ITL Industries : A small cap value pick at cmp 38-39 Target Rs 65

About Company:  ITL Industries Ltd. was established in 1986, as a partnership firm in the name of INDORE TOOLS, as a commercial Tool Room to cater to the needs of local industries.

ITL Industries Limited was converted as a a Public Limited Company & listed at Bombay Stock Exchanges in the year 1993.ITL offers a wide range of Horizontal & Vertical Bandsaw machines with 52 different models having capacity from 100 mm to 3000 mm featuring Manual, Semi Automatic, Fully Automatic, NC & CNC models.

Also, ITL offers state of the art Hydraulic Power Hacksaw Machine in Technical Collaboration with the World leader M/s KASTO, German.ITL introduced India’s first Carbide Circular Saw Metal Cutting Machine and offers 7 different models from 10mm to 200mm dia bar cutting to cater to the needs of Engineering Industries.ITL has a bright Galaxy of 3860 blue chip companies with around 7620 different machines across the country & abroad. ITL enjoys pioneer status in high speed metal sawing technology in India. The company today is a leader in the domestic and global market and has established itself as an innovative and reliable “Affordable Metal Cutting Solution Provider”.

Financials Of Company:

	2016	2015	2014	2013	2012
Revenue	56.27	55.64	42.15	44.22	46.11
Other Income	0.64	0.23	0.27	0.13	0.2
Total Income	56.91	55.86	42.43	44.35	46.31
Expenditure	-50.96	-49.98	-37.49	-38.82	-40.55
Interest	-2.19	-2.32	-2.28	-2.09	-1.48
PBDT	3.76	3.56	2.66	3.43	4.28
Depreciation	-1	-0.94	-0.97	-0.96	-0.86
PBT	2.76	2.62	1.69	2.47	3.42
Tax	-0.65	-0.32	-0.55	-0.76	-1.38
Net Profit	2.1	2.29	1.14	1.72	2.04
Equity	3.25	3.25	3.25	3.25	3.25
EPS	6.46	7.04	3.5	5.27	6.28
CEPS	9.54	9.94	6.48	8.23	8.92
OPM %	10.56	10.57	11.7	12.49	12.48
NPM %	3.74	4.12	2.7	3.88	4.43
Dividend.%	5%	5%	10%	10%	10%

Investment Positives:

1. Consistent profit making and Dividend paying company
2. Book value of Rs approx 60 increase in demand of steel and investment in infrastructure should result in increase in demand of products.
3. Available at PE multiple of 6 on EPS of 6.5  achieved in 2015-16.
4. Technical :52 week low was 34 and high was 63.8 and appears to be bottomed out

Target price:  Share is available at CMP of Rs 38 at forward PE multiple of 6 . current price is at 0.65 to book value. With improvement in economy company can see demand of product rising which should expand the PE multiple.

 Stock can be bought by long term investors with 1-2 years horizon for decent returns from current levels. Price Target would be to cross 52 week high of 64.

Disclosure: I am personally holding  shares of the company.