STOCK WATCH

With every passing day, construction/infrastructure scrips continue to rise on the back of their galloping order book positions. The share price of Petron Engg. (Code No: 530381)(Rs.208.65) has also risen smartly in the past but is still relatively cheap compared to its peers. It has a huge Rs.500 cr. of projects in hand on its small equity of just Rs.7.50 cr. For FY06, it is expected to report a turnover of around Rs.400 cr. and NP of more than Rs.12 cr., which means an EPS of Rs.16. Apart from good fundamentals, the company is also expected to make some favourable announcement like preferential allotment, merger with some bigger company etc. A good bet for the short to medium term

Historically, cement prices remain low during the monsoon due to lower demand. But this time it was different. Cement prices have remained firm and are now expected to rise from September 2005. Mangalam Cement (Code No: 502157) (Rs.89.55), a B K Birla group company, is a good turnaround story in this sector. It has more than 1 MMT installed capacity but is available at a market cap of less than Rs.250 cr. Due to various restructing initiatives, the company is expected to post an EPS of Rs.8.50 and Rs.11 for FY06 and FY07 respectively. Share price can shoot upto Rs.120 in 6 months or so. A solid buy.

After relisting with a bang at Rs.174, Indoasian Fusegear India Ltd (Code No: 532658) (Rs.146.10), the new merged entity has corrected down sharply due to market sentiment and profit booking by weaker hands. The company in undergoing a Rs.55 cr. expansion whereby it will double the production capacity of circuit production devices and will raise its compact fluorescent lamps (CFL) capacity to 10 million units. It is also foraying into the manufacture of energy meters with a initial capacity of 5 million units besides planning acquisition of manufacturing facilities for wires and cables. For FY06 it can report Sales of Rs.220 cr. and NP of Rs.25 cr. leading to an EPS of Rs.22 and diluted EPS of Rs.18. For FY07, company is estimated to double its sales to Rs.450 cr. A strong buy for the medium to long term

Indian pharma companies are expected to grow substantially on the back of huge export potential, for which reason all pharma companies are setting up internationally approved plants. Hence downstream companies like Medi Caps (Code No: 523144) (Rs.60.30) can report a good topline growth in future. The company is the market leader in the production of gelatine capsules, which are widely used to package drugs, vitamins, antibiotics and cosmetics. Apart from having strong fundamentals, it’s a cash rich company with investments of more than Rs.11 cr. For FY06, it may register sales of Rs.23 cr. and NP of Rs.3.50 cr. leading to an EPS of Rs.11 on its small equity of Rs.3.12 cr. Moreover, it may be taken over by some big pharma company.

Of late sugar scrips have corrected sharply from their recent highs on account of profit booking. Investors can accumulate Mawana Sugars (Code No: 532512) (Rs.111.70) for medium to long term gains. It is one of the leading sugar manufacturers in North India with an installed capacity of 17,500 TCD. Due to the better prospects for sugar sector, the company is planning a huge Rs.500 cr. expansion in the next 2 yrs whereby it plans to nearly double its capacity to 31,000 TCD and also set up 30 MW co-generation plant. It will also set up new distillery to produce 120 Kilolitres per day of ethanol. For FY06, it can report NP of Rs.55 cr. i.e. an EPS of Rs.14 in its topline of Rs.650 cr.

Nectar Life Sciences (Code No: 532649) (Rs.269.95), which came out with an IPO at Rs.240 in June 2005, has still not appreciated much inspite of its strong fundamentals and bullish sentiment. It operates in oral and sterile forms of cephalosporin and semi synthetic penicillin bulk drugs. The company is expanding its cephalosporin facility and is going in for forward integration by setting up a formulations unit at Baddi. It currently exports its products to China, Korea, Hong Kong, South East Asian countries like Singapore and Thailand apart from European countries like Netherlands, Italy and Spain. On a consolidated basis, the company can report an EPS of Rs.25 for FY06. A safe bet.