Multibagger Stocks Ideas : Salzer Electronics

Salzer design, develop, manufacture and supply CAM operated Rotary Switches, Selector switches, Wiring Ducts, Voltmeter Switches & Allied products. Company’s prominent clients include Schneider, GE, Philips, Larsen & Toubro, LMW, Premier, Valeo, Europa, V-Guard, BHEL,Elgi, ABB, Eaton, Yokogawa, Nuclear Power Corporation, SEARS, CED and Alstom etc.

Key Facts:

  • Salzer is the largest manufacturer of rotary switches and cable ducts in India.
  • Turnover CAGR of 21% over the last ten years ending 2016-17.
  • Company enjoys a profit-making track record for 25 years
  • Declaring dividends since 1991.
  • Salzer’s products are exported to 40+ countries
  • Exports account 18% of the company’s revenues, 2016-17.
  • Industrial switch gear contribute 45.8% of total revenue of FY17
  • Wires & Cables contribute 45.6% of total revenue of FY17
  • Company is Focusing on new vertical of energy-efficient products.
  • 35% to 40% of the Company’s product off take is done by L&T.
  • 4 manufacturing facilities in Tamil Nadu.

Stock Outlook:

  • M-cap: INR 346 cr
  • CMP: 239 INR (12th Dec 2017)
  • PE: 19.8
  • EPS:12  INR
  • Book Value: 153 INR
  • Share capital is 14.35 cr of FV 10.
  • Promoter Share holding is 28.68 %
  • FII/DII Share holding is 10.68 %

Future outlook:

  • Company intend to enhance it’s EBITDA margin by 100 bps and ROCE to around 18% in three years.
  • The company is going to add new products in its portfolio like: Miniature circuit, Distribution boards, Sealing products, plugs and sockets.
  • Company is entering the Western and Northern parts of India by expanding the distribution network
  • In next 2-3 years this stock can deliver multibagger returns.

Be Smart. Invest Smartly.

Disclaimer : Please take advice of your financial advisor before any investment

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