Sunday, June 8, 2008

Stock Ideas: Kamanwala Housing, Spanco Telesystems

After posting encouraging results for Q4FY08, Kamanwala Housing Construction Ltd. (Code: 511131) (Rs.122.65) has announced 1:1 bonus along with 25% dividend for FY08. For Q4FY08, its topline shot up 120% to Rs.28.50 cr. and bottomline surged by 85% to Rs.9.40 cr. posting a whopping EPS of Rs.17 for the quarter. But operating in the real estate & construction sector and following the revenue model on sale of agreement basis, the company is bound to post erratic and lumpy results on a quarterly basis. For full FY08, it reported total revenue of Rs.96 cr. and net profit of Rs.24.40 cr. i.e. EPS of Rs.43 on its current equity of Rs.5.65 cr. Notably, the company paid a tax of Rs.8.50 cr., which substantiates the profit. The company operates mainly in Mumbai and has a few good residential projects in Malad & Santacruz and a huge commercial project in the Bandra-Kurla complex. It has several projects lined up for future in Andheri, Mahim, Goregaon etc and even in Hydrabad. Lately, it also bought 10,000 sq. mt. land in Turbhe for Rs.15 cr. Recently, the company has allotted nearly 20 lakh preferential warrant to promoters at Rs.98. At the current market cap of Rs.75 cr., the scrip is trading fairly cheap and has the potential to cross Rs.200 level in the medium-term.


From providing telecom integration services to MNCs, PSUs and Defence sector, Spanco Telesystems Ltd. (Code: 508976) (Rs.132) has evolved to extend its expertise into the dynamic space of Business Process Outsourcing (BPO) and Radiofrequency identification (RFID) services. Recently in March 2008, the company bagged huge orders to the tune of Rs.200 cr. from Maharashtra, Bihar and M.P. governments. On the other hand, it is executing a 10-year contract to set up, operate and maintain Interactive Voice Response System (IVRS) and Regional Call Centres (RCC) for the Indian Railways in a joint venture with the Spice group. For the first three quarters, it has already recorded an EPS of Rs.17, which is higher than the entire FY07 EPS of Rs.16. Further, it is expected to clock a turnover of Rs.625 cr. with profit of around Rs.46 cr. on a standalone basis. This will work out to an EPS of Rs.22 on its current equity of Rs.20.65 cr. and an EPS of Rs.19.50 on its fully diluted equity of Rs.23.50 cr. At the same time, the company has decided to transfer all its BPO related businesses 10 including Respondez (international BPO), domestic call centre operations and the IRCTC project (a 50:50 JV with the Spice Telecom Group) into a separate subsidiary. This may be a precursor to unlocking value by hiving-off or de-merging its BPO business into a separate listed company in future. A screaming buy.

Source: Internet (MT)

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