eimco elecon - the power of quality undervalued stock

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This presentation was delivered on Feb 15, 2014 to Equity Pune group. In this presentation I discussed about an undervalued stock: Eimco Elecon. Eimco Elecon is a leading, profit making and established manufacturer of various Mining equipment. It is a zero debt company available at a Market Cap of just Rs92Cr (CMP INR 160). More importantly it has an investments of INR 60.42Crs in high grade shares and mutual funds. So effective market cap is just INR 32Crs i.e. INR 55 per share. Besides Net Current Asset per share is INR 154 and book value of INR 295. It is like company paying us to acquire its shares. Some additional highlights include consistency in operating and free cash flow, dividend yield of 2.5% (paying dividend for last several years), ROCE in double digits during last 6 years, and high promoters at 74% stake including 25% by Sandvik group. Also HDFC holding 4.79% for last several years. The key negatives are slowdown in mining and construction industries and overall economy & equipment industry and the stock is an illiquid/low volume stock. Enjoyed the discussions with the group.

TRANSCRIPT

15 February 2014

1 Blog: http://dharmawat.blogspot.com/

Eimco Elecon

Quality is a way of life

The Power of Quality Undervalued Stock

A presentation by: Niteen S Dharmawat

at Equity Pune gathering…

Recap… & some updates…

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Discussed it in one of the last meetings… and we are dot on….

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Kabir Das (Indian poet, mystic, philosopher, and one of the Northern India Saints.)

About Eimco Elecon

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Background…

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Kabir Das (Indian poet, mystic, philosopher, and one of the Northern India Saints.)

Financials

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Summary…

Financials

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Summary…

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Eimco Elecon

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Net Profit (NP) V/S Operating Cash Flow (OCF)…

Eimco Elecon

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Shareholding Pattern (SHP)…

Price chart…

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Summary…

HDFC entered somewhere here & continue to hold 4.79%….

Key Clients…

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Stability in the order book…

And other valued customers in India & abroad.

60% revenue from Spares

Construction Equipment

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a wide range of underground mining machinary & construction equipments…

Side Dump Loader

Source: company website

Construction Equipment

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a wide range of underground mining machinary & construction equipments…

Side Dump Loader

Source: company website

Coal Mining Application Equipment

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a wide range of underground mining machinary & construction equipments…

Load Haul Dumper

Source: company website

Coal Mining Application Equipment

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a wide range of underground mining machinary & construction equipments…

Load Haul Dumper (Low Height)

Source: company website

Coal Mining Application Equipment

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a wide range of underground mining machinary & construction equipments…

Load Haul Dumper

Source: company website

Coal Mining Application Equipment

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a wide range of underground mining machinary & construction equipments…

Coal Hauler

Source: company website

Coal Mining Application Equipment

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a wide range of underground mining machinary & construction equipments…

Universal Drill Machine

Source: company website

Coal Mining Application Equipment

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a wide range of underground mining machinary & construction equipments…

Universal Drill Machine (Low Height)

Source: company website

Metal Mining Application Equipment

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a wide range of underground mining machinary & construction equipments…

Low Profile Dump Truck

Source: company website

Metal Mining Application Equipment

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a wide range of underground mining machinary & construction equipments…

Rocker Shovel Loader

Source: company website

Metal Mining Application Equipment

23 Blog: http://dharmawat.blogspot.com/

a wide range of underground mining machinary & construction equipments…

Rocker Shovel Loader

Source: company website

Metal Mining Application Equipment

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a wide range of underground mining machinary & construction equipments…

Hopper Loader

Source: company website

Metal Mining/Construction Application Equipment

25 Blog: http://dharmawat.blogspot.com/

a wide range of underground mining machinary & construction equipments…

Articulated Wheel Loader

Source: company website

Metal Mining/Construction Application Equipment

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a wide range of underground mining machinary & construction equipments…

Articulated Wheel Loader

Source: company website

Chair Lift Man Riding System for underground mines

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a wide range of underground mining machinary & construction equipments…

Source: company website

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Product Portfolio a wide range of underground mining machinary & construction equipments…

ISO 9001:2008 ISO 14001:2004 BS OHSAS 18001:2007 EHS Policy

Source: company website

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Kabir Das (Indian poet, mystic, philosopher, and one of the Northern India Saints.)

What to expect…

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Future holds promosing…

Risks and Mitigation

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About the presenter:

Niteen is an MBA and cleared CFA Level 2, CFA Institute USA. A firm believer in long-term financial planning, and a 20 years veteran of the stock market, he likes to analyse the economy, and individual stocks. He also conducts investor education sessions.

He likes reading books/magazines/news papers on the topics as diverse as general management, technology, investment, fiction, marketing and the Gita.

He is a person who believes in "Everything else can stop but learning".

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IMPORTANT DISCLAIMER: Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective. The information contained herein is based on analysis and up on sources that I consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above. I sincerely request you to do your homework before you take any position whatsoever. I, my relatives or friends may have/have positions in the stocks discussed here.

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Thank you

Email: niteen.dharmawat@gmail.com

Mobile: 9850571857

Blog: http://dharmawat.blogspot.com/

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