Stock Idea: VOLTAS

Voltas, the second largest AC brand in India was up and about yesterday. With summer already scorching heat, this is the peak season time for AC companies like Voltas. And the company has made the right move at the right time, getting ready for the summer heat. It announced yesterday introduction of new ACs of 0.75 tonnes to 3 tonnes capacities, adding 5 new models with 20 variants to its existing line-up. It plans to penetrate the market with 70 new ACs in the market this season and hopes to increase its market share from the present 19%.

Q3FY11, as expected being the cyclically behavior of such companies, was subdued for Voltas. On a YoY 5% rise in net sales, it reported a 10% drop in net profit. It’s 50:50 JV with Riyadh based company for execution of electro mechanical projects in the country is expected to go on stream by April 2011. But unless the current turmoil in Bahrain is contained, this date could get postponed. Q4FY11 will be better than Q3 but it is Q1FY12 which will be more exciting. Good long term buy at every dip.

Source: internet (premiuminvestments.in)

Stock Idea: Panacea Biotec

Panacea Biotec (PBL) is India’s highly progressive research based health management company involved in research, manufacturing and marketing of branded pharmaceutical formulations, vaccines and natural products. The product portfolio includes highly innovative prescription products in important therapeutic areas like pain management, diabetes & cardiovascular management, renal disease management, osteoporosis management, anti-tubercular, gastro-intestinal care products and vaccines. The flagship brands of the company- Willgo for pain management; Glizid & Glizid-M for diabetes; Panimun Bioral & Mycept for kidney transplant occupy leadership positions in their therapeutic segments. This is in persuit of marketing strategies to build brands and drive the growth of the company. The vaccines portfolio consists of oral polio vaccines (type I and type III), Enivac-HB (Hepatitis B vaccine), Enivac-HB Safsy, Ecovac-4 (DTwP+Hep B), Easyfour (DTwP+Hib), Easyfive (DTwP+Hep B+Hib). Vaccines in the offing are- Anthrax, Dengue, Japanese encephalitis and several others. Panacea Biotec has earned the distinction of being a WHO pre-qualified supplier of oral polio and Hepatitis-B vaccines and are in the process of obtaining similar pre-qualifications for other vaccines.

PBL is the second largest vaccine producer in India and has been ranked as the third largest biotechnology company in India (as per ABLE Survey June 2009). While vaccines account for three-fourths of the company’s overall revenues, the balance comes from domestic formulations (the major therapeutic areas being pain management, diabetes and organ transplantation). The company has also established collaborations and tie-ups with international research organisations. Bulk of the vaccines is sold to the UNICEF, which largely caters to the Indian market and to some countries such as Ethiopia, Maldives, Nepal, Somalia and Yemen. The company has ultra modern, state-of-art production facilities at Baddi (Himachal Pradesh), Lalru (Punjab) & Delhi for manufacturing tablets, capsules (including soft gelatin), ointments (transgel formulation) liquids, herbal formulations and vaccines. The facilities are WHO cGMP compliant.

Net profit of Panacea Biotec rose 692.02% to Rs 16.87 cr. in the Q2 ended September 2010. Sales rose 52.32% to Rs 252.57 cr. in the quarter. Net profit of PBL had risen 226% to Rs 49.4 cr. in the first half ended Sept. 2010. Net sales were up 48% to Rs 506.5 cr. in the first half. The EPS for the half year on a equity of 6.13 cr. (Promoter stake-74.41%, FII/MF stake- 11.44%) stands at Rs 8. For the year ended March 2010, PBL had posted 14% rise in net sales to Rs 900 cr. on consolidated basis, whereas net profit stood at Rs 72.41 cr. (against net loss of 67 cr. in FY09). For FY10 PBL’s vaccine segment grew 24% to Rs 680 cr.(75% of revenues). Going forward, PBL has identified brand building in exports as its thrust area and it has significant presence in the global markets including the CIS, Africa, the Middle East and Asia. The company is actively exploring opportunities for launching as well as licensing out some of our patented products for manufacture/marketing in developed countries in Europe, North America and Latin America. Eyeing the lucrative pie of off-patent drugs, PBL is looking to manufacture generics to expand its domestic formulation business and has plans to venture into the US market. Over $150 billion drugs would be off-patent in the next several years as their exclusivity time matures. PBL which gets most of its sales from domestic operations, is looking to start operations in the US from this fiscal to expand its exports, the area and region which they ignored till now.

PBL would announce deals in the next few weeks and is currently working on the Japanese encephalitis and Dengue vaccine which may be launched this fiscal The company has about Rs 120 cr. of cash reserves and it is not looking for acquisitions but expects in licensing and out licensing opportunities deals in the vaccines and medicines for infectious diseases and organ rejection. At the current market price of Rs 204, the stock trades at 12.4x and 10x of FY11E (Rs 16- Rs 17) and FY12E earnings(Rs 20- Rs 21), respectively.

Investors can start accumulating the PBL stock at current levels and add more on declines for decent returns of 50%-60% over the next 6-9 months.

Source: Internet (Valuenotes by Sanjay Chhabria)

Stock Idea: Hindustan Construction

Hindustan Construction: Buy on dips

Company Overview—

HCC is one of the largest private sector construction companies in India and the foremost in infrastructure building. Businessman and nationalist, Seth Walchand Hirachand, founded the company. With a vision for a modern and prosperous India, Seth Walchand entered into the core sector of industry and on 27th January 1926 Hindustan Construction Company Ltd.,(HCC) was born. Company started initially with tunneling works has today grown to a Company with a dedicated, experienced and expert team of people achieving remarkable feats in the field of civil engineering construction. The Subsidiary Companies of HCC are Hincon Technoconsult Ltd, Western Securities Ltd, HCC Infotech Ltd, Pune Paud Toll Road Company Ltd and Hincon Realty Ltd. The company has staff strength of over 1250 people, including over 600 people with technical and engineering skills and experience. HCC's highly trained manpower and up-to-date machinery are, in large measure, responsible for the quality and excellence of HCC's project implementation. For its immense contribution in the field of construction, HCC has won accolades from several prestigious organizations within India and abroad. Company plans to play a

Products & services—

Company is one of the largest construction and infrastructure building company in the country. HCC specializes in the construction of technologically complex & Long-gestation period projects. The Company executes various projects from diversified areas like Hydel, Power, Roads, Bridges, Dams, Barrages, Marine Works, Buildings & Environmental Projects. The company has also undertaken several projects in Bhutan, Saudi Arabia, Iraq, Myanmar, Tanzania, Sri Lanka etc. The company also specializes in construction techniques like pre-cast units for industrial structures and jetties, slip forming for tall structures and underground shafts, bridge builders for segmented construction of long-span bridges, three-dimensional computer-aided design technology for bridges, and dredgers for speedy sinking of monoliths, etc.

HCC has contributed its civil engineering construction expertise with leading edge technologies for building some of the foremost infrastructure projects in India and abroad. Among these are over 300 road and railway bridges and several outstanding landmarks around the country. HCC has been involved in construction of the most diverse projects ranging from power, dams, highways and bridges, to marine structures, water supply, factories and waste treatment plants

Recent Developments—

10-august, HCC announced that it has bagged an order worth Rs 1.21 billion from Hindalco Industries. The work includes area grading works, water reservoir work and temporary roads & drains for Hindalco’s Aditya Aluminium project at Sambalpur, Orissa. The project is to be completed in 10 calendar months from the date of issue of this order.

9-september, Hindustan Construction Company announced that HCC-CPPL that is Hindustan Construction Co (HCC) and Coastal Projects (P) (CPPL) has been awarded a contract for construction of single line BG Tunnel No. 12 in between Khongsang-Tupul in connection with construction of New Railway Line Project between Jinbham and Tupur in Imphal, from North Front Railway. The value of the contract is Rs 3.128 billion. The company’s share in the total value of the contract is 60% that is Rs 1.876 billion.

24-september, HCC today announced that it has bagged two new contracts worth Rs 6.60 billion from GMR (Badrinath) Hydro Power Generation. The first order i.e. lot 2 involves main civil works package for coffer dams, diversion channel, barrage, power intake, and part HRT. The order is worth Rs 2.73 billion to be completed in 52 months from the date of issue. The second order i.e. lot 3 involves main civil works, package for MAT, powerhouse complex, surge shaft, pressure shaft, pothead yard, TRT and part HRT. The order is worth Rs 3.87 billion to be completed in 54 months from the date of issue.

Valuation—

Order book position of the company is growing steadily from last few quarters. HCC has expertise in hydropower and nuclear power, which will be the key growing areas in future in power sector. At CMP, stock is trading at 24.4 X multiple of its FY2011 Estimated EPS and 14.2 multiple of its FY2012 Estimated EPS. We recommend investors to “BUY” “Hindustan construction company ltd.” at every dips with medium to long-term investment horizon.

Source: Internet (Valuenotes by Abhishek Jain)

Multibagger: Navin Fluorine International

This Arvind Mafatlal group company was in the limelight yesterday. The stock soared over 11% after the company's board approved the buyback of equity shares to the extent of Rs.13.50 crore. The proposed buyback is to the extent of 10% of the paid up capital and free reserves of the company as on March 31, 2010. It would be conducted through the tender offer route at a price of Rs.400 a share.

For quarter ended 30th June 2010, on a sequential basis, despite a 28% drop in net sales, its net profit was up over 5 times. It operates the largest integrated fluorochemicals complex in India and it also generates a good source of income from sale of Carbon Credits. The company is currently in the process of restructuring its Organic Chemicals activities including dismantling and redeploying some of the assets of its Dewas unit in other projects currently under implementation at Surat. The Dewas site is now being utilized to set up another state-of-the-art contract manufacturing facility. The new multi-purpose plant and contract research and manufacturing services initiatives will begin to bring in revenue from end FY 2011.

Source: Internet (premiuminvestments.in by SP Tulsian)

 

CMP Rs. 305/-

EPS Rs. 70/-

BOOK Value Rs. 288/-

FACE Value Rs. 10/-

TARGETS Rs. 375/- 490/- 650++.

Stock Idea: Federal Mogul Goetze (India)

Federal Mogul Goetze (India) (Rs 112)

(Bse Code- 505744 Nse Code- Fmgoetze)

(P/E- 10, Promoter’s Stake-74.98%, Equity- 55.63 Cr., Market Cap- 623 Cr.)

Goetze (India) Limited was established in 1954 as a joint venture with Goetze-Werke of Germany. Goetze-Werke of Germany is now owned by Federal-Mogul Corporation, a $6.3 billion global company and one of the leading manufacturers of automotive components in the world. In 2006, US-based Federal-Mogul acquired the Indian promoters’ stake, raising its holding to 50.11%, to take control of the company after which the name of the company changed to "Federal-Mogul Goetze (India) Limited"(FMG). Federal Mogul, one of the promoters of Goetze (India) and a US auto-parts major acquired 62,30,000 equity shares of the company at Rs 222.50 per share, constituting 24.64% of the equity share capital. There was rights issue in 2008 at Rs.56 per share, which did not get adequate response from the investors and promoters subscribed to the Shares and increased their holding to 74.98%. FMG has a paid-up equity capital Rs 55.63 cr. of which promoters hold 74.98%., FII/MF’s hold 12.07%, Bodies corporate hold 3.24% and Public holds 9.71%

FMG is the largest manufacturer of pistons and piston rings in India. The parent Federal-Mogul is a leading auto-ancillary company with a very strong presence in the diesel vehicles segment. FMG is involved in the manufacture of auto components like pistons, piston rings, sintered parts and cylinder liners covering a wide range of applications including two/three-wheelers, cars, SUVs, tractors, light commercial vehicles, heavy commercial vehicles, stationary engines and high output locomotive diesel engines. FMG has 4 manufacturing facilities at Bengaluru (Karnataka), Parwanoo (Himachal), Bhiwadi (Haryana) and Patiala (Punjab) and 22 pan India marketing offices. It makes the widest range of piston rings and pistons varying from 30mm to 300mm diameter. It also manufacturers sintered parts light metal castings and cylinder liners covering a wide range of applications including two/three-wheelers, cars, SUVs, tractors, light commercial vehicles, heavy commercial vehicles, stationary engines and high output locomotive diesel engines. It is market leaders both in OEM and aftermarket. Besides, about 10% of its business is from exports. Within the original equipment manufacturing (OEM) segment, FMG’s revenues are spread across all auto players including Tata Motors, M&M, Bajaj Auto and TVS. There are also expectations that the US based auto parts major parent may use FMG as an outsourcing hub.

For the Q1 ended March 2010, FMG has posted 31% rise in net sales to Rs 209.1 cr. whereas net profit increased 29% to Rs 11.35 cr. on standalone basis. For the year ended December 2009, FMG had posted net sales of Rs 785.32 cr. and net profit of Rs 54.52 cr. on consolidated basis. On a equity of 55.63 cr. the EPS stood at Rs 9.8. For the year ended December 2008, FMG had posted net sales of Rs 706.6 cr. and net loss of Rs 6.89 cr. The Indian automobile industry is on fast revival after tough period. 2-Wheelers and passenger cars sales are already in “Topgear”. With confidence returning in economy, CV and Capital goods sales are likely to see upward trend after almost 2 years of slow down. Increased focus on rural economy can boost tractors sales in a big way. Going forward, FMG is expanding its capacity, by installing a new plant at Chennai, which is likely to begin operations next year. At CMP of Rs 112, the FMG stock trades at 11.4 times CY09 earnings (Rs 9.8) and at 9.3 times expected CY10 earnings(Rs 12), which is attractive for a company that is the biggest player in its line of business. From Rs 449 on 5 January 2007, the scrip tumbled to Rs 28 by 9 March 2009. In view of the improved results, strong parent and good medium term prospects, Investors can start accumulating the stock at current levels and add more on declines for decent returns of 45%-50% over the next 8-12 months.

Source: Internet (Valuenotes by Sanjay Chhabria)

Stock Idea: Siyaram Silk Mills

Siyaram Silk Mills is a part of Siyaram Poddar group. This is a vertically integrated textile company. This company has got in-house facilities for spinning, dyeing, weaving, finishing and also garmenting. The brand Siyaram is available at over 40,000 retail outlets all across the country. Besides that the company is also opening its own exclusive stores where it will sell Siyaram besides other brands, which the company has. Beside Siyaram the company also has Oxemberg and J Hamstead as the other brands under which their garments are sold.

If you see the financials of the company, for FY09, the company did sales of about Rs 530 crore, profit after tax (PAT) was about Rs 11.5 crore. In the first nine months, sales are up by about 25% about Rs 472 crore. Profit after tax is up by more than 150% to about Rs 18.5 crore, which means an annualized EPS of Rs 25. The stock currently trading at about Rs 170-172 is available at a PE multiple of less than 7 and a market cap of about Rs 160 crore.

If you look at the valuation of the company—you have a company, which is doing sales of close to Rs 600-650 crore that too in the branded segment available at a market cap of about Rs 160 crore and a PE of less than 7

The company has got a 20 year track record of uninterrupted dividends. Even for 2010 the company has already given an interim dividend of about 60%. The book value is about Rs 175 which means bonus is definitely a possibility. The best part is that past few years there has been no equity dilution by the company except for the bonus, which the company gave in 2006 and a small preferential issue, which was made to the promoter’s way back in 2001. Besides that there has not been any equity dilution and the equity is very small at about Rs 9.5 crore.

Given all those factors, the price to earning multiple of 7 is the company is currently discounting the PE multiple of a commodity textile play and not really of value added company with good brands. The stock is bound to get re-rated. I think it is a matter of time that the stock gets re-rated.

Source: Internet (moneycontrol.com by Ashish Chug)

Stock Idea: Granules India Ltd

Granules India Ltd (Rs97)

(BSE Code- 532482 NSE Code- GRANULES)

(P/E - 7.5, FY10E Sales - Rs475 cr, Market Cap - Rs194 cr)

Granules India Ltd.(GIL) is a fully backward integrated formulation manufacturer. The Company is a large-scale manufacturer of Finished Dosages (FDs), Pharmaceutical Formulation Intermediates (PFIs) and Active Pharmaceutical Ingredients (APIs). Granules has installed capacities of 13,550 tonnes for APIs and 8,400 tonnes of PFIs. GIL is a fully vertically integrated pharmaceutical manufacturing company with three core lines- Active Pharmaceutical Ingredients (APIs) – Granules has 3 factories manufacturing APIs and is amongst the top global manufacturers of Paracetamol and Ibuprofen. Pharmaceutical Formulation Intermediates (PFIs) – Granules pioneered the concept of PFIs and currently has 2 factories manufacturing single and multiple - active PFIs. Finished Dosages (FDs) – Granules recently opened a dedicated FD plant at its Gagillapur facility. Its plant has the capacity to produce 6 billion tablets annually and is scalable up to 12 billion tablets. GIL’s integrated model allows it to provide products throughout the value chain in a cost-effective and efficient manner. It serves over 300 customers in 50 countries through its sales offices in India, U.S., U.K., Colombia and China.

The company, which is into making of Active Pharmaceuticals Ingredients (APIs) and Pharmaceutical Formulations Ingredients, is confident that the foray into tablets would add to its overall growth. The company, which is in the niche area of granulation technology, is eying high volume business in Europe. The company’s business model is based on focusing on a few products which drive high volumes. Granules India is moving up the value chain from being a predominantly bulk drug player to a formulation player.

For the Q3 ended Dec. 2009, Granules posted net sales of Rs. 122.40 Cr., an increase of 24.7% over the same period last year and a net profit of Rs. 6.56 Cr. as compared to the same period last year at Rs. 0.49 Cr. On a standalone basis, GIL achieved sales of Rs. 101.34 Cr. and a net profit of Rs. 5.87 Cr. This is the first time the standalone unit has crossed Rs. 100 Cr. in sales. GIL’s formulation division continues to grow rapidly and now comprises over 9% of its sales. This division will ramp up significantly over the next few quarters as the company commences work on several key contracts. On a equity of 20 cr. (Promoters stake- 34.5%, FII/ Institutional stake- 32%) the EPS for Q3 stands at Rs 3.27. For the nine months ended Dec. 2009, GIL has posted 28% rise in net profit to Rs 22.99 cr. on 28% growth in net sales to Rs 347.82 cr. on consolidated basis. Going forward, it appears that the foundation for growth at GIL is laid and the company is poised to leverage its manufacturing strength in the respective product areas. With product mix tilting towards prescription formulations, GIL is poised for good growth in earnings in the coming years.

At the current market price of Rs 97, the stock trades at 7.4 times expected FY10E earnings(Rs 13) and at 6 times its FY11E earning(Rs 16). Investors can start accumulating the stock at current levels and add more on declines for decent returns of 40%-45% over the next 6-8 months.
Source: Internet (Valuenotes by Sanjay Chhabria)

Stock Idea: Riddhi Siddhi Gluco Biols Ltd (RSGB)

Riddhi Siddhi Gluco Biols Ltd (Rs 216)

(BSE Code- 524480)

(P/E - 7.5, FY’09 Sales - Rs534 cr, Market Cap - Rs244 cr)

Riddhi Siddhi Gluco Biols Ltd(RSGB) is the largest manufacturer of various types of starch, liquid glucose, dextrose monohydrate and other derivatives, high maltose corn syrup and byproducts like corn gluten meal and enriched fiber, which are used in various applications such as chocolates, processed foods, glass and medicines, paper, glucose and textiles. RSGB controls about 17% of the total starch market. About 60-65% of its turnover comes from industry majors such as Nestle, Hindustan Unilever, Ranbaxy, Ballarpur, ITC, Grasim, Indian Rayon and Godrej. Catering to a sizeable market in India, RSGB has continuously tried to increase capacities and feed the growing industry demand, which is about 12-15% at present. Per capita consumption of corn starch in India is estimated to be about 1 kg as compared with 64 kg in US and the world average of 6 kg, which leaves room for a sustainable growth in the years to come. In 2006, RSGB, the largest corn wet milling company in the Indian subcontinent having the highest crushing capacity, had joined hands with France’s Roquette Freres, a leading player in this industry with a consolidated turnover exceeding $4.5 billion, to improve the yield parameters and develop new products

RSGB’s new capacities are already in place and for technical expertise; it has found a partner in Roquette Freres, France, which is the world’s fifth largest starch company. Roquette also has a 14.93% stake in RSGB. Roquette, which sells about 1,000 products, will help RSGB increase its current product offering of 40 to add more value added products in its portfolio by way of providing technology and know-how. These new value added products will be for nutrition, biotech and health and dextrose for sugar free goods. These value added products will also help RSGB in acquiring a larger pie of the existing market and enter new industries. Considering these developments, RSGB is targeting a market share of 25% in two years as compared with 17% now. RSGB currently generates about 65 per cent of its revenues from value added products. It is planning to increase this to 80% over the next two years. RSGB is also working closely with brand-enhancing food companies like Nestle, Heinz, Cadbury, Hindustan Unilever and Britannia and pharma companies like Ranbaxy, Wockhardt, Sun Pharma and Nicholas Piramal with repeat business and sustainable revenues.

For the Q3 ended Dec. 2009, RSGB has posted net profit of Rs 12.77 cr.(up 913%) on net sales of Rs 193.58 cr.(up 56%). For the nine months ended Dec. 2009, RSGB has posted a 158% rise in net profit to Rs 27.08 cr. on a 38% rise in net sales to Rs 514 cr. on consolidated basis. The EPS for nine months stands at Rs 24.3. For the year ended March 2009, RSGB had posted net sales of Rs 533.9 cr.(up 60%) and net profit of Rs 13.98 cr.(down 30%). The net profit was down mainly due to higher interest burden, forex losses and higher depreciation. On a equity of 11.13 cr.(Promoters’stake-43%), the EPS stood at Rs 12.5 and the dividend declared was 20%.

With global economy showing signs of recovery, consumer’s willingness to spend more and demand picking up, demand for products like starch & glucose is also likely to pick up. Also, FMCG companies have continued to grow by volume and there by would in turn increase the demand for raw materials/inputs used in bakery & confectionery products. At the current market price of Rs 216, the stock is trading at a P/E multiple of 7.6 times its FY10E earnings (Rs 28-Rs 29) and 6.4 times FY11E earnings (Rs 33-Rs 34). RSGB’ market cap stands at Rs 244 cr, against expected net sales of Rs 675 cr. for FY10. Considering that the company is the largest player in its sector, investors can expect good returns over the medium-long term. Investors can start accumulating the stock at current levels and add more on declines for decent returns of 45%-50% over the next 6-8 months.

Source: Internet (Valuenotes by Sanjay Chhabria)

Stock Idea: Pitti Laminations

This one is a micro-cap stock. This company caters to the electrical sector; this company makes electrical laminations which are used in electrical devices like motors, generators and alternators. Besides lamination this company had gone in for higher value added products in the past two years. This company had its share of problems for the past two years, I will first tell you as to what went wrong for the company.

Now because of the global meltdown operations of the company were severely impacted. This company was getting roughly 75% of its revenues from exports and GE was one of their major customers and because of what happened in Europe and USA, the order flow from GE reduced because of which the operations of the company were hit.

Second is that the company made a loss of around Rs 9.5 crore in foreign exchange hedging last year and even in December quarter the company has provided for an extra ordinary expense of about Rs 5.6 crore which is basically cost sharing with GE for some engineering analysis operations.

On the positive side, after what happened to the company on the export front, the company started focusing on the domestic market. The company is getting very good order flow from the domestic electrical manufacturers. A lot of the leading Indian company's like Simens, Alstom, Areva, BHEL are the customers of the company and because of this we have seen a margin improvement in the business of the company, in fact the margins have gone up from about 11% to about 17%, If you see the financials for the first nine months.

Recently company has got an order of about USD 36 million from GE. This is roughly about Rs 160 to Rs 170 crore on the current conversion rate. Now this order is to be executed over the next two years, which means a revenue visibility for the company for the next about Rs 80 - Rs 85 crore at least from GE for the next two years.

And assuming that the company does a revenue of about Rs 250 crore which it did in FY08 and assuming a margin of about 15% operating margin, we get a operating profit of close to Rs 35 crore. At the current market price the marketcap of the company is just about Rs 40 crores. So I believe that even though the company had its share of problems in the past two years, worst may be already built into the stock price which has absolutely failed to move in the past six-nine months, it’s hovering between Rs 35 to Rs 40.

I Believe that may be from this quarter onwards the better times may return for Pitti Lamination. So from these levels I don't see too much of downside in the stock price. But if you know things go well for this company over the next couple of years, this stock may turn into a multi bagger given the fact that it operates into a sector where the demand is going to be robust at least for the next couple of years

Source: Internet (moneycontrol.com by Ashish Chugh)

Stock Idea: Castrol

The company has managed to sustain; there has been no spectacular growth but increasing operating costs indicates that margins were under pressure.

For year ended 31st Dec 2009, net revenue rose by merely 5%. Operating expenses were 83% of the revenue which in 2008, were 81%. Interest outgo was maintained at Rs.3.50 crore level and EBIDTA was down 7%. Yet, net profit was up 45% at Rs.381 crore.

2009 was the centenary year for Castrol brand in India and it celebrated that with by declaring a bonus in the ratio of 1:1. It recommended a final dividend of Rs.5/- per` share and a special dividend of Rs.10/- per share for the year ended 31st December 2009. This is in addition to an interim dividend of Rs.10/- per share, totaling to a dividend of Rs.25/- per share for the full year 2009.

Looking ahead, inflation will remain a challenge. And there could be further pressure on the margins till price pressure eases. 2010 would be more about sustaining than about growth.

Stocks like Castrol are for the long term. Capital appreciation will come with time. The company has always been liberal with its dividend payouts and bonus issues. Including the current bonus, this is the seventh bonus from Castrol India. Earlier, the company had issued a liberal 1:1 bonus, each in May 1999, February 1994 and in June 1987. Also, it had issued a 3:5 bonus, each in May 1995, May 1992 and in November 1990.

Stay invested with a 2-3 year perspective.

Source: Internet (premiuminvestments.in by SP Tulsian)

Stock Idea: Seamec Ltd.

Seamec Ltd. is engaged in providing support services including marine, construction and diving services to offshore oilfields in India and abroad and operates 4 multi purpose support vessels (MSVs) for diving and providing underwater / sub-sea engineering and construction, maintenance and inspection of underwater structures, rescue operations and fire fighting and other support services for offshore oil and gas installations.

The company has 4 MSV – Seamec I, Seamec II, Seamec III and Seamec Princess. The company has recently acquired Seamec Princess for about Rs. 180 crores. This is giving US $ 65,000/day, which is resulting in better revenue and profits for the company.

The accounting year of the Company has been changed to year ending 31st March. The current year results will be published for 15 months from January 01, 2009 to March 31, 2010.

The performance for the fourth quarter ended 31st Dec 2009 was not very good, infact it was the poorest show during the entire year. Turnover and profit was lower as three of the four vessels owned by the company were in operation and one vessel was sailing from West Africa to Middle-East for mobilisation of the next contract, compared to corresponding period of the previous year where all four vessels were in operation.

If the company were to end the year in Dec, the performance, compared to 2008 has been more than spectacular to say the least. Net revenue is at Rs.384.49 crore v/s Rs.268.59 crore posted in 2008. Net profit currently stands at Rs.232.62 crore, which is almost 5 times more than that posted in 2008. What is noteworthy is that NPM is very healthy at over 60%. On an equity of Rs.33.90 crore, EPS stands at Rs.68.62. 

At the current price of Rs.203, the stock price is ruling at a PE of less than 3.

Source: Internet (Premiuminvestments.in by S P Tulsian)

Stock Idea: McLEOD RUSSEL

This B.M.Khaitan tea company has been literally on the boil. With tea prices perking up, the company has been able to brew a set of very good financial performance for the third quarter ended 31st Dec 2009.

The world's single largest producer of tea with gardens spread across India, Vietnam and Uganda, posted on a YoY, a whopping 184% jump in net profit at Rs.137.94 crore. This super jump in net was on account of the production going up from 205 lakh kgs to 227 lakh kgs. Sales volumes jumped up from 211 lakh kg to 235 lakh kg. More importantly, its sales realization, on an average for Q3 was at Rs.142.41 kg vis-à-vis Rs.114.91 per kg.

The bullish cycle in tea is expected to continue over the next 4 years. Next year, prices are estimated to remain high due to global tea shortage on account of drought in Kenya, Sri Lanka and India, which account for more than 50% of global tea exports. There has been a 32% drop in crop harvest in Sri Lanka and 21% drop in Kenya.

Tea prices in India are expected to remain at the current high levels till end of this year. The company aims to have a revenue of Rs.1,000 crore in current fiscal and net profit is expected to be around Rs. 480 crore for the full year.

Stay invested as FY10 will end at a historical high performance for Mcleod.

Source: Internet (premiuminvestments.in S P Tulsian)

Stock Idea: Marathon Nextgen Realty Ltd. (MNRL)

Marathon Nextgen Realty Ltd. (MNRL) (Code: 503101) (Rs.380) was promoted by Mr. Ramniklal Shah in 1969 but reinforced by the technological skills and new-age vision of his successors - Vice Chairman, Chetan Shah, and Managing Director, Mayur Shah.
The Marathon Group acquired the sick Piramal Spinning & Weaving Mills Ltd. (PSWML), manufacturers of cotton fabrics, synthetic fabric and cotton yarn with mills at Lower Parel in Mumbai, Ambarnath, outside Mumbai and Surat in Gujarat. As per the rehabilitation programme sanctioned by the BIFR, PSWML’s three main divisions were demerged into 3 distinctive entities.
The assets & liabilities of PSWML as well as that of Niranjan Mills were transferred to Niranjan Piramal Textile Mills and the Ambarnath processing unit was transferred to Pyarelal Textiles in October 2001. Its third realty unit also co-opted into Ithaca Informatics Pvt Ltd to develop the property at the Lower Parel unit.
Subsequent to the restructuring, shareholders of the erstwhile PSWML were allotted one share in each of the 3 companies for every 3 shares of PSWML held by them. The name of the company was changed to Marathon Nextgen Realty Ltd.
MNRL has developed residential complexes, industrial estates, high-rises, signature homes, retail and corporate spaces catering to different lifestyles through 70 projects in India. Its ongoing projects are spread over 28 lakh sq. ft. in Mumbai.
MNRL’s lean management is supplemented by the prestigious ISO 9001:2000 certification (Quality Management Systems). One of the secrets of its success has been in acquiring the right land that ensures appreciation at an opportune time. This foresight has benefited its customers offering them convenience of location and appreciation in property value in the long run. Its acquisition of PSWML at Lower Parel in Central Mumbai in 1995 is a testimony to this as the area has turned into the fastest growing corporate hub in 2006.
In FY09, MNRL posted 32% lower net profit of Rs.41.8 cr. on 4% higher income of Rs.105 cr. and the EPS was Rs.32.5.
For Q3FY10, net profit rose 64% to Rs.39.4 cr. on 3% lower revenue of Rs.55.2 cr. For the nine months ended 31 December 2009, its net profit jumped 208% Rs.98.8 cr. on 65% higher revenue of Rs.138.3 cr. while the 9 months EPS works out to Rs.78.4.
MNRL’s tiny equity capital of Rs.12.6 cr. is supported by huge reserves of Rs.154.3 cr., which gives the share a book value of Rs.133. The promoters hold 89.2% in its equity capital, foreign holding is 0.6%, PCBs hold of 1.1% leaving 9.1% with the investing public.
Marathon NextGen was a unique product mix of high-end residential towers and two commercial projects that was well-received. Marathon NextGen Era is one of the tallest luxurious towers that offer plush apartments/penthouses with terraces and plunge pools on the 36th floor.
MNRL has entered into three joint ventures, which include the development of 3 corporate IT Parks at Lower Parel, a housing project in Bangalore and development of properties in South Mumbai and the western suburbs of Mumbai. The projects include a SEZ in Navi Mumbai, an integrated township in Badlapur near Mumbai, Commercial and residential properties in Mulund and Parel in Mumbai. These ongoing projects in and around Mumbai are spread over 28 lakh sq. ft.
The prospects of the realty sector have improved according to India's new FDI policy up to 100% investment is allowed under automatic route in townships, housing, built-up infrastructure and construction-development projects. Construction projects would include hotels, resorts, hospitals, educational institutions, housing and commercial premises. The government has also reduced the minimum mandatory area for FDI in real estate sector from 100 acres to 25 acres.
Since, the Indian economy has already recovered, there are positive signs that the realty sector is back on the growth track. Merrill Lynch forecasts that the Indian realty sector will grow from $12 billion in 2005 to $90 billion by 2015.
The rapid population growth, strong demographic impetus with young people, newer job creations, rising incomes, emergence of nuclear families, tax incentives on housing, competitive interest rates, expansion in organised retail sector, shortage of around 20 million dwelling units and the rising FDI levels in the real estate sector provide a conducive environment for investment in the housing/real estate sector for growth in a revenue and profitability.
For FY10, MNRL is likely to post a net profit of Rs.130 cr., which would fetch an EPS of Rs.103. At the current market price of Rs.380, the share is trading at a P/E of just 3.4, which gives a strong buy indication. Applying a conservative P/E of just 6 against the industry average P/E of 32 for the construction sector, will take the MNRL share price to over Rs.600. This would fetch a decent appreciation of over 60% in the medium-to-short-term. The 52-week high/low of the share has been Rs.567/91.

Source: Internet (Moneytimes)

Stock Idea: Yuken India

Long-term investors can consider accumulating Yuken India (Code: 522108) (Rs.154.60) as it is back on track since the last two quarters. Earlier, the rising metal prices had spiralled up its raw material cost that led to a significant reduction in its profit margin. But now things have improved and the company is again recording 11-12% operating margin. Accordingly, its share price has also doubled but deserves still better valuation and has considerable scope for appreciation. It is a reputed manufacturer of power saving hydraulic pumps & valves that are very popular in the heavy engineering industry. As an effective means of automation, it finds extensive use in various key sectors like machine tools, material handling equipment, construction machinery, drill rigs, automobiles, defence, steel, power & cement plants, plastic machinery etc. Besides, it also manufactures complete hydraulic power units as per customer specifications, cylinders, parison controllers, actuators, accumulators and power packs. To cater the rising demand, the company has doubled its hydraulic casting products capacity to 2400 TPA and is further augmenting it to 6000 TPA within the next couple of years. Besides, it has made a tie-up with Hydrocontrols SPA, Italy, to produce and market state-of-the-art mobile control valves especially for agriculture, construction, earth moving and lifting machineries. On the back of the sharp revival in construction and industrial activities, Yuken is expected to fare well in coming quarters. In fact, despite reporting a net loss for Q1FY10, it is estimated to post a net profit of Rs.5 cr. on sales of Rs.105 cr. for FY10. This translates into EPS of Rs.17 on its tiny equity of Rs.3 cr. For FY11, it has the potential to report an EPS of Rs.22-24.

Source: Internet (Moneytimes)

Stock Idea: Tantia Constructions Ltd.

Tantia Constructions Ltd. (Code: 532738) Rs.118.50
Established in Kolkata in 1964, Tantia Construction Ltd (TCL) has evolved over the years from a pure railway construction company to a full-fledged infrastructure company executing various diversified projects. Today, it is into construction of roads & highways, railways, tunnels, bridges & flyovers, urban infrastructure, sewerage & drainage, civil & housing construction etc. Lately, the company has also ventured into the lucrative marine infrastructure, power transmission & distribution segment and aviation infrastructure. It is among the few companies that has almost five decades of domain expertise in servicing the Indian Railways. In fact, TCL is among the five Indian companies capable of providing ‘foundation-to-finish’ for mega railway bridges spanning 2-km or more. Importantly, TCL has a very strong presence in the eastern and north-eastern regions, which gives it an edge as very few players are interested in bidding in these regions due to the difficult terrain. Its expertise can be ganged by the fact that it has executed 600 projects which include construction over 250 km of roads in the hilly areas of Mizoram, coastal areas of Kerala, plains of Punjab/Haryana and plateaus of Karnataka. For power projects, it has garnered the capability of in-house manufacturing and erecting transmission towers within a very short time. Notably, TCL has an impeccable track record of completing every single assignment since inception. Although its clientele is skewed towards PSUs, it has diversified customer base including NHAI, State Public Works Departments (PWDs), NTPC etc.
The contribution of the various business segments, domains and verticals are:
􀂄 Roads & Highways (50%): TCL ventured into advanced mechanised road construction in compliance with specifications set by the Ministry of Surface Transport in 1990. Since then, it has established its credentials in the field of construction, widening, conversion, maintenance, strengthening and beautification of roadways, road bridges, highways and flyovers. It is the only Indian company to have fabricated a 100 metre spans steel girders onsite, 4,000 mtrs above sea-level. With over 50% of total sales coming from this segment, it is the largest contributor of revenue.
􀂄 Urban infrastructure (25%): TCL established its credentials in this segment through its Kolkata improvement projects. Its expertise in soil re-engineering, mechanised earthwork, hauling for large-scale land development, sewerage & drainage projects, electrification and lighting systems and construction of college & hospital buildings. Today, the company is well acknowledged by large municipal corporations for its competence in the timely commissioning and completion of urban projects that minimise public inconvenience. TCL is now eyeing urban infrastructure projects in Punjab, Orissa, Delhi and Haryana from their PWDs.
􀂄 Railway infrastructure (20%): TCL is one of the oldest railway contractors in India with the experience of having completed assignments across diverse terrains for the Eastern Railway, North Eastern Railway, South Eastern Railway and North East Frontier Railway. It provides end-to-end solutions right from survey, designing of track embankment, earthwork, track laying, bridges, tunnels, electrification and signalling, maintenance of rail road/infrastructure, constructing railway stations and terminals, railway bridges etc. This division enjoys a pre-qualification for projects up to Rs.450 cr. when
engaged in overseas joint ventures. Some of its joint venture partners comprise reputed international names like Road Builder, Malaysia and TSO, France.
􀂄 Aviation/Marine Infrastructure (4%): TCL diversified into marine infrastructure in 2003 and now possesses proven capabilities in building tunnels, jetties and steel girders along rivers. Subsequently, it ventured into aviation infrastructure in 2005 through the Dibrugarh Airport project.
􀂄 Power Transmission projects (1%): TCL entered the power T&D solutions segment in 2005 and is now executing projects involving beam foundation, lattice structure erection, conductor stringing and cable-laying systems. To enhance its presence, TCL is planning to set up a design department to include plant design engineering.
In recent years, TCL has executed various prestigious and large scale projects in West Bengal, Assam, Bihar, Uttar Pradesh, Tamil Nadu, Kerala and Mizoram, and in neighboring countries like Bangladesh, Nepal and Bhutan. Since over 90% of its revenue comes from government projects, it caters to several government bodies including Indian Railways, Kolkata Metro Railway, NHAI, State PWD, Central PWD, State Electricity Boards, HUDCO, KMC, Airport Authority of India apart from NTPC, Ircon International, SAIL, RITES, IOC etc. It enjoys excellent business relations with them and has good direct contacts within government resulting in repeat orders of similar nature, extension of projects of a higher value and listing among preferred partner. Presently, TCL has a diversified and huge order in hand position of over Rs.1500 cr. to be executed in the next 24-36 months. It bagged over Rs.450 cr. worth of orders in the last twelve months, which gives strong revenue visibility in coming years.
Going forward, TCL is planning to bid for bigger projects in the power transmission segment as it has executed a few power projects and is now qualified to bid for the same. In the near future, it also intends to foray into BOT & BOOT projects to boost margins. It usually takes up complex projects, which are insulated from competition. It is also looking to bag airport projects coming up in non-metro cities. To cash in on the boom in civil construction, it is even contemplating to enter into real estate development. As a long-term strategy, TCL intends to enter in logistics sector by constructing and owning warehouses at strategic location across India. Water treatment, solid waste management and sewage treatment are also being considered to widen its projects profile.
In the recent 2010-11 budget, the government has provided over Rs.1,70,000 cr., which accounts for over 46% of the total plan allocations, for infrastructure development in the country. For road transport, the allocation was raised by over 13% from Rs.17,500 cr. to almost Rs.20,000 cr. It has provided nearly Rs.17,000 cr. to Railways, which is 1000 cr. more than last year. Further, it has doubled the plan allocation for power sector from Rs.2200 cr. in 2009-10 to Rs.5100 cr. in 2010-11. On the other hand, development of rural infrastructure remains a high priority area and so it has decided to allot Rs.66,000 cr. for Rural Development alone. All these developments augur well for infra companies like TCL. With a fat order book of Rs.1500 cr., the company can easily grow at 30-50% CAGR over the next couple of years. In order to fund its projects & working capital, TCL had raised around Rs.30 cr. through the FCCB route in FY08, to be converted into equity shares at Rs.140 each. For FY10, it is expected to clock a turnover of Rs.475 cr. with PAT of Rs.18.50 cr. This translates into EPS of Rs.13.50 on its current equity of Rs.15.60 cr. and EPS of Rs.11 on its fully diluted equity of Rs.18.50 cr. Although its valuations does not look cheap at an EV of Rs.450 cr., still long-term investors can buy at corrections as this infra company is expected to record healthy double digit growth in coming years.

Source: Internet (Moneytimes)

Stock Idea: IDFC

This is a stock which, typically before the Budget, always see’s a major jump in its share price. And this time too, IDFC did not disappoint. It has been on the surge since the Budget which, as usual, gave immense fillip to infrastructure development.

The company is on a sound footing. Its performance for 9MFY10 indicates that the slowdown which it has witnessed in FY09 is now left far behind. Net Interest Income (NII) increased by 20% on YoY of which NII from infrastructure loans increased by 30% while NII from treasury operations decreased by 36%. Non interest income saw a huge 50% jumo and this was mainly on the back of its asset management business which saw an increase of 1.67 times over last fiscal.

PBT rose 30% and PAT was up 32% at Rs.834 crore. Its balance sheet size grew by 4% to Rs.31,207 crore as at December 31, 2009. Net Loan book increased by 12% and its total exposure at the end of 9M was at Rs.34,757 crore. Net NPAs was placed at 0.19% of outstanding loans and interestingly, no new NPA was seen during 9M FY 2010. Net worth stood at Rs.7,010 crore.

It major exposure is to energy sector at 40%, followed by transportation, telecom, industrial and tourism, strictly in that order. Analysis of its borrowing pattern shows that 10% is from forex loans while the lions chunk, 56% is through bonds and debentures.

As at 31st Dec 2009, Govt of India held 20.2%, FIIs/FDIs held 44.9%, FIs and insurance companies held 16.3%, Mutual funds held 5.8%, Bodies Corporate held 3.8% and only 9.5% is with the retail investor.

IDFC is a very good long term wealth creator. At every dip, accumulate this stock.

Source: Internet (premiuminvestments.in by S P Tulsian)

Stock Idea: Jain Irrigation Systems Ltd.

Jain Irrigation Systems Ltd— BUY—960—INR
Sector — Plastic products (Diversified)
Regd.Off.— Bambhori, N H No. 6, Jalgaon –425001, Maharashtra, India
Listed — NSE, BSE.
Company overview—
Company is one of the pioneer names in the plastic irrigation products industry sector in India. Company is in Technical alliance with many firms for the purpose to make their products to the international Quality Standards. Company’s Rs.1000 million exports coming from the toughest markets in the world. It’s largest producer of PVC Pipes in India. Company is Pioneers of Micro Irrigation Systems in India besides pioneering the concept for small landholders in India. It’s the only manufacturer producing the widest range of Plastic Sheets (PC & PVC) under one roof. Company has got the ISO-9001 from RWTUV, Germany for the PVC Pipes and Fittings, Polytube, Emitting Pipe, Plastic Sheets, Onion Dehydration Divisions & Fruit Processing. Company is having solutions for Small Farmer, Urban Household, Urban Housing, Community Development, Mining Industry, plant tissue culture, Chemical industry, Sugar factories, Oil & Gas exploration, Optic Fiber ducting, Advertisement & Signage's, Landscaping, Green houses, water shed development, Waste Land Development, Farm production & management, solar water heaters for Households & Corporate.
Products & Services—
Products range of Jain Irrigation includes Micro Irrigation Systems & Components, PVC & PE (HDPE, MDPE, LDPE, LLDPE, ABS, PC, etc.) Piping Systems, Moulded & Extruded Plastic Products, Plastic Sheets, Dehydrated Onions and Vegetables, Processed Fruits, Tissue Culture Plants, Green Houses, Liquid/ Water Soluble Fertilizers, Bio-pesticides, Bio-fertilizers and Solar Water Heating Systems. Company is having India's only one-stop high-tech integrated agricultural shop. Company has collaboration with Technical partners of USA for solar water heating systems and other products. It is involved into Turnkey Project Services, Roof Cooling Systems, Agriculture, engineering & consultancy
Company looking towards a huge potential in setting up irrigation projects abroad and is looking at opportunities in the African continent. It is currently in talks with some African country form a joint venture to bid for some large integrated micro-irrigation project. Company is expanding its capacity in plasticulture and food business. In plasticulture, the company plans to increase capacity to 2, 04,000 ton. In food business it plans to increase capacity to 71,200 ton.
The Food division of the company’s is the largest processor of fruits and vegetables in India with factories in India and the USA. The core strength of the division is the focus on quality, which has been attested by various certifications. The division also received certifications for environment, health and safety. Jain’s fruit processing plants are located at Jalgaon in Maharashtra and at Chittor in Andhra Pradesh. The demand for processed fruits and vegetables is growing in India as well as overseas markets and this has translated into the division growing at more than 35% compounded basis over the last five years. Mango is the largest revenue earner for the product portfolio. Company is also working very closely with farmers in Maharashtra, Gujarat, Karnataka and Andhra Pradesh on increasing mango yields.
Recent Developments—
Jain Irrigation Systems has bagged an order worth Rs 1,580 million from various Coca-Cola bottlers in India and overseas for supply of mango pulp for the 2009-2010 seasons. This product will be produced in the current mango season but dispatched over next year or so.
In February, Jain Irrigation System (JISL) signed a memorandum of understanding (MoU) with the International Rice Research Institute (IRRI). Jain Irrigation will closely work with IRRI’s scientists to determine optimal irrigation and fertigation system for irrigated rice and wheat. Under this MoU, JISL and IRRI will study the relevance of different irrigation and fertilizer delivery systems for paddy cultivation in India and other south Asian countries wherever IRRI is planning research or adaptive trials. The aim is to find ways to reduce water consumption in rice cultivation while increasing crop productivity.
Valuation—
At CMP, stock is trading at 16.4 P/E multiple of its FY2011 estimated EPS. We recommend investors to "BUY" "Jain irrigation systems ltd." for medium to long-term investment prospects.

Source: Internet (Valuenotes by Abhishek Jain)

Stock Idea: Pantaloon Retail India Ltd.

Pantaloon Retail India Ltd— BUY—375—INR
Sector — Retail
Regd.Off.— Shyam Nagar, Jogeshwari (E), Mumbai - 400060
Listed — NSE, BSE.
Company overview—
Company was incorporated as Manz Wear Private Limited on October 12, 1987. Pantaloon Retail (India) Limited is India’s leading retailer with a turnover of Rs. 1073 crore (US$242 million) for the financial year ended June 2005. Company was converted into a public limited company on September 20, 1991 as pantaloon retail India limited. The group operates over 12 million square feet of retail space in over 71 cities and towns and 65 rural locations across India. The group owns several leading formats including Pantaloons, Big Bazaar, Food Bazaar, Home Town, eZone and Central. Pantaloon Retail was awarded the International Retailer of the Year - 2007, by the US-based National Retail Federation, the largest retail trade association and the Emerging Market Retailer of the Year 2007 at the World Retail Congress in Barcelona. PRIL employs over 15,000 people and has a customer base of over 20 crore Indians. Company is a part of a diversified conglomerate with presence in multiple consumer-centric businesses. Future Capital is the financial arm of the group and is involved in asset management in both private equity and real estate funds. Company operates through multiple consumer centric retail businesses present across segments like food, fashion, footwear, home solutions, consumer electronics, beauty, general merchandise, telecom, entertainment etc. The businesses are represented through multiple retail formats in lifestyle as well as value retailing.
Products & Services—
Company has a retail presence across various segments including food, fashion and footwear, home solutions and consumer electronics, books and music, wellness and beauty, general merchandise, telecom and IT, E-tailing, leisure and entertainment and financial products and services etc. Company operates multiple retail formats catering to a wide cross-section of the Indian society. In the Lifestyle retailing segment it has Pantaloons (department store), Central (seamless malls), Blue Sky (fashion accessories) and aLL (fashion apparel for plus size individuals). Company’s value retailing ventures include Big Bazaar (hypermarket), Food Bazaar (supermarket) and Fashion Station (popular fashion).
Joint Ventures & Partner Companies- Company has a stake in Galaxy Entertainment that operates chains like Chamosa, Rain, Lush, F123, Bowling Company, Sports Bar and Brew Bar. It also has a stake in Planet Retail Holdings that owns the franchisee of brands like Marks & Spencer, Guess, Debenhams, The Body Shop and Puma in India. PRIL has entered into joint ventures with kids’ apparel manufacturer - Gini & Jony and Liberty Shoes. Pantaloon Industries owns a majority stake in Indus League that markets brands like Indigo Nation, Scullers, Urban Yoga and Jealous.
Financials—
Pantaloon Retail (India) disclosed a phenomenal rise in standalone net profit for the quarter ended December 2009. During the quarter, the profit of the company rose 51.07% to Rs 506.70 million from Rs 335.40 million in the same quarter previous year. Net sales for the quarter for the quarter rose 25.38% to Rs 19,128.40 million, while total income for the quarter rose 25.38% to Rs 19,148.60 million, when compared with the prior year period. It posted earnings of Rs 2.57 a share during the quarter, registering 34.55% growth over previous year period.
Valuation—
Pantaloon Retail India has plans to invest more than Rs 5 billion to expand its seamless mall Central and the value fashion format Brand Factory over the next two years. PRIL will add 25 Brand Factory stores and 10-12 Central malls by 2011. Capital International also bought 0.69% stake in Pantaloon Retail (India) for Rs 408.27 million. Capital International via its account Emerging Markets Growth Fund Inc bought 1,091,114 shares of Pantaloon Retail (India) at Rs 374.18 a share. At CMP, stock is trading at 22.5 P/E multiple of its FY 2011 estimated EPS. We recommend investors to buy "Pantaloon Retail India Limited" with long-term investment horizon.

Source: Internet (Valuenotes by Abhishek Jain)

Stock Idea: Pennar Industries CMP 31

Business transformation, financial restructuring and productivity coupled with general buoyancy in Indian economy leads to impressive turnaround Transformation from commodity play to niche engineering as value added products ratio enhanced from 20% in early part of decade to 70% in FY09 and expected 80% in FY11 Riding big on Railways expansion of Rs 2,500 bn in the current five year plan; Pennar aims to increase revenue share from Railways to 30% by FY11 from 24% in FY09
Pennar has diversified exposure to various industries like auto, railway, building products, pollution control, white goods, road safety, electrical and fabricated products Enjoy strong relationship with Tata Motor, Ashok Leyland, TVS, ICF, BEML, L&T, ABB, Thermax, BHEL, Alstom Power, HCC and IVRCL.

Robust revenue and EBITDA CAGR of 41% and 96% in last six years; EBITDA margin consistently improved from meager 1.4% in FY02 to 11.6% in FY09, and further to 13.7% during 1HFY10 Financial position dramatically improved as D/E ratio enhanced from 13.3x in FY05 to 0.6x in FY09
Gradually enhancing metal capacity in verticals like heavy engineering without pressurizing the balance sheet as major expansion funded by internal accruals High margin pre-engineered building systems is new growth driver; 90% subsidiary Pennar Engineering Building System (PEBS) has technical know-how agreement with NCI Building Systems, USA, one of the world’s largest pre-engineered building solution providers with sales of $967 mn in CY09 (Nov)
Stock currently trades at just 1.3x cash profit during FY10-12 Completed Buyback of 3,125,000 equity share (~2.5% of capital) at a price of ~ Rs 25/share, likely to improve sentiment and reduce float from market.

Valuation
PIL is trading at P/E and EV/EBITDA of 4.4x and 2.9x on FY12 estimated earnings respectively. We believe the market would recognize PIL’s transformation into an engineering company with consistent increase in cash profits and result in re-rating of the stock. We recommend ‘BUY’ with SOTP TP of Rs 95 (206% upside from CMP), where we value standalone
business at Rs 81 (7.0x FY12 EV/EBITDA – inline with 4-year average multiple of 6.8x) and Rs 14/share for PEBS.

Source: Internet (Valenotes)

Stock Idea: Elder Pharmaceuticals Ltd.

Elder Pharmaceuticals Limited—BUY—355—INR
Sector— Pharmaceuticals (Bulk drugs & Formulations)
Regd.off— C-9, Dalia Industrial Estate, Andheri (W.), Mumbai - 400053
Listed— BSE, NSE
Company overview—
Company started its operations in 1989 and established its factory in June. In 1991 company started Research and development center for its pharmaceutical products and got recognition from the Government of India. In 1994, company tied up with Haw Par, Singapore to establish its presence in the market. Company came into stock market in 2000 by public issue. In 2003 company commissioned Patalganga Bulk Drug plant. Company ranked among the first 50 companies in India as per ORG Audit. Company's strength lies in marketing products, which are original research products where there are no patent violations and the company has created its own brand equity in pharmaceutical marketing. Elder, which has it's headquarter in Mumbai, is proficiently supported by branch offices in Chennai, Kolkata and New Delhi. It has sales depots in almost every state in the country. Company’s multi expert sales team hence ensures adequate focus on each of the covered therapeutic segments. The focus is on promotion of products in the wound care segment, antibiotics, gastroenterology, respiratory and painkillers segment. Company is engaged in the manufacture of a wide range of pharmaceutical products through research and development and also in the manufacturing and marketing of diverse products through licensing agreements with international pharmaceutical companies. All the company’s plants conform to and follow the most stringent quality control standards recommended as per GMP guidelines.
Products & services—
Elder Pharmaceuticals principal activities include the manufacturing and marketing of prescription pharmaceutical brands, surgical and medical devices. Shelcal, Elder’s No.1 brand is one of the top brands in the Indian Pharmaceutical industry. It is one of the leading players in the pharmaceutical formulation market in India, being a market leader in three therapeutic segments - Women’s Healthcare, Wound Care and Nutraceuticals. Elder has a strong portfolio of brands like Shelcal, Eldervit and Chymoral among others that are leaders in their respective therapeutic segments and manufactured in various dosage forms like tablets, capsules, injections and liquids. Company has products for Antibiotic, Antihistamines & Antiallergics, Antacid & Antiflatulant, Antiulcers, Antidepressant, Anti inflamatory & Analgesics, Antispasmodics, Antifungal, Laxative, Antihelmentics, Cough syrups, Steriods, Antimalarial, Antidiarrhoeal, Cardiac care, Eye/Ear Care, Hematinics, AntiTB, Nutritional Supplement etc. Company has entered into alliances with foreign companies for manufacture and sale of their products under license from them. It also has a presence in the OTC segment and sells the Tiger range of products from Singapore, SOLO Eucamenth tablets, AMPM mouthwash and toothbrushes. The company has diversified into sale of medical equipments. Export markets include Switzerland, Germany, England, Denmark and a few African countries. Company exports its pharma products to Colombia, Vietnam, Madagascar, Mauritius, Nigeria, Uganda, Sri Lanka & Mexico.
Company has alliances and marketing rights with ABC Ltd, USA Oxo-Chemie, Germany Paul Hartmann, Germany, Angelini, Italy GEA Ltd, Denmark TRB Chem., Switzerland Alfa-Wasserman, Italy, Sigma-Tau, Italy Tanabe, Japan Fujisawa, Japan Uriach, Spain, Covex, Spain Ferrer, Spain, Blistex, USA Haw Par, Singapore, Invacare, USA, APR, Switzerland Zambon, Italy Biorga, France Stiefel, USA Sciclone, USA Poli, Switzerland etc. for various products.
Valuation—
Company has strong position in National and International Health Care arena, with focus on research and global collaborations. At current market price, stock is trading at 8.75 P/E multiple of its FY2011 estimated EPS. We recommend investors to "BUY" "Elder Pharmaceuticals Limited" with medium to long-term investment horizon.
Source: Internet (Valuenotes by Abhishek Jain)