Investment Call: Premier Explosives Ltd.

Premier Explosives Ltd.: For the medium-term

Premier Explosives Ltd. (PEL), a 29-year old Secunderabad based company, was established in 1980 as a private limited company and later got converted into a public limited company in 1987. It manufactures small/large diameter explosives, bulk explosives and detonators. Its plants are located at Nalgonda and Khammam in Andhra Pradesh, at Chandrapur in Maharashtra and at Waidhan in Sidhi District of Madhya Pradesh. Mr. A.N. Gupta is the chairman & managing director of the company. PEL started out as an ancillary to Singareni Collieries and now supplies to Coal India Ltd. and Neyveli Lignite Corporation and has set up two plants for bulk explosives in Madhya Pradesh and Maharashtra. It also manufactures many diverse products for defence requirements and also operates and maintains a state-of-the-art chemical manufacturing facility for the Indian Space Research Organisation (ISRO). The company has diversified into the manufacture of detonating fuses (4 MTPA) and penta erythritol tetra nitrate (PETN: 100 TPA). It also manufactures site-mixed slurry (SMS), bulk explosives and detonators. The plants for PETN and detonating fuses went onstream in 1994-95. Its manufacturing unit is located close to the Singareni Colleries and has the advantage of being close to its customers. PEL has started a division at Singrauli for manufacture of SMS explosives. It has also entered into Rock Blasting & Drilling contracts and its explosives, detonators and detonating divisions have been accredited ISO 9002 certification. PEL's R&D facility is recognized by the Centre for Scientific and Industrial Research (CSIR), Government of India, as an established research centre. In May 2008, it received the Defence Technology Absorption Award 2007 by Defence Research Development Organisation (DRDO), Ministry of Defence. The company is constantly innovating and upgrading its products and technology to offer state-of-the-art products to its customers both in India and abroad.
Joint Ventures: The company has two joint ventures abroad - one in Ankara (Turkey) and the other in Tbilisi (Georgia, a CIS country), for manufacture of explosives & accessories.
Diversification: PEL has diversified into the production of white button mushrooms for exports and will avail of tax advantage by setting up a 100% EOU in Medak, Andhra Pradesh with an installed capacity 3000 TPA. It has entered into an agreement with Tray Master, UK, for technical know-how and for critical equipment. A marketing agreement has also been signed with Metro Trade, USA, to market 70% of its production. The other 30% will be marketed directly.
Performance: The company reported encouraging FY08 results registering net sales income of Rs.57.27 cr. with net profit of Rs.5.83 cr. netting an EPS of Rs.7.17.
Latest Results: Net profit of PEL rose 123.38% to Rs.1.72 cr. In the Q3FY09 as against Rs.0.77 cr. in Q3FY08. Sales rose 34.84% to Rs.20.01 cr. in Q3FY09 as against Rs.14.84 cr. in Q3FY08. It reported a basic/diluted EPS of Rs.2.12 and the annualized basic/diluted EPS works out to Rs.8.48.
Financials: The company has an equity base of Rs.8.13 cr. With a book value of Rs.27.44. Its debt-equity ratio is 1.10, RoCE is 17.62% and RoNW is 18.51%. Share Profile: The PEL share with a face value of Rs.10 is listed on the BSE under the B group. Its share price touched a 52- week high/low of Rs.42.50/Rs.16.65. At its current market price of Rs.18.55, it has a market capitalisation of Rs.15.45 cr. Dividends: The company has been consistently paying dividends since 2004. Shareholding Pattern: The promoter holding in the company is 37.92% and the balance 62.08% is held by non-corporate promoters, institutions and the Indian public.
Prospects: PEL has started production of various Pyrogen Igniters and Solid Propellants motors for the defense sector, which were successfully flight tested. The company also expects good contribution from its overseas joint ventures. As the sale of its special products is increasing and joint ventures are becoming viable, the future of the company is expected to be better. The total explosives market had been increasing steadily due to infrastructure development and more demand of key minerals and power.
Conclusion: PEL is an existing, profit-making, dividend paying company with a good track record. It is one of the few companies manufacturing the entire range of explosives and accessories for civil requirements which has plants close to the end users. At its current market price of Rs.18.55, the share price discounts its FY08 earnings by less than 3 times and the P/E ratio works out to just a tad above 2 on its estimated FY09 EPS of Rs.8.5. In view of its current working, consistent dividend paying track record and a book value of Rs.27.44, the PEL share can be considered for investment with a medium-to-long-term investment perspective.
Source: Internet (Moneytimes) By Devdas Mogili

Intraday Trading Calls for 20th February

Stock Market India may open flat to negative but high volatility can be seen in today's trading. A negative closing expected.

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

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
REL INFRA	Buy Above	511.80	520.45	530.00
	Sell Below	504.10	495.55	485.00
AREVA T&D	Buy Above	190.10	194.65	200.00
	Sell Below	186.20	182.55	176.00
CESC	Buy Above	210.60	215.45	221.00
	Sell Below	206.35	202.15	196.00
LIC HOUSING	Buy Above	208.55	213.75	220.00
	Sell Below	203.40	200.15	196.00
REL CAPITAL	Buy Above	384.50	391.75	400.00
	Sell Below	376.15	369.40	364.00
BANK OF BARODA	Buy Above	233.65	238.45	242.00
	Sell Below	229.40	225.15	220.00
SIEMENS	Buy Above	227.40	232.45	238.00
	Sell Below	223.15	218.55	212.00

GOOD LUCK

Stock Idea: KEC International

Part of the RPG group, KEC International, a leader in power transmission, engineering, procurement and construction (EPC) business, the stock was in the limelight yesterday on the back of having received huge orders.

The company won an order worth Rs 255 crore for rural electrification from West Bengal State Electricity Distribution Company and another worth Rs 67 crore from Power Grid Corp. It also won a third order worth Rs 43 crore for a turnkey transmission project from Transmission Corporation of Andhra Pradesh.

For the third quarter ended December 31, 2008 it posted a revenue of Rs.886.31 crore as against Rs 708.91 crore during the corresponding period last year, a growth of 25%. During the quarter, the operating margin of the company declined to 8.21% compared with the previous year period. Interest cost increased 67.06% to Rs.29.72 crore while depreciation cost rose 4.82%. Net profit for the third quarter was at Rs.24.97 crore, down 52% on a YoY.

Its order book was at Rs.5000 crore as on Dec 31, 2008. Despite this fall in the Q3 bottomline, KEC remains a good stock. Its biggest strength is that it has insulated itself, to some extent with a focus on international as well as domestic market. 65% of its revenue comes from international markets including 25% from the Middle East region. It is is catering to about 20 countries globally of which majority are underdeveloped in terms of power infrastructure, meaning big business opportunity. KEC is also nearly doubling its combined (outsourced and own) manufacturing capacity from 110,000 tonne to 200,000 tonne per year.

KEC is expected to end FY09 on a robust note. Best to stay invested.

Source: Sptulsian.com

Intraday Trading Calls for 19th February

Stock Market India may open flat to positive but high volatility can be seen in today's trading.

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

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
REL INFRA	Buy Above	505.60	515.45	528.00
	Sell Below	496.40	488.45	478.00
COMPACT DISK	Buy Above	35.20	37.10	39.00
	Sell Below	34.30	33.10	31.00
HANUNG TOYS	Buy Above	33.60	35.75	38.00
	Sell Below	32.40	31.25	29.00
LIC HOUSING	Buy Above	202.80	209.15	220.00
	Sell Below	198.35	194.25	188.00
REL CAPITAL	Buy Above	383.40	391.75	400.00
	Sell Below	376.15	369.40	364.00
GMR INFRA	Buy Above	81.50	84.25	88.00
	Sell Below	78.70	76.25	73.00
VOLTAS	Buy Above	40.55	42.60	45.00
	Sell Below	38.80	37.10	35.00

GOOD LUCK

Investment Pick: Patel Airtemp

Patels Airtemp (Rs. 35.00)

BSE Code : 517417

Market Cap : Rs. 18 Cr.

TTM EPS : Rs. 13

Pmt Stake : 36 %

52W H/L : Rs. 81/25

P/E Ratio : 2.7x

Dividend : 15 %

Incorporated in 1973, Patels Airtemp (India) Ltd (PAL) is one of the leading designers, manufacturers and suppliers of the complete range of heat exchangers such as shell & tube type, finned tube type and air cooled heat exchangers, pressure vessels, columns & air-conditioning and refrigeration equipments like coils, exhaust air units, fan coils, fans & blowers, condensers & chillers etc. It also makes Dow therm condensers, inter coolers & after coolers, oil coolers, air heaters, HP & LP feed water heaters, LPG bullets etc. All these industrial process plant equipments are supplied to leading industrial sectors like power projects, refineries, fertilizers, cements, steel, aluminum, automobile, petrochemicals, engineering, pharmaceuticals, textiles, paper, chemical etc. Importantly, the company

Also undertakes turnkey projects in the highly specialized and related area of Humidification, Ventilation and Air-Conditioning i.e. HVAC. Its expertise in HVAC project includes industrial air conditioning, pharmaceutical plant air conditioning, textile humidification, and pressurization and ventilation systems, evaporative

Cooling systems etc. Besides, it also undertakes project work for air-conditioning multiplexes, offices, educational institutions, halls, theaters, hospital etc.

Importantly, in the past PAL has successfully executed several orders of Nuclear Power Corporation of India.

Hence it is expected to good orders from NPCIL in future due to signing of the Indo-US nuclear deal. Currently it boasts of having unexecuted order in hand to the tune of Rs 50 cr including Rs 16 cr order bagged from Essar Oil in Sept 2008. Recently, company reported good set of nos for the Dec'08 quarter, as it registered 30% rise in sales as well as NP to Rs 13 cr & 1.75 cr respectively. Even for nine months, the sales have increased by 35% Rs 49 cr whereas it saw a 40% jump in NP to Rs 5.20 cr thereby posting an EPS of Rs 10 till date. Accordingly it may end FY09 with sales of Rs 60 cr and PAT of Rs 6 cr leading to an EPS of Rs 12 on equity of Rs 5 cr. It may maintain its 15% dividend which gives a yield of 5% at CMP. For FY10 it can report a topline of Rs 75 cr and bottomline of Rs 7.50 cr i.e EPS of Rs 15 on current equity. Although it's a small company with a gross block of less than Rs 15 cr but the share price can easily double within 9~12 months. Investors are recommended to buy at current levels.

Source: Internet (SmartInvestment)

Multibagger: HBL Power Systems

HBL Power Systems (Rs. 110.00)

BSE Code : 517271

TTM EPS : Rs. 39

Market Cap : 275 Cr.

Pmt Stake : 63 %

52W H/L: Rs. 420/96

P/E Ratio : 2.8x

Dividend : 15% (F.V. 2)

Founded in 1977, HBL Power Systems Ltd (HBL) is an acknowledged leader in design, development and manufacture of industrial & specialized batteries, allied electronic products and DC (direct current) systems in India. DC power systems are used across the world for a variety of application where the traditional power supply system cannot be sustained/ supported. It is specifically required in mobile (nonstationary)applications like rail coaches, aviation etc. Therefore company focuses mainly on five key sectors namely telecom, aviation, railways, defense and other industrial segment including oil & gas, power, petroleum, steel etc.

A. Batteries :- This is the core business of company deriving more than 90% of total revenue. HBL is a technology focused manufacturer of several ranges of specialized application batteries i.e. nickel cadmium (pocket, fibre, and sintered plate), lead acid (VRLA, Tubular, LMLA), silver oxide zinc, lithium, thermal, etc.

B.Railway Electronics :- Traditionally HBL has been sup- plying various batteries for train lighting, air conditioned coaches, locomotives, signaling and communications. But off late, company has designed and developed wide range of microprocessor based signaling products and power systems to cater to the needs of Indian Railways. It now offers integrated power supplies for railway stations and does turnkey signaling works contracts including design, installation and commissioning.

C. Defence Electronics :- Although HBL derives hardly 5% revenue from this division but it boasts of supplying several specialized, tailor made batteries to the Army, Navy and the Air Force. EPS of Rs 33 on equity of Rs 24.30 cr. Incidentally company has a debt of Rs 350 cr leading to a debt equity ratio of 1.2x times. In order to fund its expansion, company had planned a preferential allotment as well as a right issue, but due the stock market sentiment, had to shelve it off. Importantly, with telecom, power, railway & defense being its focus market, HBL isn't much affected by the ongoing recession. And in case if it witnesses any

slowdown in domestic demand it can always cater to international market and increase its export revenue which is currently around 10% of total sales. Considering all the factors investors are strongly recommended to buy at current levels with a price target of Rs 240 in 12~15 months.

Source: Internet (SmartInvestment)

Intraday Trading Calls for 18th February

Stock Market India may open flat to Negative but recovery expected from lower levels and a flat trading expected today.

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

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
AXIS BANK	Buy Above	403.75	411.40	420.00
	Sell Below	395.15	388.45	380.00
BARTRONICS	Buy Above	84.65	88.45	92.00
	Sell Below	82.40	79.20	76.00
REL CAPITAL	Buy Above	384.60	392.45	400.00
	Sell Below	376.35	370.15	364.00
HEXAWARE	Buy Above	32.10	34.05	36.00
	Sell Below	30.50	29.15	27.00
IRB INFRA	Buy Above	110.05	114.75	120.00
	Sell Below	107.20	103.45	100.00
GMR INFRA	Buy Above	80.10	82.65	85.00
	Sell Below	78.40	76.25	73.00
VOLTAS	Buy Above	40.55	42.60	45.00
	Sell Below	38.80	37.10	35.00

GOOD LUCK