BAJAJ STEEL INDUSTRIES LTD. BSE 507944 CMP 180

[Hemangi Gandhi]

BAJAJ STEEL INDUSTRIES LTD. BSE 507944  CMP 180

 

Bajaj Steel Industries Limited (BSL), Nagpur, India, established in 1961, is a public limited company, listed on Bombay Stock Exchange. The company is having world class engineering setup in its various plants situated in and around Nagpur.

BSL is the largest and modern Cotton Ginning and Pressing Plant & Machinery Manufacturer in India. With over five decades of experience and expertise, the company is having world class engineering facilities with diversified sectoral presence. 

The company manufactures/sells throughout the world machineries/system of Cotton Ginning, Cotton Conveying, Cotton Cleaning, Cotton Bailing Presses, Delinting and Decorating Machineries, Humidification Systems, Power Transmission Products, Pre - Engineered Buildings, Electrical Panels, Firefighting Systems, Specialty Conveyor, Hydraulics Equipment, Master Batches etc.

 The company is serving the Ginning and Pressing Industries worldwide and has been well recognized for its quality and is the *only company in the world producing machineries for all the Four Ginning Technologies used in the world viz. Single Roller, Double Roller, Rotobar and Saw Gin and all the Pressing Technologies viz. Down packing, Up packing & Horizontal packing.*

The Machineries/equipment's manufactured under technical collaboration with M/s. Continental Eagle Corporation USA by us, are well accepted all over the world and the company has supplied such machineries/equipment to various advance countries such as Australia, Greece, USA, Uzbekistan, etc. apart from substantial supplies to Africa.

 BSL has also tapped the new markets such as Argentina, Brazil, Sudan, Benin and other West African countries for enhancing growth of its products and has *expanded its Electrical Panels division and have commenced its Manufacturing at New Plant at Plot No. XI-73, MIDC Industrial Area, Hingna, Nagpur- 440028 for manufacturing various Electrical Panels including PCC Panels, MCC Panels, APFC Panels, IMCC Panels, Drive Panels, PLC & SCADA Panels, AMF Panels, Synchronization Panels, Control Panels, Lighting Panels, Power Distribution Boards, Customized Panels and Panel Cabinets and these panels are being well received in the India and abroad.*

Further, the pre engineered steel buildings division has also been expanded and getting good response within and outside India. 

*The growth potentials of both these divisions are high*. 

The Company is also successfully involved in the business of *Pre-Fabricated Buildings (PEB) and executed more than 250 Steel Building projects (Domestic and Export)*. The Company has in-house Design & Engineering Capabilities to reach new frontiers of technical excellence.

 The Company is providing different solutions for different purposes such as Pre-Engineered Buildings, Pre-fabricated Buildings, PEB Industrial Shed, Pre-fabricated School Buildings, Prefabricated Warehouse, Structures, Agricultural Buildings, etc. 

*SUPERPACK* division, is a leading Manufacturer and Supplier of wide range of Master batches having well equipped production facility with well-versed quality section which help the company to deliver consistently high-quality product to the customer at the most competitive price. 

*Superpack Division is into the production of various kind of Master batches having proven range of master batches for various applications* like especially for HDPE & PP tapes, Injection & blow molded items lamination of woven fabrics, non-woven fabrics etc. TiO2, UV & elastomer based master batches. All grades are well accepted & adopted by various plastics processing industries.

*The Company is also expanding its activities in the selling of complete fire-fighting systems including Fire extinguishers, Hydrant systems, Sprinkle systems and Fire Diversion Systemsand Steel Doors etc.*

 The strong vision and dedication of the management and employees has put the Company as one of the biggest manufacturers of Cotton Ginning and Pressing Machineries with distinction of having *only company in the world with capabilities for manufacturing Cotton Ginning Machines for all the four major cotton ginning technologies being used in the world and enjoying substantial of the market share in India while rapidly expanding in the other cotton growing countries of the world.*

 The company also undertakes turnkey projects including civil in its area of operation.

BSL’s wholly owned subsidiary company i.e *Bajaj Steel Industries (Uganda) Limited* has completed the project of Cotton Development Organization for Phase -III also in Cotton Seed Processing Plant at Pader District in Uganda. The prospects for the current year are encouraging.

The Company is also trying to increase the revenue from other segments such as PEB, Electrical Panels, Fire Fighting Equipment's and Specialty Conveyors etc. 

*The company has been diversifying into different products to mitigate the risks and to grow in the business.*

The company with well diversified product mix within capital goods category products where it earn 75% of its revenue and the rest is contributed by growing *Superpack* division, is having small equity capital of just 2.35 crore where promoters hold 36%, 20% is held in physical form with individual shareholders, 12% held by promoter group company, 2.3% with IEPF Fund, leaving low floating stock in the market, With trailing twelve months sales of 380 crores and Net profit of 21 crores giving an EPS of 59 per share. is trading at a *PE of just 2.82,* while industry PE for capital goods company is 40. The company is *regular dividend paying company since year 2007*. With improving sales and profit over the last few years, the financial position of the company is becoming very strong which can be seen from improving *ROE which stands at 18.39% and RoCE of 21.25%*, BSL is one of the few capital goods company whose sales and profit are rising even during slowdown of last couple of years and even during lockdown, which can be seen in June quarter numbers.

At CMP the company is available at *Market cap TO Sales of only 0.20*, which is undervalued by any standard. *Debt to equity is 0.68 and Debtor days are 54*. 

With revival of rural economy, backed by bumper sowing of cotton crops coupled with anti-china sentiment and support of Governments Atmanirbhar Bharat campaign to help local industry, the demand of the company’s product will improve sharply giving boost to its topline and bottomline. 

For FY 2021 and FY 2022 company is likely to report sales and profit at 20/25% CAGR with improved RoE and RoCE numbers, *can report EPS of Rs 75 and Rs 90 for the next two years.* Hence available at forward PE of just 2 times against Industry PE of Capital Goods company which stands at 40 times, even if market gives multiple of 10 PE the price should touch 900 Rs. 

Promoters recently subscribed preference shares at Rs 107 and increase their stake by 10%. Company is reducing the debt and will be debt free in next few years.

Investors with the long term views may study the stock for long term appreciation.

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NIFTY PE Ratio at All time High!!! Is Market Ready for a HUGE FALL AGAIN??? 

https://youtu.be/Oapla0tZ6mQ