GEI Industrial Systems Ltd - 530743

Name of Company	GEI Industrial Systems Ltd.
BSE Code	530743
NSE Code	GEIINDSYS
ICICI Code
Established	1970
My Take	So-So
Headquarters	Bhopal
Promoters	CE Fernandes & family, Pannalal L Mundhra
Story	Air cooled heat exchangers and Air cooled steam condensers are major heat transfer equipments manufactured by this company. 2 factory locations near Bhopal. Claims to have installed all around the world.
Sector	Engineering
Sub-sector	Air cooled heat exchangers
Website	http://www.geiind.com
Positives	PCA India infrastructure fund, BanyanTree Growth Capital LLC hold around 5 and 10% in the company. Good growth has happened recently (last few quarters – Q3FY11, Q2FY11).
Negatives	Very much dependent on Power sector.  Promoters have pledged shares – 18% of 41% promoter shareholding (even ones by CE Fernandes and family). This has improved from Jan 2009 when 87% of the 41% promoter stake was pledged – share price has gone up from 30 to 200 in this 2 year period up to early 2011. Interest costs are high for the company and interest rates pose a risk due to 86 Cr debt in FY10. Slowdown in economy could hit this company hard. Salary of CE Fernandes is 1.4 Cr, which I feel is huge compared to the tens of crores the company is making – greedy promoter.
Peers
News	GEI enters technical tie up with Innosping(Swiss company),
Price @ blogged	191 (04-May-11)
Cost of company	317.06 Cr market cap for a 14.86 Cr NP in FY ending Mar ' 10 makes it 21.33 times. This is for a company with 86.12 Cr debt and 70.75 Cr reserves
Group	Cyclicals
Growth	Revenue has grown from 69.38 to 249.38 Cr in 5 years from FY06 to FY10. Profits have also grown from 4 to 14 Cr in the same period. FY11 revenues are expected to be around 350 Cr which is a huge jump due to expanded capacity.