STOCK WATCH
Hyderabad Industries (Code:509675) (Rs.300), the flagship company of the CK Birla group is the pioneer and leader of the building products industry with 24% market share. Its product range include fibre cement roofing sheets, autoclaved aerated concrete blocks and panels called AEROCON, calcium silicate insulation product called HYSIL and jointing material for gasket. Recently, it started commercial production at its new asbestos cement sheets plant in UP taking its total capacity to 6,52,000 MTA, and is expected to report better numbers for the Sept’06 quarter. For June’06 quarter, it reported lower profit due to provision of exceptional item to the extent of Rs.4.40 cr. For future growth, it is implementing a Rs.100 cr. expansion involving setting up of two fibre cement sheet units and one autoclaved aerated concrete blocks manufacturing facility. It may end FY07 with a turnover of Rs.500 cr. and net profit of Rs.40 cr. i.e. EPS of Rs.56 on its tiny equity of Rs.7.50 cr. With 52-week high of Rs.585, it’s a screaming buy, which can easily appreciate by 50% in 6-9
months.
Surya Pharma (Code:532516) (Rs.86) is among the top five manufacturers of the Betalactum and Cephalosporin range of anti-infectives. It has also diversified into the high-margin lifestyle segments like anti-histamines and cardio vascular drugs and is enhancing its exports. Nearly half the production is exported to more than 60 countries across Europe, South East Asia, the Far East, Middle East, Latin America and Africa. Apart from carrying out massive capacity expansions at its existing facilities in Baddi and Banur, the company is setting up a new US-FDA compliant facility in Jammu. Last year, it raised around Rs.50 cr. via the FCCB route to be converted into equity shares at Rs.160 per share. For FY07, it is expected to report a top-line of Rs.275 cr. and bottom-line of Rs.27 cr., which translates into an EPS of Rs.15 on its fully diluted equity of Rs.18.25 cr. A good bet in the pharma sector, which can give 30% return in 12 months.
Bilpower Ltd. (Code:531590) (Rs.120) is the pioneer in the field of manufacturing of Electrical Laminations, Stampings and Cores and produces the largest range of transformer cores in India. It also enjoys highest brand preference for superior quality and performance. A few days back it declared terrific numbers for Sept’06 quarter as sales doubled to Rs.56.50 cr. while net profit increased by 50% to Rs.4.50 cr. registering a quarterly EPS of Rs.7.50. Although its OPM witnessed a 3% fall, higher volumes made up for compensated it and led to a sharp increase in bottom-line in the absolute terms. For FY07, it is estimated to clock a turnover of Rs.210 cr. with net profit of Rs.14 cr. This works out to an EPS of Rs.23 on its current equity of Rs.6 cr. and Rs.16 on its full-diluted equity of Rs.9 cr. Its one of the cheapest share in the power ancillary sector and can give handsome returns in the medium to long term. Just buy and wait.
months.
Surya Pharma (Code:532516) (Rs.86) is among the top five manufacturers of the Betalactum and Cephalosporin range of anti-infectives. It has also diversified into the high-margin lifestyle segments like anti-histamines and cardio vascular drugs and is enhancing its exports. Nearly half the production is exported to more than 60 countries across Europe, South East Asia, the Far East, Middle East, Latin America and Africa. Apart from carrying out massive capacity expansions at its existing facilities in Baddi and Banur, the company is setting up a new US-FDA compliant facility in Jammu. Last year, it raised around Rs.50 cr. via the FCCB route to be converted into equity shares at Rs.160 per share. For FY07, it is expected to report a top-line of Rs.275 cr. and bottom-line of Rs.27 cr., which translates into an EPS of Rs.15 on its fully diluted equity of Rs.18.25 cr. A good bet in the pharma sector, which can give 30% return in 12 months.
Bilpower Ltd. (Code:531590) (Rs.120) is the pioneer in the field of manufacturing of Electrical Laminations, Stampings and Cores and produces the largest range of transformer cores in India. It also enjoys highest brand preference for superior quality and performance. A few days back it declared terrific numbers for Sept’06 quarter as sales doubled to Rs.56.50 cr. while net profit increased by 50% to Rs.4.50 cr. registering a quarterly EPS of Rs.7.50. Although its OPM witnessed a 3% fall, higher volumes made up for compensated it and led to a sharp increase in bottom-line in the absolute terms. For FY07, it is estimated to clock a turnover of Rs.210 cr. with net profit of Rs.14 cr. This works out to an EPS of Rs.23 on its current equity of Rs.6 cr. and Rs.16 on its full-diluted equity of Rs.9 cr. Its one of the cheapest share in the power ancillary sector and can give handsome returns in the medium to long term. Just buy and wait.
Infosys has beaten the expectations of all analysts and gave a robust earning guidance, which indicates that future outlook for IT sector is promising. Aftek Infosys Ltd. (Code:530707) (Rs.58), a mid-cap tech company is trading extremely cheap and can shoot up sharply once its Sept.’06 numbers are out. Interestingly, the company is growing aggressively through the inorganic route and has taken over various small companies, which now form its subsidiaries with each one focused on a niche area in enterprise business management. It has a wholly-owned subsidiary by the name of Opdex in USA and Arexera Technologies GmbH in Switzerland. It also holds 33% in Seekport, 25% in Digihome, 17% in V-soft, and 15% in Elven. It reported fabulous numbers for the June’06 quarter and for the full year FY07 it may report a top-line of Rs.300 cr. with a net profit of Rs.89 cr., which would lead to an EPS of Rs.9 on fully diluted equity of Rs.19 cr. On a consolidated basis, it is a much stronger company and deserves much higher valuation than its current market cap ofaround Rs.530 cr.
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