STOCK WATCH

Vishal Export (Code No: 532618) (Rs.20.80) has come out with quite decent numbers for June quarter. Its total revenue grew by 50% to Rs.870 cr. whereas its NP jumped 70% to Rs.12 cr. and it posted an EPS of Rs.1 for the qtr on its equity of Rs.12 cr. and face value of Re.1 per share. Recently, it announced 2:1 bonus along with 40% dividend. Company is in an aggressive expansion mode. Apart from setting up 100 MW wind farm, it is also expected to come out with ADR/GDR issue in the near future. At current P/E discounting of 5, the scrip appears to be reasonably cheap and can appreciate handsomely in the long term.

Gujarat Carbon (Code No: 506457) (Rs.30.85), manufacturer of Methyl Ethyl Ketone and Secondary Butyl Alcohol has again posted fantastic numbers for the June’05 qtr. Net sales has tripled to Rs.6.60 cr. and NP stood at Rs.2 cr. against Net loss of Rs.0.50 cr. last year posting an EPS of Rs.1.60 for the qtr. For FY06, it can report an EPS of Rs.6. Promoters hold around 83% stake, which few people are aware of and domestic institutions hold around 6%. Aggressive investors can buy at CMP although it has around Rs.10 cr. of unpaid accumulated interest waiting to be waived off.

Srinivasa Hatcheries (Code No: 526893) (Rs.75.50), a relatively lesser-known company posted excellent numbers for the June’05 qtr. Net Sales has increased by 35% to Rs.17 cr. and NP spurted by 245% to Rs.1.80 cr. registering an EPS of Rs.3.70. For FY05, it earned a NP of Rs.4.20 cr. on total revenue of Rs.60.50 cr. and declared 25% dividend. For FY06, it can report more than Rs.12 as EPS. It’s a well managed company with promoters holding 75% stake. Investors can buy it at declines for decent return in 12~15 months.

Some people are very happy to see Essar Shipping (Code No: 500630) (Rs.38.05) numbers and are buying it blindly. But investors are advised to stay away from this company. On the face of it June’05 number seems stunning but in reality it’s not. Company has included Rs.68.50 cr. profit (on sale of fleet) in the sales figure. So the topline and bottom line figure is not that rosy if we exclude this item. Besides, its equity has been diluted this qtr by issue of Rs.1.25 cr. shares on conversion of FCCB @ Rs.16~17. Hence please study the figures in detail and don’t invest just based on June numbers alone.

All casutic soda manufacturers have come out with excellent numbers and Standard Inds. (Code No: 530017) (Rs.29.15) is no exception. For the June’05 qtr, its Sales has increased by nearly 50% to Rs.59 cr. whereas its NP stood at Rs.17 cr. against a Net loss of Rs.11 cr. last year. It registered an EPS of Rs.2.70 on an equity of Rs.32.16 cr. on the face value of Rs.5 per share. For FY06, it may report an EPS of Rs.8 making it a value buy for the long term. But at the same time, falling caustic soda prices and low promoter holding is a concern to watch out for.

MSK Projects (Code No: 532553) (Rs.68) is engaged in infrastructure development projects, particularly road sector projects on a build-operate-transfer (BOT) basis. Currently, it has number of projects in hand amounting to nearly Rs.250 cr. for which it is raising money to fund these projects. Recently, it raised around Rs.17.50 cr. through preferential allotment of 25 lakh shares @ Rs.70 and may raise more money in future in a similar manner. For FY06, the company may report an EPS of Rs.8~10 even on its diluted equity, which makes it a good buy in the construction sector. Investors are recommended to buy at the current price as share price can hit a century in the short to medium term.