Grauer and Weil  is a market leader in metal finshing sector. Listed on bse indonext, code no 505710.  Cmp 67.

Catering to almost all the companies in the automobile industry, GWL is among the larger manufacturers of electroplating chemicals and equipment.

Taking into account the turnaround  in the auto industry  Grauer is likely to benefit as an auto ancillary play.

Business: The  company derives about 85 per cent of its revenues from the chemical division. It supplies finishing chemicals and technology to companies such as Hero Honda, TVS, Bajaj Auto, Escorts, Sundram Fasteners, Atlas, Hero Cycles, Siemens, L&T Defence and Railways. The company has about 45 per cent market share.

GWL's engineering division caters to the auto industry and also to companies engaged in metal finishing. It derives about 15 per cent of the revenues from this division.

Export : Having captured most of the market share in the domestic market, GWL is focussing on exports, which would be its growth driver.

GWL has a range of collaborators — Serfilco of US, NDS of Japan, Hawkings Corporation of UK and Utikal of Germany — from whom it sources technology. The company also has a joint venture with Goema of Germany for developing recovery systems and effluent treatment systems. This has helped GWL to expand its product range.

The company has also established a subsidiary Grauer and Weil Shanghai to try and establish itself in China.

Value additions: GWL has been attempting to move to the upper end of the value chain, where margins are better.

It has introduced a number of specialty metal-coating chemicals such as Koalex, Superspec and Ginplate over the year. GWL has also made a successful foray into niche markets of top coatings and final finishes.

Recently Grauer merged Bombay Paints with itself and the merger ratio was 1:1. And following this the equity increased from 12.79 to 22.67 crores and promoters stake rose from around 50 % to 69%.

DEBT IS AROUND  90 CRORES AS ON MARCH 09.

MARKET CAP IS AROUND 152 CRORES.

The company has started a plant in Jammu and it has commenced commercial production since June 09 and it will help the company avail tax benefits.

REAL ESTATE VALUE:

GROWEL 101--- KANDIVALI, MUMBAI

The company has Growel 101 mall which is a functional mall with a  total planned capacity of 7.5 lac sq ft area in phases. Phase I with 1 lac sq ft is operational since 2005-06 and second phase of 3 lac sq ft is nearing completion.  So effectively, around 4.5 lac sq. Ft  area is available for use.

POONA BOTTLING LIMITED

This is a subsidiary of the company which catered to bottling for Pepsi and other companies but is more important for its real estate value.

TECHNICAL VIEW:

The stock has been in a consolidation phase since June 09 in an ascending triangle and recently gave a breakout to post a high of around 85 and since then has come down to current levels of 66-67.

All time high was 218 around Nov 07 and since then the stock has been in a downtrend.

VALUATION:

LOOKING AT THE VALUE OF REAL ESTATE AROUND 7.5 LAC SQ FT IF CONSERVATIVELY VALUED AT AROUND 5000 RS PER SQ FT THE VALUATION COMES TO MORE THAN 350 CRORES AND IF POONA VALUE IS ADDED THEN IT INCREASES SOME MORE.

TOTAL MARKET CAP IS AROUND 150 CRORES AND IF ONE ADDS DEBT OF AROUND 100 CRORES, THE BUSINESS OF THE COMPANY IS THERE FOR FREE WITH SOME CHANGE TO SPARE.

Any one with any further info kindly share it.

Disclosure: I hold a small position in the company.