Investment Picks: IDEA, Llyod Electric, IGL

Idea cellular (Rs. 105.00) (Code 532822) :-Financial performance of the one of the leading wireless telecom company was excellent in the quarter ended on 31st March 2008. The company has its operations in 11 out of the 22 circles in the country. The company will start its operations in other 11 circles in around one year. The company is expected to increase its subscriber base by on crore customers and with inclusion of new subscribers base total subscribers of the company will reach to the level of 2.5 crores. Company is likely to add around 17 lac customers, a month after six months and growth rate of the company is expected to touch the level of 50 per cent by the end of calendar year 2008. The company has turn over of Rs. 6719 crores and net profit of Rs. 1044 crores during the FY ended on 31 March 2008. Company has EPS of Rs. 3.96 and PE of 27. EPS of the company is likely to reach to the level of Rs. 5.66 and Rs. 8 in FY 2008-09 and 2009-10 respectively, where as PE of the company is expected to
touch the level of 19.26 and 13 respectively during the two FY. Private equity company Aditya Birla has invested Rs. 64 crores in the company to purchase 20 per cent equity stake of the company. Aditya Birla has total 57.69 per cent stake in the company. Even international investors have started taking interest in the company.

Lloyd Electric & Engineering (Rs. 94.00) (Code 517518) :- The Company is largest producer of Evaporate and conditioner coils in the country. The company has captured 60 per cent market share. The company manufactures window split Air conditioners for MNC’s. The company also provides AC coach on turn key basis to railways. The company is also in the field of designing, manufacturing, supply and installation plus maintenance services. Gross turnover of the company was Rs. 650 crores and profit of Rs. 31 crores after payments of tax of around Rs. 58 crores (PAT) and has EPS of Rs. 19. Investors may invest in the scrip as the price is damn cheap.

Indraprasth Gas (Rs. 118.00) (Code 532514) :- Company was promoted by BPCL and GAIL to work in the area of distribution. Both promoters has 22.5 stakes in the company, where as mutual funds has total holding of around 40 per cents. Public has 15 per cent shares in their kitty. Total equity capital of the company is Rs.120 crores. Gross income of the company during FY 2007-08 was Rs. 706 crores, which is in comparison to the income of company during FY 2006-07 of Rs. 614 crores. PAT of the company stood at Rs. 174.50 crores and EPS at Rs. 12.46. Company has increased its dividend payments. Stock has seen 52 weeks high of Rs. 182 and low of Rs. 102. Investment the scrip may provide good return in 8 to 12 months period.

Source: internet (Smart Investment)

Stock Idea: Pondy Oxides & Chemicals Ltd.

Pondy Oxides & Chemicals Ltd. (Code: 532626) Rs.20
Incorporated in 1995, Pondy Oxides & Chemicals Ltd. (POCL) is one of India’s leading integrated metallic oxides and plastic additives producers. It manufactures zinc oxide, litharge (Lead monoxide), grey oxide (lead sub oxide) red lead and solid/liquid stabilizers of PVC. Metallic Oxides are largely used in batteries and the automobile sector whereas plastic additives are primarily used for the manufacture of PVC stabilizers. POCL has even promoted a subsidiary company, M/s. Baschem Pharma Ltd. to manufacture liquid stabilisers, epoxy oil and paint dryers. Besides, it also has a facility to manufacture lead acid batteries, which manufactures stationary batteries used for uninterrupted power supply (UPS), inverters, emergency lamps, photovoltaic batteries and automobile batteries. But recently, the company decided to dispose-off the same so that it can concentrate on its core business. Importantly, POCL boasts of being an integrated producer with in-house production facility of lead metal for captive consumption.
POCL’s has four manufacturing plants spread across Pondichery & Tamil Nadu with an installed capacity of 4680 MTA for lead sub oxide, 2880 MTA for zinc oxide, 1800 MTA for litharge and 360 MTA for red lead. To sum up, it has the capability to produce 9720 MTA of metallic oxides and 4200 MTA of PVC stabilizers. In addition it has a name plate capacity to manufacture 96,000 units of lead acid batteries at its Madurantagam plant, which the company is looking to sell off. Incidentally, lead is the major raw material for production of metallic oxides followed by zinc. Hence in order to reduce its dependence on suppliers and ensure regular and economical supply, POCL undertook backward integrated in late 2006 to manufacture lead and lead compounds. It has established a state-of-the-art manufacturing plant with a rated capacity of 14,4000 MTA for lead and lead alloys and another 3600 MT for lead compounds. The company is also engaged in the smelting, refining and alloying of lead metal and specialises in manufacturing lead alloys like lead tin calcium, lead tin, lead selenium alloy, lead antimony selenium alloy and others, which find use in the battery industry for grid casting for lead-acid batteries. Meanwhile, POCL is also looking to venture into the manufacture of refined Zinc and the project is under consideration. Another significant step recently finalized by the company is to acquire 51% stake in M/s. Lohia Metals Pvt. Ltd. at an investment of around Rs.2.25 cr. and make it a subsidiary. Lohia Metals is an associate company with a turnover of roughly around Rs.25-30 cr. and is engaged in the process of refining and alloying of lead metal with an installed capacity of 12,000 MTA. To fund its backward integration project, POCL had raised Rs.7.35 cr. in August 2006 through a 2:3 rights issue Rs.4 per share on the face value was Rs.2 per share. Subsequently, the company also issued 1:10 bonus and later consolidated all the equity shares on 20th January 2007 from the face value of Rs.2 to Rs.10 per share. On better capacity utilisation of the lead smelter and higher price realisation for metallic oxides, POCL’s sales shot up 60% to Rs.170 cr. and net profit jumped up 55% to Rs.4.50 cr. for FY08. It is expected to announce 15% dividend, which will give a yield of mind-boggling 7.5% at CMP. With robust metallic oxide prices and being an integrated producer as far as lead is concerned, POCL is expected to clock a turnover of Rs.200 cr. with PAT of Rs.5 cr. for FY09 i.e. EPS of Rs.5 on its equity of Rs.10 cr. So despite its low profit margin and low promoter holding, investors can buy this scrip at current levels as it can give 50% return in 12-15 months.

Source: Internet (MT)

Stock Idea: Prime Property Development Corp.

Prime Property Development Corpn. (Code: 530695) Rs.65.75
Incorporated in 1992, Prime Property Development Corporation Ltd. (PPDCL) is small real estate developer based in Mumbai. It made a late entry and started its real estate activity only in 2002. PPDCL is led by Shri Padamshil L Soni who has a rich experience of nearly two decades in construction. Apart from his two sons, the company has eminent personalities on its board including Shri Y. C. Pawar, Shri K. Nalinakshan, Dr. B. Samal to name a few. Under their leadership, the company has now positioned itself as a unique company catering to the niche segment of the property market. Within a short span of time, the company boasts of constructing landmark residential and commercial buildings for high end customers in Mumbai. ‘Prime Beach’ and ‘Prime Centre’ constructed in Santracruz by the company are among the most luxurious apartments and also well known for its modern and elegant architecture. On the other hand, its ‘Prime Plaza’ is a 100% commercial project with ultra modern facilities in Santacruz was a huge success. ‘Prime Avenue’ – a 100,000 sq. ft. residential cum commercial project in Vile Parle was the flagship project of the company comprising residential flats and large commercial units like showrooms, shops and offices.
Currently, PPDCL is developing two projects that are nearing completion. Of these, ‘Prime Down Town Mall’ project is much bigger being a 270,000 sq ft luxurious composite Mall with multiplexes. The mall is at the prime location of Hughes Road, Mumbai and is being constructed in partnership with others. Once operational it will be among the largest malls in Mumbai with hi-tech elevation and an international feel. ‘Prime Tech Park’, the other project is a 90,000 sq ft commercial building in Vile Parle mainly for IT /ITES companies. It is just next to the Western Express highway and barely a few kms away from the domestic and international airports. Apart from these two projects, the company has undertaken two more projects, of which both are shopping malls – one in Mumbai and the other in Pune. The Mumbai mall name ‘Prime Square’ is a four storey, 70,000 sq ft mall located on, S.V. Road, in Goregaon – a flourishing suburb of Mumbai. The Pune mall called ‘Prime Pune Mall’ will be a gigantic 430,000 sq. ft. state-of-the-art mall with anchor shops, multiplexes, food courts, entertainment area and a hotel. In short, the company is estimated to generate more than Rs.500 cr. of revenue over the next 2-3 years.
PPDCL has also finalised a location in Vile Parle (W) to construct a 60,000 sq ft shopping mall and has even created a blue print for the same. It is also planning to develop a residential project in Pimpri, Pune. The plan is still on paper and yet to be finalized. Financially, due to sale of units in ‘Prime down Town Mall’ and ‘Prime Tech Park’, PPDCL has ended FY08 on quite a buoyant note. It recorded a topline of Rs.105 cr. and bottomline of Rs.32.70 cr. Importantly, it has made the highest tax provisioning of Rs.17.50 cr., which ensures the integrity of its real profit. This translates into an EPS of Rs.16 on its equity of Rs.10 cr. with face value of Rs.5 per share. It is expected to declare Rs.2.50 as dividend which gives a yield of nearly 4%. Considering the company’s current projects on hand and that too at prime locations, it may report total revenue of Rs.150 cr. with net profit of Rs.40 cr. for FY09 i.e. an EPS of Rs.20 on its current equity. Hence, the scrip is available fairly cheap at a current P/E ratio of merely 4 times. At the same time, adverse profiling of the sector coupled with higher input prices, imposition of service tax on rentals of commercial property & hardening interest rates are bound to dampen the sentiment and affect the demand for certain categories of properties. Yet, the company is largely insulated from the downturn and investors can buy the scrip at current levels with a price target of Rs.100 in 9-12 months.

Source: Internet (MT)