Monday, September 24, 2012

Govind Rubber - Buy

Govind Rubber Limited (GRL) is a global name for a range of world-class bicycle tires. The company is showing string growth with an increase of 35% for the quarter ending June 30, as compared to the corresponding period in 2011. The profitability for Q1 jumped by as much as 248% over the last year.

For the quarter ending June 30, net sales of the company were reported to be Rs 7,823 lakh, which was Rs 5,768 lakh in 2011. The profit after tax (PAT) shot up to Rs 101 lakh, from Rs 29 lakh in 2011.
The company expects better profitability in the quarters to come due to softening of rubber prices, which would be a major contributing factor, coupled with other avenues explored by the company.
The company is setting up a greenfield project near Dahej with a capital outlay of Rs 750 crore. It has entered into a joint venture agreement with a South Korean company to set up a manufacturing plant for specialized rubber. 
At an EPS (TTM) of 5.37 and book value of 13.90 the share price is trading at 20.80 making it an attractive long term buy. 
Disclosure:- It is safe to assume that the author may have interest in the sectors recommended in this blog. Seeking personal advice from your Financial Advisor is recommended before acting on any of the substance given herein. The numbers, figures, etc., presented may have been taken from various sources

1 comment:

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