STOCK WATCH
More than five decades old, Delton Cables (Code No.: 504240) (Rs.82.75) is one of the largest manufacturers of cables and offers Total Telecom Solution Products- from conventional telecom cables to microwave accessories etc. It is a prime supplier to the Power, Telecommunication, Railways, Steel and Mining sectors in India and has firmly established itself in the international market. For FY06, its turnover grew by almost 50% to Rs.100 cr. but its net profit jumped 370% to Rs.3.50 cr. resulting in an EPS of Rs.12 on its tiny equity of Rs.2.88 cr. It can easily report an EPS of Rs.14 for FY07. Where other cable company shares are richly discounted by 12-14 times, this share is available below 6 times its forward PE. Although, no dividend is a cause of concern, still with its recent high of Rs.150, the scrip can easily double in 15-18 months.
Bilpower (Code No.: 531590) (Rs.90.35) is the pioneer in the field of manufacturing all types of Transformers, Electrical Laminations, Stampings and Cores. In fact, it is the leading trader of CRGO & CRNGO and produces the largest range of ready-to-assemble cores for distribution transformer in India. It reported stunning numbers for the year ending 31st March 2006. Sales have more than doubled to Rs.126 cr. whereas PAT spurted 165% to Rs.11 cr. registering an EPS of Rs.18 on its current equity of Rs.6 cr. For FY07, it is expected to clock a turnover of more than Rs.150 cr. with net profit of Rs.13.50 cr. This translates into an EPS of Rs.15 on its fully diluted equity of around Rs.9 cr. To fund its expansion, the company has already allotted 4 lakh warrants to be converted into equity at Rs.97 per share. Its share price has the potential to hit a new high of above Rs.180 in next 15-18 months.
After hitting Rs.166 on 2nd May’06, FCS Software (Code No.: 532666) (Rs.80.80) was badly beaten down to Rs.66 on 14th June’06. Notably in September’05, the company had allotted 35 lakh shares at Rs.50 per share through a public offering. The company is primarily a niche player in core IT areas like e-learning, digital content services, IT consultancy and product engineering services. It reported encouraging numbers for FY06 with top-line registering 40% growth at Rs.116 cr. and net profit rising 60% to Rs.15 cr. This works out to an EPS of Rs.11 on its expanded equity of Rs.14 cr. It declared 15% dividend. Once the market sentiment changes, this scrip will immediately shoot up to Rs.110-120 levels. A good bet in the IT sector.
In the recent carnage, Ind-Swift Labs (Code No.: 532305) (Rs.78.75) is one scrip which has become one third from its 52W high of Rs.236. It is one of the largest manufacturers of Clarithromycin in the world and enjoys 30% to 33% of the world capacity for this drug. Importantly, the company has also already received TGA (Therapeutic Goods Administration) certification and EDQM (European Directorate for the Quality of Medicines) certification for Clarithromycin which gives it access for exports to regulated markets. Also, tap the regulated markets of US, Japan & Australia; it has already filed over 7 DMFs in USA and over 50 DMFs in other European countries. The Company has also filed 13 patents for non-infringing processes for its products in USA & India. Moreover, the company has recently launched four new APIs which are Letrozole (Aromtase Inhibitor), Quetiapine Fumerate (Anti-Psychotic), Aripiprazole (Anti-Pshycotic) & Ropinirole (Parkinson Disease). In short, a great buy in the pharma sector.
Although Aarvee Denim (Code No.: 514274) (Rs.71.70) may not declare so goods numbers for March’06 quarter on 28th June due to lower price realization, still it is a strong buy at current levels. The company is implementing an aggressive expansion plan to increase its production capacity by 50% to 72 million metres per month. It is also planning to launch its own brand name ‘ADEN’ in Ahmedabad, Delhi and Mumbai initially. It may end FY06 with sales of Rs.280 cr. and net profit of Rs.35 cr. which may rise to Rs.320 cr. and Rs.42 cr. respectively for FY07. This would mean an EPS of Rs.18 for FY07 on its fully diluted equity of about Rs.23.50 cr. At a reasonable discounting by 7-8 times, the scrip should trade in the range of Rs.130-150. A screaming buy with a very nominal downward risk.
Bilpower (Code No.: 531590) (Rs.90.35) is the pioneer in the field of manufacturing all types of Transformers, Electrical Laminations, Stampings and Cores. In fact, it is the leading trader of CRGO & CRNGO and produces the largest range of ready-to-assemble cores for distribution transformer in India. It reported stunning numbers for the year ending 31st March 2006. Sales have more than doubled to Rs.126 cr. whereas PAT spurted 165% to Rs.11 cr. registering an EPS of Rs.18 on its current equity of Rs.6 cr. For FY07, it is expected to clock a turnover of more than Rs.150 cr. with net profit of Rs.13.50 cr. This translates into an EPS of Rs.15 on its fully diluted equity of around Rs.9 cr. To fund its expansion, the company has already allotted 4 lakh warrants to be converted into equity at Rs.97 per share. Its share price has the potential to hit a new high of above Rs.180 in next 15-18 months.
After hitting Rs.166 on 2nd May’06, FCS Software (Code No.: 532666) (Rs.80.80) was badly beaten down to Rs.66 on 14th June’06. Notably in September’05, the company had allotted 35 lakh shares at Rs.50 per share through a public offering. The company is primarily a niche player in core IT areas like e-learning, digital content services, IT consultancy and product engineering services. It reported encouraging numbers for FY06 with top-line registering 40% growth at Rs.116 cr. and net profit rising 60% to Rs.15 cr. This works out to an EPS of Rs.11 on its expanded equity of Rs.14 cr. It declared 15% dividend. Once the market sentiment changes, this scrip will immediately shoot up to Rs.110-120 levels. A good bet in the IT sector.
In the recent carnage, Ind-Swift Labs (Code No.: 532305) (Rs.78.75) is one scrip which has become one third from its 52W high of Rs.236. It is one of the largest manufacturers of Clarithromycin in the world and enjoys 30% to 33% of the world capacity for this drug. Importantly, the company has also already received TGA (Therapeutic Goods Administration) certification and EDQM (European Directorate for the Quality of Medicines) certification for Clarithromycin which gives it access for exports to regulated markets. Also, tap the regulated markets of US, Japan & Australia; it has already filed over 7 DMFs in USA and over 50 DMFs in other European countries. The Company has also filed 13 patents for non-infringing processes for its products in USA & India. Moreover, the company has recently launched four new APIs which are Letrozole (Aromtase Inhibitor), Quetiapine Fumerate (Anti-Psychotic), Aripiprazole (Anti-Pshycotic) & Ropinirole (Parkinson Disease). In short, a great buy in the pharma sector.
Although Aarvee Denim (Code No.: 514274) (Rs.71.70) may not declare so goods numbers for March’06 quarter on 28th June due to lower price realization, still it is a strong buy at current levels. The company is implementing an aggressive expansion plan to increase its production capacity by 50% to 72 million metres per month. It is also planning to launch its own brand name ‘ADEN’ in Ahmedabad, Delhi and Mumbai initially. It may end FY06 with sales of Rs.280 cr. and net profit of Rs.35 cr. which may rise to Rs.320 cr. and Rs.42 cr. respectively for FY07. This would mean an EPS of Rs.18 for FY07 on its fully diluted equity of about Rs.23.50 cr. At a reasonable discounting by 7-8 times, the scrip should trade in the range of Rs.130-150. A screaming buy with a very nominal downward risk.
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