INSUBCONTINENT EXCLUSIVE:
This company with a diversified auto ancillary portfolio has been quietly creating wealth for investors for some time now.
Take this: An
investment of just Rs 10,000 in Rane Holdings on April 1, 2013 would have become over Rs 1,50,000 today.
Both fundamental and technical
analysts believe the ongoing momentum on the stock has a lot of steam left
The government plan to make airbags compulsory in the near term will be a huge bottom line booster for Rane Holdings.
The company offers an
subsidiaries and JVs, such as Rane Madras ( (RML), Rane TRW Steering System (RTSSL) and Rane Steering Systems (RNSSL).
With expectations of
airbags becoming mandatory for any type of PVs in India over the next one or two years, airbags could be a strong growth opportunity for
RTSSL.
Due to its existing relationship with OEMs and technology support from TRW, RTSSL should be able to capture a major chunk of that
opportunity, says domestic brokerage Chola Securities.
Shares of Rane Holdings (RHL) have jumped 1,430 per cent to Rs 2,449.65 as of March
28, 2018 from Rs 160.10 on April 1, 2013
target price of Rs 3,183.
For the quarter ended December 31, 2017, the company posted a consolidated net profit of Rs 45.50 crore, up 108
per cent from Rs 21.35 crore reported for the corresponding quarter last year
Net sales increased to Rs 570.05 crore from Rs 524.63 crore.
The company has more than doubled its bottom line during the financial year
ended March 31, 2017, reporting a net profit of Rs 136.82 crore for FY17 against Rs 65.54 crore a year ago and Rs 71.72 core five years back
in FY12.
Net sales have jumped 10 per cent annually (CAGR) over the past five years
share of international business from 21 per cent of revenue in FY17 to 25 per cent by FY20E
up to 900 per cent, other group firms including Rane (Madras), Rane Brake Lining and Rane Engine Valve have also delivered multibagger
returns to investors over the past five years.
Shares of Rane Brake Lining have jumped 894 per cent to Rs 934.80 as of March 28, 2018 from
Rs 94.05 on April 1, 2013
Rane (Madras) and Rane Engine Valve have climbed 603 per cent and 204 per cent, respectively in this period.
The company management is
exploring multiple avenues such as strengthening of USA business with more hirings, stepping up direct exports to OEMs, taking assistance of
JV partners to boost overseas sales and fast establishing presence in global replacement markets.
Institutional investors look bullish on
Domestic fund houses like Sundaram Mutual Fund, UTI Mutual Fund and LT Mutual Fund held nearly 10 per cent stake in the company as of
December 31, 2017, shareholding data shows.
The stock is looking good on technical charts, says Milan Vaishnav, Technical Analyst, Gemstone
Equity Research and Advisory.
The stock presents a buoyant picture for short to medium term
After sideways consolidation for almost a year and a half, the stock is in an upward rising channel for almost two years now since mid-2016
It has rebounded from the 20-period moving average and shown resumption of the upward move
The lead oscillators are favourably placed and the stock seems to have 10-12 per cent upside potential, says Vaishnav.
Mazhar Mohammad,
Investors can keep stop loss below Rs 2,240 on a closing basis, Mohammad said.
