Magna Electro Castings :517449 : Buy at CMP of Rs 120-123 one year target Rs 175

About Company: Magna  is in the Business of Manufacturing and Supplying Ferrous Components in small and medium volumes to users worldwide.

Magna specializes in the manufacture of Ductile Iron and Gray Iron casting in the weight range of 300 grams to a maximum of 2000 Kilograms. Magna also adds value by heat treatment, surface treatments and machining so that the products are ready to assemble.

Magna also produces fully machined components, utilizing its in-house CNC machine shop and other facilities as well. Magna has extensive experience in the supply of safety requirement components in the casting and fully machined forms. The components meet stringent requirements in terms of Radiographic Quality and Metallurgical Control.

Magna has established warehousing in the USA, this facility along with bi-weekly container shipments, allows us to cater to low volume requirements. Also our warehousing capability enables us to supply products just in time, to customers in the United States of America."

Financial Performance of Company: Company has maintained profitability in last 5 years and consistently paid dividend for last five years.

5		2016-E	2015		2014	2013	2012	2011
Revenue		103	105.06		79.56	92.08	88.44	65.22
Other Income		0.65	0.45		0.77	0.95	0.52	0.42
Total Income		103.65	105.51		80.33	93.03	88.96	65.63
Expenditure		-85	-90.41		-65.08	-78.46	-74.93	-53.51
Interest		-2	-2.32		-2.58	-2.37	-2.33	-1.74
PBDT		16.65	12.79		12.67	12.2	11.7	10.38
Depreciation		-4.4	-4.42		-6.96	-6.16	-5.5	-4.79
PBT		12.25	8.37		5.71	6.04	6.2	5.59
Tax		-4.5	-2.94		-1.09	-0.79	-2.02	-1.84
Net Profit		7.5	5.43		4.62	5.25	4.18	3.76
Equity		4.58	4.58		4.58	4.58	4.58	4.58
EPS		16	11.85		10.09	11.46	9.12	8.2
NPM %		7%	5.17		5.81	5.7	4.73	5.76

The stock can be accumulated  at current levels for  long term target of Rs 175.Available at PE multiple of 10 .

Interestingly Elgi equipment has a small stake in the company that adds to fundamentals of company.