STOCK WATCH

As forecast, Bilpower Ltd. (Code: 531590) (Rs.178.80) came out with a very encouraging set of numbers for the March’07 quarter. Its sales increased by 90% to Rs.78.50 cr. whereas PBT jumped up 130% to Rs.7.75 cr. For the full year FY07, sales almost doubled to Rs.245 cr. whereas net profit grew by 65% to Rs.18 cr. due to the higher tax provisioning of Rs.6 cr. This works out to an EPS of Rs.20 on its equity of Rs.9 cr. After taking over Tarapur Transformers, it is moving forward by merging SunTranstamp, a power ancillary equipment company with itself. To fund further acquisitions, it plans to raise around Rs.100 cr. through the FCCB/GDR route in future, which will lead to a re-rating of the company. For FY08, the company is estimated to clock a turnover of Rs.325 cr. and PAT of Rs.23 cr. i.e. EPS of Rs.26 on its current equity of Rs.9 cr. Hence at CMP, the company is discounted by 7 times only against its FY08 earnings and the scrip has the potential to cross Rs.300 in the medium-term.

Micro Technologies Ltd. (Code: 532494) (Rs.240.40) is currently one the most poorly discounted IT scrip on the bourses. In spite of being a niche player and having an unique product portfolio, its share is available at a P/E ratio of merely 6 times its estimated FY08 earning. For the March’07 quarter, it reported 55% rise in sales of Rs.30 cr. and net profit increased by 45% to Rs.9.50 cr., leading to a quarterly EPS of Rs.9. For the full year ending 31st March 2007, its sales as well as profit grew by 80% to Rs.106 cr. and Rs.32 cr. respectively. This translates into EPS of Rs.30 on its equity of Rs.10.50 cr. The management has very aggressive plans for the future and company is expected to grow at CAGR of more than 50% over the next few years. It may end FY08 with a topline of more than Rs.150 cr. with a bottomline of Rs.42 cr. i.e. EPS of Rs.40 on its current equity. With FIIs holding 13% stake and domestic mutual funds holding 6% stake, the scrip has the potential to double in a year’s time.

Jupiter Biosciences Ltd. (Code: 524826) (Rs.161.55) has surprised the market with substantial jump in sales for the March’07 quarter. It registered a record high sale of Rs.38 cr. up 65% compared to last year and net profit rose by 40% to Rs.8.70 cr. For FY07 its sales increased by 30% to Rs.104 cr. and the profit increased by 50% to Rs.25 cr. This leads to an EPS of Rs.26 on its diluted equity of Rs.9.86 cr. The promoters have already converted their 10 lakh warrants into equity shares in March 2007 whereas the balance Rs.17.50 lakh warrants have been converted at Rs.146 in April 2007. Hence, its equity stands at Rs.11.61 cr. The company is further raising Rs.100 cr. through QIP placement and has entered into strategic business alliance with Ranbaxy on peptide pharmaceuticals for the global market. As per the contract, Ranbaxy is taking 14.90% stake, which will further expand its equity. These all are very positive developments for the company and it is estimated to end FY08 with total revenue of Rs.180-200 cr. and profit of Rs.42-45 cr. Scrip is bound to hit a new high soon

After couple of not so encouraging quarters, Ador Fontech Ltd. (Code: 530431) (Rs.87.60) has declared satisfactory result for the March’07 quarter. Both sales and profit improved by 20% to Rs.27 cr. and Rs.2.50 cr. respectively Interestingly, it reported an OPM of 15% compared to 9% in the preceding quarter. However, for the full year sales and net profit increased by 15% to Rs.80 cr. and Rs.5 cr. respectively thereby registering an EPS of Rs.15 on its tiny equity of Rs.3.50 cr. The management has maintained the dividend payout ratio of more than 30% and declared a whopping Rs.5 as dividend for FY07. At CMP, the dividend yield itself works out to more than 6%. Although the merger with Ador Welding is not on the cards but the management may merge both the companies in future for operational synergies. This will trigger the share price of Ador Fontech

Recently, Uttam Galva (Code: 513216) (Rs.33.65) announced a good set of numbers for the March’07 quarter. It doubled its net sales to an all time high figure of Rs.840 cr. but net profit increased marginally by 10% due to lower operating margin and higher interest cost. However, it ended FY07 on a buoyant note with 45% rise in sales to Rs.2567 cr. and 35% gain in net profit to Rs.100 cr. As the company raised about Rs.85 cr. in March 2007 through its GDR issue at Rs.40 per share, its equity got diluted to Rs.105.30 cr. Hence its EPS works out Rs.9.50 for full year. Besides, the company had earlier raised around Rs.200 cr. through FCCB route, which is yet to be converted into equity shares. Although the conversion price is Rs.64.50, it is expected to get revised to around Rs.44-48. On the back of aggressive expansion, the company is estimated to clock turnover of Rs.3750 cr. and net profit of Rs.150 cr. for FY08. This means an EPS of Rs.10 on its estimated fully-diluted equity of Rs.150 cr. At CMP its a strong buy as the scrip can easily appreciate 50% in 12 months.