Query: I have 200 shares of Sundram Fastners @85/-, Will I ever get my price back? this share has been a constant downtrend despite the company making good profits. Mukul KulshresthaThebullishtrends: Sundram Fastners(CMP Rs.59.40) is a flagship company of US $ 3 billion TVS Group it crossed in 2007 revenue - Rs.1577 crore(US $ 364 million). Sundram Fastner is Manufacturer of automotive and engineering components.
The company products inculdes Fastners,Radiator Cap,s Gear shifters,Powder Metal Parts, Cold Extruded Parts, Hot Forged Parts including Pumps and Assemblies. Sundram Fasteners recently announced that the company acquired 100% equity share capital of Upasana Engineering, a step-down wholly owned subsidiary from Sundram Fasteners Investments, a wholly owned subsidiary of the company.
Consequent to acquisition of the equity shares, UEL has now become a wholly owned subsidiary of the company with effect from Dec. 12, 2007. Upasana Engineering is engaged in the business of manufacture spokes and nipples, tools and other and components at its two units located in Chennai and Hosur, both in the State of Tamil Nadu.
Recently Sundram Fasteners Limited has established a manufacturing facility with an initial investment of around Rs. 30 crores in Pantnagar, Integrated Industrial Estate, Rudrapur, Dist Udam Singh Nagar, Uttarakhand, for the manufacture of high tensile fasteners, powder metal parts, water pumps and oil pumps. The commercial production has commenced from 1st December 2007. Pantnagar unit will cater to the requirements of Tata Motors, Bajaj Auto, Mahindra & Mahindra and other customers located in the northern region besides servicing after - market requirements."
Having good fundamentals but the stock price is declining why it is like that? yes we have answer for this question, when you observed its last quarter results the sales turnover is decling on Q on Q basis but at the same time the company improved its operating profit from Rs.26.18 Cr (Mar'07) to Rs.40.10 Cr not only this the netprofit is compared to last year the same quarter. Sundram Fastners is having sound promoter back ground hence one cannot expect abnormal declining in share price. But the companie's recent unit at Pntnagar has started it's operations in Dec'07 it will slowlyimproves Sundram Fastners bottom level performance.
Technically the share price is in downward position but you need not get panic about this down trend wait for 3rd Quarter results.
