STOCK WATCH
Vivimed Labs (71.00) is a speciality chemical manufacturer catering to segments including oral care, sun care, skin care, hair care, natural extracts, preservatives, anti microbial, anti oxidants, anti-aging molecule etc. Infact it is world’s 2nd largest manufacturer of Triclosan - an antibacterial used for oral care and one of the top three companies for Avis – a chemical which improves UV absorbing ability of Sunscreen. Couple of months back it acquired 100% stake in M/s James Robinson,UK which is an international manufacturer and supplier of speciality chemicals used in hair dyes, pharmaceuticals and photographic films/prints to ophthalmic sunglasses. Organically as well company has been expanding its capacity and has chalked out Greenfield expansion plan in Uttaranchal and Hyderabad. Considering its Q1FY09 nos and acquisition of UK company, company is estimated to report a consolidated sales of more than Rs 225 cr and net profit of Rs 17 cr. This leads to an EPS of Rs 18 on current equity of Rs 9.40 cr whereas diluted EPS works out to Rs 13 on diluted equity of Rs 12.65 cr. Accumulate at declines.
Hitachi Home & Life Solutions (108.00), a 68% subsidiary of Hitachi-Japan is amongst the top airconditioning companies in India with an installed capacity of 250,000 units per year. It maufactures high technological home and commercial air conditioners like window AC, split AC, concealed splits, ductables, chillers and specific telecom cooling solutions. To capitalize its brand equity and strong distribution network in India. company has also ventured in the business of trading for the refrigerators and washing machines. Its plant at Kadi, Gujarat is among the seven Hitachi room air conditioner facilities worldwide. Being a technology driven company, it has introduced several innovative products such as “ACE, IOTA, ATOM Square, Takumi” which are doing extremely well in the market. Its refrigerator and washing machines sales are also picking up. On the other hand its commercial air conditioning division is also on a rampant growth mainly due to the retail sector and mall culture expanding in a big way. A trend of having BPOs and R&D centers is also picking up in India. Although its June quarter nos were not that encouraging still it is expected to end FY09 with sales of Rs 525 cr and PAT of Rs 42 cr i.e. EPS of Rs 18 on equity of Rs 23 cr. At current levels its trading reasonably cheap and can by bought for a target of Rs 180 in medium term.
Graphite India (58.00) is one of the few players globally manufacturing graphite electrodes as it’s a closely guarded technology. With the present installed capacity of 78,000 tonne, company boasts of producing nearly 8% of the total global graphite output. To cater the rising demand, it is implementing a capex at Durgapur plant to increase the graphite electrodes capacity by 10,500 tonne to be operational by end of FY09. Being backward integrated, it has the facility to produce 30,000 mtpa of calcined petroleum coke apart from generating 33 MW of power through Hydel and Multi-fuel routes. Further it is contemplating to enhance its captive power generation by 100 MW in next two years. Earlier in Oct 2005 company raised nearly Rs 175 cr thru FCCB route which is yet to be fully converted @ Rs 55. Despite hit by forex losses it posted decent result for the June quarter and accordingly is estimated to end FY09 with consolidated sales of Rs 1500 cr and NP of Rs 155 cr which works out to an EPS of Rs 9 on fully diluted equity of Rs 36 cr having face value as Rs 2/- per share. With a dividend yield of nearly 5% this is one of the safe pick with minimal downward risk.
SKF India (220.00) is India’s largest bearing manufacturer commanding more than 30% market share across the country. It manufactures all types of roller bearing, ball bearing, bearing units, bearing housing, plain bearing etc in hundred of sizes thereby having an extensive product range and literally providing solution for any and every conceivable application. Last fiscal it launched power transmission products as a new product range to capture the growth in the energy sector. Of late, SIL also got engaged into marketing, sales and distribution of large size bearings for industrial segment being produced by another group company. For future growth company is putting up a new plant in Haridwar, Uttarakhand with a capacity of 48 million pieces of bearing which will cater to two wheeler market segment. The plant is expected to start commercial production by mid 2009. Due to rise in input cost and stiff competition coupled with pressure from customers, company may not be able to maintain its CY07 EPS of Rs 30 and may end CY08 with sales of Rs 1725 cr and profit of Rs 145 cr i.e. EPS of Rs 27. Despite taking de-growth into consideration, this debt free MNC is available fairly cheap. Buy at declines.
Hitachi Home & Life Solutions (108.00), a 68% subsidiary of Hitachi-Japan is amongst the top airconditioning companies in India with an installed capacity of 250,000 units per year. It maufactures high technological home and commercial air conditioners like window AC, split AC, concealed splits, ductables, chillers and specific telecom cooling solutions. To capitalize its brand equity and strong distribution network in India. company has also ventured in the business of trading for the refrigerators and washing machines. Its plant at Kadi, Gujarat is among the seven Hitachi room air conditioner facilities worldwide. Being a technology driven company, it has introduced several innovative products such as “ACE, IOTA, ATOM Square, Takumi” which are doing extremely well in the market. Its refrigerator and washing machines sales are also picking up. On the other hand its commercial air conditioning division is also on a rampant growth mainly due to the retail sector and mall culture expanding in a big way. A trend of having BPOs and R&D centers is also picking up in India. Although its June quarter nos were not that encouraging still it is expected to end FY09 with sales of Rs 525 cr and PAT of Rs 42 cr i.e. EPS of Rs 18 on equity of Rs 23 cr. At current levels its trading reasonably cheap and can by bought for a target of Rs 180 in medium term.
Graphite India (58.00) is one of the few players globally manufacturing graphite electrodes as it’s a closely guarded technology. With the present installed capacity of 78,000 tonne, company boasts of producing nearly 8% of the total global graphite output. To cater the rising demand, it is implementing a capex at Durgapur plant to increase the graphite electrodes capacity by 10,500 tonne to be operational by end of FY09. Being backward integrated, it has the facility to produce 30,000 mtpa of calcined petroleum coke apart from generating 33 MW of power through Hydel and Multi-fuel routes. Further it is contemplating to enhance its captive power generation by 100 MW in next two years. Earlier in Oct 2005 company raised nearly Rs 175 cr thru FCCB route which is yet to be fully converted @ Rs 55. Despite hit by forex losses it posted decent result for the June quarter and accordingly is estimated to end FY09 with consolidated sales of Rs 1500 cr and NP of Rs 155 cr which works out to an EPS of Rs 9 on fully diluted equity of Rs 36 cr having face value as Rs 2/- per share. With a dividend yield of nearly 5% this is one of the safe pick with minimal downward risk.
SKF India (220.00) is India’s largest bearing manufacturer commanding more than 30% market share across the country. It manufactures all types of roller bearing, ball bearing, bearing units, bearing housing, plain bearing etc in hundred of sizes thereby having an extensive product range and literally providing solution for any and every conceivable application. Last fiscal it launched power transmission products as a new product range to capture the growth in the energy sector. Of late, SIL also got engaged into marketing, sales and distribution of large size bearings for industrial segment being produced by another group company. For future growth company is putting up a new plant in Haridwar, Uttarakhand with a capacity of 48 million pieces of bearing which will cater to two wheeler market segment. The plant is expected to start commercial production by mid 2009. Due to rise in input cost and stiff competition coupled with pressure from customers, company may not be able to maintain its CY07 EPS of Rs 30 and may end CY08 with sales of Rs 1725 cr and profit of Rs 145 cr i.e. EPS of Rs 27. Despite taking de-growth into consideration, this debt free MNC is available fairly cheap. Buy at declines.
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