Talbros Automotive Components Ltd - Go with this successful journey

Talbros Automotive Components Ltd : 


BSE  CODE: 505160
Market Price: Rs. 103
Market cap: Rs. 127 Crore
FY - 2014  Sales:  Rs. 365 Crore
NP: Rs. 19. 3 Crore
EPS: Rs. 15.3

           Talbros Automotive Components Ltd, an integrated player in the Auto Component manufacturer   is established in 1956 by Talwar family at Faridabad. The company manufactures Gaskets, steering & suspension components and stamping, rubber products and forgings. It has five solid tie-ups and three joint ventures with notable global players like Federal mogul - USA, Nippon leakless - Japan and Presswerk krefeld - Germany. 

      As the largest gasket manufacturer in India, the company's products are widely used in Two wheelers, Passenger vehicles, Farm equipments and commercial vehicles. All most all of the  auto companies and engine manufacturers including Ashok leyland, Bajaj Auto, Cummins, Eicher, Escorts, Hero Honda, Honda, John deere, Force motors, Maruti, Tata companies, Suzuki and Affinia Automotives are major clients of Talbros. The company now design develop and manufacture products as per clients requirements. Talbros got numerous awards from its vendors like M&M Tractors, Cummins, Honda and Eicher Motors. Some of these company's single source supplier too Talbros.

       With the growth of the domestic Auto mobile industry, the company also growing so quickly. While the company's overall growth in the last year almost muted, its forging division shows over 50% growth since the past four years. In the export front too the company is doing very well. Widely expected interest rate reduction in the coming quarter will boost the auto sales and helps further improvements in sales of the company.

               The company's R&D facility is very strong. Last year Talbros has developed and started commercial production of asbestos free gaskets.

      The company has a dividend paying track record of last 50 years, which tells the commitments to its equity share holders. 

      Since the past couple of months the promoters of the company is acquiring its shares from the open market which shows the confidence of the management about the future growth of the company.

             

    On the valuation front the company's stocks seems tinny and it is one of the major attraction for investment. Talbros sales to market cap stood at 0.33X only. For the trailing 12 months period the company reported a sales income of Rs. 366 crore and  net profit of Rs. 18.3 crore. On an equity capital of Rs. 12.4 crore, its TTM EPS stood at Rs. 14.75. We are giving a BUY call on this stock with a price target of Rs. 200 within a period of one year as we consider the company's solid track record, new products development, expected higher export contribution to revenue and moreover the hopped for Auto sales in the years to come.

Disclaimer: I/ My dependants have no investment in the above mentioned stock.