LLOYD ELECTRIC & ENGINEERING - KHUSHIYON KI GUARANTEE

Company Profile  -

Achieving the highest quality standards and sustaining them over an extended period of time has been the cornerstone of Lloyd Electric and Engineering’s success over the past two decades. With an in-depth understanding of efficient manufacturing processes and its customer requirements the company continues to deliver a wide range of cost effective heat transfer solutions. With an eye for detail & a collaborative approach with its clients, Lloyd has continuously raised the standards for both product delivery and service support. This management philosophy had lead to it become not just a dependable partner to some of the leading global HVAC&R companies but also the preferred choice for their heat exchanger needs.


With its extended capability to design, develop, manufacture & maintain highly engineered HVAC systems for the Railway industry, Lloyd is uniquely positioned in the mobile HVAC systems space as well as in the heat transfer industry. The company’s strong track record in investing in the latest technology, state-of-the-art equipments & training its workforce on regular basis has enabled the company to attain a leadership position in each of the markets it operates in.

Why to buy?

1. Higher presence in railway HVAC system business (60-65% revenue Lloyd derives from this sengemt)

2. Market Leader in growing heat exachngers & coil business ( 40% market share )

3. OEM supplier to Air conditioning companies ( Majority of company depends on Lloyd for this  counter)

4.Own Brand product - with higher margin ( AC, TV and consumer Electronic business)

5. European market acquisition to become established global player.

Our View - 

At CMP of 149 Lloyd is trading at 6 - 7 PE. Since lloyd is focusing in establishing its own brand value, we believe lloyd is likely to consider as a long term player. Hence investor with longer term outlook can start investing in this counter for 3 year target view of 300 Rs. 

adi finechem - silent rocket

Company Profile :- 

Adi Finechem Limited engages in the manufacture and sale of specialty fine chemicals in India, the United States, Europe, and Japan. It provides oleo chemicals and products for the nutraceutical industry. The company’s oleo chemical products include dimer fatty acid, monomer fatty acid, linoleic fatty acid, and soya fatty acid for use in amines, alkyd resins, plasticizer emulsifiers, polyamides, lubricants, metal soaps, and enzymes; saturated fatty acid used in alkyd resin, amines, and esters; distilled fatty acid for alkyd resins and textile auxiliaries; glycerin for use in textile auxiliaries and paints; and oil for industrial purposes, such as oil feed chemicals, biodiesel, and mould release agent. It also offers intermediate nutraceutical and health products comprising natural concentrated tocopherols for the natural vitamin E/food, feed, and cosmetic industries; and natural concentrated sterols for the natural sterols, food, and pharmaceuticals industries. The company was formerly known as H. K. Finechem Limited and changed its name to Adi Finechem Ltd. 

Why to Buy?

Specialized Products :-

More than 55% of Adi Finechem‘s business consists of specialized products like Dimer Acid and Tocopherol where it is either sole or one of the lowest cost producer in India, providing edge to the company.In remaining products also,prices move in tandem with raw material prices giving AFL stable margins.

Capacity Expansion :-

It has lined up additional Rs 22cr capex for taking capacity to 45,000 MT which is expected to be operational by Oct’14. Phase 1 of capacity expansion has already completed and we will likely to see the numbers will getting reflected from coming quarters.The revenue potential after the expanded capacity is Rs 280 cr p.a.(FY14 revenues Rs 152 cr).

Excellent growth :-

Our view :-

At 318 CMP company is trading at 20 times of FY14 PE and we expect company to post 20 Rs. EPS in FY15. So a company operating in speciality chemical business is currently trading at 16 PE of FY15 earnings per share. Further, capacity expansion will continue to deliver growth for the company. Hence we recommend this stock at CMP of 318 with the target of 30% upside potential.

Kellton Tech - story unfolding

Company Overview - 

Kellton Tech is a global IT company with a portfolio comprising an exhaustive list of IT services in the web, mobile, security, ERP and cloud Space. Kellton Tech boasts a global presence spanning three continents, three countries and five cities.  Founded in 1993, we are a two-decade-young organization. Created with a vision to offer infinite possibilities with technology they are committed to providing end-to-end IT solutions, strategic technology consulting and product development services. 

Interesting points to buy -

1. Company provides end  to end solution in the growing IT sector like ERP, cloud and mobile sector. We believe this choice of growing sector will help company to generate increasing revenue in coming quarters.

2. Company has very widely known clients like PVR , makemytrip DailyNews Newyork, Educomp, Nokia, Kaplan, Nielsen. Company provides quality solutions to the world's widely known companies.

3. Kellton Tech Selected Among the 'Top 20 Travel & Hospitality Solution Provider in June 2014.

4. Company is providing consistent performance, 

Total Income From Operations	41.81	40.22	26.42	25.22	12.63
Total expense	37.25	37.74	24.5	23.38	11.18
Net Profit/(Loss) For the Period	2.52	1.49	1.22	1.13	0.85
Basic EPS	0.71	0.42	0.34	0.32	0.24

5.Promoters increased their shareholding by subscribing to the warrants at Rs 15 per share and they haven't pledge a single share till date.

Our View- 

We expect company to post EPS into similar lines for rest of the Financial year which makes it 2.9 for the entire year. At CMP of 21.5 company is trading at the PE multiple of 7-8. Further, company has taken lot of acquisition on the book pursuing aggressive expansion strategy. (FYI - It acquired Kellton tech from USA and changed their own name to Kellton tech to focus better on their US market.) Further, promoters are steadily increased their stake in the company which shows their commitment to the company. We consider company is currently in the infant stage and has lot of potential to grow into multifold return. Hence we recommend this stock for long term investment at CMP 21.5.