STOCK WATCH

Lot of positive developments are taking place in Micro Technologies Ltd. (Code:532494) (Rs.267.50). The company has appointed Madison Communications, one of the top ad agencies for its publicity campaign. Recently, it also launched a unique Global e-Security product called Micro Internet Access Security System – BANK for banking industry to secure online-based accounts. This month, its Micro Vehicle Navigator System won approval from the Municipal Corporation UAE, which is a good breakthrough for the company in the global market. For the first half, its topline grew by 80% to Rs.48 cr. and PAT zoomed by 135% to Rs.13.90 cr. With its focus on Security, E-commerce, Telecommunication, Wireless Technology and GIS, its future is very promising and the company has potential to grow multifold. For FY07, it can register revenue of about Rs.100 cr. with profit of Rs.25 cr. i.e. EPS of Rs.24 on its equity of Rs.10.50 cr. For FY08, it can easily report Rs.30 EPS. Hence, the scrip may touch Rs.420 considering an average P/E multiple of 14 against its FY08 earnings.

Easun Reyrolle Ltd. (Code:532751) (Rs.629.45) is a strong and independent solution provider in power system protection, control, automation, metering and switching. Of late, it has ventured into construction of projects on turnkey basis wherein it will concentrate on substation projects and power system automation project. For the nine months ending 30th Sept.’06, its top-line as well as bottom-line grew by 25% to Rs.59 cr. and Rs.7.25 cr. respectively. For future growth, it is setting up a 45,000 sq ft world class manufacturing facility at Hosur for medium voltage switchgear at an investment of Rs.12 cr. and recently, its in-house R&D won recognition from Govt. of India (DSIR). For FY07, it is estimated to report a top-line of Rs.135 cr. and bottom-line of Rs.16 cr. This works out to an EPS of Rs.48 on its tiny equity of Rs.3.33 cr. For FY08, it may report EPS more than Rs.60. At a reasonable discounting by 14 against its FY08 earning, the scrip should trade around Rs.850. Given its huge reserve of Rs.35 cr. it is a strong bonus candidate as well. A strong buy.

Few broking firms have turned bullish on Jupiter Bioscience Ltd. (Code:524826) (Rs.136.40). As P/E ratio reports, the company has developed eight generic peptides which are ready for launch. Besides, Sven Genetech and its US subsidiary have formed another wholly-owned subsidiary in Japan to supply peptide and chiral intermediaries to the top four Japanese pharma companies. Moreover, it is setting up a 5500 sq. ft. manufacturing facility in Maryland, USA, to cater the US, Canadian and European markets. It is also looking to acquire few companies globally. To fund the company’s growth plans, the promoters are infusing Rs.40 cr. by subscribing to 27.5 lakh share warrants to be converted into equity shares at Rs.146 per share. Further Rs.95 cr. will be raised by debt and FCCB issue. For full year FY07, it is expected to clock a turnover of Rs.90 cr. with net profit of Rs.21 cr., which works out to an EPS of Rs.24 on its current equity of Rs.8.86 cr. However on its diluted equity of Rs.11.61 cr., EPS comes to around Rs.18. The company is at an inflexion point and its real growth will be witnessed in FY08 and FY09. A good long term bet.

Surya Pharma (Code:532516) (Rs.88) is among the top five Indian players in betalactum and cephalosporin range of anti-infectives and is gradually moving up the product value chain from being a manufacturer of betalactum antibiotics (a low-margin product) to a maker of third-and fourth-generation cephalosporin’s (a high-margin product). It has also diversified into the lucrative lifestyle segments like anti-histamines and cardio vascular drugs. Of late, it has made an impressive foray into contract research and manufacturing (CRAMS) space. Apart from carrying out massive capacity expansions at its existing facilities in Baddi and Banur, it is setting up a new US-FDA compliant facility in Jammu at an investment of Rs.90 cr. For FY07, it is estimated to clock a turnover of Rs.275 cr. and net profit of Rs.27 cr. which leads to an EPS of Rs.15 on its fully-diluted equity of around Rs.18 cr. Scrip can appreciate 50% in 9-12 months. Accumulate at declines.