STOCK WATCH
Mid caps are back in action and hitting new highs. With 52W high of Rs.29, Manali Petro (Code No: 500268) (Rs.19.60) has the potential to rise 25~30% in the short term. It is engaged in the manufacture of Propylene Oxide, Propylene Glycol and is the sole producers of Polyols in India. To strengthen its balance sheet, the company is implementing financial restructuring to wipe off its accumulated losses by reducing its share capital to the extent of 25%. Post restructuring, the face value of the share will stand reduced to Rs.7.50 and the equity capital will be Rs.86 cr. For FY07, its topline and bottomline is estimated to be Rs.475 cr. and Rs.52 cr. respectively, which translates into an EPS of Rs.5. The scrip can shoot upto Rs.35 in a year’s time.
Kilburn Engineering (Code No: 522101) (Rs.43) belonging to the Williamson Magor Group operates process design, engineering, manufacture installation and commissioning of turnkey plants and systems catering to industries such as petrochemical, chemical fertilisers, refineries, oil and gas and food processing. Recently, it bagged a huge order or around Rs.19 cr. from a Malayasian company. For FY07, it is estimated to report a turnover of Rs.90 cr. and NP of Rs.7.50 cr. This works out to an EPS of Rs.6 on its expanded equity of Rs.13.50 cr. The company is even expected to return to the dividend form FY07 after a gap of 10 yrs. Scrip has the potential to hit Rs.75 in 6~9 months time.
Apart from being a leading integrated diamonds and jewellery manufacturer & exporter, Gitanjali Gems Ltd (Code No: 532715) (Rs.178) is the largest player in the branded jewellery segment with well-known brands like GILI, NAKSHATRA, ASMI & D’DMAS. Recently, it formed a joint venture with Sanghvi Exports to manufacture and market SANGINI brand of diamond jewellery. It already has a large retail set-up with 26 exclusive distributors and 620 outlets across 30 cities in India. To increase its market share, it is setting up further 10 Asmi retail outlets, 100 D'damas stores, 90 kiosks at Shoppers Stop departmental stores, 6 Nakshatra flagship stores and 25 outlets for Fantasy Diamond. For FY07, it is estimated to report sales of around Rs.2000 cr. and NP of Rs.50 cr. posting an EPS of Rs.12 on its equity of Rs.59 cr. Considering its brand image and expansion plans, it should trade between Rs.220~260 at a reasonable discounting of 18¬22 times.
GM Breweries Ltd. (Code No: 507488) (Rs.104) has come out with terrific set of numbers beating the expectations of the most optimistic analysts. For March’06 qtr., its Sales increased by nearly 50% to Rs.44 cr. whereas the NP zoomed 250% to Rs.7.40 cr. reporting a. quarterly EPS of Rs.8 on its current equity of Rs.9.40 cr. Its OPM improved substantially to 28% for the qtr. compared to 12% in the corresponding previous quarter. It even declared 15% dividend. With FY06 EPS of Rs.14 and having a market cap of less than Rs.100 cr., it is trading very cheap. For FY07, it can even report sales of Rs.175 cr. with NP of Rs.18 cr. i.e. an EPS of Rs.19. Scrip has the potential to touch Rs.220 in a year or so. Just grab it!
Kilburn Engineering (Code No: 522101) (Rs.43) belonging to the Williamson Magor Group operates process design, engineering, manufacture installation and commissioning of turnkey plants and systems catering to industries such as petrochemical, chemical fertilisers, refineries, oil and gas and food processing. Recently, it bagged a huge order or around Rs.19 cr. from a Malayasian company. For FY07, it is estimated to report a turnover of Rs.90 cr. and NP of Rs.7.50 cr. This works out to an EPS of Rs.6 on its expanded equity of Rs.13.50 cr. The company is even expected to return to the dividend form FY07 after a gap of 10 yrs. Scrip has the potential to hit Rs.75 in 6~9 months time.
Apart from being a leading integrated diamonds and jewellery manufacturer & exporter, Gitanjali Gems Ltd (Code No: 532715) (Rs.178) is the largest player in the branded jewellery segment with well-known brands like GILI, NAKSHATRA, ASMI & D’DMAS. Recently, it formed a joint venture with Sanghvi Exports to manufacture and market SANGINI brand of diamond jewellery. It already has a large retail set-up with 26 exclusive distributors and 620 outlets across 30 cities in India. To increase its market share, it is setting up further 10 Asmi retail outlets, 100 D'damas stores, 90 kiosks at Shoppers Stop departmental stores, 6 Nakshatra flagship stores and 25 outlets for Fantasy Diamond. For FY07, it is estimated to report sales of around Rs.2000 cr. and NP of Rs.50 cr. posting an EPS of Rs.12 on its equity of Rs.59 cr. Considering its brand image and expansion plans, it should trade between Rs.220~260 at a reasonable discounting of 18¬22 times.
GM Breweries Ltd. (Code No: 507488) (Rs.104) has come out with terrific set of numbers beating the expectations of the most optimistic analysts. For March’06 qtr., its Sales increased by nearly 50% to Rs.44 cr. whereas the NP zoomed 250% to Rs.7.40 cr. reporting a. quarterly EPS of Rs.8 on its current equity of Rs.9.40 cr. Its OPM improved substantially to 28% for the qtr. compared to 12% in the corresponding previous quarter. It even declared 15% dividend. With FY06 EPS of Rs.14 and having a market cap of less than Rs.100 cr., it is trading very cheap. For FY07, it can even report sales of Rs.175 cr. with NP of Rs.18 cr. i.e. an EPS of Rs.19. Scrip has the potential to touch Rs.220 in a year or so. Just grab it!
Some analysts feel that sugar as a commodity is in secular bull run for another 5 years at least. In such a scenario, Mawana Sugars (Code No: 532512) (Rs.127) can give extraordinary return if held for 2~3 yrs. It has already merged its 100% subsidiary, Nanglamal Sugar Ltd., which recently expanded its capacity to 8000 TCD. With this, Mawana Sugars total capacity stands enhanced to 30,000 TCD. Besides, it is implementing aggressive expansion plans to further add around 8500 TCD by Nov 2006. It’s also setting up 30MW co-generation plant and ethanol distillery units to produce 40 million litres per annum. Considering all this, for FY07 ending 30 Sept.’07, it is expected to report Sales of Rs.850 cr. and NP Rs.85 cr., which means an EPS of Rs.20 on its equity of Rs.42.50 cr. Although, the company is expected to raise more than Rs.200 cr. through FCCB/ADR route that may dilute the equity by Rs.15 cr. or so, still it’s one of the best bets in the sugar sector for the long-term.
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