Equity research report on Gujarat Suspenstion Ltd.; The Indtitute of Chartered and Financial analysts of India

Abstract

Gujarat Suspension is one of the companies of the GR group of industries. It is primarily in the manufacture of laminated le Springs for automobiles and is 4 major supplier of leaf springs to various State transport undertakings. The company has secured export orders for the supply of leaf springs to the USA. The company is a closely held family concern with the promoters holding a controlling stake of about 40 % and went in for a public issue in 1991. The company’s works are located at Halol which is about 42 Kms from Baroda and is a fast developing industrial area. The plant of the company is modern and well equipped, even though the manufacturing process is basically low tech. The company is small in size with about 77 full time employees and is run like a typical family owned concern where all strategic decision making is centralised. The management style of the company is entrepreneurial through relationship building with its employees on a personalised level. The company’s liquidity and leverage positions are good and sales and profits are increasing. Margins are improving and = so are the turnover ratios. EFS of the company is 1.2 which is lower than the range of the industry players. The expected automobile boom and the increases in exports augurs well for the company as it already has a presence in the export market.