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Wednesday, August 6, 2008

Rasandik Engineering Industries:Ride on it guys

ScripScan:Rasandik Engineering Industries India Ltd

Introduction:Rasandik eng industries is engaged in the business of manufacturing of sheet metal components.The company is also receiving good orders in the areas of tool manufacturing, component manufacturing and is an active participant in the world wide bidding process of a large number of oems in europe.In order to reduce the lead time for manufacturing and make timely delivery to the customers and to be able to take more orders, the company over the last few years has done 100% expansion of capacities of the tool shop. The expansion of capacities took place in all areas of cad/cam, design, cnc manufacturing and assembly.

Research&Developments:The company's research and development activities include up-gradation of technology and cost reduction by value engineering.It has one of the most modern technologies and has facility of international standards.Rasandik is also concentrating on higher capacity utilization, control on costs and overall improvement in the efficiency of operations.

Export thrust:Rasandik is giving a huge thrust to exports.It has identified products and potential customers for export.The company has huge export orders in hand and the product development is under process. The increase in production capacity in coming years and global sourcing of mnc's becoming active will increase the company's export at a scorching pace

Oppurtunities&strengths:The government's thrust on infrastructure and road projects should ensure increased demand for commercial vehicles (cvs). The demand for automobiles in the current year will largely be driven by the road projects, which should be a positive for the major oems.India is fast turning into a sourcing and r&d hub for global majors.Global oems are using india as a base for sourcing auto components.Rasandik's strengths are modern technology,state-of-the-art equipment, lean manufacturing system,price competitiveness,state-of-the-art tool room( integration of production facilities),integrated product development and infrastructure, brand image e.t.c.

Outlook:Rasandik has shown strong consitency in turnover over the last 7-8years.From a 48cr company in 2000-01,it is now going to end this year with a turnover of over 225crs.With a solid management,Rasandik offers a good scope of affreciation over the medium to long term perspective. The company's bottomline too will receive a boost on increased contribution from the high margin yielding Tools and Dies division.

Conclusion:At current levels of Rs 58, the stock discounts FY2009E earnings by just 3times.Rasandik should hit a level of 3 digits in the coming 6-9 months period.Altogether a great buy.

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