Multibagger - Hercules Hoist Ltd.

>> Friday, March 27, 2009

Script - Hercules Hoist Ltd.
CMP - Rs 87
BSE Code - 505720
52 Week H/L - 329.00 - 71.55

Summary -
The company was incorporated in Jul,y 1962 at Mumbai. The company is engaged in manufacture of Spur Gear chain pulley blocks, electric hoists of various capacities. It has technical and financial collaboration agreement with Hernrich de Fries GmbH Germany.

Business -
Hercules Hoists has distinct features like, an ultra modern manufacturing facility equipped with, CNC machines, gear cutting machines, broaching machines. It has enviable set of customers. In automobile manufacturers its clients are, Tata Motors, Mahindra & Mahindra, Maruti Udyog, New Holland, Escorts, Premier Auto, Bajaj Auto, Kinetic, Ford India, Daewoo Motors, Ashok Leyland and Punjab Tractors. In Steel industry it caters to Tisco, Bokaro Steel Plant, Rourkela Steel Plant, SAIL, Mukund, and Jindal. In the Cement industry, its clients are Ultratech, Ambuja Cements, ACC and Birla Cement and in State Electrcity Boards, it caters to MPEB, RSEB, MSEB and BSES.

The whole range of material handling equipment manufactured by Hercules Hoists is marketed by Indef Marketing Services Limited (IMSL). The company has merged ISML with itself in FY 2005. ISML has a network of 45 Authorized
Marketing Associates and is an established name in India and internationally. The merger with ISML enabled Hercules Hoists to achieve higher efficiency in operational management and reduced avoidable administrative expenses, which has lead to improvement in overall profitability of the larger company.

Diversification -
The company is also diversifing itself in to new segment of Wind Energy. It has already started its operation in 2005 - 2006.
This would also benefit the stock price / balance sheet.

Key Financials -

Capital 1.60 Cr.
PBT 25.38 Cr. for 9 months ending Dec. 08
NP 16.56 Cr. - do -
EPS 10.35 Cr. - do -
EPS 13.80 Cr. (Projected for march ending 09)
FV 1.00
Gen. Reserves 61.00 Cr.

Gross Profits stands at 29.54 cr. on YoY basis.
The general public hold only 15.18% shares of the company i.e. 2428800 shares only.
The stock is good for long term.

Target arround 250 (2 years)