STOCK WATCH
Nectar Life Science (Code No.: 532649) (Rs.104.55) is among the largest manufacturers and exporters of Cephalosporins-antibiotic used to treat bacterial infections and Semi Synthetic Penicillins. In fact, it is among the few life saving API manufacturing companies with facilities to produce sterile APIs through both Lyophilization and Crystallization processes. Recently, it filed Drug Master File (DMF) for one of its Oral Cephalosporin Active Ingredient both with USFDA and EDQM which is the first step towards moving into regulated and lucrative markets like USA & EU. It is expected to file around 7-8 DMFs in the current fiscal. Couple of months back, it raised around Rs.160 cr. through the FCCB route at Rs.332 per share but currently the scrip is available below Rs.100. For FY06, it may clock turnover of Rs.290 cr. with net profit of Rs.22 cr. i.e. EPS of Rs.11 on the fully diluted equity of around Rs.20 cr. For FY07, it can post an EPS of Rs.14. Hence the scrip has the potential to double in a year’s time. Best time for long-term investors to buy this scrip.
APW President (Code No.: 590033) (Rs.107.35) manufactures and markets a wide range of enclosures and cabinets under the brand name ‘President’ for telecommunications, general electronics, networking, industrial purpose etc. Due to the robust demand the company is expanding its Bangalore facility and is also setting up a greenfield project in SEZ to cater to Telecom, Electronics and Data Com/ Kiosk business. To fund its expansion, the company is planning to raise capital through equity route, which will trigger the share price in the near future. It may end FY06 with sales of Rs.75 cr. and net profit of Rs.6.50 cr. i.e. an EPS of Rs.11 on its current equity of Rs.6.05 cr. With its 52W high at Rs.214, the scrip has the potential to give handsome returns in the medium to long-term.
Gemini Communication (Code No.: 532318) (Rs.371.05) is the first and only company in India designing and manufacturing RFid products. It makes RFid-based readers and antennas under the brand ‘Traze’ with technology assistance from Texas Instruments. Moreover, it is India’s largest Wireless Solution Provider (WSP) on the ‘Last Mile’ to corporates for intra-city communications and to ISP’s for internet connectivity. For FY06, its top-line grew by 78% to Rs.126 cr. but its net profit jumped 150% to Rs.11.75 cr. registering a EPS of Rs.27. Importantly, it is expected to grow extraordinarily in coming years and may report a top-line and bottom-line of Rs.225 cr. and Rs.25 cr. respectively for FY07. This means an EPS of Rs.52 on its diluted equity of Rs.4.88 cr. Hence scrip can easily double in a 12-15 months. Moreover, the company is going in for a stock split, which will further trigger the share price.
Belonging to the TVS group, Harita Seating Systems Ltd. (Code No.: 590043) (Rs.145) provides seating solutions in commercial vehicles, buses/coaches, agriculture tractors, construction machinery, two wheelers, three wheelers, cars, multi-utility vehicles etc. It has also developed public seating for auditoriums and theatres. To cater to the rising demand, the company is setting up a unit in Himachal Pradesh for the manufacture of seats for two wheelers, bus passenger vehicles and tractors at an estimated cost of Rs.7.5 cr. For FY06, its turnover increased by 16% to Rs.137 cr. but its net profit spurted 35% to Rs.6.20 cr. thereby reporting an EPS of Rs.16 on its small equity of Rs.3.90 cr. For FY07, it can post an EPS of Rs.21, which means the scrip is available at a forward PE of just 7 times. A solid buy.
GM Breweries (Code No.: 507488) (Rs.88.15) enjoys a virtual monopoly in country liquor in the districts of Mumbai and Thane as it is the single largest manufacturer in Maharashtra. It is working at 75% capacity utilization and has tremendous opportunity to penetrate into interior districts taking advantage of its brand image. For FY06, its sales increased by 115% to Rs.155 cr. whereas its net profit shot to Rs.13.40 cr. compared to Rs.0.73 cr. last year due to better operating efficiency. This translates into an EPS of Rs.14 on its equity of Rs.9.36 cr. But the more interesting aspect is its rising operating profit margin with every passing quarter. Assuming the same trend, it can report sales of Rs.185 cr. and net profit of Rs.20 cr. i.e. EPS of Rs.21 for FY07. Reasonable discounting it by 14 times, its share price can touch Rs.300 mark. At the current market cap of Rs.80 cr. it’s a screaming buy.
APW President (Code No.: 590033) (Rs.107.35) manufactures and markets a wide range of enclosures and cabinets under the brand name ‘President’ for telecommunications, general electronics, networking, industrial purpose etc. Due to the robust demand the company is expanding its Bangalore facility and is also setting up a greenfield project in SEZ to cater to Telecom, Electronics and Data Com/ Kiosk business. To fund its expansion, the company is planning to raise capital through equity route, which will trigger the share price in the near future. It may end FY06 with sales of Rs.75 cr. and net profit of Rs.6.50 cr. i.e. an EPS of Rs.11 on its current equity of Rs.6.05 cr. With its 52W high at Rs.214, the scrip has the potential to give handsome returns in the medium to long-term.
Gemini Communication (Code No.: 532318) (Rs.371.05) is the first and only company in India designing and manufacturing RFid products. It makes RFid-based readers and antennas under the brand ‘Traze’ with technology assistance from Texas Instruments. Moreover, it is India’s largest Wireless Solution Provider (WSP) on the ‘Last Mile’ to corporates for intra-city communications and to ISP’s for internet connectivity. For FY06, its top-line grew by 78% to Rs.126 cr. but its net profit jumped 150% to Rs.11.75 cr. registering a EPS of Rs.27. Importantly, it is expected to grow extraordinarily in coming years and may report a top-line and bottom-line of Rs.225 cr. and Rs.25 cr. respectively for FY07. This means an EPS of Rs.52 on its diluted equity of Rs.4.88 cr. Hence scrip can easily double in a 12-15 months. Moreover, the company is going in for a stock split, which will further trigger the share price.
Belonging to the TVS group, Harita Seating Systems Ltd. (Code No.: 590043) (Rs.145) provides seating solutions in commercial vehicles, buses/coaches, agriculture tractors, construction machinery, two wheelers, three wheelers, cars, multi-utility vehicles etc. It has also developed public seating for auditoriums and theatres. To cater to the rising demand, the company is setting up a unit in Himachal Pradesh for the manufacture of seats for two wheelers, bus passenger vehicles and tractors at an estimated cost of Rs.7.5 cr. For FY06, its turnover increased by 16% to Rs.137 cr. but its net profit spurted 35% to Rs.6.20 cr. thereby reporting an EPS of Rs.16 on its small equity of Rs.3.90 cr. For FY07, it can post an EPS of Rs.21, which means the scrip is available at a forward PE of just 7 times. A solid buy.
GM Breweries (Code No.: 507488) (Rs.88.15) enjoys a virtual monopoly in country liquor in the districts of Mumbai and Thane as it is the single largest manufacturer in Maharashtra. It is working at 75% capacity utilization and has tremendous opportunity to penetrate into interior districts taking advantage of its brand image. For FY06, its sales increased by 115% to Rs.155 cr. whereas its net profit shot to Rs.13.40 cr. compared to Rs.0.73 cr. last year due to better operating efficiency. This translates into an EPS of Rs.14 on its equity of Rs.9.36 cr. But the more interesting aspect is its rising operating profit margin with every passing quarter. Assuming the same trend, it can report sales of Rs.185 cr. and net profit of Rs.20 cr. i.e. EPS of Rs.21 for FY07. Reasonable discounting it by 14 times, its share price can touch Rs.300 mark. At the current market cap of Rs.80 cr. it’s a screaming buy.
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