Patels Airtemp

Patel’s Airtemp Limited – a small dividend paying company having a good business model

Patel’s Airtemp Limited a dividend paying company having a Marketcap of just Rs.36 crores is engaged in the fabrication of heat exchangers and chilling systems.

The company generated sales of Rs.78 crores in FY2011 as against revenues of Rs.72 crores in previous fiscal. PAT was marginally higher at Rs.8.87 crores in FY2011 as compared to Rs.8.68 crores in FY2010..In Q4FY11 the revenues were Rs.27.17 crores as compared to Rs.21.24 crores in Q4FY2010. The company’s profit margins are in the region of 8 to 13 per cent.

Buzz is that company’s Order Book in current fiscal Fy2012 is over Rs 1 billion

Given its low debt-equity ratio of 0.35:1, a dividend yield of 2.75% and a healthy ROE of 32% , the stock`s valuations appear to be quite attractive.

The Board of Directors of the Company has recommended dividend Rs. 2.00 per share on the share of Rs. 10.00 each @ 20% on the equity shares for financial year 2010-11.Patels Airtemp India Ltd has informed BSE that the Register of Members & Share Transfer Books of the Company will remain closed from September 23, 2011 to September 30, 2011 (both days inclusive) for the purpose of Payment of Dividend & Annual General Meeting (AGM) of the Company.

Whilst the company has a robust business model that can only get better when huge investments are made in the Oil and Gas sector, the low promotor’s holding at 38 per cent is a matter of concern.

Dated: July 21, 2011