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DHP India

DHP India is in the business of manufacturing LPG Pressure Regulators. The company has shown reasonable growth in revenues and operating profitability in the last five years – reporting about 4cr in operating profits on 24cr of revenues in the last financial year.  It operated with modest leverage of 3cr (as at 31 st March, 2010). The company, however, has not generated much free cash flows (operating cash flows – investing cash flows) in the recent past. It is exposed to price rises in its raw materials (brass, zinc etc.) and seems to operate in a low-value product category that has infrequent demand (from an individual customer’s perspective).  It is also heavily exposed to foreign exchange movements (US$ and GBP) since it exports all of its finished products.