Sanghvi Movers – A Good Investment

Reputed Customers Advantage

Reputed Customers Advantage
Reputed Customers Advantage | Source
Sanghvi Movers - Share Price movement
Sanghvi Movers - Share Price movement | Source

Sanghvi Movers - Latest Financial Results

(in Cr.)
Dec-11
Sep-11
FY10-11
Revenue
114.1
109.91
361.25
Net Profit
24.58
14.51
86.31
EPS
5.68
3.35
19.94
Cash EPS
11.89
9.68
41.39
OPM %
72.35
73.1
74.21
NPM %
21.54
13.2
23.89
Sanghvi Movers - Latest Financial Results

Sanghvi Movers - Share Price Movement

 
 
 
Weekly H/L
111
104.55
Monthly H/L
113.6
103.25
52 Weeks H/L
131.3
84.5
 
( 12 Aug 11 )
( 2 Jan 12 )
Delivery / Var+ELM %
77.04
30.98
Sanghvi Movers - Share Price Movement

Tough Times


Good Results

Sanghvi Movers has produced good results for the quarter ended 31.12.11 when compared to the previous quarter. Revenue has increased from Rs.109 crore to Rs.114 crore. Net profit has jumped from Rs.14 crore to Rs.24 crore. Margins are healthy. The shares of Sanghvi Movers are traded in the Indian stock markets at Rs.108 now (BSE 20.04.12). The face value of the company’s shares is Rs.2. The highest and the lowest prices recorded by the shares of the company in the last one year are Rs.131 and Rs.84 respectively.

Tough Times

The company is facing tough times. Business from the power sectors and wind energy continues to be hazy. Utilization is much below installed capacity. This situation has forced Sanghvi Movers to rethink about its proposed expansion plans slated to be effected in the year 2013. Foreigners are scouting for opportunities to hire out cranes in India at much cheaper rates. There has been a slowdown in the construction of cement and steel plants in India. There has been delay in the execution of power projects in India. In the first half of the financial year 2011-12, Sanghvi Movers purchased 33cranes at Rs.150 crore. It is planning for a further capital expenditure of Rs.230 crore. Now it may rethink about this proposed capital expenditure.

Reputed Customers Advantage

But the advantage with Sanghvi Movers is that it has reputed customers across various industries like Reliance, BHEL, IOC, NTPC, JSW, Suzlon and Tata Steel. The Book Value to market price of the share is also very attractive. The company is also having low debt. Therefore debt servicing is not a problem for the company. This fact also improves the margins of the company.

Largest Company In India In Its Sector

Sanghvi Movers is the largest company in India that hires cranes. It has a fleet size of more than 400 cranes. It is engaged in the business of providing crawler and hydraulic cranes. These hi-tech cranes are used in the infrastructure industries like power, windmills, steel, refineries and cement. Till the second quarter of the current financial year, around 40% of the company’s revenue came from windmills, around 30% from power and around 20% from refineries. Remaining came from steel and cement sectors. Sanghvi Movers has an installed capacity of 5.05 MW of wind power generation. It is a Pune-based company.

Sanghvi Movers Will Be Benefitted

Government of India is encouraging renewable energy generation like wind power and is offering several incentives for it. Therefore Sanghvi Movers will be naturally benefitted from such incentives. Nearly three fourths of the installed capacity in renewable power is wind power. About 2000 MW capacity addition is expected in the current year. The current installed wind power capacity in India is 1.2 GW. It is expected to increase to 4.6 GW in one year’s time. Turbine manufacturers and power firms will have a good opportunity to capitalise on this trend. Sanghvi Movers will also be one of the major beneficiaries because of this trend.

Good Investment

Sanghvi Movers is a profit-making and dividend-paying company. It has been paying dividend consistently for the last five years with a yield of 150% of its face value. Even in the event of a slowdown in the infrastructure projects, the company can survive the lean period with its comfortable margins. Moreover Sanghvi Movers is the market leader in the sector it operates. Therefore investors can acquire the shares of Sanghvi Movers at the current price and accumulate them at every decline for medium term holding for decent gains.

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