STOCK WATCH

Bilpower Ltd. (Code:531590) (Rs.73) has once again come out with terrific numbers reporting all time high turnover and profit figures. For the June’06 qtr. its sales and net profit stood at Rs.44.50 cr. and Rs.4.40 cr. compared to Rs.24.10 cr. and Rs.2.50 cr. last year. Earlier in March this year, it made a preferential allotment of 10 lakh shares at Rs.97 per share to fund its expansion and modernization. Company is one of the reputed manufacturers of Transformers, Electrical Laminations, Stampings and Cores and has the largest range of ready to assemble cores for distribution transformers in India. Considering the strong demand for its product it is expected to end FY07 with a top-line of Rs.175 cr. and PAT of Rs.14 cr., which leads to an EPS of Rs.21 on its diluted equity of Rs.6.80 cr. A screaming buy at current levels as the scrip can easily appreciate 50% in a month or two.

Although most of the textile scrips are in a downtrend due to restrictions on TUF, Winsome Textiles (Code:514470) (Rs.33) is been hitting upper circuits and has appreciated by more than 50% last week. This is because the company has announced fantastic results for the June’06 quarter. Its sales grew by 10% to Rs.34 cr. but its net profit increased substantially to Rs.2.85 cr. compared to Rs.1.08 cr. last year, which was mainly due to increase in stock in trade to the extent of Rs.3.20 cr. Moreover, the company has undertaken modernisation cum expansion projects to add 13000 spindles, 10 tonnes per day dyeing, 2.50 MW Hydro Power Plant along with complete replacement of old ring frames at an estimated cost of Rs.117 cr. For FY07, it is expected to clock a turnover of Rs.150 cr. with net profit of Rs.4.50 cr. i.e. EPS of Rs.8 on its equity of Rs.5.90 cr. With cash EPS (CEPS) of Rs.18 and a book value of Rs.55, this scrip is available extremely cheap at a market cap of less than Rs.20 cr.

On back of strong industrial growth, the bearings industry is doing exceptionally well and Austin Engineering (Code:522005) (Rs.71), too, has come out with flying colours for the June’06 qtr. Its sales rose by 25% to Rs.13.70 cr. whereas it net profit spurted by 80% to Rs.0.80 cr. The company is a leading manufacturer in all types of ball and roller bearings like Ball Bearings, Cylindrical Roller Bearings, Needle Roller Bearings, Tapered Roller Bearings, Spherical Roller Bearings and Flexible Roller Bearings. It has returned to the dividend list and has declared 12% dividend for FY06. For FY07, it is estimated to report a sales of Rs.65 cr. and net profit of Rs.4.25 cr. i.e. EPS of Rs.12 on its diluted but small equity of Rs.3.50 cr. At a reasonable discounting by 8 times, the scrip has the potential to cross Rs.100 level once the market sentiment turns positive.

In the metal sector, Ramsarup Industries (Code:532690) (Rs.86) appears to be one the best bets as it primarily caters to power, housing and infrastructure sectors. Incidentally, it is the second largest steel wire producer and among the very few manufacturers in India to provide the whole range of TMT products using the Thermax technology. It is also expanding its product portfolio by setting up a structural mill with an installed capacity of 1,35,000 tonnes to produce medium weight structurals like angles, channels and beams at a cost of around Rs.70 cr. It has recently forayed into laying of Power Transmission Lines business through its fourth unit 'Ramsarup Infrastructure' and is executing projects of more than Rs.80 cr. For the full year FY07, it may report a turnover of Rs.1350 cr. and net profit of Rs.45 cr., which translates into an EPS of Rs.26 on its current equity of Rs.17.50 cr. Hence the scrip can double in a year’s time.

Another textile scrip which announced good set of numbers is Suryajyothi Spinning (Code:514138) (Rs.56). For the quarter of June’06, its turnover grew by nearly 10% to Rs.35 cr. but the PAT increased by 50% to Rs.3 cr. registering a quarterly EPS of Rs.2.25 on its equity of Rs.13.50 cr. Couple of months back, it completed the first phase of its modernization & expansion by adding 7,056 spindles at its Makthal unit to manufacture value added yarns like multifold and combed yarns. Besides, the civil work of the new unit being set up at Rajapur with an installed capacity of 25,200 spindles is in advanced stage of completion and the project is likely to be completed by March’07. Hence for FY07, it is expected to clock a turnover of Rs.175 cr. and net profit of Rs.9 cr. i.e. an EPS of Rs.7. Scrip is bound to rise 50% in a year’s time.