Ingersoll Rand's strong financial performance augments MF interest in the company

Notwithstanding the severe slowdown across the capital goods sector, the compressor and drilling equipment manufacturer - Ingersoll Rand registered a top-line growth of over 10% while its bottom line grew by over 25% year on year for the first quarter of the current fiscal.

Given an almost flat growth in the cost of raw material vis-a-vis the corresponding quarter of the previous year, the company's EBITDA margins (including other income) increased by more than 300 basis points year on year to 25% for the quarter - the highest operating margins reported by the company since Sep '10 quarter.

The company stock currently trades around Rs 460 commanding a price-earning multiple (P/E) of over 16, which is at a relative premium to its peers. The company has nevertheless lost 15% in value in the past one year, giving in to the impact of the overall downturn in the industry.

The company's strong performance, however, has infused an investment interest in the company by the domestic fund houses whose shareholding in the company has nearly doubled from 0.7% in Mar '12 to 1.25% as at Jun '12. This is also the highest shareholding by the Mutual Funds in this company since Jun '10.