Analysis – Garware Wall Ropes
GARWALLROP is engaged in the manufacturing of Ropes & Yarns made of nylon and plastic polymers of various sorts and nettings.
P/E: 9 to 10
P/B: 0.85
D/B: 0.51
Promoter holds 55% of the stock, which is a plus.
Pretty much consistent EPS, except for one quarter in Dec 2008, where it was EPS of -2.05. The growth in revenue or profit growth is not spectacular, but I am analyzing it from Net Assets point of view:
a) Net-Net assets per share: 23 Rs
b) (Reserves – Long term debt) per share: 31 Rs per share
a + b = 54 Rs
Net assets per share: 51 Rs
These caluculations are according to 2009 Annual Report, the last quarter results were inline with earlier results.
So given that share trades about 20-25 Rs above the 54Rs (which is (Net-Net Assets + Reserves) with Debt removed twice, to be conservative), it is a bargain. I went through the corporate announcements and did not find any major negatives.
I have bought a small position and see how the stock moves.
Sealpoint 
And where would be the potential exit point with respect to the valuation metrics?
Soham,
Well the standard answer would be “when the valuations become untenable?” 🙂 But I am still not very sure about it, been thinking about it. Will post it some time.
One thing is sure, If you go by past performance of the stock, it is not in line with the financial performance. It had a price of 200 Rs in 2008 and 50 Rs in 2009 with almost the same fundamentals.
So I wont catch a falling knife and will exit if I see substantial losses, exit on the higher end I am yet to figure out.