ITL Industries....A value Buy for 2019

Dear members

Glad to post new stock analysis from Industrial machinery sector.

Fundamentals are Good, should be in portfolio for long term, I will add slowly 40-50 stocks every month for 12 month in portfolio.

ITL INDUSTRIES LTD.
Cmp :- 165

(SCRIPT CODE :- ITL)

BSE CODE :- 522183

COMPANY PROFILE :- 

• ITL (a BSE Listed Company since 1993) came into existence before 30 Years with its own indigenous design & developed India’s first Double Column Bandsaw Machines. ITL offers a wide range of Horizontal & Vertical Bandsaw machines with 52 different models having capacity from 100 mm to 3000 mm featuring Manual, Semi Automatic, Fully Automatic, NC & CNC models. ITL introduced India’s first Carbide Circular Saw Metal Cutting Machine and offers 7 different models from 10mm to 200mm dia bar cutting to cater to the needs of Engineering Industries. ITL has a bright Galaxy of 3860 blue chip companies with around 7620 different machines across the country & abroad. ITL enjoys pioneer status in high speed metal sawing technology in India. In the year 1999, ITL ventured in complete new segment of machine manufacturing where micron and metallurgy was of utmost importance and started manufacturing of Tube and Pipe Mills, Section Mills, Straightening Machine, online Cold Saw Burr Free Fly Cut Off, Accumulators etc. ITL provides Single Point Service & is a one-stop responsibility center for setting up an entire Tube Manufacturing Plant. ITL can undertake total turn key projects for setting up the entire tube production line. The company today is a leader in the domestic and global market and has established itself as an innovative and reliable “Affordable Metal Cutting Solution Provider”. Keeping pace with time & its Endeavour to serve the industry better & better, the company has yet come up with new technology for betterment. PRODUCTS :-

• KEY FUNDAMENTALS :-  STOCK INFO Market Cap 52 Cr P/E 7.7 52 W High/Low 293 / 140 Face Value 10 EPS 16 Book Value 103 Price/Book Industry PE 1.57 24 SHARE HOLDING PATTERN Promotors 43.95 % MF --- DII -- Public/NII 56.05% TOTAL 100%

CLIENTS :- 

Some of our key customers are named below:

• Bhabha Atomic Research Centre (BARC)
• Defence Metallurgical Research Laboratory (DMRL)
• Indian Space Research Organization (ISRO)
• Mishra Dhatu Nigam Limited (MIDHANI)
• Nuclear Fuel Complex (NFC)
• Bharat Heavy Electrical Limited (BHEL)
• Steel Authority of India Limited (SAIL)

Some of our global clients are mentioned as under:

• ABB
• Firth
• Kirby
• Siemens
• ASB
• Fomas
• KSB
• Assab
• Ford
• Kusters
• Wendt
• Burgmann
• General Motors
• Calico
• Crisp
• Buckau Wolf
• Gerb
• Macawber Beekay
• Auma
• Buderus
• GE
• Oil Country
• Plasser
• Delsy
• Alsthom
• Powmex Steel
• Suzuki
• Drillco Seco
• Gabriel
• Sulze
• Mahindra
• Erhardt Leimer
• Hoerbiger
• Sandvik
• Tata
• Echlin
• Hagglunds
• Dantal
• Bharat Forge
• Elgi
• Hyundai
• Carpenter
• Defence
• Eiche Fisher
• Honda
• Salzgitter

ANNUAL RESULT :- 

• Company constantly generating revenue and slowly growing. Company constantly making higher profit. PAT increases YOY Company continue posting profit of PROFIT of 2.10 Cr in 2016 to reach profit 5.13 CR. in FY 18. Expected Good YOY result in FY19. If same trend continue than FY19 PAT will be expected to 6.85 Cr. which is highest ever PAT since company's establishment. Company shown 2.5 fold jump in EPS in FY16 to FY18.

TECHNICALS:- 

• STOCK IS TRADING AT STRONG TRENDLINE SUPPORT, MAKING HIGHER HIGH FROM LAST MONTH.

• TRADING AROUND 50 DMA, 169 IS 100 DMA , BREAKOUT OF 169 MAY LEAD IMMEDIATE TARGET OF 190 WITHIN 3-4 MONTHS.

• POSSIBLE SYMMENTRICAL TRIANGLE WILL FORM AROUND 167 LEVELS, BREAKOUT ABOVE 167.

• 160-167 IS NARROW RANGE , WHERE WE CAN ACCUMULATE THIS STOCK.

• FOR SAFE SIDE I WOULD PLACE 140 AS STOP LOSS ON CLOSING BASIS, DUE TO ELECTION MONTH THERE WILL BE HIGH VOLATILITY IN MARKET.

Why to invest in Company :- 

• Trading at PE 7.75 against industry average PE of 24.

• Profit making company.

• Company is consistently paying dividend.

• Debt to Equity Ratio almost Nil.

• More Specific focus on R & D carried out by the company. To develop special purpose Machines/ Plants and technological upgradation of existing products. 

• In current year the Company is confident of growing much faster in comparison to economy & capital goods industry looking to the present level of orders and enquiries for Manufacturing Division i.e. Bandsaw and Tube & Pipe Manufacturing equipment are showing good sign of recovery.

•  ITL's outlook on over-seas markets and domestic market are positive on account of its strength on cutting edge technology, cost and effective after sales services.

• Client list is from prominent Government PSU, well known companies and Global leaders

Verdict :-

• Valuation of the stock is reasonable, by seeing the strong growth prospects of the company, I have invested few amount in the stock keeping 190 target till JUNE 2019

• The stock can touch 300 levels in 1 year.

Negative :- 

• Low volume stock.

Happy Investing

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NOTE : THE ABOVE IS NOT A RESEARCH REPORT NOR A RECOMMENDATION  BUT INFORMATION AS AVAILABLE ON PUBLIC DOMAIN. 

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