ESAB India Limited a part of the international ESAB group (have operations in USA, Brazil, India etc.) started its operations in 1987 by acquiring the welding business of Peico Electronics & Electricals Limited. The Company continued its expansion in the Indian market with the purchase of Indian Oxygen Limited's welding business in 1991 and Flotech Welding & Cutting Systems Limited in 1992, followed by the merger of Maharashtra Weldaids Limited in 1994. ESAB India Limited is owned 37% by the ESAB Group. The company is listed on the stock exchanges of Mumbai, Kolkata and the National Stock Exchange. Mr. Michael Foster is the Chairman of the Company. The Company employs around 600 individuals. ESAB India has established itself as one of the leading suppliers of welding and cutting products in the country. ESAB products are now an integral part of industries like Shipbuilding, Petrochemical, Construction, Transport, Offshore, Energy and Repair and Maintenance. Company has ISO 9000 and ISO 14000 certifications for four of its principal manufacturing facilities located at Kolkata, Chennai and Nagpur. Company has excellent Research and Development Departments, which helped the Company to offer a wide range of world-class products for diverse applications, cost effectively.

Products & services:

Company manufactures welding and cutting equipment, accessories and systems. The bulk of the revenue comes from welding electrodes. It remains the second largest player in the welding industry. ESAB products are now an integral part of industries like Shipbuilding, Petrochemical, Construction, Transport, Offshore, Energy and Repair and Maintenance. ESAB India has a wide and comprehensive range of welding, cutting and allied products and services. The product range covers Welding Consumables, Reclamation Consumables, Arc Equipment, Industrial Gas Equipment, Cutting Machines and Working Environment Products for your specialized welding, cutting and allied needs. All the products are manufactured to stringent quality control measures in the state-of-the-art manufacturing units. Company also markets the latest generation of Welding Consumables and equipment and cutting machines from other group companies located outside India and work as a one point source for all the needs of the Welding industry. ESAB India also manufactures and markets medical gas equipment.

Company products are classified into the following categories:

Welding Consumables
Reclamation Consumables
Arc Equipment
Industrial Gas Equipment
Medical Gas Equipment
Cutting Systems

Company has developed a wide range of welding and cutting products. ESAB products are now an integral part of industries like Shipbuilding, Petrochemical, Construction, Transport, Offshore, Energy and Repair and Maintenance, to name a few. This would not have been the case without an extensive R&D and quality effort.

Company's initiative on Total Quality Management has resulted in ISO 9000 and ISO 14000 certifications for all four of its principal manufacturing facilities located at Kolkata, Chennai and Nagpur. Further, the skills, know-how and resources at ESAB India's Research and Development Departments, have helped the Company to offer a wide range of world-class products for diverse applications, cost-effectively.

Quality standards:

Company has received ISO 9001 and ISO 14001 certifications for its Equipment factory at Kolkata and ISO 9002 and ISO 14001 certifications for its Welding Consumables factories located at Kolkata, Chennai and Nagpur. Every unit strictly adheres to a quality manual that describes in detail how quality is to be addressed.

Except this, Company has also achieve certification from a number of other bodies including the American Society of Mechanical Engineers (ASME), Nuclear Safety Standards Commission (Kerntechnischer Ausschuss, KTA) and Technischer Überwachungs-Verein (TüV). Furthermore, all production units for welding consumables have product approvals from Verband der Technischen Überwachungs-Vereine (VdTüv) and many other classification societies.

Recent developments:

Esab India is proposing to expand capacity at its unit in Kalmeshwar, Nagpur at a total outlay of Rs 300 million. The expansion is for production of MIG / MAG wires. This expansion at the Nagpur plant will be carried out in phases spreading over the next 3 years. The company manufactures and markets welding and cutting equipment accessories and systems.

Valuation:

At current market price, Stock is trading at 8.14 P/E multiple of its FY2010 Estimated earnings par share. We recommend investors to buy" Esab India" with medium to long-term investment horizon.