Roto Pumps Ltd - 55.00 Rs

Roto Pumps Ltd (RPL) was established in 1968 for manufacture of progressive cavity pumps with indigenous technology, for the first time in India, as an import substitute. Since then it has emerged as a reputed manufacturer primarily for progressive cavity pumps and twin screw pumps. It offers a comprehensive range of pumps as per application, apart from horizontal internal bearing, horizontal external bearing, vertical bearing pumps etc. Company markets its products under brand name ‘RotoFLOW’ and ‘RotoPOSI’ which are very well accepted in the market. These pumps have very wide application and are used by across the industry including oil & gas, sugar, paper, steel, fertilizer, agriculture, good, chemicals, mining, ceramic, waste water treatment, pharma etc. Importantly, RPL also manufactures pump’s spare parts and other accessories like pressure switches, gauges, relief valves, strainers, dry running protection device etc. It also offers paid annual maintenance contracts including spare parts for its own pumps as well as pumps of other makes.

RPL has two manufacturing facilities – one unit at Noida and the second one at Noida Special Economic Zone (NSEZ). Being an integrated player, most of the critical components of the pump are manufactured in house leading to lower cost of production and best quality. Infact, company has a rich heritage in manufacturing technology with sophisticated machine tools and testing facilities. It has a good distribution network across the country with offices in Noida, Vadodara, Kolkata, Bangalore, Chennai, Pune, Mumbai etc. Besides India, it has warehouse cum marketing office in Australia and U.K. Due to higher realization, company is putting special thrust on export with its products being exported to USA, Canada, Brazil, Spain, Germany, Egypt, South Africa, Japan, Taiwan, UAE etc. RPL is strengthening its supply chain system and has increased stock levels at UK and Australia warehouses to enable them service the market more effectively and also penetrating in other existing markets. Meanwhile, company is developing other markets in China, Middle East, Far East Asia, Africa and have been able to establish contacts with potential partners. In future, RPL has plans to introduce Triple Screw pumps and Lobe pumps to enhance its product line.

On the back of strong industrial growth, it registered 40% jump in sales to 34 cr whereas PAT shot up 125% to 2 cr for FY07. So it reported an EPS of nearly 7 Rs on a small equity of 3.10 cr. It declared 15% dividend for FY07 against 10% last year and the scrip is still trading cum dividend giving a yield of approx 3% at CMP. For the June’07 quarter, sales grew by 35% to 7.90 cr but NP increased by 70% to 0.44 cr due to better operating margin. Accordingly for the current year it may clock a turnover of 45 cr and profit of 3 cr i.e. EPS of 10 Rs on current equity. With 52 week H/L as 71/30 Rs and promoter holding of 70%, this engineering company is trading reasonably cheap at a market cap of merely 17 cr. Investors are advised to buy at current levels as share price has the potential to appreciate 50% in 12~15 months.

Ansal Buildwell Ltd - 78.00 Rs

Incorporated in 1983, Ansal Buildwell Ltd (ABL) - flagship company of the high profile Ansal Group, is a well known player in the field of real estate development and construction. It has presence across the real estate sector and has expertise in developing shopping complex, malls, residential township, row houses, sky scrappers, corporate offices etc. In short it caters to both - residential as well as commercial sector. Notably, the group has a major contribution in converting the Connaught place, Delhi into an enviable commercial business district. Although company has majority projects in Gurgaon, still it can boast of developing landmarks like Sushant Lok I, II and III in south of Delhi, Ansal KRSNA-I & II, Ansal FORTE at Bangalore, Ansal's Riverdale at Kochi and Ansal's Green Valley at Dehradun and Prakash Enclave at Moradabad.

Shalimar Residency, Executive Residency, Silver Crest, Eden Villa, Oriental Homes, Royale Casa, Sushant Floors and Flexi Homes are few of its popular residential creations. In order to cater the elite class, company has recently designed and constructed prestigious projects namely 'Florence Homes', 'Florence Super', 'Florence Grand', 'Florence Manor' & 'Florence Elite' in Gurgaon. All these schemes are complete and possession is being offered to the respective clients. Among the ongoing and new projects, ABL is developing Florence Marvel & Florence Villa in Gurgaon and a huge residential township called “Ansal City” in Amritsar, Punjab. It has also acquired around 35 acres of land at Kochi for development of plots, villas and town houses, again under the project name “Ansal City”. On the commercial front company has completely handed over the corporate park namely Sushant Tower and Navkriti Arcade. It is now constructing a huge shopping mall called ‘BOOM PLAZA’ in Guragaon only. In the wake of the booming real estate industry, ABL has acquired land in Amritsar, Jaipur, Panipat, Faridabad and Jhansi. Infact in Faridabad company is venturing into multi-storeyed group housing societies.

Apart from real estate, ABL also carries out hi-tech engineering projects and has successfully being associated with Baner hydel project, Sardar Sarover Narmada main canal project, Jammu Udhampur rail link project, Bangladesh road project etc. Currently it is engaged in Thoubal spillway project-Manipur, NEIGRIHMS Project-Shillong, Palam Drain Project-Delhi & C-DOT main R&D building project-Delhi. Incidentally, company has diversified into hospitality also and has completed the work of group housing club namely 'Harmony Club'. Due to encouraging response for the membership, it has started another hospitality project 'Club Florence'. ABL has further expanded its area of operation by giving consultancy in sales & marketing of real estate to various new property owners. Moreover in joint venture with Chaudhari group of Nepal it has developed three projects in Nepal namely Kathmandu Residency, Mount View Residency Phase-I & Phase –II which are completely sold out and handed over.

Financially, ABL recorded a marginal growth of 5% in total revenue to 120 cr but its PAT quadrupled to 7.25 cr for FY07 against 1.70 cr last year. Hence it reported an EPS of 10 Rs and declared 18% dividend. For the latest June qtr, its topline grew by 30% to 28 cr whereas NP jumped up 70% to 1.80 cr. Hence for FY08 it may report revenue of 150 cr and profit of 10 cr which leads to an EPS of 14 Rs on small equity of 7.40 cr. Even at a modest discounting by 8x times, share price can shoot up to 120 Rs (50% appreciation) in 9 - 12 months.

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.