ABC BEARINGS
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Stock Synopsis
Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=3019
Printed Date: 21/Apr/2025 at 1:40am
Topic: ABC BEARINGS
Posted By: hit2710
Subject: ABC BEARINGS
Date Posted: 06/Oct/2010 at 11:19pm
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ABC BEARINGS CMP 165 MARKET CAP 190 CRORES
ABC bearings makes tapered roller bearings which are mainly used for commercial vehicles and tractors. Brief details: market cap 190 crores. company has paid off most of its debt in fy 10 and now is practically debt free. Last six quarters make interesting viewing: qtr mar09 june 09 sep 09 dec 09 mar 10 june10 sales 27 30 38 40 52 48 NP 0.28 2.43 3.77 4.5 6.55 5.92 The company has a technological tie up with NSK Bearings Japan which also has an equity stake in ABC Bearings. So the company is not likely to be short of technological advances. It has manufacturing facilities at Bharuch and having seen the location, the site adjoining GNFC facility is a lucrative real estate prospect nowadays although selling the land is not the investment argument, but it lends some valuation comfort. New manufacturing facilities: Its plant at Uttarakhand has started commerical production since March 11 and should now start contributing to growth in topline and bottomline. Company is also setting up another manufacturing plant for slew bearings and large bearings which is expected to be completed by fy 11 end and should enhance product portfolio. Projections for FY 11: Based on the robust sales numbers shown by all CV manufacturers and tractor manufacturers, ABC is likely to post sales in excess of 210 crores(fy 10 was 160 crores) and net profits in excess of 26-29 crores(20 crores for fy 10) which could give eps in the region of 23-25. Return ratios are good with ROE expected to be around 25 for fy 11. The company paid a dividend of Rs 4.5 per share in fy 10 and looking at future growth, dividend payment is likely to be maintained. TECHNICALS Technically the stock is currently consolidating between 157 and 170 range and on a breakout past 170-175 levels is likely to target 225 levels. Disc: I am invested in this company. Acknowledgement: This stock has come to my notice going through two reports, one by Ayush Mittal and another by Anand Rathi. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Replies:
Posted By: venkym2000
Date Posted: 06/Oct/2010 at 10:31am
| Hit Jee, Had a look at NRB bearings also? |
Posted By: hit2710
Date Posted: 06/Oct/2010 at 10:41am
NRB Bearings is into needle bearings. That also is a good company but I dont know about comparative valuations. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: vaib
Date Posted: 06/Oct/2010 at 11:29am
| Chennai plant ownership is 75%-NSK 25%-ABC so how does this work ? BSE shows only Indian promoters. Sales from the plant are shown in ABC results ?? ABC shows its 25% profit in net profit ?? |
Posted By: hit2710
Date Posted: 07/Oct/2010 at 12:11pm
From what I have read, there is no chennai plant. There are two functional units first in bharuch and other in north india. What you mention might be a subsidiary with minority stake. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: titu
Date Posted: 07/Oct/2010 at 12:33pm
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Hiteshji,
ABC bearing made a sharp rise from June 2010 to August 2010 from 105 to 165, then consolidating in the range 160-170. Last Qr. result was very good. Another upmove may take this to 225+. ------------- An uncultured man blames others, a semi-cultured man blames all but a cultured man blames himself. |
Posted By: jigneshk
Date Posted: 07/Oct/2010 at 2:15pm
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hit2710, ABC Bearing is good bet no doubt. However, I guess FAG is much better bet looking at technology edge of parent schaeffler, scale of operation (1200 Cr expected for CY2010), market cap is just about 1 time sales which is very low I feel, sales jump YoY 35% and QoQ 15%, OP jump YoY and QoQ, EPS jump YoY and QoQ, Book Value of 276 and CY 11 expected EPS is 72-75 which is just 11-12 PE. In May 2006 this was available at 750 and now after 4.5 years still available at 850. Re-rating is due any time. My view could be completely wrong.
DISC: I have vested interest in FAG as I hold.
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Posted By: vaib
Date Posted: 07/Oct/2010 at 2:38pm
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http://www.nsk.com/company/presslounge/news/2008/press080218.html
I was talking about this. |
Posted By: balloon
Date Posted: 07/Oct/2010 at 2:49pm
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FAG in all probability do more than Rs.82 per share in CY11...the Company might do about 70-71 this year itself...i agree with jigneshk on FAG.
------------- "The only way to win is work, work, work and hope to have a few insights" - Charlie Munger |
Posted By: studentoflife
Date Posted: 07/Oct/2010 at 6:07pm
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I was invested in this stock pre 2008. Sold at a loss. These are the pros and cons: Pros: 1)Debt free 2)Good Return on Equity Cons 1)Commodity business 2)Cyclical business 3)Was once a loss making company Also this is a highly volatile stock.Those of who are awaiting a correction can get it really cheap. ------------- First step towards learning is the realization that you do not know anything. |
Posted By: hit2710
Date Posted: 07/Oct/2010 at 7:13pm
I have tried a comparision of the two companies. NRB FY 10 Sales: 373 cr NP 24 cr m cap 509 cr Q1 fy 11 sales 99 cr NP 12 cr ABC FY 10 sales 173 cr NP 20 cr mcap 190 cr Q1 fy 11 sales 48 cr NP 5.92 cr Margins are almost similar for both companies in Q1 whereas earlier for fy 10, ABC had better margins. m cap to sales ratio for nrb is 1.36 and for abc is 1.09 My view is both will sink or swim together. FY 11 is expected to be very good for both companies. Both these stocks in my view are cyclical stocks and will align themselves with the auto sector and there seems to be some more juice left in them, more so in abc. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: titu
Date Posted: 07/Oct/2010 at 9:54pm
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Hiteshji,
NRB bearing was very strong today and may rise further. This stock has not risen much even in Ex-bonus or cum-bonus vis-a-vis ABC bearing has made a sharp rise from Rs.105. ------------- An uncultured man blames others, a semi-cultured man blames all but a cultured man blames himself. |
Posted By: rushabh
Date Posted: 13/Oct/2010 at 3:03pm
| Talking pros; take into account its consistent dividend policy. 4-4.5 each year. Now dats actually a good bet. |
Posted By: hit2710
Date Posted: 25/Oct/2010 at 2:33pm
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Results for Q2 fy 11 out.
Sales for quarter at 40.28 cr vs 38.6 cr for q2 fy 10 Net profit at 5.02 cr vs 3.77 cr in q2 fy 10. Sales for first H1 FY 11 at 88.65 cr vs 68.85 cr for H1FY10 Net profits for H1 FY 11 at 10.93 cr vs 6.19 cr for H1FY 10 Half yearly eps at 9.46 vs 5.36 cr for H1 fy 10. Results seem to be good with good margin improvement in the quarter and in half year, but stock has been correcting being down around 8-9%. Mr market seems to be in a mood to punish this one. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: excel_monkey
Date Posted: 28/Nov/2010 at 7:21am
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Hit bhai
a report on ABC by Parag Parikh published just a few days back https://www.ppfas.com/pdf-docs/research/research-reports/2010/abc-bearings-ppfas-ic.pdf |
Posted By: hit2710
Date Posted: 28/Nov/2010 at 9:44am
Yes I went through the report. Currently if company gives dividend of around Rs 5 to 5.5 per share for fy 11 as indicated in the report, the stock is available at a div yield of 4%. Plus if you calculate the replacement value or liquidation value of the company based on its factory premises in good residential area of Bharuch, the business is available for peanuts. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: suru27
Date Posted: 24/Jan/2011 at 7:34pm
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Request tedians to provide inputs on following:
1) What is the current production capacity
2) What is current utilization? 3) Is new plant operational? 4) The effect of new plants is not visible in post mar-10 QTR results. Why? ( I hold a small position in this company)
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Posted By: Market Maniac
Date Posted: 09/Feb/2011 at 11:47pm
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Lovana Property which is around 50% of the MCap and is disposable. -the property has a frontage of 90mts(300ft) and extends 1000 feet inside like a rectangle.at a conservative 2000 rs.sq/ft 60 crs is a reasonable value for the property. -the current rent the property receives is 1.7 crs so 3% yield seems reasonable for lonavla. -the company shut its plant due to union problems and strikes. -tops securities is guarding the premises currently. -in lonavla the property market usually has 60%(black)-40%(white)ratio. -there is no litigation in the property as per the info i received. Co. started earning rent from the said property only from FY09. Rent : FY09 - 48L FY10 - 1.7Cr. (Gross) Co. will do 22.5-25Cr. in PAT this year. Long Term Average RoE is above 20% Debt Free Peak Earnings are yet to come. And so is the Stock Price. |
Posted By: srisaurabh2000
Date Posted: 09/Feb/2011 at 12:44pm
| Guess this property is where the big boss shooting takes place. |
Posted By: hit2710
Date Posted: 09/Feb/2011 at 8:38am
Are we talking about ABC Bearing owning this property in lonawala? Because I have seen the plant at Bharuch and it is located in a very attractive location. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: srisaurabh2000
Date Posted: 09/Feb/2011 at 9:37am
Yes.
http://www.colorstv.in/uk/terms-and-conditions-uk/ - http://www.colorstv.in/uk/terms-and-conditions-uk/ . Search for ABC Bearing in this article.
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Posted By: baba
Date Posted: 19/Feb/2011 at 12:37pm
thankx monkey  |
Posted By: Ravenrage
Date Posted: 02/May/2011 at 9:35pm
Results out .. 60 % dividend ... 
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Posted By: TCSer
Date Posted: 07/Jun/2011 at 6:32pm
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HOW IS THIS COMPANY AT 5 pe & A VERY DECENT DIV YIELD.HAVENT TRACKED THIS CO N SECTOR.VIEWS INVITED.
------------- Share market is nothing but a game of temperament. Success mantra Right Price,Right Business,Patience, Conviction .Do not do panic buying or selling.It may be the only profession where inactivity pays |
Posted By: Ravenrage
Date Posted: 31/Jul/2011 at 9:14pm
| Results have been pathetic . |