Dalal Street Investment Journal - - QUERYBOARD -

Artson En­gi­neer­ing Lim­ited (AEL) is a ma­jor­ity owned sub­sidiary of TATA Projects Lim­ited (TPL) which owns 75 per cent of paid-up eq­uity shares of AEL. The bal­ance 25 per cent shares are owned by In­dian Pub­lic. AEL has ex­pe­ri­ence of ex­e­cut­ing projects in oil re­fin­ery tank­ages, pip­ing & me­chan­i­cal pack­ages, chem­i­cal, oil and gas, re­fin­ery prod­uct stor­age & dis­tri­bu­tion ter­mi­nals, cross­coun­try pipe­lines and me­chan­i­cal equip­ment con­struc­tion projects in met­als, min­ing, power etc.

AEL has its man­u­fac­tur­ing fa­cil­ity lo­cated in Nasik equipped to man­u­fac­ture pres­sure ves­sels, col­umns, heat ex­chang­ers and other process equip­ment. In ad­di­tion to its Nasik man­u­fac­tur­ing fa­cil­ity, AEL has in­vested in fab­ri­ca­tion yards lo­cated in Nag­pur, Jamshed­pur & Ranchi to cater to struc­tural steel fab­ri­ca­tion and main­te­nance / erec­tion ser­vices for va­ri­ety of process plants in­clud­ing oil and gas, steel and ther­mal power.

On the fi­nan­cial front, AEL’S rev­enue in­creased 38.01 per cent to ₹ 29.59 Crore in Q1FY18 from ₹ 21.44 crore in Q1FY17. How­ever, the com­pany’s PBDT in­creased by 810 per cent to

₹ 0.91 crore in the first quar­ter of FY18 vis-à-vis ₹ 0.10 Crore in Q1FY17. The com­pany’s net profit also im­proved by 476 per cent to ₹ 0.49 crore for the same pe­riod.

On an an­nual ba­sis, the com­pany’s rev­enue de­clined by 5.23 per cent to ₹ 104.71 crore in FY17 com­pared to the pre­vi­ous fis­cal. The com­pany’s PBDT in­creased by 38.60 per cent to ₹ 6.59 crore in FY17 on a yearly ba­sis. The com­pany’s net profit in­creased from ₹ 2.86 crore in FY16 to ₹ 27.17 crore in FY17.

The stock is trad­ing at 37.21 times its book value. Although the com­pany is re­port­ing re­peated prof­its, it is not pay­ing out div­i­dends. The com­pany has de­liv­ered a nom­i­nal growth of 10.76 per cent over past five years. We rec­om­mend our reader-in­vestors to HOLD the stock.

I bought 100 shares of Artson En­gi­neer­ing Ltd @ 45. Should I hold or sell the stock? - Kar­tik

(Clos­ing price as on Sept 27, 2017)

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