STOCK WATCH
Sukhjit Starch (145.00) is mainly engaged in manufacturing edible and non edible maize starch, dextrine, liquid glucose and dextrose monohydrate. Besides, it also produces sorbitol, maize oil, maize gluten, maize husk, high maltose syrup, oxidized/pregelatinized starch etc. For the June qtr it recorded 25% growth in topline to 44 cr but net profit shot up 125% to 6 cr. Importantly, company has started commercial production at its new unit in HP from this week only. This new unit will enhance the capacity by nearly 25% and is dedicated for high margin starch and derivative products especially for pharmaceutical industry taking shape in Baddi, Himachal Pradesh. Although maize prices are ruling high still company is making decent profit. Hence for FY08 it may clock a turnover of 210 cr and PAT of 25 cr i.e. EPS of 34 Rs on current equity of 7.40 cr. Scrip is trading 4/- Rs cum-dividend and can give 30% return within a year.
Belonging to LMW group, Lakshmi Electricals (280.00) is basically engaged in manufacturing of electrical components like switch gear, control panel, contactors, thermal overload relays, control relays and textile machinery components using engineering plastic. It is also into wind power generation. For the June qtr its turnover increased by 30% to Rs 20 cr whereas NP rose by 15% to 1.90 cr. For the entire FY07 it had earned a profit of 7.90 cr on sales of 68 cr posting an EPS of 32 Rs on tiny equity of 2.46 cr. Due to lack of interest from institutional investors and conservative management, company is getting poor discounting. But with reserves of more than 30 cr (i.e. book value of 130 Rs) on such a tiny, company is ripe for bonus. Moreover it has a 100% subsidiary engaged in manufacturing of yarn with a spinning capacity of 25200 spindles. Considering all the factors it can report sales of 90 cr and PAT of 8.75 cr for FY08 on standalone basis. This translates into EPS of 36 Rs on current equity. With market hitting all time high, this scrip is a value buy at current market cap of around 70 cr.
Cubex Tubing (75.00) is engaged in manufacturing of copper and copper alloy tubes, rods, strips, profiles and wires which are used by the core sector and other critical industries such as thermal & nuclear power plants, refinery & petrochemicals, electrical & electronics, condenser & heat exchangers etc. For the June qtr its topline as well bottomline grew by 25% to 28 cr and 2.50 cr respectively. Off late company has developed large diameter cross-section copper-nickel tubes to meet the requirements of defence and shipyards. Further, it is entering into the manufacture of oxygen-free high conducting grade copper extrusions mainly used by the electronics industry. It also has plans to introduce large cross-section copper bus bars and specialty copper products. Accordingly it is expected to end FY08 with sales of 125 cr and profit of 10.50 which translates into EPS of 17 Rs on current equity of 6.18 cr. However company has allotted 15.75 lac warrants @ 48 Rs which may get converted into equity shares in near future. Hence diluted EPS works out to 14 Rs. Scrip has the potential to touch 100 Rs in 6-9 months.
By increasing the share of slag cement in the total cement sales coupled with higher price realization, operating margin of Deccan Cements (170.00) have improved substantially from last few quarters. For the June qtr its sales improved by nearly 20% to 48 cr but NP zoomed up 80% to 10 cr that too after making tax provisioning of 5.50 cr. For FY07 its net sales and NP stood at 172 cr and 28 cr respectively i.e. EPS of 40 Rs. In future, company intends to shed off its mini cement manufacturer tag as it is planning to ramp up its capacity by setting up a new 10 lakh tonne cement facility along with a captive power plant. For FY08, it may report sales of 200 cr and PAT of 35 cr i.e. EPS of 50 Rs on small equity of 7 cr. Moreover having reserves of whopping Rs 87 cr (i.e. book value of 134 Rs) in its balance sheet, it’s a potential bonus candidate as well. A good bet for short to medium term.
Belonging to LMW group, Lakshmi Electricals (280.00) is basically engaged in manufacturing of electrical components like switch gear, control panel, contactors, thermal overload relays, control relays and textile machinery components using engineering plastic. It is also into wind power generation. For the June qtr its turnover increased by 30% to Rs 20 cr whereas NP rose by 15% to 1.90 cr. For the entire FY07 it had earned a profit of 7.90 cr on sales of 68 cr posting an EPS of 32 Rs on tiny equity of 2.46 cr. Due to lack of interest from institutional investors and conservative management, company is getting poor discounting. But with reserves of more than 30 cr (i.e. book value of 130 Rs) on such a tiny, company is ripe for bonus. Moreover it has a 100% subsidiary engaged in manufacturing of yarn with a spinning capacity of 25200 spindles. Considering all the factors it can report sales of 90 cr and PAT of 8.75 cr for FY08 on standalone basis. This translates into EPS of 36 Rs on current equity. With market hitting all time high, this scrip is a value buy at current market cap of around 70 cr.
Cubex Tubing (75.00) is engaged in manufacturing of copper and copper alloy tubes, rods, strips, profiles and wires which are used by the core sector and other critical industries such as thermal & nuclear power plants, refinery & petrochemicals, electrical & electronics, condenser & heat exchangers etc. For the June qtr its topline as well bottomline grew by 25% to 28 cr and 2.50 cr respectively. Off late company has developed large diameter cross-section copper-nickel tubes to meet the requirements of defence and shipyards. Further, it is entering into the manufacture of oxygen-free high conducting grade copper extrusions mainly used by the electronics industry. It also has plans to introduce large cross-section copper bus bars and specialty copper products. Accordingly it is expected to end FY08 with sales of 125 cr and profit of 10.50 which translates into EPS of 17 Rs on current equity of 6.18 cr. However company has allotted 15.75 lac warrants @ 48 Rs which may get converted into equity shares in near future. Hence diluted EPS works out to 14 Rs. Scrip has the potential to touch 100 Rs in 6-9 months.
By increasing the share of slag cement in the total cement sales coupled with higher price realization, operating margin of Deccan Cements (170.00) have improved substantially from last few quarters. For the June qtr its sales improved by nearly 20% to 48 cr but NP zoomed up 80% to 10 cr that too after making tax provisioning of 5.50 cr. For FY07 its net sales and NP stood at 172 cr and 28 cr respectively i.e. EPS of 40 Rs. In future, company intends to shed off its mini cement manufacturer tag as it is planning to ramp up its capacity by setting up a new 10 lakh tonne cement facility along with a captive power plant. For FY08, it may report sales of 200 cr and PAT of 35 cr i.e. EPS of 50 Rs on small equity of 7 cr. Moreover having reserves of whopping Rs 87 cr (i.e. book value of 134 Rs) in its balance sheet, it’s a potential bonus candidate as well. A good bet for short to medium term.
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