Salzer Electronics - will be steady performer?

Overview:

Salzer is the market leader in India for Rotary Switches, PV application switches & PVC wiring ducts.
Salzer addresses the needs of customers in the electrical equipment, machine tools, renewables, medical equipment, building segment, automotive and uninterrupted power system spaces, each of which is a proxy of a modern and growing India.
Salzer is associated with Larsen & Toubro Limited, the Indian industrial giant, who markets its (Salzers) switches throughout India.

Valuations:

Currently trading mcap/sales of 1 and P/E of 23, which I feel is not a fair price for a consistent performer and dividend payer.
Salzer has been a consistent performer since last many years.  Their top-line has increased every year for last 10 years.  And have healthy OPM of 12-15%
D/E is 0.85, but the debt is safeguarded buy their current assets
L&T holding 19% stake. 

Recent Developments:

Recently, company raised 62cr through QIP and many FIIs and DIIs subscribed to it.  Full disclosure here.  The proceeds from the same will be used for future growth plans.

Salzer promoters recently allotted 1000000 convertible share warrants to themselves.  375000 of which is already alloted.

Also, ace investor Mr. Vijay Kedia holding 1.89% which he bought recently.

All of these gives enough confidence on the management and execution ability of Salzer group.

Future Outlook:

Management confident of 25% CAGR for next 3 years.  They have a ambitious plan making Salzer 1000cr enterprise by 2020.  Order book @ 106cr

Summary:

Looks poised for future growth.  Recent developments + future outlook gives good visiblity into the future.
Value buy at CMP of 277/-.  Listed only in BSE.

Disc : Holding Salzer from 210/- levels.  This post is neither not a recommendation for buy/sell.

Cosmo Films - very much undervalued

Overview :

Company is into the packaging segment and is the largest exporter of BOPP films from India.  They provides Films and Lamination's and serve various industries like Food Packaging, Industrial packaging, Printing & Lamination (magazine covers, gift wraps, etc).
They have plants in India, US, Europe, Korea and have global customer base exporting to over 45 countries.

Valuations :

What caught my attention here is the undervaluation of the stock.  This year sales on standalone basis were at 1472cr and the current market cap is just 240cr with P/E around 6.
Promoter holding is at 43% and its consistently dividend paying.  This year they paid 35% dividend.  Last few years company faced troubles due to higher raw material costs + weak global economic conditions. Even during those times company managed to pay dividend.

On the Balance sheet side, they are generating 1472cr revenue from total assets of 1000cr.  Their debtors and creditors are very good at 7% and 9.5%.  Inventory days in just 24 days.  D/E is around 0.95. They have reduced their debt by over 20% this year.  They have healthy cash flow from operating activities.  They have cash bank balance of 13cr.  Nothing worrisome on contingent liabilities side.

The total equity is 410cr while the market cap is 240cr so the P/B is just ~0.58

With available information so far, they don't have any plans for expansion.  This would reduce the cash outflow from investing activities thereby increase in the overall net cash flow.  However they haven't mentioned anywhere about the current utilization (current installed capacity is 116,200 MT)

Future outlook :

Company seems to have good market share in the packaging sector.  With increasing urban population and thereby increased consumption of FMCG products, company is poised to tap this opportunity.  Increased demand of packaged food should also act as fuel in the growth.  They are serving the segment which would grow in future.

Summary :

The Balance sheet looks clean and stock looks very much undervalued with decent future growth opportunity.  Looks like a safe bet and a value buy at CMP of around Rs 147/-.

Disc :  Vested interest; Hold few shares.  Shouldn't be considered as recommendation to buy/sell.