Parekh Aluminex Ltd. TIME TO BUY

Management Discussion and Analysis:


The company is steadily targeting to become a world-class company in its product category by making substantial investment in production capacities, offering diverse product range to satisfy every need of the customer and supplying quality product on time. Companys strategy is to foresee customers requirement and offer solution at competitive price. Management is aware that in the era of globalisation, survival and growth is possible only through product innovation, mass production and penetrating price range. That is why management has adopted a tactical view to invest in capacity creation year after year. The results are evident. Today, Company has mould bank of 83 moulds. They can pack and help transport every conceivable quantity of solid, semi-solid and liquid eatable product in utmost hygienic and convenient way. Similarly, marketing and shipping activities are paid due attention and requisite resources are provided to strengthen them.
Varied product range and production capacity is converted in to value added product which are offered to Indian and global buyers. Management seizes all available business opportunities at most opportune time. It has tried and successfully secured collaboration and co-operation of some of the leading producers and customers of AFC product to give an edge, which is hard to match by any other Indian company. In terms of customers satisfaction and market share your company is numero uno in India and marching ahead to become a force to reckon with in the world market.
Management believes in sharing the wealth of the company with all the stakeholders and distribute it equitably. Year after year increase in dividend payout and increased book value of Companys higher EPS takes care of the shareholders. Employees are provided with better working environment, upgrading of skill and promotion as well as competitive emoluments. Suppliers are paid for the value of goods supplied by them. Company also pays all due taxes to ex-chequer as a law abiding citizen. Apart from this, management is also aware about the social responsibility of the business. Long-term survival demands that part of the wealth generated be repaid to the society for the benefit of underprivileged masses to help them rise to a respectable level. Towards this end and as a mark of its gratitude, company has contributed to build part of the hostel and hospital so that both present and future generation can get benefit of these facilities.

Business Performance:

During the year, company has recorded highest ever result of sales and profit in.its history. Capacities built up in last 5 years, overseas acquisition of company last year and assiduously built up marketing network, both local as well as global, are the instrument in achieving these results. Innovative product development to satisfy the requirement of existing as well as new customers helps to capture more market share. Timely delivery and adherence to quality level enables company to increase its export sales and make its presence felt in the global competitive market.

During the year company completed its expansion project of Rs.400 million in time and as per projected cost. Of this, significant amount has been invested in acquiring and installing productive assets for producing newer varieties of AFC products and increase in existing production capacities. The result of this expansion has been partly reflected in 2006-07. However, real impact will be seen in this year i.e. 2007-08 when another significant jump in income and profit will accrue. The said project was financed through judicious use of owned and borrowed capital to have financial leverage effect. The borrowing from banks was raised at most competitive rate and equity was raised at market based premium. Whereas lower interest on this loan will improve profitability, the premium collected on equity issue will enhance net worth of the company and book value per share, apart from higher earnings per share (EPS).
Significant jump in the export sales is a result of Companys quality products adhering to timely deliveries and giving most competitive prices to the customers.

From this year Company has started exports to America, Germany, Dubai, Bahrain, Turkey etc. Company has a good order book position. Company is paying special attention to the Airlines customers and it has added in its fold Etihad Airways, Thai Airways, Emirates Flight
Catering, Gulf Airways, Air Asthana, Singapore Airlines, Sri Lankan Airlines, Changi International Airport Services amongst others.

Company continues to lead the domestic market with increased sales to institutional buyers and sales through distributors. Rising income level and awareness about the benefit offered by the companys products continuously increase demand for it. This shows marked increase in domestic offtake of the companys sales.

To keep up with the pace of increasing business requirement and to seize the opportunity available in global financial market, your company plans to raise sizeable fund through issue of fresh equity which will be productively employed in working capital and enhancement of production capacity as deemed fit by the board. Requisite approval has been secured in last EGM and directors are devising ways and means to implement the same. Once implemented, it will have potent and cumulative effect on the earning capacity of the company.
Companys manufacturing facilities located at Dadra are fully insured and maintained in an up to date working conditions. Employee skill is continuously upgraded with installation and operation of modern equipments. Newer moulds and tools for development and production are continuously acquired for higher productivity and cost reduction.
The industrial relations remains cordial as employees are treated as core assets of the company and instrumental in growth. It gives due emphasis on their training, up gradation of skill and job satisfaction in addition to good monetary compensation.

IT has allotted 27,50,000 equity share at Rs 260/- per share on Preferential basis
to the following Investors:

1. National Investment Funds Company: 450000 No of Shares Allotted
2. Dharmesh Ajitsinh Khimji: 700000 No of Shares Allotted
3. Sachin Kamath: 111000 No of Shares Allotted
4. Vikas Dixit: 39500 No of Shares Allotted
5. Al Zaman Investments LLC: 160000 No of Shares Allotted
6. Mahesh Keshavji: 160000 No of Shares Allotted
7. Bipin Dharamsey Nensey: 160000 No of Shares Allotted
8. Tawoos LLC: 640000 No of Shares Allotted
9. Sur International (Salim Said Hameed AL Araimi): 170000 No of Shares Allotted
10. Oman International Development and Investment Co. S.A.O.G.: 80000 No of Shares Allotted
11. Oryx Holding Ltd: 79500 No of Shares Allotted.


IT HAS POSTED (FOR NINE MONTHS )20.28 CR ON A EQUITY OF 9.2 CR
AND I AM EXPECTING 29CR FOR FULL YEAR (EPS OF 31RS)
IT IS TRADING AT 180 (6P.E.)
NORMAL PACAGING COMPANYS QUOTE AT 25 P.E .

EXPECTING PRICE TARGET OF 350.IN THREE MONTHS.