STOCK WATCH
After hitting a recent high of Rs.1060, Easun Reyrolle (NSE listed) (Rs.476.65) has corrected sharply by more than 50% in the recent carnage as the company’s board opposed Siemens open offer bid for acquiring 20% stake. Siemens already has a 23% stake in the company and it is its direct competitor. Whether or not it takes over Easun Reyrolle, the fundamentals of Easun are improving making it a value buy at the current level. The company is a leader in the field of electrical power management and provides products and services for the protection, control, metering and automation of power. For FY06, its sales doubled to Rs.106 cr. whereas it net profit jumped 270% to Rs.13 cr. thereby exposing an EPS of Rs.39 on a very tiny equity of Rs.3.33 cr. For FY07, it may post an EPS of Rs.50. Moreover, the scrip is ripe for stock-split or bonus. Buy at declines as the scrip is in a downward trend.
Few days back, GNFC (Code: 500670) (Rs.84) came out with quite encouraging numbers while its total revenue grew by 40% to Rs.431 cr., its net profit increased nearly 80% to Rs.47 cr. compare to Rs.26 cr. (excluding extraordinary item of Rs.35 cr.) in the last quarter although there was some pressure on operating margin. But in absolute terms it was compensated by the rise in sales volumes. It has declared Rs.4.25 as dividend for FY06 and the scrip is still trading cum dividend giving a handsome yield of more than 5% at the current price level. Besides, the merger with Narmada chematur has been finalized, which will further consolidate and integrate its operations leading to better efficiency. For FY07, it is estimated to clock a consolidated turnover of Rs.2750 cr. and net profit of 350 cr. i.e. an EPS of Rs.22 on its expanded equity of around Rs.156 cr. It’s a strong buy.
Another scrip which has crashed mercilessly is Kalindee Rail Nirman Ltd. (Code: 522259) (Rs.77.05). From a high of Rs.223. the scrip is constantly hitting new lows and is currently trading around Rs.77. The company is a niche player and forerunner in the execution of major Railway Signalling & Telecommunications projects in India. After the successful execution of the high value and prestigious Delhi Metro contract, its order book is constantly bulging. It has bagged several high value contracts from Rail Vikas Nigam Ltd. for Gauge Conversion, for installation of signalling, for supply and installation of track and Yard lighting works etc to be completed in the next two years. Besides, Kalindee has further diversified into Ballasted and Ballast-less Railway Track, Access Control Systems for Metro Rail, Roads, Buildings and Bridges. To consolidate its position further, it is merging its group company Kalindee India Projects and Engineering Services Ltd with itself. The future of the company seems quite promising though huge equity dilution in the near future is a cause of concern.
Godawari Power (Code: 532734) (Rs.65.50) is part of the Rs.550 cr. Hira Group and declared its March result post listing for the first time. Sales have more than doubled to Rs.86 cr. whereas net profit increased by 70% to Rs.10 cr. It even declared 10% dividend. The company is basically engaged in the production of sponge iron, steel billets, steel wires, steel rods/ pipes and captive power generation. Incidentally, in January’06 it completed its first phase of expansion thereby increasing its capacity of Sponge Iron from 105000 MT to 235000 MT, Captive Power Generation from 18MW to 28MW, Steel billets from 150000 MT to 250000 MT and new capacities for the manufacturing of ferro alloys (16500 MT) and steel wires (60000 MT) per annum. Besides, the company’s first 7MW CDM power project from waste heat recovery has been registered with the CDM Executive Board and hence will get carbon credits for the same. For FY07, it may clock a turnover of Rs.325 cr. with net profit of Rs.35 cr. i.e. EPS of Rs.14 on its expanded equity of Rs.24.80 cr.
RTS Power (Code: 531215) (Rs.67.05) is one of the leading manufacturers of power and distribution transformers and supplies to most of the State electricity boards, government and semi government organization and to a few private players. Due to the government’s aggressive plans of ‘power for all’ by 2012 and modernization of existing equipment, the company’s products are in huge demand leading to a healthy order book for the company. For FY06, while sales increased by 65% to Rs.89 cr., net profit zoomed 350% to Rs.3.71 cr. For FY07, this may shoot up to Rs.120 cr. and Rs.5 cr. respectively. This will lead to an EPS of Rs.10 on its equity of Rs.5.20 cr. Earlier, there were also rumours of Siemens taking some interest in this company. As the scrip is in a downtrend, it can correct further to Rs.55 level where it can be accumulated for handsome gains over a long period of time.
Few days back, GNFC (Code: 500670) (Rs.84) came out with quite encouraging numbers while its total revenue grew by 40% to Rs.431 cr., its net profit increased nearly 80% to Rs.47 cr. compare to Rs.26 cr. (excluding extraordinary item of Rs.35 cr.) in the last quarter although there was some pressure on operating margin. But in absolute terms it was compensated by the rise in sales volumes. It has declared Rs.4.25 as dividend for FY06 and the scrip is still trading cum dividend giving a handsome yield of more than 5% at the current price level. Besides, the merger with Narmada chematur has been finalized, which will further consolidate and integrate its operations leading to better efficiency. For FY07, it is estimated to clock a consolidated turnover of Rs.2750 cr. and net profit of 350 cr. i.e. an EPS of Rs.22 on its expanded equity of around Rs.156 cr. It’s a strong buy.
Another scrip which has crashed mercilessly is Kalindee Rail Nirman Ltd. (Code: 522259) (Rs.77.05). From a high of Rs.223. the scrip is constantly hitting new lows and is currently trading around Rs.77. The company is a niche player and forerunner in the execution of major Railway Signalling & Telecommunications projects in India. After the successful execution of the high value and prestigious Delhi Metro contract, its order book is constantly bulging. It has bagged several high value contracts from Rail Vikas Nigam Ltd. for Gauge Conversion, for installation of signalling, for supply and installation of track and Yard lighting works etc to be completed in the next two years. Besides, Kalindee has further diversified into Ballasted and Ballast-less Railway Track, Access Control Systems for Metro Rail, Roads, Buildings and Bridges. To consolidate its position further, it is merging its group company Kalindee India Projects and Engineering Services Ltd with itself. The future of the company seems quite promising though huge equity dilution in the near future is a cause of concern.
Godawari Power (Code: 532734) (Rs.65.50) is part of the Rs.550 cr. Hira Group and declared its March result post listing for the first time. Sales have more than doubled to Rs.86 cr. whereas net profit increased by 70% to Rs.10 cr. It even declared 10% dividend. The company is basically engaged in the production of sponge iron, steel billets, steel wires, steel rods/ pipes and captive power generation. Incidentally, in January’06 it completed its first phase of expansion thereby increasing its capacity of Sponge Iron from 105000 MT to 235000 MT, Captive Power Generation from 18MW to 28MW, Steel billets from 150000 MT to 250000 MT and new capacities for the manufacturing of ferro alloys (16500 MT) and steel wires (60000 MT) per annum. Besides, the company’s first 7MW CDM power project from waste heat recovery has been registered with the CDM Executive Board and hence will get carbon credits for the same. For FY07, it may clock a turnover of Rs.325 cr. with net profit of Rs.35 cr. i.e. EPS of Rs.14 on its expanded equity of Rs.24.80 cr.
RTS Power (Code: 531215) (Rs.67.05) is one of the leading manufacturers of power and distribution transformers and supplies to most of the State electricity boards, government and semi government organization and to a few private players. Due to the government’s aggressive plans of ‘power for all’ by 2012 and modernization of existing equipment, the company’s products are in huge demand leading to a healthy order book for the company. For FY06, while sales increased by 65% to Rs.89 cr., net profit zoomed 350% to Rs.3.71 cr. For FY07, this may shoot up to Rs.120 cr. and Rs.5 cr. respectively. This will lead to an EPS of Rs.10 on its equity of Rs.5.20 cr. Earlier, there were also rumours of Siemens taking some interest in this company. As the scrip is in a downtrend, it can correct further to Rs.55 level where it can be accumulated for handsome gains over a long period of time.
1 comment:
Excuse please, that I interrupt you.
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