STOCK WATCH
When most pharma companies are reporting disappointing numbers, Jupiter Bioscience (Code No: 524826) (Rs.137) has declared pretty encouraging results. Its total revenue grew by 15% to Rs.20 cr. and NP also increased by 15% to Rs.5.70 cr. For the full year, it may report a topline of Rs.78 cr. and NP of Rs.16 cr. i.e. an EPS of Rs.18 on its current equity of Rs.8.86 cr. Besides, the company may GDR/FCCB issue to raise funds for expansion in the near future which will push the scrip to new highs. The company has already allotted to the promoters 27,50,000 warrants that can be converted into equity shares price to be determined later. Moreover, the company has increased its authorized share capital to Rs.20 cr. from the existing Rs.12 cr. which means that the management is planning to take some aggressive steps. All these developments will lead to a re-rating of the company and its market capitalization is poised to shoot up in future.
Austin Eng (Code No: 522005) (Rs.80) is a leading manufacturer and exporter of quality auto components like ball bearings and roller bearings. It manufactures all types of bearings that include Ball Bearings, Cylindrical Roller Bearings, Needle Roller Bearings, Tapered Roller Bearings, Spherical Roller Bearings and Flexible Roller Bearings. Due to strong demand from the user industry, the company is doing exceptionally well. For the Dec’05 qtr., its Sales rose by 53% to Rs.15 cr. whereas its NP tripled to Rs.1.10 cr. For the full year it may register net sales of Rs.55 cr. and NP of Rs.3.50 which leads to an EPS of Rs.11 on its current equity of Rs.3.28 cr. It may, therefore, return to the dividend list and may declare 18~20% dividend for FY06. A solid buy for long term investors.
Post debt restructuring, Sujana Universal Industries (Code No: 517224) (Rs.23) has been announcing excellent numbers due to huge saving in interest cost. As per the scheme, the company is subjected to repay Rs.75 cr. of loan and Rs.41 cr. of deferred interest in instalments starting from Oct 2007. Its outstanding loan is estimated to fall sharply to Rs.31.50 cr. and the interest on term loans has also been negotiated and brought down to 8% with retrospective effect. Besides, the company has raised around Rs.70 cr. through its GDR issue and is planning to raise more money by issuing another 40 lakh shares. It also has casting and light engineering component divisions which are faring exceedingly well. In short, future prospects look promising with healthy cash flows and the company is expected to end FY06 with sales of Rs.900 cr. and NP of Rs.28 cr. i.e. EPS of Rs.7 on its current equity of Rs.41.40 cr. and diluted EPS of Rs.6. The scrip is trading at 60% discount its book value and has a market cap of merely Rs.100 cr. A good bet for 50% returns in a year.
Austin Eng (Code No: 522005) (Rs.80) is a leading manufacturer and exporter of quality auto components like ball bearings and roller bearings. It manufactures all types of bearings that include Ball Bearings, Cylindrical Roller Bearings, Needle Roller Bearings, Tapered Roller Bearings, Spherical Roller Bearings and Flexible Roller Bearings. Due to strong demand from the user industry, the company is doing exceptionally well. For the Dec’05 qtr., its Sales rose by 53% to Rs.15 cr. whereas its NP tripled to Rs.1.10 cr. For the full year it may register net sales of Rs.55 cr. and NP of Rs.3.50 which leads to an EPS of Rs.11 on its current equity of Rs.3.28 cr. It may, therefore, return to the dividend list and may declare 18~20% dividend for FY06. A solid buy for long term investors.
Post debt restructuring, Sujana Universal Industries (Code No: 517224) (Rs.23) has been announcing excellent numbers due to huge saving in interest cost. As per the scheme, the company is subjected to repay Rs.75 cr. of loan and Rs.41 cr. of deferred interest in instalments starting from Oct 2007. Its outstanding loan is estimated to fall sharply to Rs.31.50 cr. and the interest on term loans has also been negotiated and brought down to 8% with retrospective effect. Besides, the company has raised around Rs.70 cr. through its GDR issue and is planning to raise more money by issuing another 40 lakh shares. It also has casting and light engineering component divisions which are faring exceedingly well. In short, future prospects look promising with healthy cash flows and the company is expected to end FY06 with sales of Rs.900 cr. and NP of Rs.28 cr. i.e. EPS of Rs.7 on its current equity of Rs.41.40 cr. and diluted EPS of Rs.6. The scrip is trading at 60% discount its book value and has a market cap of merely Rs.100 cr. A good bet for 50% returns in a year.
The ongoing boom in housing construction sector is definitely benefiting the ceramic tiles sector. Inspite of stiff competition from cheap imported tiles from China, Orient Ceramics (Code No: 530365) (Rs.92.50) came out with very impressive numbers for Dec’05 qtr. Sales jumped 36% to Rs.35 cr. and NP spurted by 43% to Rs.2.80 cr. thereby reporting a quarterly EPS of Rs.6. It’s a dividend paying company with promoters stake at 72% Aggressive investors can buy it for short term gains but it is not recommended for long term as the profit margin of this industry will be under pressure. A pure short term bet for momentum play.
Suryalata Spinning (Code No: 514138) (Rs.80) has completed its expansion cum modernization programme at Kalwakurthy at a cost of Rs.8.6 cr. and the expansion scheme at Ramtek unit at a cost of Rs.11 cr. to add 7200 spindles. Now its total spinning capacity stands enhanced to about 65,000 spindles. For Dec’05 qtr., its sales grew by 15% to Rs.45 cr. whereas its NP shot up 300% to Rs.2.20 cr. For the first nine months, it has already reported NP of Rs.7 cr. and is expected to end the full year with Rs.8 cr. after deducting deferred tax etc. This works out to an EPS of Rs.15 on its current equity of Rs.5.45 cr. For future growth, it has capex plans of Rs.126 cr. which includes addition of 45,000 splindles and setting up of weaving and processing unit with a capacity of 50,000 mtrs a day. It may allot some preferential shares to institutional investors at high premium, which may trigger its share price in future.
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