Stock Views on KABRA EXTRUSIONTECHNIK, INEOS ABS INDIA, HONDA SIEL POWER PRODUCTS

HONDA SIEL POWER PRODUCTS

Honda Siel Power Products, a part of the Honda Motor Company, makes portable generator sets, general-purpose engines, water pumps, lawn mowers and brush cutters. Its sales have grown at a CAGR of 8.2% over the past five years and it has given a return on capital of 20% for FY10. Honda Siel is debt free and has adequate cash for any further expansion. Given the power shortage in India, especially in the rural areas, the demand for generators remains robust. The company, however, faces competition from cheaper Chinese products in the market. Birla Power Solutions is its closest competitor among established players, though from an investment perspective, Honda Siel offers more value.

 

 

INEOS ABS INDIA

Ineos ABS India, which is an 83% subsidiary of Ineos Global Group, is India's leading maker of an engineering plastic named acrylonitrile butadiene styrene (ABS). It is a highperformance plastic, used predominantly in automobiles and consumer durables. After stagnating at the topline for four consecutive years the company achieved a 33% growth in 2010. In the meantime, its profit has been growing steadily year after year with the only exception of 2008. As a result, the 5-year CAGR in net sales is at 13% against 34% in profit. It has increased its ABS capacity to match rising domestic demand. During 2010, Ineos ABS India expanded its ABS capacity by 33% to 80,000 tonne per annum. The company remains a debtfree and cash-rich with a consistent dividend paying history.

 

 

KABRA EXTRUSIONTECHNIK

Kabra Extrusiontechnik is maker of machinery used for producing plastic pipes, packaging films, window and door profiles. It has augmented its offering with a new plant that makes drip irrigation systems. To benefit from growing domestic demand of plastic products, it has embarked on a project investing 85 crore, which will double its gross block by FY12. Under this, the company has already added one assembly shop in Daman and another manufacturing unit is being set up by end 2011. KETL is a cash-rich, debtfree company with a history of strong operating cash flows. Its cash and equivalent investments have grown at a CAGR of 58% in the past five years to 46.3 crore as on March 31, 2010.