Stock Idea: Cranes Software

Cranes Software International Ltd (Rs 42)

(BSE Code- 512093 NSE Code- CRANESSOFT)

(P/E- 4, Market Cap- 494 cr.)

Cranes Software (CSI) is a specialized software products company, focused on providing products and solutions to address the needs of scientists and engineers globally. The company's main focus areas are data visualization and presentation, statistical and analytical software and engineering. Cranes' core success lies in its unique `Acquire-Enhance-Expand' business model. This model has enabled the company to create a significant intellectual property (IP) driven technology business within the focus area of scientific and engineering software. Acquisitions are an integral part of Cranes' business model and their success the basic reason for the company's strong performance in the past. Its acquisitions include products that have faced problems due to shortage of funds, weak management, and lack of sales and marketing network. These products are usually technologically strong and have brand names. Cranes acquires such products and then uses its R&D capabilities and marketing network to further enhance and sell them.

Today, CSI has its presence in 39 countries across the world and has a 350,000 strong global user base. Cranes Software offers a range of proprietary products - SYSTAT, SigmaPlot, SigmaStat, SigmaScan, TableCurve 2D, TableCurve 3D, PeakFit, NISA, XID, XIP, Survey ASYST, iCapella, InventX and world-renowned products from reputed principals such as Engineering Technology Associates, The Mathworks, Texas Instruments and IBM. The company has grown its sales and net profits at compounded rates of 58% and 67% respectively over the period FY02 to FY06. One of Cranes' major strengths is marketing. The company has direct offices in five locations - the US, the UK, Germany, India and Singapore - apart from distributors. The strong distribution network of the company has been one of the key reasons as to why it has been able to ramp up sales of the acquired products over a period of time.

Total consolidated revenues for Q1FY10 are up 6% to Rs. 121.8 cr. whereas PAT for Q1 is at Rs 28.1 cr.. EPS for Q1 ended June 2009 is Rs 2.4. Total consolidated revenues for FY09 were up 32.7% to Rs. 528.9 cr.. Overseas revenues increased 41.0% to Rs. 450.9 cr. and constituted 88.6% of total revenues. Operating profit improved by 17.9% to Rs. 240.2 cr.. Operating margins for the year stood at 45.4%. Net profit after tax is up 5.5% to Rs 121.3 cr.. Accordingly, FY09 EPS on a Rs 2 paid up share stood at 10.3 on a equity of 23.55 cr (Promoter's stake- 36.68%, FII Stake- 41.78%) and the dividend declared is 10%. Proprietary products grew by 31% on a corresponding basis and constituted 87% of total revenues. CSI expects this segment to grow at a healthy pace and constitute majority of total revenues. CSI has, with a longer-term view, invested in proprietary technologies that would deliver returns over a longer period of time. These include wireless technology standards and micro electro-mechanical systems (MEMS).

During the year, CSI entered into alliances with several leading Companies and announced new product launches that will serve as a platform for its future growth initiatives. Going forward, it will continue to focus on consolidating operations to sustain long-term growth and with increased emphasis on productivity of resources. CSI's premier graphing application, SigmaPlot 11 won the Scientific Computing Magazine's Reader's Choice Award 2008 in the 'Graphing' and 'Statistical Analysis' categories. CSI shifted its Engineering and Technology operations to 35,000 sq ft of own office premises, which is expected to result in considerable savings in FY10. The company continues to witness strong traction in its IP-led business model. The continuous launch of newer versions of its proprietary products is a positive factor which is necessary in order to sustain growth in a product-led business model, it is necessary to have a strong R&D set-up in place, as well as a strong marketing network. The company is also in the process of launching its `Solutions' business, which will drive the topline going forward. This initiative will give Cranes an end-to-end solution suite in the niche area of engineering and scientific software products. The stock currently trades at Rs 42, implying a P/E multiple of 4 times FY09 earnings. Investors can start accumulating the stock at current levels and add more on declines for decent returns of 40%-50%over the next 6-8 months.

Source: Internet (Valuenotes by Sanjay Chhabria)

Stock Idea: Shri Lakshmi Cotsyn Ltd.

Shri Lakshmi Cotsyn Ltd— BUY—65—INR

Sector — Textiles

Regd.Off.— 19/X-1, G T Road, Krishanpuram, Kanpur (U.P.)- 208007

Listed — NSE, BSE (BSE CODE: 526049).

Company overview—

Incorporated in 1988, the Shri Lakshmi Cotsyn Ltd (SLCL), with two manufacturing facilities in Fathephur (Uttar Pradesh) and Sonepat (Haryana), has ambitious plans for its future expansion & developments. Shri lakshmi cotsyn is one of the few textiles mills in India having broad products range for the domestic as well as international business. Company is engaged to supply defence requirements with high quality standards. Company engaged for processing synthetic as well as cotton fabrics and other textile related items. Later Company planned a diversification to manufacture Polyfibre Filled Beds Spreads and Quilts with an installed capacity of 8 Lakh meters par annum.

Products & services—

The Company produces Bedspreads, Puff Cushions, Pillows, Sleeping Bags and other Home Furnishing Products in the computerized Quilting Machine based on Swiss technology. The machine has capacity up to 130" wide clothes. In the year 1998, the Company undertook a project envisaging Expansion of capacity for production of Polyfibre Filled Quilted Cloth by 4 Lakh meters. Par annum and Setting up of facilities for manufacture of Microdot Fusing Cloth (MDFC) of 100 Lakh meters Par annum Embroidery Cloth of 8 Lakh Meters per annum. In Suiting & Shirting Segment Company is having installed capacity of 18 MMPA and its brand is well established in domestic market. It also has few products for defense as well as industrial sector. Company has its presence into Cotton Fusible Interlining and has an installed capacity of over 10 MMPA. It's a one of the leading player in this segment with over 15% market share. In the embroidery, lace & quilted fabric it has an installed capacity of around 1.2 MMPA with an in house processing capability. Company has its presence into textile specialty chemicals in its chemical division for its own consumption. The product profile includes Poly Vinyl Acetate, Fabric Softener, KVS, Stain Remover, Polyethylene Emulsion, and Micro-Amino Silicon emulsion, AMH.

Recent development—

Company plans to further increase its on-going expansions plans by Rs 3,500 million aggregating to Rs 8,090 million. Under its phase III expansion plan, the company plans to add 12,000 MT capacities in Terry Towel and 12 MW co- generation agri-based power plant for 100% captive consumption. With this expansion plan, SLCL will become the second largest producer of terry towels in India with the total capacity of 15,000 MT. The increased capital expenditure would be financed through term loans under TUFS (Textile Upgradation Fund Scheme), Equity/FCCB/Warrants and internal accruals. The company has already completed its Rs 2,640 million project for terry towel, bed sheets, denim and bottom weight, Rs 1,250 million project for nylon and home furnishing and Rs700 million project for garments in the past two years.

Company plans for the revision of shareholding pattern of Armet Armored Vehicles (India) has been approved by the board. The board has decided to increase the shareholding percentage of Shri Lakshmi Cotsyn from 49% to 75% and consequently the shareholding of the Joint Venture Partner, Armet Armoured Vehicles U.K. to be decreased to 25% from 51%. Shri Lakshmi is increasing its focus on high margin technical textile business. The company has recently entered into joint venture with the Armet Armored Vehicles U. K. for manufacturing of High-End 360 degree Armoured Vehicles first of its Kind in India with bullet- mine and bomb -proof accessories. It expects to roll out about hundred such highest security protection level armored vehicles by 2009. The JV will also manufacture assembly of armour plates, panels, helmets and other safety and security related equipments in India. SLCL is an approved vendor with host of Indian defence establishments, manufacturing safety textiles such as bio- chemical, high altitude fabric, bullet-proof jackets and bullet-proof helmets, camaflouge fabrics, uniform fabric, IR fabric and carbon fabric.

Financials—

Quarterly results for 01-APR-2009 to 30-JUN-2009 (Fourth Quarter)

Description	Amount(Rs. in lakhs)
Net Sales/Income from Operations	33062.00
Increase/Decrease in Stock in trade and work in progress	1683.00
Consumption of Raw Materials	24533.00
Employees Cost	533.00
Depreciation	705.00
Other Expenditure	2169.00
Total Expenditure	29623.00
Profit from Operations before Other Income, Interest & Exceptional Items	3439.00
Other Income	311.00
Profit before Interest & Exceptional Items	3750.00
Interest	1561.00
Profit after Interest but before Exceptional Items	2189.00
Profit(+)/Loss(-) from Ordinary Activities before tax	2189.00
Tax Expense	262.00
Net Profit(+)/Loss(-) from Ordinary Activities after tax	1927.00
Net Profit (+) / Loss (-) for the period	1927.00
Face Value (in Rs.)	10.00
Paid-up Equity Share Capital	1558.00
Basic EPS before Extraordinary items (in Rs.)	12.37
Diluted EPS before Extraordinary items (in Rs.)	12.37
Basic EPS after Extraordinary items (in Rs.)	12.37
Diluted EPS after Extraordinary items (in Rs.)	12.37

Valuation—

At current market price, stock is trading at 2.67 P/E multiple of its FY2010 estimated earnings. We recommend investors to buy "Shri Lakshmi cotsyn Limited" with medium to long term investment horizon.

Source: Internet (Valuenotes By Abhishek Jain)

Stock Idea: Greenply Industries

About the Company
Incorporated in August 1984 by Mr. S. P. Mittal, Greenply is India 's largest Interior Infrastructure Company. A leader in the plywood, laminate, decorative veneers and particle board industry, Greenply accounts for 25% of the organized plywood and 15% of the organized laminate market in India. Greenply is the only integrated manufacturer of plywoods, laminates, decorative veneers, particle boards and prelam particle boards/MDF. Popular brands include Greenply Plywood, Green Club Premium Ply, Greenlam Laminates, Green Decowood, Green Lamiboard and Ecotec.

Greenply has 28 branches across India with a strong dealer/distributor/sub-dealer/retailer network of over 9600 and a presence in over 300 cities. It has five modern manufacturing facilities are located in Nagaland, West Bengal, Uttaranchal, Rajasthan, Himachal Pradesh and Gujarat. Greenlam, the flagship decorative laminate brand from Greenply is exported to more than 50 countries including Thailand, Indonesia, Taiwan, Canada, Bahrain, Hong Kong, Malaysia, Singapore, Kenya, Dubai, Russia, Syria, USA, Australia, Mexico, Saudi Arabia, China and Israel.
Industry Scenario

The plyboard and laminates is a highly fragmented industry. Share of unorganised sector is approx. 80% in plywood and around 50% in laminates. Particle Board & MDF (Medium Densified Fiber) segment is growing at a rate of 25% with imports having a share of around 70%. Growth of organised sector is 15-20% in comparison to overall industry growth of 5%, indicating the shift of customer preferences from Unbranded to Branded goods.

Investment Argument
In a sweet spot - well positioned to profit from growth Looking at current market dynamics Greenply has an opportunity to increase its market share in the organised plywood and laminate industry. The organised wood panel industry is poised to grow 15-20% in FY10. Greenply is the market leader in both plywood and laminates segment, having the highest share of the organized market. The unorganized sector constitutes nearly 70% of the plywood and laminates
market is steadily losing its market share to organised sector as customers seek superior quality and value. Creating and sustaining successful brands is also going to be important going forward. Greenply is well positioned to profit from this trend. Huge potential in MDF Greenply is venturing into MDF, a very popular and successful panel product worldwide. MDF is a very versatile product with applications primarily in Paneling. It is also used in a wide range of furniture, windows,doors, frames, handicraft items, display or exhibition stands and signs, ceiling, toys, carving, partitions, maritime applications and educational equipment. 70% of the country’s MDF requirements are currently met by imports. Imports of MDF is costly since the freight component in MDF is around 30-35%.

Greenply is setting up India’s largest MDF Plant with a capacity of 180,000 cbm at the existing unit in Uttaranchal. Project is being setup at a cost of Rs.250 crores. Project implementation is progressing as per schedule and plant is expected to start commercial production by March 2010. The Unit will enjoy Fiscal benefits in the form of excise duty exemption for 10 years and corporate tax exemption on 100% of profits for first 5 years and 30% for the next five. MDF is expected to contribute around Rs.375 crores to the gross revenue at full capacity.
Capacity Expansion in Laminates Greenply has installed a new laminate unit with a capacity of 33 lakh sheets (126.4 lakh Sqm) which commenced commercial production in one press out of a total of three presses proposed to be installed. The plant will get Fiscal benefits in form of - (a) excise duty exemption for 10 years and (b) corporate tax exemption on 100% of profits for first 5 years and 30% for next five years. The total capital outlay for the plant will be Rs.105 crores. Unitwill manufacture compact laminates in three different formats apart from the present (4’x 8’). This will open up markets internationally such as US, Europe, parts of Asia, South Africa, Australia as well as new markets in India. This plant is expected to generate gross revenues of Rs.250 crores at full capacity.
Environmental benefits
Rajasthan unit is registered under the UNFCCC for carbon credits shifting from conventional fuel consumption to mustard husk in its boilers. Uttaranchal unit is in the process of registration. During Q3 FY09 Greenply received Rs.1.2 crore towards carbon credit in respect of the laminates facility at Rajasthan. Carbon credit worth Rs.50 lakh is still under the final clearance process.
Key Risks
Economic slowdown in the domestic and global markets may lead to a fall in growth prospects of Greenply. As a major risk factor, downturn in the realty sector may affect interior infrastructure industry prospects. Globally, allthe countries are adopting environmental compliance measures, which may affect business, as raw materials like timber comprise major input for the company. Rising competition within the organised segment may lead to reduced margins.

At the CMP, Greenply trades at a Price-Earning Ratio of about 5. Our assumption factors in a sales growth of 7.5% and an operating profit growth of 10%. Due to decrease in cost of debt, the net profit is expected to increase by about 48%. The company is expected to report an EPS of Rs.32.54. Assuming a base case P/E ratio of 5.5, gives us a price target of Rs.179.

Source: Internet

Intraday Trading Calls for 21st August

Indian Stock Market may open positive and remains good positive for the day today.

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

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
SELAN EXPLO	Buy Above	224.70	231.35	238.00
	Sell Below	221.35	216.45	211.00
CAIRN INDIA	Buy Above	242.65	247.40	252.00
	Sell Below	239.45	235.15	230.00
TATA STEEL	Buy Above	445.60	454.15	465.00
	Sell Below	438.35	430.10	420.00
ADSL	Buy Above	435.80	443.50	454.00
	Sell Below	430.35	420.45	412.00
IGL	Buy Above	157.25	161.55	167.00
	Sell Below	154.70	150.45	146.00
PURVANKARA (532891)	Buy Above	112.20	118.65	124.00
	Sell Below	109.40	105.10	100.0
OIL COUNTRY (500313)	Buy Above	88.20	92.45	97.00
	Sell Below	86.10	82.30	78.00

Short to Medium Term Delivery Buy:

Buy SE Investment LTD. (532900) CMP Rs. 170/- Target Rs. 250/-.

GOOD LUCK

Intraday Trading Calls for 20th August

Indian Stock Market may open positive and remains good positive for the day today.

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

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
SELAN EXPLO	Buy Above	220.10	226.40	234.00
	Sell Below	217.35	212.60	205.00
CAIRN INDIA	Buy Above	235.65	240.45	246.00
	Sell Below	233.15	229.15	225.00
ESSAR OIL	Buy Above	130.10	134.75	140.00
	Sell Below	128.35	124.15	120.00
ADSL	Buy Above	433.75	441.60	450.00
	Sell Below	427.30	420.45	412.00
BRFL	Buy Above	187.60	192.75	198.00
	Sell Below	184.35	180.10	175.00
NARGARJUNA CONSTRUCTION	Buy Above	130.20	134.50	140.00
	Sell Below	127.35	124.10	120.00
JAIPRAKASH ASSOCIATES	Buy Above	207.65	214.35	221.00
	Sell Below	204.35	198.60	192.00

GOOD LUCK

Intraday Trading Calls for 19th August

Indian Stock Market may open flat to positive but remains very volatile.

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

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
SELAN EXPLO	Buy Above	217.60	223.15	230.00
	Sell Below	214.35	208.45	202.00
CAIRN INDIA	Buy Above	240.20	244.75	250.00
	Sell Below	238.15	234.10	230.00
ESSAR OIL	Buy Above	135.70	140.20	145.00
	Sell Below	133.45	130.10	126.00
BRFL	Buy Above	191.70	198.45	205.00
	Sell Below	188.35	183.25	178.00
NARGARJUNA CONSTRUCTION	Buy Above	129.25	133.65	138.00
	Sell Below	127.15	123.70	120.00
JAIPRAKASH ASSOCIATES	Buy Above	213.75	220.15	225.00
	Sell Below	210.35	205.10	200.00
POLARIS (532254)	Buy Above	136.25	140.15	144.00
	Sell Below	134.30	131.20	127.00

Short to Medium Term Delivery Buy:

Buy ALLIED DIGITAL SERVICES LTD. (ADSL) (532875) at decline CMP Rs. 416/- Short to Med. Target Rs. 550/-.

GOOD LUCK

Intraday Trading Calls for 18th August

Indian Stock Market may open negative and remains very volatile but a bounce back expected from lower levels.

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

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
APTECH LTD.	Buy Above	216.70	222.65	228.00
	Sell Below	213.40	208.55	203.00
MARICO LTD. (531642)	Buy Above	88.60	92.10	95.00
	Sell Below	87.35	85.10	82.00
PRISM CEMENT	Buy Above	51.25	54.40	57.00
	Sell Below	49.45	47.20	44.00
MICRO TECHNOLOGIES	Buy Above	135.50	140.65	148.00
	Sell Below	132.70	128.20	124.00
EKC	Buy Above	186.70	192.45	198.00
	Sell Below	183.35	178.45	172.00
BAJAJ HIND	Buy Above	183.60	188.10	193.00
	Sell Below	181.35	177.60	174.00
RENUKA SUGAR	Buy Above	172.70	178.40	184.00
	Sell Below	170.35	166.15	161.00

GOOD LUCK