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Sunday, August 27, 2017

Kulkarni Power Tools: Deep Value.

Kulkarni Power Tools:

CMP: 30.05
MCap: 10.22Cr
Sales March 2017:69.22Cr
Net Profit: -7.16Cr

KPT.. Where Positive Change is the Only Constant

Over the last 25 years, since its inception, KPT has kept pace with change. An in-depth understanding of changing customer requirements has guided us into delivering world-class quality, in the manufacturing and marketing of electric power tools.

The story of KPT goes further back. It was founded in 1976 as a Joint Venture with Black&Decker, USA. The first sign of radical change occurred in 1993, when KPT celebrated its independence.

Today, our state-of-the-art plant at Shirol, Maharashtra, specializes in manufacturing Electric Power Tools, Spares, Control Motors and Blowers.

Over the years, our quality products, supported by our sincere service has helped us garner the faith of many discerning names, as loyal customers.

But for us at KPT, that not a reason to celebrate, but to reinvent ourselves. So that we can address the rapidly changing demands of the 21st century. 

KPT has three Divisions:
  • KPT Blowers
  • KPT Power Tools
  • KPT Shakti Tools
KPT Blowers: In 2004, KPT entered in business to manufacture Roots (Positive Displacement) Blowers / Exhausters. These Blowers / Exhausters are required for Water / Effluent / Sewage Treatment Plants, Pneumatic Conveying Systems, Dairy and Bakery Industry, Petrochemical, Chemical, Fertilizers, Glass, Power Plants, Mining, Agriculture, Food Processing Plants, etc
Applications: 
Ore Processing :- Cake Blowing, Combustion air, Vacuum filtration
Distilleries: - Liquor moving, Conveying Of grains etc.
Fishery :- Aeration of fish Tanks, Removal of eggs from fish, Agitation of washing tanks
Glass : -Pneumatic Convey of vac. Holding of sheet glass for transfer ,Evacuation of test chamber
Steel mills – Blast furnace air supply, coke oven exhauster, fly ash collections, combustion air for open health furnace.
Coal :- Coal Washing, Tunnel ventilation, Dust Collection
Conveying :- Pneumatic, Vacuum, or combination for material such as coal, salt, cement ,sand, feeds, fly ash, sugar, starch, carbon black, transfer material from trucks, hoppers
Food Processing :- Flower / sugar Conveying,
Sugar :- Pneumatic Conveying, sulphdization, Aeration of storage bins, vacuum filtration
Water Treatment :- Saline Water, Desalinization, salt water Desalinization
Sewage: - Aeration in activated sludge plants – Industrial, municipal, communities.

KPT Power Tools:- KPT product range includes Drills, Angle Grinders, Sanders, Polishers, Tile Cutters, Cut-off Saws, Valve Master Refacer's, etc.

KPT products are used in - Bus Body Building, Rail Coaches, Ship Yards, Fabrication Work, Pipe Laying for Refineries, for electrician / plumber / wood working etc.

 KPT Shakti Tools:- KPT introduces a new range of SHAKTI TOOLS & many more...

SHAKTI TOOLS range includes Garden Tools, Pressure Washers, Vacuum Cleaners, Drills, Grinders, Rotary Hammers, Demolition Hammers, Diamond Tools, Wall Chasers, Mixers, Water Grinders, Vibrators, Marble Cutters, Planers, Routers, Trimmers, Saws, Cordless Tools, Car Polishers, Sanders, Bench Top Tools, Detectors, Measuring Lasers and Artisan Tool Kits.

Clients:- Voltas, Infosys, Wipro, Crompton Greaves, Kirloskar, Prism Cement, Aditya Birla Cement, Ambuja Cement, Alstom Projects, Asian Paints, Forbes Gokak, Bhushan Steel, Tata Steel, Siemens, NALCO, NMDC, HEG, INDOFIL, Indian Oil, IPCL(Reliance Industries), Mahindra & Mahindra, L&T, Ranbaxy, P&G, Coco Cola, GSK, Nestle, Jubilant, NTPC, Thermax, BGR Energy, ITC, Rainbow Papers, TNPL, Taj Hotels.

Power Tools, Blowers and spares are the three main segments, Grinders & sanders make up 23% of sales, Root blowers: 18%, Drills :13% (Business activites contributing more than 10% of sales)

KPT exports its products to Middle East, Africa, Nigeria and South Africa, South East Asia and SAARC countries under brand name "POWERMASTER".

Annual Report -2016-17
Annual Report-2015-16
Annual Report-2014-15

KPT seems to be a well run company..reporting losses as promoters are increasing stake in the company..
June 2014: Promoter holding: 43.8%
June 2015: Promoter holding: 48.04%
June 2016: Promoter holding: 48.08%
June 2017: Promoter holding: 48.22%

looking at the Cash Flows from Operations: 10yrs Avg Cash Flows from Operations: +ve 6.95Cr while current market cap is: 10.22Cr (CMP:30.05) The promoters are it seems of conservative in nature...








5 yrs EMA is 36.94 so right now you can buy kulkarni power tools at a price below its 5 yrs avg price of 36.94..














Conclusion: KPT initially started off with Black & Decker and has the right lineage.. with experience they decided to part ways and build their own Power Tool Brand (KPT, Shakti, Power Master).. the company prefers to maintain a low profile.. Power Tools increase the productivity of employees and the country as a whole.. I'm sure as India moves to the next level.. Power tools demand is going to increase through the roof.. and KPT will be there to benefit from it. With GST in place we can expect a more level playing field against chinese imports and KPT and indigenous manufacturers need to lobby for better protection.. I went to a shop to buy a drill and there it was a Chinese drill and it had a market price of 500/- INR printed on it.. I protested to the shopkeeper.. that's its written 500/- and you are saying its cost is 1800/- well he said that to avoid taxes the printed price is always like this for Chinese products.. Players like KPT should step forward and get meaningfull/effective legislation.. well further research landed me to KPT...so some good came out of it..
=happy investing
whatsup-indianstockideas.blogspot.com

5 comments:

Anonymous said...

WhatsUp Ji,

It's a nice small company. Unfortunately, thinly traded.

What'sUp Prahalad said...

initially jayant agro was also a thinly traded company.. now you can buy it on margin at the same margin rate as SBI or godrej industries..
even if you buy kulkarni power tools at upper circuit price.. I think it will still be a value buy..

-happy investing
whatsup-indianstockideas.blogspot.com

Ttk555 said...

There are two stocks where I live kpt and indo count.indo count I went through at glance and amazed that company in my town is in stock exchange.nothing I did.indo count was trading at 70 with no volumes,now a multibagger.kpt son sachin kulkarni my batchmate in school but now no idea where he is.management family is old and conservative.apart from financials you are more aware since I ant read through financial reports.rest time will tell.invested but small qty in kpt,as don't want to miss like indo count.

Ttk555 said...

I could see mr.shyam shekhar used to hold this one in 2014 2015 annual report but sold.

What'sUp Prahalad said...

TTK ji,

thank you for sharing information.. did not know about Shyam Sekhar ji.. also being invested..

=happy investing
whatsup-indianstockideas