Guindy Machine Tools (GMT), established in 1959 and based in Chennai, specializes in manufacturing manual and CNC lathe chucks, metrology equipment like surface plates, and machine tools including flat lapping machines and belt grinders. GMT is the sole Indian supplier of robust cam-operated manual chucks and represents Berg Spanntechnik, Germany, for clamping technology in India.
Revenue Growth: The company's revenue increased from ₹37 crore in FY22 to ₹41 crore in FY23, marking a growth of approximately 12%. Revenue is predominantly derived from chucks, chuck components, and other machinery, which constitute about 90% of total earnings.
Profitability Ratios: Company has reduced its cost of goods sold as % of sales from 24% in FY22 to 18% in FY23, this has increased the net profit margin of the company from 12% in FY22 to 14.6% in FY23.
Strong customer base: Backed by strong customers such as Manukraft Technology Pvt Ltd, QCE Designers, Galaxy, Mahindra 2 Wheelers, Honda Power Products, Baltibo, Ratco (with a tagline ‘Engineering Excellence & Innovation’), Arbomex.
The company is virtually debt-free.
Investment Thesis: The company has experienced growth of nearly 5% over the past five years. This slower growth rate can be attributed to the impact of the COVID-19 pandemic in 2020. Prior to the pandemic, the company achieved a compound annual growth rate (CAGR) of 16%. However, from FY21 to FY23, the company rebounded strongly, posting a remarkable CAGR of 61%. Additionally, the company has approximately ₹19 crore in idle cash.
Currently, the company appears to be fairly valued with an EV/EBITDA ratio of 12.8x, which is slightly higher than the peer average of 12x. Based on this valuation metric, the company's share price is expected to range between ₹340 and ₹370.
Quantity
Invest
, Min. Investment: ₹