Kabra Extrusion - Rs.65.00

Incorporated in 1982, this Kolsite group company from the Capital Goods sector manufactures Plastic Extrusion Machinery to manufacture a wide range of Plastic Pipes i.e. PVC, HDPE, LDPE, PP, Composite Pipes etc. Demand for pipes is growing due to the thrust on agriculture, water management, telecommunication and other infrastructure areas. Its clientele include Reliance, GAIL, Finolex, Supreme Industries, Garware Polyester, Nirma, Jain Irrigation, Flex, Sintex etc.

Its manufacturing facility is at Daman spread over an area of 4,00,000 sq. ft. equipped with state-of-the-art special purpose CNC machines for in-house machining The most critical components of the extrusion machines like screws, barrels, dies, spirals, thrust bearing housings, etc. are manufactured in-house. The company has collaboration with Battenfeld Extrusiontechnik GmbH of Germany, a part of SMS Plastics Technology, which is the world's largest manufacturer of plastic extrusion machinery. The company's in-house R&D having decades of engineering experience and advanced designing software has enabled it to regularly introduce the latest products.

FY04 was very good for the company as sales doubled to Rs. 80 cr. and NP increased by 131 per cent to Rs.7.70 cr. The company shared the good time with shareholders by declaring 1:1 bonus and giving 35 per cent dividend on expanded equity. Q1FY05 was quite flat with NP of Rs. 1.5 cr. on revenue of Rs.13 cr. Considering its leadership position in the industry and the large potential in domestic as well as export markets, it is expected to post sales of Rs.90 cr. and NP of around Rs.10 cr. leading to an EPS of Rs.15 on its small equity of Rs.6.86 cr. At CMP of Rs.65, it is quoting at P/E of just 4.5 and investors can expect 50 per cent appreciation in 12 months time.

Shivalik Bimetal Controls - Rs.131.00

Shivalik Bimetal Controls was incorporated in 1984 to manufacture Thermostatic Bimetal Strips and other Clad Materials. Apart from manufacture and supply of Thermostatic Bimetals in Strip Form. The company also manufactures and supplies Components out of Thermostatic Bimetals and Other Alloys/Stainless Steel. Its plant is equipped with a Press Shop and Tool Rooms for production of such components, which are consumed by manufacturers of Colour Picture Tubes, Switchgears, Circuit Breakers and various other Electrical and Electronics appliances. In addition, the company also supplies Precision Rolled Stainless Steel Strips, High Precision Electrolytic Copper and Snap Action Discs

Its plant at Solan is equipped with the latest technology and is located Himachal Pradesh , at a height of 5000 ft. above sea level, which ensures dust free atmosphere which is conducive to the bonding process. The company produces 51 types of Bimetals and Trimetals and has recently developed narrow width burr free slitting, high precision EB welding, pre-soldered (Solder reflow) Strip in continuous coil and development of Electron beam welded shunt material for energy meters. Currently, the company is working to develop various Bimetal/Trimetal components for the automobile and Electric/electronics industry for different usage. Last year, the company completed substantial expansion of Unit-II in and is now expanding Unit-I for which major equipments have been identified and orders placed thereof.

For FY04, it reported Sales of Rs.48 cr. and NP of Rs.4 cr. with an EPS growing 68 per cent to Rs.21.25. Exports jumped to above Rs.9 cr. from Rs.2 cr. in FY03 and it paid 50 per cent dividend. For June'04 quarter, sales increased to Rs.16 cr. from Rs.8.34 cr. and NP also doubled to Rs.1.67 cr. from Rs.0.80 cr. Since its equity is very, very small at Rs.1.92 cr., small increase in NP will lead to a windfall rise in EPS. Moreover 61 per cent equity is held by the promoters. Since floating stock is low. This will lead to sharp appreciation going forward. With a huge export potential, it is estimated that the company will clock Net sales of Rs.60 cr. and NP of Rs.6 cr. leading to an EPS of over Rs.31. Investors can expect 100 per cent return in 12-15 months.

STOCK WATCH

Hinduja TMT Ltd. (HTMT) (Code No. 500189) (Rs.290.95) a well-managed professionally run company recently acquired Source One Communication, an USA based BPO firm with 500 seats for US $ 8.5 million. Since Tech companies are expected to post robust growth for FY05, it has the potential to appreciate by 50 per cent in 12 months time. Scrip will be re-rated soon.

*CESC Ltd. (Code No. 500084) (Rs.129.50) is being accumulated by a big operator. The company plans to add 250 MW capacity it an investment of Rs.2000 cr. It is also replacing its high cost debt with low cost loans. For Q1FY05 though its sales was flat at Rs.636 cr. net profit jumped 2.5 times to Rs.37 cr. from Rs.15 cr. For FY05 the company expects to post NP of Rs.120 cr. and register an EPS of Rs.15 on its expanded equity of Rs.81.50 cr. The company has huge reserves of Rs.1054 cr. Scrip can appreciate 25 per cent from current level in the short term.

*Lot of good news is pouring in for Teledata Informatics(Code No. 532358) (Rs.52.50). But the management does not enjoy a good reputation and the company's balance sheet is not clean. Think twice before investing at current levels.

*One analyst feels that Mercator Lines (Code No. 526235) (Rs.611.70) is fully valued at CMP. Company is planning huge equity dilution and raising debt substantially for buying vessels and further price action may be to support the offer. He advises to switch to SCI or GE Shipping.

*Uttam Galva (Code No. 513216) (Rs.28.15) was accumulated during its T2T transfer period. Now that it has been shifted back to normal trading, it is ready to take-off. For FY05, it will register an EPS of more than Rs.10 and can double in 9-12 months.

Entertainment sector will witness some action with the launch of Reliance Media & Entertainment Fund. *Padmalaya Tele (Code No. 532350) (Rs. 70.50) looks reasonably cheap quoting cum dividend of Rs.3.50 offering a dividend yield of more than 5 per cent!

*Ankur Drugs (Code No. 531683) (Rs.33.40) management is quite positive about the company's future prospects and target a better operating margin due to reduction in raw material costs. Their Baddi plant is expected to become operational form Oct 2005. Few high networth individuals (HNIs) are very bullish on it and are accumulating it with a target of Rs.50+

*Hind Zinc(Code No. 500188) (Rs. 123.70) is expected to announce a price hike since zinc price have risen smartly in the international market. It can be accumulated at current level for medium term.

Gujarat based Shah Alloys (Code No. 513436) (Rs.92.25) is planning an IPO of its subsidiary SAL Steel for backward integration. Scrip is expected to see some action before issue hits the market.

*People are offloading Bhushan Steel (Code No. 500055) (Rs.114.70) due to the rocket explosion at its Ghaziabad factory. But this temporary shut-down will not affect its production much. A good opportunity to accumulate this performer for the long term.

*D-Link (Code No. 532419) (Rs. 123.00) can be accumulated as a safe bet since it has not participated in this bull run. It is now diversifying into software development, Technical Call Centre (BPO), & training centers.