Electrotherm- say YO to the future!!
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=559
Printed Date: 20/Apr/2025 at 8:01am
Topic: Electrotherm- say YO to the future!!
Posted By: jstk
Subject: Electrotherm- say YO to the future!!
Date Posted: 06/Nov/2006 at 4:37pm
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Electrotherm is a into Induction heating furnaces & host of other allied products catering to the foundry & steel industry.
They have done more than 1400 installations with clients all over the world. [ worldwide competitor- ABB & Inductotherm ] in this segment.
Since they manufactured a lot of critical equipment used in a steel set up , they set up a steel division [ 50% contribution to turnover but much lesser contribution to np ] which does TMT bars, sponge iron,ductile iron pipes used mainly in the constrution sector.
The exciting part is their new Automotive division- Indus Electrans which manufactures 2 wheelers [ YO brand ]. Key highlights:
1] require no RTO registration / licence etc
2] Run on rechargeable battery
3] runnning cost - max 20 ps / km against 80 ps / km for a petrol version
4] 3 wheelers / low platform bus also in the pipeline
5] I spoke with their dealer in Mumbai- the showroom inauguration is on 11th Nov . they have managed to sell 50 bikes even before the official opening !!!
6] price range- Rs.26000- 29000
equity is 4.77 cr. Some warrants etc have been alloted a couple of months back
Last yr co turnover was 337 cr & np 18.79 cr , eps 39.
june qtr np was 5.77 cr on sales of 91 cr
sept qtr np was 8.23 cr on sales of 139 cr
This yr co seems to be on course to achieve a np of 27- 30 cr
Debt burden has gone up this yr to around 214 cr mainly for the automotive project.
current market cap is around 152 cr.
This stock has the potential be a huge play addressing non petrol vehicles. Also with the other divisions doing well, it looks like a very very promising investment @ 320.
the co website is http://www.electrotherm.com - www.electrotherm.com and the auto division website is http://www.induselectrans.com - www.induselectrans.com
jayendra ------------- If you buy for a non-value reason, you will end up selling for a non-value reason. |
Replies:
Posted By: nav_1996
Date Posted: 06/Nov/2006 at 5:27am
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Jayendra,
Can you tell us about management of the company? Also, electric bike technology may not be an entry barrier for likes of Bajaj and Honda. |
Posted By: jstk
Date Posted: 06/Nov/2006 at 10:28am
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The Bhandaris manage this company. It is a gujarat based co and they manufacture in Kutch [ tax free zone ] They are very aggressive and so far have managed growth without any equity dilution.[ they have issued warrants a couple of months back ]. I dont have much info about them otherwise but they appear to be quite competent. I agree that electric bikes will not be an ebtry barrier but in these kind of new / concept businesses , first mover advantage can be huge.
Electrotherm has managed to sell some 7000 bikes in 6 months and if they can scale up and create a strong franchise for YO, the possibilities are endless. They are also looking at the export market.
Also the traditional business has been doing very well and has a good future too. At the current price , risk reward favours inestors in the stock.
jayendra
------------- If you buy for a non-value reason, you will end up selling for a non-value reason. |
Posted By: tyler_durden
Date Posted: 06/Nov/2006 at 11:45am
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i read a piece of news where it was ,mentioned that a leading player in this field from thailand(if i am not mistaken) is lookin to set up a plant in punjab.
they re eyeing an investment of around 250 cr in coming years. so competition will be stiff as this player has 90% market share in its home land because of the quality of product it delivers. and its product range covers a 6 yr child to 60 yr old. the news was in ET few days back. anyone who has read it thoroughly can throw some more light. |
Posted By: Bobby
Date Posted: 14/Nov/2006 at 5:11pm
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Jyanendra,
this stock is already at it's 52 week high level & was freezed today. Do u feel it can be bought for long term perspective given that Honda is also planning to come with electric bikes. |
Posted By: jstk
Date Posted: 15/Nov/2006 at 4:10pm
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The Induction heating business of the co is doing exceedingly well. We have to see how the Electric bike business pans out but judging by the performance over the last 6 months, they seem to be on track. This is really creditable as this is not only a totally new business for the company but involves developing a market / selling the concept from scratch. If you notice their distribution strategy, they are aggressively tying up with dealers in tier 1 & 2 towns which is very smart thing to do as the biggies will target the cities first. There is a fair bit of risk in execution involved and we have to see how things unfold over the next year or so to get a better hang of the future picture.
The co should do an eps of 57-60 for the current year [ primariliy from its core business ] . I cannot say much about day to day price movements but its is a good stock to buy and hold over the next 12-18 months [ or longer depdning on how the bike business performs ]. jayendra------------- If you buy for a non-value reason, you will end up selling for a non-value reason. |
Posted By: omshivaya
Date Posted: 21/Mar/2007 at 3:32pm
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I found a company that could have a good investment prospect. I think TEDdies should try doing a bit research on this one. It is still in its initial growth phase and hence opportunity is good for next 3-4 years. Following is what I could get on it from various websites:
Electrotherm India Ltd - The Company is an engineering and manufacturing Company with major strength in power electronics. With its core strengths in power electronics and project implementation, the Company set up a special steel products plant at Kutch in record time. This plant has facilities to produce steel products, Stainless Steel products, Ductile Iron Pipes and other engineered and fabricated items. Leveraging its core strength in power electronics, the Company through its in house R&D facilities developed a battery operated scooter.
The Company is also in the process of establishing a waste heat power plant which will make the unit self sufficient in power. With its captive sponge iron, the Company is already well integrated and does not get affected by vagaries of fluctuating scrap market. The waste heat power plant as well as battery-operated vehicles will make the Company eligible for carbon credits. For setting up the above facilities, the Company embarked on a capital investment plan of Rs 530 crores, in two phases. The first phase of Rs 130 crores, was implemented in a record time by Term Loans and accruals. All the divisions of the Company have huge growth potential. The engineering and projects division is focusing on exports in a big way.
The exports, which earlier accounted for 15% of the Company's turnover, will now increase to 35% in the current year and will further jump to 50% in next two years.
In the past the Company has successfully competed with multinationals like ABB and GEC, and due to its superior product and better service, it commands a market share of nearly 50% in India.
The Company is now looking at overseas market where it is even more competitive due to its ability to carryout detailed engineering at a fraction of cost generally incurred by engineering Companies in the west. The composite steel product unit at Kutch, is producing quality bars, stainless steel and ductile iron pipes and product is now well established in the market. In a short time, the Company has become the leading supplier of these items.
With the commissioning of structural mill, the Company will be able to supply structural steel for sophisticated applications, including transmission line towers.
The Company has also made a small beginning in the battery operated scooters segment. After the initial successful launch in Gujarat, the Company battery operated vehicles are now available practically all over the country. Looking at the overwhelming response from the consumers, the Company is ramping up its manufacturing capacity and building strong partnerships with vendors to roll out more than 150,000 vehicles next year.
ICICI Venture Funds Management Company Ltd. has invested Rs 82 crore, through a private placement, to part fund its second phase of expansion plans of Rs 400 crores. While ICICI Venture would subscribe to Rs 82 crores worth equity of the Company the promoters would bring in Rs 58 crores to meet the equity portion. Terms loans worth Rs 200 crores and internal accruals of Rs 60 crores would meet the balance funding requirements of the proposed expansion plan. KPMG Corporate Finance was the sole advisor for the transaction. The Term Loans have been sanctioned and disbursed and the Company has already invested Rs 300 crores out of the total planned expenditure of Rs 400 crores. Mr. Bhandari, of the Company said, "We are delighted have ICICI Venture as our equity partners in the Company. With its excellent understanding of the Indian environment, we are confident that ICICI Venture would bring its expertise to benefit our Company in the coming years."
Over the last 18 years, ICICI Venture has been successful in identifying trends well ahead of the curve; be it retail, media and entertainment, information technology, real estate or pharmaceuticals and biotechnology.
Electrotherm recently made pref. issue of warrants issued at Rs. 600 a piece. It is currently quoting at: Rs. 490
Sourced from: http://www.moneycontrol.com - http://www.moneycontrol.com
More about Electrotherm at: http://www.electrotherm.com/Website.pps - http://www.electrotherm.com/Website.pps
MC Link: http://www.moneycontrol.com/stocks/cptmarket/pricechart.php?sc_did=EI02 - http://www.moneycontrol.com/stocks/cptmarket/pricechart.php?sc_did=EI02 ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: sunny_agarwal
Date Posted: 21/Mar/2007 at 5:08pm
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i am very bullish on electrotherm india. good company into a great business. the business model is itself so encouraging. good pick in current market scenarion.
disclosure: i have it in my personal portfolio. ------------- Be the change you wish to see in this world!!! |
Posted By: omshivaya
Date Posted: 21/Mar/2007 at 5:20pm
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Hello Sunny ji,
Definitely would like to have more inputs form your side on this one:
1) How long have you been in it?
2) More about its financials, like previous 2 year EPS growth%.
3) Its EBITDA margin seems to be pretty low, though it has improved over the last 2 years, from around 6% to 12-13% probably. What is the reason for this?
4)It's PAT growth also has been pretty low. What is the reason for this?
5) What is the projected growth going forward for next 3 years that a) market and b)you, are expecting out of it?
6) Do you know that of any sales target that they are targeting, like 5000 crore sales or 10,000 crore sales by 2010 or something. I ask since almost every company has some kind of target, that the market knows it is targeting?
Thanks in advance for the answers. Please be as detailed as you possibly can. No pressure though. Thank you again.  ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: omshivaya
Date Posted: 21/Mar/2007 at 6:07pm
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Basant sir, I think I posted something about Electrotherm on TED. But jtsk ji already had a thread on this one way before mine. I would kindly request the Admin to remove my thread and add its contents to this one.
Thank you very much. Appreciate it really!!!! ------------- The most important quality for an investor is temperament,not intellect.A temperament that neither derives great pleasure from being with the crowd nor against it |
Posted By: us121
Date Posted: 21/Mar/2007 at 12:14pm
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Electrotherm started with a manufacturing unit just at the exterior of Ahmedabad (about 5kms away). they are expanding and setting up mfg unit in kutch.
i will try to get some info on this in the next week.
however, the bikes they have launched, are chinese makes.
people had shown lots of interest in the beginning. however, due to world known poor quality of chinese stuff, there is lots of dissatisfaction in the market.
i heard, that repeat orders are very hard to get for them and therefore their intial figures of sales should be seen carefully thru the glass.
they also have some flight training business. may be handled by some other brother of mr. bhandari.
------------- ABILITY will get u at d top. CHARACTER will retain u at d top |