STOCK WATCH
Most mid cap pharma scrips are beaten down badly as marketmen were expecting cut in excise duty in the Budget but were disappointed. Ironically, Aarti Drugs (Code No: 524348) (Rs.91) hit a new low of Rs.84 from its 52W high of Rs.180. This is a golden opportunity for long-term investors looking to enter the pharma sector. Aarti Drugs has a strong presence in anti-diarrhoea, anti-inflammatory therapeutic groups with products such as Tinidazole, Metronidazole, Nimesulide, Rofecoxib and is the largest producer of Benzene based basic and intermediate chemicals in India. Recently, it has established a US FDA compliant facility at Tarapur and is in the process of submitting its 1st DMF to US FDA. For FY06, it may report a topline of Rs.250 cr. and a bottomline of Rs.13 cr. i.e. EPS of Rs.11 on its current equity of Rs.11.71 cr. With its plant expected to get US FDA approval by FY07, the company is estimated to make much better profits in FY07 and FY08. A screaming buy at CMP
Lot of retail investors sold in panic, when the share price of Sanjivani Parenteral (Code No: 531569) (Rs.48) crashed. But long-term investors need not worry with this short term price fluctuation and huge volatility. The company is faring satisfactorily as per industry standards and has reported a healthy topline of nearly Rs.12 cr. for the Dec.’05 qtr. It even raised capital by making preferential allotment of Rs.11.45 lakh shares @ Rs.60 to outsiders. Recently, the company announced that it is going to launch Anti-Cancer products, which have a market size of Rs.500 cr. For this, it has tied-up with a European multinational company. For FY06 and FY07, company is expected to report an EPS of Rs.10 and Rs.12 respectively. Aggressive investors should accumulate it at every decline.
Something is cooking between the promoters of Winsome Textile (Code No: 514470) (Rs.28). Its entire stake of 25 % in Winsome Yarns was sold for around Rs.6.5 cr. i.e. @ Rs.10 per share. At one time, this stake was worth more than Rs.20 cr., which means this deal, was done at the cost of Winsome Textile shareholders. Despite this, with a cash flow of Rs.6.50 and NP of Rs.3.50 cr., the company is available at a market cap of only Rs.17 cr. With an expected EPS of Rs.6, cash EPS of Rs.14 and book value of around Rs.50, its share price is bound to hit the Rs.50 mark in medium term. Keep accumulating at declines.
In spite of the Sensex rising from 5000 to above 10000 level, one scrip that has not rallied much is MTNL (Code No: 500108) (Rs.162), for obvious reasons. But a lot of positive things are taking place within the company and it appears a value buy in the current overheated market. First of all, it’s a debt-free company with cash in hand of more than Rs.2500 cr. (i.e. equivalent to Rs.40 per share). Recently, it won a case and is expected to get Rs.1233 cr. tax refund from IT dept. Its Gross Block is Rs.14,000 cr. and Net Block is 6500 cr. Besides, it has a huge reserve of more than Rs.10,000 cr. which translates into book value of more than Rs.175. In spite of such strong fundamentals, MTNL is available at a market cap of less than 10,000 cr. For FY06, it is expected to report total revenue of Rs.5250 cr. and NP of Rs.650 cr. (excl. extraordinary items) which means EPS of Rs.10. Scrip may shoot up to Rs.180 in the short-term and will then gradually cross the Rs.200 mark. A good short to medium term bet.
Lot of retail investors sold in panic, when the share price of Sanjivani Parenteral (Code No: 531569) (Rs.48) crashed. But long-term investors need not worry with this short term price fluctuation and huge volatility. The company is faring satisfactorily as per industry standards and has reported a healthy topline of nearly Rs.12 cr. for the Dec.’05 qtr. It even raised capital by making preferential allotment of Rs.11.45 lakh shares @ Rs.60 to outsiders. Recently, the company announced that it is going to launch Anti-Cancer products, which have a market size of Rs.500 cr. For this, it has tied-up with a European multinational company. For FY06 and FY07, company is expected to report an EPS of Rs.10 and Rs.12 respectively. Aggressive investors should accumulate it at every decline.
Something is cooking between the promoters of Winsome Textile (Code No: 514470) (Rs.28). Its entire stake of 25 % in Winsome Yarns was sold for around Rs.6.5 cr. i.e. @ Rs.10 per share. At one time, this stake was worth more than Rs.20 cr., which means this deal, was done at the cost of Winsome Textile shareholders. Despite this, with a cash flow of Rs.6.50 and NP of Rs.3.50 cr., the company is available at a market cap of only Rs.17 cr. With an expected EPS of Rs.6, cash EPS of Rs.14 and book value of around Rs.50, its share price is bound to hit the Rs.50 mark in medium term. Keep accumulating at declines.
In spite of the Sensex rising from 5000 to above 10000 level, one scrip that has not rallied much is MTNL (Code No: 500108) (Rs.162), for obvious reasons. But a lot of positive things are taking place within the company and it appears a value buy in the current overheated market. First of all, it’s a debt-free company with cash in hand of more than Rs.2500 cr. (i.e. equivalent to Rs.40 per share). Recently, it won a case and is expected to get Rs.1233 cr. tax refund from IT dept. Its Gross Block is Rs.14,000 cr. and Net Block is 6500 cr. Besides, it has a huge reserve of more than Rs.10,000 cr. which translates into book value of more than Rs.175. In spite of such strong fundamentals, MTNL is available at a market cap of less than 10,000 cr. For FY06, it is expected to report total revenue of Rs.5250 cr. and NP of Rs.650 cr. (excl. extraordinary items) which means EPS of Rs.10. Scrip may shoot up to Rs.180 in the short-term and will then gradually cross the Rs.200 mark. A good short to medium term bet.
With the metal sector coming back in action one can buy Mahindra Ugine (Code No: 504823) (Rs.126) for short term gains. Belonging to the Mahindra & Mahindra Group, it is one of the better manufacturers of alloy steel in the country. It also has a stampings division to manufacture pressed sheet metal components and assemblies. Considering the buoyant market and the encouraging trends, it is planning to expand its installed capacity to 2,40,000 tonnes at an estimated cost of Rs.95 cr. Last year, it successfully developed two new grades of steel for railway application and for crankshaft application. Moreover, shareholders have already approved to merge ‘Console Estate & Investments Ltd’, ‘Valueline Hotels & Resorts Ltd’ and ‘Pranay Sheetmetal Stampings Ltd’ with the company, which will have a positive impact on its market sentiment going forward.
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