STOCK WATCH
The share price of Balaji Amines Ltd. (Code: 530999) (Rs.214.50) has crashed severely over the last few days on the back of sanctions imposed by USA on the company. This gives a golden opportunity for long-term investors to buy as the company hardly exports to USA and this sanction will not have any monetary effect on the company. It is a leading producer of specialty chemicals viz. Aliphatic Amines and its derivatives at its plant in Osmanabad District in Maharashtra. For the first quarter ending 30th June’06, its sales increased by 55% to Rs.46 cr. whereas net profit jumped 60% to Rs.4.85 cr. For the full year FY07, it may report sales of Rs.175 cr. with a net profit of Rs.13 cr. i.e. an EPS of Rs.40 on its tiny equity of Rs.3.25 cr. with a 52-week high of Rs.510, it’s a good bet at current levels.
The last fiscal was not good for KIC Metaliks Ltd. (Code: 513693) (Rs.39.50) due to high raw material costs for iron ore and mettalurgical coke and lower price realization for pig iron. But things have improved this fiscal as raw material prices have cooled off from their highs. It already has a 1,44,000 TPA captive coke oven plant and is now setting up a Hot Blast Stove, which will be operational by 31st October’06. For the June’06 quarter its sales improved by 125% to Rs.38 cr. whereas net profit increased by 50% to Rs.2 cr. A few months back, it allotted about 6 lakh shares at Rs.80 on preferential basis. To fund the expansion, promoters are planning to bring in more money by making preferential allotment to themselves. For FY07, it is estimated to clock a turnover of Rs.150 cr. and net profit of Rs.7, which means an EPS of Rs.14 on its current equity of Rs.4.30 cr.
Gujarat Apollo Equipments Ltd. (Code: 522217) (Rs.135.20) is India's No.1 manufacturer of Asphalt based road construction & maintenance equipment and produces the entire range of equipments for building roads like Asphalt plants, soil stabilization plants, indirect heating equipment, paver finisher, bitumen sprayer, rollers, kerb paver and road maintenance equipments like milling machines and recycling machines. For the current first quarter, its sales doubled to Rs.34 cr. and PAT spurted by 130% to Rs.3.20 cr. In spite of being in such a high growth trajectory, the company is available at single digit P/E ratio. Recently, it concluded its 1:2 right issue offer at Rs.100 per share and the share is trading at just 15% premium to that. For FY07, it can register total revenue of Rs.135 cr. and net profit of Rs.13.50 cr. i.e. an EPS of Rs.13 on its expanded equity of Rs.10.50 cr. A risk-free buy which can give 50% return in 12-15 months.
To cater to the increasing demand, Mangalam Cement Ltd. (Code: 502157) (Rs.161.75) is investing around Rs.75 cr. to enhance its cement capacity to 1.6 MT from 1.1 MT and clinker capacity to 8,25,000 lakh tonnes from 6,00,000 lakh tonnes. It is also setting up a captive thermal power plant of 17.5MW capacity, which is expected to be commissioned by June’07. For the June’06 quarter, sales increased by 35% to Rs.113cr. but its net profit zoomed 380% to Rs.19 cr. Interestingly, the company’s OPM has improved substantially to 27% compared to 11% last year due to better operating efficiency and reduction in other expenses. For the full year ending September’06, it may report sales of Rs.400 cr. and profit of Rs.60 cr. i.e. EPS of Rs.21 on its current equity of Rs.28.20 cr. Although most cement scrips are richly discounted, this scrip is trading a market cap to sales ratio of almost 1 and is available at 35% discount from its recent high of Rs.230.
In the paper and newsprint sector, Rama Paper Mills Ltd. (Code: 500357) (Rs.27.50) is trading extremely cheap and at mouth watering levels. It is a reputed producer of newprint/ writing and printing paper with an installed capacity of around 40,000 TPA. For the June’06 quarter, its top-line grew by 20% to Rs.21 cr. whereas its bottom-line registered a gain of 10% to Rs.1.90 cr. The company is implementing a massive expansion for which the promoters have infused their own money to the tune of Rs.9 cr. by making preferential allotment of 25 lakh shares at Rs.35 to themselves. The promoter holding as on June’06 stands at 52%, which imparts confidence to shareholders over the management’s commitment. Its book value has also grown to Rs.26. For FY07, it may report sales of Rs.100 cr. with net profit of Rs.7 cr., which translates into an EPS of Rs.9 on its diluted equity of Rs.7.60 cr. A screaming buy.
The last fiscal was not good for KIC Metaliks Ltd. (Code: 513693) (Rs.39.50) due to high raw material costs for iron ore and mettalurgical coke and lower price realization for pig iron. But things have improved this fiscal as raw material prices have cooled off from their highs. It already has a 1,44,000 TPA captive coke oven plant and is now setting up a Hot Blast Stove, which will be operational by 31st October’06. For the June’06 quarter its sales improved by 125% to Rs.38 cr. whereas net profit increased by 50% to Rs.2 cr. A few months back, it allotted about 6 lakh shares at Rs.80 on preferential basis. To fund the expansion, promoters are planning to bring in more money by making preferential allotment to themselves. For FY07, it is estimated to clock a turnover of Rs.150 cr. and net profit of Rs.7, which means an EPS of Rs.14 on its current equity of Rs.4.30 cr.
Gujarat Apollo Equipments Ltd. (Code: 522217) (Rs.135.20) is India's No.1 manufacturer of Asphalt based road construction & maintenance equipment and produces the entire range of equipments for building roads like Asphalt plants, soil stabilization plants, indirect heating equipment, paver finisher, bitumen sprayer, rollers, kerb paver and road maintenance equipments like milling machines and recycling machines. For the current first quarter, its sales doubled to Rs.34 cr. and PAT spurted by 130% to Rs.3.20 cr. In spite of being in such a high growth trajectory, the company is available at single digit P/E ratio. Recently, it concluded its 1:2 right issue offer at Rs.100 per share and the share is trading at just 15% premium to that. For FY07, it can register total revenue of Rs.135 cr. and net profit of Rs.13.50 cr. i.e. an EPS of Rs.13 on its expanded equity of Rs.10.50 cr. A risk-free buy which can give 50% return in 12-15 months.
To cater to the increasing demand, Mangalam Cement Ltd. (Code: 502157) (Rs.161.75) is investing around Rs.75 cr. to enhance its cement capacity to 1.6 MT from 1.1 MT and clinker capacity to 8,25,000 lakh tonnes from 6,00,000 lakh tonnes. It is also setting up a captive thermal power plant of 17.5MW capacity, which is expected to be commissioned by June’07. For the June’06 quarter, sales increased by 35% to Rs.113cr. but its net profit zoomed 380% to Rs.19 cr. Interestingly, the company’s OPM has improved substantially to 27% compared to 11% last year due to better operating efficiency and reduction in other expenses. For the full year ending September’06, it may report sales of Rs.400 cr. and profit of Rs.60 cr. i.e. EPS of Rs.21 on its current equity of Rs.28.20 cr. Although most cement scrips are richly discounted, this scrip is trading a market cap to sales ratio of almost 1 and is available at 35% discount from its recent high of Rs.230.
In the paper and newsprint sector, Rama Paper Mills Ltd. (Code: 500357) (Rs.27.50) is trading extremely cheap and at mouth watering levels. It is a reputed producer of newprint/ writing and printing paper with an installed capacity of around 40,000 TPA. For the June’06 quarter, its top-line grew by 20% to Rs.21 cr. whereas its bottom-line registered a gain of 10% to Rs.1.90 cr. The company is implementing a massive expansion for which the promoters have infused their own money to the tune of Rs.9 cr. by making preferential allotment of 25 lakh shares at Rs.35 to themselves. The promoter holding as on June’06 stands at 52%, which imparts confidence to shareholders over the management’s commitment. Its book value has also grown to Rs.26. For FY07, it may report sales of Rs.100 cr. with net profit of Rs.7 cr., which translates into an EPS of Rs.9 on its diluted equity of Rs.7.60 cr. A screaming buy.
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