Tuesday, April 20, 2010

BANCO PRODUCTS:VERY HIGH VALUATION



Ksushik ji,
what are your views on Banco Products for over 1-2 years investments.

Amarendra bhaskar


1. Banco products are an auto and engine parts company with 2 rupees face value.
2. Book value of banco products is 23.64 only and year low is 20 currently traded at 98 near about his year high of 104.
3. I can not understand that why you like investment in such company traded near about his year high.
4.EPS of banco products is 5.80 and currently traded at P/E of 16, not very high P/E but such type of low book value and low face value share is not attract to me.
5. Banco Products (India) Ltd has informed BSE that:

"With reference to news item appeared in a leading financial daily titled "Maruti takes 1-lakh A-Stars off the roads", where in Banco Products (India) Ltd, has been mentioned as supplier of gaskets to A-Star model. Banco Products (India) Ltd. clarifies that the Company has been supplying gaskets for various models of Maruti Suzuki India Ltd. Gaskets are made based on the technical specifications given by the OEM. We only supply gaskets to models for which we have approvals from OEMS.

In this case, we are not suppliers of the specific gasket fitted in recalled A-star model. The company also further clarifies that there will not be any claim on the company, as the company has not supplied the gasket fitted in A-Star model".
6. So I think after cool down auto rally this share will automatically cool down and good entry point for this share is below 40.
7. my holding is zero in this company

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