STOCK WATCH

Although most of its peer groups posted losses, Simplex Casting (55.00) has once again reported decent performance for March’09 quarter. Not only it recorded 15% growth in sales to Rs 50 cr but also registered impressive 40% rise in bottomline to Rs 2.80 cr. Even for the entire FY09, sales have improved by 15% to Rs 173 cr and net profit have increased by 25% to Rs 9 cr. This leads to an EPS of Rs 15 on equity of Rs 6 cr. It may declare 15% dividend for FY09 as well. Company is one of the largest producers of Bogies (engines chasis) frame in India and supplying wide range of its products to Railways. It manufactures several product, some of which are zero leakage coke oven doors, coco bogies, casnub bogies, bogie frame, truck frame, slag pot, blast furnace, ingot moulds, pump casting, pump body, etc. It exports around 20% of its production to USA, Italy, France, Japan, Korea, Egypt, Spain etc. Infact company claimes to be one of the largest manufacturers of zero leakage coke oven doors in the whole world. Company has been gradually but constantly expanding and upgrading its manufacturing facility. For future it has plans to venture into project execution and turnkey business of steel plants and also intends to forward integrate into valve manufacturing business, which is a very high margin business. For FY10 it has the potential to clock a turnover of more than Rs 200 cr and PAT of Rs 11 cr which translates into EPS of Rs 18 on current equity. Worth accumulating for long term.

Voltamp Transformer (700.00) is a leading manufacturer of customized transformers for industrial, building and power applications. It has special expertise in production of dry type vacuum resin impregnated (upto 3 MVA/11 kV class) and cast resin transformers (upto 7.5 MVA/33 kV class) apart from manufacturing regular oil filled power & distribution transformers, induction furnace transformers & unitized substations. Infact, company is the market leader in dry type transformers with around 40% market share. Unlike other transformer makers, VTL's focus is on the non-SEB industrial and engineering segment, which has enabled the company to prese rve profitability on a consistent basis. Even for latest March’09 quarter, it clocked 15% growth in sales to Rs 186 cr whereas net profit shot up 40% to Rs 30 cr thereby posting an EPS of Rs 30 for the single quarter. On the full year basis, its sales was up 10% to Rs 737 cr and PAT increased by 45% to Rs 115 cr. This works out to an EPS of Rs 113 on current equity of Rs 10.12 cr. Notably its OPM stood at 23% against 21% last fiscal. Currently company is in the midst of putting up a Greenfield plan with an installed capacity of 4000 MVA thereby taking the total transformer manufacturing capacity to 13000 MVA. Although the margins may cool down in future, still this debt free company can be bought at sharp declines.

3i Infotech (70.00) is one of India’s leading IT companies and among the top 4 Indian software products companies. It provides software products and IT services (managed IT services, application software development & maintenance, payment services, business intelligence, document imaging & digitization, operations outsourcing (BPO) and IT consulting) for the Insurance, Banking, Capital Market, Mutual Funds, Wealth Management and Government verticals. It services customers in over 50 countries across 5 continents. Its quality certifications include SEI CMMI Level 5 for software business, ISO 9001:2000 for BPO, ISO/IEC 27001:2005 for data center operations and ISO/IEC 20000-1:2005 for data center management services. Recently, company has forayed into domestic media and broadcasting industry thereby offering services related to system integration. On the other hand, it has set up a 100% subsidiary for BPO business to consolidate all its BPO activities which is spread across 200 Indian cities and contributes nearly 35% of total revenue. At the same time company is acquiring J.P. Morgan Treasury Services’ national retail lockbox business (NRLB) which will enable it to process more than 700 million payments annually. Financially also company is doing well as it reported encouraging performance for the March’09 quarter. Effectively on a consolidated basis for FY09 its total revenues were up 90% to Rs 2305 cr and PAT shot up by 45% to Rs 282 cr leading to an EPS of Rs 21 on current equity of Rs 130.75 cr. It’s a professional well managed company and good growth potential. Investors can safely buy this scrip at current levels for 50~100% return in 12~15 months.

Vakrangee Software (60.00) is a leading provider of complete document and data management solutions encompassing large-scale data capturing & management, scanning, digitization and printing. To maintain its growth momentum, VSL is focusing more on private sector and is constantly adding large companies to its list from the banking and financial service, retail, power and telecom sector. It competently manages the printing of statements (monthly/quarterly/yearly), bills and mass communication collaterals of these private service providers. Its service matrix includes secured data hosting in the Data Centre, data composition/mining from the data dump like CRM data, transaction data, billing data, design of a one-to-one communication layout and superimposing the relevant text data of each customer of the client to make an effective and efficient personalized communication statement, followed by printing the data stream so prepared in a physical format or SMS/e-mail it to the end customer. At the same time it continues to execute the various e-governance project and has been recently approached by TCS for working as a build partner for Passport Seva Kendra (PSK) project at 6 sites. Since last three years, company’s topline and bottomline has been growing at an impressive CAGR of 90% and 160% respectively. Moreover, company has been consistently registering an OPM of more than 40% & NPM of 20%. It is yet to declare its March’09 quarter nos. Thus it has already clocked an EPS of Rs 16 for first 3 quarters and is expected to end FY09 with topline of Rs 290 cr and NP of Rs 42 for full year i.e. EPS of Rs 20 on current equity of Rs 21.40 cr. Scrip may shoot up post March’09 qtr nos.