Note - I have recommend this stock 3-4 weeks back. Here is the full Analysis.
The BJP-led NDA Government seems to be serious about encouraging private investment in defence. Undoubtedly, the move to allow FDI in the defence is aimed at boosting self-reliance in defence production, encouraging more private sector manufacturers to enter the sector, cutting expensive imports, bringing more clarity on guidelines and curbing corruption.
Premier Explosives Limited (PEL) is one of the major companies manufacturing the entire range of explosives and accessories for the civil requirement. Starting as a Small Scale unit in 1980, it was founded by A.N.Gupta, a Gold Medallist in Mining Engineering. Its current turnover is about Rs. 600 million per year. The export earnings of the company are about Rs. 200 million per year.
PEL is the first manufacturer in India to deploy totally indigenous technology. PEL today has the widest range of products and technologies in the manufacture of Explosives & Accessories. These include Emulsion and Slurry explosives, LD cartridge explosives, Bulk Explosives, Small-dia non-permitted explosives, Permitted explosives, Cast Boosters, Pillow-packs for secondary blasting; Detonating Fuse of various core-loads, Plain detonators, Instantaneous Electric Detonators, Electric Delay Detonators, Permitted Detonators, Cord Relays and Amardet NoN Electirc Shock-tube Detonators.
The Indian explosives industry is fragmented with around 45 units and around 10 major manufacturers Premier Explosives is the 6th largest manufacturer of explosives with around 5% market share.
PEL is also the first and only Indian private entity designing, developing and manufacturing solid propellants for country's prestigious missiles Akash, Astra and LRSAM.
It is the first company in the world to produce safer and greener Nickel Hydrazine Nitrate detonators on commercial scale replacing Lead Azide, Lead Styphnate and Aluminum Powder detonators.
Premier is the only private entity producing oleoresin based tear gas grenades used for mob control by law enforcement departments. The company had developed this product in collaboration with Defence Research Development Establishment (DRDE), Gwalior.
Premier also produces Explosive Bolts, Pyro Actuators, Smoke Markers, Cable Cutters and many other products including Blazer Plates for the Indian defence services,providing import substitutes and saving foreign exchange.
PEL is operating and maintaining a State-of-Art Chemical Manufacturing facility of Indian Space Research Organisation ISRO at Sriharikota and Solid Fuel Complex of Advanced Systems Laboratory at Jagdalpur.
Major Customers for Commercial Explosives:
Coal India Limited
Singareni Collieries Limited
Neyveli Lignite Limited
NMDC Limited
Karnataka Emta Coal Mines Ltd
Cement companies
PEL also exports commercial explosives to S.E Asian countries,Middle East & Europe.
| Mar ' 14 | Mar ' 13 | Mar ' 12 | Mar ' 11 | Mar ' 10 | |
| Contingent liabilities | 38.08 | 28.26 | 6.69 | 5.84 | 4.24 |
| Sales | 145.4 | 109.4 | 116.66 | 101.87 | 94.95 |
| Defense Sales | 26.8 | 13.61 | 8.91 | 8.99 | 5.24 |
| Cont Liab % of sales | 26% | 26% | 6% | 6% | 4% |
| Defense Contribution | 18% | 12% | 8% | 9% | 6% |
Income (Figures in Rs Cr)
Revenue
Other Income
Total Income
Expenditure
Operating Profit
Interest
PBDT
Depreciation
PBT
Tax
Net Profit
EPS (Rs)
Sep-2014
35.29
0.09
35.38
31.51
3.87
0.49
3.38
0.89
2.49
0.74
1.75
2.01
Jun-2014
35.16
0.19
35.35
33.37
1.98
0.50
1.48
0.87
0.61
0.07
0.54
0.65
Mar-2014
41.41
1.19
42.60
38.37
4.23
0.54
3.68
0.59
3.09
0.71
2.38
2.91
Dec-2013
33.35
0.05
33.40
29.04
4.36
0.75
3.61
0.60
3.01
0.94
2.07
2.53
Sep-2013
33.85
0.14
33.99
30.31
3.67
0.59
3.09
0.60
2.49
0.68
1.81
2.23
Profits for last four years[2010 to 2014] is stagnant and the stock price has gained 300%
Note - I have invested since 190 levels.
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2 comments:
New to your blog. Coincidentally i have invested in all the companies recommended by you except NIIT. Sir really nice write up of all. I have gone through all the write up.
Sir my question is what is the target of PEL for medium term to long term looking at financial aspect and future developments to take place. thanks in advance.
1 year target is 500, but it could achieve it sooner in this bull run.
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