US Railways Order Will Lift the Image of Steelcast

Steel casting

Steelcast - a good company to invest

Steelcast - a  good company to  invest
Steelcast - a good company to invest | Source

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Steelcast - latest financial results

(in Cr.)
Dec-11
Sep-11
FY10-11
Revenue
64.65
55.09
133.26
Net Profit
4.96
2.94
4.33
EPS
12.52
7.41
11.33
Cash EPS
17.43
12.19
23.87
OPM %
20.13
17.36
11.75
NPM %
7.67
5.33
3.25
 
 
 
 
Steelcast - latest financial results

Steelcast - share price movement

 
 
 
Weekly H/L
176.85
165.6
Monthly H/L
176.85
146.1
52 Weeks H/L
185
74.2
 
( 7 Feb 12 )
( 23 Aug 11 )
Delivery / Var+ELM %
72.12
31.19
Steelcast - share price movement

Good Q3 Results


Good Q3 Results

Steelcast has produced good Q3 results for the quarter ended 31.12.11 compared to the previous quarter. Revenue has increased from Rs.55.09 crore to Rs.64.65 crore. Revenue for the whole year 2010-11 was at Rs.133.26 crore. Net profit has increased from Rs.2.94 crore to Rs.4.96 crore. Net profit for the whole year 2010-11 was at Rs.4.33 crore. Annualised EPS works out to Rs.50.08 as against Rs.11.33 for the whole year. Annualised cash EPS works out to Rs.69.72 against Rs.23.87 for the whole year. Operating profit margin increased from 17.36% to 20.13%. Net profit margin increased from 5.33% to7.67%.

Gujarat-Based Company

The shares of Steelcast are traded in the Indian stock markets at Rs.167 now (BSE 22.03.12). The company’s Registered Office is located at Ruvapari Road, Bhavnagar, Gujarat 364 005. The company’s paid-up capital stands at Rs.3.96 crore. Free reserves stand at Rs.42.08 crore as on 31.03.11. The highest and the lowest prices recorded by the shares of Steelcast in the last 12 months are Rs.185 and Rs.74 respectively.

Expansion Of Capacity

Steelcast plans to invest Rs.70 crore capital expenditure. Steelcast has struck a marketing-cum-technical tie-up with the US-based Michigan Steel. There is a huge demand for castings from American railways amounting to multi billion dollars. In order to tap this demand, Steelcast is expanding its capacity at an investment of Rs.70 crore. Steelcast is focused on construction and mining equipment market. Steelcast plans to expand its steel cast capacity from the existing 17000 tonnes per annum to 36000 tonnes per annum in two years time. Chetan Tamboli is the CMD of the company.

Order From US Railways

The shares of Steelcast are listed in BSE but not in the NSE. Already the company has expanded its capacity from 17000 tonnes per annum to 24000 tonnes per annum at an investment of Rs.24 crore. Further expansion to 36000 tonnes per annum will be done at an investment of Rs.45 crore. The company’s 50:50 joint venture was signed with Michigan Steel in June 2010. Steelcast will be the second company from India to bag the quality certification from US Railways. The approval of US Railways has the potential to generate revenue for Steelcast upto Rs.200 crore in the next five years. The company’s products will be used by the US Railways for freight transport. For this, Michigan Steel will be providing technology to Steelcast. Michigan Steel will also assist Steelcast to obtain the necessary approvals from US authorities.

Opportunity In Delhi-Mumbai Freight Corridor

An order placed from US Railways will lift the image of the company in India and other countries. Steelcast will be able to procure orders from Indian Railways also in future. The upcoming Delhi-Mumbai freight corridor will generate immense opportunities for the company in future. Considering the bright future of the company, its reputation for the quality of its products, order from the US Railways and excellent financial position including high book value, investors may acquire the shares of Steelcast on every decline for medium to long term investment.

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