CENLUB INDUSTRIES LTD (522251) - STOCK OF THE WEEK

Dear Investors, Today I am expressing my view on one Industrial machinery segment stock.

CENLUB INDUSTRIES LTD (522251)

Cenlub Industries Limited (CIL) is engaged in the manufacture of centralized lubrication systems for machinery, plant and various manufacturing industries. The Company was incorporated in 1977 as a proprietorship firm named Cenlub Engineers. Company has become public under the Companies Act, 1956 by Registrar of Companies, Delhi & Haryana in the year 1992.

Lubrication is a prime requirement for all machines, equipment’s or plants as it adds to the life and efficiency of the machine by reducing wear and tear of its parts. The lubricating oil forms a film between the moving parts which results in lesser friction and correspondingly less heat generation in the machine, thereby keeping the working temperature of machine parts within safe operating limits. Wear and tear of parts is thus greatly reduced resulting in fewer breakdowns, greater machine utility, lower maintenance cost and longer machine life.

CENLUB is synonymous with CENTRALISED LUBRICATION answering to all problems related to friction in machines, plants and equipments.

The Company has three independent manufacturing units. Company is having its manufacturing plants in Faridabad, Bangalore and Rajkot.

Apart from the three plants, CIL is having 17 offices all over India to take care of Sales and Service i.e. Aurangabad, Ahmedabad, Bangalore, Bhuvaneshwar, Dhanbad, Chandigarh, Chennai, Coimbatore, Faridabad, Hyderabad, Jamshedpur, Kolkata, Mumbai, Pune, Rourkela, Rajkot and Visakhapatnam.

PRODUCTS

Company manufactures number of equipment’s in the field of lubrication. Following are the some of them.

Single Shot Centralised Lubrication System for MACHINE/MACHINE TOOLS is an efficient and safe method for a predetermined amount of oil to be delivered at various lubrication points of a Machine/Equipment from a centralised source. It is a TOTAL LOSS SYSTEM and does not require any return line for collection of used OIL.

Manual Pumps Motorised Pump Metering Cartridges Manifolds Fittings & Tubings Controllers & Timers Manual Pump: Company is having mainy 8 variety of this type of products for various applications and duty. It is generally used in any manufacturing industries and they are hand operated. It has a reservoir to fill the lubricant each model is having different capacities of the lubricant storage. Motorised Pump: This is electrically driven and automated lubrication system. Which does not require human intervention regularly. Here also different models are being manufactured by CIL for different applications. Apart from this company assembles the accessories which are required for these system which mainly includes, Cartridges, manifolds, fittings and controllers. Dual Line Lubrication system: This is much more mechanized way of lubricating the equipment’s. This has mainly two types Loop type and End type and having seven different models in it. Company is serving to the following industries and their major clients are as follows. MACHINE TOOLS Practically all the machine tool manufacturers, particularly CNC machine tool manufacturers have adopted our system as Original Equipment, some of them are Batliboi, HMT, Windsor ACE Systems etc.  STEEL PLANTS CIL supplying Centralised Lubrication System to various steel plants and have proven record for the same. Some of  major customers are - SAIL, JINDAL ,TISCO, ELECTROSTEEL, MUKUND and many more SPONGE IRON PLANTS Recently there is a boom in Sponge Iron Plants and all manufacturers are born for CIL  products. Company fully equipped with to meet the lubrication requirement of this segment. Some of  major customers are - JINDAL, ANKIT METALS & POWER, NRSPONGE and many more. CEMENT PLANTS CIL supplying lubrication systems to various Cement Plants and have proven record for the same. Some of  major customers are:- ACC, JK, SAGAR CEMENT, SHREE CEMENT, ZUARI, GUJ AMBUJA and many renowned cement industries.  SUGAR PLANTS CIL is  the original equipment supplier to  Sugar Plants in India as well as abroad and some of them are:- AP SUGAR, BAJAJ HINDUSTAN, MAWANA SUGAR, DALMIA SUGAR and many more. POWER PLANTS : CIL serves power plants also major customers are COAL INDIA, NTPC, TAMIL NADU STATE ELECTRICITY etc.  PAPER PLANTS CIL supplying Lubrication System to various Paper Plants, and some of major customers are ANDHRA PAPER, STAR PAPER MILLS, MOHIT papers etc. MISCELLANEOUS: CIL products are extensively used in MARUTI, BOSCH etc. EXPORT Initially for two decades the company was busy in catering to the Indian market and prior to the inception of the company, basically lubrication units were imported. Having catered efficiently the Indian market, the company started contributing to the world market. Now the company is exporting its products to many countries. Company website: Clickhere FINANCIALS AND OUTLOOK Company shares are trading in BSE. Promoter holding in company 43.13% Company posted 11.73 Cr top line in March qtr. Net profit is 1 Cr in the March qtr. Company pasted 35.5 Cr Top line on yearly basis as compared to 31.3 Cr previous year (13.4 % increase YOY basis) - consolidated Profit has jumped to 1.74 Cr from 1 Cr (74 % increase YOY basis) - consolidated Stock is trading low PE (12) as compared to industry PE (28). EPS 4.69 Company is having reducing debt, Debt to equity is 0.7 Stock is trading at Rs 59. Company has shown good performance on YOY basis, operating margins were improved compared to last qtr. Company stock  is trading PE is low as compared to industry. Company’s products are having a huge demand in all major manufacturing sector. New products are having more demand in Sponge iron industries are boost for the stock. Stock will rerate to its industrial peers and industrial segment. Export business is also doing well and continue to do well in future also. By considering above facts and performances stock will definitely bring more returns to investors in coming days. NOTE : THE ABOVE IS NOT A RESEARCH REPORT NOR A RECOMMENDATION  BUT INFORMATION AS AVAILABLE ON PUBLIC DOMAIN.  Registration status with SEBI: I am not registered with SEBI under the (Research Analyst) regulations 2014 and as per clarifications provided by SEBI: “Any person who makes recommendation or offers an opinion concerning securities or public offers only through public media is not required to obtain registration as research analyst under RA Regulations”