STOCK WATCH
Simbhaoli Sugar Mills (Code No.: 507446) (Rs.86.35) recently got listed in NSE. For FY06, while it turnover grew by 11% to Rs.432 cr., its net profit increased 150% to Rs.30 cr. including extraordinary items thereby registering an EPS of Rs.15 on its current equity of Rs.20 cr. It declared Rs.3 as dividend, which means yield of more than 3% at CMP. Due to strong uptrend in the sugar sector, the company is putting up a new integrated sugar plant at Brijnathpur with a crushing capacity of 4000 TCD alongwith a power co-generation of 8 MW and an ethanol distillery with a capacity of 18 million litres. It’s also augmenting its Chilwar plant capacity to 6600 TCD from 3800 TCD. The company is also exploring possibilities to set up a greenfield manufacturing facility in sugarcane growing countries of Africa and South America. Although it’s not the cheapest scrip in the industry, it can still give decent returns in the short-term.
Control Print (Code No.: 522295) (Rs.68.95) is the undisputed market leader in the coding and marking machinery with a market share of around 40%. It has a product range of contact coders, superior touch coders, specialised metal marking systems, sophisticated ink jet coders and also advanced laser coders that can be used to print on any type of material like plastic, glass bottle, paper, wood, steel etc. It came out with decent set of numbers for March’06 quarter and ended FY06 with sales at Rs.38 cr. up 15% with net profit rising by 40% to Rs.6.07 cr. For FY07, it may register a top-line of Rs.50 cr. and bottom-line of Rs.7.50 cr. i.e. an EPS of Rs.10 on equity of Rs.7.40 cr. Being in a growth sector and enjoying a NPM of 15%, its share price can easily cross Rs.100 in the medium term.
NIIT Technologies (Code No.: 532541) (Rs.177) focuses on the well-defined industry verticals of Banking and Financial Services, Insurance, Transportation, Retail and Manufacturing. It offers services in Application Development and Management, Enterprise Solutions including Managed Services and Business Process Management. It reported very encouraging numbers for March’06 quarter. For the full year, its total revenue increased by 20% to Rs.220 cr. whereas its PAT spurted 50% to Rs.60 cr. This translates into an EPS of Rs.15 on its current equity of Rs.38.65 cr. and it even declared Rs.6 as dividend. For FY07, it can report top-line and bottom-line of Rs.275 cr. and Rs.70 cr. respectively i.e. EPS of Rs.18 Interestingly, the company has acquired 20 acre land in Greater Noida to setup a SEZ for its own requirement. Share price can easily cross Rs.250 mark in short to medium term. Accumulate on dips.
GNFC (Code No.: 500670) (Rs.96.30) continues to post encouraging results and has once again ended FY06 on a buoyant note. Its turnover registered an increase of 20% to Rs.2148 cr. whereas its net profit recorded 30% rise to Rs.295 cr. posting an EPS of Rs.20 on its equity of Rs.146.50 cr. It declared handsome dividend of Rs.4.25 and the scrip is still trading cum dividend offering a whopping 5% yield. The company is implementing a merger of its 56% subsidiary Narmada Chematur with itself whereby it will allot one share for every 3 shares of Narmada. For FY07, it is estimated to clock a turnover of Rs.2750 cr. and net profit of Rs.350 cr. i.e. EPS of Rs.22 on its expanded equity of around Rs.156 cr. Hence on a reasonable PE multiple of 8 times, the share price can hit Rs.175 in 12-15 months.
With a good monsoon expected this season coupled with favourable government policies and the banks thrust on agriculture credit growth, investors can look to invest in VST Tillers Tractors Ltd. (Code No.: 531266) (Rs.82.20), a leading manufacturer of power tillers. It recorded a Sales and net profit of Rs.130 cr. and Rs.7.40 cr. respectively for FY06 which may rise to Rs.150 cr. and Rs.8.50 for FY07. This works out to an EPS of Rs.13 for FY06 and Rs.15 for FY07. It has announced Rs.3 as dividend i.e. a yield of 4% at CMP. Although it Shakthi brand power tiller enjoys a 60% market share still to beat the competition it has entered into an agreement with Wuxi Taihu Tractor Co Ltd of China to import and market its tillers in India. It is also planning to set up 50:50 joint venture with Mitsubishi to manufacture diesel engines for power generators and tractors. A good buy at current levels.
Control Print (Code No.: 522295) (Rs.68.95) is the undisputed market leader in the coding and marking machinery with a market share of around 40%. It has a product range of contact coders, superior touch coders, specialised metal marking systems, sophisticated ink jet coders and also advanced laser coders that can be used to print on any type of material like plastic, glass bottle, paper, wood, steel etc. It came out with decent set of numbers for March’06 quarter and ended FY06 with sales at Rs.38 cr. up 15% with net profit rising by 40% to Rs.6.07 cr. For FY07, it may register a top-line of Rs.50 cr. and bottom-line of Rs.7.50 cr. i.e. an EPS of Rs.10 on equity of Rs.7.40 cr. Being in a growth sector and enjoying a NPM of 15%, its share price can easily cross Rs.100 in the medium term.
NIIT Technologies (Code No.: 532541) (Rs.177) focuses on the well-defined industry verticals of Banking and Financial Services, Insurance, Transportation, Retail and Manufacturing. It offers services in Application Development and Management, Enterprise Solutions including Managed Services and Business Process Management. It reported very encouraging numbers for March’06 quarter. For the full year, its total revenue increased by 20% to Rs.220 cr. whereas its PAT spurted 50% to Rs.60 cr. This translates into an EPS of Rs.15 on its current equity of Rs.38.65 cr. and it even declared Rs.6 as dividend. For FY07, it can report top-line and bottom-line of Rs.275 cr. and Rs.70 cr. respectively i.e. EPS of Rs.18 Interestingly, the company has acquired 20 acre land in Greater Noida to setup a SEZ for its own requirement. Share price can easily cross Rs.250 mark in short to medium term. Accumulate on dips.
GNFC (Code No.: 500670) (Rs.96.30) continues to post encouraging results and has once again ended FY06 on a buoyant note. Its turnover registered an increase of 20% to Rs.2148 cr. whereas its net profit recorded 30% rise to Rs.295 cr. posting an EPS of Rs.20 on its equity of Rs.146.50 cr. It declared handsome dividend of Rs.4.25 and the scrip is still trading cum dividend offering a whopping 5% yield. The company is implementing a merger of its 56% subsidiary Narmada Chematur with itself whereby it will allot one share for every 3 shares of Narmada. For FY07, it is estimated to clock a turnover of Rs.2750 cr. and net profit of Rs.350 cr. i.e. EPS of Rs.22 on its expanded equity of around Rs.156 cr. Hence on a reasonable PE multiple of 8 times, the share price can hit Rs.175 in 12-15 months.
With a good monsoon expected this season coupled with favourable government policies and the banks thrust on agriculture credit growth, investors can look to invest in VST Tillers Tractors Ltd. (Code No.: 531266) (Rs.82.20), a leading manufacturer of power tillers. It recorded a Sales and net profit of Rs.130 cr. and Rs.7.40 cr. respectively for FY06 which may rise to Rs.150 cr. and Rs.8.50 for FY07. This works out to an EPS of Rs.13 for FY06 and Rs.15 for FY07. It has announced Rs.3 as dividend i.e. a yield of 4% at CMP. Although it Shakthi brand power tiller enjoys a 60% market share still to beat the competition it has entered into an agreement with Wuxi Taihu Tractor Co Ltd of China to import and market its tillers in India. It is also planning to set up 50:50 joint venture with Mitsubishi to manufacture diesel engines for power generators and tractors. A good buy at current levels.
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