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Sunday, April 15, 2018

Birla Precision Technologies: Comeback kid!!

Birla Precision Technologies
CMP: 8.17
Market Cap: 43.02Cr
Sales: 155.37Cr (March 2017)

Birla Precision Technologies Ltd (BPT) the erstwhile Birla Kennametal Ltd was established in 1986, as a joint venture company between YBG (Yash Birla Group) and Kennametal Inc, USA In July 2007. YBG acquired the stake of Kennametal in the JV consequent upon which Birla Kennametal was renamed as “Birla Precision Technologies” (BPT). BPT continues to be a primary vendor of Kennametal worldwide –USA, Germany and APAC supplying rotating tool holders in AT3 class. Besides, BPT also exports in a large way to other major customers in the USA, Europe and in recent times to the Far East including China

Leveraging its core competency of machining, forward integration into machining of precision components and castings was a natural progression and catering to global giants like Cummins, Knorr-Bremse, Husco International .

Yash Birla Group sold its Dagger Frost cutting tool division to Samvardhana Motherson Group (SMG) in 2009 .. though the remains of the cutting tool business with Yash Birla Group is a division of Birla Precision called "Indian Tools Manufacturers" https://www.indiantool.com/

The other division is: Birla Kennametal division which makes rotating tool holders AT3 Class.. Here Kennametal shareholding has been bought by Yash birla Group and name of the company was changed from Birla Kennametal to Birla Precision Tools. http://www.birlaprecision.in/index.html

The third division is "machine casting division" which makes Automotive components and exports it to automotive customers like Cummins and Honeywell.. this division was done in collaboration with "Perucchini of italy"

Birla Precision had debt restructuring and as part of it all companies related to automotive tools have been merged into Birla Precision as separate divisions mentioned above.. (consolidation of business) 

Now the promoters have recently (April 13,2018) passed a resolution for preferential allotment of shares to promoter company in Birla Precision. 

The company shares are also at rock bottom prices and turned bullish (golden Cross)

Conclusion: Book value is 18, cmp is: 8.17 and has recently shown some movement..
Considering the consolidation of all automotive and tools related business with Birla Precision and the subsequent preferential allotment to promoters.. Birla Precision looks like a long term bet on the Yash Birla group turning the company profitable.. Birla Precision has all the right ingredients just needs to think big.. and work towards it.. Invest is my view..

PN: this is not an investment advice.. it is my though process and a timeline for my point of view.. Pls consult a SEBI registered advisor.. and do your own deep dive..
=happy investing


Freefield said...

Yash Birla is not a trust worth person

Freefield said...

Atleast a promoter

What'sUp Prahalad said...

Yash Birla's Son Vedant Birla is running the company.

=happy investing

Naina Agrawal said...

A good research has been done on birla company

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