Asian Electronics Ltd.(AEL) is into design, manufacturing and marketing of energy efficient products. It offers efficient and high quality luminaries for applications in the domestic, corporate, industrial, floodlighting, landscaping areas and for special applications as in clean rooms in the pharmaceutical industry.

 

Current Price – Rs.1028

Market Cap – Rs. 1475 Crs

EPS – Rs.47.87 for FY07 (Rs.28.13 for FY 06)

 

In early July, AEL acquired Green Hydrocarbons Pvt.Ltd and the operations division of US Intruments Pvt. Ltd. The company has also formed a joint venture with Cimelia Resource Recovery Pte.Ltd, a 100% subsidiary of Enviro Hub Ltd., listed on the Singapore Stock Exchange. What is AEL gameplan? Green Hydrocarbons is in the business of converting waste into energy. According to AEL, the conversion can be 100%. AEL expects that in the next two-three years it can generate 800 MW of energy from this process, which will add more than Rs.1000 crore of revenues. Cimelia deals with e-waste management. Spread over 200,000 sq. ft it is the largest e-waste management facility in Singapore with a capacity to recycle about 25000 tonnes of e-waste per annum. This JV will combine AEL’s plastic-to-fuel technology with the strong corporate brand name of Cimelia to sell this technology in eight eight countries from Far East Asia to Brazil.

 

This technology is not a pie in the sky. It has been developed by Prof Alka Zadgaonkar, head of Dept. of Applied Chemistry at the Nagpur based GH Raisoni College of Engineering. She has invented an environment friendly process for disposal of waste plastic by using ‘catalytic-additive’ which is different from the generally existing pyrolytic processes. The process yielded liquid hydrocarbons, gas and residual coke. This process was subsequently tested and enhanced by the R&D department of Indian Oil Corporation and applied on a commercial basis with funding from SBI. AEL is making machinery for this breakthrough project. The patented process has undergone rigorous testing to ensure zero emission. The process operates in a closed loop and is therefore 100% eco-friendly, causing no pollution in any form to the environment. The hydrocarbon generated is apparently very rich in calorific value. It has as much as 11000 kcal in liquid form and upto 25000 kcal in gaseous form, totaling approx. 13000-14000 kcal per kg of plastic. It can be used for generation of power or for transportation with modification. It can also be used for downstream operation in refineries or in the plastic industry. AEL has two JVs with Home Solutions (Future Group)

 

Meanwhile, AEL’s lighting business is doing very well. It had an order book of Rs.400 crore as the end of its March quarter. Its recent growth has been very strong with revenues growing at an average of 88% over the past fice quarters while operating profit grew by 78% over the same period. AEL’s operating margin is healthy 19%. For the year ended March 07, AEL’s turnover had jumped 140% and net profit was up over 165%.

 

Given the high price of oil and rising cost of all forms of energy, energy saving is a hot area. AEL is the only listed company focused on technology driven energy efficient products. And now, if this plastic to energy technology turns out to be viable on a larger commercial scale, the stock can go a long way.

 

ABN AMRO MF seems to be the most bullish on this stock.

 

For more visit http://www.aelgroup.com/

 

Source: Moneylife

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Comments welcome from TEDdies...I know us121 and kaizen are holding this stock..

Devesh ji,

Edited by omshivaya - 22/Jul/2007 at 11:02pm

Well, this is one of my early exist.  missed multibagger , I sold at 520  with a resonable profit , its very true that one has to hold winners . Th company fundamentals are good and definatley will give good returns (But also remember the stck has run up a lot already !!) Best time is to buy during market crashes !!1

Shivanand Mankekar is invested into this one -----------------------------------------------------