Equity research report on Gujarat Rodrel Engg. Products Ltd.; The Institute of Chartered and Financial Analysis of India (ICFAI)

Abstract

Gujarat Rodrel is the flagship company of the GR group of industries. It is primarily in the manufacture of laminated leaf spring for automobiles and is a major supplier of leaf springs to various State transport undertakings and it’s brand "Panther" is well known in the replacement market. The company has secured export orders from M/s UCF America Inc. for the supply of leaf springs ta the USS. The company is a closely held family concern with the promoters holding a controlling stake of about 42 % and it went in for a public issue in 1994. The company’s works are located at Halal 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 125 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 but sales and profits suffered in 1993-94 due to labour unrest. EPS of the company is 2.0 which i5 within 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.