Monday, April 27, 2015
International Combustion - BSE 505737 - CMP 221 BUY
INTERNATIONAL COMBUSTION (INDIA) LTD : (FV RS 10) RS. 221
This company was founded in 1936 as a trading house representating the interests of International Combustion, UK. From a modest beginning with manufacture of mineral grinding mills, the Company today serves all the major core industries with a specialised range of products which include, Vibrating Screens and Feeders, Cone crushers, Bulk Material Handling Equipment, Mining haulages, Raymond Grinding Mills, Air Classifiers and Flash Drying systems and Geared Motors and Gear Boxes.
The company serves all the major core industries including mining, steel, cement, petrochemical, construction, sugar, power, textile, paper, rubber, pharma, chemicals etc. The company has served to an esteemed set of clientele that includes industry leaders such as Sail, Tisco, JSPL, Essar Steel, Amtek, Ashok Leyland, NMDC, Hindustan Zinc, ACC, Madras Cement, NTPC, Bayer, Dabur, Borosil, EID Parry, HUL, Marico, L&T, McNally Bharat, Thermax, Simplex, Alfa Laval, AP Paper Mills, MRF, Andhra Sugars, Cadbury India, Britannia, Nestle, HLL, Tata Chemicals, Reliance, Laxmi Machine Works, TNPL, Nevyeli Lignite, Nirma, P&G, etc. We believe, the diversified industries as its customers, not only provides ICL wider exposure, but also keeps the company isolated from the risks of slowdown in a particular sector/industry.
Fully equipped manufacturing facilities at Calcutta, Nagpur and Aurangabad ensure total control over production and product quality. IC’s products are characterized by high availability, low operating cost and energy consumption and protection of the environment. High quality products and continual search for peak technical performance, IC’s strong marketing and service organization spread over the country assures quick and direct contact with customer during all phases- Consultation. Contractual negotiation, followed by execution and after sales services. Company has offices at Bangalore, Chennai, Hyderabad, Mumbai, Delhi, Nagpur, Pune, Vadodara & Kolkata, with employee strength of 500.
Foreign technical collaborations and licensing agreements with world leaders in the respective product groups have ensured manufacture of premium quality equipment, alongwith core focus on :-
Technilogy Absorption & Research & Development – The company has always been recognized as technology leader in the area of operations and this has helped the company to continually expand the business, both in India and abroad, this trend is expected to continue in future also. Several steps have been taken to improve the efficiency of the equipments presently manufactured by the company, which resulted in substantial increase in the productivity of the end users, in future also the company is planning for continued upgradation programme of their product range to match with international standard from time to time, which helps company to remain competitive against cheap products which are less adaptive to local requirements.
Company takes full advantage of complete absorption of latest technology received from the Globally renowned, leader of their industry Licensed Partners and implement the same commercially, which helps company to match the quality of their products with the international standard at competitive pricing.
The engineering division (MMPHE) has few products of huge significance such as screens, feeders and others which are being supplied to steel (including SAIL, TISCO) and cement industries. The company enjoys leadership position in the above products with nearly 70% market share. Further, the product offerings include Sugar Graders / Sizers which is said to have pioneered by the company and thus commands a dominating position in this industry
OMNI SCREEN & CRUSHERS, BRAZIL (FOR JAW CRUSHER, CONE CRUSHER, VERTICAL SHAFT IMPACTOR & ROLL CRUSHER)
BAUER GMBH, GERMANY (FOR GEAR MOTORS & GEAR BOX)
ALLGAIER, GERMANY (FOR ROTARY DRUM DRYERS)
MOGENSEN, GERMANY (FOR MULTIDECK SCREENING MACHINES)
ECUTEC, SL, SPAIN (FOR TURBINE CLASSIFIER & ULTRAFINE GRINDING PLANTS)
GUMMI KRUPER, GERMANY (FOR POLYMER PANELS FOR SCREENING MACHINES)
In 1961, the company started its manufacturing activities, and presently has three business divisions, viz
Heavy Engineering Division (Nagpur & Kolkata Factory)
Vibratory Equipment : Grizzly Screen Feeder, Linear & Circular Motion Screen, Mogensen Sizer (Sizers, Sizer 2000, Bar Sizers & Vibro Bar Sizers), Omni Screen, Flip Flop Screening Machines, Vibrating Feeders (Mechanical Feeders & Electromagnetic Feeders), Vibration Exciters, Polyurithine & Rubber Screen Decks & Liners & Monitoring Systems for Electronic Vibrating Machines
Grinding Mills Classifiers for Drying Systems : Raymond Roller Mills, Raymond Impax Pulverizers, UFG Vertical Mills, Turbine Air Classifiers, Mechanical Air Seperators
Bulk Material Handling : Spiralling Belt Conveyors, Scooping Belt Conveyors, Girdle Pocket Elevators, Apron Feeders, Haulages.
Crushers : Jaw Crushers, Cone Crushers, Vertical Shaft Impactor, Roll Crushers.
Rotary Drum Dryers / Coolers : Mozer Drum Dryer & Cooler, Allgaier Process Fluidised Bed Plants
Bauer Gear Motors Division (Aurangabad Factory)
B2000 Series : Shaft Mounted Geared Motors, Roller Tabled Geared Motors
Being a leading suppliers of high quality Bauer gear motors & gear boxes with extensive success in Mill Table, Rolling Mill, Bottling Plant, Conveying Packaging, Water & Waste Water Technology, Environmental Technologies & Textile Printing, Packaging, Crane Application, Etc.
Utilizing Bauer’s application and expertise customers can work with them to choose the correct gear motor manufacturing facilities that enable them to deliver a complete solution to fit all type of environment and demands. With in-house motor manufacturing facilities specialized motor characteristics can be designed and optimized to cater with precision exactly what the application demands. Fully crowned gear teeth provide the highest misalignment and torque ratings & smooth axial travel.
Project Plant Systems
The comfortable liquidity position arising out of retained earnings over the preceding few years has enabled the Company to meet all its capital expenditure out of internal generation. The surplus remaining after meeting the capital expenditure has been kept invested partly in Fixed Maturity Plans (F.M.P.) and partly in Fixed Deposit Schemes for short periods with various banks/finance Companies/ mutual funds.
The business environment has started showing certain improvement and company expects that the business environment will improve further during the current year. Joint Venture with Allgaier Werke GmbH, Germany for Mozer Type Rotary Dryers and Coolers has been formed during the year FY 14 and capital investment has been made by the Company for manufacture of these Dryers at Nagpur Plant and Company expect these hi-tech equipment and systems to make substantial contribution to the performance of the Company in the current and the future years.
The current average blended capacity utilization runs at around 50-55% and thus, the company can easily manage a turnover of Rs.200-230 crores with the existing capacities on a single shift basis.
The market demand for the products of Gear Box and Geared Motor Division has been increasing steadily during the last few years and the capacity enhancement undertaken by the Company in the recent past is expected to support the business growth in this area.
The financial position of the company is very strong. It has very low equity of Rs 2.5 crore, of which 53% is held by promoters. Its Reserve & Surplus is 91 Crore against market cap of 55 Crore. Company also has Land & Buildings (factory & offices) which was acquired decades back, the value of which should be several times at current price.Nett block is at 29 cr as on 31-3-2014. Investment in Mutual Funds is 22 cr, 4.85 cr in FDs and Bank Balance.
The company is DEBT FREE and its spare land at Kolkata is nearly worth Rs 50 Crore (Rs 200 Per Share, means we are getting this debt free capital goods business almost at NIL Valuation) if monetized by the company.