STOCK WATCH

Lloyd Electric & Engineering Ltd. (Code: 517518) (Rs.137.55) is India’s largest manufacturer of evaporator and condenser (E&C) coils used in air conditioners with an installed capacity of more than 1 mn. coils and can also assemble around 2,20,000 air conditioners per annum. Recently, it set-up a new manufacturing unit in Dehradun (Uttaranchal) to manufacture room air-conditioners, components of air-conditioners and electronic goods. Besides, it is in contract with an Australian company for designing, manufacturing and supplying of AC package units to Metro Rail in India It has also tied up with a Korean company for the manufacture of roll bond and frost-free coils for refrigerators. For FY07, it is expected to report sales of Rs.475 cr. with net profit of Rs.43 cr. This will work out to an EPS of Rs.14 on its diluted equity of Rs.31 cr. This can improve upto Rs.17-18 due to expansion and other factors in FY08. A solid bet.

Visesh Infotechnics Ltd. (Code: 532411) (Rs.30.30) has strategic partnerships & alliances with global IT leaders like Novell, Microsoft, Oracle, Compaq, IBM, Sun, Cisco, 3Com, HP, Toshiba etc. Its ERP softwares and other products are being successfully used in almost all industry verticals such as telecommunications, chemicals, automobiles, pharmaceuticals, services (including finance & ITeS), government, education, sugar, sales & distribution. Of late, it has diversified into high technology and fast emerging areas of mobile telematics. Last fiscal, the company ventured into the business of Knowledge Process Outsourcing (KPO) and BPO through its newly-formed division VConnect™. The company has other aggressive expansion plans for which it may raise more than Rs.40 cr. in the near future. It may end FY07 with a topline of around Rs.125 cr. and bottomline of Rs.19 cr. i.e. EPS of Rs.7 on its current equity of Rs.26.97 cr. The scrip can easily rise 50% in the medium-term. Just buy and hold.

Kavveri Telecom Products Ltd. (Code: 49.55) (Rs.590041) is a leading manufacturer of telecom related products like Antennas, Radio frequency (RF) components, Cables & Connectors, Repeaters, Fixed Cellular Terminals and Solar Products. Besides it also provides solutions like Site/RF Survey, RF planning, designing & implementation, Repeater based GSM & CDMA indoor as well as outdoor coverage solution and Microcell based indoor coverage solution. Its esteemed clientele includes industry giants such as Ericsson, Motorola, Spice, Airtel, Reliance Infocomm, BEL, MTNL, BSNL, Tata Teleservices, Aircell, Infosys, IBM, HP, LG, ISRO, World Space etc to name a few. A few days back, the company bagged a huge contract from Hutchison Essar for providing In-Building Solutions (IBS) to their network for all its circles throughout India for the year 2007. Last year, it also acquired Til-Tek Antenna - a leading antenna manufacturing company based in Canada. For FY07, it may report sales and net profit of Rs.40 cr. and Rs.5.25 cr., which may shoot up to Rs.60 and Rs.8.50 cr. respectively in FY08. This means EPS of Rs.5 & Rs.9 on its current equity of Rs.9.80 cr. A good buy for the medium-to-long-term.

Austin Engineering Co. Ltd. (Code: 522005) (Rs.77.80) is a leading manufacturer and exporter of quality automobile and industrial ball and roller bearings. It manufactures all types of bearings including Ball Bearings, Cylindrical Roller Bearings, Needle Roller Bearings, Tapered Roller Bearings, Spherical Roller Bearings and Flexible Roller Bearings. On the back of strong industrial growth, the bearing industry is doing exceptionally well and this company, too, is expected to announce decent numbers for the March 2007 quarter. For full year ending 31st March 2007, it may register net sales of little less than Rs.65 cr. with net profit of Rs.5.50 cr. This translates into an EPS of Rs.16 on its tiny equity of Rs.3.53 cr. and may declare 20-25% dividend. With huge reserves of Rs.20 cr. supporting its small capital, the book value works out to more than Rs.65. For FY08, it can register an EPS of Rs.18. At a current P/E ratio of less than 5 and EV of Rs.40 cr., it’s a value buy.

After hitting a high of Rs.320, the share of Indo Asian FuseGear (Code: 532658) (Rs.117.75) has reduced to one third although its fundamentals have not changed much. The company manufactures all types of LT switchgears, miniature circuit breakers, compact fluorescent lights and other allied electrical engineering goods. Apart from six manufacturing facilities, it recently put up three more units in the tax-free area of Haridwar- Uttaranchal, all of which have begun commercial production. Last year, it entered into a joint venture with a Spanish company for setting up a new plant to manufacture and market state-of-the-art wiring accessories and products that include Intelligent Building and Home Automation products. Although its FY07 working may not be so great but the coming three years will be bumper years, as the company is on the inflexion point and the expansion effect will start kicking in from FY08. It is expected to register total revenue of Rs.350 cr. with net profit of Rs.30 cr. for FY08, which means an EPS of Rs.20 on its diluted equity of around Rs.15 cr. This is one of the best contrarian bets for the long-term.