Wednesday, 3 January 2018

Grauer & Weil: A Small Cap Multibagger

Article by : Mr. Sayan Satvaya, Student 2016–18 batch, Calcutta Business School

The only Indian company and one of the few in the world which is into the business of complete corrosion-protection solutions across various industries. Some of its prime clients are ISRO, Bhabha Atomic Research Centre and HAL. It is also registered with global brands like Rolls Royce and domestic airline GoAir. This company caters to industries like infrastructure, automobiles, hardware, jewellery, oil and gas and other heavy industries. Its products also find usage in nuclear, defence and space sectors.

The stock was trading at Rs. 5/- in 2012 and currently it is trading at Rs. 71/-. It has multiplied investor’s money almost 14 times in last five years. It’s current market capitalization is Rs. 1620 crore. The company’s revenue has grown from Rs. 336 crore to Rs. 444 crore in last five years. Some other financial ratios are highlighted below:

The current PE ratio is 28 compared to Industry PE of 58. The stock had a good run in last few months and may face consolidation for the time being. However, it is expected that the revenue and profitability growth will remain consistent in the next few years and hence, the stock should test Rs. 220/- level by 2022.

Disclaimer: The recommendation and advice are of my own opinion. Please do your own research for confirmation. 

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