Brief description of the Company: Fluidomat Ltd is an ISO 9001-2008 certified company which manufactures a wide range of fixed speed and variable speed fluid couplings for industrial and automotive drives up to 3500 KW since 1971.
The use of a fluid coupling offers many advantages over the direct coupling of a drive system. The advantage over its counterparts make fluid couplings preferable in many engineering applications.
Keeping in view the amount of investments to be made in the thermal and nuclear power generation, I believe that demand of fluid couplings will see an upsurge. Add to that there are limited number of manufacturers in the world of all types of industrial fluid couplings. So one can find enough opportunity in this space.
The company has been a very consistent performer for the last 5 years increasing it's revenue from Rs 8 crore at the end of FY 06 to Rs 18.25 crore at the end of FY 10. Similarly there's been a sequential growth in net profit from Rs 0.80 crore to Rs 1.92 crore for the same period. For the half year ending Sep'10 the company has already recorded an improvement of 48% in turnover at Rs 9.59 crore while there's a 59% improvement in profitability at Rs 1.16 crore.
On the basis of annualized half year Sep'10 earnings the company is trading at a PE of 8.62, however for engineering companies the last two quarters are usually the highest revenue accretive and thus the company is available at even cheaper valuations.
The good thing about the company is that for the last 1 year and before the management has been continuously increasing stake and are currently holding close to 47% stake in the company. They have been regularly purchasing shares of the company through open market purchase.
2 Phase Buying Strategies Suggested [Always buy in SIP ways]
ü 1st Phase : Buy at the current price range Rs 38-40 [30% of investment]
ü 2nd Phase : Add if the price fall down to Rs 33-35 [70% of investment]
>>> Expect at least 60-100% return in next 12 months time frame!!!
Stock Hit the High of Rs. 49.60/- today. Happy Investing.
ReplyDeleteHits an all time high of 110 :)
ReplyDeletesuperb pick
a good pick!! (Y)
ReplyDelete