STOCK WATCH
Thirumalai Chemicals (Code: 500412) (Rs.137.50) has world scale plants for manufacturing diverse products including Pthalic Anhydride (PAN), Maleic Anhydride (MAN), Fumaric Acid, Food Acids etc. From this fiscal, the company has changed its marketing strategy and now enters contract for regular supply on a pre-determined formula basis to its customers. This has improved its capacity utilization and led to higher sales volume leading to economies of scale. For June’06 quarter, it reported stunning numbers whereby net sales increased 110% to Rs.143 cr. and it posted a net profit of Rs.9.80 cr. compared to a net loss of Rs.2.25 cr. last year. This is in spite of higher tax provisioning of Rs.5 cr. For the current full year, it may report sales of Rs.450 cr. with net profit of Rs.25 cr. i.e. EPS of Rs.24 on an equity of Rs.10.25 cr. However, fluctuating raw material cost is a concern, which may dent its profit if it rises significantly going forward.
Under license from Bauer-Germany, International Combustion (Code: 505737) (Rs.235) offers a comprehensive range of geared motors, gearboxes and electric motors manufactured on specially designed interlinked CNC production lines. It also manufactures and markets a wide range of mechanical and electro-magnetic vibrating screens, feeders & conveyors to handle all types of bulk material. Due to strong demand from the user industry, it sales grew by 50% to Rs.21 cr. whereas its net profit jumped 120% to Rs.1.85 cr. for the June’06 quarter. Considering the same growth rate, for FY07, it may register a turnover of Rs.90 cr. and PAT of Rs.7.50 cr. i.e. EPS of Rs.30. Moreover, it has huge reserves of around Rs.25 cr. on its very tiny equity of Rs.2.27 cr. i.e. book value of Rs.124 making it a strong bonus candidate.
Cubex Tubings Ltd. (Code: 526027) (Rs.35) is a leading manufacturer of copper and copper alloy seamless condenser tubes, rods, strips, profiles and wires. Recently, it has developed large diameter cross-section copper-nickel tubes to meet the requirements of defence and shipyards. Further, it is entering the manufacture of oxygen-free, high conducting grade copper extrusions mainly used in the electronics industry. Besides, it reported excellent numbers for June’06 quarter with sales increasing by 130% to Rs.22.50 cr. whereas net profit doubled to Rs.2.04 cr. Couple of months back, it bagged some big orders from NTPC for seamless solid drawn condenser tubes under global competitive bidding and has also participated in other tenders aggregating Rs.50 cr. Hence for FY07, it may clock a turnover of Rs.85 cr. and profit of Rs.8 cr. This works out to an EPS of Rs.10 on its fully diluted equity of Rs.7.70 cr. A good bet at CMP.
Under license from Bauer-Germany, International Combustion (Code: 505737) (Rs.235) offers a comprehensive range of geared motors, gearboxes and electric motors manufactured on specially designed interlinked CNC production lines. It also manufactures and markets a wide range of mechanical and electro-magnetic vibrating screens, feeders & conveyors to handle all types of bulk material. Due to strong demand from the user industry, it sales grew by 50% to Rs.21 cr. whereas its net profit jumped 120% to Rs.1.85 cr. for the June’06 quarter. Considering the same growth rate, for FY07, it may register a turnover of Rs.90 cr. and PAT of Rs.7.50 cr. i.e. EPS of Rs.30. Moreover, it has huge reserves of around Rs.25 cr. on its very tiny equity of Rs.2.27 cr. i.e. book value of Rs.124 making it a strong bonus candidate.
Cubex Tubings Ltd. (Code: 526027) (Rs.35) is a leading manufacturer of copper and copper alloy seamless condenser tubes, rods, strips, profiles and wires. Recently, it has developed large diameter cross-section copper-nickel tubes to meet the requirements of defence and shipyards. Further, it is entering the manufacture of oxygen-free, high conducting grade copper extrusions mainly used in the electronics industry. Besides, it reported excellent numbers for June’06 quarter with sales increasing by 130% to Rs.22.50 cr. whereas net profit doubled to Rs.2.04 cr. Couple of months back, it bagged some big orders from NTPC for seamless solid drawn condenser tubes under global competitive bidding and has also participated in other tenders aggregating Rs.50 cr. Hence for FY07, it may clock a turnover of Rs.85 cr. and profit of Rs.8 cr. This works out to an EPS of Rs.10 on its fully diluted equity of Rs.7.70 cr. A good bet at CMP.
Paradyne Infotech (Code: 532672) (Rs.56) is among the very few recently listed companies whose scrip is trading above its IPO price. In October’05, it came out with an IPO at Rs.42 per share and hit a high/ low of Rs.93/ Rs.42 respectively. Recently it declared very encouraging results for the June’06 quarter with sales of Rs.27 cr. and net profit of Rs.2.84 cr. i.e. quarterly EPS of Rs.2.60 on equity of Rs.10.88 cr. Incidentally with every passing quarter, its top-line and bottom-line is increasing and more importantly, its OPM is improving. From 9% in December’05 its OPM has increased to 15% for June’06 on account of better product mix. For FY07, it can register a top-line of Rs.120 cr. and bottom-line of Rs.12 cr., which means an EPS of Rs.11. Though it may not get enjoy higher discounting like other IT scrips, a reasonable P/E of 8 times, it may again test its high in the current calendar year itself.
On the back of constant selling and drastic fall in the share price of Mirco Technologies Ltd. (Code: 532494) (Rs.152.30) just before the Q1 result, few marketmen expected poor numbers from this company. Bu to their surprise, it came out with flying colours. For the June’06 quarter, its total revenue increased by 90% to Rs.22 cr. while the net profit almost tripled to Rs.6.52 cr. Moreover, it received the approval for installation of Micro VBB (Vehicle Black Box) Classic Series in Ford Ikon Vehicles, which is a good breakthrough for the company. Considering the company’s aggressive marketing plan, it is estimated to end FY07 with a top-line of Rs.100 cr. and bottom-line of Rs.26 cr., which means an EPS of Rs.25 on its diluted equity of Rs.10.50 cr. After touching a bottom of Rs.123, the scrip has made a sharp technical pull-back and may continue its upward journey if the sentiment remains positive.
On the back of constant selling and drastic fall in the share price of Mirco Technologies Ltd. (Code: 532494) (Rs.152.30) just before the Q1 result, few marketmen expected poor numbers from this company. Bu to their surprise, it came out with flying colours. For the June’06 quarter, its total revenue increased by 90% to Rs.22 cr. while the net profit almost tripled to Rs.6.52 cr. Moreover, it received the approval for installation of Micro VBB (Vehicle Black Box) Classic Series in Ford Ikon Vehicles, which is a good breakthrough for the company. Considering the company’s aggressive marketing plan, it is estimated to end FY07 with a top-line of Rs.100 cr. and bottom-line of Rs.26 cr., which means an EPS of Rs.25 on its diluted equity of Rs.10.50 cr. After touching a bottom of Rs.123, the scrip has made a sharp technical pull-back and may continue its upward journey if the sentiment remains positive.
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