STOCK WATCH
After two disappointing quarters Torrent Cables (Code: 504096) (Rs.173) have made a smart come back in the thirdquarter. Sales jumped up 55% to Rs.51 cr. whereas net profit increased by 65% to Rs.7 cr. registering a whopping EPS ofRs.9 for the quarter. The company could control raw material costs whence its OPM shot back to 23% against 11% &13% in the preceding two quarters respectively. However due to not-so-good H1, it may end FY07 with sales of Rs.175cr. and PAT of Rs.18 cr. i.e. EPS of Rs.24 on its equity of Rs.7.50 cr. With government’s special thrust on power sector reforms, the demand for cables is estimated to remain robust in coming years. It is estimated to report sales of Rs.225 cr. with net profit of Rs.24 cr. for FY08, which means EPS of Rs.32. So at a realistic discounting by 8 times against its FY08 earning, its share price can once again test the Rs.250 level in a year’s time. Accumulate at declines.
Micro Technologies (Code: 532494) (Rs.277) has declared its Dec.’06 numbers, which are very encouraging. Total revenue increased by 125% to Rs.28 cr. and the PAT doubled to Rs.8.75 cr. Recently, it launched a unique Global e- Security product called Micro Internet Access Security System – BANK for the banking industry to secure online-based accounts. Its other products are also well-accepted. Few weeks back, its Micro Vehicle Navigator System won the approval of the Municipal Corporation, UAE. Considering its nine month figures, it may end FY07 with sales of Rs.105 cr. with PAT of Rs.30 cr. This translates into an EPS of Rs.29 on its equity of Rs.10.50 cr. For FY08, it may report a topline of more than Rs.150 cr. and bottom-line of Rs.42 cr. i.e. EPS of Rs.40. At a reasonable P/E ratio of 14 against its FY08 earning, the share price can touch Rs.550 in 12-15 months. A strong buy.
Micro Technologies (Code: 532494) (Rs.277) has declared its Dec.’06 numbers, which are very encouraging. Total revenue increased by 125% to Rs.28 cr. and the PAT doubled to Rs.8.75 cr. Recently, it launched a unique Global e- Security product called Micro Internet Access Security System – BANK for the banking industry to secure online-based accounts. Its other products are also well-accepted. Few weeks back, its Micro Vehicle Navigator System won the approval of the Municipal Corporation, UAE. Considering its nine month figures, it may end FY07 with sales of Rs.105 cr. with PAT of Rs.30 cr. This translates into an EPS of Rs.29 on its equity of Rs.10.50 cr. For FY08, it may report a topline of more than Rs.150 cr. and bottom-line of Rs.42 cr. i.e. EPS of Rs.40. At a reasonable P/E ratio of 14 against its FY08 earning, the share price can touch Rs.550 in 12-15 months. A strong buy.
Andhra Petrochemicals (Code: 500012) (Rs.16) is engaged in the business of manufacture and sale of Oxo-Alcohols. Notably, it is the only producer in India and currently has the capacity to produce around 42,000 MTPA with the balance demand being met by imports. Recently it came out with terrific numbers for the Dec.’06 quarter. Sales increased by more than 30% to Rs.64 cr. but net profit spurted to Rs.10 cr. compared to merely Rs.14 lakh last year. Due to higher pricerealization and lower power cost, it reported a record high OPM of 33% against 9% last fiscal. Since its entire feed stocksand fuels are petroleum products, its raw material cost is expected to come down substantially as crude price has taken a sharp hit in the last couple of months. For FY07, it is expected to clock a turnover of Rs.250 cr. and with net profit of Rs.30 cr., which translates into an EPS of Rs.4 on its equity of Rs.85 cr. For FY08, it can report an EPS of more than Rs.5. Hence even at a reasonable P/E ratio of 6, the scrip can easily appreciate by 50% from current levels.
Bilpower Ltd (Code: 531590) (Rs.205) is a pioneer in manufacturing Transformers, Electrical Laminations, Stampings and Cores. Besides it’s a leading trader of CRGO & CRNGO and produces the largest range of transformer cores in India. Two days back, it reported terrific numbers for the Dec’06 quarter. Net Sales has more than doubled to Rs.66 cr. and net profit has shot up 130% to Rs.7 cr. reporting an EPS of Rs.9 for the quarter. After taking over Tarapur Transformers, it is planning to merge Sun Transtamp, a power ancillary equipment company with itself. For the full year FY07, it may report a turnover of Rs.235 cr. and profit of Rs.20 cr., which will lead to an EPS of Rs.22 on its fully diluted equity of Rs.9 cr. The company is interested in further acquisitions and is in talks with different companies, for which it may raise capital through FCCB/GDR route in the near future. This is another EMCO in the making. Buy at every decline.
Gayatri Projects (Code: 532767) (Rs.362) a leading construction and infrastructure company has recently announced excellent results for the Dec.’06 quarter. Total revenue has increased by more than 50% to Rs.153 cr. – the highest ever in the company’s history whereas net profit zoomed up by 120% to Rs.8.50 cr. registering an EPS of Rs.8.50 for the quarter. For the nine months ending Dec. 2006, it has already recorded sales of Rs.336 cr. with profit of Rs.20 cr., which is higher than earned in entire FY06. Currently, it has massive orders of nearly Rs.2500 cr. spread across road work, irrigation works and other projects. To fund its working capital requirement, the company is planning to raise US $30 million through the FCCB route, which will trigger its share price in the near future. For FY07, it is expected to clock a turnover of Rs.500 cr. with net profit of Rs.30 cr., which will lead to an EPS of Rs.30 on its current equity of Rs.10 cr. However,
its equity may get diluted by 30% due to the FCCB issue in future. The share is trading cheap compared to its peers due to promoter concerns. But it can still rise 25-30% in good market conditions.
Bilpower Ltd (Code: 531590) (Rs.205) is a pioneer in manufacturing Transformers, Electrical Laminations, Stampings and Cores. Besides it’s a leading trader of CRGO & CRNGO and produces the largest range of transformer cores in India. Two days back, it reported terrific numbers for the Dec’06 quarter. Net Sales has more than doubled to Rs.66 cr. and net profit has shot up 130% to Rs.7 cr. reporting an EPS of Rs.9 for the quarter. After taking over Tarapur Transformers, it is planning to merge Sun Transtamp, a power ancillary equipment company with itself. For the full year FY07, it may report a turnover of Rs.235 cr. and profit of Rs.20 cr., which will lead to an EPS of Rs.22 on its fully diluted equity of Rs.9 cr. The company is interested in further acquisitions and is in talks with different companies, for which it may raise capital through FCCB/GDR route in the near future. This is another EMCO in the making. Buy at every decline.
Gayatri Projects (Code: 532767) (Rs.362) a leading construction and infrastructure company has recently announced excellent results for the Dec.’06 quarter. Total revenue has increased by more than 50% to Rs.153 cr. – the highest ever in the company’s history whereas net profit zoomed up by 120% to Rs.8.50 cr. registering an EPS of Rs.8.50 for the quarter. For the nine months ending Dec. 2006, it has already recorded sales of Rs.336 cr. with profit of Rs.20 cr., which is higher than earned in entire FY06. Currently, it has massive orders of nearly Rs.2500 cr. spread across road work, irrigation works and other projects. To fund its working capital requirement, the company is planning to raise US $30 million through the FCCB route, which will trigger its share price in the near future. For FY07, it is expected to clock a turnover of Rs.500 cr. with net profit of Rs.30 cr., which will lead to an EPS of Rs.30 on its current equity of Rs.10 cr. However,
its equity may get diluted by 30% due to the FCCB issue in future. The share is trading cheap compared to its peers due to promoter concerns. But it can still rise 25-30% in good market conditions.
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