Small-cap idea: Samkrg Pistons and Rings
The auto sector has been impacted by the demonetisation drive and some analysts we spoke to, confessed that they had not factored in the cash component in the sale of motorbikes. While exploring companies which are in the auto ancillary business, we came across Samkrg Pistons and Rings. The company manufactures and markets a wide array of engineered pistons, piston pins, piston rings and circlips for the automotive markets.
Headquartered in Hyderabad, the company has one of its plants near Hyderabad and two in Srikakulam, close to Vishakapatnam, which is one of India's biggest sea ports. The company has been a strong leader in the OEM (original equipment manufacturer) for automobiles and also the aftermarket of domestic and overseas markets. The healthy mix of business in both India and abroad ensures that Sam Pistons maintains its profitability in economic downturns, making it a stock to consider investing. Add to it, the company has maintained a strong commitment to customer service and innovation which has made it a leader in the automotive markets.
Financials
The shareholding pattern is skewed to promoters holding nearly 70 per cent of the stocks, with domestic institutions being the next big chunk. The company is almost debt-free with steady increase in profits and reserves. The share price was Rs 197 on Jan 18 with a PE of 12, which makes it attractive. Market-cap of Rs 194 crores makes it an interesting stock idea worth exploring.