Fundamental Call on May14, 09: Buy Elgi Equipment

Fundamental Call on May14, 09: By Praveen Sevak
Co Name: Elgi Equipment Reco: Buy
CMP: Rs 36.5 (around) (Buy in small quantity at CMP)
Best Buy Level: Rs 32 (around) (accumulate dip around this level)
Target: Rs 43-45 (1-2 months), Rs 62 (6-12 months)
Investment Rational:
1. Elgi, the market leader and Asia's largest manufacturer of air compressors and automobile service station equipment, has incorporated a wholly owned subsidiary company in China also. And already, it has presence in all the major markets across the world covering Europe, North America, Latin America, Africa, Australia, Middle East, South east and west Asia.
2. It is a debt free company and have almost maintained growth even in the downturn also.
3. Though its Net Sales and Net profit has gone down in the 4th quarter of FY 09, it has managed to increase its profitability margins that clearly shows its competitive advantage over its peers.

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