Pitti Laminations

Pitti Laminations has performed well during the first quarter ended Jun-06. Total Income is up by 91.4% to Rs 302.60 million as compared to Rs 158.10 mn for the same period last year. Net profit is up by 35.88% in the first quarter ended Jun-06 to Rs 20.26 million as compared to Rs 14.91 mn for the same period last year.

 

In FY-06 the Total Income was up by 85.44% to Rs 846.5 million as compared to Rs 456.49 mn in FY-05. Net profit was up by 37.21% in FY-06 to Rs 68.95 million as compared to Rs 50.25 mn in FY-05.

 

I am attaching a report dated 3 Oct 06 by Prabhudas Liladhar. They have the following comment to make

 

"Set up in 1983 at Hyderabad, Pitti Laminations (PLL) is a leading manufacturer of electrical steel laminations and stampings, die-cast rotors, tools, jigs, fixtures and moulds. Its manufacturing facilities are located at Nandigaon village in Andhra Pradesh. These laminations are used in industrial motors, alternators, power and wind generators, DC machines, train-lighting generators, pumps, medical diagnostic equipment and in aeronautics, to name a few.

 

Pitti currently has a capacity to manufacture 25,000 tonnes per annum of stampings. The company is setting up a new facility for fabricating steel stator bodies, machining stator bodies and for core dropping operations. This forward integration initiative would help Pitti to get better realizations. It plans to set up by May 2007 a facility to manufacture 1,800 to 2,000 pieces of core droppings, primarily to cater to the requirements of GE ( USA). The project is expected to cost about Rs 400m.

 

PLL has a large customer base and supplies to power equipment manufacturers such as ABB, BHEL, Siemens, Crompton Greaves, Areva T&D, VA Tech, Bharat Bijlee, Kirloskar Brothers, Suzlon, GE (USA), etc. Pitti has a current order book to supply 17,000 MT of stampings and 1,200 pieces of core droppings. This translates into orders worth approximately Rs 1,400m.

 

We expect CAGR of 55.1% in Pitti's revenue and 72.8% in its earnings for the period FY06 – FY08. At the CMP of Rs 88, the stock trades at 6.3x and 3.9x its FY07E and FY08E earnings, respectively, of Rs 13.9 and Rs 22.4. On an EV/EBIDTA basis, the stock trades at 3.6x and 2.2x respectively. We rate the stock a BUY with a target price of Rs 140."

 

 

Pitti Laminations Ltd			BSE Code: 513519
	FY-06	FY-05	FY-04	FY-03	FY-07 Q1	FY-06 Q1
Total Income	846.50	456.49	379.61	256.92	302.60	158.10
Expenditure	708.33	365.38	324.75	226.03	260.25	130.41
Operating Profit	138.17	91.11	54.86	30.89	42.35	27.69
Op Profit %	16.32%	19.96%	14.45%	12.02%	14.00%	17.51%
Interest	19.18	7.58	8.94	9.73	8.34	3.12
Depreciation	11.80	7.80	7.99	7.83	3.48	2.09
Tax	38.24	25.48	(2.38 )	1.15	10.27	7.57
	69.22	40.86	14.55	18.71	22.09	12.78
Net Profit	68.95	50.25	40.31	12.18	20.26	14.91
Net Pr %	8.15%	11.01%	10.62%	4.74%	6.70%	9.43%
Earning Per Share	8.79	8.05	8.72	3.88	2.20	2.33
Calculated EPS	8.80	8.05	6.46
Share Capital	78.34	62.44	62.42	31.42	92.04	78.34
Reserves	192.90	47.72	8.08	(32.24 )
Book Value	34.62	17.64	11.29	(0.26 )	10.00	10.00
Dividend	20.00%	15.00%	0.00%	0.00%
Dividend Payout	22.75%	18.63%	0.00%	0.00%
Growth in Income	85.44%	20.25%	47.75%		91.40%
Growth in Profit	37.21%	24.66%	230.95%		35.88%
Net Sales	845.38	450.72	377.89	251.45	302.40	158.00
Other Income	1.12	5.77	1.72	5.47	0.20	0.10
Total Income	846.50	456.49	379.61	256.92	302.60	158.10
Net Sales	99.87%	98.74%	99.55%	97.87%	99.93%	99.94%
Stock	(62.446 )	(22.367 )	2.994	(2.521 )	(5.26 )	(10.56 )
Raw Materials	582.714	273.576	240.279	161.462	205.11	99.08
Staff Cost	59.202	43.173	27.588	21.665	22.51	11.15
Other Expenditure	128.856	70.993	53.892	45.425	37.89	30.75
Total Expenditure	708.326	365.375	324.753	226.031	260.250	130.413
Materials %	61.46%	55.03%	64.08%	61.86%	66.05%	55.99%
Staff Costs %	6.99%	9.46%	7.27%	8.43%	7.44%	7.05%
Other Exp %	15.22%	15.55%	14.20%	17.68%	12.52%	19.45%
Interest %	2.27%	1.66%	2.36%	3.79%	2.76%	1.97%
Depreciation %	1.39%	1.71%	2.10%	3.05%	1.15%	1.32%
Tax %	4.52%	5.58%	-0.63%	0.45%	3.39%	4.79%