yuken india good long term bet

Yuken India (Rs.186)

manufactures hydraulic equipment including hydraulic pumps for industrial and mobile applications, hydraulic valves, mobile valves and complete hydraulic systems to suit customer-specific requirements. Besides pumps and valves, it also manufactures cylinders, accumulators and power packs and recently introduced Piston pumps with Electro proportional control.
Hydraulic devices are very popular in the heavy engineering industry as an effective means of automation and its products find extensive use in various automation projects and retrofit projects. Some of the key sectors that which use its products extensively are Machine Tool Manufacturers, Plastic Machinery Manufacturers, Furnaces and Heat Treatment Plant Manufacturers, Automobile Manufacturers, Hydraulic Press Manufacturers, Steel Plants, Construction Equipment Manufacturers, Drilling Rig Manufacturers, Material Handling Equipment Manufacturers, Dam Hydraulics, Power Plants, Defence sector, etc.

To make the economy competitive globally, a lot of automation and hydraulic tools would be required as Hydraulic systems improve quality, lead to consistency, lower fatigue and improve the safety and productivity. So the demand for Yuken's products will keep increasing in a growing economy.

Yuken's profitable growth will emerge from increasing acceptance of outsourcing as a relevant business strategy in the globalized world as well as the new range of products that can be offered to its customers.

For FY07, its net profit rose 82.64% to Rs.4.42 cr. as against Rs.2.42 cr. during FY06. Sales rose 20.79% to Rs.85.10 cr. as against Rs.70.45 cr. in FY06.

For Q1FY08, its net profit rose by 137.50% to Rs.0.76 cr. as against Rs.0.32 cr. during Q1FY07 while sales rose 8.02% to Rs.19.67 cr. in Q1FY08 as against Rs.18.21 cr. during Q1FY07. The company is expected to fare well over the long run and its full year standalone EPS is likely to be around Rs.22/23. It seems all the new development work I in its four subsidiaries is over and they may contribute well to profits in the current year.

Since its capital is very low at Rs.3 cr., a sharp jump in its net profit will results in a very attractive EPS over next few years. Investors can keep adding this stock at every dip for good long-term growth. Stock is cum 25% dividend while its book value is Rs.70. Closing above Rs.225 level will give a decisive breakout and it can touch Rs.300 to 350 over the next one year.

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Thanks for the picks

Yuken india 220, more update on our investment call of two weeks back..


foundry division capacity is now double at 200 tonne per month & company is planning to increase it further to 500 tonnes per month slowly over next 18 months . funds for the same shall be raised through borrowings.

In the last 31 years, YUKEN has achieved the fastest growth rate in the Oil Hydraulics Industry in the Country in spite of being the last entrant.

Today, most manufacturers of Original Equipment have accepted YUKEN as their preferred partners for hydraulics.



Yuken has Focus on process improvements to enable the Company to penetrate the Export market.
Strong focus on employee involvement to eliminate waste in Operations through focused initiatives. Company is also planning to enter in to USA market & expecting good orders over long run. it has already developed some products for USA market.

YUKEN is high precision product company so it is using its subsidiary as outsourcing & supportive unit . It has total four such subsidiary . In one of the such company there was some teething problem with new developments which is being sorted out.

it is expected that stand alone sales to be around rs 110 cr in 0708 & around rs 150 crs for 0809. while consolidated sales will be still higher by 25 % approx.

there is indication of better margins in coming years & also consistent performance.

company is importer of certain raw material in dollar so it is getting benefit from firmness of rupee.

company has done good developments over last few years & better effect of the same shall get reflected over next few years.


beside doing very well in domestic market , over next year it is going to become good global outsourcing too.



capital of the company is just rs 3 crs. if last few qtrs are any indications , It is expected to report eps to be around 24/28 level in current year which may even go up to 40 level in next year.

so a precision engineering , high tech, strong brand , MNC COMPANY , four subsidiary we are getting at just p/e ratio of less than 8 for projected earning of current year. market cap is just 63 crs at current price of rs 210

INVESTORS should take note of it that hydraulic vane pumps , valves & equipments is not a product which any company can develop. This takes years to develop customer confidence & brand values. But yuken has done it with dedicated efforts of last thirty years.

stock is catching atn of research analysts of few broking frims.

so stock is strongly advised for good long term investment for long term target of rs 500.