Investment Idea - Rishi Lasers.

>> Tuesday, August 12, 2008

Scrip: - Rishi Laser.
BSE Code: - 526861
CMP : - 68
Market Cap: - 55 Cr.
52 Weeks H/L: - 206 / 51
Tgt: - 120 (6-7 Months.)

Summary: -
Rishi laser is a leader in the usage of Laser Cutting for manufacturing components and assemblies.Rishi(RLCL) set up its first Laser Cutting facility in 1995. Even though Laser Cutting was very popular in Western Countries at that time, Laser Cutting of metals was very new to India.The progress in the first five years was very slow because Laser Cutting was still looked as a very expensive method of processing steel. Also the Indian Engineering Capital Goods Industry was passing through a very difficult period in later nineties. The scenario has completely changed today for the sector and the company. The Engineering and Capital Goods sector is booming in India and Laser Cutting is fast becoming a very standard method of processing flat steel.The fabrication industry is highly fragmented and there are very few organised large Companies in the business. Rishi Laser continues to be the leader in the business in terms of capacity with 20 CNC steel processing machines. RLCL is now embarking on major growth path to add further facilities to enhance capacity.

Financials: -

Its reserves are increasing year over year. The current reserves are 19 Cr. Odd. Its sales have increased considerably. Rishi has been consistently perfoming well over the last 4 years or so and the same trend is expected to continue in the coming years as well.We expect RLCL to deliver a topline of aound 75crs and a bottomline of about 4.8crs for fy08 .With a low equity base of 6crs the bottomline results in an EPS about 5rs.At the current price of 67rs RLCL quotes at a P.E of slightly above 11.8 times.

Key Positive Points: -
Demand in this sector is growing consistently.
Good sales.
It is there in Rakesh Junjunwalas Portfolio.

Key Negative Points: -
High operating cost.
Not a dividend paying stock.


Happy Investing.!

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