STOCK WATCH

Mobile Telecommunications Ltd. (Code: 532127) (Rs.16.91) manufactures box assemblies as well as PCB assemblies and caters to clients from IT, Auto, Power, Medical and the Telecommunications sector. But post acquisition of the BPO facility of M/s Quantum eServices, the company is now focusing on VOIP & IP telephony, BPO and manufacturing of WLL handsets. It has already acquired the licence for corDECT technology and is setting up a plant for the production of WLL handsets. It has also forayed into the energy-saving device business and has got into APFC (Automatic Power Factor Controller) panels under the joint venture with Herodex Power Systems. It has plans to launch the Automatic Meter reading system, which will collect the data automatically from meters and other devices via telecommunications at a remote central location of the client’s choice. It also intends to enter the rapidly growing market of Wireless Broadband Services. It is expected to report a topline of Rs.23 cr. with a bottomline of Rs.1.50 cr. for FY07, which means an EPS of Rs.1.20 on its equity of Rs.11.90 cr. For FY08, it has the potential to clock an EPS of more than Rs.2. Buy at sharp declines.

Alufluoride Ltd. (Code: 524634) (Rs.17.40) is a reputed manufacturer and exporter of aluminium fluoride, which is used as flux in reducing the melting point of Alumina in the production of aluminium. Of late, the company has succeeded in sourcing an alternate supplier for Hydrofluosilicic acid for conversion on ad-hoc basis and is now working at higher capacity utilization. For the March’07 quarter, its sales grew by 10% to Rs.5.40 cr. and the PBT was Rs.1.20 cr. against a loss of Rs.0.20 cr. last year. However, due to tax provision of a whopping Rs.1.60 cr. including Rs.1.20 cr. as deferred tax, it reported a net loss of Rs.0.40 cr. Importantly, it clocked a record high OPM of 27% for this quarter. For the full year FY07, its sales and net profit were Rs.21 cr. and Rs.2.05 cr. respectively i.e. an EPS of Rs.3 on its equity of Rs.7 cr. Considering the strong improvement in its profit margin, it is estimated to end FY08 with topline of Rs.25 cr. and bottomline of Rs.3.50 cr., which means an EPS of Rs.5. Scrip has the potential to touch Rs.30 in the medium-term.

Batliboi Ltd. (Code: 522004) (Rs.107.55) is engaged in the business of machine tools, textile engineering, air conditioning and refrigeration. Its machine tools division manufactures and sources leading brands from across the world to meet the domestic requirements. It is a well-known supplier of a wide range of world-class textile machinery for spinning, weaving, knitting, processing and garmenting. It also executes turnkey HVAC (humidity, ventilation and air conditioning) projects across the globe. Moreover, it is actively involved in the design, selection, engineering, fabrication, supply, installation and commissioning of air and water pollution control equipment and systems for a variety of industrial and municipal application. Under a joint venture Batliboi enXco, it provides operation, service and maintenance for all types of wind turbine generators. Recently, it acquired 100% stake in Quickmill Inc., a Canada based machine tools company, for a consideration of approximately Rs.22 cr. in an all cash deal. For FY07, it is expected to register a total revenue of around Rs.130-135 cr. with PAT of Rs.13 cr. i.e. an EPS of Rs.10 on its equity of Rs.13.50 cr. For FY08, it can report an EPS of Rs.13 on a standalone basis. A good bet for 50% gain in a year’s time

Gontermann Peiper (I) Ltd. (Code: 504701) (Rs.50.90), an Ispat Group company is one of the leading manufacturers of Cast rolls and Forged rolls which find application primarily in the steel industry. Not only in India, its products are widely appreciated in USA, Canada, China, South Africa, Taiwan, South Korea, Thailand, Indonesia and many other countries. With the domestic and global steel industry adding capacity at a fast pace, the company is implementing an expansion-cum-modernization plan of Rs.40 cr. to enhance its production capacity to 18,000 MT of finished roll from 12,000 MT. This project is likely to be completed by end of 2007. Considering the future trend of the business globally, the company has given thrust to new product development – enhanced carbide rolls in ICDP variety and High Speed Steel Rolls. It is also scouting for inorganic growth opportunities in Europe to capitalize on the current boom in the steel industry and cater to European and US markets. It may end FY07 with net sales of Rs.150 cr. with net profit of around Rs.12.50 cr., which means EPS of Rs.9 on its equity of Rs.13.90 cr. With 52-week high at Rs.72, it’s a good buy at current levels.