STOCK WATCH
Seshasayee Paper (162.00) is engaged in manufacturing of printing/writing papers, packing/wrapping papers and speciality papers. For the June qtr its sales grew marginally to 108 cr but net profit shot up 80% to 11.50 cr registering an EPS of 10 Rs for the qtr. Importantly, it recorded a healthy OPM of 18% for the second consecutive quarter. To enhance its environmental performance, company is replacing its 30 yr old wood pulp mill of 230 TPD capacity with a comparatively newer but second hand pulp mill from USA which has advanced technological features, like RDH Pulping, Oxygen De-lignification, ECF Bleaching etc apart from having higher capacity of 350 TPD. The equipment has already reached the company’s site and is expected to become operational from Dec’07. Besides, company is taking various initiatives to better its operational efficiency and ensure cheaper and regular raw material supply. For FY08 it is expected to clock a turnover of 500 cr and NP of 40 cr which works out to an EPS of 36 Rs on equity of 11.25 cr. Although company debt has increased substantially to 244 cr still it’s a good long term bet.
Thirumalai Chemicals (162.00) is the leading manufacturer of phthalic anhydride (PAN), maleic anhydride (MAN), fumaric acid, pthalate esters, food acids etc. Till now company was working at very less capacity utilization but because of increasing demand from the pigment as well as resin sector its capacity utilization improved to 75% for FY07 and is further estimated to improve substantially in FY08. For the June qtr its topline increased by 25% to 180 cr but due to higher interest cost and tax provisioning, NP grew by 15% to 11.40 cr posting an EPS of 11 Rs for the quarter. In future company has some capital expenditure plans to increase it PAN manufacturing capacity by 40% to around 150,000 tonnes. Importantly, the PAN prices are trading higher and are expected to remain high due to strong demand. Hence company may end FY08 with sales of 675 cr and PAT of 33 cr. This leads to an EPS of 32 Rs on equity of 10.25 cr. Share price has the potential to cross 200 mark in medium term. XL Telecom & Energy Ltd (131.00) is among the very few companies, manufacturing CDMA handsets, fixed wireless phone, SPMS, solar photovoltaic system and ethanol in India. Incidentally, all these are high growth sectors and have immense potential. As company’s financial year ending is in month of June, it is yet to come with its last qtr nos. Hence it is estimated to clock a turnover of 525 cr and profit of 20 cr i.e. EPS of nearly 14 Rs on equity of 14.50 cr. Ironically, company has a huge 300 cr capex plan for its solar photovoltaic business under which it intends to expand the capacity of solar photovoltaic module making plant from the existing capacity 25 MW to 65 MW and setup a new solar photovoltaic cell manufacturing plant with a capacity of 120 MW per annum. Hence it is planning to raise 160 cr thru FCCB route and make pref allotment of around 52 lac warrants to promoters and others. Company is bound to get re-rated in future and the share price may shoot up like Bartronics. Buy and hold patiently. Ramsarup Industries (133.00) has been continuously enhancing its production capacity for steel wire as well as TMT bars and has completed the expansion project at its existing plants viz Kalyani and Shyamnagar. It recorded 15% growth in sales to 355 cr and 25% rise in PAT to 12.50 cr for the latest June’07 quarter. To cash on the ongoing boom, company has a massive expansion plans whereby it is putting up a greenfield plant in Durgapur for manufacture of Low Relaxation Prestressed Concrete (LRPC) strand wire along with special grade steel wires. Phase-I of this new plant is near completion and expected to commence operation by Sept 2007. Moreover its Infrastructure division is engaged in laying of power transmission lines and has also got a contract of Indo-Bangladesh border fencing. Company has plans to raise around 200 cr via FCCB/GDR route in future. For FY08, it may report a total revenue of 1750 cr and PAT of around 48-50 cr. This works out to an EPS of 28 Rs on current equity of 17.50 cr. At a modest discounting by 7x times, share price can touch 200 Rs in 9-12 months. However it may not get very rich valuation being a commodity company and earning lower profit margin.
Thirumalai Chemicals (162.00) is the leading manufacturer of phthalic anhydride (PAN), maleic anhydride (MAN), fumaric acid, pthalate esters, food acids etc. Till now company was working at very less capacity utilization but because of increasing demand from the pigment as well as resin sector its capacity utilization improved to 75% for FY07 and is further estimated to improve substantially in FY08. For the June qtr its topline increased by 25% to 180 cr but due to higher interest cost and tax provisioning, NP grew by 15% to 11.40 cr posting an EPS of 11 Rs for the quarter. In future company has some capital expenditure plans to increase it PAN manufacturing capacity by 40% to around 150,000 tonnes. Importantly, the PAN prices are trading higher and are expected to remain high due to strong demand. Hence company may end FY08 with sales of 675 cr and PAT of 33 cr. This leads to an EPS of 32 Rs on equity of 10.25 cr. Share price has the potential to cross 200 mark in medium term. XL Telecom & Energy Ltd (131.00) is among the very few companies, manufacturing CDMA handsets, fixed wireless phone, SPMS, solar photovoltaic system and ethanol in India. Incidentally, all these are high growth sectors and have immense potential. As company’s financial year ending is in month of June, it is yet to come with its last qtr nos. Hence it is estimated to clock a turnover of 525 cr and profit of 20 cr i.e. EPS of nearly 14 Rs on equity of 14.50 cr. Ironically, company has a huge 300 cr capex plan for its solar photovoltaic business under which it intends to expand the capacity of solar photovoltaic module making plant from the existing capacity 25 MW to 65 MW and setup a new solar photovoltaic cell manufacturing plant with a capacity of 120 MW per annum. Hence it is planning to raise 160 cr thru FCCB route and make pref allotment of around 52 lac warrants to promoters and others. Company is bound to get re-rated in future and the share price may shoot up like Bartronics. Buy and hold patiently. Ramsarup Industries (133.00) has been continuously enhancing its production capacity for steel wire as well as TMT bars and has completed the expansion project at its existing plants viz Kalyani and Shyamnagar. It recorded 15% growth in sales to 355 cr and 25% rise in PAT to 12.50 cr for the latest June’07 quarter. To cash on the ongoing boom, company has a massive expansion plans whereby it is putting up a greenfield plant in Durgapur for manufacture of Low Relaxation Prestressed Concrete (LRPC) strand wire along with special grade steel wires. Phase-I of this new plant is near completion and expected to commence operation by Sept 2007. Moreover its Infrastructure division is engaged in laying of power transmission lines and has also got a contract of Indo-Bangladesh border fencing. Company has plans to raise around 200 cr via FCCB/GDR route in future. For FY08, it may report a total revenue of 1750 cr and PAT of around 48-50 cr. This works out to an EPS of 28 Rs on current equity of 17.50 cr. At a modest discounting by 7x times, share price can touch 200 Rs in 9-12 months. However it may not get very rich valuation being a commodity company and earning lower profit margin.
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