STOCK WATCH

Sagar Cement (Code:502090) (Rs.158) has come out with stunning numbers while sales shot up by 40% to Rs.26 cr. in Q3FY07, the NP zoomed to Rs.6.40 cr. from Rs.0.21 cr. in the previous corresponding quarter. Due to higher price realization, it registered an all time high OPM of 42% in this quarter. For the nine months ending 31st Dec. 2006, it has recorded sales of Rs.82 cr. with NP of Rs.21.75 cr. Importantly, it has made a tax payment of Rs.7.25 cr. for this fiscal till December’06 and announced 10% interim dividend for FY07. For the full year FY07, it may clock a turnover of Rs.110 cr. with profit of Rs.28 cr. This translates into EPS of Rs.25 on its current equity of Rs.11.15 cr. A victim of the government’s initiative to bring down cement prices, its share price has fallen sharply from its recent high of Rs.177 but is bound to rebound and touch Rs.200 in the next couple of months.

Marketmen are apprehensive about Jupiter Bioscience (Code:524826) (Rs.142) as the scrip has been a laggard, its outlook continues to be bright and patient investors will stand rewarded. Recently, it announced very encouraging results for the Dec’06 qtr. On a standalone basis, it reported an all time high sales and NP of Rs.28 cr. and Rs.7.20 cr. respectively registering an EPS of more than Rs.8 for the quarter. Few months back it acquired a manufacturing facility for 15 cr. from Aurobindo Pharma and is presently in the midst of further expansion. Last year, the company issued 27.50 lakh warrants to the promoters @ Rs.146 per share and is now raising further capital of about Rs.100 cr. through QIP route. Post this placement; the company’s share will be listed on the NSE also, which will improve its liquidity and market sentiment. It may end FY07 with a topline of Rs.95 cr. and bottomline of Rs.23 cr. i.e. EPS of Rs.26 on its current equity of Rs.8.86 cr. For FY08, its sales & NP can shoot up to Rs.150 cr. and Rs.30 respectively. It’s time the scrip to got re-rated.

In the engineering sector, Gujarat Apollo Equipment (Code:522217) (Rs.222) reported excellent set of numbers. Sales grew by 15% to Rs.34 cr. but profit jumped up 50% to Rs.4.80 cr. resulting in an EPS of Rs.7 for the Dec.’06 quarter. Importantly, the company recorded an OPM of 24% for the quarter against 18% last fiscal due to better operating efficiency. The company has also cleared shareholders by declaring 1:2 bonus as it had already given 1:1 bonus in 2005. It recently changed its name to ‘Gujarat Apollo Industries’ and has decided to set up a wholly owned subsidiary to consolidate its manufacturing of mobile construction equipment at a new location. The new entity will add several new products to further enhance its productline. For FY07, it is estimated to clock a turnover of Rs.130 cr. with NP of Rs.15 cr. i.e. EPS of Rs.21 on its equity of Rs.7 cr. Of late, reputed mutual funds have entered the counter and the scrip is bound to attract higher discounting. Post bonus, it will list on NSE, which will give a fresh trigger to its share price.

Satnam Overseas Ltd. (Code:512559) (Rs.79) is the undisputed leader in the domestic branded basmati rice market with more than 35% market share with reputed brands like Kohinoor, Trophy, Charminar, Rose, Darbar, Shehanshah and Falcon. It is aggressively expanding its presence in the lucrative ready-to-eat foods (RTE) segment and has also set up a frozen food processing facility at Haryana. Its sales jumped by 30% to Rs.182 cr. and NP spurted by 50% to Rs.8 cr. for the Dec.’06 quarter. It has an exclusive tie-up with Reliance Retail and has also chalked out an aggressive expansion plan for which it raised around 90 cr. through the FCCB route to be converted @ Rs.85 per share. It may end FY07 with a topline of Rs.600 cr. and bottomline of Rs.27 cr. i.e. EPS of Rs.14 on its current equity of Rs.19.60 cr. It is one of the cheapest scrips in the food-processing sector and may shoot up to Rs.110 in the short to medium term.

Ambika Cotton Mills (Code:531978) (Rs.187) manufactures premium quality cotton yarn, both carded and combed, for knitting and weaving. A few months back, it completed expansion of 10080 spindles taking its total production capacity to 66,000 spindles. For the Dec.’06 quarter, its sales increased by 30% to Rs.39 cr. and NP improved by 25% to Rs.7 cr. registering a quarterly EPS of a whopping Rs.12. It is planning to further expand its capacity by 43200 spindles to be operational by December 2007. For tax benefits, the company has also set up its own windmill of 13 MW. For the full year FY07, it may report net sales of Rs.150 cr. and profit of Rs.25 cr. i.e. EPS of Rs.43 on a small equity of Rs.5.88 cr. Although the company has not made provision for deferred tax and has a very high debt of Rs.140 cr., still it’s a good bet at the current level. It has huge reserves of Rs.91 cr. leading to a book value of Rs.160 plus making it a strong bonus candidate as well.