STOCK WATCH
Deccan Cement (Code No: 502137) (Rs.67.65) is a small cement company based in South India. It is expected to come out with good numbers on 24th June and may declare 25% dividend. For the first 3 quarters, it has already reported 50% higher profit of Rs.6 cr. inspite of huge tax provision of Rs.2 cr. For the full year, it may report an EPS of Rs.12. Besides it has huge reserves of around Rs.55 cr. on its small equity of Rs.7 cr. leading to a book value of above Rs.90. Recently, it has caught the attention of few HNIs and the share price is expected to run beyond Rs.100. A strong buy.
Investors who fancy turnaround scrips can take a look at Gujarat Carbon Industries (Code No: 506457) (Rs.21.01). Though it has seen a fast run up from Rs.2 to Rs.20 but it still looks good. Since the last 2 quarters, it’s reporting fantastic numbers and has shown a sharp turnaround. The company is into manufacturing of Methyl Ethyl Ketone and Secondary Butyl Alcohol. For FY05, its sales doubled to Rs.23 cr. and NP stood at Rs.4.20 cr. compared to loss of Rs.1.90 cr. last year. It reported an EPS of Rs.3.25 on its current equity of Rs.12.40 cr. For FY06, it can report an EPS of Rs.7 and hence becomes a good bet for the long term.
Gradually action is building up in National Oxygen (Code No: 507813) (Rs.69) as 30th June comes closer. Huge buying may take place in anticipation of fantastic numbers and a good dividend of 35%. The company may report an EPS of Rs.13~14 for FY05 and is currently trading cheap at 5 PE. Since the liquidity is very poor for Bombay Oxygen, this company becomes the best choice in this sector. Its share price has the potential to rise 50% in the next 3 months.
Competent Automobiles (Code No: 531041) (Rs.43) is recommended for investors who trust the Maruti growth story. The company is a leading dealer for Maruti cars. It has 5 big showrooms and 3 workshops in Delhi. It has one showroom in Himachal Pradesh also and is planning to open one workshop soon. This Rs.500 cr. company has small equity of Rs.6 cr. and reserves of more than Rs.25 cr. leading to a book value of Rs.55 for its share. Though the company works on a narrow margin, it is a dividend paying company and the promoters hold 69% of the stake. For FY05, it reported an EPS of Rs.6, which can rise to 7.5 for FY06. Scrip can rise 50% in 12 months.
GNFC (Code No: 500670) (Rs.87.65) once again came out with wonderful figures for FY05 though dividend payout was a bit lower than expected. For FY05, its total revenue increased 26% to Rs.1822 cr. where its bottomline doubled to Rs.224 cr. due to better operating efficiency and lower interest cost. This works out to an EPS of Rs.15 on its current equity of Rs.146.50 cr. Though there are concerns over the recent gas price hike, this scrip can still be accumulated at declines as it can give 25~30% return in a year if the monsoons are good.
In auto ancillary sector, Amara Raja Batteries (Code No: 500008) (Rs.126.60) is still available reasonably cheap. It is gradually increasing its market share and achieved a recent breakthrough on being selected as an exclusive supplier for the Maruti Swift. The company manufactures batteries for cars, tractors, LCV, HCV, three wheelers, home inverter etc. They have an ongoing agreement as original equipment supplier with Maruti, Tata Motors, M&M, Ashok Leyland and is exclusive supplier to Daimer Chrysler, Ford and Swaraj Mazda. In future, the company is expected to witness exponential growth and can report an EPS of Rs.15 for FY06. Scrip can cross Rs.200 easily in the next 12 months. Keep accumulating at sharp declines.
Investors who fancy turnaround scrips can take a look at Gujarat Carbon Industries (Code No: 506457) (Rs.21.01). Though it has seen a fast run up from Rs.2 to Rs.20 but it still looks good. Since the last 2 quarters, it’s reporting fantastic numbers and has shown a sharp turnaround. The company is into manufacturing of Methyl Ethyl Ketone and Secondary Butyl Alcohol. For FY05, its sales doubled to Rs.23 cr. and NP stood at Rs.4.20 cr. compared to loss of Rs.1.90 cr. last year. It reported an EPS of Rs.3.25 on its current equity of Rs.12.40 cr. For FY06, it can report an EPS of Rs.7 and hence becomes a good bet for the long term.
Gradually action is building up in National Oxygen (Code No: 507813) (Rs.69) as 30th June comes closer. Huge buying may take place in anticipation of fantastic numbers and a good dividend of 35%. The company may report an EPS of Rs.13~14 for FY05 and is currently trading cheap at 5 PE. Since the liquidity is very poor for Bombay Oxygen, this company becomes the best choice in this sector. Its share price has the potential to rise 50% in the next 3 months.
Competent Automobiles (Code No: 531041) (Rs.43) is recommended for investors who trust the Maruti growth story. The company is a leading dealer for Maruti cars. It has 5 big showrooms and 3 workshops in Delhi. It has one showroom in Himachal Pradesh also and is planning to open one workshop soon. This Rs.500 cr. company has small equity of Rs.6 cr. and reserves of more than Rs.25 cr. leading to a book value of Rs.55 for its share. Though the company works on a narrow margin, it is a dividend paying company and the promoters hold 69% of the stake. For FY05, it reported an EPS of Rs.6, which can rise to 7.5 for FY06. Scrip can rise 50% in 12 months.
GNFC (Code No: 500670) (Rs.87.65) once again came out with wonderful figures for FY05 though dividend payout was a bit lower than expected. For FY05, its total revenue increased 26% to Rs.1822 cr. where its bottomline doubled to Rs.224 cr. due to better operating efficiency and lower interest cost. This works out to an EPS of Rs.15 on its current equity of Rs.146.50 cr. Though there are concerns over the recent gas price hike, this scrip can still be accumulated at declines as it can give 25~30% return in a year if the monsoons are good.
In auto ancillary sector, Amara Raja Batteries (Code No: 500008) (Rs.126.60) is still available reasonably cheap. It is gradually increasing its market share and achieved a recent breakthrough on being selected as an exclusive supplier for the Maruti Swift. The company manufactures batteries for cars, tractors, LCV, HCV, three wheelers, home inverter etc. They have an ongoing agreement as original equipment supplier with Maruti, Tata Motors, M&M, Ashok Leyland and is exclusive supplier to Daimer Chrysler, Ford and Swaraj Mazda. In future, the company is expected to witness exponential growth and can report an EPS of Rs.15 for FY06. Scrip can cross Rs.200 easily in the next 12 months. Keep accumulating at sharp declines.
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