Move with Sanghvi Movers and keep moving, keep smiling all the way to your bank!

Sanghvi Movers Ltd (SML) was founded in 1989 by C.P Sanghvi and A.P Sanghvi. It is the largest crane hiring company in India and was ranked 19th globally by Cranes International. The company is based out of Pune.The company derives revenue by hiring the following type of equipments:

• Crawler Cranes with Lattice Boom ranging between 65 to 750 MT
• Hydraulic Truck Mounted Lattice Boom Cranes ranging between 125 to 450 MT
• Hydraulic Truck Mounted Telescopic Boom Cranes ranging between 20 TO 800 MT

Thus, SML provides various types of cranes and Logistic Services. SML is a great proxy on the surge in India Inc's Capex cycle. Cranes are an essential component for infrastructure building and with the massive investments lined up both by the government and private sector in India, the company is bound to benefit from the increased demand.

The clients of SML is indeed impressive and it includes major like RIL, L&T, BHEL, Suzlon etc

SML work requires transportation of heavy-duty cranes and extensive logistics services for mobilising and demobilising its cranes. It recently acquired a fleet of 50 trailers with an investment of Rs 8.5 Crs to help it carry its own cranes with short lead times.

I can as well write a thesis on India’s Infrastructure and win a Phd but nonetheless the entire thesis can be summed up in just these few words: “India will need to spend more than $1 trillion on infrastructure from 2010 to 2019, with roads requiring $427 billion, power $288 billion and railways $281 billion,” according to Goldman Sachs. And infrastructure needs cranes, lots of them – as simple as that. That’s precisely how India is destined to grow and that’s how SML is bound to grow and further that’s how your bank balance will grow even as the share price reflects the growing top line and bottom line of the company. So, did it not cross your mind that how complex things can be made simple. I have seen the corporate world in and out and I have seen people who love to confuse other people - guess they get paid for such a hobby! But, I for one love to simplify complex things even when it comes to explaining why planes don't crash midair when flying in the dead dark sky!

SML’s five year top line CARG was 18.69 per cent and bottom line CARG was 22.98 per cent. The revenues for the last fiscal of 2009-10 stood at Rs.331 crores and PAT was Rs.90 crores. Promotors stake stood at 44.72, FII’s stake was 7.83 and DII’s stake was 20.31 per cent as of September 2010. Thus 72.86 per cent is in strong hands.

SML has a Market Cap of Rs.780 crores, the 52 week range was Rs. 272 – 156 and the CMP is Rs.180.30/share, PE being just around 8.2! Just go for it and sleep tight on it for about 2 years flat. Now, tell me friends, can any FD or Post Office saving scheme give you such handsome returns? The answer has to be a resounding NO. So, take calibrated risks and start investing money in the stock markets for a better future.

Conclusion: Considering the fact that India’s infrastructure growth is pregnant with huge opportunities for players like SML, expect your money to double in about 2 years time even from the current levels. The downside risk is moderate and is linked to the approvals by our beloved sarkari babus and fund flows position of the private infrastructure players.

Kishor S. Khot, [Kishor@hbjcapital.com], Equity Strategist, HBJ Capital Services Pvt Ltd