7.33 P/BV 1.18 1.94 1.00 0.36 0.32 P/CEPS 8.48 7.96 9.15 5.56 5.36 EV/EBIDTA 4.19 4.91 5.93 2.03 2.98 Market cap/sales 0.89 1.09 0.59 0.24 0.24

i know little about D Link. But it is closely related business.

MroTek makes good products,particularly their products with technology from RAD are excellent.
 we are using few of them, having purchased some time back.


they have good manufacturing and service base.
At least 2 years back i knew some people who were there with the company for more than decade.

they were affected for few years due to the cheap imports and sl*ggsh market on broadband.

seems to have good management.

sp tulsian used to recommend this stock.

the positive side as i think is: now electronics manufacturing sector is improving in india. with broadband and wireless data gaining ground, there is huge demand likely to come up for the kind of equipments they are making. Also transmission (bulk data transport) network is gaining lime light due to huge bandwidth requirement likely to come up due to tremendous growth of net and also due to content oriented surfing which is bandwidth hungry. they are also in some of the transmission related equipments.

their website: http://www.mro-tek.com/html/about_us_company_profile.htm

May be we can get some more info from our Bangaluru TEDies...


Edited by us121 - 27/Oct/2007 at 11:37am

I would avoid investing in technology product companies like D-Link or MRO-TEK. But had we been in 2000, these two would have been in Sensex or Nifty.

I used to own this stk once upon a time (one of my loosers) Mr Baliga always talks bullish on this stock (and hence I stay away from such companies and stocks !!)