LG Balakrishnan & Bros bounces back from 52-week low on sale of unit

LG Balakrishnan & Bros rose 19.78% to Rs 16.65 at 15:15 IST on BSE after it agreed to sell its industrial chain business to UK's Renold PLC for 5.7 million pounds.

The stock hit a high of Rs 16.65. It hit a low of Rs 13.70 also a 52 week low for the scrip. The stock had a 52-week high of Rs 45.40 on 31 December 2007.

The company has an equity capital of Rs 7.85 crore. Face value per share is Rs 1.

The current price of Rs 16.65 discounts its Q4 March 2008 annualised EPS of Rs 2.06, by a

PE multiple of 8.08.

This transaction would lead to a potential joint venture in which LG Balakrishnan & Bros (LGB) will hold 25% and Renold will hold 75%. Renold is a leading global manufacturer of industrial chains, the company said. It also manufactures specialist gearboxes and couplings.

The net profit of L G Balakrishnan & Bros rose 67.6% to Rs 4.05 crore on a 26.9% rise in sales to Rs 156.14 crore in Q4 March 2008 over Q4 March 2007.

LG Balakrishnan & Bros makes automobile and industrial components, cold, hot & warm forging components, fine blanking components and also variety of flat wires and shaped wires.