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Saturday, June 6, 2009

Everest Kanto Cylinder - Good Mid Cap Stock To Buy

Everest Kanto Cylinder (EKC) is a leader in the industrial and CNG cylinders manufacturing business in India. It commands an overall market share of 85% in CNG cylinder industry & is well placed to tap the growing market for environment-friendly Compressed Natural Gas (CNG) applications.

Everest Kanto Cylinder - Best Mid Cap Stock To Buy Everest Kanto is one stock where clearly the world is moving towards CNG and Everest Kanto is one of the largest players there in that space.

If you look at the domestic market too, GAIL city gas project is coming up so overall the industry fundamentals are quite good.

CNG is a source of mobile-energy, which can be easily supplied on a mass scale at affordable prices. Due to its inherent clean properties, the substitution of petrol & diesel by CNG is advantageous in not only enhancing energy security but also in cutting harmful GHG emissions.

Roughly 800,000 vehicles in Pakistan run on compressed natural gas (CNG). Each needs a specialised cylinder where the CNG is stored under high pressure. And, an Indian company — Everest Kanto Cylinders — is controlling 65 per cent of this market.The company makes CNG cylinders in India and Dubai and sells them in Malaysia, Thailand, several Gulf countries and CIS nations, besides Pakistan.

Market Cap 2,228.00
EPS (TTM) 3.68
P/E 59.85
P/C 37.20
Book Value 42.80
Price/Book 5.15
Div(%) 60.00
Div Yield(%) 0.54
Market Lot 1.00
Face Value 2.00
Industry P/E 27.36

In terms of valuations you have this stock which is going to be growing at 20-25% CAGR (Compound Annual Growth Rate) for the next 2 years and available at somewhere close to 9x-11x FY11 multiples. Everest Kanto cylinders should catch up with the other midcaps sooner or later.

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