Goldstone Infratech Multibagger

Goldstone Infratech is already a multibagger stock. It has given a return of 1067% over the past 24 months and 684% over the past 12 months.

However, keeping in mind the prospects of the industry and the capabilities of the Company, it is not unrealistic to expect that Goldstone Infratech will be able to provide more multibagger gains to investors.

About Goldstone Infratech

Goldstone Infratech Limited is pioneer in Indian Composite Insulators Business. Its proactive approach for design, development and manufacturing composite insulators meeting dynamic requirements of customers and marketing expertise had always provided it competitive advantage.

It is a part of the highly diversified Goldstone Group, with major interests in Composite Insulators, Amorphous core-distribution transformers, Data Analysis and IT Consulting.

GIL is an ISO-9001:2008 certified company and its R & D Center is recognized by the Department of Scientific and Industrial Research, Govt. of India.

GIL is the largest manufacturer and suppliers of Composite Insulators in India.

GIL is a public listed company. GIL is currently traded on the Bombay Stock Exchange (BSE), the National Stock Exchange (NSE.

GIL, is market leader through creative technologies, and commitment to excellence. Composite Insulators are well used across the globe as a significant technology breakthrough.

The Composite Insulators manufactured are of the rating 800 KV HVDC, 765 KV, 400 KV, 220 KV, 133 KV, 66 KV, 33 KV & 11 KV. It has also developed and tested 1200 KV insulators for PGCIL.

Industry prospects

Demand for electricity has been increasing rapidly due to economic growth. Therefore demand for electrical equipment and those requiring in electricity transmission has been increasing every year.

There has been addition of generating capacity to the tune of 88.54 GW during 12th Plan (2012-17).

There is target of 100 GW for 13th Plan. This addition of generation capacity will require matching investment for evacuation. In view of this, there will be good demand for the products of Insulators manufactured by Goldstone Infratech.

The Electrical Industry has witnessed growth of 4.25% in the year 2016-17 over the previous year.

Insulators have witnessed growth of 3.5%.

Exports in power sector have been growing at about 10% CAGR, while imports have been declining at a rate of about 4% per year in last 5 years. However, in case of Polymer Insulators imports from China have been rampant and country imported insulators worth Rs 250 Crores last year.

The Indian power sector has an investment potential of Rs 15 trillion (US $ 225 billion) in next 5 years thereby providing immense opportunity to power equipment market.

(E-bus Division)

The Indian automobile industry is one of the fastest growing globally. Growth in transportation sector, has resulted in higher greenhouse emissions, noise pollution andoil imports. To promote ecofriendly vehicles, the Government of India (GOI) has launched the FAME (Faster Adoption and Manufacturing of Electric Vehicles) India scheme offering incentives on electric vehicles.

According to the National Electric Mobility Mission Plan 2020 (NEMMP 2020), by 2020 the annual demand for passenger vehicles, commercial vehicles and two wheelers in India will be 10 million, 2.7 million and 34 million units, respectively, making India the third largest vehicle market in the world.

Joint Venture between Goldstone Infratech and BYD

Goldstone has diversified from the manufacture of silicon rubber insulators into the EV space by entering into a partnership or joint venture with Warren Buffet backed Chinese electrical vehicle manufacturer BYD.

In November 2016, Goldstone received its first order of six electric buses from the Brihanmumbai Electric Supply & Transport Undertaking (BEST).

In February 2017, it bagged an order for 25 electric buses from the Himachal Road Transport Corporation.

PK Srivastava, head of e-bus division at Goldstone Infratech, said that the parallel target is electric trucks and electric three-wheelers and there is a plan to make 200-300 buses per year, which means the turnover will go to Rs. 500 crore from this.

The share of this segment is expected to go up to 50% in a year from 10% currently. The company is also in the process of setting up a plant in Hyderabad in partnership with BYD.

So, based on the above, it can be said that the stock is likely to have more multibagger potential in the years to come.

KEY FUNDAMENTALS

PARAMETER VALUES
MARKET CAP (Rs CR)   672
EPS – TTM (Rs) [*S] 1.97
P/E RATIO (X) [*S] 94.52
FACE VALUE (Rs)   4
LATEST DIVIDEND (%)   5.00
LATEST DIVIDEND DATE 20 SEP 2012
DIVIDEND YIELD (%) 0.00
BOOK VALUE / SHARE (Rs) [*S] 25.56
P/B RATIO (Rs) [*S] 7.28

[*C] Consolidated     [*S] Standalone    

FINANCIAL RESULTS

PARTICULARS (Rs CR) JUN 2017 JUN 2016 % CHG
NET SALES 22.22 20.63 7.71
OTHER INCOME 0.21 0.14 50
TOTAL INCOME 22.43 20.77 7.99
TOTAL EXPENSES 18.37 17.57 4.55
OPERATING PROFIT 4.05 3.2 26.56
NET PROFIT 1.11 0.7 58.57
EQUITY CAPITAL 14.43 14.43

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