Stock Idea: Mcnally Bharat Engineering Company

McNally Bharat Engineering Company (MBECL) provides turnkey solutions in the areas of power, steel, alumina, material handling, mineral beneficiation, coal washing, ash handling and disposal, port cranes, civic and industrial water supply.
The stock hit a new low at Rs.28.80 on 5th March and since then has managed to recover to around levels of Rs.30 but it continues to remain around the low levels. And this is despite the company having posted a good performance for the third quarter ended 31st Dec 2008. It also has a good order book, so surely it is the overall market sentiments, which is keeping the stock low.
For Q3FY09, on a YoY, net sales rose by a smart 92.2% at Rs.227.07 crore. Net profit was up 35% at Rs.5.61 crore. Margins have always been below 10%, only this time, the NPM shows more pressure. OPM was up at 9.62% compared to 8.62% in Q3FY08 but NPM was at its lowest ever at 2.47% as against 4.19% in Q3FY08.
The company had orders in hand exceeding Rs 2810 crore as on December 31, 2008. Infact, on 2nd March 09’, the company bagged an order worth Rs 115.92 crore from SAIL for water supply system for its IISCO Steel Plant, Burnpur in West Bengal, to be executed within 18 months. And in Dec 2008, it also secured a Rs.244 crore order from Vedanta group.
The company’s Asansol plant at Kanyapur industrial area in West Bengal also commenced commercial production with effect from 1 March 2009.
As on 31/12/08, total promoters' shareholding in the company stood at 32.30%. A promoter group company, Williamson Magor & Co, pledged 2.89% stake of the company.
The nine month performance for the current fiscal indicates that in terms of topline, the company would more than surpass that posted in FY08. But the concern is whether it would be able to post a higher net profit or maintain net profit at FY08 levels. Should be easier given the order book.

Source: sptulsian.com

Intraday Trading Calls for 12th March

Stock Market India may open Positive with gap up & a good positive closing expected today.

Today's Intraday Stock Tips / Trading Calls (Keep strict Stop Loss for Each Trade):

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
LIC HOUSING	Buy Above	190.10	194.70	200.00
	Sell Below	187.40	183.25	178.00
TECH MAHINDRA	Buy Above	264.75	270.15	275.00
	Sell Below	261.20	257.25	252.00
TULIP IT	Buy Above	284.70	291.35	298.00
	Sell Below	279.70	275.15	270.00
KLG SYSTEL (531269)	Buy Above	63.20	66.10	69.00
	Sell Below	61.40	59.20	56.00
BANK OF BARODA	Buy Above	184.60	191.25	198.00
	Sell Below	182.40	179.25	175.00
BANK OF INDIA	Buy Above	182.80	188.45	195.00
	Sell Below	179.70	175.45	170.00
ICSA INDIA	Buy Above	56.50	59.25	63.00
	Sell Below	54.15	51.70	48.00

GOOD LUCK

Multibagger: Lloyd Electrics

Lloyd Electrics (Rs. 14.00)
BSE Code : 517518
Market Cap : Rs. 45 Cr.
TTM EPS : Rs. 11
Pmt Stake : 32 %
52W H/L : Rs. 131/13.50
P/E Ratio : 1.3x
Dividend : 10 %
Incorporated in 1988, Lloyd Electric and Engineering Ltd (LEEL) was primarily setup as a backward integrated unit of Fedders Lloyd Corp, the leading group company to manufacture coils for air conditioners. Since then it specializes in the custom design and manufacture of heating and cooling coils including ‘U’ bend and return bend tubes for heat exchanger coils, system tubing, header line etc and sheet metal items for air-conditioning and refrigeration applications. Over the year it has emerged as India’s largest manufacturer of evaporator and condenser (E&C) coils with around 60% market share. E&C coils are critical components in AC manufacturing next only to the compressor and account for approximately 20% of the cost of manufacture. Of late, company has got itself forward integrated into lucrative business of contract manufacturing of window/ split air conditioners for various multinational companies in India. Thus it has become an OEM supplier to almost all AC manufacturers in India and its clientele includes Samsung, Electrolux, Carrier, Haier, Voltas, Blue Star, LG, Hitachi, Onida, Symphony, National, Whirlpool, Diakin etc. It even provides customized AC solutions for institutional clients like railways, defence, telecom etc apart from undertaking airconditioning services for luxury buses including Volvo etc. As of now, LEEL derives roughly 60% revenue from coils, 30% revenue from contract manufacturing of AC’s and balance 10% from railways.
Sarcastically, LEEL has neither disclosed the acquisition cost nor it is making the Luvata’s quarterly financial statement public. The company which earned net profit of Rs 55 cr from core business operation last year is now available for Rs 55 cr. Financially, LEEL’s sales fell by 15% to Rs 411 cr and PAT declined by 55% to Rs 20 cr for nine months ending Dec’08. Although the retail demand for air conditioners may remain low in the current calendar year as well, but the sharp fall in copper, steel, aluminium and other metal prices, increased government spending on railways & massive investment by Metro Rail are few of the positive factors for the company. Also not to forget, with extremely low penetration, there is tremendous demand potential for air conditioners in India over the long run. To fund its growth plan LEEL has issued 50 lakh convertible warrants @ Rs 225 per warrant. Considering the current market price, it’s but obvious that warrant holders will let it lapse in March 2009. On a standalone basis it may end FY09 with sales of Rs 500 cr and PAT of Rs 20 cr i.e. EPS of Rs 6 on current equity of Rs 31 cr. With reserves of over Rs 300 cr, Gross block of Rs 224 cr, & debt/equity ratio of 0.45x, it seems all the negatives have been factored in the share price. However, scrip may witness some panic selling as around 23 FII’s including Morgan Stanley, Bank of New York etc are still holding 25% stake in the company. Long term investors can safely accumulate this scrip during panic times to get a multibagger return in 2~3 years.

Source: Internet (Smartinvestment)