Thursday, July 16, 2009

Stock Idea: Ind-Swift Lab, Tantia Construction

Ind-Swift Laboratories Ltd. (Code: 532305) (Rs.40)
reported satisfactory results for Q4FY09. Sales grew by 20% to Rs.148 cr. but net profit remained flat at Rs.11 cr. posting an EPS of little over Rs.4 for the quarter. Accordingly for entire FY09, its sales jumped up 30% to Rs.588 cr. and profit increased by 10% to Rs.35 cr. After considering one-time extraordinary expense of Rs.5 cr. Thus the company reported an EPS of Rs.16 on its current equity of Rs.25 cr. Notably, the company has started exporting to USA after obtaining USFDA approval in September 2007 for its API manufacturing facility for Clarithromycin at Derabassi Punjab. Exports constitute around 40% of sales with its presence in 45-50 countries. For future growth, the company has a robust product pipeline of 25 products, which includes few blockbuster drugs as well. It has successfully filed over 72 DMFs with the US, Canadian, UK and European drug authorities. The company has been aggressively expanding its capacity and has enhanced its gross block by almost five times to Rs.470 cr. from Rs.100 cr. in 2005. With a healthy book value of Rs.97, the scrip is trading relatively cheap at a P/E ratio of just 2.5 times. However, high debt: equity ratio is a cause of concern.

Tantia Construction Ltd. (Code: 532738) (Rs.65)
has posted an excellent performance by clocking an impressive 15% operating margin and is registered 160% jump in net profit at Rs.12.50 cr. although its topline was flat at Rs.169 cr. For entire FY09, its PAT improved by 12% to Rs.17.25 cr. while revenue increased by 25% to Rs.450 cr. recording an EPS of Rs.11 on its equity of Rs.15.57 cr. This stupendous performance is backed by a good orders in the last few months and its current order book position stands healthy at Rs.1500 cr., which is more than 3 times its FY09 turnover and gives strong future revenue visibility. The company constructs roads and highways, railways, tunnels, bridges & flyovers, urban infrastructure, sewerage and drainage, civil & housing construction etc. Lately, it also ventured into the lucrative marine infrastructure space, into power transmission and distribution segment and aviation infrastructure. In fact, it is among the five Indian companies capable of providing 'foundation-to-finish' for mega railway bridges spanning 2-km or more. Importantly, it has a very strong presence in the eastern and north-eastern regions, which gives it a distinct edge, as very few players are interested in bidding in these regions due to the difficult terrain. With Mamata Banerjee as the Railway Minister, a special fund has been created for development of North Eastern railway in the Railway Budget presented on Friday, 3 July 2009. This augurs well for the company as its forte lies in railway infrastructure. A decent bet for the long-term.

Source: Internet (Moneytimes)

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