Stock Name: Pitti Laminations Ltd

Trading : NSE and BSE

CMP:Rs. 43/-

BSE Code:513519

Book Value 73/-

Operators are Accumulating daily slowly any time will go 67/- to 75/-

In this Market Value Buy for this stock; No risk and No Tensions Just invest and hold it for 1 month to 3 months will get 50% to 100% minimum.

EPS 12/- (Declared Good Results for 2011 March Quarter EPS 12/- Annual and Total year 9/-).

Estimating EPS for 2011-2012 : 17/- to 19/- (Company having Huge Orders from GE and Margins also Improved)

Dividend : 10%

Target : 69/- & 75/-in Short Time.

Upside : 99%

Downside: 1%

Operators Will Active soon in this counter; So Accumulate at this CMP and get 50% minimum Return in Short term.

Incorporated in 1983, Pitti Laminations Limited (PLL) is engaged in the manufacture of electrical laminations for use in various Motors, Alternators, Direct Current (DC) Machines, Pumpsets, Hydroelectric generators etc. The company also manufactures Die-Cast Rotors and Assembled Stators, besides manufacture and sale of Press Tools, Progressive Tools Jigs and Fixtures. PLL's manufacturing facilities are located at Nandigaon (Andhra Pradesh). The company has established business relationships with Siemens, BHEL, Alstom Projects, VA Tech Hydro, Crompton Greaves, Cummins Generator Technologies, ABB, Marathon Electric India, and Bharat Bijlee etc. in the domestic market and GE Consumer Products (Canada), GE Transport System (USA), Groupo Electromechanico (Mexico), E-Mod (Germany), and Welco Technologies (USA) in the overseas market.

Pitti Laminations, an ancillary manufacturer for the electrical & capital goods industry, is poised to register robust growth on the back of a strong order book position, upward movement along the product value chain and increased thrust on exports.PLL's fortunes are linked to those of the electrical & capital goods industry.Growth in the electrical and capital goods industry will benefit the company, as it will boost the demand for stampings & laminations.There has also been a buzz that Reliance Energy (REL) is eyeing a minority stake in the company. Pitti manufactures electric-grade steel stampings and laminations, the key components in motors, rotors and other electricalcomponents.Its clients include ABB, BHEL, Siemens, Suzlon and GE (US).REL is looking to have strategic tie-ups with key vendors for effective inventory management as it will be handling large projects.If it fructifies pitti would get catapulted to a new level and certainly would attract tremendous investors fancy.The company has been very aggresive in expanding its capacities to cater to the heavy demand.Though the present environment been challenging but it should be prudent to note that stock market is a place which discounts future in no time.At present prices its quoting at 4 PE its forward earnings which is cheap for a company growing great guns.It has a good dividend cover ratio and yield is hefty enough to satiate ones desire.A decent buy at present levels.

The economic environment has been improving and the company has received orders worth over Rs.160 crores (US $ 36 mn) from GE, to be executed over the next 2 years.

From initially starting off with manufacture of electrical laminations for use in general purpose industrial motors (25 to 30 HP), the company's sales mix has steadily shifted away from this segment in favor of application in machines used in the infrastructure sector (transportation, earth moving equipment, oil and gas exploration etc) and the power sector having relatively lower competitive intensity and lower business risk.

The company's has registered much higher operating margins for 9 months ended Dec 09 over the same period last year. (17.32% against 10.58%). In view of the recent orders from GE and the initiatives undertaken by the company in the domestic markets, we believe the revenues of the company in FY11 can be significantly higher compared with FY10. Significantly higher revenues coupled with improved margins would have a multiplier effect on the profitability of the company. In view of the above factors, we expect the profitability of the company for FY 12 to be significantly higher compared to the current FY.

The company currently has a market cap of roughly Rs.42 crores. In view of the order from GE & domestic sales, Sales of Rs.350 crores in FY12 may not be difficult to achieve. Assuming Operating margins of 15% conservatively (as against Margin of over 17% achieved in 9 months ended Dec 09), would result in an Operating Profit of Rs.30 crores. Factoring Interest, Depreciation and Tax, the company can easily achieve an EPS of Rs,17-19. The stock available at a PE of less than 4 and a Market Cap of Rs.42 crores for a company which can potentially make Operating Profit of Rs.30 crores in a single year, therefore looks very attractive. Stock will go easily 69/- to 75/- in Short term.