Thursday, August 21, 2008

Review of a small cap stock worth investing for long term.

SKF India Ltd: Current Market Price as on 21.8.08 is Rs. 218/-.Recommended in our columns on 30.5.08 at Rs 264/-. The company is into manufacturing of bearings for automobiles, power transmission equipments for power, steel & cement industry, and has recentently entered into high growth niche areas such bearings for Wind Mills, aerospace & marine Industry and large size bearings where the margins are higher. Likely to double its turnover every 3.5 to 4 years , i.e., a growth of over 20% p.a. Likely EPS for f/y 2011 is Rs. 50/- to Rs. 60/-. Currently ruling well below its intrinsic worth of Rs. 401/- - 417/- and close to its recent low of Rs.202/-. Consolidating in the range 215-225/-. Likely to move up to next higher range of Rs.240/- to 280/- in the near term. This stock is likely to give compounded return of over 26% p.a for the next 10 years.
Expected price range for 2008-09 is Rs. 210/- to 300/-.
Expected price range for 2011-2012 is Rs. 750/- to 930/-.
Expected price range for 2017-2018 is Rs. 2000/- to 2200/-.
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