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)