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SHARETIPSINFO >>Research Reports >>TRF LTD (24-09-2009)
LISTING |
|
|
Rs502 |
|
Rs953.00 / 180.05 |
|
Rs10 |
PE RATIO |
5 |
AVERAGE VOLUME |
15000 |
MARKETCAP |
Rs553 crore |
DIV YIELD |
2.46% |
COMPANY OVERVIEW:
It was incorporated in the year 1962. The company was promoted by Tata Steel and ACC in financial and technical collaboration with Hewitt-Robins Inc of USA and General Electric Co. ltd, UK.
The main objective of the company is to manufacture of material handling equipments such as idler rollers, vibrating screens, sectional and mine conveyors, industrial chains, wire screen cloths, winder, tippler, crusher, ore and coal preparation equipment and coal cutters and undertaking “system contract” for such equipments including design, manufacture, supply and installation of equipment.
TRF products and services have developed market for themselves in the infrastructure sector in India and overseas.
Company operations are segregated into four divisions:
Bulk Material Handling Equipment Division: The division specializes in design and manufacture of wide range of material handling equipments used in infrastructure industry.
Bulk Material Handling System Division:
The division offers complete package of material handling and allied system and service on turnkey basis.
Port and Yard Equipment Division: Focuses on the design, supply, erection and the commissioning of unit material handling equipment for ports and stock yards.
Design and Engineering Division: The division with the help of application engineering customizes its products to specific application, ensuring customer satisfaction.
SUBSIDIARY:
The TRF group comprises of TRF India, York Tea, Dutch Lanka Trailer and Adithya Automotive Application.
The group has presence in over 30 countries.
PRODUCT MIX:
PRODUCT |
SALES(In crore) |
% of Total |
Material Handling Equipments |
Rs405.38 crore |
76.22% |
Idler Rollers |
Rs18.79 crore |
3.53% |
Tipplers |
Rs17.65 crore |
3.31% |
Components |
Rs15.64 crore |
2.94% |
Conveyors Sectional &Mines |
Rs14.97 crore |
2.81% |
Service charges |
Rs9.87 crore |
1.85% |
Vibrating screen |
Rs9.74 crore |
1.83% |
Crusher |
Rs9.21 crore |
1.73% |
Components(Idler Rollers) |
Rs8.21 crore |
1.54% |
Components(Vibrating Screen) |
Rs7.9 crore |
1.48% |
Components (Crushers) |
Rs7.38 crore |
1.38% |
Crawler Mounted Side Dump Loader& Under Carriage for Underground mining |
Rs2.4 crore |
0.45% |
Components (Tipplers) |
Rs2.18 crore |
0.41% |
Engineering |
Rs2.1 crore |
0.39% |
Wire Screen Cloth |
Rs0.25 crore |
0.04% |
Scrap |
Rs0.14 crore |
0.02% |
|
|
|
INVESTMENT RATIONAL:
Company is operating in the segment that growing exponentially.
Promoter of the company is Tata Group.
PE ratio is very attractive at 5 where as industry PE is 28.
Company through its subsidiary is having presence in SriLanka, which will see good reconstruction work after decade of civil wars.
Govt spending hugely on Infrastructure Company is bound to get the benefit.
As it is manufacturing of heavy engineering equipments for infrastructure, it requires high level of technology. This acts as the entry barrier and hence helps in retaining the margin.
SHAREHOLDING PATTERN:
|
|
NO. OF SHARES |
% OF TOTAL |
PROMOTER |
2301087 |
|
41.82% |
|
INSTITUTION |
947257 |
|
17.22% |
|
GENERAL PUBLIC |
2253862 |
|
40.96% |
|
GRAND TOTAL |
5502206 |
|
100% |
|
FINANCIAL:
|
|
31/03/06 |
31/03/07 |
31/03/08 |
31/03/09 |
TOTAL INCOME |
216.79 |
349.36 |
366.64 |
540.85 |
EXPENDITURE |
-199.28 |
-314.92 |
-313.52 |
-449.45 |
PBDITA |
|
17.51 |
34.44 |
53.12 |
91.4 |
DEPRECIATION |
-1.3 |
-1.32 |
-1.47 |
-1.9 |
PBIT |
|
16.21 |
33.12 |
51.65 |
89.5 |
INTEREST |
|
-4.35 |
-2.45 |
-1.73 |
-5.79 |
PBT |
|
11.86 |
30.67 |
49.92 |
83.71 |
TAX |
|
-4.5 |
-10.4 |
-17.96 |
-24.76 |
PAT |
|
7.36 |
20.27 |
31.96 |
58.95 |
*Extraordinary item not considered while calculating PAT.
Key Highlights:
Total Income grew at CAGR of 35.6%.
PBDITA grew at CAGR of 73.5%.
Net Profit grew at CAGR of 100%.
RATIOS:
|
|
31/03/06 |
31/03/07 |
31/03/08 |
31/03/09 |
EPS |
|
13.38182 |
36.85455 |
58.10909 |
107.1818 |
PBDITA MARGIN |
8.076941 |
9.858026 |
14.48833 |
16.89933 |
NPM |
|
3.394991 |
5.802038 |
8.716998 |
10.89951 |
INTEREST COVER |
3.726437 |
13.51837 |
29.85549 |
15.45769 |
COMPARISION OF Q1FY2010 WITH Q1FY2009:
|
|
Q1FY2009 |
%CHANGE |
Q1FY2010 |
TOTAL INCOME |
60.51 |
82% |
|
110.09 |
EXPENDITURE |
-53.2 |
|
|
-97.6 |
PBDITA |
|
7.31 |
71.20% |
|
12.49 |
DEPRECIATION |
-0.41 |
|
|
-0.57 |
PBIT |
|
6.9 |
|
|
11.92 |
INTEREST |
|
-0.84 |
|
|
-1.81 |
PBT |
|
6.06 |
|
|
10.11 |
TAX |
|
-2.17 |
|
|
-3.56 |
PAT |
|
3.89 |
68% |
|
6.55 |
Key Highlights:
Total Income change by 82%.
PBDITA moved up by 71.2%.
Net Profit surged by 68%.
VALUATION:
At CMP of Rs 502 stock is trading 4.4X to trailing twelve months earning. At the same time the industry PE is of 29X. So the stock is trading at considerable discount to the industry. We value the stock very conservatively at 8X. The fair value comes at Rs864.
Looking at the Promoters of the company and its profitability track record this is a gem. Even the valuation we did is much lower than the real worth of the company.
CONCLUSION:
Investor should take position on the counter. The risk reward ratio is very favorable. You rarely find such a company at through away price.
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