Srikalahasthi Pipes Ltd Detail
As per the Company website it is one of the leading manufacturers of Ductile iron pipes (DI) pipes in India. It also offers superior quality foundry grade pig iron, cement and low ash metallurgical coke.
Srikalahasthi pipes is an associate company of Electrosteel casting limited (ECL). It has manufacturing unit in Tirupathi Kalahasthi road in Andhra Pradesh. The Company has build its own sewage water treatment plant, own captive power plant and own limestone mines.
The clients of this Company includes Water and Sewerage boards, Municipal corporations, Railways and State irrigation departments. The products are used in Water infrastructure and Irrigation projects.
Company has capacity of around 3 lakhs TPA DI pipes and flanged pipes.
I have shared long term price performance chart of the Company below.As per Dow theory of technical analysis price performance over a period of time reflects Company state.
Srikalahasthi Pipes Ltd Stock Performance
The Company got listed in year 2007 at listing price of 39. This was not good time to get listed. Soon after listing it touched 100 mark but due to global crisis stock went below listing price. It took 5 years to recover from global crisis downfall.
The stock performed well after 2015 and went close to 400. So on absolute basis stock gave 6 times return to investors. The dividend yield at current market price is good (more than 2%). The Company has given decent return to investors considering no positive growth till year 2015.
Srikalahasthi Pipes Ltd My Opinion
Srikalahasthi Pipes Ltd is a Pipes Company. The product of Company find usage in Drinking water infrastructure and Irrigation projects. These two are required for Agricultural growth and Basic requirement for Human civilization.
India is focusing on drinking water supply and Irrigation both. The water infrastructure is focus area. As of now most part of India does not have drinking water supply and it is huge task to make each corner connected with Supply system.
The Company has major presence in this field. The scope is there for Company to cash in. This will drive growth for the Company. However you also need to see longevity of these pipes. Once the pipes are laid down how often they need to be repaired or better replaced.
The replacement will drive sales if the replacement cycle is less then recurring sales will be more frequently adding to revenue of the Company. It will also make it a cyclic Company with quarters of performance and non performance depending on maintenance orders and new orders.
I am not invested in this sector but the Company looks decent. I will be exploring more about it by tracking it in my watch list..
In case you are interested then you can track the company by adding it to your stock watch list. That way you can keep close eye on the Company.