Thursday, November 13, 2008

Multibagger: XL Telecom & Energy Ltd.

XL Telecom & Energy Ltd. (XLTEL) (Code: 532788) (Rs.68.90) has produced excellent Q1FY09 (June – September 2008) results posting 150% higher net profit of Rs.15 cr.
Incorporated in 1985, XLTEL, formerly XL Telecom, is a Hyderabad based company that operates through two divisions: Telecom and Energy. In December 2006, it came out with an IPO of 39,50,000 shares of Rs.10 each at Rs150 per share aggregating Rs.59 cr. for expansion.Its manufacturing facilities at Hyderabad in Andhra Pradesh and Nanded in Maharashtra have annual installed capacities of 500,000 units of cable jointing kits, 2,880 of SMPS plants, 65 MW solar modules, 3 million CDMA phones, and 150,000 litres of ethanol per day. XLTEL used to derive almost 80% sales from Telecom products and the balance 20% from its Energy Division, which comprises two segments – Ethanol and Solar Photovoltaic Systems (SPV). This has drastically come down to just 1.5% from 44% in FY08 (June-end) due to high margin concentration in the energy business.
XLTEL has set up a 120 MW solar photovoltaic cell manufacturing plant in the Rajiv Gandhi Nano Technology Park SEZ at a cost of Rs.360 cr., which is scheduled to commence its operations soon. It recently raised $40 million (Rs.160 cr.) through a FCCB issue to part fund the above project. The FCCBs are convertible after one year but before 5 years post issue. The balance funding of Rs.200 cr. is being financed by a Term Loan from IDBI at 11% p.a.
It has a 3-year exclusive distribution agreement with Forta Im Ex SL, Italy to deliver a minimum of 3 MW solar modules per annum to Europe and collaborations with Alfa Laval, Axesstel, Corning and Kyocera Wireless. During FY08 (June end), XLTEL posted 24% higher sales of Rs.650 cr. and earned 99% higher net profit of Rs.40 cr. yielding an EPS of Rs.21.4.
During Q1FY09, sales have further gone up by 70% to Rs.257 cr. and net profit up by 150% to Rs.15 cr. This net profit of Rs.15 cr. is arrived at after the notional provision of Rs.5.5 cr. towards foreign exchange fluctuation. The company’s equity capital is Rs.18.8 cr. and with reserves of Rs.269 cr., the book value of its share works out to Rs.154. The promoters hold 61% in the equity capital, foreign holding is 29.4%, institutions hold 4.4%, PCBs hold 1.5% leaving 3.7% with the investing public.
XLTEL is looking at establishing series of Solar Farms in Italy, southern France and other European countries generating about 300 MW over 3 years. The first of its solar farm has been established in Majorca, Spain, with an installed capacity of 1.6 MW at a capital outlay of Euro 9.5 millions (Rs.62.7 cr.). The company has submitted bids for three tenders to supply solar energy equipment worth Rs.640 cr. in Europe. XLTEL has received TUV Certification for quality assurance from Germany that will act as a major catalyst for exports to Europe. The company has signed a Power Purchase Agreement (PPA) for 25 years with a Spanish utility company. The project is expected to generate about Euro 19 million in revenues over its initial life with almost negligible maintenance costs.
It has signed a 5-year contract with LDK under which, LDK Solar will deliver approximately 300 MW of multi-crystalline silicon solar wafers to XLTEL over a 5-year period, commencing in Q1FY09 and extending through 2013. Looking at the growing global demand for Non-Conventional Energy Power Generation in the global market place, XLTEL, as a part of its strategy to be a serious player, has decided to embark on forward integration in the solar value chain by entering the EPC segment of solar farm establishment and into power generation using Solar Technologies.
Globally, the solar photovoltaic market is estimated at $16 billion and is expected to touch $65 billion by 2012, which provides ample opportunity for the growth of XLTEL. XLTEL is likely to achieve sales of Rs.1000 cr. for FY09 June year end. Net profit is likely to go up by 50% to Rs.60 cr., which would give an EPS of Rs.32. At the CMP of Rs.68.90, the share is trading at a P/E of just 2.1 on its estimated EPS of Rs.32 for FY09 and offers potential for further gain of about 40% in the medium-term. The 52-week high/ low of the share has been Rs.595/58.
Source: Internet (Moneytimes)

Multibagger:Logix Microsystems Ltd.

Logix Microsystems Ltd.
BSE Code: 532341
NSE Code: LOGIXMICRO
Last Close: Rs.48.65
Logix Microsystems Ltd. (LML) is a Bangalore based company and has a long client list like GE, ABB, HP, Philips, LG Polymers, Hoechst, ABN AMRO, etc. The company’s equity capital is just Rs.12.25 cr. while it has huge reserves of over Rs.165 cr. i.e. 13.4 times its equity capital. Foreign holding in this company is around 48.12% while the promoters hold 22.60%, corporate bodies hold 11.37% and the Indian public holds only 15.94%. LML has posted marvellous Q2FY09 results. Net sales zoomed by 50.38% while net profit zoomed 123.81% to Rs.4.23 cr. In H1FY09, its sales zoomed by 55.60% while net profit zoomed 177.84% to Rs.9.53 cr. Its EPS was Rs.7.77. Its 52-week high/low is Rs.393/48, which means that the stock is available at a very low price. The company paid 40% dividend (Rs.4 per share) to shareholders FY08. At the current level, the stock yields 8.33% tax-free dividend. The stock is traded at a P/E ratio of just 4.
At the current level, the LML stock looks attractive for short-to-long-term investment. Buy at every lower level with a stop loss of Rs.38. On the upper side, the stock will go up to Rs.63 level. Crossover can take the stock to Rs.81 level in less than 6 months and it can touch Rs.110 level in less than 15 months.

Source: Internet (Moneytimes)

Multibagger: Titan Industries

Multi Bagger:Titan Industries Recommended Price 934.50
PN Vijay, Portfolio Manager Report Dated: Nov 11, 2008
Company Profile: Titan Industries is one of the fastest growing companies in the Consumer Goods & Luxury space in India. It is a leading manufacturer of watches and jewelry and has recently forayed into eyecare segment.The company was established in 1984 as a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation. By mid nineties, it became India’s largest player in the watch industry overtaking HMT. It launched its first brand Sonata in 1998, and hasn’t looked back since then. At present, the company operates in all ranges (popular/midrange and premium) with its bouquet of brands – Sonata, Titan, Titan Raga, Fastrack, and Xylus. It also introduced global brands such as Tommy Hilfiger and Hugo Boss into India. Currently, the company has a total network of 243 ‘World of Titan’ and 12 Sonata showrooms.In 1995, the company diversified into jewelry under Tanishq. Its pioneering role as a first mover played an important role in a fragmented market. Later on the company launched its second Jewelry brand, Gold Plus. The network has expanded to 114 Tanishq boutiques and 28 Gold plus stores.Titan has now diversified into fashion Eyewear by launching Fastrack Eye-Gear sunglasses, as well as Prescription Eyewear. The company has currently 30 stores and plans to cross the 150 mark by FY11.
Titan had an excellent quarter with the Sales and Net Profits going up 53% and 88% respectively. All segments grew in strong double digits with the mature Watch business growing 19% and Jewelry an impressive 71% (aided by higher Gold prices) and the newly created Eyewear – a scintillating 94%. What was gratifying was that all this growth was achieved with an improvement in margins across segments.The profits got translated into Earnings per share(EPS) growth of 88% with the EPS itself amounting to Rs 19.63 for Q2 of FY0809. For the half year, Titan has shown Sales and Profit growth of 38% and 104% respectively. The momentum in Eyewear makes us believe that going forward also, this growth trajectory is sustainable.
Investment Positives: Titan has reported a strong growth in its revenues, EBIDTA and PAT. Further, all its segments (Watches, Jewelry and Eyewear) have taken part in this growth. Titan operates in the sector which to a large extent is insulated from commodity and interest rate meltdowns. Its foray into Eyewear has been a success and it now has three distinct growing business segments. Titan always had a problem of high valuations but this has been corrected in the recent 40% fall in its share price in the stock market crash inspite of the impressive profit growth.
Concerns: In case of sudden fall in consumer spending, demand for Titan’s products which are upmarket will be affected.If Gold prices move up sharply, the fortunes of its Jewelry business are bound to suffer.
Recommendation: Titan is one of the most admired brands in all the segments it operates in. The company has shown a very robust growth in the past and continues to surpass the street expectations with its stellar numbers. Company’s recent foray into Eyewear has put it into a new league among specialty retailers. With the stock price correcting substantially in the recent stock market crash, we believe the valuations are very attractive. The stock is quoting at 17x FY09E EPS, which leaves excellent scope of appreciation considering that the Net profits are likely to go up by around 60%. We recommend a strong BUY with a one year price target of Rs 1500.
Source: Internet (Poweryourtrade.com)

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