Rexnord Electronics & Controls Ltd:
BSE Code: 531888
Market Price : Rs. 21
Market Cap: Rs. 13 crore
FY 2014 Sales : Rs. 40 cr
NP: Rs. 1.95 cr
Rexnord Electronics and Controls Ltd is Mumbai based, BSE listed company since the past two decades. The company is engaged in the business of manufacturing and sales of Cooling Fans, DC brushless Fans, Cooling condensers, gear motors and shaded pol motors all are for industrial use. These motors are widely used in computers, servers, refrigerators, freezers, inverters, injection moulding machines and photo copying machines etc. The company has a humble beginning and still it is a small company. But the interesting thing is since the past three years the company is growing more than 25% annually. In the export front too the company is doing very well. Last year export revenue increased by 18.5%.
Rexnord holds ISO 9001:2008 quality certificate from TUV NORD CERT GmBH. Because of the outstanding quality of the company's products it got numerous quality awards from it vendors like Voltas, Carrier Aircon, Bluestar etc.The quality of the product protect the company from stiff competition from the local players. The company introduces more product in its portfolio to increase it revenue and for better margins. To meet the fund requirement for expansion, the company has allotted 3478800 convertible preference shares to its promoters in September 2014 at Rs. 13.4 per shares for Rs. 4.7 crore. With the conversion of the said warrents promoters holdings increase fro current 46.5% to 56.6%.
Yet the company's sales income for the FY 2014 stood at Rs. 40 crore, its market capitalization stood at just 13 crore which seems the stock is highly undervalued. Considering the company's expansion, growth potential in the user industry and attractive valuation we feel the stock would be a multi-bagger in the medium term.
Disclaimer: I/My dependants have no investment in the above mentioned stock
