STOCK WATCH
Gujarat Apollo Industries (182.00) is India's No.1 manufacturer of asphalt based road construction & maintenance equipment like asphalt plants, soil stabilization plants, indirect heating equipment, paver finisher, bitumen sprayer, rollers, kerb paver etc. For the June qtr it reported satisfactory nos as sales grew marginally by 7% to 36 cr but NP increased by 25% to 4 cr on the back of higher other income component. Importantly, couple of months back company has concluded an exclusive technical know how agreement with a German company for design and manufacture crushers and aggregate producing equipment. This will expand and compliments its current product line and will also enable it to address mining and re-cycling industry in coming years. Besides to cater to the increased demand, company is implementing brown field expansion plan for which it has made pref allotment of 5.50 lakh warrants @ 180 Rs to promoter group. For Fy08, it is estimated to report a topline of 175 cr and profit of 20 cr which translates into EPS of 18 Rs on diluted equity of 11.05 cr. Hence it’s one of cheapest scrip compare to its peer and has the potential to cross 250 Rs in short to medium term. Moreover, scrip has been recently listed in NSE also.
Belonging to the reputed Hero group, Shivam Auto (96.00) was formed due to demerger of Munjal Auto Industries. Hence, company is engaged in manufacturing of forging and machining components for two-wheelers of Hero Honda thru its plant at Binola near Gurgaon. Presently its product range consists of precision auto components including gear blanks, transmission gears, transmission shafts, warm forged ratchets etc. For FY07, its sales and NP stood at 130 cr and 16 cr respectively thereby posting an EPS of 16 Rs on equity of 10 cr. However for the June qtr, sales remained flat at 31.50 cr but PAT dropped sharply by 40% to 2.60 cr due to slightly lower margin coupled with higher interest/depreciation cost. Although its business is depended on Hero Honda, still it can register a topline of 140 cr and NP of 16 cr i.e. EPS of 16 Rs on current equity. Buy only at declines.
Bilpower Ltd (180.00) is one of the leading players in the field of manufacturing transformers of all types, electrical laminations, stampings and cores. Besides it’s a leading trader of CRGO & CRNGO and produces the largest range of transformer cores in India. For the June’07 quarter its sales grew by 35% to 60 cr but PBT jumped up 50% to 6.50 cr. However on the net profit level it recorded 15% rise to 5 cr. To cash on the ongoing power sector boom, company has chalked out very aggressive plans to grow organically as well as inorganically. As a step towards forward integration, company has acquired Tarapur Transformers and is now planning to merge SunTranstamp, a power ancillary equipment company with itself. It is interested in further acquisitions and is in talks with different companies, for which it may raise capital thru FCCB/GDR route in future. For FY08 it may clock a turnover of 300 cr and PAT of 21 cr which leads to an EPS of 23 on current equity of 9 cr. At a fair discounting by 12x times scrip can cross 275 Rs in medium term. Buy on declines.
Cement sector is once again in action in anticipation of price hike in coming days; hence JK Lakshmi Cement (162.00) can see a smart rally accordingly. Company has started the work on the projects for further expanding its capacity from the existing 3.4 million tonne to 5 million tonne per annum and is planning to complete it by October 2008. Importantly, it has fully commissioned both its captive thermal power plants of 18 MW, thereby making huge savings in power cost which will boost its bottomline. Moreover, it is already operating 5 RMC (ready-mix concrete) plants and hopes to add at least 5 to 6 plants more during the current year. It reported 40% growth in sales to 266 cr whereas NP zoomed up 75% to 68.50 cr for June’07, hence posting an EPS of whopping 12 Rs for the qtr. On a conservative basis, it is estimated to end FY08 with sales of 1000 cr and profit of 185 cr i.e. EPS of 30 Rs on fully diluted equity of around 61.20 cr. Despite having higher debt, scrip has the potential to cross 200 mark in medium term.
Belonging to the reputed Hero group, Shivam Auto (96.00) was formed due to demerger of Munjal Auto Industries. Hence, company is engaged in manufacturing of forging and machining components for two-wheelers of Hero Honda thru its plant at Binola near Gurgaon. Presently its product range consists of precision auto components including gear blanks, transmission gears, transmission shafts, warm forged ratchets etc. For FY07, its sales and NP stood at 130 cr and 16 cr respectively thereby posting an EPS of 16 Rs on equity of 10 cr. However for the June qtr, sales remained flat at 31.50 cr but PAT dropped sharply by 40% to 2.60 cr due to slightly lower margin coupled with higher interest/depreciation cost. Although its business is depended on Hero Honda, still it can register a topline of 140 cr and NP of 16 cr i.e. EPS of 16 Rs on current equity. Buy only at declines.
Bilpower Ltd (180.00) is one of the leading players in the field of manufacturing transformers of all types, electrical laminations, stampings and cores. Besides it’s a leading trader of CRGO & CRNGO and produces the largest range of transformer cores in India. For the June’07 quarter its sales grew by 35% to 60 cr but PBT jumped up 50% to 6.50 cr. However on the net profit level it recorded 15% rise to 5 cr. To cash on the ongoing power sector boom, company has chalked out very aggressive plans to grow organically as well as inorganically. As a step towards forward integration, company has acquired Tarapur Transformers and is now planning to merge SunTranstamp, a power ancillary equipment company with itself. It is interested in further acquisitions and is in talks with different companies, for which it may raise capital thru FCCB/GDR route in future. For FY08 it may clock a turnover of 300 cr and PAT of 21 cr which leads to an EPS of 23 on current equity of 9 cr. At a fair discounting by 12x times scrip can cross 275 Rs in medium term. Buy on declines.
Cement sector is once again in action in anticipation of price hike in coming days; hence JK Lakshmi Cement (162.00) can see a smart rally accordingly. Company has started the work on the projects for further expanding its capacity from the existing 3.4 million tonne to 5 million tonne per annum and is planning to complete it by October 2008. Importantly, it has fully commissioned both its captive thermal power plants of 18 MW, thereby making huge savings in power cost which will boost its bottomline. Moreover, it is already operating 5 RMC (ready-mix concrete) plants and hopes to add at least 5 to 6 plants more during the current year. It reported 40% growth in sales to 266 cr whereas NP zoomed up 75% to 68.50 cr for June’07, hence posting an EPS of whopping 12 Rs for the qtr. On a conservative basis, it is estimated to end FY08 with sales of 1000 cr and profit of 185 cr i.e. EPS of 30 Rs on fully diluted equity of around 61.20 cr. Despite having higher debt, scrip has the potential to cross 200 mark in medium term.
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