This small cap stock makes devices for power transmission and it had ended FY12 with a 35% rise in topline and 55% rise in net profit. Its margins for the year were amongst the best – OPM was at 21.34% v/s 19.13% and NPM was at 13.33% v/s 11.40%. But Q1FY13 was not all that great. Margins and overall numbers took a tumble. OPM for the quarter was at 16.50% compared to 23.03% in Q4Fy12 and NPM was at 9.5% v/s 14.29%. Seasonally, Q1 is always the weakest while Q4 is the best. So YoY, topline fell 3% and bottomline by 23% thus overall, Q1 in current fiscal was weak.

Its equity base is pretty small at Rs.4.93 crore and it’s a debt free company. Its biggest risk is from dependence on aluminium which is its main raw material amongst many. Too much spike up in the price of the metal could topple the cart but in current Q1, it got the advantage of the lower prices. The company caters mainly to sectors like steel, infra, cement, power. Orders come when these sectors do well, expand and modernize. As long as they do well, so will the company. There is no FII holding or any major institutional holding in the company. This discounts the current price by around 5 times.