Sundram Fasteners soars on plans to make its biggest capital investment in 2011-12

Sundram Fasteners is currently trading at Rs. 48.20, up by 0.80 points or 1.69% from its previous closing of Rs. 47.40 on the BSE.

The scrip opened at Rs. 48.00 and has touched a high and low of Rs. 48.50 and Rs. 47.55 respectively. So far 5,209 shares were traded on the counter.

The BSE group 'B' stock of face value Rs. 1 has touched a 52 week high of Rs. 76.50 on 12-Nov-2010 and a 52 week low of Rs. 43.15 on 11-Jun-2010.

Last one week high and low of the scrip stood at Rs. 49.00 and Rs. 46.00 respectively. The current market cap of the company is Rs. 1013.87 crore.

The promoters holding in the company stood at 49.53% while Institutions and Non-Institutions held 18.32% and 32.15% respectively.

Sundram Fasteners (SFL) part of the TVS group, will be making its biggest capital investment in 2011-12 in an attempt to target the wind energy and automotive segments with new products. SFL plans to step up its capex to nearly Rs 200 crore, a third more than 2010-11, with significant sums allotted for making wind turbine fasteners and bevel gears.

On the other hand, the company is also tapping the know-how of two of its overseas arms to launch these products. While it is likely to use the technology of its German subsidiary Peiner Umformtechnik GmbH to make wind turbine fasteners, its UK arm Cramlington Precision Forge will transfer technology for the manufacture of bevel gears.

The wind turbine fasteners facility, in which SFL plans to spend up to Rs 50 crore, would be coming up near Puducherry by August, this year. Both the products would be marketed for the local as well as overseas markets. The company is also upgrading the existing mills with higher production capacity and which would create demand for such fasteners. Currently, it has 23 factories, including 20 in India.

The company has reported a net profit of Rs 28.01 crore for the quarter ended December 31, 2010 up by 30.58% as compared to Rs 21.45 crore for the quarter ended December 31, 2009. Its total income from operations has increased by 29.37% to Rs 465.49 crore for the quarter ended December 31, 2010 from Rs 359.82 crore for the quarter ended December 31, 2009.SFL’s product range consists of high-tensile fasteners, powder metal components, cold extruded parts, hot forged components, radiator caps, automotive pumps, gear shifters, gears and couplings, hubs and shafts, tappets and iron powder