Circuit Systems

Business:
Small time manufacturer of Printed Circuit Boards (PCB).
No entry barriers.
Competition from unorganized players

Objects
Circuit systems' manufacturing capacity for PCB is 84,000 square meters. It wants to increase its total capacity to 1,50,000 square meters.
Working capital requirement and acquisition of business

Financials
The company's net sales, operating profit, and net profit in the FY 2006-07 were Rs 38.84 crore, Rs 6 crore, and Rs 2.67 crore respectively. Over the last three financial years its net profit margin has gone up slightly from 5.92% to 6.88%.
Realisations from exports have gone down.

ValuationsA P/E of 15 times makes it an unattractive one as it deserves a single digit multiple.
AVOID