IFGL Refractories manufactures specialized refractories and bio-ceramics as well as technical ceremic products. Krosaki Harima, a subsidiary of Nippon Steel, Japan, is the technology provider and holds 4.57 per cent equity stake. Sojitz Corporation Japan holds 9.90 per cent stake. Total promoter stake stands at 71.30 per cent.
This is a safe bet with good prospects of appreciation. Just consider:
The company believes in going global and growing inorganically. Prior to the global financial crisis, IFGL acquired Monocon group of companies (which has plants in Brazil, China, UK, EU and Taiwan) and Holfmann group of companies (which has plants in Czech Republic and Germany.) Despite the current crisis environment, the subsidiaries are doing very well.
Monocon manufactures refractory materials like monolithic refractory dart, dart machines etc. used predominately in steel industry, while Holfmann is mainly into manufacturing of ceramics used in filters for foundry industry. IFGL currently manufactures these products for the subsidiaries, which they sell in local markets after value addition. These value added products will be introduced into Indian market also when the steel industry in Indian regains momentum.
Treating the crisis in the international steel industry as an opportunity. The company shifted some of the high-cost manufacturing jobs from Monocon and Holfmann plants to its Indian plants and again exported to the subsidiaries, which were thus able to sell at much competitive rates compared to their peers. The strong brand image of Monocon and Holfmann helped the company earn better margins than it could have earned on its own. It also shifted manufacturing base from the UK plant to its Chinese subsidiary. Taiwan plant was shut down completely. Holfmann closed its Czech plant and shifted the base to India. All these activities are now paying off. When the world continues to remain in turmoil; the company came out with strong set of numbers.
In the quarter ended September 2011, consolidated net sales grew 42 per cent to Rs. 160.16 crore. The operating profit margin increased 530 bps to 13.4 per cent. The net profit almost doubled to Rs. 11.99 crore. For the half year ended September 2011, net sales grew 32 per cent to Rs. 285.92 crore and net profit shot up 156 per cent to Rs. 22.69 crore.
For 2011-12, we expect the company to report a consolidated EPS of Rs. 12.1. At the current market price of Rs. 32, P/E works out to just 2.6.
Keep visiting us for best stock market analysis coupled with trading tips which make money every day in share market of India.
You
should Trade Less But Trade Accurately & this is Achieved with our Tip.
