STOCK WATCH
Kallam Spinning (Code No: 530201) (Rs.30.55) has once again announced fantastic results for the Sept.’05 quarter. Its Sales grew by 12% to around Rs.8 cr. whereas its NP stood at Rs.1.22 cr. compared to Net loss of Rs.7 lakh last year. Its OPM improved substantially from 13% to 31% this quarter and the company even declared a maiden dividend of 7%. For future growth, it is constructing an export-oriented spinning mill with a production capacity of 14,500 spindles in Guntur at an outlay of Rs.22 cr. For FY06, it can report an EPS of Rs.7 and more than Rs.10 for FY07 and its share price can easily appreciate by 50% in 6~12 months.
Due to their strong performance, sugar scrips are getting back in to action with renewed interest from institutional investors. Ponni Sugars Erode Ltd (Code No: 532460) (Rs.39.50), a small South based sugar company also reported excellent numbers, which went unnoticed by retail investors. Sales increased by 40% to Rs.29 cr. and NP spurted 160% to Rs.2.10 cr. posting an EPS of Rs.2.60 for the quarter. Its second half will be much better and for the whole of FY06, it can report an EPS of Rs.9 on its current equity of Rs.8.20 cr. With a forward PE of 4x and dividend yield of more than 3%, this scrip appears to be a good value buy for the medium to long term.
After hitting a recent high of Rs.78, Bhuruka Gas (Code No: 509728) (Rs.47.80) has corrected sharply by more than 50% in the recent carnage. This is inspite of the fact that its fundamentals are improving with every passing quarter. For the Sept.’05 quarter also its NP grew by whopping 200% to Rs.2.40 cr. due to better operating efficiency whereas its revenues were flat at Rs.11 cr. Moreover, its promoters have increased their stake this quarter to 79% from 64% by way of preferential allotment to themselves. For full FY06, it can clock a turnover of Rs.50 cr. and NP of Rs.9~10 cr. which works out to an EPS of Rs.7 on its expanded equity of Rs.3.52 cr. For the short-term, this scrip can give 20~25% return in 6 months or so.
Eldeco Housing & Industries Ltd (Code No: 523329) (Rs.114.10), which is engaged in civil construction and housing has declared encouraging results for the Sept.’05 quarter. Its total revenue grew 22% to Rs.8.30 cr. but its NP multiplied 5 times to Rs.1.10 cr. due to higher operating margins. This leads to a quarterly EPS of Rs.5.50 on its tiny equity of Rs.1.97 cr. Considering its order in hand and the work in progress position, the company is estimated to report a topline of Rs.55 cr. and bottomline of Rs.4 cr. i.e. EPS of Rs.20 for FY06. In spite of such strong fundamentals and part of a growth sector, its current market cap is only Rs.22 cr. and is discounted merely 5 times against its forward earning. It’s a good value buy, as the scrip has corrected sharply from its recent high of Rs.178.
Tinplate Co. of India (Code No: 504966) (Rs.72.05) which is undergoing capacity expansion to 1,70,000 MT by 2006, recently came out with very impressive numbers for the Sept.’05 quarter. Its Sales increased by 50% to Rs.82 cr. and NP jumped 170% to Rs.11 cr. in spite of the lower other income and higher tax provision. For FY06, it can report a Net Sales of around Rs.350 cr. and NP of Rs.40 cr., which works out to an EPS of Rs.14 on its current equity of Rs.28.90 cr. Its share price is bound to cross Rs.100 sooner than later
In the recent onslaught where most of the mid caps corrected sharply, GSFC (Code No: 500690) (Rs.148.15) stood firm and is currently trading near its 52-Week high of around Rs.160. It is the largest producer of caprolactum and has one of the largest capacities of Diammonium Phosphate. Besides, it also manufactures chemicals, fertilisers, petrochemicals and other allied products. For Sept.’05 quarter, it reported a decent set of numbers with Sales remaining flat at Rs.612 cr. but NP registering an impressive growth of 70% to Rs.58 cr. due to lower interest cost and better price realization. For the full FY06, it can post an EPS of Rs.26. Its only a matter to time for the scrip to cross the Rs.200 mark.
After hitting a recent high of Rs.78, Bhuruka Gas (Code No: 509728) (Rs.47.80) has corrected sharply by more than 50% in the recent carnage. This is inspite of the fact that its fundamentals are improving with every passing quarter. For the Sept.’05 quarter also its NP grew by whopping 200% to Rs.2.40 cr. due to better operating efficiency whereas its revenues were flat at Rs.11 cr. Moreover, its promoters have increased their stake this quarter to 79% from 64% by way of preferential allotment to themselves. For full FY06, it can clock a turnover of Rs.50 cr. and NP of Rs.9~10 cr. which works out to an EPS of Rs.7 on its expanded equity of Rs.3.52 cr. For the short-term, this scrip can give 20~25% return in 6 months or so.
Eldeco Housing & Industries Ltd (Code No: 523329) (Rs.114.10), which is engaged in civil construction and housing has declared encouraging results for the Sept.’05 quarter. Its total revenue grew 22% to Rs.8.30 cr. but its NP multiplied 5 times to Rs.1.10 cr. due to higher operating margins. This leads to a quarterly EPS of Rs.5.50 on its tiny equity of Rs.1.97 cr. Considering its order in hand and the work in progress position, the company is estimated to report a topline of Rs.55 cr. and bottomline of Rs.4 cr. i.e. EPS of Rs.20 for FY06. In spite of such strong fundamentals and part of a growth sector, its current market cap is only Rs.22 cr. and is discounted merely 5 times against its forward earning. It’s a good value buy, as the scrip has corrected sharply from its recent high of Rs.178.
Tinplate Co. of India (Code No: 504966) (Rs.72.05) which is undergoing capacity expansion to 1,70,000 MT by 2006, recently came out with very impressive numbers for the Sept.’05 quarter. Its Sales increased by 50% to Rs.82 cr. and NP jumped 170% to Rs.11 cr. in spite of the lower other income and higher tax provision. For FY06, it can report a Net Sales of around Rs.350 cr. and NP of Rs.40 cr., which works out to an EPS of Rs.14 on its current equity of Rs.28.90 cr. Its share price is bound to cross Rs.100 sooner than later
In the recent onslaught where most of the mid caps corrected sharply, GSFC (Code No: 500690) (Rs.148.15) stood firm and is currently trading near its 52-Week high of around Rs.160. It is the largest producer of caprolactum and has one of the largest capacities of Diammonium Phosphate. Besides, it also manufactures chemicals, fertilisers, petrochemicals and other allied products. For Sept.’05 quarter, it reported a decent set of numbers with Sales remaining flat at Rs.612 cr. but NP registering an impressive growth of 70% to Rs.58 cr. due to lower interest cost and better price realization. For the full FY06, it can post an EPS of Rs.26. Its only a matter to time for the scrip to cross the Rs.200 mark.
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