Anand Rathi - Quick Pick - Enkei Castalloys

ENKEI CASTALLOYS

Company is in to manufacturing of - Aluminium alloys castings for engine parts like - Cylinder heads, Crank cases plus Alloy Wheels. The Enkei Corp of Japan [technology provider], which holds 38% stake in company is a global leader in Aluminium Alloy Wheels. Company supplies engine parts to - Bajaj Auto, Maruti and Hero Honda; while Ally wheels are supplied to Honda Siel cars for latest models like - Accord and Civic.

Company raised Rs 20 crs by private placement of 2.5 lakh shares each to two institutional investors - ICICI Fusion Fund & Minivet, Maritious. The shares were issued @ Rs 400 per share [10/- FV] [There after a split given in DEc 06, so FV of stock reduced to Rs 5 now]. So present price at Rs 140 is post 1:1 split and is at significant discount to adjusted placement price of Rs 200/-.

We expect company to do exceedingly well in 07-08 and report handsome profits - closer to 18 crs. This will give an EPS estimate for '08, more then Rs 15. Thus for a quality & fast growing MNC stock, the forward discounting for current year at below 9X is quite attractive.

BUY around current price with target of Rs 165 in short term and Rs 195 in medium term.

Anand Rathi - Quick Pick - Enkei Castalloys