Market may open with negative bias but some recovery expected in mid-session.
Today's Intraday Picks:
GMDC LTD.
PNB
MTNL
DLF
Ansal Infra
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Good Luck
Sunday, March 16, 2008
STOCK IDEAS
Manugraph India Ltd. (Code: 505324) (Rs.84.95) is India's largest manufacturer of web offset and sheet fed offset printing presses. With a whopping 70% market share, its printing presses are present in almost all major publication houses. In India, it has worldwide presence from Latin America to Europe and from the Middle East to China. Last year, it acquired Dauphin Graphic Machines Inc, the No. 1 company in the USA in the four page segment for US $19.20 million. With this acquisition it has become the world’s largest single width printing press manufacturing company. Accordingly, the US subsidiary has started outsourcing the component parts from India and even marketing Manugraph machines in North America. But due to the economic slowdown in USA, the response was not as good as anticipated earlier. Still on the back
of robust domestic demand, it is expected to end FY08 with sales of Rs.400 cr. and PAT of Rs.50 cr. on a standalone basis.
This translates into EPS of Rs.16 on its current equity of Rs.6.08 cr. with a face value of Rs.2. The scrip has been beaten down mercilessly from its recent high of Rs.205 in November 2007 and offers an excellent opportunity to buy. Also, its agreement of business co-operation for marketing with MAN Roland of Germany is under negotiation.
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Lokesh Machines Ltd. (Code: 532740) (Rs.64.10) is engaged in the design, development and manufacture of custom built special purpose machines and general purpose CNC (computerised numerical controls) machines along with their components. Presently, it derives 70% revenue from the machining division whereas the balance 30% comes from its auto components division. The company caters primarily to customers in the auto OEM, auto ancillaries and general engineering space. Hence it supplies mainly to Tata Motors, Bajaj Auto, Force Motors, Cummins, Bharat Forge, Kirloskar Oil Engines, Everest Kanto Cylinders etc. with separate dedicated facilities for M&M and Ashok Leyland. Of late, it has also forayed into overseas markets with good orders. On the back of an encouraging performance for the first three quarters of FY08, it is estimated to register sales of Rs.105 cr. with net profit of Rs.13 cr. for FY08. This works out to an EPS of Rs.11 on its equity of Rs.11.80 cr. Considering its IPO price of Rs.140 in Arpil 2006 and 52-week high/low as Rs.168/60, it’s a screaming buy.
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Being the market leader in High Tension XLPE power cables, Torrent Cables Ltd. (Code: 504096) (Rs.217) manufactures XLPE insulated cables in the voltage range of 1.1KV to 132 KV, Low-Tension (LT) power cables up to 1.1KV and High- Tension (HT) power cables up to 11KV. It also produces EHV, TRS flexible cables, welding cables, lift cables, colliery cables and specialty cables in the form of fire resistant low smoke cables (FRLS), railway-signalling cables, mining and trailing cables. It has a very exhaustive customer base spread over State Electricity Boards (SEBs), Utilities, EPC Contractors, government/semi-government companies, private companies, dealer network, consultants and many more. Apart from the SEBs, its clientele includes biggies like Tata Power, L&T, BHEL, ABB, Siemens, Alstom, Jindal, Reliance, Essar, Suzlon, NTPC, Railways, Powergrid, SAIL, Torrent Power etc. The rural electrification plans, APDRP programmes and government’s aim to achieve power for all by 2012 has resulted in increased demand for power related products like cables. Hence, for FY08, the company is estimated to clock a turnover of Rs.225 cr. with net profit of Rs.30 cr. i.e. EPS of Rs.40 on its small equity of Rs.7.50 cr. With a 52-week high/low of Rs.440/143, it’s a screaming buy as it can
easily appreciate 50% within a year.
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Patels Airtemp (India) Ltd. (Code: 517417) (Rs.57.50) is engaged in the manufacture and sale of an extensive range of heat exchangers such as shell & tube type, finned tube type and air cooled heat exchangers, pressure vessels, air-conditioning and refrigeration like power, refineries, fertilizers, cement, petrochemicals, pharmaceuticals, textiles and the chemical industries. For future growth, the company is concentrating more on high value added engineering products and has even got its product the coveted ASME `U' Stamp authorization. For the December 2007 quarter, the company’s net sales declined by 15% to Rs.10.50 cr. due to delay in dispatches but net profit shot up to Rs.1.40 cr. on lower depreciation cost. Hence it is expected to register a topline of Rs.50 cr. and profit of Rs.5 cr. for FY08. This will lead to an EPS of Rs.10 on its current equity of Rs.5 cr. Technically, the scrip seems to have bottomed out and can shoot up 50% in 6-9 months.
of robust domestic demand, it is expected to end FY08 with sales of Rs.400 cr. and PAT of Rs.50 cr. on a standalone basis.
This translates into EPS of Rs.16 on its current equity of Rs.6.08 cr. with a face value of Rs.2. The scrip has been beaten down mercilessly from its recent high of Rs.205 in November 2007 and offers an excellent opportunity to buy. Also, its agreement of business co-operation for marketing with MAN Roland of Germany is under negotiation.
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Lokesh Machines Ltd. (Code: 532740) (Rs.64.10) is engaged in the design, development and manufacture of custom built special purpose machines and general purpose CNC (computerised numerical controls) machines along with their components. Presently, it derives 70% revenue from the machining division whereas the balance 30% comes from its auto components division. The company caters primarily to customers in the auto OEM, auto ancillaries and general engineering space. Hence it supplies mainly to Tata Motors, Bajaj Auto, Force Motors, Cummins, Bharat Forge, Kirloskar Oil Engines, Everest Kanto Cylinders etc. with separate dedicated facilities for M&M and Ashok Leyland. Of late, it has also forayed into overseas markets with good orders. On the back of an encouraging performance for the first three quarters of FY08, it is estimated to register sales of Rs.105 cr. with net profit of Rs.13 cr. for FY08. This works out to an EPS of Rs.11 on its equity of Rs.11.80 cr. Considering its IPO price of Rs.140 in Arpil 2006 and 52-week high/low as Rs.168/60, it’s a screaming buy.
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Being the market leader in High Tension XLPE power cables, Torrent Cables Ltd. (Code: 504096) (Rs.217) manufactures XLPE insulated cables in the voltage range of 1.1KV to 132 KV, Low-Tension (LT) power cables up to 1.1KV and High- Tension (HT) power cables up to 11KV. It also produces EHV, TRS flexible cables, welding cables, lift cables, colliery cables and specialty cables in the form of fire resistant low smoke cables (FRLS), railway-signalling cables, mining and trailing cables. It has a very exhaustive customer base spread over State Electricity Boards (SEBs), Utilities, EPC Contractors, government/semi-government companies, private companies, dealer network, consultants and many more. Apart from the SEBs, its clientele includes biggies like Tata Power, L&T, BHEL, ABB, Siemens, Alstom, Jindal, Reliance, Essar, Suzlon, NTPC, Railways, Powergrid, SAIL, Torrent Power etc. The rural electrification plans, APDRP programmes and government’s aim to achieve power for all by 2012 has resulted in increased demand for power related products like cables. Hence, for FY08, the company is estimated to clock a turnover of Rs.225 cr. with net profit of Rs.30 cr. i.e. EPS of Rs.40 on its small equity of Rs.7.50 cr. With a 52-week high/low of Rs.440/143, it’s a screaming buy as it can
easily appreciate 50% within a year.
******
Patels Airtemp (India) Ltd. (Code: 517417) (Rs.57.50) is engaged in the manufacture and sale of an extensive range of heat exchangers such as shell & tube type, finned tube type and air cooled heat exchangers, pressure vessels, air-conditioning and refrigeration like power, refineries, fertilizers, cement, petrochemicals, pharmaceuticals, textiles and the chemical industries. For future growth, the company is concentrating more on high value added engineering products and has even got its product the coveted ASME `U' Stamp authorization. For the December 2007 quarter, the company’s net sales declined by 15% to Rs.10.50 cr. due to delay in dispatches but net profit shot up to Rs.1.40 cr. on lower depreciation cost. Hence it is expected to register a topline of Rs.50 cr. and profit of Rs.5 cr. for FY08. This will lead to an EPS of Rs.10 on its current equity of Rs.5 cr. Technically, the scrip seems to have bottomed out and can shoot up 50% in 6-9 months.
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Pratibha Industries (Rs.311.15) has received the Certificate of Registration for its quality management system – API Specification Q1 for 'Design and Manufacture of Line Pipe'. With this registration, the company's SAW Pipe Manufacturing Unit is now fully geared to manufacture pipes for supply to the oil & gas segment. This approval is in line with our expectations. Investors are advised to stay invested for good long-term targets.
English Indian Clay (Rs.1739.25) - Shareholders to get four shares for every 19 shares of Bharat Starch Product Ltd. held on 20th February 2008. The stock is trading after this demerger, it is yet to become ex-right. Book part profits at Rs.1900 level.
J P Associates (Rs.236.25) has value unlocking potential with regard to JP Power Ventures, awarding land to Jaypee Infratech and potential value from the Ganga-Balia Expressway, which would act as triggers. Stay invested or add on dips.
Punj Llyod’s (Rs.329.55) strong order position and Investments in PSL and Ramprastha JV could add significant value. Stock looks attractive at current rate.
MTNL’s (Rs.100.20) book value is Rs.185 and dividend is 40%. Stock looks attractive at Rs.100 level.
Balmer Lawrie (Rs.366.95) has a strong book value of Rs.165 with expected EPS is Rs.50/52 while last dividend was Rs.135%. It is a good stock to add in small quantities on dips.
Revathi Equipments (Rs.919.20) is looking for more acquisitions, if informed sources are to be believed. It is also developing small real estate in partnership in Mumbai. With coal prices shooting up, coal mining equipment manufacturers are likely to see better times ahead. Investors are advised to stay invested or add on dips around Rs.800 level. There are also indications, as per unconfirmed sources, that few MNC companies have shown interest in the company for taking a stake.
Mather & Platt Pumps (Rs.149.40) will benefit by the fast growing pump markets in Asia and Eastern Europe where a lot of activity is taking place in waste-water treatment, municipal water supply and construction. The company will have access to both through Wilo's strong presence in Europe and its Korean and Chinese operations. Long-term investors will benefit. Stay invested.
Ranbaxy (Rs.464.10) - Strong reports are pouring in. Stay invested.
Ashiana Hsg. (Rs.97) - Profit projections and long-term story is intact. Due to change in sentiment, stock price has come down in line with the trend. Stay invested.
Valuation of IFCI (Rs.49.85) is attractive at Rs.49 level. Investors can add with a long-term view.
Natural Capsules BSE Code: 524654 Last close: Rs.23.90
Natural Capsules Ltd. was established in the year 1993 at Bangalore. The company has a well-equipped modern manufacturing plant to manufacture hard gelatin capsules shells, hard cellulose capsule shells and pharmaceutical dosage in capsules. It has an equity of just Rs.4.28 cr., promoters hold 42.48% stake and the company paid 10% dividend last year. In January 2008, its share price had touched Rs.49.75 level but it is now available at Rs.24. The company posted an EPS of Rs.4.30 for the first nine months of FY08 which may touch Rs.6 for the full year. Against the estimated EPS, the stock is trading at a P/E ratio of just 4. The company will be allotting warrant and shares to promoters and promoter group at Rs.30. Buy with stop loss of Rs.19.50 for a medium-term target of Rs.28-30. Thereafter, stock will go up to Rs.35 and later to Rs.49 in the long run.
Source: Internet
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