Stock Idea: Goa Carbon

A part of the Dempo group, Goa Carbon has had an exceedingly good first quarter, carrying forward the winning stroke it had in FY08. A simple change in sales strategy has put the company on the firm path to superlative growth.

Net sales rose by a whopping 130% on a YoY at Rs.109.60 crore. EBIDTA doubled up from Rs.4.04 crore to Rs.19.16 crore. PBT was up more than 10 times at Rs.19.16 crore. The company had a MTM forex loss of Rs.8.56 crore. PAT was up over 8 times at Rs.11.63 crore. What is noteworthy here is that for entire FY08, the company had posted a PAT of Rs.17.32 crore

And this change in fortunes was brought about due to the change which the company made in its sales policy, starting from January 08’. It started selling on a spot basis instead of forward contracts. This helps the company sell CPC at an average rate of over $500-550 per tonne as against the price of $350-400 per tonne it was selling earlier. It also stopped selling on credit and this too helped.

It currently has a manufacturing capacity of 2.40,000 tpa, making it the second largest after Rain Commodities, which has a capacity of 6,00,000 tpa. It exports 25% of its production while the rest is sold to consumers in aluminium, titanium dioxide and metallurgical chemical industries. Of this, aluminium manufacturers account for 75% of the business, meaning its fortunes are closely linked to that of the aluminium sector.

The company has chalked out a capex of Rs.480 crore to set up a greenfield plant to produce up to 5 lakh tpa of CPC with a co-generation power plant of 40 MW.

The stock price has moved up sharply in August and currently it is hovering in the range of Rs.130-136. Stay invested, infact at every dip, accumulate the stock.

Source: sptulsian.com

Stock Idea: India Glycols

One glance at the financial performance for first quarter ended 30th June 2008, be it YoY or QoQ, indicates an across the board fall in topline as well as bottomlines. Sequentially, OPM has slipped from 19.05% in Q4FY08 to 17.08% in current Q1, NPM slipped from 6.99% to 4.85%. YoY, the fall is sharper. OPM has come down from 27.43% and NPM from a very healthy 13.14%.
There were two reasons for this fall. The biggest culprit is the fact that the company has shut down the plant for 21 days for debottlenecking of capacities & catalyst change. 21 days is almost like a full month, juts one week short. So of the three months in Q1, the company actually operated for just 2 months and one week. Naturally, the profitability was bound to take a hit.
Secondly, even on the lower net sales, the company’s operating expenses was quite high. YoY, one may feel that the company has managed to keep it at the same levels of Rs.215 crore but when compares it as percentage of sales, it becomes apparent that the outgo was much higher. In Q1FY09, operating expenses ate away 86% of the net sales, which was at 79% in Q1FY08.
The current fiscal is expected to be good. Its carbon-di-oxide plant of 80 ton per day capacity at Kashipur started commercial production in April’08 and this would also start contributing to the bottomlines in the current fiscal.
India Glycols is a very good company, its product is its winner. It manufactures MEG from molasses unlike others who do it from crude, hence it is protected from the vagaries of the rising crude prices and at the same time, gives a more cost effective substitute for its customers. Its located in Uttaranchal, which is close to the main sugar belt of India. And that is the reason why the company did not hit rock bottom despite the performance.
Currently quoted at Rs.210, its best to accumulate this stock at every dip and keep a 15-18 months perspective for gains.

Source: sptulsian.com

Intraday Trading Calls for 09th September

Stock Market India may open flat to nagetive and see some profit booking but recovery also expected from lower levels and a flat to positive closing expected today.

Today's Intraday Trading Calls / Stock Tips (Keep Appropriate Stop Loss for each trade):

RPOWER (168)
Buy Above 169.60 Target 172.55, 176.00
Sell Below 166.80 Target 163.25, 160.00
GMDC (191)
Buy Above 193.25 Target 198.75, 208.00
Sell Below 189.20 Target 184.25, 178.00
INDIABULLS SECURITIES (63.5)
Buy Above 64.45 Target 66.75, 69.00
Sell Below 62.60 Target 60.20, 58.00
GSS AMERICA INFO (297)
Buy Above 300.10 Target 306.75, 314.00
Sell Below 294.55 Target 288.05, 282.00
PUNJ LLOYD (309)
Buy Above 311.45 Target 315.75, 322.00
Sell Below 307.55 Target 302.20, 295.00
SEL MANUFACTURING (237)
Buy Above 240.55 Target 248.05, 258.00
Sell Below 234.60 Target 228.35, 220.00

Others for Intraday: INDIAINFOLINE, ORG INFORMATICS, STONE INDIA, HPCL, BPCL.

GOOD LUCK.