Pradeep Metals Ltd Multibagger 2022 Analysis
This article we can explore the possibility of Pradeep metals Ltd as a multibagger 2022 Stock based on Value Investing principles.
| Website | https://pradeepmetals.com |
| CMP | Rs. 94.50 |
About Pradeep Metals Ltd
Pradeep Metals Ltd., an ISO 9001-2008 compliant company manufactures closed-die ferrous and non-ferrous forgings and fully machined components since 1984. The company specializes in Automotive Components and Stainless Steel Forgings for the Valve, Flanges & Fittings, Dairy and General Engineering Industries.
The Company has both press forging, hammer forging as well as hot and cold coining facilities along with most modern tool room facilities with CAD/CAM. With in-house heat treatment. machining and destructive and non-destructive testing facilities, the Company is in a mission to produce closed die forgings weighing up to about 40 Kgs.
With a history of quality excellence and experienced technocrats, Pradeep Metals Limited manufactures closed-die forgings for the Oil & Gas, Valve, Instrumentation, Petrochemical, and General Engineering industries around the world. The production plant is integrated with state-of-the-art facilities for design, die tooling, laboratory testing, cutting, forging, heat-treating, and machining.
About 70% of the Company’s production is exported to various countries including USA, UK, Germany, Sweden, France, China, Singapore etc which is a testimony for the quality and timely delivery and the reputation of the company for more than two decades.
By working closely with customers in the Americas, Europe, and Asia, company can achieve lead times of only 5 days; A testament to company’s focus on customer satisfaction for three decades.
Pradeep Metals Limited is a public limited company traded on the Bombay Stock Exchange and crossed annual revenues of INR 1 billion (approx USD 20 million) in FY2010-2011.
Company was started in 1982 as a private limited company, Pradeep Metals Limited was co-founded by Pradeep Goyal and Late Mr. Ved Prakash Goyal who was a Chartered Engineer with 50 years of experience in the steel and heavy engineering industries. He believed in producing and delivering a product of the highest quality to his customers. Together with his son Pradeep, a metallurgist by qualification, Mr. Goyal built a business to supply high quality steel forgings around the world.
He handed over the reigns of the business in 1992 to pursue his personal passion for serving the nation and began his journey in politics. He was nominated to the upper house of the Indian Parliament in 1992 and subsequently served in the Prime Minister’s Cabinet as the Minister of Shipping from 2001 to 2003. Today, the company generates over 1 billion Rupees in annual sales, and continues to deliver upon those same founding principles as it strives to push its quality, capabilities, and customer satisfaction levels to new heights.
Products & Services
- Forged Flanges
- Valves
- General Engineering
- Manifolds
- Material Grades
Profit & loss
Warren Buffett Checklist
| Factor | Value |
| Economic moat | Moderate |
| Growth | Moderate |
| Valuation | Good |
| Debt | Moderate |
| Integrity | Good |
Positives
- Company is moderately undervalued based on PE Ratio & PB Ratio
- The Intrinsic Value Discount stands at 92% given the sudden surge in EPS past years
- Company has reduced debt
- The ROE & ROCE are in good leavels above 15%
- Dividend Yield is good at 1.1%
Negatives
- The company has delivered a poor sales growth of 1.83% over past five years.
- The Growth is not steady & inverted curve showing sudden burst in economic demands & not mainly on the company product quality or brand recognition with repeated customers
- Company is having High Debt of D/E Ratio 1 – this will be harmful in repaying interest during tough business times
Summary
As per the Expansion & Value Investing grounds the company have Multibagger Potential.
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