The company has consistently done well and it did not disappoint in Q2Fy13 too. On a YoY 63% rise in net sales, it posted a net profit of Rs.6 crore, up 12%. Raw material cost remains is largest outgo, at 67% of the net sales. In current Q1, this cost has come down 4%. But more importantly, its interest outgo has come down drastically from Rs.3.12 crore in Q1FY12 to Rs.4 lakh in Q1Fy13. For H1FY13, net profit stands at Rs.12.50 crore v/s Rs.21 crore for Fy12. On an equity of Rs.5.25 crore, its half yearly EPS is at Rs.24 discounts the annualized EPS of Rs.48 by less than 6 times.

The company makes precured rubber and clearly, it made merry when rubber prices soared. It is the largest retreading company in India, retreading used tires and given the run-up in rubber and new tyre costs, demand has been good for this company, mainly from commercial vehicles. And going ahead, with the debottlenecking completed, it could end FY13 with an EPS of around Rs.48-50. Despite the 77% promoters holding, it is unlikely to go for delisting and promoters would rather opt for stake dilution of 2%.