Wednesday, February 4, 2015

SRIKALAHASTHI PIPES LIMITED (SRIPIPES) - VALUE PICK

Dear friends,

 

      Today we are discussing Iron & Steel Products category stock for long term portfolio, This stock reported massive q3 results, now come to the stock




          "Srikalahasthi Pipes Limited"

 

                       

Lanco Industries Limited (LIL) was incorporated on 1 st November, 1991 by Lanco Group of Companies to manufacture Pig Iron using Korf (German) technology and Cement. The unit is located at Rachagunneri Village on Tirupathi - /Srikalahasthi road which is about 30 kms. from Tirupathi and 10 kms. from Srikalahasthi. The installed capacity of Pig Iron was 90,000 TPA and with similar capacity 90,000 TPA for cement.


Due to the poor demand and other reasons, the operations of the cement unit of the Company was suspended and the unit was reengineered for producing a different product mix having potential in south India.


As a measure of forward integration project for adding value to the Pig Iron manufactured by the Company, LIL floated an another company named Lanco Kalahasthi Castings Limited (LKCL) on 4 th March 1997 to manufacture iron castings and spun pipes in the same campus of the Company with an annual capacity of 40,000 TPA and 35,700 TPA respectively. Accordingly, LIL had an arrangement with LKCL for supply of molten iron and Pig Iron to LKCL, being a value added product, as such iron pipes manufactured by LKCL offered better returns.


However, due to falling Pig Iron prices, increase additional capacity in the industry, competition and the technical & financial assistance, the operations of both LIL and LKCL were effected and the Company was exploring financial and technical strategic alliance with Indian / Foreign Partner.


During the same time M/s. Electrosteel Castings Limited, was also looking for additional capacities for producing spun pipes. Considering the synergies involved, Lanco Industries Limited entered into a strategic alliance partnership during December 2002, with M/s. Electrosteel Castings Limited (ECL), Kolkatta a leading manufacturer of CI, Pipes and DI pipes. This was win-win situation for both LIL and ECL. After takeover, a financial re-engineering and re-structuring of LIL was undertaken by ECL.


 STEP BY STEP COMPANY'S GROWTH


   1991Incorporation of lanco
1994
Setting up of Mini Blast Furnace with 90,000 TPA capacity
1995
Setting up a 250 TPD Mini Cement Plant
1997
Setting up of LKCL for manufacture of 40,000 TPA castings and 35,700 TPA D I Pipes
2002
Strategic Alliance with Electrosteel Casting Limited
2002
Infusion of Rs.2200 lakhs to the equity and financial restructuring
2003
Merger of LKCL with LIL for synergy
2003
Capacity of Pig Iron was increased to 90,000 TPA to 150000 TPA.
2004
Capacity of DI Pipes was increased to 90,000 TPA.
2005
Commissioning of 150,000 TPA coke oven plant.
2005
Setting up of Captive Power Plant of 12 MW by using the waste heat recovered from the coke oven plant.
2006
Capacity of D.I.Pipes was further increased from 90,000 TPA to 1,20,000 TPA and the 12 MW Waste Heat Recovery Based Co-Generating Captive Power Plant was set up, which started generating power from March, 2007.
2007
Stamp Charging System was successfully implemented at Coke Oven Plant for producing quality metallurgical coke at a lower cost.
2008
Company implemented ERP system (SAP) to support business process and effective resource planning and management.
2009
Capacity of D.I. Pipes was increased from 1,20,000 TPA to 1,80,000 TPA
2010
Capacity of Mini Blast Furnace (MBF) for production of Liquid Metal/Pig Iron was enhanced from 150,000 TPA to 225,000 TPA and also the capacity of DI Pipes was enhanced from 180,000 TPA to 225,000 TPA with a capital outlay of about Rs.45 Crore

Srikalahasti Pipes mulls expansion with Rs.325 crore

 Lanco Industries Limited, one of the leading manufacturers of ‘ductile iron pipes’ in South India which has been renamed to Srikalahasti Pipes Limited (SPL), has approved a major expansion plan to manufacture Smaller Dia Ductile Iron Pipes (SDP) by investing Rs.325 crore.

SPL Director G.S. Rathi, during a recently conducted board meeting, announced the details of the expansion plan to manufacture SDPs of diameter ranging between 100mm and 300mm, with a production capacity of 1 lakh tonne a year.

“The investment includes increase in capacity of the Mini Blast Furnace (MBF) from 250 to 280 cubic meters along with other facilities and the entire project will be funded by an optimum combination of internal accruals and debt,” he said.

Mr. Rathi further said that the expansion project would be completed in 18 months and would be ready by March 2016.

“The company will meet the requirements of all Water Boards, Public Health Engineering Departments (PHEDs), Corporations and several other water infrastructure projects. Besides, the projects to increase production in the existing ‘Ductile Iron Pipe’ plant by 50,000 tonne a year (company’s capex plan of Rs.100 crore), is in an advanced stage and is expected to be operational by January 2015,” he added.

The project to be funded by a combination of internal accruals and debt will be completed by March 2016



  Company posted 782cr top line 52.55cr bottom line with an EPS of  13.2 in nine month ended 31/12/2014 compare to last full year EPS was 9.73 ,expecting full year EPS around 20.
 
Latest results click HERE
 
Promoter holding 50.78 % of 39.6cr paid up equity, 1000cr top line company available just 424cr market cap, book value of 57, industry P/E 14.23 SRIPIPES TRADING JUST 5.35PE forward earnings.

Stock trading both NSE and BSE  @107. long term investor can buy @ current price and buy more @ any  decline and hold for one year it may give multiple return in portfolio.
 

 Disclosure :- I am holding this company shares.
 





    































































 

17 comments:

  1. Why a single share is not moving up after your recommendation ?. Everything at this home page is still below or at the same rate of recommendation .

    ReplyDelete
    Replies
    1. I am not a operator to keep stock price above recommended price,read all my blogs and decide how many stocks given investor to good return, don't expect every stock hit up freez after recommendation,I think you speculator not a investor

      Delete
  2. Sir, ur views on Rajoo engineers after result?

    ReplyDelete
  3. Hi, ur views on Narmada Gelatines, ltd?

    ReplyDelete
  4. Hi, ur view on Mindteck india and salzar electronics?

    ReplyDelete
  5. Sri . Thanq for ur good picks
    Ur views on himatsinge. Cairn india .intense Technologies.ybrant digital.

    ReplyDelete
  6. Himatsinge and cairn good picks for long term portfolio.other two I am not tracked

    ReplyDelete
  7. Why mps share price in downward direction?any negative news

    ReplyDelete
    Replies
    1. Posted decent set of numbers (every quarter 50% growth not practical) so long term investor can add more in correction,mps can give multiple return.

      Delete
    2. Sir pl recommend any stock for buying in this correction

      Delete
  8. Thank you sir... i colud see yr block 4 month before because i invested lot of money in garbage stock like gitanjali, jaype assosiate etc..

    Am planning for a correction..

    ReplyDelete
  9. Ur view on DHP india?

    ReplyDelete
  10. Dear sir,

    Am very excited..Am holding this stock 100@200 share. Thanks a lot for your suggestion.

    -Sreenivas

    ReplyDelete