Hindustan Composites Ltd BUY

Hindustan Composites Limited (HCL) was incorporated in 1964; it is a part of the Rasoi group. The company manufactures fibre-based composite material used for automotive, rail and industrial applications. The company’s registered office is in Mumbai, it has 3 manufacturing plants — in Paithan, Jalna and Bhandara — all in Maharashtra

HINDUSTAN FERODO LTD NAME CHANGED AS  HINDUSTAN COMPOSITES LTD.

KEY HIGHLIGHTS
 

Strong distribution network
 

The company produces and supplies to a wide range of sectors in India. It produces automotive brake linings for 2- and 4-wheelers, automotive disc brake pads and railway brake blocks in Paithan near Aurangabad. The Jalna unit, also in Aurangabad, manufactures compressed jointing sheets and limpet sheets. In Bhandara, the company produces clutch facings (wet mix, moulded and random wound) and industrial roll linings. HCL has a wide distribution network with residential sales offices throughout India, 4 regional offices, 7 depots and 165 distributors servicing more than 10,000 outlets.
 

Wide range of products with established client base across sectors
 

HCL’s wide range of products caters to the needs of core sector industries such as railways, engineering, mining, aerospace, steel, chemical, petrochemical, fertiliser, power generation, ship building, atomic energy, electrical, oil exploration, automotive, etc.

 The company’s clientele includes Indian Railways, Indian Oil, Ashok Leyland, SAIL, NTPC, Tata group, Hindalco, Mahindra & Mahindra and Reliance Industries. HCL exports to more than 30 countries in Europe, Latin American, Middle East and Southeast Asia. 

 KEY RISKS
 

• Increase in prices of major raw materials such as fibres, ferrous materials, chemical &solvents and rubber.
• Increase in competition from small players, leading to lower realizations.
• Government putting stricter control on manufacture and usage of asbestos based products.

	Quarter ended			Year to Date			Year ended
	201312 (3)	201212 (3)	% Var	201312 (9)	201212 (9)	%Var	201303 (12)	201203 (12)	% Var
Sales	35.13	28.57	22.96	104.19	85.99	21.17	116.99	119.02	-1.71
Other Income	NA	NA	NA	NA	NA	NA	NA	3.47	-100.00
PBIDT	8.90	5.13	73.49	23.16	13.48	71.81	18.59	33.72	-44.87
Interest	0.30	0.07	328.57	0.44	0.23	91.30	0.28	1.57	-82.17
PBDT	8.60	5.06	69.96	22.72	13.25	71.47	18.31	32.15	-43.05
Depreciation	1.79	1.60	11.88	5.27	4.46	18.16	6.15	4.55	35.16
PBT	6.81	3.46	96.82	17.45	8.79	98.52	12.16	27.60	-55.94
TAX	1.28	0.50	156.00	3.12	1.82	71.43	1.96	6.68	-70.66
PAT	5.53	2.96	86.82	14.33	6.97	105.60	10.20	20.92	-51.24
Equity	4.92	4.92	0.00	4.92	4.92	0.00	4.92	4.92	0.00

INTERESTING FACT IS MARKET CAP IS 200 CR  CASH INVESTMENTS IN THE COMPANY IS 341 CR ASSET VALUE OF THE COMPANY IS 511 CR  CURRENT MARKET PRICE IS 400RS EXPECTED EPS IS AT 40RS.BUY ON EVERY DECLINE FOR BETTER RETURNS