Man Industries (India) Ltd - Rs 40.00

Established in 1988 as an aluminium extruder, Man Industries India Ltd (MIIL) today is one of India's largest producers and exporter of submerged arc welded (SAW) pipes. Being led by dynamics personalities like Mr R.C. Mansukhani and Mr. J.C. Masukhani, MIIL is the flagship company of reputed MAN group which has diversified business interest in India, USA, UK and UAE. Within the last ten years, company has multiplied its production capacity 20x times, from 50,000 tonne in 1998 to 1 million tonne currently. It specializes in production of large diameter Longitudinally SAW pipes & Helically (Spirally) SAW pipes. LSAW line pipes are generally used in transportation of oil and natural gas in high temperature and pressure applications in refineries and petrochemical units apart from finding application in fertilizers and dredging industry. On the other hand HSAW pipes are used under low pressure condition for transportation of oil, water, sewerage, agriculture and in construction sector. Company has the capability to manufacture LSAW pipes with outer diameter ranging from 16~60 inches and wall thickness of 6~38 mm upto maximum pipe length of 12 mtrs. Whereas for HSAW it can make pipes having 16~84 inches of outer diameter upto maximum length of 18 mtrs. Infact it is the only company in India to manufacture 18 mtr long HSAW pipe and up to 30 mm thickness in X-70 grade steel. Besides manufacturing, MIIL also has the in-house processing facilities for all types of Anti-corrosion coating such as 3LPE, FBE, Internal Epoxy etc and cement mortar coatings. And among the recent developments MIIL has diversified into real estate & infrastructure development in a small scale thru a subsidiary “Man Infraprojects” and has also hived off the extrusion business into “Man Aluminum – a separate listed company.

Currently, MIIL has two huge manufacturing plants spread across 200 acres – one at Pithampur, MP and other at Anjar, Gujarat having combined installed capacity of 500,000 TPA of LSAW pipes and 500,000 TPA of HSAW pipes. Out of this, 200,000 tonne of HSAW pipe manufacturing has been added last year only. With a vision to become a true global player, company has acquired 155 acres of land in Little Rock, USA for putting up state-of-the-art HSAW pipe manufacturing plant having capacity of 300,000 MTPA at an estimated investment of Rs 400~450 cr. However, due to world economic condition this project is put on hold and may be even dropped in future. But at the same time it will enjoy the benefits from recent domestic expansion. Couple of months ago company bagged a huge single order to the tune of Rs 1340 cr from a Middle East company which proves the strong credentials and execution capability of the company. With this its current order book position swelled to Rs 2000 cr straight away. Earlier company had a bagged order worth nearly Rs 1000 cr from a single US client. Apart from current order in hand, company has emerged as lowest bidder for order worth Rs 1100 cr in domestic and international markets. This is including a major order of Rs 400 cr approx, which has been re-invited for tender by GAIL and challenged by MIIL in the court as already being declared the lowest bidder. Actually, at the time of placing the order post tender, GAIL had asked the company to reduce the tender price. But as MIIL rejected the same, GAIL went ahead and made invitations for re-tender for the same contract. Although this may strain some business relations with GAIL but MIIL already has an impressive global clientele comprising Shell, Technip, Bechtel, Elpaso, Kinder Morgan, ENI, Hyundai, Petronas, Petrojet, Petrobras, Saipem and several oil majors in Middle east in the international markets, and Cairn India, ONGC, IOC, Reliance Industries, Essar Oil, BPCL, HPCL, IBP LNG Petronet, etc in the domestic market. Thus, company is in the bidding stage for many projects for supplying pipes worth Rs 5000 cr and expects to bag additional Rs 2000 cr order this fiscal.

The demand for SAW pipes is significantly dependent upon the level of exploration activities and transportation of oil and natural gas in India and globally, which is currently being driven up by volatile crude oil prices. Incidentally, concentration of source of crude in the Middle East augurs well for Indian pipes manufacturers as they have the advantage of being in the close proximity to Middle East vis-a-vis other major pipe manufacturers in Japan or Europe. On the other hand, demand arising from the replacement of old pipelines, dominantly in the USA and Russia is further pushing up the SAW pipes demand. As per certain estimates, there is a global demand supply mismatch of nearly 2 million tones currently. Moreover, here in India, demand for pipes has risen significantly with thrust on laying pipeline infrastructure for oil & gas transportation. The Indian natural gas market is relatively underdeveloped compared to other regions of the world. By 2024-2025, the share of natural gas would increase to 20% of total primary energy consumption, according to Hydrocarbon Vision 2025. With growth in consumption, the transportation infrastructure would naturally see a phenomenal jump. Higher usage of natural gas requires better & economical transportation medium and thus more pipelines. Further, strong growth expected in infrastructure, power, construction and housing sector would also lead to a spurt in the demand for pipes. In addition to all the above, severe correction in metal prices and shipping freight will have positive impact on the company’s bottomline going forward.

Infact recently, MIIL posted encouraging result for the March’09 quarter. Sales zoomed up 75% to Rs 722 cr whereas PAT jumped up 40% to Rs 19 cr posting an EPS of 3.60 for the quarter. Accordingly for entire FY09 it recorded 25% rise in sales to Rs 1883 cr but net profit declined by 35% to Rs 47 cr. Thus it posted an EPS of Rs 9 on current equity of Rs 26.60 cr having face value as Rs 2 per share. It declared and maintained Rs 1.50 as dividend giving a yield of nearly 4% at CMP. On the flip side, is OPM for FY09 fell considerably by 300 basis points on account of volatile metal prices which constitute more than 80% of production cost. Of late, the steel and other metal prices have corrected & stabilized, which will enable the company to improve and maintain the margin in coming quarters. Financially, MIIL had raised around Rs 200 cr in May 2007 thru FCCB route to set up a plant in USA. But now as the company is not proceeding with that plan and also doesn’t has any other major capex plan, it has decided to buyback the FCCB thru the unutilized amount and thru internal accruals. This will prevent the equity from huge dilution which would have been detrimental for the existing shareholders. Incidentally, due to high conversion price and adverse market sentiment, not a single bond has been converted into equity, despite the conversion price being revised downward couple of times. Importantly, promoters have increased their stake thru creeping acquisition as it stands to 48% against 44% a year back. Secondly, few days back they have also taken preferential allotment of 25 lac warrants to be converted into equity @ Rs 35 per share. With an expected EPS of Rs 11 and current book value of Rs 70, company is available fairly cheap at market cap of little over Rs 200 cr. Investors are strongly recommended to buy at current levels for 50% gain within a year.

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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.

Jupiter Bioscience Ltd - Rs 60.00

Established in 1985, Jupiter Bioscience Ltd (JBL) is a reputed pharmaceutical company specializing in niche areas of peptides, advanced organic chemistry, chiral chemistry, and biotechnology. Led by Mr. Venkat R Kalavakolanu, today JBL ranks among global top 10 players in the peptide chemistry and the only one in India with a distinction of integrated model of peptide pharmaceuticals. Along with its subsidiaries, company is an end to end peptide solution provider covering the entire spectrum from key peptide raw materials to finished formulation. It has strong expertise in the manufacturing 700 different varieties of amino acids and its derivatives which constitute the peptide building blocks. It produces Fmoc-, Boc-, Z-protected aminoacids at large scale. Apart from offering a wide range of coupling reagents used for the synthesis of peptides, JBL also provides Generic peptide API’s for the unregulated market. It has the cost advantage in the large scale manufacturing of generic peptide APIs, as the peptide building blocks are produced in-house. Notably, it has capabilities in both - solution and solid phase strategies for peptide synthesis. Synthesis of cyclic peptides of variable sizes is the specialty of the company which makes it different from other players in the peptide market. Secondly, it is also one of the few international players manufacturing unnatural amino acids.

Under the non peptide segment, it manufactures a several organic APIs covering a wide range of therapeutic segments including antihypertensives, antidepressants, antispasmodics, antiallergics and antiulcer drugs. It also produces dozens of drug intermediates & fine chemicals which are eventually supplied to reputed pharmaceutical company on regular basis. It even supplies two veterinary (animal) drugs in the antihelmintics segment. Besides, company is active in lucrative and rapidly growing CRAMS segment, as API manufacturing companies in the developed countries are looking for contract R&D and manufacturing partners to take the cost advantage. Moreover, JBL has the capabilities to undertake customized synthesis of amino acid derivatives, bulk peptides and new chemical entities for its clientele. Broadly, company has segmented its product profile in three groups namely ‘Peptides’, ‘Drug Intermediaries’ and ‘Special & fine chemicals’ with around 55% revenue coming from the first, 25% from second and the rest 20% comes from the third segment. In near future, JBL intends to take the peptide share to above 65% and then gradually to more than 80%. It aims to become a leading integrated global peptides company.

Presently JBL is having four domestic manufacturing facilities – one in Karnataka (Bidar) and three in Andhra Pradesh (Cheriyal, Medak & Cherlapally) with a combined installed capacity of 472 TPA as on March 2008. However the capacity utilization stands at nearly 50% which means it can easily double its topline without any capital expenditure. Apart from above, company has last year acquired a high end GMP approved manufacturing facility of Merck, located in Switzerland which has given it a competitive edge. Besides, JBL has set up another two wholly owned subsidiaries to cater the higher segment of peptide value chain. For specially catering to the regulated market like USA, Europe, Japan etc, its US subsidiary is in the process of implementing a cGMP manufacturing facility in Maryland, USA for the manufacture of custom and clinical peptides and peptide based generic active pharmaceutical ingredients (APIs). The plant is expected to commence commercial operation shortly in the current fiscal. On the other hand its Indian subsidiary namely Sven Genetech is mainly into the business of development of process capabilities for several products that are pre-cursors to new generation drugs in the fields of AIDS treatment, Cardiology, Oncology, Immunology, Endocrinology, vaccines and others. In short it is enaged in R&D of peptide raw materials, peptide bulk actives and formulations, unnatural amino acids, custom peptide synthesis, nutraceuticals and enzymes. Importantly, till March’08 JBL has already invested whopping Rs 125 cr in these subsidiaries, which are expected to boost the topline as well as bottomline in future years. Infact, JBL has now started reaping the fruit of all the investments in R&D and global marketing made in the past. It is now being recognized in several parts of the world as the highly focused and competent player in the peptides arena.

Being a technology & R&D driven company, JBL has to regularly invest considerable amount in research and technology development. Roughly between 5~8% of sales are spent on R&D activities every year which are capitalized and generally written off in five years. In the last couple of years, JBL has made significant investments to upgrade and modernize the manufacturing facilities & quality assurance system to meet the expectations of international customers. The result of which is Gross block has almost doubled to Rs 260 cr by FY08. This was funded by raising Rs 100 cr thru QIB placement @ Rs 153 per share in 2007. Because of all these initiatives, last year company won a long term contract from Merck, Germany to supply peptide raw materials and intermediates. Besides, many leading pharmaceutical companies in Europe and USA became its regular clients in the last two years. Moreover, company had entered into a 10 year product purchase agreement with Ranbaxy to leverage the latter's vast global market reach and put its upcoming peptide products on a fast-track. Accordingly, Ranbaxy was supposed to take 15% stake @ Rs 147 per share and was already allotted the convertible warrants. But unfortunately, due to management change at Ranbaxy the deal didn’t take off. At the same time company issued 40 lakh warrants @ Rs 182 to few strategic investors which may lapse in July 2009. Importantly, JBL has been investing and creating facilities for its subsidiaries, although they have still not started to contribute significantly. So once the subsidiaries start working at optimum level, they will give a huge fillip to company’s financials.

Even on a standalone basis its fundamentals are quite strong with operating margin in the range of 45-50% and NPM of whopping 20~25%. For FY09 it recorded 10% growth in topline to Rs 143 cr but PAT was marginally up to Rs 32 due to 100% rise in interest cost. This works out to an EPS of Rs 20 on current equity of Rs 16.13 cr. Remarkably, company was able to improve its OPM by 200 basis points to 49% for FY09. Considering the company’s future plans and various initiatives it is expected to end FY10 with total revenue of Rs 175 cr and PAT of Rs 38 cr leading to an EPS of Rs 24 on current equity. Looking the current market sentiment, no equity dilution is expected in near future. Considering its R&D capabilities, company deserve much better discounting and hence investors are strongly advised to buy at current levels as scrip can very easily double to Rs 120 within a year. If we include subsidiaries valuation as well, then JBL is trading grossly cheap at current market cap of Rs 100 cr and can turn out to be multi bagger if held for 3~5 years.

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South India Paper Mills (50.00) declared flat performance for the March’09 qtr as sales declined marginally to Rs 27 cr and PAT remained flat at Rs 2.10 cr. It reported an OPM of 15% which is highest in the last four quarters. However for entire FY09 it reported a 30% decline in net profit to Rs 8.25 cr on flat sales of Rs 126 cr. This translates into EPS of Rs 11 on equity of Rs 7.50 cr. Despite a sharp fall in profit, company declared the same amount of dividend i.e. 30% as given last year which proves the investors friendly attitude of the management. At CMP the dividend yield works out to an healthy 6%. Company is having strong presence in packing paper and paper boards apart from manufacturing writing and printing paper. On back of robust demand, company is implementing a brown field expansion with an investment of about 110 cr under which it will more than double its paper manufacturing capacity to 115,000 TPA from 55,000 TPA currently. It will also be augmenting its captive power generation capacity by 3.50 MW. Besides expansion, company is going for forward integration into high quality corrugated boards and intends to have at least one 100% owned facility and possibly one facility under joint venture near Chennai. It is one of well managed company which has the potential to clock an EPS of 16~18 Rs for FY10. Scrip can easily appreciate 50% within a year.

Although share price of Gremach Infrastructure’s (40.00) has more than doubled in short time and also has an operator play, still aggressive investors can buy at current levels. It hasn’t yet declared its March’09 quarter performance and is expected to come out with its nos by end of this month. Company’s main activity is to provide rental of construction/earthmoving machineries to infrastructure companies including L&T, Punj Lloyd, Shapoorji Pallonji, Gammon India, HCC, Gannon Dunkerley etc. It has a huge asset bank of heavy equipments ranging from compacters, rollers, concrete mixers, dozers, forklifts, loaders to excavators, PTR, dumpers, electronic sensor pavers, kerb laying machine, concrete batching and mixing plant. In addition to renting its owned equipments, it also hires equipments owned by other parties and rent to its own clients. For the first nine months ending Dec’08 it has already registered an EPS of Rs 15 by earning PAT of Rs 23.30 cr on topline of Rs 238 cr. Although off late company has witnessed sharp fall in demand due to slowdown in construction sector, but going forward it is expected to regain normal business. Interestingly, it has got in-principle approval for 100 hectar Metal SEZ at Kolhapur & another at Dhule in Maharashtra. It has also taken 75% controlling stake in 11 Coal mine licenses in Mozambique. To fund its growth plant company has raised almost Rs 200 cr in Feb 2008 thru FCCB route to be converted into equity @ Rs 376 per share. Ironically, share price which hit a high of Rs 504 in Jan’08 went down to hit a low of Rs 18 in March 2009.

Although Rama Paper (10.00) seems to be operator scrip, investors can accumulate it at current levels for handsome gain in long term. Technically scrip has consolidated for long time and has relatively lower risk of downfall. Financially company has once again reported dismissal performance for the March’09 quarter with an profit margin of barely 5% at the operating level. However for entire FY09 it has recorded a decent OPM of more than 13% which is still very low against 19% last fiscal. Interestingly due to lower tax provisioning company has been able to report 25% higher net profit to Rs 3.90 cr for FY09 against Rs 3.00 cr last fiscal. At the same time it sales improved by 25% to Rs 107 cr. Thus company has reported an EPS of Rs 4 for FY09 and is trading at a PE of 2.5x times. Company derives nearly 60% revenue from newsprint segment. Of late it has also put up 6 MW co-generation captive power plant which is fully operational now. Further it has undertaken expansion project of putting MG Machine to manufacture Tissue / Poster Paper thru a capex of Rs 24 cr. In the last two years, promoter have infused more than Rs 15 cr of their own money by taking preferential allotment of 45 lac equity shares @ 35 Rs per share. Recently company has taken approval from the member to convert preference shares of Rs 5 cr to equity shares which may lead to further equity dilution. Despite company having very debt equity ratio it available cheap at a market cap of Rs 7~8 cr. At the same time, investors are informed that promoter’s reputation is now taken well by the market veterans.


Tera Software (38.00) is one of the leading e-governance solution providers, undertaking data entry/scanning works for digitization of information maintained under Right to Information Act. It also undertakes short-term projects like issue of photo ID cards, ration cards and election commission cards. Last year company successfully executed Maharashtra Vikri Kar Seva Project in Maharashtra State (VAT Implementation of Maharastra sales tax department) on BOOR (Build own operate and refresh) model as the scope of work was computerization of sales Tax department in the entire state of Maharashtra. Of late company has been able to procure additionally six new projects of the State Government of Andhra Pradesh, Karnataka, Rajasthan, West Bengal and Himachal Pradesh. It also ventured into imparting computer education in more than 225 schools in Goa and AP by establishing the computer labs with Computers and providing the teaching staff and maintenance of systems. For the latest March’09 quarter it reported 25% decline in net profit to Rs 2.35 cr despite healthy growth of 90% in topline to Rs 29 cr. Accordingly for full FY09 its net profit fell by 15% to Rs 10.50 cr, although its total revenue increased by 40% to Rs 83 cr. This works to an EPS of Rs 8.50 on equity of Rs 12.50 cr. Company is expected to declare 20% dividend which leads to a yield of 5% at CMP. Moreover company has few acres of surplus land in Hyderabad, which it can either sell or enter into JV with infrastructure company. Worth accumulating at sharp declines.

Tantia Constructions Ltd - Rs 55.00

Established during 1964 in Kolkata, Tantia Construction Ltd (TCL) has gradually evolved over the years from a pure railway construction company to a full-fledged infrastructure company executing various diversified projects. Today it boasts of having presence in roads and highways, railways, tunnels, bridges and flyovers, urban instructure, sewerage and drainage, civil & housing construction etc. Lately, company also ventured into the lucrative marine infrastructure space, power transmission and distribution segment and aviation infrastructure. It is among the few companies which have very strong domain expertise in servicing the Indian Railways. Infact, TCL is among the five Indian companies capable of providing ‘foundation-to-finish’ for mega railway bridges spanning 2-km or more. More importantly, TCL has a very strong presence in the eastern and north-eastern region which gives it an edge, as very few players are interested in bidding in these regions due to difficult terrain. Company’s expertise can be evaluated from the fact that it has constructed over 250 km of roads in the hilly areas of Mizoram, coastal areas of Kerala, plains of Punjab/Haryana and plateaus of Karnataka. On the power project front, company has remarkably garnered the capability of in-house manufacturing and erecting transmission towers within a very short time. Incidentally, company has impeccable track record of completing every single assignment since inception. As of now company has expertise in following business segments, domains and verticals.

Roads and highways: TCL ventured into advanced mechanized road construction in compliance with specifications set by the Ministry of Surface Transport in 1990. Since then it has established its credentials in the field of construction, widening, conversion, maintenance, strengthening and beautification of roadways, road bridges, highways and flyovers. It is the only Indian company to have fabricated a 100 metre spans steel girder onsite, 4,000 mtrs above sea-level. Presently this segment is the largest contributor of revenue.

Railway infrastructure: TCL is one of the oldest railway contractors in India with the experience of having completed assignments across diverse terrains for the Eastern Railway, North Eastern Railway, South Eastern Railway and North East Frontier Railway. It provides end to end solution right from survey, designing of track embarkment, earthwork, track laying, bridges, tunnels, electrification and signaling, maintenance of rail road/infrastructure, constructing railway stations and terminals, railway bridges etc. This is the second largest segment for the company & enjoys a pre-qualification for projects up to Rs 450 cr when engaged in international joint ventures. Some of its joint venture partners comprise reputed international names like Road Builder Sdn Berhad, Malaysia.

Urban infrastructure: TCL established its credentials in this segment through a presence in Kolkata improvement projects, its expertise comprising soil re-engineering, mechanized earthwork, hauling for large-scale land development, sewerage & drainage projects, electrification and lighting systems and construction of college & hospital buildings. Today company is well acknowledged by large municipal corporations for its competence in the timely commissioning and completion of urban projects that minimize public inconvenience during construction tenures. TCL is now eyeing urban infrastructure projects in Punjab, Orissa, Delhi and Haryana for the Public Works Department.

Aviation / Marine Infrastructure:
TCL diversified into the marine infrastructure space in 2003 and now possesses proven capabilities in building tunnels, jetties and steel girders along rivers. Subsequently it ventured into the aviation infrastructure space in 2005 through the Dibrugarh Airport project.

Power Transmission projects: TCL entered the power T&D solutions segment in 2005 and is now executes projects involving beam foundation, lattice structure erection, conductor stringing and cable-laying systems. To increase the presence, TCL is contemplating to set up a design dept to enhance plant design engineering.

In recent years TCL has executed various prestigious and large scale projects in the states of West Bengal, Assam, Bihar, Uttar Pradesh, Tamil Nadu, Kerala and Mizoram, and in neighboring countries like Bangladesh, Nepal and Bhutan. As more than 90% of revenue comes from government project it caters to several govt bodies including Indian railways, Kolkatta Metro railway, NHAI, State PWD, Central PWD, State Electricity boards, HIDCO, KMC, Airport Authority of India apart from NTPC, Ircon Int, SAIL, RITES, IOC etc. It enjoys
excellent business relations and has good direct contact with govt resulting in repeat orders of similar nature, extension of projects of a higher value and a listing among preferred partners. Presently, TCL has diversified and huge order in hand position of more than Rs 1500 cr to be executed in next 24~36 months. Thus, company has a strong revenue visibility for coming years.

Going forward TCL is planning to bid for bigger projects in power transmission segment as it has executed few power projects and is now qualified to bid for the same. In near future company intends to foray into BOT & BOOT projects to boost up its margin. It usually takes up complex projects which are insulated from competition. It is also looking to bag airport projects coming up in non- metro cities. To cash on the boom in civil construction, it is even contemplating to enter into real estate development. As a long term strategy, TCL intends to enter in logistics sector by constructing and owning ware-houses at strategic places across India. Water treatment, solid waste management and sewage treatment are also being considered to widen its work profile.

In March 2006, TCL came out with an IPO of 1.125 cr of equity shares @ Rs 50 per share with public net offer of 42.50 lakh shares. The issue was oversubscribed by whopping 83x times. Ironically, against the high of Rs 310 in 2006, scrip tumbled down to hit a low of below Rs 30 in 2009. This is despite the fact that its fundamentals have improved considerably in last couple of years. Even for latest March’09 quarter it reported excellent performance by clocking on operating margin of impressive 15%. Thus is registered 160% jump in net profit to Rs 12.50 cr although its topline remained flat at Rs 169 cr. Effectively for entire FY09, its PAT improved by 12% to Rs 17.25 cr and revenue increased by 25% to Rs 450 cr thereby posting an EPS of Rs 11 on current equity of Rs 15.57 cr. With such an fat order book of Rs 1500 cr company can easily grow at 30~50% CAGR for next couple of years at least. Thus it has potential to report an EPS of Rs 14~15 for FY10. In order to fund its projects & working capital company has raised around Rs 30 cr thru FCCB route to be convertible into equity shares @ Rs 140. Considering the CMP, the possibility of conversion in near future seems bleak, hence not considered in calculating the diluted equity. Being discounted at less than 4x times, this scrip is available fairly cheap. Hence investors are recommended to buy at current levels as share price can double in 12~15 months.

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