STOCK WATCH

Indian Sucrose Ltd. (Code No: 500319) (Rs.24) earlier known as Oswal Sugars Ltd, is a small sugar company with a capacity to crush 3500 tonnes of sugarcane per day. Few months back, it acquired M/s Ranger Breweries Ltd from the Modi Group and now owns its distillery at Mehatpur in H.P. Given the uptrend in sugar prices, better operating efficiency and various govt. benefits, this company has sharply turned around in FY05. Its Net Sales grew by 50% to Rs.68 cr. whereas its NP jumped 800% to Rs.10.50 cr. recording an EPS of Rs.7 on its current equity of Rs.15.50 cr. Even if the company maintains its current profit margin, it can report an EPS Rs.5~6 for FY06 and its share price can rise 50% in the next 6 months. A good buy

Recently, all hotel scrips have been re-rated sharply, thanks to the higher occupancy rate and growth in tourism. In such a scenario, Blue Coast Hotel (Code No: 531495) (Rs.69), the owner of Park Hyatt Goa Resort & Spa, is worthy of investment. The company is doing well and has reported a sharp turnaround. For the six months ending 31st March 2005, its total revenue increased by almost 50% to Rs.39 cr. which is marginally higher than the full last year revenue and it reported a NP of Rs.4.40 cr. compared to the net loss of Rs.0.50 cr. last year. For FY05, it may report an EPS of Rs.12 on its small equity of Rs.6.55 cr. Only aggressive investors are advised to accumulate it on sharp declines, as there is a risk of equity dilution in the near future.

Aggressive Investors can consider taking some exposure in Steel Exchange (Code No: 590037) (Rs.24.40) due to the strong uptrend in the steel sycle. This 6-year-old company has reported a substantial increase in bottomline. For FY05, its topline increased by 33% to 343 cr. but its NP zoomed to Rs.8.30 cr. compare to Rs.0.74 cr. last year. It reported an EPS of Rs.6 on its current equity of Rs.14.20 cr. Its OPM improved substantially to above 4% from below 1% in FY04. Its 52-week high/low is Rs.35/13. It book value stands at Rs.16 but promoters hold only 21% stake.

KCP Sugars & Industries (NSE Listed) (Rs.194.75) is a leading sugar producer in the South and has posted an excellent performance for FY05. Sharing the success of the company, the management has announced a total dividend of 100% for FY05 compared to just 25% last year. It doubled its OPM to 25% form 12% in FY04, which is much higher compared to its peers. Its net sales grew by 40% to Rs.310 cr. but its NP doubled to Rs.41 cr. reporting an EPS of Rs.36. And that too after a huge tax provision of Rs.24 cr. Else, its EPS before tax comes to Rs.58. With such a good dividend yield and the bright future prospects of the sugar industry, this scrip is among the best buys from the sector.

Uttam Galva Steel Ltd (Code No: 513216) (Rs.44) is a well-managed and professionally run company. It has huge expansion plans whereby it plans to double its cold rolled and galvanized steel production capacity to 10,00,000 and 7,50,000 tonnes respectively by 2006. It ended FY05 with fantastic figures. Sales increased by 80% to Rs.2094 cr. and NP zoomed 300% to Rs.95 cr. registering an EPS of Rs.12. Though some analysts have concerns regarding its dividend policy and tax provisioning method, it still remains a good buy at current levels. Its share price can double from hereon in the next 12 months.

Telecommunications & Power sector is on expansion spree, which indirectly benefits cable manufacturers. Delton Cable Ltd. (Code No: 504240) (Rs.54.90), a lesser-known Delhi based cable company, which manufacturers almost all types of cables is witnessing a sharp turnaround and is expected to perform even better in coming quarters. It reported excellent numbers for March’05 quarter. Sales jumped 90% to Rs.20 cr. whereas NP stood at Rs.0.75 cr. compared to a net loss of Rs.0.14 cr. It has a very tiny equity of Rs.2.90 cr. with the promoter holding of 73%. For FY05, it registered an EPS of Rs.3.5, which can shoot up to Rs.8 in FY06. Buy at declines as the share price can rise by 50% returns in 6~9 months.