Friday, October 30, 2015

Rajoo Engineers Ltd - Result Update

Very good performance by Rajoo Engineers Ltd, even in bad times.

Quarter Numbers

Sales up 35% QoQ
Net Profit up 105% QoQ

Hold stock for long term, this is just the beginning for Capital Goods sector

Thursday, October 29, 2015

RAJOO ENGINEERS LTD (BSE 522257 FV RS.1) RS. 17 – A Global player in Plastic Extrusion Machinery

RAJOO ENGINEERS LTD (BSE 522257 FV RS.1) RS. 17 – A Global player in Plastic Extrusion Machinery

Company : Rajoo Engineers Ltd (REL), founded in 1986 as a private limited entity engaged in a business of manufacturing Plastic Extrusion Machines. In the last 29 years, the company has  blossomed to become one of the most respected name in the Extrusion Machine Manufacuring industry. The company boasts of having commissioned over 2000 installations till date in india and across over 56 plus countries including Germany, Spain & UK which speaks for the acceptance of company’s products by the most stringent and developed markets of the world. Over 50% of company’s products are exported and Over 60% of the business of the company comes from repeat orders, which indicates the satisfaction levels of the existing customers.

Products : The company today is a Market Leader in Blow Film Lines, Sheet Lines and Thermoformers (in the Indian sub-continent as well as amongst its peers in Asian sub continent.)  Other products includes  PP Non woven fabric making machine, Foam Extrusion Systems (Chemical & Physical), Pipe Plants & Drip Irrigation.

Application : The machinery manufactured by the company, has applications across various Industries, such as : Flexible Packaging, Agriculture, Infrastructure, Automobiles, Food & Beverages, Pharmaceutical, White Goods, Stationery & Printing.

Technical Collaboration : For expanding its product line, company has technical collaboration with :

COMMODORE INC, U.S.A. for manufacture of XPS Sheet line and Thermoformer.

WONDERPACK, a leader in Thermoforming Industry, was merged with Rajoo Engineers Ltd

HOSOKAWA ALPINE AG, GERMANY one of the most reputed company in Blown Film Technology

A JV with BAUSANO & FIGLI S.P.A. of ITALY a global leader in Pipe manufacturing technology & Drip Irrigation Solutions.

A JV with MEAF Machines B.V, Netherlands for manufacturing world class Sheet Extrusion Equipments and Thermoforming Machinery to address growing demand for Semi-flexible packaging system.

The company carries many record for developing / bringing latest technology first time in the country and in the world, for which the company & its founders have received many Awards for business leadership, innovation in technology and contribution to plastic & polymer industry. Recently company launched a product which consumes 40% less Power.

Business Strategy : To mark its overseas presence and showcase the products, the company has participated in 10 exhibitions last year, out of which 6 were overseas, the company has got excellent exposure and good response, hence next target for the company is to participate in 15 such exhibitions related to plastic industry both local and overseas.

Outlook : With Increasing demand for plastic products due to Consumerism, Mall Culture and Improving Hygiene habits, plastic industry is having good times with increase in profitability due to fall in with weak Crude Oil Price, which is allowing it to invest more into capital goods for expansion & addition of new product lines, which in turn benefits Rajoo Engineers Ltd, as it is one of the leading suppliers of machinery to plastic industry. Plus company to get huge benefit due to its venture into Plastic Pipes and Drip Irrigation Solutions the demand for which is huge from within the country and overseas as water crisis is becoming a Global Phenomenon, Here in India Drip Irrigation is supported by central government’s “More Crop, Per Drop” policy. 

Valuation : An Award winning company for its Innovation & Advance Technology, which is truly a global player into niche segment of Plastic Extrusion Machinery, with technical collaboration with global leaders, and a Debt Free company is available at a P/E of just 17 times (Industry P/E 30) TTM Eps of Rs 0.96 per share. Recent released IIP data states huge increase in manufacturing of plastic extrusion machinery, which suggest better days for the company, and stock is yet to catch up with the current rally, hence investors should study this stock for long term investment purpose. Delivery data on BSE from Jul 2015 till date is above 85% which suggest good accumulation by Smart investors.