STOCK WATCH
Although its Q4FY06 results were quite flat, Indian Sucrose’s (Code No: 500319) (Rs.50) full year figures look very impressive while its revenue grew by 50% to Rs.102 cr., its net profit zoomed 162% to Rs.15.50 cr. registering an EPS of Rs.10 on an equity of Rs.15.50 cr. Its OPM of 24% is one of the best in the industry. And this is just standalone figures. Consolidated figures will be far better as recently it acquired a sugar unit - Cosmos Industries in Dhuri, Punjab, having a capacity of 2500 TCD. Moreover, the company has also expanded its own capacity to 5000 TCD from 3500 TCD, the full impact of which will be visible in FY07. It may report an EPS of Rs.13 for FY07 and may even return to the dividend list. The scrip is trading cheap currently only because it’s in Z category. The share price is bound to cross Rs.100 sooner than later.
Riding the infrastructure boom, Ador Fontech (Code No: 530431) (Rs.138) came out with fantastic results for the March quarter. Its topline increased by nearly 30% to Rs.22 cr. but net profit more than doubled to Rs.2 cr. due to better margins. For the full year FY06, it registered a turnover of Rs.69 cr. (up 26%) and a net profit of Rs.4.45 cr. (up 134%) with an EPS of Rs.13 on its tiny equity of Rs.3.50 cr. It even declared Rs.4 as dividend. Based on the same pace, for FY07 it can report a net profit of Rs.6.50 cr. on a topline of Rs.90 cr. i.e. an EPS of Rs.19. That means the scrip has the potential to double in 12-15 months. But the only concern is its merger with Ador Welding, in which the swap ratio may not favour the company. Otherwise, it’s a great buy even at current levels.
With the markets hitting an all time high, retail participation in rising volumes are healthy and stock broking firms are making merry. And Twentieth Century Management (Code No: 526921) (Rs.49) run by Mumbai based broker, Sundar Iyer is no exception. This debt free company ended FY06 on a very buoyant note. Its total revenue increased by 140% to Rs.19.65 cr. whereas its net profit tripled to Rs.17.75 cr. This translates into an EPS of Rs.17 on its equity of Rs.10.50 cr. It is learnt that the company is still holding shares of some reputed construction companies whose market value is much higher than its cost. Moreover, the company is planning to approach RBI for restoration of its NBFC registration. But in spite of being a profit making company, it did not declare any dividend. Hence only aggressive investors are advised to take exposure as it’s a risky bet.
After reporting disappointing results for the first half, the second half of FY06 has been quite good for Rajratan Global Wire (Code No: 517522) (Rs.127). For Q4FY06 though its sales was down 15% to Rs.26 cr., its net profit more than doubled to Rs.2.80 cr. on the back of a higher operating margins. For the full year its sales was marginally up to Rs.99 cr. but its net profit increased by 30% to Rs.6 cr. which led to an EPS of Rs.14 on its small equity of Rs.4.35 cr. Its OPM stood at healthy 13%. With the rising demand for tyres from vehicle manufacturers as well as the replacement market, the company is expected to perform well in coming years. Assuming the same profit margin, the company can register an EPS of Rs.20 for FY07. Hence investors can buy this scrip with an expectation of 25-30% return in a year.
Post the amalgamation of Pranay Sheetmetal and Valueline Hotel & Console Estate, Mahindra Ugine (Code No: 504823) (Rs.160) came out first time with the consolidated results and surpassed analysts’ expectations. For Q4FY06 its sales increased by 22% to Rs.186 cr. whereas its first time spurted 130% to Rs.35 cr. in spite of tax provision of a whopping Rs.17 cr. amazingly, it reported an OPM of 30%. If it continues to perform in the same fashion, it will register an OPM of 20-25% on a conservative basis and can report sales of Rs.775 cr. with a net profit of Rs.90 cr. for FY07 i.e. an EPS of Rs.28. Investors are strongly recommended to buy it at declines as the scrip can touch Rs.225 in the medium term.
Riding the infrastructure boom, Ador Fontech (Code No: 530431) (Rs.138) came out with fantastic results for the March quarter. Its topline increased by nearly 30% to Rs.22 cr. but net profit more than doubled to Rs.2 cr. due to better margins. For the full year FY06, it registered a turnover of Rs.69 cr. (up 26%) and a net profit of Rs.4.45 cr. (up 134%) with an EPS of Rs.13 on its tiny equity of Rs.3.50 cr. It even declared Rs.4 as dividend. Based on the same pace, for FY07 it can report a net profit of Rs.6.50 cr. on a topline of Rs.90 cr. i.e. an EPS of Rs.19. That means the scrip has the potential to double in 12-15 months. But the only concern is its merger with Ador Welding, in which the swap ratio may not favour the company. Otherwise, it’s a great buy even at current levels.
With the markets hitting an all time high, retail participation in rising volumes are healthy and stock broking firms are making merry. And Twentieth Century Management (Code No: 526921) (Rs.49) run by Mumbai based broker, Sundar Iyer is no exception. This debt free company ended FY06 on a very buoyant note. Its total revenue increased by 140% to Rs.19.65 cr. whereas its net profit tripled to Rs.17.75 cr. This translates into an EPS of Rs.17 on its equity of Rs.10.50 cr. It is learnt that the company is still holding shares of some reputed construction companies whose market value is much higher than its cost. Moreover, the company is planning to approach RBI for restoration of its NBFC registration. But in spite of being a profit making company, it did not declare any dividend. Hence only aggressive investors are advised to take exposure as it’s a risky bet.
After reporting disappointing results for the first half, the second half of FY06 has been quite good for Rajratan Global Wire (Code No: 517522) (Rs.127). For Q4FY06 though its sales was down 15% to Rs.26 cr., its net profit more than doubled to Rs.2.80 cr. on the back of a higher operating margins. For the full year its sales was marginally up to Rs.99 cr. but its net profit increased by 30% to Rs.6 cr. which led to an EPS of Rs.14 on its small equity of Rs.4.35 cr. Its OPM stood at healthy 13%. With the rising demand for tyres from vehicle manufacturers as well as the replacement market, the company is expected to perform well in coming years. Assuming the same profit margin, the company can register an EPS of Rs.20 for FY07. Hence investors can buy this scrip with an expectation of 25-30% return in a year.
Post the amalgamation of Pranay Sheetmetal and Valueline Hotel & Console Estate, Mahindra Ugine (Code No: 504823) (Rs.160) came out first time with the consolidated results and surpassed analysts’ expectations. For Q4FY06 its sales increased by 22% to Rs.186 cr. whereas its first time spurted 130% to Rs.35 cr. in spite of tax provision of a whopping Rs.17 cr. amazingly, it reported an OPM of 30%. If it continues to perform in the same fashion, it will register an OPM of 20-25% on a conservative basis and can report sales of Rs.775 cr. with a net profit of Rs.90 cr. for FY07 i.e. an EPS of Rs.28. Investors are strongly recommended to buy it at declines as the scrip can touch Rs.225 in the medium term.
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