Saturday, November 24, 2012

EON ELECTRIC - WORTH A BET



 

 
The present form of EON ELECTRIC is the result of two de-mergers during past two years. This company (formerly known as INDO ASIAN FUSEGEAR) sold its Switch Gear business to French electric equipment maker Legrand for a consideration close to Rs.500 Cr in 2010.Later in 2011 ,company de-merged its metering business into another company named Advance Metering Technology.After  both of these transactions company is left with lighting products, wires  and wiring accessories , cables and Fan.Now company is concentrating its efforts to develop many new energy efficient products in these categories.LED lighting products is one among them . Since LED is  not using any  hazardous materials like mercury it is expected to get consumers priority over  CFL  in coming years .For getting advanced technology in this field ,EON already tied-up with one Japanese and another European company operating in this field.Recently company ventured into home automation products with the introduction of modular switches .Company’s R & D division introduced indigenously  developed presence sensor technology based lighting accessories  to save energy.Recently company started production of Lithium Ion Batteries from its newly set up plant in Haridwar. Company is claiming this is the first such manufacturing facility in India to produce Lithium Ion batteries to be used in mobile handsets, laptops, cameras, tablets ..etc which is still now imported from China.Company is expecting to garner reasonable market share in this products based on superior quality over cheap Chinese products.
                                     Even the company not started to show black in its bottom line after the  selling of its Switch Gear division and de- merging of metering  business, sharp improvement is visible in its turnover and reduction in loss in recent times ( See Table below)





Out of the total amount received from the selling of  Switch Gear division, company distributed Rs.10/- per share as special dividend,came out with a  buy back program at a maximum price of Rs.130/- per share and most importantly paid back majority of its  debt.After the scheme of later de-merger ,on a rough estimate company is still with a cash balance over Rs.100 Cr where the  market capitalisation of this company is  is just Rs.48 Cr . I believe the well knitted marketing network and well experienced promoters are two big positive factors for this company .EON having enough cash to utilise the available opportunities and the company is already started its capex .I am expecting  the company can back to black in another few quarters  and at current market price of Rs.30/- it is worth for a bet for investors with some risk appetite.Stock is listed both in NSE and BSE.


Link to Company website HERE
Link for latest Annual Report HERE

120 comments :

  1. Sir,

    Is ABG infralogistics a buy at current market prize.how the kandla port issue will affect its financials

    ReplyDelete
    Replies
    1. Not advising for a buy mainly due to the mentioned reason.

      Delete
  2. Sir,

    What do you think about Vinyl Chemicals?

    ReplyDelete
  3. This is called "damdaar" stock. working on future technology this company can be a multibagger in time to come . Very good pick sir.

    ReplyDelete
    Replies
    1. Pls don't post such messages. what happens if this stock is not a multibagger? Just because its a low price stock?
      Pls post some details on why you think and if you have such knowledge then you shoould have bot it long time back. Piggy backing on someone and giving such statements don't make sense.

      this is in the interest of small investors.

      Saket

      Delete
    2. Dear Saket

      kindly think before u post anything. Can u point me where hv i mentioned that eon is my research . u cannot say that i m piggy banking on value picks sir.
      'i hv expressed my own views. I think it ll be a multibagger if u don't don't buy. Nobody is recommending u.

      Delete
  4. Book value is 200+

    ReplyDelete
  5. Hi Sir,
    your valuable input on Gujarat Narmada Valley Fertilizers (GNFC) at the current price?

    ReplyDelete
  6. similar company wit this LED technology MIC electronics failed .what it is due to?

    ReplyDelete
  7. LED lighting is only a part of their plans and it is not a company based only on these products.Even the business model of both these cos are entirely different where MIC was in LED based display boards ..etc and in institutional business ,EON is looking for LED based lighting systems for
    retail business.Many factors other than business related may have diverted the attention of MIC .A small sample in the below link :

    http://www.dnaindia.com/money/report_mic-electronics-chief-under-police-scanner_1715868


    ReplyDelete
  8. EPC Industries is under T group for quite a long period. Any specific reason for this? Promoters are are also seemingly not bothered. Would like have your view on this aspect.
    BEST Regards.

    ReplyDelete
    Replies
    1. Why promoters need to bothered about the group ?.I don't understand why people think like this .If it is about 'Z' group there may be some concern,otherwise what is the problem for investors ,only traders need to bother about that .What is fundamentally changing in the business of a company according to the group changes in an exchange where it is listed ?

      Delete
  9. Sir,
    How do you get into a stock? First do you see results, new business ,promoter fame ,entry of celebrity investors or any ratios ? :)
    You are extremely good at finding one.Your width of reading is reflected in the posts and comments.Thank you so much for all the help.
    -vivek

    ReplyDelete
    Replies
    1. First is nothing from the above list,but the potential of the industry .

      Delete
  10. Dear VP Sir,
    I read few earlier messages on HSIL and few months back you indicated not tracking and recently you mentioned about buying on dips. Sir wanted to check if there was any change in fundamental which indicated you to be bullish on it.

    I am holding and would like to avg if that's the case as I don't want to get struck in non performing stock as I was not able to understand the reason of its fall.

    Pls do respond sir as it will help me to take decision.

    Thanks sir.

    Shashi

    ReplyDelete
    Replies
    1. Now I believe the user industry has bottomed out and expecting gradual improvement backed by softening interest rate going forward.

      Delete
  11. I guess Piramal was valued and sold close to thrice is annual sales coorect?Current year expectd sales is 100 crores for span and its current market cap is 36 cr.
    So considering good managements,plans for growth its a good bet at current levels?

    ReplyDelete
  12. Hi Sir

    Request you to please comment on these stocks-
    himalaya international
    REI agro
    Gujarat ambuja exports
    Hanung Toys
    Greenply

    Thanks for all your research and guidance.
    -Gaurav

    ReplyDelete
    Replies
    1. Even the products of Himalaya having potential , I am not sure about the integrity of promoters.Not tracking the rest.

      Delete
  13. I'd blogged about this earlier but due to unrelated diversification and cash burn, had felt its risky. Would like your inputs on this(admittedly pre FY12 results..still)
    http://specialsituationsindia.blogspot.in/2011/11/eon-electric-trading-at-14th-of-its.html

    ReplyDelete
    Replies
    1. Dear Anandh

      Some of your points are relevant and some others like website updation are already met.(Company created a new website and updating it periodically but still the name of old website is provided in BSE).In my opinion key factor for success is effective use of surplus cash and in a recent communication they mentioned that the surplus amount will be utilised as and when good opportunities arise.I don't think the recent diversification is totally into an unrelated field.What you said is right- there is some risk but I feels the current market price is very low while we consider even only the cash component .I believe if promoters have no plans to loot this money and they are committed to invest the same in this company itself there is chances for improvement ,hence suggested it.

      Delete
  14. Dear Valuepick,

    While recommending Aditya Birla Chemicals, you advised the readers to follow the pricing of the end product. Could you kindly advise, where can we track the same.

    Thank you,
    Vijay

    ReplyDelete
    Replies
    1. Dear Vijay

      There may not be a single point to get such data .But if you have some academic interest to know anything there will be some ways like below:



      http://www.ihs.com/news-analysis/chemical/index.aspx

      Delete
  15. Dear VP,
    Kale Solutions is hitting upper circuit everyday for quite a long time. Probably I missed the trick as I sold it at 200 after buying at your recommended price.
    Where does it go from here, only north? and how long?

    Regards
    Sakharam

    ReplyDelete
  16. sirji

    your valuable opinion on A2Z maintenance

    Rgd
    BRK

    ReplyDelete
  17. Dear VP, Whats ur view on Marksans Pharma?

    ReplyDelete
  18. Hi VP,
    Can you give idea about
    1. Omkar Speciality Chemicals
    2. Claris Life Science
    3. Thangamayil Jewelleries
    4. Atul Auto

    Thanks

    ReplyDelete
    Replies
    1. Already covered Claris and Atul Auto and no change in previous opinion on that ,not tracking the rest.

      Delete
  19. Hi Sir..
    Have a peaceful Weekend..
    Whats ur views abt 20 Microns, Thinksoft, Mayur Uniquot..?
    Regards Aman

    ReplyDelete
  20. Sir

    Still awaiting your views on Cenlub industries that you recommended a long time ago....

    ReplyDelete
  21. Hold 20 Microns,not tracking the rest

    ReplyDelete
  22. Hi Sir,

    How do you find Country Club at this price? How is the management?

    ReplyDelete
    Replies
    1. Based on available information company's service quality is poor .I don't think companies in a sector like this can grow without a good public opinion beyond certain extent .So no opinion for investment, but remember price of any stock may move reasons beyond fundamentals in a bullish market .In this case political link is also there.

      Delete
  23. Hi Valuepick,

    Wht is your thoughts on the Government's new 5% ethanol blending policy impact on Sugar companies like Shree Renuka and Bajaj Hindustan?

    Regards,
    Vikas

    ReplyDelete
  24. Sir,
    Your view on Aurobindo Pharma? After the sept results do you think one can buy on dips for longer term?
    The stock has moved well and consolidating and wanted to know your views on business prospects.

    Thank you sir,
    Amit

    ReplyDelete
  25. Dear VP sir,

    What is your view on CAPLIN POINT LAB?

    Thanks

    ReplyDelete
  26. i tried to buy eon today in my SHARE KHAN account.. but its not getting executed at all. Can anyone please tell me whats wrong

    ReplyDelete
  27. Dear VP...Any suggestion for Gateway Distiparks or Arshiya International or any counter on the logistic space on a long term i.e 2-3 years horizon
    Regards
    Anirudh Banerjee

    ReplyDelete
    Replies
    1. Not tracking GDL , Arshiya is not a bad choice for longer term.

      Delete
  28. Hi VP,

    I remember you have recommedned claris lifescience. Now I am hearing that they are selling their injectible business which is their key growth business. Assuming they are selling their injectible business, do you think it is better to sell this stock.

    Regards
    Amit

    ReplyDelete
    Replies
    1. I agree that it is not confirmed news from company, but if the news comes in Economic times, then it can be trusted. See the link below

      http://economictimes.indiatimes.com/news/news-by-industry/healthcare/biotech/pharmaceuticals/claris-lifesciences-in-talks-with-otsuka-pharma-to-sell-injectables-business-sources/articleshow/17370020.cms

      Please share your view based on above link.

      Regards
      Amit

      Delete
    2. If it happens I don't think it is a good news provided there is no immediate plans to utilise sale proceeds to expand cos business.

      Delete
  29. Hello Sir
    whats your view on Amtek Auto
    the stock once again touched its 52 week low.
    I was thinking to invest in this stock.

    any idea, please share.

    thanks A lot.

    ReplyDelete
  30. Vp sir,
    Could you suggest some stock from oil exploration sector.would love to hear about cairn india.
    Aksh parses
    bhopal

    ReplyDelete
    Replies
    1. Selan and Cairn already posted,use the above search option

      Delete
  31. Can you provide an insight on KEI?

    ReplyDelete
  32. Hi sir, what is your take on Bajaj Electicals - well diversified company at current valuation?

    ReplyDelete
  33. Sir
    What is your view on hydrebad industries ltd
    Regards
    Vinay

    ReplyDelete
  34. vp sir,
    hello! what is going wrong with opto circuits?this stock had always given good returns but this year things have been quite different.Is the working capital condition so bad that it has come to such low levels? another stock sah petroleums is in my review recently .do u think it is worth buying?

    ReplyDelete
    Replies
    1. As you are aware there is still some confusion about its accounting policies and no clarity on stake dilution of its subsidiaries.Institutions normally offload their holdings in such situations and it was a stock with high institutional interest .This may be a rason.

      Delete
  35. Vp ji,
    Any change of views on Themis medicare? Please reply.

    Manmohan garg

    ReplyDelete
  36. It mentioned for long term buy @ Rs.94 which is now @ Rs.105.No change in previous view

    ReplyDelete
  37. Does your view posted earlier on Selan holds good now?

    ReplyDelete
  38. vp sir,
    may i know the reason for all in hritage food.acually planing to add more.

    waiting for your precious replay

    nilans ramkumar

    ReplyDelete
    Replies
    1. It think it is just because of the inclusion of Heritage in 'T' Group.I like very much its business model and expecting better future on more than one reason.Take any dip as a buying opportunity and HOLD for long term.

      Delete
  39. Sir, your thoughts on Bajaj Electricals at cmp - 200?

    ReplyDelete
  40. hello sir please share your views on PTC India Financial Services for 1-2 years horizon

    ReplyDelete
  41. Sir...

    Hearing a lot of news on SHALE gas and fracking boom. Guar gum prices are soaring due to this and VIKAS WSP is a direct beneficiary of the same. I request you to provide me with some insights on this. On the other side of the coin,promoters are not reliable.

    Also need you to let us know your views on NDTV and TV18 .. lot of buzz due to mandatory digitization. Do you think that this is going to be a game changer for them???

    ReplyDelete
    Replies
    1. Not dare to recommend this stock mainly due to poor promoter quality .An interesting read on this subject in the below link

      http://www.mydigitalfc.com/commodities/guar-gum-exports-set-drop-150

      Delete
  42. VP,

    I could see Eon posted a net loss this quarter. Do you still recommend us to buy this stock. Your valuable feedback would be useful for my investment.

    Thanks,
    Palani.

    ReplyDelete
  43. Sir,
    Kindly let me know your views on narmada gelatin

    Madhu Shanker

    ReplyDelete
  44. Sir,

    Your view on Zylog Systems,is it worth taking a bet at CMP of 75?

    Thanks,
    Ajit

    ReplyDelete
  45. Sir
    What is your view on caplin point laboratories ltd?
    Regards
    Anand

    ReplyDelete
  46. Hello VP

    I would like to know your views on Brand House retail, do you see it as a beneficiary of FDI in retail where most of the large funds are betting on pantaloon,shoppers stop can this be a potential multibagger? Also do you track Tijaria PolyPipes?

    ReplyDelete
    Replies
    1. Not interested in any company from S Kumar's group

      Delete
  47. sir, i bought simran farms reading your posts recently and as you mentioned in a later post that simran farms may dip because of high raw material cost, i sold a major portion and now wants to accumulate again. Please let me know whether it is the right time and price to accumulate simran farms.
    Lots of thanks for your pick Vadilal Industries, in which i was able to gain good profits.

    ReplyDelete
    Replies
    1. The same issue may affect one more quarter based on the current trend in feed price.Try below Rs.20,if ready to hold for long term

      Delete
  48. Rajeshkumar Panchal , Vadodara.November 28, 2012 at 3:26 PM

    Dear sir, Can we suggest buy in following w.r.t. long term view ?
    a. timex
    b. sacheta
    c. gei
    d. yuken.
    Thnaks as always. Hope i may have some reply.

    ReplyDelete
    Replies
    1. Avoid Timex and Sacheta for the time being .GEI run up recently so buy only in a dip and only for long term.Yuken may buy in small lots.

      Delete
  49. Dear VPji, saw ur comments that Positive on National Peroxide, however, would likr to know is it still worth buy at current valutions 495? or should i wait for some correction. Pls. advise.

    Reason behind asking you is that I'm very weak at finding the correct valution of company (technically). Could you also throw some light/guide us to how to look at the parameters contributing in finding the valution of any company.

    Thanks again sir for great work.

    ReplyDelete
  50. dear value

    what are the reason for not running of agri stocks? keep investment in tata chem, coromandal int, gnfc, rallis, basanth, aries etc.?

    PATIDAR

    ReplyDelete
    Replies
    1. Lack of a concrete subsidy policy of government ,effect of late monsoon,unfavorable rupee movement ..etc may eat the profitability of some of these companies in this FY

      Delete
  51. Leave Timex and Sacheta for the time being ,rest only for long term

    ReplyDelete
  52. Hi Valuepick,

    Do u see any stock re-rating happening in Sequent Scientific, due to rumors of Pfizer buying out Agila unit of Strides Arcolab?

    Regards,
    Vikas

    ReplyDelete
    Replies
    1. Not to speculate on rumors , but it is a definite HOLD for me

      Delete
  53. Dear VP,

    Request your opinion on JK Agrigenitics

    ReplyDelete
  54. Sir, does it still makes sense to buy KAVERI SEED company at CMP?

    ReplyDelete
    Replies
    1. This stock recommended below Rs.300 which is now @ Rs.1300/-.It is a great company but at CMP a HOLD for me.

      Delete
  55. Dear VPji,

    Any idea on NHC Foods (517554) @ 50. its a old company.

    Your comments on same will be appreciable.

    Regards,
    Aajay

    ReplyDelete
    Replies
    1. I think its old name is Mid point Software ,not tracking it.

      Delete
  56. Request your views on Confidence Petroleum, in case you are tracking it. If not, then do you have any views abt it or the sector in which it oprates (i.e. LPG Bottling and manufacture & sale of Cylinders) positive or negative, whichever way.

    Thank You Sir.
    Manish...

    ReplyDelete
    Replies
    1. Only one I am tracking from this sector is Eastern Gas and mentioned about the same earlier.

      Delete
  57. Sirji

    Pls put your valuable comment on Everest Kanto
    BRK

    ReplyDelete
  58. VPji,

    any view on savita oil...am holding big quantity from 460 levels?

    amit

    ReplyDelete
    Replies
    1. Good company ,but profitability is very sensitive to raw material cost.Track the trend of crude price too.

      Delete
  59. Hi VP,

    I am very new to this forum and went thru ur archieved blogs too...I am in market for few years now and lost and learnt all the while. Now having no portfolio and thinking to build it as an investor(long term)...Can you suggest the trick...like sector allocation %age, %age of case should be kept reserved, portfolio should have only value picks,high beta or bluechips...is mixed what should be %age, When to book profit, do we have shares for short term prospective too etc???
    I know its all basic stuffs and I am supposed to know but sorry to say I am not clear on these even now.....

    Your opinion would be helpful to understand.

    Thank you in advance!

    ReplyDelete
    Replies
    1. Frankly speaking I don't know how to answer for this.

      Delete
  60. What is your view on Ashok Leyland?

    ReplyDelete
    Replies
    1. Not tracking Ashok Leyland,prefer SML and Force from this space.

      Delete
  61. sir ,
    vp ji. what are your views on kohinoor foods.could you share about there promoter quality and huge debt.

    k gupta

    ReplyDelete
  62. Hello Sir

    I am not a regular reader of your blog:)
    Please help me out in following:
    1.) Just to inform you, I am holding tight Rossell India and wont sell anytime soon since their hospitality Kebab Outlets have been started. Any other info about Rossell India.? Please share.

    2.) I saw that your earlier reconmmendation Hi Tech Gears is trading at 52 week low despite of not that bad 2nd quarter results. Was thinking to buy in bulk since company seems to be going good. Do you still recommend investing in Hi Tech Gears..?

    3.) The last question is about the rail stocks like Kalindee Rail Nirman, Titagorh Wagons, Kernex Microsystems etc.The general trend is that the rail stocks start rallying from start of december due to rail budget being near. I was thinking of buying rail stocks based on this. But I would like to have your specific recommendation in rail sector based on strong fundamentals. Please help me to get rail related stocks:)
    Hope you dont mind sharing line or two about all three questions.
    Wishing you good health.:)

    Thanks

    ReplyDelete
    Replies
    1. 1) Rosell is planning to open 10 each outlets in next three years.

      2)Re rating of auto ancillary companies may take some more time.

      3)Not tracking any of the mentioned companies

      Delete
  63. Sir Please let me know your current views on Cenlub Industries... you recommended this long time back!!!!

    ReplyDelete
  64. Hello VP,
    Do you like anything from media and entertainment, Auto and indian comsumption space at CMP?

    Best Regards/Ravish

    ReplyDelete
  65. Do you track cox & kings, what's your view for long term? Also i am stuck in glodyne technosoft, is there any chance the shares would be back to levels of even 80?

    ReplyDelete
  66. Sir waiting for your reply on above question?

    ReplyDelete
  67. Dear VP Sir ,

    Can you pls share your views on ;

    1, Alok Ind at present level
    2. Educomp at CMP
    3. Dishman Pharma

    Thanks,
    Abhik

    ReplyDelete
  68. Dear VP,

    I came across your blog while searching information on EON Electric and i can see that you have compiled lot of useful information on this blog. I am bookmarking this page and will keep visiting to this page in future.

    Now coming to subject, i purchased shares of EON Electric in the year 2012 at about Rs. 38 per share. after my investment the share price fell heavly, however i kept holding the same. i needed your current/future outlook of this stock, i dont mind holding them for another 5 to 10 years if you feel it is worth holding the same,

    Please guide.

    Regards, Amit

    ReplyDelete

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