Punj Lloyd : Multibagger

Punj Lloyd : Multibagger by PN Vijay, Investment Advisor Punj Lloyd is increasingly focusing on the high value added Hydrocarbon vertical where the margins are higher and the work is also more specialized.

Current Market Price: Rs 275

Target Price: Rs 500

Punj Lloyd is a leading construction company with two major verticals, namely Hydrocarbon and Infrastructure. It also has an overseas subsidiary SembCorp. It is showing significant growth in both its verticals due to strong order flows in the Oil and Energy sector and in basic infrastructural sectors. During the first quarter which just ended, Punj Lloyd reported an increase in its net sales of 73%, EBITDA of 39% and a net profit growth of 126% to Rs. 59.5 crores on a consolidated basis. The quarter was marked by a robust growth in new orders in the pipeline division.

REASONS TO BUY:

1. The company is increasingly focusing on the high value added Hydrocarbon vertical where the margins are higher and the work is also more specialized. There has been an impressive improvement in the profitability of SembCorp.

2. The debt level is reduced significantly and the debt / equity ratio now stands much lower than one.

In terms of valuation it is trading around 22 times its expected EPS to Rs. 12 for 2007-08. This is an almost 100% improvement on the EPS just concluded financial year.

Source: Internet

Orchid Chemical: Target Rs 375

Buy Orchid Chemical
CMP: Rs.225

Price target: Rs375
Market cap: Rs1,538 cr
52 week high/low: Rs285/165
NSE volume (No of shares) : 3.3 lakh
BSE code: 524372
NSE code: ORCHIDCHEM
Free float (No of shares) : 5.0 cr

RESULT HIGHLIGHTS
Orchidís top line grew by 18.1% year on year (yoy) to Rs238.2 crore in Q1FY2008. The top line growth was above our estimates of Rs223.2 crore and was driven by new launches including the launch of Cefepime injections in the USA.
Driven by the improvement in the raw material costs, Orchidís operating profit margin (OPM) expanded by 110 basis points to 29.9% in Q1FY2008. On the other hand, the rising R&D costs (due to FTF filings) and increasing staff costs adversely impacted the margins. Consequently, the operating profit grew by 22.8% to Rs71.2 crore in Q1FY2008.
The reported net profit jumped up by 251.7% to Rs51.3 crore, largely due to the foreign exchange (forex) gains recorded during the quarter and the reduction in the interest expense. On adjusting for the forex gains, losses and the associated tax implications, the adjusted net profit rose by 81.8% to Rs26.5 crore.
Orchid has just received approval for Cefdinir tablets and suspension from the US Food and Drug Administration (USFDA). The product, with a market size of $850 million in the USA, will be launched immediately by Orchid. We estimate Orchid to generate approximately $19 million and $25.5 million in revenues in FY2008 and FY2009 respectively.
At the current market price of Rs225, Orchid trades at 9.9x its estimated FY2009 earnings, on a fully diluted basis. We retain our positive outlook on the stock and maintain our Buy call with a price target of Rs375.

SHAREHOLDING PATTERN:

Promoters 23%
Public & others 16%
Nonpromoter 9%
Institutions 16%
Foreign 36%

Source: Sharekhan

Markets Today

It was a good closing for markets but on extremely thin volumes but good breadth. It started with a gap up showed some weakness but pulled up again to end on a high note. The markets have seen been very volatile in the last two weeks but saw a decent session of trade today.
Cues from Asia were mixed and Europe was trading with a gain of around 1% supporting markets at higher level. Other than IT index all the BSE sector indices ended in green. Auto, FMCG and metal index were up over 1.5%.
IT stocks slipped as rupee is trading strong at 40.58 levels. HUL and Tata Power showed solid surge.
Sensex was up 148.96 points or 1.00% at 15017.21, and the Nifty up 40.30 points or 0.93% at 4373.65.
About 2026 shares have advanced, 907 shares declined, and 64 shares are unchanged.
The broader markets have outperformed the frontline indices. The BSE Midcap Index ended at 6,575.17 up 68 points or 1%.
The BSE Smallcap Index ended at 8,028.28 up 124 points or 1.6%.
The BSE Bankex closed at 7,827.77 up 0.7%. Centurion Bank, Axis Bank, Federal Bank, IOB, Canara Bank moved upwards.
The BSE Capital Goods Index was up 0.4% at 12,815.39. Triveni Engg, ABB, Thermax, Carborundum, BEML, Jyoti Structure closed higher.
The BSE Health Care Index was up 1% at 3,641.14. Orchid Chemical, Cipla, Glenmark, Panacea Biotech, Matrix Lab, Ranbaxy Labs closed higher.
The BSE Auto Index closed at 4,825.93 up 2%. MRF, Exide Industrie, Tata Motors, Maruti Udyog, Mah and Mah, Bajaj Auto advanced.
The BSE Metal Index closed at 11,008.83 up 1%. Jindal Steel, Jindal Saw, Sterlite Ind, Shree Precoated, Tata Steel advanced higher.
The BSE FMCG Index gained 1.5% at 1,932.16. HUL, Tata Tea, Godrej Consumer, Nestle, ITC closed higher.
BSE Oil and Gas Index closed at 7,810.81 up 0.7%. Reliance Natura, BPCL, Reliance Petro, Reliance, Petronet LNG ended in green.
The BSE IT Index closed at 4,765.04 down 0.2%. HCL Tech, Mphasis, Infosys, TCS closed lower.
The NSE cash turnover was at Rs 8245.56 crore and the NSE F&O turnover was at Rs 31627.64 crore. The BSE cash turnover was Rs 3703.52 crore. Total market wide turnover was at Rs 43576.72 crore.

Source: Moneycontrol.com

Intraday Calls for 13th August

Nifty Support 4300, 4220 and Resistance 4380, 4440
Sensex Support 14600 and Resistance 15000.

Market should open flat but can see some recovery and trade positively. Again can see some selling in late hours. So today is much volatile day for the market. Be carefull.

Buy Satyam @ 479 Target 485-488 SL 475
Buy Polaris @ 122 Target 128 SL 119
Buy RCOM@ 522 Target 530-535 SL 516
Buy Orchid Chemical @ 218 Target 225 SL 214
Buy PunjLlyod @ 275 Target 285-294 SL 270
Buy Prithvi Info @ 292 Target 300+ SL 288
Buy Crompton Greaves @ 295 Target 310 SL 290
Buy Sail @ 148-150 Target 155 SL 146

Other: Everonn System, Infosys, MphasisBFL, Emkay Shares, Paramount Communication, Nagarjun Fert, IDBI.

Good Luck.