Revenues at Everest more than tripled in three years, to $168 million for the fiscal year ending in March. Sales abroad were up nearly fivefold in the same period, to $122 million. And annual profits climbed from $7.5 million to $27 million. No wonder Everest made FORBES ASIA's Best Under a Billion list for a second straight year.
At home Everest has to deal with rising competition from the likes of Mumbai's Nitin Fire (another BUB listee) and Rama Cylinders. But Everest has first mover's advantage, having learned to navigate stringent regulatory environments--in India as well as globally, with approvals in 80 countries.
Everest's current air pocket, with sales off 30% in the last two quarters, is largely because of the outsized presence in Iran--36% of overall revenues in fiscal 2009. Mumbai-listed shares are down 60% from the market peak in January 2008 and analysts remain cautious.
Future Expansion Plans:
- Ultra Large (Jumbo) Cylinder Plant has been commissioned and commercial production is to start in Q1 2009-10.
- Billet Piercing Plant to be operational in July 2009 and this is expected to lower cost of production thereby making the products more cost competitive
- It is venturing into the market for light weight CNG cylinders mainly required by OEMs in Europe and Asia and this project is expected to go into production in Q4 2009-10. This would result in much higher value addition besides providing value to customer.
- Given the stated policy of the Indian Government to expand the availability and distribution of CNG across many more states and cities in the coming months, it is expected that this would offer the impetus for acceleration in the conversion as well as manufacture of CNG driven vehicles and also considering the fact that the economy is expected to have a positive turnaround very soon.
| Mar ' 09 | Mar ' 08 | Mar ' 07 | Mar ' 06 | Mar ' 05 | |
| Sales | 357.15 | 333.60 | 330.57 | 235.50 | 132.40 |
| Operating profit | 94.47 | 83.63 | 73.45 | 58.80 | 28.40 |
| Interest | 5.54 | 4.83 | - | 3.71 | 2.27 |
| Gross profit | 101.09 | 91.35 | 87.13 | 57.31 | 29.72 |
| EPS (Rs) | 3.68 | 4.67 | 4.82 | 3.80 | 2.38 |
Important Stats:
Book Value Rs 38.84 Face Value Rs 2 Debt/Equity 0.85 Promoter Holding 59.75% (As on 30-Sep-2009)
Manufacturing Facilities:
Capacity Utilisation has been calculated for finished cylinders only and does not include semi finished cylinders made in China
Don't plan to raise funds now: Everest Kanto http://www.moneycontrol.com/news/business/dont-plan-to-raise-funds-now-everest-kanto_423970.html
EKC Q2FY10 net loss stood at Rs 5.5 crore versus profit of Rs 20 crore and net sales stood at Rs 144.9 crore versus Rs 221 crore.
EKC is trading in an up-channel on graph and can target Rs 165/180 in current rally itself. Accumulate the stock for handsome returns over short as well as long term.
