Stock Idea: Diamond Power Infrastructure (DPIL)

Diamond Power Infrastructure (152)

(BSE Code - 522163 NSE Code - DIAPOWER)

(P/E-5, Equity - Rs37.21 cr, Market Cap - Rs565 cr)

Diamond Power Infrastructure (DPIL) is a play on the power cable and transmission conductors segment, both in the domestic and export markets. Established in 1970, Vadodara based DPIL is one of the oldest and largest manufacturer of Wire Products in the country. It is the third largest manufacturer of All Aluminum Alloy Conductors (AAAC) in India. DPIL manfacturers the entire range of Power cables from Aluminum to copper for power and control applications. To capitalize on the current growth opportunity in the power sector in the country DPIL in 2007 had diversified into undertaking EPC business in a bigger way. The company has adopted both inorganic and organic approach to emerge as a leading EPC player in the turnkey power projects. DPIL is now an integrated turnkey power player with strong presence in cables and transformers. DPIL is a Gujarat based transmission and distribution services provider and equipment manufacturer company. DPIL provides turnkey services in T&D, manufactures Power Cables upto 550KV, Power & Distribution Transformers upto 220KV, Transimission and Distribution Conductors upto 765KV and Transmission Towers.

With the acquisition of DPTL (Western Transformers) in 2007, DPIL has captive control on three critical power transmission and distribution products namely conductors, cables, transmission towers and transformers. With the proposed commissioning of EHV cables facility in Q4FY11, it will be virtually a fully integrated player in the power T&D segment. During Q1 FY11, DPIL has completed the expansion of its LT and HT cables capacity. The company is currently implementing the EHV cables facility. The transmission towers will mainly cater to the in house requirement of EPC projects in rural electrification. The demand for EHV cables is expected to grow tremendously in the coming years

DPIL received orders aggregating Rs. 332 cr. in July 2010. The total outstanding orders as on July 16, 2010 stood at Rs 1450 crs. DPIL has received orders from various agencies like Gujarat Urja Vikas Nigam, MSEDCL, HVPNL, PSEB, Areva T&D and Larsen and Toubro Ltd. In July 2010, DPIL had raised Rs.114 Cr through QIP by issuing 5.59 Mn shares at Rs. 203.80 per share. It has also raised Rs 18 Cr from Kotak Private Equity. DPIL’s major capex will get completed in FY11. DPIL is at the fag end of a Rs 270 cr. capex consisting of a expansion in LT/HT cables, transmission towers and EHV cables. Post this, DPIL will have adequate capacity for driving growth in the medium-term. DPIL has also strengthened its balance sheet by infusing funds worth Rs 150 cr. through QIP and warrants. The funds will enhance the working capital of DPIL thus enabling it to bid for higher volume of project work.

Net profit of DDPIL rose 110.29% to Rs 29.23 cr. in the Q3 ended December 2010. Sales rose 80.33% to Rs 378.48 cr. in the quarter. For the half year ended Sept. 2010, DPIL has posted 105.4% rise in net sales to Rs 731.67 cr. and the net profit during this period grew by 133.2% Rs 58.98 cr.. On a equity of 37.21 cr.(Promoters’stake- 40.2% FII/MF stake-27.82%), the half yearly EPS stood at Rs 15.85. For the year ended March 2010, DPIL had posted net profit of Rs 62 cr. on net sales of Rs 860 cr.. The dividend declared was 15% and DPIL had also issued bonus shares in the ratio of 1:3 in Dec. 2009. At Rs 152, the DPIL stock trades at 5.4 and 4.4 times its estimated EPS for FY11(Rs 28) and FY12(Rs 34), respectively.

Investors can start accumulating the DPIL stock at current levels and add more on declines for decent returns of 40%-50% over the next 6-9 months

Source: Internet (Valuenotes by Sanjay Chhabria)

Intraday Trading Calls for 11th March

Indian Stock Market may open positive and positive trading expected today with very high volatility.

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

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
DEEPAK FERT.	Buy Above	150.75	155.70	161.00
	Sell Below	147.45	143.40	139.00
UFLEX LTD.	Buy Above	142.70	148.25	154.00
	Sell Below	140.05	136.15	131.00
VIP INDUSTRIES	Buy Above	548.60	559.60	570.00
	Sell Below	539.45	530.20	520.00
C MAHINDRA EXPORTS	Buy Above	256.25	262.75	268.00
	Sell Below	251.35	245.60	240.00
JAIN IRRIGATION	Buy Above	191.25	196.55	202.00
	Sell Below	188.45	183.25	178.00
INDIABULL REALEST	Buy Above	114.70	118.25	122.00
	Sell Below	112.15	109.35	106.00
CHAMBAL FERT.	Buy Above	72.55	74.75	77.00
	Sell Below	71.30	69.25	67.00

GOOD LUCK

Intraday trading Calls for 10th March

Indian Stock Market may open positive and positive trading expected today with very high volatility.

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

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
LIC HOUSING FINANCE	Buy Above	202.20	207.50	214.00
	Sell Below	199.35	194.40	190.00
UFLEX LTD.	Buy Above	142.70	148.25	154.00
	Sell Below	140.05	136.15	131.00
VIP INDUSTRIES	Buy Above	552.25	562.60	575.00
	Sell Below	543.45	531.40	522.00
C MAHINDRA EXPORTS	Buy Above	260.70	266.35	272.00
	Sell Below	254.50	248.35	242.00
JAIN IRRIGATION	Buy Above	191.25	196.55	202.00
	Sell Below	188.45	183.25	178.00
INDIABULL REALEST	Buy Above	114.60	118.25	122.00
	Sell Below	112.15	109.35	106.00
ICSA	Buy Above	127.60	132.75	138.00
	Sell Below	124.75	120.60	116.00

GOOD LUCK

Intraday Trading Calls for 09th March

Indian Stock Market may open positive and positive trading expected today with very high volatility.

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

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
LIC HOUSING FINANCE	Buy Above	198.10	203.75	210.00
	Sell Below	195.00	191.60	185.00
UFLEX LTD.	Buy Above	138.60	144.25	148.00
	Sell Below	135.40	131.55	128.00
VIP INDUSTRIES	Buy Above	530.0	545.60	560.00
	Sell Below	517.45	505.40	492.00
C MAHINDRA EXPORTS	Buy Above	240.25	246.35	252.00
	Sell Below	237.15	232.35	225.00
VIDEOCON INDUSTRIES	Buy Above	190.60	195.55	200.00
	Sell Below	187.45	183.25	178.00
HDIL	Buy Above	164.80	168.05	171.00
	Sell Below	161.70	157.35	154.00
BRFL	Buy Above	255.20	261.35	267252.00
	Sell Below	251.45	246.20	240.00

GOOD LUCK

Stock Idea: Ansal Properties

Ansal Properties is a stock which is currently out of favour. It belongs to a sector which is currently out of favour with the investors. This company has been around for over four decades and is involved in the entire gamut of the real estate activities. This company has got about 19 township projects, which are going on in almost five states. Some of the large projects, which the company is executing includes is a 3500 acre project in Lucknow by name of Sushant Golf City. They are doing a 2500 acre project in Greater Noida. The company has recently started a project called Esencia, which is about 220 acre, including phase I and phase II. This project is located in Gurgaon.

If you look at the financials of the company, for FY10, this company achieved sales of about Rs 750 crore. Meanwhile, PAT was about Rs 70 crore. In the first nine months of the current financial year this company has done almost what it did the entire last year which is Rs 750 crore and it has achieved a PAT of about Rs 68 crore, which is almost similar to what it did for the full year last year. For full year, the EPS is expected to be around Rs 5-5.5. So at the current price of about Rs 37-38 this stock is trading at a PE multiple of about seven, which seems reasonable for this company.

If you look at the investments, which have been made by various PE funds in various projects of the company, HDFC Asset Management bought 8.5% stake in the Greater Noida project and it gave about Rs 225 crore for the 8.5% stake. Redford Capital has just invested in the Esencia project. They have given Rs 200 crore to the company for the Esencia project. Of course, all these projects, all these investments are project level findings and not really investments into Ansal Properties.

This company has passed the enabling resolution to raise about Rs 1,000 crore by way of QIP. Now, given the size and scale of the projects the investments made into the company and also the revenue and profit potential for these projects, I think for the company the current marketcap of about Rs 600 crore looks small.

 

For a long-term value investor, out of favour stock in out of favour sector provides margin of safety. We are in a scenario when the inflation is high and the interest rates are also high which do not augur well for an interest rate sensitive sector like real estate. So this is a stock for the patient contrarian investor.

The stock during the boom times had seen a price of over Rs 500 and it also fell to about Rs 21 when the markets came down in 2008-09. At the current price of Rs 38 given the improved financials and also the fact that the company is able to manage funds for expansion, I think the negative with regards to the sector and the company looks pretty much factored in the current market price.

Source: Internet (Moneycontrol.com by Ashish Chug)

Stock Idea: Ganesh Polytex

This is a company which has been a beneficiary of higher cotton and crude prices mainly because of two reasons. There has not been any significant increase in the cost of raw material for the company, which is pet bottle waste, and also there has been a significant increase in the prices of its finished product, which is recycled polyester staple fibre. The prices have moved in tandem with PSF made from virgin material.

Ganesh Polytex is into waste management. The company recycles pet bottle waste and converts into polyester staple fibre. This company is the largest recycler of pet bottle waste in the country. It has got a capacity of close to 58,000 tonne per annum. The company has got two plants: one is located in Kanpur and other one is in Rudrapur. If you look at the financials of the company, for FY10, the sales were about Rs 200 crore. It was up by 45% over FY09, while profit after tax was about Rs 9 crore up by about 100%.

In the first nine months of the current financial year the company has achieved 30% increase in sales to about Rs 185 crore. The PAT has almost doubled from Rs 5.5 crore to Rs 11.5 crore. The full year PAT is expected to be about Rs 17 crore, which mean an EPS of close to Rs 12 on the current equity of about 13.4. At the current price of about Rs 60-62 the stock is trading at a PE multiple of about 5-5.5.

This company has undertaken expansion projects. It is increasing its capacity further by about 12,000 tonne per annum which will become operational in the next one to one-and-a-half years. Also, the company besides employing the traditional methods for collection of pet bottle waste, is taking a number of new initiatives for collecting pet bottle waste. This includes tying up with various shopping malls and multiplexes to collect pet bottle waste from those multiplexes. The company is also toying with the idea of setting up a collection and washing unit somewhere in the Middle East or South Asia. These measures would lead to long-term raw material security for the company.

Now, you have a company which is the largest recycler of pet bottle waste in the country and the capacity of 18000 tonnes per annum which went into operation a couple of months back could not have come in at a more appropriate time since prices of recycled polyester staple fibres are on a high. Also cotton yarn prices are buoyant, which may lead to customer shifting from cotton yarn to recycled polyester staple fibre. The company is thinking about raw material security and using non conventional method for pet bottle waste. The future for the company looks bright.

So at the current price of about Rs 60-62-63, this stock warrants a buy. Since the markets are volatile, I would suggest to make a staggered purchase in the stock and not buy everything in one go because it is possible in case the market comes down the stock can also drop to about Rs 55-58 levels.

 

Long-term investors can choose to do a staggered buying of the stock. The long-term potential of the stock and the price competitiveness vis-à-vis the cotton yarn and virgin PSF looks to be in favour of the company. So at the current valuation the stock looks attractive for investment.

Source: Internet (moneycontrol.com by Ashish Chug)

Intraday Trading Calls for 08th March

Indian Stock Market may open positive and positive trading expected today with very high volatility.

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

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
LIC HOUSING FINANCE	Buy Above	194.65	201.20	207.00
	Sell Below	192.40	187.60	183.00
UFLEX LTD.	Buy Above	136.75	141.25	147.00
	Sell Below	133.05	128.55	124.00
WALCHAND NAGAR IND	Buy Above	155.75	161.05	167.00
	Sell Below	152.45	148.40	142.00
C MAHINDRA EXPORTS	Buy Above	218.20	223.75	230.00
	Sell Below	214.05	209.35	205.00
VIDEOCON INDUSTRIES	Buy Above	188.50	193.45	198.00
	Sell Below	185.00	181.25	178.00
HDIL	Buy Above	161.25	165.05	169.00
	Sell Below	158.70	154.35	150.00
ONMOBILE GLOBAL	Buy Above	218.50	224.15	230.00
	Sell Below	213.70	207.20	202.00

GOOD LUCK