STOCK WATCH

Bhuruka Gas (Code No: 509728) (Rs.38) is the largest independent producer of Argon gas in India and South India’s largest producer of industrial gases. It produces all commercial gases like Argon, Hydrogen, Nitrogen, Oxygen etc. and various types of mixed gases and wide range of calibration gases. It also produces medical oxygen and supplies to government organizations like HAL, ISRO, WIDIA, TAGUTEC etc in the interest of defence activities. It is also planning to merge Calibration Gas India Pvt. Ltd with itself in the near future. For FY06, it may report sales of Rs.45 cr. and NP of Rs.8 cr. i.e. an EPS of Rs.6 on its tiny equity of Rs.3.52 cr. with a FV of Rs.2.50 per share. With a 52W high of Rs.77, the scrip has bottomed out and can give 25~30% return in a year’s time.

International Conveyors (Code No: 509709) (Rs.118) is the leading manufacture of solid woven PVC conveyor belting for use in underground as well as above the ground for material handling in collieries. It is also well known exporter of Fire-resistant & Anti-static conveyor beltings from India. Besides in the last, fiscal it set up a 0.60 MW Wind Energy Converter Turbine (Wind Mill) project in Chitradurga District of Karnataka at a cost of Rs.3.01 cr., which has already started producing electricity. Interestingly, from the last 2 qtrs. its OPM has improved substantially which has boosted its bottomline. Considering the same track record, it may end this fiscal with topline of Rs.35 cr. and NP of Rs.3.25 cr. For FY07, its NP can shoot upto Rs.4 cr. On its very tiny equity of Rs.2.40 cr., the EPS works out to Rs.14 and Rs.17 respectively. With promoters holding 72% and low floating stock, the scrip may move from C2C once it catches market fancy.

All sugar scrips are consolidating currently and may witness another round of rally past March numbers. Simbhaoli Sugars Ltd. (Code No: 507446) (Rs.138) is undergoing huge expansion, whereby its installed capacity will be enhanced to more than 20,000 TCD by end of this calendar year. It is also setting up a co-gen facility of about 26 MW and 24 MW at both its plant. To part finance its expansion it has recently raised Rs.145 cr. through the FCCB route which will be converted into equity @ 170 per share. It has already entered into agreement with UP Power Corp to sell around 19 MW of power. Moreover it also signed an agreement with M/s Cargill International SA for the export of white sugar upto 25,000 MT by April 2006. To conclude, it’s a solid medium to long-term bet.

Pacific Cotspin (Code No: 531118) (Rs.10) an ISO 9001-2000 certified company and 100% EOU. This Govt. Recognized Star Export House is engaged in manufacturing of 100% cotton combed and carded, waxed yarn. Company is a significant player in the coarser and medium segment i.e. in 20’s to 60’s count of the world cotton yarn market. Presently, it has an installed capacity of 30,000 spindles but is expanding it by 25,000 spindles at an estimated project cost of Rs.80 cr. To fund its expansion, it made a preferential allotment of 58 lakh shares to the promoters @ Rs.17 and is now coming out with right issue in the ratio of 1:2 @ Rs.11~13 per share. Despite such huge equity dilution to Rs.39 cr., it may report an EPS of around Rs.2 for FY07 and more than Rs.3 for FY08. A good long-term story.

Jaihind Project Ltd (Code No: 531339) (Rs.25) is a 40 year old engineering and construction company serving the oil & gas, steel, water supply and power industries with cross country pipelines being its prime area of operation. It has already laid 2500 km of cross-country pipelines and 1500 km of plant piping ranging from 4.6 to 56 in diameter. It also offers services for water system, gas distribution, and corrosion protection and has also executed various other engineering and turnkey projects. Company has rich experience of executing numbers of big projects successfully for GAIL, ONGC, L&T, Essar Oil, BPCL, IPCL, Engineers India and for various water bodies of Gujarat and Rajsasthan. In spite of expected turnover of Rs.75 cr. and NP of Rs.2 cr. (i.e. EPS of Rs.4) its current market cap is only Rs.14 cr. Presently, it has healthy orders in hand of more than Rs.30 cr. A strong buy.