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!!! W E L C O M E !!!
In INDIA, people generally relate to stock market as “EASY MONEY” or “SATTA BAZAAR”. For them it’s purely a GAME or matter of sheer LUCK and nothing more than that. But seldom do they know, by following certain PRINCIPLES and taking INFORMED decision, this same platform has the power to take them from rags to riches. No doubt, it has a certain amount of RISK attached to it. But every business or investment has it. What more, the Finance Ministry has already made the long term capital gain as TAX FREE whereas the short term capital gain is taxed at merely 10%. On the economic front, India’s GDP is growing and is expected to grow at scorching pace of more than 8%. Unfortunately, even today our market is being ruled and dominated by FIRANGI’s money. But I can see, the day is not far when our general PUBLIC will change its perception and start putting MOST of their savings in equities as an ** Investment **.
Remember, "K N O W L E D G E" and "P A T I E N C E" are the key to success.
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SAARTHI

Sensex (LIVE- Intraday)

Sensex (LIVE- Intraday)

Wednesday, March 14, 2007

STOCK WATCH

Hind Rectifiers Ltd. (Code:504036) (Rs.740) is a beneficiary of the recent railway budget as 50% of its revenue comes from the railways. It makes locomotive transformers, power electronics components and equipments. It manufactures diodes and thyristors (types of semiconductor devices), rectifiers, inverters and transformers that are used in locomotives. For the first three quarters, its sales grew by more than 20% to Rs.60 cr. whereas net profit jumped 55% to Rs.8 cr. To maintain its future growth, the company has modernized its Mumbai plant and is setting up two new plants in Uttaranchal, where it will get tax benefits as well. Commercial production may start by April 2007. For the full year FY07, it may report a topline of Rs.85 cr. with net profit of Rs.11.50 cr. But for FY08, it can report sales of more than Rs.100 cr. with PAT of around Rs.15 cr. on contribution from the new plant. This works out to an EPS of Rs.76 for FY07 and Rs.99 for FY08 respectively. It’s a solid buy for medium to long-term.

Accel Frontline Ltd. (Code:532774) (Rs.59.55) is a mid cap IT company which concentrates mainly on the four segments viz. IT Infrastructure solutions, IT Infrastructure Management services, Enterprise Software solutions and Business Process Outsourcing services. For the first nine months ending 31st December 2006, its topline grew by 20% to Rs.142 cr. whereas bottomline jumped 80% to Rs.9.50 cr. Couple of months back, it was been chosen by Sun Microsystems as its Strategic Regional Partner for Tamil Nadu and Kerala. Besides it recently acquired the banking solutions division of Telesis Global Solutions Ltd., a Chennai based Software Company specializing in software products for banking applications and implementation and migration services for core banking software in India, Middle East and African regions. The company is aggressively working to increase its global presence and has raised around Rs.39 cr. through the IPO route at Rs.75 per shares in October’06. It may end FY07 with total revenue of Rs.190 cr. and PAT of Rs.14 cr. i.e. an EPS of Rs.6 on its equity of Rs.22.50 cr. For FY08, it can report an EPS of Rs.8. Currently, the scrip is hitting new lows and is trading at 20% discount to its issue price. Accumulate at declines.
Another scrip which is quoting at 20% discount to its issue price is Sunil Hitech Engineers Ltd. (Code:532711) (Rs.80). It specializes in fabrication, erection, testing & commissioning of thermal power plants with high precision quality and timeliness. It also looks after overhauling and maintenance of the plant. For the current first three quarters, its turnover remained almost flat at Rs.98 cr. but net profit increased by 15% to Rs.4.30 cr. Recently, the company forayed into manufacturing of transmission towers by setting up a galvanizing plant at Nagpur with an annual production of 20,000 MT capacity. For the full year FY07, it is estimated to clock a turnover of Rs.150 cr. with profit of Rs.6.25 cr. But with a present order book position of more than Rs.500 cr. and still growing, its future earnings will be quite strong. For FY08, it can report a total revenue of Rs.200 cr. with net profit of Rs.9.50 cr. Hence, it is expected to report an EPS of Rs.6 for FY07 and Rs.10 for FY08 respectively. With its 52-week high as Rs.167, the scrip can easily appreciate 50% in 6-9 months.
Electrosteel Castings Ltd. (Code:500128) (Rs.390.70) is a water infrastructure company that provides techno-economic solutions in the area of water supply and sewerage systems. In fact, it is India’s largest manufacturer of ductile iron pipes and cast-iron pipes with a capacity of around 2,50,000 TPA. It also provides turnkey services, which encompass manufacturing; supplying, laying, operating and transferring complete ductile iron pipe projects. For the December’06 quarter, it reported stunning numbers. Its sales shot up by 50% to Rs.300 cr. and net profit almost tripled to Rs.29.50 cr. To reduce the cost of production, the company is setting up a sintering plant with a capacity of 850 tonnes per day (TPA) at Khardah and has also been allocated the Parbatpur Coal Block in the Jharia Coal Field for mining coal for captive consumption. To fund these projects, it had raised about Rs.340 cr. through the FCCB route to be converted into equity shares at Rs.450 per share. For FY07 & FY08, it is expected to report revenues of Rs.1100/ Rs.1300 cr. with profit of Rs.105/ Rs.130 cr. respectively. This leads to an EPS of Rs.51 and Rs.63 on its current equity of Rs.20.80 cr. However, on its fully diluted equity of Rs.28.50 cr. considering the full FCCB conversion at Rs.450 per share, the FY08 EPS works out to Rs.45. Buy at sharp declines only.

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