STOCK WATCH
Indian Sucrose (Code No: 500319)(Rs.30.95) is a great turnaround story, which has still not caught the market fancy, and is available cheap compared to its peers. It’s a small sugar mill with a capacity of 3500 TCD. For FY06, it can report Net Sales of Rs.90 cr. and NP of Rs.11~12 cr. leading to an EPS of Rs.7~8 on its current equity of Rs.15.50 cr. besides it has also acquired a distillery with 4 well known brands of Rum. Scrip has the potential to double in 12 months. A strong buy.
At a time when the overall Sensex is discounted by 16~18 times, shipping companies are available at a PE of 4~5. A sharp re-rating is overdue and the current best bet in this sector is G E Shipping (Code No: 500620) (Rs.198.65). Its demerger is already finalised and shareholders will get 4 shares of GE Shipping and 1 share of Great Offshore Ltd for every 5 shares currently held. This will unlock shareholder value substantially as the market richly discounts the offshore business. This is the safest bet in the current market scenario and 25~30% returns can easily be expected in the next 6 months. A great buy.
One great pick in the current mid-cap crisis is Sanjivani Parenteral (Code No: 531569) (Rs.65.50). Scrip has corrected 35% from its recent high of Rs.104. Its one of the fastest growing companies in contract manufacturing of pharmaceuticals and constantly reporting impressive numbers since last the 3/4 qtrs. For FY06, it can report Net Sales of Rs.45 cr. and NP of Rs.7 cr. i.e. an EPS of Rs.14. Share price has the potential to double in 9~12 months. Just grab it.
Winsome Textiles (Code No: 514470) (Rs.26.30) is a professionally managed company engaged in the manufacture of 100% cotton yarn for weaving as well as knitting. To cater to the increasing demand, the company has chalked out Rs.10.50 cr. capex plan under which it intends to add 5 combers to convert part production of carded cotton yarn to combed yarn which has better margins. Also some balancing equipment is planned for the dyeing house to increase production. This expansion will be funded by debt and internal accruals without any equity dilution. For FY06, it can report Sales of Rs.150 cr. and NP of Rs.4 cr., which means and EPS of Rs.7 on its small equity of Rs.5.90 cr. Its share price can easily double by mid FY06 and it can be a multibagger if held for 3 years or more.
At a time when the overall Sensex is discounted by 16~18 times, shipping companies are available at a PE of 4~5. A sharp re-rating is overdue and the current best bet in this sector is G E Shipping (Code No: 500620) (Rs.198.65). Its demerger is already finalised and shareholders will get 4 shares of GE Shipping and 1 share of Great Offshore Ltd for every 5 shares currently held. This will unlock shareholder value substantially as the market richly discounts the offshore business. This is the safest bet in the current market scenario and 25~30% returns can easily be expected in the next 6 months. A great buy.
One great pick in the current mid-cap crisis is Sanjivani Parenteral (Code No: 531569) (Rs.65.50). Scrip has corrected 35% from its recent high of Rs.104. Its one of the fastest growing companies in contract manufacturing of pharmaceuticals and constantly reporting impressive numbers since last the 3/4 qtrs. For FY06, it can report Net Sales of Rs.45 cr. and NP of Rs.7 cr. i.e. an EPS of Rs.14. Share price has the potential to double in 9~12 months. Just grab it.
Winsome Textiles (Code No: 514470) (Rs.26.30) is a professionally managed company engaged in the manufacture of 100% cotton yarn for weaving as well as knitting. To cater to the increasing demand, the company has chalked out Rs.10.50 cr. capex plan under which it intends to add 5 combers to convert part production of carded cotton yarn to combed yarn which has better margins. Also some balancing equipment is planned for the dyeing house to increase production. This expansion will be funded by debt and internal accruals without any equity dilution. For FY06, it can report Sales of Rs.150 cr. and NP of Rs.4 cr., which means and EPS of Rs.7 on its small equity of Rs.5.90 cr. Its share price can easily double by mid FY06 and it can be a multibagger if held for 3 years or more.
Strong scrips like Indo Asian Fuse Gear India Ltd (Code No: 532658) (Rs.113.60) has also taken a beating in this correction with its share price falling nearly 35% to Rs.118 from the recent high of Rs.174. It’s a leading manufacturer of electrical safety devices such as miniature circuit breakers, residual current circuit breakers, HRC fuses, transformers, switchgears wires & wiring accessories, industrial plugs & sockets, contactor relays, distribution boards etc. The company is among the top three players in the domestic compact fluorescent lamps market and sells its product under the brand name ‘Ecolite’. Recently, it announced its foray into specialised outdoor lighting equipment manufacturing for future growth. It has formed a joint venture with Nordex Lighting Spa of Italy and is setting up a state-of-the-art plant in the tax free zone of Uttaranchal at Haridwar. For FY06, it can report total Sales of Rs.200 cr. and NP of Rs.25 cr. leading to an EPS of Rs.18 on its fully diluted equity of Rs.14.30 cr. Scrip can easily cross Rs.200 in 12 months. A solid buy.
Another good scrip, which has corrected sharply, is Hazoor Media (Code No: 532467) (Rs.12.25), which has tumbled 35% from recent high of Rs.20.50 as Parle Biseleri sold its stake in it. The company is into production of media content in diversified software categories viz. entertainment, film and film based programmes, sitcoms, news and current affairs, game shows and caters to the demand of media companies in the international market. HMPL also provides infrastructure services like shooting locations, floors, studios, post production processing facilities, filming equipment and qualified trained manpower to the film & entertainment industry. Apart from these it has various triggers like huge property, upcoming ethanol project, power generation etc. Scrip has the strength to touch Rs.25 in 12~15 months. Aggressive investors can take exposure at current levels.
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