Company Name : Sika Interplant Systems Ltd (Sika)

Age :  Incorporated on 1985 (26 Years)

Last 10 Days Average Delivery % : More than 70%

Sector : Capital Goods

Industry: Engineering –Industrial Equipments

About : Sika Interplant Systems is engaged in Business of Engineering Products for Aerospace & Defence.

Website: http://www.sikaglobal.com/

 

Trading at almost ALL TIME HIGH (19/02/2021) - 366

EPS                                           : 21.23

PE Ratio                                    : 14.1

Book Value                               : Rs. 143

ROCE                                       : 19.3%

ROE                                          : 14.4%

Debt/Equity Ratio                     : 0.01

Promoter Holding Pledge         : Nil

1 Year Return                            : 80.95%

  

10 Reasons to take a deeper look at Sika CMP 366 Mcap 155.25 cr.

 

1. Sika is a Blr based engineering co focused on aerospace/defense sectors. Company has a good presence in India's aero MRO (Maintenance Repair Overhaul) which is set to grow exponentially with many indigenous aircraft soon to be deployed.

2.  Co has set up India's only landing gear mfg facility in the private sector in association with UK based company Aerotek. Recently commissioned 22500 sq feet Greenfield facility within the 6.5 acre Sika campus. This is a mirror facility to the UK facility of Aerotek with all certification and approvals of Aerotek UK applying to this automatically.

3. Within a short time this facility this facility has been approved by European Union Aviation Safety Agency, Ministry of Defense and HAL.

4. 5 Years CAGR for numbers is encouraging. Revenue grows at 16% CAGR. Profit grows at 35% CAGR. In comparison the stock has done only 18% CAGR. OPM has also increased every year from 7% to 14% in last 5 yrs. This will increase dramatically as % of own manufacturing goes up in the future.

5. Co is almost debt free. Zero dilution in past 15 Years and no plan to dilute in the future. Equity is small at approximated 42 lac shares. Promoter stake is 71.72%.

6. For FY20 co generated positive cash flow from ops of 13.4cr. CFO is positive for last 5 years.

7. Co is cash rich. In fy20 they had 18cr of debt mf and cash balance of 4cr. This translates into 50 rupees of cash per share.

8. It is a dividend paying co. Now that Capex is getting over and cash flows are going up, we can see higher payouts in the future

9. Stock gave a breakout on charts yesterday and hit all time high.

10. Sika is a rare co where u are able to buy big future potential at valuations which can be justified on current financials. For 6mfy21 the EPS is almost 14...Can end the year in 30-35 range. With the low float, net cash balance sheet + high growth and huge thrust on domestic defense companies , this can easily trade at 25 PE giving a potential target of 750-850 by the time Q4 numbers are announced.

(Disclaimer: This information is taken from several sources and we are not SEBI registered Advisors hence we are not recommending this stock. Our sole purpose is to provide the Educational knowledge about the company. Please take prior advice from your financial advisors before taking any step. We won’t be responsible for any loss if you made investment on the basis of this analysis)