Wendt India

Abrasives and precision component maker Wendt India, a Rs.10 face value stock quoted at almost Rs.2000 is debt free, with a consistent dividend paying track record, and as such does not look like a small cap stock. But its market cap at around Rs.400 crore belies the stock price and this point is further driven home by its earnings. The Q1FY17 numbers are good but so small compared, once again, to the stock price.

Consolidated net sales for the quarter rose 6% (YoY) at Rs.36 crore. Operating profit came in flat at Rs.4 crore and margins slipped from 12.12% to 11.11%, down due to 7% rise in costs. It ended the quarter with a net profit of Rs.3.53 crore, up 18%. Its equity capital is tiny at Rs.2 crore and EPS came in at Rs.17.66. Reserve stands at Rs.101 crore and as always, bnus hopes remains high which explains the high fancy for the stock.

The company is in violation of the SEBI stipulated law of promoters holding not exceeding 75% - here the German parent and Carborundum Universal holds 39.87% each, taking total stake to 79.74%.