INDO ASIAN FUSE GEAR

Indo Asian Fusegear
Geared to a bright future
BSE ticker code 532658
NSE ticker code INDOASIFU
Major activity Electric Equipment
Chairman V P Mahendru
Equity capital Rs 14.28 crore
52-week high/low Rs 208/88 (FV Rs 10)
CMP Rs 136
Mkt capitalisation Rs 195.47 crore
Recommendation Buy and accumulate at declines

In the exciting field of power and electric equipments, Indo Asian Fusegear (IAFL) is emerging as a major player engaged in manufacturing and marketing a range of high-tech electrical products used for distribution, protection, control and conservation of energy. The script holds good potential for investors.
Just consider:
f The Government has taken many initiatives to enhance the national power generation capacity, thus creating a spurt in power generation and consequent exponential demand in power transmission and distribution equipments including wide range of electrical switchgear and lighting equipment which are the core products of Indo Asian. This thrust is expected to continue for the next few years. With the rapid growth of GDP, the living standards are improving continuously. Along with this, the concern for safe and efficient electrical equipment is also rising. Thus there is good growth potential for the company.
f The developed countries, including UK and many other European countries, have been facing high cost of production for electrical distribution equipment (EDE), as a result of which, they are looking at India as an important and potential source for meeting their needs. While the emerging environment of fast-growing demand at home has helped Indo Asian to grow into a leading manufacturing and marketing company, its consistent efforts in R&D is now helping it to secure export business of some of the well-known brands in Europe and U.K for EDE including MCBs, RCDs and Consumer Boards, CFLs and other lighting equipments which have been Indo Asian’s special strength.
f In a recent effort to strengthen its global marketing, Indo Asian signed an MOU with one of the oldest and established electrical houses of Sri Lanka, Kamalsons for marketing its full range under Indo Asian / Indo Kopp brand. The company has forayed into specialized outdoor lighting equipment category by setting up a joint venture with Nordex Lighting SpA of Italy. Indo Asian holds 60 per cent equity in this joint venture. These developments will add to the company’s top as well as bottom line in due course.
F The company has come out with encouraging results for FY07 with the top line moving up to Rs 224.9 crore from Rs 115.76 crore in the previous year and the bottom line rising to Rs. 17.34 crore from Rs 15.8 crore. It is expected to clock a 70-80% growth in sales to around Rs 400 crore with profits in the range of Rs 30 crore, mainly due to the commissioning of a new facility in Haridwar and an increased contribution from export sales. The shares of the company are currently quoting around Rs 132 with PE multiple of 12. For the coming fiscal, EPS works out to Rs 21, so at the current level, the PE is just 6.2, it is a very attractively priced script. n