BUY

Price ` : 144.4
Target: SIP Pick

1st February 2011 Capital Goods Sanghvi Movers Limited

Company Background STOCK INFO

Sub- Sector Equipment Lending
Sanghvi Movers Limited (SML) is India’s one of the largest crane hiring company, 3rd

COMPANY REPORT
Listing BSE/NSE
largest in Asia and ranked 9th largest in the world. The company owns a fleet of over 340
medium to large size cranes with capacity ranging from 20 tons to 800 tons. BSE Code 530073
Bloomberg Code SGM.IN
It provides its material handling services through its various depots present across several
Face value (`) 2.00
states to sectors like power, wind mills, refinery and ports, among others.
Sensex (February 1, 2011) 18,022.22
Business Verticals Market cap (` Cr.) 640.00
Free float (%) 55.27
For H1 FY11, of the company’s total revenue of ` 174 crs the segment wise client 236.50/142.1
52 week H/L (`)
contribution are as follows:
Beta 0.45
Exhibit: S egmentwise Revenue
Debt-Equity 1.12
Others
Metal 7.00% As on 30.09.2010
10.00% Power No. Of Shares 43288000
28.00%

KEY FINANCIAL RATIOS

Refinery
14.00% EPS FY10 (`) 20.89
EPS TTM (`) 21.80
BV FY10 (`) 108.49
Cement Wind Power
17.00% 24.00%
Price/Earnings (TTM) 6.6
Power Wind Power Cement Refinery Metal Others
Price/BV (FY10) 1.33
Source: Company Dat a, MPA Finsecurit ies

Dividend Yield (%) 2.1

What’s the Theme? PRICE PERFORMANCE (%)

We believe that the theme behind SML is its dominance in the Indian cranes lending Time Frame Stock Sensex
segment and with further gearing up in infrastructure and power projects the company is
well poised to benefit from the same 1 Month -17.51 -12.35
3 Months -20.59 -11.46
The key theme for investments are:
1 Year -37.61 2.64
3 Years -54.04 -11.22
 SML’s diversified fleet of cranes at major strategic locations gives an added advantage
over its peers and help it save time and cost in movement of cranes and boost bottom-line

 Credible clientele like L&T, Vedanta, ONGC, Reliance, GE Power, NTPC, etc. who are SHAREHOLDING PATTERN (%)
slated to increase their capex sending to offer further growth momentum to SML’s Promoters 44.73
revenue FIIs 21.98
DIIs 5.97
 Planned capex of over ` 134 crs in FY11 and ` 600 crs in the next 2 years will
Retail 9.03
allow SML to take advantage of increased spending in the 12th Five year Plan
Others 18.29
 Despite its strong expected growth the stock is trading at P/E only 6.6x (ttm)

Risks Rahul Sonthalia

rahul@mpafinsecurities.com
Slowdown in economy resulting in delay in infrastructure spending and could hurt its
utilization levels and hike in interest rates could have downside effect on profitability
MPA Finsecurities Private Limited Refer Last Page For Disclosures For Private Circulation Only
Management

COMPANY REPORT
Company is managed by qualified professionals who have vast experience in the field of
steel, power, real estate and allied industries.

Exhibit: Top Management

Name De signation
Mr. C.P.Sanghvi Chairman & MD
Mr. Sham D. Kajale ED & CFO
Mr. R.S. Desai ED
Source: SML, MPA Finsecurities

Financials:

Exhibit: Key Financials

Particulars FY2008 FY2009 FY2010 H1 2011
Net S ales 254.32 357.50 331.53 174.40
EBIT M argins (%) 55.64 58.80 55.90 53.45
PAT 72.75 101.05 90.42 48.54
PAT M argins (%) 28.61 28.27 27.27 27.83
Diluted EPS 16.81 23.34 20.89 11.21
P/E (x) 12.55 3.03 9.93 15.92
Paid up Capital 8.66 8.66 8.66 8.66
Networth 303.62 394.35 469.63 518.16
Total Debt 370.86 499.32 474.47 578.84
Net Block 559.77 807.88 879.69 960.27
Debt / Equity Ratio (x) 1.22 1.27 1.01 1.12
ROCE (%) 24.40 26.81 20.17 5.73
ROE (%) 28.67 28.96 20.93 19.66
Source: ACE Equity, Company Data, M PA Finsecurities

Valuations:
Moreover it is trading at only 6.2 x its FY11
At the current market price of ` 144 the stock is trading at only 6.7 x its trailing twelve expected EPS of ` 23/share and 5.2 x its FY12
months EPS despite given its strong earnings growth CAGR of over 21% in the last 4 expected EPS of ` 27.6/share, despite expected
years and robust business model. earnings growth of 15% in FY11 and around
20% for FY12.
Moreover it is trading at only 6.2 x its FY11 expected EPS of ` 23/share and 5.2 x its
FY12 expected EPS of ` 27.6/share, despite expected earnings growth of 15% in FY11
and around 20% for FY12.

Thus we believe that the stock has good upside potential, however due to current
volatility in market the stock should be added in SIP format with over 2-3 years of time
horizon in the investment portfolio.

MPA Finsecurities Private Limited Refer Last Page for Disclosures For Private Circulation Only
 COMPANY REPORT
DISCLOSURES

This document was produced by MPA Finsecurities Private Limited ‘MPA’. The document is being furnished to MPA clients for their information
purposes only and is not an offer or the solicitation of an offer, to buy or sell a security. This document is not to be relied upon or used in
substitution for the exercise of independent judgment.

Information and opinions contained herein have been compiled or arrived by MPA from sources believed to be reliable, but MPA has not
independently verified the contents of this document. Accordingly, no representation or warranty, express or implied, is made as to and no reliance
should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this document. MPA accepts
no liability for any loss arising from the use of this document or its contents or otherwise arising in connection therewith.

We and our affiliates, directors, and employees worldwide may: (a) from time to time, have long or short positions in, and buy or sell the securities
thereof, of company (ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company (ies) discussed herein or have other potential conflict of interest
with respect to any recommendation and related information and opinions.

It is being furnished to MPA clients for their information purposes only and may not be reproduced or published in any media, website or otherwise,
in part or as a whole, without the prior consent in writing of MPA. Persons who receive this document should make themselves aware of and adhere
to any such restrictions.

ADDRESS

# 32, Harish Mukherjee Road, Kolkata – 700025

Tel: +91-33-24191901 /02/03/04

Fax: +91-33-24191905

For further queries you can mail us at rahul@mpafinsecurities.com

MPA Finsecurities Private Limited Refer Last Page for Disclosures For Private Circulation Only