STOCK WATCH
Belonging to the L.N. Agrawal group, Suryavanshi Spinning Mills Ltd. (Code: 514140) (Rs.50.45) is one of the most modern hi-tech spinning mills of South India with an installed capacity of more than 1,00,000 spindles. It is also engaged in knitting, yarn dyeing, fabric dyeing, processing and manufacturing of fashionable garments. A few months back, it raised Rs.13 cr. by a preferential allotment of 15 lakh shares at Rs.87, which will be utilized to add 35,000 spindles at a separate unit and for repayment of high cost debt. Besides, the management is also planning to merge its other group company Suryavanshi Textiles engaged in garment manufacturing with itself. For FY07, it may clock a turnover of more than Rs.300 cr. with net profit of around Rs.10 cr. i.e. EPS of Rs.14 on its equity of Rs.7.15 cr. At the current market cap of Rs.37 cr., it’s one of the cheapest textile scrips.
Due to the strong demand, steel companies continue to raise the price of galvanized steel whereas zinc prices have cooled off from their recent highs. This will have positive effect on National Steel & Agro (Code: 513179) (Rs.21.50), which has a capacity of 2,10,000 TPA of galvanized steel apart from 2,40,000 TPA of cold roll steel capacity. For the June’06 quarter, sales increased by 30% to Rs.440 cr. and net profit grew by 7% to Rs.4.50 cr. At the current market cap of Rs.70 cr., this Ruchi group company is available for a song. Once the company returns to the dividend list, the scrip will attract better valuation and may easily double from hereon. For FY07, it may clock a turnover of Rs.2200 cr. and net profit of Rs.20 cr. which will lead to an EPS of Rs.6 on its equity of Rs.32.60 cr. With cash EPS of more than Rs.13 and book value of Rs.52, the scrip can give handsome returns if held for 15-18 months.
Sanjivani Paranteral Ltd. (Code: 531569) (Rs.33) has steadily progressed by manufacturing high quality medicines mainly injectibles since 1998 for many reputed companies and has emerged as one the biggest manufacturers of injectibles in the country. Its manufacturing facility which is WHO GMP certified is located at Taloja in Maharashtra and can manufacture high grade antibiotics and life saving injectibles used in various pre and post operative infections. For the June’06 quarter, its sales grew by 35% to Rs.17 cr. whereas net profit increased by 50% to Rs.1.30 cr. It is now planning to launch anti-cancer products in India through a tie-up with an European multinational. For FY07, it is expected to report a turnover of Rs.70 cr. and PAT of Rs.5 cr. which will lead to an EPS of Rs.8 on its current equity of Rs.5.90 cr. This fundamentally strong scrip is thus trading cheap and has the potential to touch Rs.60 levels in the medium term. The main trigger for the share price will be the merger with its other group company, Sanjivani Pharmaceuticals.
Due to the buoyancy in Sugar, Oudh Sugar Ltd. (Code: 507260) (Rs.112), a K.K. Birla group company, is implementing an aggressive expansion plan involving capital expenditure of Rs.480 cr. From the coming crushing season, its capacity will be expanded to 22000 TCD from 18000 TCD currently. Besides, it is in the process of setting up a green-field plant in Gorakhpur (U.P.) with a capacity of 7000 TCD. Hence post expansion, it will have a consolidated crushing capacity of 29000 TCD, captive power generation of 30 MW and two distilleries of 75 kilo litres per day. For the year ending 30th June’06, its top-line grew by 40% to Rs.501 cr. whereas its net profit zoomed up 300% to Rs.45 cr. registering an EPS of Rs.25 and it declared Rs.4.50 per share as dividend giving yield of 4% at CMP and is currently trading cum dividend. To fund its expansion, it may raise money through the equity route, which may dilute its share capital to Rs.20.20 cr. For FY07, it may clock a turnover of Rs.550 cr. and net profit of Rs.45 cr. A best bet in the sugar sector.
To meet the growing demand for its products in the domestic and export markets, Plastiblend India (Code: 523648) (Rs.136) has embarked on a major expansion. It is expanding the capacity at its existing facilities in Daman from 24,000 to 35,000 TPA in phases by March’07 and is also setting up a new unit at Uttaranchal with an initial capacity of 5,000 TPA, which will be again operational by March’07. The whole capex of Rs.20 cr. will be funded by internal accruals only as it is a cash rich and debt-free company. It reported fantastic numbers for the June’06 quarter with sales improving by 45% to Rs.29 cr. and profit grew by 40% to Rs.3.70 cr. It is estimated to end the current year with a top-line of Rs.100 cr. and net profit of Rs.13 cr. i.e. EPS of Rs.20 on its equity of Rs.6.50 cr. Notably, the company has a strong track record of handsome dividend payout of above 30% and a current dividend yield of around 5%. Buy at sharp dips.
Due to the strong demand, steel companies continue to raise the price of galvanized steel whereas zinc prices have cooled off from their recent highs. This will have positive effect on National Steel & Agro (Code: 513179) (Rs.21.50), which has a capacity of 2,10,000 TPA of galvanized steel apart from 2,40,000 TPA of cold roll steel capacity. For the June’06 quarter, sales increased by 30% to Rs.440 cr. and net profit grew by 7% to Rs.4.50 cr. At the current market cap of Rs.70 cr., this Ruchi group company is available for a song. Once the company returns to the dividend list, the scrip will attract better valuation and may easily double from hereon. For FY07, it may clock a turnover of Rs.2200 cr. and net profit of Rs.20 cr. which will lead to an EPS of Rs.6 on its equity of Rs.32.60 cr. With cash EPS of more than Rs.13 and book value of Rs.52, the scrip can give handsome returns if held for 15-18 months.
Sanjivani Paranteral Ltd. (Code: 531569) (Rs.33) has steadily progressed by manufacturing high quality medicines mainly injectibles since 1998 for many reputed companies and has emerged as one the biggest manufacturers of injectibles in the country. Its manufacturing facility which is WHO GMP certified is located at Taloja in Maharashtra and can manufacture high grade antibiotics and life saving injectibles used in various pre and post operative infections. For the June’06 quarter, its sales grew by 35% to Rs.17 cr. whereas net profit increased by 50% to Rs.1.30 cr. It is now planning to launch anti-cancer products in India through a tie-up with an European multinational. For FY07, it is expected to report a turnover of Rs.70 cr. and PAT of Rs.5 cr. which will lead to an EPS of Rs.8 on its current equity of Rs.5.90 cr. This fundamentally strong scrip is thus trading cheap and has the potential to touch Rs.60 levels in the medium term. The main trigger for the share price will be the merger with its other group company, Sanjivani Pharmaceuticals.
Due to the buoyancy in Sugar, Oudh Sugar Ltd. (Code: 507260) (Rs.112), a K.K. Birla group company, is implementing an aggressive expansion plan involving capital expenditure of Rs.480 cr. From the coming crushing season, its capacity will be expanded to 22000 TCD from 18000 TCD currently. Besides, it is in the process of setting up a green-field plant in Gorakhpur (U.P.) with a capacity of 7000 TCD. Hence post expansion, it will have a consolidated crushing capacity of 29000 TCD, captive power generation of 30 MW and two distilleries of 75 kilo litres per day. For the year ending 30th June’06, its top-line grew by 40% to Rs.501 cr. whereas its net profit zoomed up 300% to Rs.45 cr. registering an EPS of Rs.25 and it declared Rs.4.50 per share as dividend giving yield of 4% at CMP and is currently trading cum dividend. To fund its expansion, it may raise money through the equity route, which may dilute its share capital to Rs.20.20 cr. For FY07, it may clock a turnover of Rs.550 cr. and net profit of Rs.45 cr. A best bet in the sugar sector.
To meet the growing demand for its products in the domestic and export markets, Plastiblend India (Code: 523648) (Rs.136) has embarked on a major expansion. It is expanding the capacity at its existing facilities in Daman from 24,000 to 35,000 TPA in phases by March’07 and is also setting up a new unit at Uttaranchal with an initial capacity of 5,000 TPA, which will be again operational by March’07. The whole capex of Rs.20 cr. will be funded by internal accruals only as it is a cash rich and debt-free company. It reported fantastic numbers for the June’06 quarter with sales improving by 45% to Rs.29 cr. and profit grew by 40% to Rs.3.70 cr. It is estimated to end the current year with a top-line of Rs.100 cr. and net profit of Rs.13 cr. i.e. EPS of Rs.20 on its equity of Rs.6.50 cr. Notably, the company has a strong track record of handsome dividend payout of above 30% and a current dividend yield of around 5%. Buy at sharp dips.
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