STOCK WATCH
Elgi Equipment (55.00) is the market leader and Asia's largest manufacturer of air compressors and automobile service station equipment. Recently, it has reported very encouraging performance for March qtr. Sales improved by 20% to Rs 126 cr whereas PAT shot up 75% to Rs 10 cr. Accordingly, it registered a Net profit of Rs 39.50 on sales of Rs 421 cr for entire FY08. This leads to an EPS of Rs 6 on equity of Rs 6.30 cr having a face value as Rs 1/-. Against this it declared total dividend of 120% for FY08. To concentrate on each business segment company is hiving off its automotive equipment business into a separate wholly owned subsidiary called ATS-Elgi Ltd. For FY09 it is estimated to post an EPS of Rs 7 which means scrip is currently discounted by less than 8x times against its FY09 earnings. A solid buy for medium to long term.
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. For the latest March qtr its revenue increased by 70% to Rs 352 cr and net profit jumped up 60% to Rs 50 cr. With significant growth anticipated in the transaction services business in India, company has set up a hub and spoke model spanning across the country with cost efficient delivery capabilities and is into processing of credit cards, insurance applications, contact point verification, soft collections, cheque clearing services, reconciliations, etc. As on date company is having a very healthy order book position of Rs 865 cr. For entire FY08 it recorded 80% and 75% growth in sales and NP to Rs 1223 and Rs 183 cr respectively. This translates into EPS of Rs 14 on current equity of 130.50 cr. However the EPS works to Rs 11 on fully diluted equity (conversion of all FCCB) of Rs 165 cr. Recently company has acquired a strategic stake of 26% in Hyderabad-based Locuz Enterprise Solutions Ltd for an undisclosed amount, with a commitment to acquire remaining stake over a period. A strong and a safe bet.
IMP Power (145.00) is engaged in manufacturing of entire range of power & tistribution transformers, electrical & digital measuring instruments, testing equipments etc. For the March’08 qtr it reported 45% rise in sales to Rs 39 cr whereas PAT increased by 30% to Rs 3.10 cr. To maintain its growth momentum company has undertaken 28 cr capex for expansion of its manufacturing facilities situated at Silvassa from existing 3,600 MVA to 6,000 MVA. It is also contemplating to increase it meter manufacturuing capacity by nearly 50% to 315,000 units. For FY08 ending June 2008, it is expected to report a topline of Rs 150 cr and bottomline of Rs 12.50 cr i.e. EPS of Rs 18 Rs on current equity of Rs 6.80 cr. Whereas the EPS works out to Rs 15 on fully diluted equity (post conversion of all warrants and CCRP) of around Rs 8.50 cr. After hitting a high of Rs 330 in Jan’08 scrip has tumbled down 50% and is available at attractive valuation now. Keep accumulating at declines.
Few days back Honda Siel (240.00) announced decent set of nos as sales grew by 10% to Rs 84 cr whereas PAT increased by 255 to Rs 8 cr. Accordingly for full year it registered 10% growth in sales to Rs 252 cr but the net profit shot up 40% to Rs 24.70 cr on back of higher other income to the tune of Rs 15.50 cr. Hence it posted an EPS of Rs 24 on equity of Rs 10 cr. Being a 67% subsidiary of Honda Motor Co. Japan, company is the undisputed leader in the field of portable generators with its “HONDA” brand commanding more than 70% market share. Infact company boasts of launching India’s first LPG run gensets which is doing extremely well along with its super silent series. To consolidate the manufacturing operations company is shifting its Rudrapur (Uttaranchal) plant to its factory at Greater Noida in Uttar Pradesh. Hence apart from production loss company is also incurring substantial costs which it will provide in coming years. So it is estimated to clock an EPS of Rs 26 for FY09 with sales of Rs 300 cr and PAT of Rs 26.50. At a reasonable discounting by 12x times scrip can shoot upto Rs 320 in 9~12 months
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. For the latest March qtr its revenue increased by 70% to Rs 352 cr and net profit jumped up 60% to Rs 50 cr. With significant growth anticipated in the transaction services business in India, company has set up a hub and spoke model spanning across the country with cost efficient delivery capabilities and is into processing of credit cards, insurance applications, contact point verification, soft collections, cheque clearing services, reconciliations, etc. As on date company is having a very healthy order book position of Rs 865 cr. For entire FY08 it recorded 80% and 75% growth in sales and NP to Rs 1223 and Rs 183 cr respectively. This translates into EPS of Rs 14 on current equity of 130.50 cr. However the EPS works to Rs 11 on fully diluted equity (conversion of all FCCB) of Rs 165 cr. Recently company has acquired a strategic stake of 26% in Hyderabad-based Locuz Enterprise Solutions Ltd for an undisclosed amount, with a commitment to acquire remaining stake over a period. A strong and a safe bet.
IMP Power (145.00) is engaged in manufacturing of entire range of power & tistribution transformers, electrical & digital measuring instruments, testing equipments etc. For the March’08 qtr it reported 45% rise in sales to Rs 39 cr whereas PAT increased by 30% to Rs 3.10 cr. To maintain its growth momentum company has undertaken 28 cr capex for expansion of its manufacturing facilities situated at Silvassa from existing 3,600 MVA to 6,000 MVA. It is also contemplating to increase it meter manufacturuing capacity by nearly 50% to 315,000 units. For FY08 ending June 2008, it is expected to report a topline of Rs 150 cr and bottomline of Rs 12.50 cr i.e. EPS of Rs 18 Rs on current equity of Rs 6.80 cr. Whereas the EPS works out to Rs 15 on fully diluted equity (post conversion of all warrants and CCRP) of around Rs 8.50 cr. After hitting a high of Rs 330 in Jan’08 scrip has tumbled down 50% and is available at attractive valuation now. Keep accumulating at declines.
Few days back Honda Siel (240.00) announced decent set of nos as sales grew by 10% to Rs 84 cr whereas PAT increased by 255 to Rs 8 cr. Accordingly for full year it registered 10% growth in sales to Rs 252 cr but the net profit shot up 40% to Rs 24.70 cr on back of higher other income to the tune of Rs 15.50 cr. Hence it posted an EPS of Rs 24 on equity of Rs 10 cr. Being a 67% subsidiary of Honda Motor Co. Japan, company is the undisputed leader in the field of portable generators with its “HONDA” brand commanding more than 70% market share. Infact company boasts of launching India’s first LPG run gensets which is doing extremely well along with its super silent series. To consolidate the manufacturing operations company is shifting its Rudrapur (Uttaranchal) plant to its factory at Greater Noida in Uttar Pradesh. Hence apart from production loss company is also incurring substantial costs which it will provide in coming years. So it is estimated to clock an EPS of Rs 26 for FY09 with sales of Rs 300 cr and PAT of Rs 26.50. At a reasonable discounting by 12x times scrip can shoot upto Rs 320 in 9~12 months
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