MUHURAT PICKS

Shah Alloys - Rs.108.15
This Rs.1000 cr. company is its way to become an integrated stainless steel producer and is setting up a backward integration project at Gandhidham for producing sponge iron, ferro alloy and power. It’s the second largest stainless steel producer and has ambitious growth plans for the future. It has just started to gain market fancy and can give handsome returns going forward.

Ankur Drugs - Rs.39.10
Ankur Drugs is into contract / license manufacturing of Tablets, Capsules, Liquid orals, Dry Syrup for pharma MNCs and Indian companies Like IT, contract manufacturing or outsourcing in the pharma industry is expected to see phenomenal growth in coming years. Ankur is well-poised to encash the trend that and is setting up a new plant at Baddi, Himachal Pradesh as per US FDA requirement. It will manufacture injectibles also alongwith high value products for direct export on behalf of foreign pharma MNCs. A good long-term story

Star Paper Mills - Rs.43.00
This Duncan Group G.P company is set to see better times ahead, thanks to robust paper prices and the strong demand. Recently, it upgraded and modernised its integrated plant Saharanpur and is increasing its capacity in a phased manner over the next 3 years. Its gearing towards becoming a more professionally managed company and has taken various initiatives to achieve high operational efficiency. To turn more investor-friendly, the management may even declare 25 per cent dividend for FY05. This muhurat pick has the potential to double by next Diwali.

Dhampur Sugar - Rs.46.40
We can’t ignore this sector which is estimated to see best of times in the coming 2 years and Dhampur Sugar is a good bet in the Sugar sector. It is one of the largest sugar manufacturing group in India with 5 sugar mills in India and one in Nepal with a total installed capacity of 32,000 tonnes of cane crushed per day. Other than sugar, it also manufactures Alcohol, Acetic Anhydride, Oxalic Acid, Ethyl Acetate Nicotinamide, INH etc. More importantly, all its 5 sugar plants have cogeneration by bagasse based power plants with a combined capacity in excess of 83 MW, out of which approx 41 MW is being evacuated to the UP Grid. Due to poor rainfall and various other factors, the sugarcane output has dropped drastically this year which lead to a spurt in the sugar prices and in coming year demand is estimated to exceed supply. Considering all these aspects Dhampur will see a good growth in its bottom-line.

SCI - Rs.164.95
Although shipping scrips have seen a good rally in the recent past but still shipping holds a promising future for at least one more year or so. SCI being the largest player will benefit the most. First of all, freight rates are very high and will remain high due to the Chinese demand and crude oil factor. Secondly, tonnage tax will boost its bottom-line substantially and the company may even report an EPS of Rs.40 for FY05. Thirdly, the Government is planning to divest 20 per cent its stake, which will improve its liquidity and will attract more FII / FI participation. Last but not the least, the dividend yield will be too good to resist. In short, 50 per cent return can be expected in the next 12 months.

Uttam Galva - Rs.28.55
Scrips from Steel sector have become the darlings of investors. We, too, couldn’t stop from recommending the one. Uttam Galva Steels Limited is involved in the production of Cold Rolled Coils & Sheets and Galvanized coils & sheets. The company has more thrust on exports and around 70 per cent of its production is exported all over the world to over 103 countries. To cater to the increasing demand, the company has chalked out huge expansion plans to be completed by mid 2005. It’s a multi-bagger in the long-run.

STOCK WATCH

Bhushan Steel targets Rs. 800 cr. exports for FY05. Its new hi-tech Khopoli plant is working at almost 100 per cent capacity. For the half-year ended September 2004, its net profit doubled to Rs 68 cr. on a sales growth of 82 per cent to Rs 1187 cr. It is expected to post an EPS of around Rs. 35 for the full year. Moreover, for future growth the company is going in for backward integration and has plans to set up an integrated steel project with a capacity of 1,50,000 TPA in Orissa at an investment of Rs.3200 cr. A strong buy with a medium term perspective

By early 2005, GIPCL is planning to raise funds for its expansion plans by issuing shares. This will lead to a re-rating of this scrip in future. The company posted excellent numbers for the Sept.’04 quarter with NP zooming to Rs.32 cr. from Rs. 1.90 cr. in the corresponding last quarter. Its revenue was up 6 per cent to Rs. 203.40 cr. but its operating margin improved substantially to 55 per cent from 48 per cent YOY basis and from 46 per cent sequentially. For the full year FY05, it should report an EPS of around Rs.12, which discounts the current price of Rs. 65 merely by 5 times. A relatively safe bet.

Shree Cements is setting up 1 million MT greenfield cement plant at Ras in the Pali district of Rajasthan involving an investment of Rs.300 cr. This will take its total capacity to 3.60 million MT. For the six months ending Sept.’04, it reported an NP of Rs 43 cr., up 166 per cent on net sales of Rs. 292 cr. For the full year FY05, it is estimated to report an EPS of more than Rs. 25. A good long term bet which will provide Red-Oxide to your portfolio.

DCM Shriram Industries is reportedly doing well. For six months ended Sept 2004 sales increased by 30% to 249 cr and NP was 12.60 against 72 lac last year. Its operating margin also improved 200 basis point to 14.50%. For full year company is expected to post an minimum EPS of 14 Rs. Investor are advised to buy at dips keeping long term in view.