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Friday, September 10, 2010

Pitti Laminations: June Results Review: Strong Buy!!

Pitti Laminations (CMP: 43 Market Cap: 40.6Cr)
We will review Pitti Laminations June 2010 Results..

1. PBDIT Margin for June is: 13.80% which is a contraction over Dec 2009 Margin 17.10% with increase in topline.
2. Interest Payments have also dropped by 149bps (1.49%) which is a very good sign.

Looking at the larger picture also we can see that Pitti laminations is already set for a positive future..

Margin Expansion in March 2010 (15.41%) as compared to March 2009 (10.23%) ie increase of  518bps (5.18%)
If we compare the margins for latest quaterly results (PBDIT=13.80% ) March 2011 Margins should be close to 14% a slight drop which indicates cost pressures but with increasing topline.

Conclusion: The one time expenses of year ending March 2010 is keeping the data fudged.. Pitti laminations margins are being maintained but cost pressures can be seen in the latest quaterly results. In June Quarter the margins have reduced and topline growth though an improvement is not stellar. We have to keep a strict watch on the margin picture as well as growth in topline for future quarterly results. Pitti is on its way to report an improved +ve bottomline for the year end March 2011 (due to zero exceptional expenses) 

Pitti is a long term value buy with SIP investment on dips and a close watch on future margins and topline growth.

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