STOCK WATCH
Liberty Phosphate Ltd. (Code: 530273) (Rs.18.50) is the largest manufacture of Single Super Phosphate commanding more than 14% market share. Its ‘Double Horse’ brand is very popular among farmers and is said to have the having highest sale in India. Due to unimpressive numbers for the Sept.’06 quarter, its share price is stagnant and the scrip has not participated in the ongoing rally. However, for the 6 months ending Sept.’06, its sales have more than doubled to Rs.75 cr. whereas net profit rose marginally to Rs.1.70 cr. due to higher interest cost and depreciation. Recently, it raised around Rs.5 cr. through an issue of 20 lakh equity shares at Rs.15 per share to promoters and their relatives. For FY07, it is estimated to clock a turnover of Rs.150 cr. with net profit of Rs.3.50 cr., which works out to an EPS of Rs.6 on its diluted equity of Rs.6.13 cr. With a market cap of only Rs.12 cr. this is the cheapest profit making fertilizer company stock.
Last week, cement scrips saw some correction giving an opportunity to accumulate them. Vinay Cements Ltd. (Code: 518051) (Rs.27) is a leading manufacturers of cement in the North East and has a small cement plant with a capacity of around 2,50,000 MTA producing both Ordinary Portland Cement and Pozzolana Portland Cement under the brand name ‘Vinay’. On the back of higher realization, it reported stunning numbers for the Sept.’06 quarter as sales jumped up by 130% to Rs.13 cr. and net profit shot up by 500% to Rs.1.60 cr. With the demand for cement expected to remain strong, it can end FY07 with turnover of Rs.55 cr. and net profit of Rs.6.50 cr. This would lead to an EPS of Rs.6.50 on its equity of Rs.10 cr. Hence at a P/E multiple of 4, book value of Rs.33 and a market cap of only Rs.25 cr., this is one of the cheapest scrips in the cement sector.
Recently, Hazoor Media & Power Ltd. (Code: 532467) (Rs.31) came out with a decent set of numbers for the Aug.’06 quarter. Revenue increased by 35% to Rs.5.30 cr. whereas net profit rose by 10% to Rs.1.45 cr. For the full year ending Aug.’06, its topline grew by 40% to Rs.20 cr. and net profit increased by 25% to Rs.5.5 cr. This works out to an EPS of Rs.6 on its current equity of Rs.3.70 cr. having a face value of Rs.4 per share. It declared 10% dividend also apart from announcing 1:1 bonus earlier. Of late, the company has ventured into real estate development and is getting itself renamed as ‘Hazoor Multi Projects Ltd.’. Notably, it owns huge property near Amby Valley Lake City, Lonavala, and has already deployed Rs.17 cr. for development and intends to make further investment of Rs.65 cr. in Phase I. It is a debt-free company and its current market cap is just Rs.25 cr. To fund its construction activity the company is planning to raise capital through the equity route, which will lead to a re-rating of the scrip.
Gradually, the paper sector is coming into the limelight again with some foreign broking firms getting bullish on this sector. South India Paper Mills Ltd. (Code: 516108) (Rs.52) is trading relatively cheap at a market cap of less than Rs.40 cr. It reported satisfactory numbers for Sept.’06 quarter with sales registering 10% rise at Rs.28 cr. while PBT grew by 23% to Rs.3.75 cr. For H1FY07, its sales improved by 15% to Rs.55 cr. and net profit rose by 12% to Rs.5.30 cr. in spite of a higher tax outgo. The company is planning to raise its capacity to around 86,000 TPA by Dec.’07 from 55,000 TPA. For FY07, it may report a total revenue of Rs.110 cr. with net profit of Rs.9 cr. i.e. EPS of Rs.12 on its equity of Rs.7.50 cr. Moreover, it’s a handsome dividend paying company with the yield working out to around 5% at CMP. A safe bet in the current market situation.
Real Strips Ltd. (Code: 513558) (Rs.33) is a leading manufacturer and exporter of stainless steel strips, coils and cold rolled coils. Its products are used in various industries like automobiles, construction, oil & gas, petrochemicals, food & dairy, sugar, pipes & tubes, chemical process, electronics, surgicals etc for very specialized application. It declared fantastic numbers for Sept.’06 quarter. Sales jumped by 70% to Rs.23 cr. and net profit spurted by 55% to Rs.1.10 cr. thereby registering an EPS of Rs.3.30 for the quarter. H1FY07 numbers are also very encouraging. The company has even put up windmills with a capacity of 1.25 MW and 0.35 MW respectively, as alternative energies to save power cost. For the full year FY07, it is estimated to clock a turnover of Rs.85 cr. and net profit of Rs.3.25 cr. i.e. EPS of Rs.10 on its tiny equity of Rs.3.27 cr. At a current market cap of Rs.10 cr. only and with a book value of Rs.37, this scrip is trading extremely cheap.
Last week, cement scrips saw some correction giving an opportunity to accumulate them. Vinay Cements Ltd. (Code: 518051) (Rs.27) is a leading manufacturers of cement in the North East and has a small cement plant with a capacity of around 2,50,000 MTA producing both Ordinary Portland Cement and Pozzolana Portland Cement under the brand name ‘Vinay’. On the back of higher realization, it reported stunning numbers for the Sept.’06 quarter as sales jumped up by 130% to Rs.13 cr. and net profit shot up by 500% to Rs.1.60 cr. With the demand for cement expected to remain strong, it can end FY07 with turnover of Rs.55 cr. and net profit of Rs.6.50 cr. This would lead to an EPS of Rs.6.50 on its equity of Rs.10 cr. Hence at a P/E multiple of 4, book value of Rs.33 and a market cap of only Rs.25 cr., this is one of the cheapest scrips in the cement sector.
Recently, Hazoor Media & Power Ltd. (Code: 532467) (Rs.31) came out with a decent set of numbers for the Aug.’06 quarter. Revenue increased by 35% to Rs.5.30 cr. whereas net profit rose by 10% to Rs.1.45 cr. For the full year ending Aug.’06, its topline grew by 40% to Rs.20 cr. and net profit increased by 25% to Rs.5.5 cr. This works out to an EPS of Rs.6 on its current equity of Rs.3.70 cr. having a face value of Rs.4 per share. It declared 10% dividend also apart from announcing 1:1 bonus earlier. Of late, the company has ventured into real estate development and is getting itself renamed as ‘Hazoor Multi Projects Ltd.’. Notably, it owns huge property near Amby Valley Lake City, Lonavala, and has already deployed Rs.17 cr. for development and intends to make further investment of Rs.65 cr. in Phase I. It is a debt-free company and its current market cap is just Rs.25 cr. To fund its construction activity the company is planning to raise capital through the equity route, which will lead to a re-rating of the scrip.
Gradually, the paper sector is coming into the limelight again with some foreign broking firms getting bullish on this sector. South India Paper Mills Ltd. (Code: 516108) (Rs.52) is trading relatively cheap at a market cap of less than Rs.40 cr. It reported satisfactory numbers for Sept.’06 quarter with sales registering 10% rise at Rs.28 cr. while PBT grew by 23% to Rs.3.75 cr. For H1FY07, its sales improved by 15% to Rs.55 cr. and net profit rose by 12% to Rs.5.30 cr. in spite of a higher tax outgo. The company is planning to raise its capacity to around 86,000 TPA by Dec.’07 from 55,000 TPA. For FY07, it may report a total revenue of Rs.110 cr. with net profit of Rs.9 cr. i.e. EPS of Rs.12 on its equity of Rs.7.50 cr. Moreover, it’s a handsome dividend paying company with the yield working out to around 5% at CMP. A safe bet in the current market situation.
Real Strips Ltd. (Code: 513558) (Rs.33) is a leading manufacturer and exporter of stainless steel strips, coils and cold rolled coils. Its products are used in various industries like automobiles, construction, oil & gas, petrochemicals, food & dairy, sugar, pipes & tubes, chemical process, electronics, surgicals etc for very specialized application. It declared fantastic numbers for Sept.’06 quarter. Sales jumped by 70% to Rs.23 cr. and net profit spurted by 55% to Rs.1.10 cr. thereby registering an EPS of Rs.3.30 for the quarter. H1FY07 numbers are also very encouraging. The company has even put up windmills with a capacity of 1.25 MW and 0.35 MW respectively, as alternative energies to save power cost. For the full year FY07, it is estimated to clock a turnover of Rs.85 cr. and net profit of Rs.3.25 cr. i.e. EPS of Rs.10 on its tiny equity of Rs.3.27 cr. At a current market cap of Rs.10 cr. only and with a book value of Rs.37, this scrip is trading extremely cheap.
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