STOCK WATCH
Lok Housing & construction (210.00) is having a land bank of whopping 1222 acres across Mumbai, Pune and Bangalore with development potential of 62.5 million sq ft. Most of the land has been acquired long back at very low cost and are located at Ambernath(80 acres), Kalyan(92 acres), Vasai(136 acre), Turbhe(180 acre), Pune(425 acres), Bangalore(240 acres) and balance 69 acre spread across Andheri, Malad, Khar, Thane & Virar in Mumbai. With the recent merger of Lok Shelter, company is now involved into lucrative business of urban rehabilitation and reconstruction projects as well. Hence, it has already submitted a proposal to the state government to rehabilitate tenants of about 300 unsafe cessed buildings in Mumbai and simultaneously develop 6 million sq ft in the heart of the city in association with MHADA. At the same time it has several residential townships under construction at Mulund, AMbernath, Khar, Virar, Thane, Kalyan, Marol etc. Importantly, it has finalized to make pref allotment of 50 lac warrants @ Rs 354 to promoters. Keep accumulating at declines.
Yuken India (190.00) is one of the reputed manufacturers of power saving hydraulic pumps & valves which are very popular in heavy engineering industry as effective means of automation and hence find extensive use in various key sectors like machine tools, material handling equipment, construction machinery, drill rigs, automobiles, defence, steel, power & cement plants, plastic machinery etc. Besides it also manufactures complete hydraulic power units as per customer specifications, cylinders, parison controllers, actuators, accumulators and power packs. Due to phenomenal demand, company has recently doubled its hydraulic casting products capacity to 2400 TPA and is further augmenting it to 6000 TPA within next 2~3 years. Besides it made a tie up with Hydrocontrols SPA Italy to produce and market state-of-the-art mobile control valves especially for agriculture, construction, earth moving and lifting machineries. For FY08 it is estimated to clock a turnover of Rs 100 cr and PAT of Rs 5.50 cr which translates into EPS of Rs Rs 18 on very tiny equity of Rs 3 cr. For FY09, EPS is estimated to shoot up to around Rs 25. It’s a screaming buy as scrip as corrected 50% from its recent high of Rs 400.
3i Infotech (125.00) is the fourth largest Indian software products company offering a comprehensive range of software products & solutions primarily for banking, insurance, capital markets, mutual funds, telecom, manufacturing, retail & distribution industries. It provides complete end-to-end outsourcing solutions to various industries mainly in the domestic market and specializes in non-voice based BPO services. It is also recognized as one of the major national players in the e- Governance consultancy space in India. Importantly, company derives revenues from products and services in a 1:1 ratio which differentiates it from other IT companies. In order to beat the competition and grow at a rapid pace, company is betting high on inorganic route and has adopted an acquisition-led strategy to acquire new capabilities and foray into new geographies in the BFSI space. With net dollar inflow of less than 10%, company is hardly affected by the rupee appreciation. On the back of excellent performance till now and considering the strong order book position, it is expected to report total revenue of Rs 1200 cr and net profit of Rs 175 cr on consolidated basis. This works out to an EPS of Rs 10 on fully diluted equity of Rs 175 cr. A good contrarian bet.
Aurobindo Pharma (310.00) is among India’s top five pharmaceutical companies with operation in over 100 countries and marketing over 180 APIs and 250 formulations. Infact it is one of the largest players in Semi Synthetic Penicillin and Cephalosporin space and is backward integrated into manufacturing key raw material P-Gen. Presently company derives nearly 70% of the revenue from the sale of APIs and intermediates while about 30% comes from formulations. Interestingly, it is one of the largest DMF filer with the US FDA from India with 114 DMFs filed to date. Besides it has filed 100 ANDAs in US and 40 ANDAs in Europe, out of which 62 approvals (both final and tentative) have been received from US and only 7 approvals from Europe. In order to increase its foot hold in Europe, company earlier acquired Pharmacin in Netherlands with a portfolio of 203 market authorizations; and Milpharm in UK having 100 market authorizations. For future, company is planning to invest around Rs 200 cr in SEZ at Jedcherla near Hyderabad, and Rs 160 cr in Pharma city near Visakhapatnam. To fund its growth plan APL has raised nearly Rs 900 cr thru FCCB route to be converted into equity shares @ Rs 1014 and Rs 879 in tranches. On a standalone basis it is expected to register a topline and bottomline of Rs 2200 cr and Rs 280 cr for FY08 i.e. EPS of Rs 52 on current equity of 26.90 cr and Rs 40 on estimated diluted equity of Rs 35 cr (assuming FCCB conversion @ Rs 550). A good bet in pharma space.
Yuken India (190.00) is one of the reputed manufacturers of power saving hydraulic pumps & valves which are very popular in heavy engineering industry as effective means of automation and hence find extensive use in various key sectors like machine tools, material handling equipment, construction machinery, drill rigs, automobiles, defence, steel, power & cement plants, plastic machinery etc. Besides it also manufactures complete hydraulic power units as per customer specifications, cylinders, parison controllers, actuators, accumulators and power packs. Due to phenomenal demand, company has recently doubled its hydraulic casting products capacity to 2400 TPA and is further augmenting it to 6000 TPA within next 2~3 years. Besides it made a tie up with Hydrocontrols SPA Italy to produce and market state-of-the-art mobile control valves especially for agriculture, construction, earth moving and lifting machineries. For FY08 it is estimated to clock a turnover of Rs 100 cr and PAT of Rs 5.50 cr which translates into EPS of Rs Rs 18 on very tiny equity of Rs 3 cr. For FY09, EPS is estimated to shoot up to around Rs 25. It’s a screaming buy as scrip as corrected 50% from its recent high of Rs 400.
3i Infotech (125.00) is the fourth largest Indian software products company offering a comprehensive range of software products & solutions primarily for banking, insurance, capital markets, mutual funds, telecom, manufacturing, retail & distribution industries. It provides complete end-to-end outsourcing solutions to various industries mainly in the domestic market and specializes in non-voice based BPO services. It is also recognized as one of the major national players in the e- Governance consultancy space in India. Importantly, company derives revenues from products and services in a 1:1 ratio which differentiates it from other IT companies. In order to beat the competition and grow at a rapid pace, company is betting high on inorganic route and has adopted an acquisition-led strategy to acquire new capabilities and foray into new geographies in the BFSI space. With net dollar inflow of less than 10%, company is hardly affected by the rupee appreciation. On the back of excellent performance till now and considering the strong order book position, it is expected to report total revenue of Rs 1200 cr and net profit of Rs 175 cr on consolidated basis. This works out to an EPS of Rs 10 on fully diluted equity of Rs 175 cr. A good contrarian bet.
Aurobindo Pharma (310.00) is among India’s top five pharmaceutical companies with operation in over 100 countries and marketing over 180 APIs and 250 formulations. Infact it is one of the largest players in Semi Synthetic Penicillin and Cephalosporin space and is backward integrated into manufacturing key raw material P-Gen. Presently company derives nearly 70% of the revenue from the sale of APIs and intermediates while about 30% comes from formulations. Interestingly, it is one of the largest DMF filer with the US FDA from India with 114 DMFs filed to date. Besides it has filed 100 ANDAs in US and 40 ANDAs in Europe, out of which 62 approvals (both final and tentative) have been received from US and only 7 approvals from Europe. In order to increase its foot hold in Europe, company earlier acquired Pharmacin in Netherlands with a portfolio of 203 market authorizations; and Milpharm in UK having 100 market authorizations. For future, company is planning to invest around Rs 200 cr in SEZ at Jedcherla near Hyderabad, and Rs 160 cr in Pharma city near Visakhapatnam. To fund its growth plan APL has raised nearly Rs 900 cr thru FCCB route to be converted into equity shares @ Rs 1014 and Rs 879 in tranches. On a standalone basis it is expected to register a topline and bottomline of Rs 2200 cr and Rs 280 cr for FY08 i.e. EPS of Rs 52 on current equity of 26.90 cr and Rs 40 on estimated diluted equity of Rs 35 cr (assuming FCCB conversion @ Rs 550). A good bet in pharma space.
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