STOCK WATCH
Inspite of strong March nos, share price of Uttam Galva (33.00) is lying low. It is the second largest manufacture of cold rolled and galvanized products like coils, plain sheets, corrugated sheets, CRCA and colour coated steel. It exports to 128 countries worldwide including developed nations such as USA, Japan, Australia, New Zealand, Canada, Germany etc to name a few. It is undergoing massive expansion estimated to complete by August this year which will take its cold rolling capacity to 10,00,000 MTPA and galvanizing to 7,00,000 MTPA. Couple of month back it raised 85 cr thru GDR @ 40 Rs per equity share. For FY07 it clocked a turnover of 2567 cr and PAT of 101 cr ie EPS of 10 Rs on equity of 105 cr. With steel prices remaining stable and expansion effect kicking in from August, it may end FY08 with total sales of 3500 cr and profit of 125 cr. Earlier company had raised approx 200 cr thru FCCB which is yet to be converted into equity shares. Although the conversion price is Rs 64.50 per share we assume it to be finally converted into 44/- Rs per share. Hence after conversion we estimate fully diluted to be nearly 150.00 cr. Accordingly FY08 EPS works out 8 Rs. Hence investors can buy with a price target of 48 Rs in 6~9 months.
Indo Asian Fusegears (135.00) is engaged in manufacturing of all types of LT switchgears, miniature circuit breakers, compact fluorescent lights and other allied electrical engineering goods. Apart from six manufacturing facility, it has recently put up three more units in tax free area of Haridwar- Uttaranchal, all of which have begun commercial production. Importantly company has entered into various foreign tie-ups for manufacturing as well as marketing state of the art modern style lighting equipments, fittings & accessories, home automation products, wiring accessories etc in India. It may report Sales and NP of 210 cr and 17 cr for FY07, which is expected to shoot up to 325 cr and 27 cr for FY08. This translates into EPS of 11 Rs and 18 Rs respectively on diluted equity of 15.05 cr. Hence at a reasonable discounting by 12x times scrip has the potential to touch 220/- Rs in medium term
Besides Indian hotel and EIH, Panoramic Universal (115.00) is the only company in India which owns and operates five hotels in USA and a small motel in New Zealand. Here in India, it has three hotels at Shirdi, Goa and Malvan each. Moreover it also owns “Pancard Club Hotel and Resort in Baner Hills along with ‘Area 51’, a large entertainment lounge in Pune. Company is now constructing two 3 star hotel cum club, one each at Thane and Durgapur. Further it intends to develop three 5 star hotels of 250-300 rooms each in Pune, Kerala and Goa. Above all it has very aggressive plans to grow inorganically. In near future, company may undergo some restructuring as management wants to consolidate its group companies into one. On a consolidated basis, for FY07 it has clocked a turnover of 132 cr and NP of 33 cr ie EPS of 26 Rs on small equity of 6.50 cr having 5/- Rs face value. Which means stock is trading at P/E ratio of less than 5x times. Considering the recent rupee appreciation, scrip has fallen sharply. For FY08 it can register 30 Rs EPS. However, high debt equity ratio with total debt of around 120 cr is cause of concern but at the same time promoter holding of 74% give some comfort level.
Couple of days back Kulkarni Power Tools (88.00) came out with decent set of nos for the March quarter. It recorded 25% growth for both sales as well as PBT to 12.50 cr and 1.20 cr respectively. However, due to higher tax and VRS provisioning its NP declined by 10% to 0.65 cr. But on a full year basis its sales improved by 15% to 44 cr and NP increased by 25% to 2.35 cr. This is inspite of higher deferred tax provisioning to the tune of 1.50 cr and VRS expense of 0.26 cr. Still it reported an EPS of 14 Rs on a tiny equity of 1.70 cr and declared 30% dividend for FY07. Company is a leader in the design, engineering, manufacturing and marketing of power tools like drills, grinder, hammers, cutters, polishers etc for construction and various other industrial activities. Notably, with its “POWERMASTER” brand, it has developed strong customer alliances with some of the largest retailers and most important brand names in the world. For FY08 it can register a topline of 50 cr and bottomline of 4 cr ie EPS of 24 Rs. Consdering the 52week H/L as 173/76 Rs it’s a good bet at CMP.
Indo Asian Fusegears (135.00) is engaged in manufacturing of all types of LT switchgears, miniature circuit breakers, compact fluorescent lights and other allied electrical engineering goods. Apart from six manufacturing facility, it has recently put up three more units in tax free area of Haridwar- Uttaranchal, all of which have begun commercial production. Importantly company has entered into various foreign tie-ups for manufacturing as well as marketing state of the art modern style lighting equipments, fittings & accessories, home automation products, wiring accessories etc in India. It may report Sales and NP of 210 cr and 17 cr for FY07, which is expected to shoot up to 325 cr and 27 cr for FY08. This translates into EPS of 11 Rs and 18 Rs respectively on diluted equity of 15.05 cr. Hence at a reasonable discounting by 12x times scrip has the potential to touch 220/- Rs in medium term
Besides Indian hotel and EIH, Panoramic Universal (115.00) is the only company in India which owns and operates five hotels in USA and a small motel in New Zealand. Here in India, it has three hotels at Shirdi, Goa and Malvan each. Moreover it also owns “Pancard Club Hotel and Resort in Baner Hills along with ‘Area 51’, a large entertainment lounge in Pune. Company is now constructing two 3 star hotel cum club, one each at Thane and Durgapur. Further it intends to develop three 5 star hotels of 250-300 rooms each in Pune, Kerala and Goa. Above all it has very aggressive plans to grow inorganically. In near future, company may undergo some restructuring as management wants to consolidate its group companies into one. On a consolidated basis, for FY07 it has clocked a turnover of 132 cr and NP of 33 cr ie EPS of 26 Rs on small equity of 6.50 cr having 5/- Rs face value. Which means stock is trading at P/E ratio of less than 5x times. Considering the recent rupee appreciation, scrip has fallen sharply. For FY08 it can register 30 Rs EPS. However, high debt equity ratio with total debt of around 120 cr is cause of concern but at the same time promoter holding of 74% give some comfort level.
Couple of days back Kulkarni Power Tools (88.00) came out with decent set of nos for the March quarter. It recorded 25% growth for both sales as well as PBT to 12.50 cr and 1.20 cr respectively. However, due to higher tax and VRS provisioning its NP declined by 10% to 0.65 cr. But on a full year basis its sales improved by 15% to 44 cr and NP increased by 25% to 2.35 cr. This is inspite of higher deferred tax provisioning to the tune of 1.50 cr and VRS expense of 0.26 cr. Still it reported an EPS of 14 Rs on a tiny equity of 1.70 cr and declared 30% dividend for FY07. Company is a leader in the design, engineering, manufacturing and marketing of power tools like drills, grinder, hammers, cutters, polishers etc for construction and various other industrial activities. Notably, with its “POWERMASTER” brand, it has developed strong customer alliances with some of the largest retailers and most important brand names in the world. For FY08 it can register a topline of 50 cr and bottomline of 4 cr ie EPS of 24 Rs. Consdering the 52week H/L as 173/76 Rs it’s a good bet at CMP.
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