Small & Beautiful
At the time where most of the its peer companies are finding it difficult to maintain the topline as well as margin, Asian Granito (52.00) came out with flying color for the June qtr. Due to commencement of production at wall tile unit, its sales zoomed up 70% to Rs 73 cr and NP shot up to Rs 9 cr posting an EPS of more than Rs 4 for the single quarter on a standalone basis. Company is one of the largest producers of vitrified tiles in India under the brand name “Asian Tiles”. Recently, it has expanded its vitrified tile capacity to 16,000 sq mtr from 14,000 sq mtr tiles per day and also started new wall tile plant having a capacity of 9,300 sq mtr per day. Besides, its 100% subsidiary Asian Tile Ltd which is getting merged with itself, is into the business of manufacturing ceramic floor tiles with a capacity of 7,000 sq mtr per day. So on a consolidated basis, company is estimated to register a turnover of Rs 350 cr and PAT of Rs 32 cr for FY09. This works out to an EPS of Rs 15 on equity of Rs 21 cr. Even a average PE ratio of 5x times scrip can appreciate 50% in a year
For the June quarter, Mazda Ltd (58.00) reported 70% growth in sales to Rs 17.50 cr whereas its net profit zoomed up 160% to Rs 2 cr. Importantly it recorded an healthy OPM of 20% for the quarter. It is among the few engineering companies in the world, manufacturing very specialized, high technology and critical equipments for various industries like power, refineries, fertilizers, chemicals, nuclear, sugar, paper, food, pharma etc. Broadly its product profile is segmented into Vacuum system, Valve division, Air pollution control equipment, Crystallizers and Evaporators. Notably, company has a technical collaboration with world renowned Croll-Reynolds Inc. USA, who holds 12% stake in the company. To cater the increasing demand, it is setting up a third unit with an investment of approximately 5 to 6 cr. For FY09 it is expected to clock a turnover of Rs 70 cr and PAT of Rs 7.25 cr, assuming it to record an OPM of 18%. Is translates into EPS of Rs 17 on small equity of Rs 4.25 cr. At an Enterprise value of Rs 30 cr scrip can easily double from current levels. A screaming buy.
Belonging to well known Ruchi group, National Steel (24.00) is one of the steel company reporting consistent performance irrespective of commodity price movement. For the June qtr as well its registered 15% growth in sales to Rs 590 cr and 20% increase in NP to Rs 7.30 cr. It is engaged into manufacturing of galvanized corrugated & plain steel sheets as well as coils under the brand name “APPU”. It also has a cold rolling mill and a modern state-of-the-art colour coating line which produces sophisticated and unlimited range of coloured steel with high corrosion resistance. To cater to the increasing demand, company has been constantly expanding, and currently has a capacity of 2,10,000 tonnes of galvanized steel, 2,40,000 tonne of cold roll steel and 80,000 tonne of colour coated line. For FY09 it may post an EPS of Rs 9 with net profit of Rs 28.50 cr on sales of Rs 2500 cr. Notably, company has been making highest tax provisioning of more than 35% but despite being profit making company has never declared dividend in last 10 years. Fundamentally it looks cheap with a book value of Rs 64, PE ratio of less than 3x times and market cap of Rs 80 cr.
Last week, Pitti Lamination (40.00) reported encouraging set of nos for the June qtr. Sales jumped up 50% to Rs 52.50 cr whereas PBT increased by 40% to Rs 2.85 cr. However due to higher tax provisioning its NP registered only 20% rise to Rs 2 cr. Company is primarily engaged in manufacture of electrical steel laminations and stampings which form a critical part in all types of industrial motors, alternators, pump sets, aeronautics, windmill generators and DG sets. It even produces small laminations via High Speed Press for compressors. With its installed capacity of 25,000 MTPA, company is presently working at 70% capacity utilization leaving ample scope for future growth. Besides in Jan 2008 it has completed its forward integration plan and has put up a project for fabrication of steel stator bodies, machining of stator bodies and dropping of assembled stator core into the stator body. This will result in value addition and considerable improvement in the margins. With rupee stabilizing above Rs 42 levels, company is expected to clock sales of Rs 200 cr and profit of Rs 8 cr i.e. EPS of more than Rs 8 on equity of Rs 9.50 cr. Moreover company has declared 20% dividend which gives a yield of 5% at CMP. Scrip can shoot upto Rs 70 within 9~12months
For the June quarter, Mazda Ltd (58.00) reported 70% growth in sales to Rs 17.50 cr whereas its net profit zoomed up 160% to Rs 2 cr. Importantly it recorded an healthy OPM of 20% for the quarter. It is among the few engineering companies in the world, manufacturing very specialized, high technology and critical equipments for various industries like power, refineries, fertilizers, chemicals, nuclear, sugar, paper, food, pharma etc. Broadly its product profile is segmented into Vacuum system, Valve division, Air pollution control equipment, Crystallizers and Evaporators. Notably, company has a technical collaboration with world renowned Croll-Reynolds Inc. USA, who holds 12% stake in the company. To cater the increasing demand, it is setting up a third unit with an investment of approximately 5 to 6 cr. For FY09 it is expected to clock a turnover of Rs 70 cr and PAT of Rs 7.25 cr, assuming it to record an OPM of 18%. Is translates into EPS of Rs 17 on small equity of Rs 4.25 cr. At an Enterprise value of Rs 30 cr scrip can easily double from current levels. A screaming buy.
Belonging to well known Ruchi group, National Steel (24.00) is one of the steel company reporting consistent performance irrespective of commodity price movement. For the June qtr as well its registered 15% growth in sales to Rs 590 cr and 20% increase in NP to Rs 7.30 cr. It is engaged into manufacturing of galvanized corrugated & plain steel sheets as well as coils under the brand name “APPU”. It also has a cold rolling mill and a modern state-of-the-art colour coating line which produces sophisticated and unlimited range of coloured steel with high corrosion resistance. To cater to the increasing demand, company has been constantly expanding, and currently has a capacity of 2,10,000 tonnes of galvanized steel, 2,40,000 tonne of cold roll steel and 80,000 tonne of colour coated line. For FY09 it may post an EPS of Rs 9 with net profit of Rs 28.50 cr on sales of Rs 2500 cr. Notably, company has been making highest tax provisioning of more than 35% but despite being profit making company has never declared dividend in last 10 years. Fundamentally it looks cheap with a book value of Rs 64, PE ratio of less than 3x times and market cap of Rs 80 cr.
Last week, Pitti Lamination (40.00) reported encouraging set of nos for the June qtr. Sales jumped up 50% to Rs 52.50 cr whereas PBT increased by 40% to Rs 2.85 cr. However due to higher tax provisioning its NP registered only 20% rise to Rs 2 cr. Company is primarily engaged in manufacture of electrical steel laminations and stampings which form a critical part in all types of industrial motors, alternators, pump sets, aeronautics, windmill generators and DG sets. It even produces small laminations via High Speed Press for compressors. With its installed capacity of 25,000 MTPA, company is presently working at 70% capacity utilization leaving ample scope for future growth. Besides in Jan 2008 it has completed its forward integration plan and has put up a project for fabrication of steel stator bodies, machining of stator bodies and dropping of assembled stator core into the stator body. This will result in value addition and considerable improvement in the margins. With rupee stabilizing above Rs 42 levels, company is expected to clock sales of Rs 200 cr and profit of Rs 8 cr i.e. EPS of more than Rs 8 on equity of Rs 9.50 cr. Moreover company has declared 20% dividend which gives a yield of 5% at CMP. Scrip can shoot upto Rs 70 within 9~12months
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