Equity Watch

REMI METAL GUJARAT is a perfect take-over target

Remi Metal Gujarat , a 25 year young company, is into manufacture of special alloy steel and Seamless Pipes and Tubes ranging in sizes from 1″ to 9″.It has Technical collaboration with  M/S Intertech GmbH Germany. Electric Arc Furnace based integarted steel and seamless pipe plant has capacity of 50,000 TPA . It also has 140,000 TPA of steel manufacturing and steel rolling capacity. The company is located in Gujarat on a 150 acre plot in Distt. Bharuch, just about 23 kms. from Ankleshwar and 85 kms from Dahej and Hazira.

Company’s equity capital is Rs. 75.6 crores divided into 12.6 crore shares of Rs. 6 FV. At CMP ( Rs. 6.95 ) its market capitalisation is less than Rs. 90 crores.Companies like Welspun Gujarat, Man Industries,Jindal Saw,etc. must be eyeing to acquire this company as its a perfect fit with their present very profitable operations.

 Dryden ( Mauritious ) Ltd. holds 36.72 % of the company’s equity and 34.58% is held by public.In case Dryden is willing to transfer the equity at an appropiate price which could be anywhere above Rs. 50 per share ,the company will change hands and the Indian Public will be able to sell the shares in Buy Back at a considerable premium to CMP .Overnite the share will turn out to be a multibagger.

Over the last few Quarters of FY 07 , Its operations and financial results are showing a definite improvement. Top line has gone up by 330% during the last two quarters, and net loss has dropped by almost 800 % from Rs. 18.4 crores in Q2 of FY07 to Rs. 2.2 crores in Q4 of FY07. A turnaround in company’s operations is clearly visible.

 Scrip Code : 500365    Company Name : Remi Metals Gujarat Ltd

Type UnAudited UnAudited UnAudited UnAudited UnAudited
Date Begin 01 Jan 07 01 Oct 06 01 Jul 06 01 Apr 06 01 Jan 06
Date End 31 Mar 07 31 Dec 06 30 Sep 06 30 Jun 06 31 Mar 06
Description Value(Rs. million)
Gross Sales 865.8 546.3 261.55 677.4 470.6
Excise Duty -121.9 -73.5 -35.34 -94.95 -63.6
Net Sales 743.9 472.8 226.2 582.45 407
Other Income 24.5 1.9 0.97 7.37 2.8
Total Income 768.4 474.7 227.17 589.82 409.8
Expenditure -703.6 -502.1 -318.58 -570.41 -421.9
Operating Profit 64.8 -27.4 -91.41 19.41 -12.1
Interest -54.8 -58.9 -59.71 -57.7 -65.7
Gross Profit 10 -86.3 -151.12 -38.29 -77.8
Depreciation -32.1 -32.1 -32.01 -31.68 -36.3
Profit before Tax -22.1 -118.4 -183.14 -69.97 -114.1
Tax -0.2 -0.1 -0.18 -0.12 -0.5
Profit after Tax -22.3 -118.5 -183.32 -70.1 -114.6
Extraordinary Items 1.9
Prior Period Items -0.6 -0.1 -0.67 -0.12 -1.4
Net Profit -22.9 -118.6 -183.98 -70.22 -114.1
Equity Capital 756.2 756.2 756.15 756.15 756.2
EPS -0.18 -0.94 -1.46 -0.56
Result Type Q Q Q Q Q
  Notes Notes Notes Notes Notes

    (Financials reproduced from BSEINDIA)

Cost of such a plant with 150 Acres of land, strategically located closer to Ankleshwar town, an all weateher port at Dahej and Hajira, excellant technical collaboration and manufacturing seamless pipes used in Oil Exploration,Crude Oil, Oil Products, Gas and Chemical transportation ,automobiles,forging and castings industry  could be easily  above Rs. 500 crores  on a very conservative basis.Therefore share available at close to its PAR VALUE is an excellant BUY.

BUY is recommended at CMP with 2 years HOLD

This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision. Neither the author nor his firm accepts any liability arising out of use of the above information/ article.

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2 thoughts on “REMI METAL GUJARAT is a perfect take-over target

  1. Hi

    can you just let me know more abt this company cos i have done some investments in this share for a long period would this be benefitial and how much can i expect from this particular share after a period of time atleadt 2yrs…

    my email Id is me_sudee@yahoo.com
    Please revert

    Like

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