Gillanders Arbuthnot is a well diversified company with 6 (six) major divisions viz. Tea Division, Engineering (MICCO) Division, Textile Division, Chemical (Waldies) Division, Property Division and Trading Division. However the major contributors to the income of the company are Tea division, Engineering and Textiles division. The other divisions such as trading, property and Chemicals do not lend a major impact on the income statements of the company.
The company has been doing well for the last 4 years, although that could be attributed to certain amalgamations but be whatever the reason, at the end it's the results that matter. Growth may be registered from both organic and inorganic route and Gillanders has been resorting to second method by amalgamating companies like The Tengpani Tea co, GIS cotton mill ltd.
There have been a few developments in the company in the recent past and have rather been good. The company recently got its equity shares listed and admitted to dealings on National Stock Exchange of India Ltd. with effect from December 14, 2009. The listing of the company on National Stock exchange helps in better visibility of the company amongst Institutional investors and is thus always a positive outbreak. Also the company amalgamated The Tengpani Tea co.
Now, talking in terms of performance :
Tea Division
Tea prices in India have firmed-up in the last few months due to tightening of supply and increase in domestic demand. This division of the company is expected to perform better during the current year, as already reflected by the results of first two quarters.
For the half year ending Sep'09 the tea division of the company recorded revenues of Rs 46.50 crore in comparison to Rs 35.7 crore over year ago period. This is after taking into account the effect of consolidation for the previous year, so the results are comparable. The profit before interest and tax stood at Rs 14.81 crore (year ago Rs 8.49 crore).
Engineering Division
This division of the company is engaged in execution and implementation of turn key projects of steel, cement, power and aluminum. It is involved inter-alia in Structural, Mechanical, Electrical and Instrumentation work. It achieved a turnover of Rs.132 crores in FY2008-09 as compared to Rs.75 crores in the FY2007-08, and continuing its good performance, the company has achieved a PBIT of Rs 8.16 crore for the half year ending Sep'09 over Rs 4.91 crore for the year ago period.
I wont go into the details of other divisions as only these two seem promising at this point of time. The company has been commanding reasonable valuations as it has already recorded EPS of Rs 13 for half year. The last two quarters have usually been good for Gillander and assuming that it is able to record the same earnings, the company is available at a multiple of 6-6.5.
The company has been doing well for the last 4 years, although that could be attributed to certain amalgamations but be whatever the reason, at the end it's the results that matter. Growth may be registered from both organic and inorganic route and Gillanders has been resorting to second method by amalgamating companies like The Tengpani Tea co, GIS cotton mill ltd.
There have been a few developments in the company in the recent past and have rather been good. The company recently got its equity shares listed and admitted to dealings on National Stock Exchange of India Ltd. with effect from December 14, 2009. The listing of the company on National Stock exchange helps in better visibility of the company amongst Institutional investors and is thus always a positive outbreak. Also the company amalgamated The Tengpani Tea co.
Now, talking in terms of performance :
Tea Division
Tea prices in India have firmed-up in the last few months due to tightening of supply and increase in domestic demand. This division of the company is expected to perform better during the current year, as already reflected by the results of first two quarters.
For the half year ending Sep'09 the tea division of the company recorded revenues of Rs 46.50 crore in comparison to Rs 35.7 crore over year ago period. This is after taking into account the effect of consolidation for the previous year, so the results are comparable. The profit before interest and tax stood at Rs 14.81 crore (year ago Rs 8.49 crore).
Engineering Division
This division of the company is engaged in execution and implementation of turn key projects of steel, cement, power and aluminum. It is involved inter-alia in Structural, Mechanical, Electrical and Instrumentation work. It achieved a turnover of Rs.132 crores in FY2008-09 as compared to Rs.75 crores in the FY2007-08, and continuing its good performance, the company has achieved a PBIT of Rs 8.16 crore for the half year ending Sep'09 over Rs 4.91 crore for the year ago period.
I wont go into the details of other divisions as only these two seem promising at this point of time. The company has been commanding reasonable valuations as it has already recorded EPS of Rs 13 for half year. The last two quarters have usually been good for Gillander and assuming that it is able to record the same earnings, the company is available at a multiple of 6-6.5.
Note: The stocks discussed at MPS thru blog postings are neither a part of “Business Insights” issue nor a “Penny Stocks” which we reco/publish for paid subscribers. These are just stock specific views by MPS team; one MUST do the due diligence before doing any investment based on our reco.
To contact the Lead associate on this story: Ekansh Mittal in Noida (New Delhi) at Ekansh@hbjcapital.com
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