STOCK WATCH

Some months back Sesa Goa (Code No: 500295) (Rs.745) had been granted a Prospecting Lease in Jharkhand, which gives it the right to explore for iron, ore in that State as well. Though iron ore prices have cooled off from their recent high, they are still expected to remain high due to the strong demand from China and the domestic steel industry. Its June’05 qtr. numbers were quite impressive as Sales increased 90% to Rs.464 cr. and NP spurted 132% to Rs.158 cr. posting an EPS of Rs.40 for the qtr. Ironically, its OPM improved to 49% compared to 40% last year. For the full year FY06, it may report an EPS of more than Rs.135.

Agro Dutch Inds. (Code No: 519281) (Rs.65.20), the largest mushroom producer in India has ambitious expansion plans. It plans to increase its capacity from 37,000 to 50,000 tonnes of mushrooms at an investment of Rs.25 cr. Besides, it also intends to set up a Rs.40 cr. facility to manufacture cans in Chennai. Most importantly, USA has reduced the anti dumping duty on mushrooms to 0.62% from 30% earlier, which will have significant impact on the company’s bottomline as it is the largest exporter to USA. With such positive developments coupled with 1:1 right issue at Rs.30, its share price is bound to cross Rs.100 mark soon. Investors are recommended to hold on to it patiently.

For quite long time GIPCL (Code No: 517300) (Rs.76.80) is underperforming the broader index and has consolidated at current levels. Due to reduction in tariff rate and the huge contribution by other income to the bottomline, marketmen are not that bullish on this scrip. But in such a high market, this scrip becomes a safe bet as it downside is very limited but the upside potential is good in the long run. For the June’05 qtr., its topline reported a fall of 23% to Rs.188 cr. but its NP increased by 23% to Rs.42 cr. due to lower interest cost and higher ‘other income’ posting an EPS of Rs.3.85 for the qtr. For FY06, it can register an EPS of Rs.12 and the share has the potential to cross the Rs.100 mark.

In spite of such a sharp run up in its share price, long-term investor will still gain handsomely from Sanjivani Paranteral (Code No: 531569) (Rs.90.50), even from current levels. It declared quite impressive numbers for June’05 qtr. Sales jumped 425% to Rs.12.65 cr. whereas NP stood at Rs.2.40 cr. compared to Rs.0.05 cr. last year. This works out to an quarterly EPS of around Rs.5 on its current equity of Rs.4.85 cr. Growing at such a fast pace, Sanjivani can end FY06 with Net Sales of Rs.45 cr. and NP of Rs.7 cr. with an EPS of Rs.14 and its share price can gradually rise upto Rs.150 in 6~9 months

Long-term investors are strongly recommended to buy Mumbai based Valecha Engg. (Code No: 532389) (Rs.168) as this is the only construction company which has still not caught of the market and its share price is underperforming for quite some time now. This is in spite of the fact that it has more than Rs.450 cr. orders in hand. Thus its future is very promising. For June’05 qtr., its revenue declined by 14% to Rs.36 cr. whereas its NP remained flat at Rs.2.20 cr. due to better operating efficiency. For FY06, it can report more than Rs.200 cr. turnover and EPS of Rs.18. It is one of the promoters of Jyoti Structures Ltd. holding around 11 lakh shares in it. Moreover, the board has already approved 1:5 rights issue, which may be priced at Rs.110.

Bilpower Ltd. (Code No: 531590) (Rs.99.30), a leading manufacturer of Transformers, Laminations, Stampings, Cores etc. came out with terrific numbers for the June’05 qtr. Its sales have trebled to Rs.24 cr. and NP zoomed to Rs.2.50 cr. compared to Rs.0.25 cr. in the same quarter last year. Hence, it has posted an EPS of Rs.5 for the qtr on its small equity of Rs.5 cr. Its OPM stood healthy at 11% against 5% in last June’04. Although there is the risk of equity dilution in future, still it is a good bet for the long term and can report an EPS of Rs.14~15 for FY06. Buy at declines.