Eon Electric Analysis-Part 2

Hello Investors once again,

As I blogged in earlier post, I am positive on Eon Electric as it is terribly undervalued. In this post, I will show some analysis based on their numbers. 

Lets first take the company Advanced Metering Technology Ltd. (ATML).

The company yesterday posted the numbers. Everyone knows the amazing returns share market has in last 1 year and so has the Mutual Funds. The company posted Other Income of more than Rs 6 crores which was. So, even though the market were bleeding real RED today (DOWN 722 pts), the stock was able to close 20% UP. This is the small things that matter to see if the investments done are worth.

Now these companies Eon Electric and AMTL has nice investments already done in Mutual Funds and in fact the value of these funds investments are larger than the company's market cap. 

Looking at Fundamentals now. The promoters have been increasing the holding in the company in last few quarters. They now hold 60% of the company which was 55% in last year.

Sales has been decreasing but over Rs 100 crores in last 5 years.

Pros: 

• Company has reduced debt.
• Company is virtually debt free.
• Stock is trading at 0.19 times its book value
• Market value of investments Rs.174.39 Cr. is more than the Market Cap Rs.66.73 Cr. 
• Promoters increased stake.

Cons:

• The company has delivered a poor growth of -12.08% over past five years.
• Company has shown losses in previous quarters.
• CMD V. P. Mahendru had very optimistic numbers which he has failed to achieve in past.

Products Pros:

• Attached brand value.
• Internet activeness and the brand following .
• Ease of availability of products.
• Sold at higher Price than competitor's price as they with better quality (as mentioned by management personnel).
• Available on all leading e-commerce sites.

Products Cons:

• Branding costs more and so Expenses will increase.
• Marketing Expense will increase.
• One of the JV failed which is why they stepped out of it.

Verdict: So, looking at all the current scenario's quite happy with the price of the stock that it is available at. The chances of the stock moving upwards is much more and go down is much lesser. Once the brand is established, runup will be amazing from here. So recommending this one for Long Term Investment. If the investors find a turnaround story here, the share's original potential will be unlocked.

Links: Videos related to Eon Electric: Eon Electric Videos

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