STOCK WATCH

Sirpur Paper Mills (Code No:502455) (Rs.99.55) has decided on a massive expansion-cum-mill development at its existing 800 acres site at Sirpur-Kagaznagar in Adilabad district of Andhra Pradesh at an estimated cost of Rs294 cr. Paper prices are ruling high due to strong demand and Sirpur is expected to post an EPS of Rs25 for FY05. It is a safe bet.

The Tea sector is buzzing even in a falling market on expectations of an increase in tea price in the dometic market. A lesser know tea company, B & A Plantation (Code No: 508136) (Rs.43.00), is doing well. For the six months ending 30 Sept. 2004 it has already posted a NP of Rs3.05 cr. on its small equity of Rs3.10 cr. registering a half yearly EPS of Rs10. For the full year FY05, it can report an EPS of Rs12. A strong buy with a medium to long term perspective.

Kilburn Chemicals (Code No: 524699) (Rs.34.25) manufacturer of Titanium Oxide came out with good December numbers. Sales were up 47 per cent at Rs16.30 cr. and NP increased by 18 per cent to Rs1.51 cr. For FY05, the company is expected to post an EPS of Rs7. Currently, the stock trades at 5x PE and investors are advised to buy at sharp declines for handsome gain in the long run.

Orissa Sponge (Code No: 504864) (Rs.43.05) is an emerging player in the sponge iron industry. It has ambitious growth plans and will grow at much faster face in coming years. It’s a multibagger for long term investors. For the six months ending 30 Sept.’04, it posted a NP of Rs5.60 cr. on an equity of Rs.11.8 cr. Its OPM improved substantially form last year and is quite decent around 25~28 per cent. For FY05, it can report and EPS of Rs11 and is a screaming buy.

Most marketmen have written off shipping shares due to a decline in freight rates. But we still recommend it considering its promising future prospects. And SCI (Code No:523598)(Rs.149.00) with amazing fundamentals is the best bet in this sector. This scrip may surprise the market by its FY05 numbers and may report an EPS of more than Rs40. This scrip has the potential to double from the current levels in the next 12 months. Investors should hold on to it patiently.

To cater to the increasing demand of sponge iron, Monnet Ispat Ltd (Code No: 513446) (Rs.156.10) is implementing Rs230 cr. capacity expansion of 4,40,000 TPA, which will take its total capacity to 7,40,000 TPA. It is working on the acquisition of some iron ore mines in Chhattisgarh & Jharkhand, which is at a fairly advanced stage. In coming years, it will become a fully integrated player from raw material to finished product. For FY05, it can report an EPS of more than Rs35 and its share price can appreciate by 50 per cent over the next 12 months.

Deepak Fertilizers (Code No: 500645) (Rs.50.70) one of the largest producers of methanol is still discounted poorly compared to its fundamentals and future prospects. It’s a well managed & investor friendly company with good future growth plans. For FY05, it will report an EPS of around Rs8 and its share price has the potential to cross Rs100 in the future. Patient investors should buy it for long term to get handsome returns.