STOCK WATCH
Amex Information Technology (Code No: 532311) (Rs.33) is a relatively small player engaged in BPO and IT enabled products and services. It also provides biometric solutions and offer a range of products from PC based biometric devices to biometrics embedded devices used by OEM's in their Access Control Devices. The company has an enviable clientele in India and abroad. For the qtr. ending Dec. 2005, while it’s total revenue grew by nearly 30% to Rs.11.50 cr., its NP jumped by 80% to Rs.3.30 cr. i.e. EPS of Rs.2 on its current equity of Rs.16.75 cr. For the full year FY06, it is expected to post an EPS of Rs.7. Although the promoters’ stake is only 14%, it’s a dividend paying company and the scrip has the potential to give 50% return in the medium term.
Small cap pharma scrips have been written off by marketmen as if there was no tomorrow! Syncom Formulation (Code No: 524470) (Rs.62.50) too has corrected sharply and is hitting new lows daily. For the nine months ending 30th Dec 2005, it has clocked a turnover of Rs.41 cr. and NP of Rs.5.30 cr. For the full year FY06, it may report a topline of Rs.55 cr. and NP of Rs.6 cr. which translates into an EPS of around Rs.11 on its equity of Rs.5.62 cr. It has prepaid its entire loan and has become a debt-free company. Besides, it is also planning to diversify into power, construction, coal business and investment. For FY06, the company is expected to declare Rs.1.50 dividend, which means a dividend yield of 2.50%. Since it’s an operator driven scrip, only aggressive investors are advised to buy.
After a dream run till Rs.60, Indian Sucrose (Code No: 500319) (Rs.44) has cooled off sharply due to profit booking on the back lacklustre Dec.’05 numbers. From this season, the company has increased its crushing capacity to 5000 TCD from 3500 TCD. Besides it has also acquired a company called Cosmos Industries Ltd with a sugar manufacturing unit at Dhuri in Sangroor district of Punjab with an installed capacity of 2500 TCD. Earlier, it had acquired a distillery that owns 4 well-known brands of Rum. For FY06, it may report Sales of Rs.100 cr. and NP of Rs.12 cr. which translates into an EPS of Rs.8. With the sugar price expected to rise in future, it can report Rs.10~12 EPS for FY07.
Before listing of Gitanjali Gems, we may see some action in the Gems & Jewellery sector. Earlier, this industry was avoided by markemen but with the evolution of retailing and gold prices hitting new highs, it has caught market fancy and the attention of some big operators. Su-raj Diamond (Code No : 507892) (Rs.62) is also positioning itself in the retailing segment in the domestic market through its subsidiary and associate company ‘Su-Raj Diamond Dealers Ltd’ and ‘Forever Precious Jewellery and Diamonds Ltd’. It has nine manufacturing units in the country and also has permission to set up jewellery manufacturing units in SEZ at Kolkata and Kochi. For FY06, it can report a turnover of Rs.1200 cr. and NP Rs.36 cr. which means an EPS of Rs.9. A safe bet.
Small cap pharma scrips have been written off by marketmen as if there was no tomorrow! Syncom Formulation (Code No: 524470) (Rs.62.50) too has corrected sharply and is hitting new lows daily. For the nine months ending 30th Dec 2005, it has clocked a turnover of Rs.41 cr. and NP of Rs.5.30 cr. For the full year FY06, it may report a topline of Rs.55 cr. and NP of Rs.6 cr. which translates into an EPS of around Rs.11 on its equity of Rs.5.62 cr. It has prepaid its entire loan and has become a debt-free company. Besides, it is also planning to diversify into power, construction, coal business and investment. For FY06, the company is expected to declare Rs.1.50 dividend, which means a dividend yield of 2.50%. Since it’s an operator driven scrip, only aggressive investors are advised to buy.
After a dream run till Rs.60, Indian Sucrose (Code No: 500319) (Rs.44) has cooled off sharply due to profit booking on the back lacklustre Dec.’05 numbers. From this season, the company has increased its crushing capacity to 5000 TCD from 3500 TCD. Besides it has also acquired a company called Cosmos Industries Ltd with a sugar manufacturing unit at Dhuri in Sangroor district of Punjab with an installed capacity of 2500 TCD. Earlier, it had acquired a distillery that owns 4 well-known brands of Rum. For FY06, it may report Sales of Rs.100 cr. and NP of Rs.12 cr. which translates into an EPS of Rs.8. With the sugar price expected to rise in future, it can report Rs.10~12 EPS for FY07.
Before listing of Gitanjali Gems, we may see some action in the Gems & Jewellery sector. Earlier, this industry was avoided by markemen but with the evolution of retailing and gold prices hitting new highs, it has caught market fancy and the attention of some big operators. Su-raj Diamond (Code No : 507892) (Rs.62) is also positioning itself in the retailing segment in the domestic market through its subsidiary and associate company ‘Su-Raj Diamond Dealers Ltd’ and ‘Forever Precious Jewellery and Diamonds Ltd’. It has nine manufacturing units in the country and also has permission to set up jewellery manufacturing units in SEZ at Kolkata and Kochi. For FY06, it can report a turnover of Rs.1200 cr. and NP Rs.36 cr. which means an EPS of Rs.9. A safe bet.
Steel scrips are coming back into action and most of them registered smart gains last week. National Steel & Agro (Code No: 513179) (Rs.23), belonging to the renowned Ruchi Group has not risen and is still trading very cheap. For FY06, the company may report a turnover of Rs.1750 cr. and NP of Rs.16 cr. Against this, it is available at market cap of only Rs.75 cr. and is discounts its FY06 earnings of Rs.5 by 5 times only. The scrip has the potential to rise 20~25% in the short term. Moreover, the Ruchi Group is consolidating all its business and is planning to focus mainly on its metal business in future. Hence it’s a good long-term bet as well.
The forthcoming Budget is estimated to be favourable for the food processing industry and Agro Dutch Inds. (Code No: 519281) (Rs.38) is tipped to rise sharply post budget. The company has recently raised money through a right issue and is implementing Rs.86 cr. capex plans whereby it is increasing its total capacity to produce 50,000 tonnes of mushroom. This whole expansion will be for frozen mushrooms for which the realization is better than canned mushrooms. Hence it is setting up a plant for individual quick frozen (IQF) mushrooms. Moreover, it is also putting up a Rs.40 cr. facility to manufacture tin cans in Chennai. With lower anti dumping duty in USA and better price realization, the company is estimated to earn a NP of Rs.18 cr. on sales of Rs.210 cr. for FY07. With an EPS of more than Rs.6, the scrip can appreciate handsomely in future whereas the downfall is minimal form the current level.
The forthcoming Budget is estimated to be favourable for the food processing industry and Agro Dutch Inds. (Code No: 519281) (Rs.38) is tipped to rise sharply post budget. The company has recently raised money through a right issue and is implementing Rs.86 cr. capex plans whereby it is increasing its total capacity to produce 50,000 tonnes of mushroom. This whole expansion will be for frozen mushrooms for which the realization is better than canned mushrooms. Hence it is setting up a plant for individual quick frozen (IQF) mushrooms. Moreover, it is also putting up a Rs.40 cr. facility to manufacture tin cans in Chennai. With lower anti dumping duty in USA and better price realization, the company is estimated to earn a NP of Rs.18 cr. on sales of Rs.210 cr. for FY07. With an EPS of more than Rs.6, the scrip can appreciate handsomely in future whereas the downfall is minimal form the current level.
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