STOCK WATCH
Belonging to Patodia Group, PBM Polytex (Code No: 514087) (Rs.32) is a leading producer of top of the line 100% combed cotton yarn using blends of Egyptian giza cotton etc. In FY05, it suffered a severe setback because of a five months illegal strike by the workers at its Borgaon unit. But in FY06, things are working fine and the company is back on track with Sales at Rs.83 cr. and NP at Rs.3.05 cr. for the nine months ending 31st Dec 2005. Hence for FY06, it can post an EPS of Rs.6. Having a book value of Rs.50, Cash EPS of Rs.12, 52 week high of Rs.45 and market cap of merely Rs.25 cr., this regular dividend paying company is trading reasonably cheap. Besides, the management has decided to dispose off its texturising and twisting unit at Silvassa which may trigger its share price.
From the Budget speech one can easily make out that the FM cares for farmers and as always the government’s focus is on agriculture. Increasing the farm credit limit to Rs.1,75,000 cr. and directing NABARD to give short term loans to farmers @ 7% with an upper limit of Rs.3,00,000, is all good news for Dhanuka Pesticides (Code No: 507717) (Rs.108) which has already corrected sharply from its recent high of Rs.163. For FY06, it is expected to clock sales of Rs.55 cr. and NP Rs.4 cr., which translate into EPS of Rs.20. Due to its tiny equity of Rs.1.98 cr., EPS for FY07 can shoot upto Rs.30 as well. With a dividend yield of 4% and a market cap of merely Rs.20 cr., the scrip has the potential to rise sharply in future. One of the best bets related to the agriculture sector.
From the Budget speech one can easily make out that the FM cares for farmers and as always the government’s focus is on agriculture. Increasing the farm credit limit to Rs.1,75,000 cr. and directing NABARD to give short term loans to farmers @ 7% with an upper limit of Rs.3,00,000, is all good news for Dhanuka Pesticides (Code No: 507717) (Rs.108) which has already corrected sharply from its recent high of Rs.163. For FY06, it is expected to clock sales of Rs.55 cr. and NP Rs.4 cr., which translate into EPS of Rs.20. Due to its tiny equity of Rs.1.98 cr., EPS for FY07 can shoot upto Rs.30 as well. With a dividend yield of 4% and a market cap of merely Rs.20 cr., the scrip has the potential to rise sharply in future. One of the best bets related to the agriculture sector.
Due to debt restructuring and one-time settlement with all institutions/banks, Cubex Tubings (48.00) turned around sharply in the last fiscal. Since then, it is on a high growth trajectory. It manufactures copper, copper alloy products and enamelled copper wires used by the core sector and other critical industries like power generation, shipbuilding, railways, telecommunications, defence and automobiles. Recently, it made a preferential allotment of 9,25,000 equity shares and 15,75,000 share warrants @ Rs.48 for expansion and modernisation to increase its production capacity from 2800 TPA to 5000 TPA. For FY06 ending June 2006, it is estimated to report sales of Rs.60 cr. and NP of Rs.5.50 cr. i.e. EPS of Rs.7 on its diluted equity of 7.70 cr. Only aggressive investors should take exposure as there is risk of further equity dilution upto Rs.10 cr. through the FCCB/ADR/GDR route.
Mayur Uniquoters Ltd. (Code No: 522249) (Rs.35) is engaged in the manufacture and export of PU/PVC made Synthetic leather. Being a highly capital intensive, technology intensive industry, there is hardly any quality manufacturer of PU in India. Last fiscal; the company installed a new coating line with a production capacity of 3.6 million metres per annum (MMPA) which has increased its overall production capacity by 60%. Recently, it has diversified into the growing home furnishing business and is developing a lot of products for the upper end market in upholstery and furnishing products. The company is also making rigorous efforts to develop the market for its leather products in the countries like South Africa, Dubai, Shri Lanka, Malaysia, West Africa, etc. For FY06, it is estimated to report an EPS of Rs.5 which may rise to Rs.6~7 in FY07.
Ahlcon Parenterals Ltd. (Code No: 524448) (Rs.66) manufactures life saving Intravenous Fluids and medical disposables by employing a highly sophisticated production process imported from Switzerland. Its product range includes Dextrose, Saline, Electrolytes, Amino Acids, Fat Emulsion, Blood Substitutes, Small Volume Injectables, Eye Drops etc. It is also diversifying to add more value added ophthalmic products and expand its existing Infusions and Anti- microbial solutions. Moreover, the company has already initiated the process of setting up a state-of-the-art Testing Facility and Formulation Development Lab equipped with the best infrastructure. For FY06, it is estimated to register total revenue of Rs.45 cr. with NP Rs.7 cr. which can lead to an EPS of Rs.10 on its current equity of 7.20 cr. It may even declare 25~30% dividend for FY06, which works to a dividend yield of 4%. With a net profit margin (NPM) of around 15%, this scrip deserves much better discounting.
Ahlcon Parenterals Ltd. (Code No: 524448) (Rs.66) manufactures life saving Intravenous Fluids and medical disposables by employing a highly sophisticated production process imported from Switzerland. Its product range includes Dextrose, Saline, Electrolytes, Amino Acids, Fat Emulsion, Blood Substitutes, Small Volume Injectables, Eye Drops etc. It is also diversifying to add more value added ophthalmic products and expand its existing Infusions and Anti- microbial solutions. Moreover, the company has already initiated the process of setting up a state-of-the-art Testing Facility and Formulation Development Lab equipped with the best infrastructure. For FY06, it is estimated to register total revenue of Rs.45 cr. with NP Rs.7 cr. which can lead to an EPS of Rs.10 on its current equity of 7.20 cr. It may even declare 25~30% dividend for FY06, which works to a dividend yield of 4%. With a net profit margin (NPM) of around 15%, this scrip deserves much better discounting.
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