STOCK WATCH
Aro Granite (90.00) is one of the largest manufacturer and exporter of modular granite tiles and slabs with the share of more than 5% of India’s total export of granite products. Company has recently expanded its tile capacity to 5,40,000 sq mtr from 1,80,000 sq mtr, whereas slab capacity has been enhanced to 3,90,000 sq mtr from 2,95,000 sq mtr. This means overall it has augmented its production by 100%. To meet its raw material requirement company has started importing rough granite blocks from Saudi Arabia, Norway, Brazil & Finland etc. Besides there is also an improvement in the availability of raw material in the domestic market which was not the case earlier. Notably, the company has bagged the special export award from CAPEXIL for the sixth time in the year 2005-06. Company has managed to report satisfactory nos for the June qtr and is expected to report a topline of 150 cr and PAT of 19 cr for FY08. This leads to an EPS of 26 Rs on small equity of 7 cr. In order to increase the liquidity, the equity shares of the company have also been listed in NSE with effect from 24.04.2007. In case rupee continues to appreciate sharply in future, company’s margin may come under pressure.
Panoramic Universal (103.00) erstwhile IT Microsystem derives more than 80% of revenue from hospitality business as it 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. It also manages India’s largest discotheque as well biggest revolving entertainment lounge called ‘Area 51’ in Pune. On the back of rising ARR & occupancy level, company has implemented aggressive expansion plan and is coming up with hotels / resorts at Thane, Pune, Durgapur, Jaipur, Hyderabad, Kerala, and Goa. Earlier in May’07 its subsidiary in USA has purchased 79 acres land in Fort Drum at Watertown, New York, USA for commercial and residential project. In short, from the present 918 rooms under operation, the company targets to own and operate 1846 rooms in the next two years. To fund its growth plan, company is raising 55 cr thru 1:2 right issue @ 85 Rs per share and is also slated to come out with FCCB, QIB placement etc. Meanwhile it acquired 4.46% stake in Inter-connected Stock Exchange of India Ltd (ISE) at a bid price of Rs 250/- per share. For FY08 it is estimated to register total revenue of 150 cr and PAT of 36 cr i.e. EPS of 28 Rs on current equity of 6.50 cr having a face value of 5/- Rs per share. However the huge equity dilution and appreciating rupee is cause of concern.
On the back of boom in housing sector and strong demand for commercial property, Ansal Housing (190.00) is aggressively expanding and has launched residential townships branded as “Ansal Town” across seven cities namely Agra, Indore, Jammu, Rewari, Karnal. Meerut and Ghaziabad which are spread over 1400 acres. In all, company has lined up gigantic 56.10 million sq. ft of development (80% in the residential segment) spread over 22 cities in the next five years. It will also be developing an I.T. Park in Bangalore apart from venturing into construction of budget hotels and serviced apartments. Currently, company has a rich land bank of 2500 acres with about 50% under its own name while the rest under firm collaborators agreement. On a standalone basis it may end FY08 with total revenue of 275 cr and profit of 50 cr i.e. EPS of 29 Rs on fully diluted equity of 17.50 cr. Notably, the total value of the projects with the company and under joint ventures is around Rs. 6000 crores. Against this, the company is available at a market cap of merely 350 cr. It’s a screaming buy.
Purely on the fundamental basis, GM Breweries (95.00) is trading fairly cheap at the current enterprise value of 100 cr. Company enjoys virtual monopoly in country liquor in the districts of Mumbai, Navi Mumbai and Thane. Infact, it is the single largest manufacturer of country liquor in the state of Maharashtra. With the installation of additional bottling lines last fiscal, company now has the capacity to process 8.26 crores bulk litres of country liquor per annum. However the capacity utilization was little over 60% which means company has got tremendous potential to utilize the balance capacity by penetrating into interior districts of Maharashtra taking advantage of its brand image. Besides it also has the facilities to manufacture IMFL, which is not being utilized currently. With 68% holding promoters are investor friendly and has an uninterrupted record of dividend payment from the day of listing. It is expected to end FY08 with sales of 190 cr and NP of 15 cr which means an EPS of 16 Rs on equity of 9.40 cr. Having a gross block of whopping 68 cr, low debt equity ratio, strong cash flow, decent margins etc, the company deserves much better discounting. Scrip is bound to get re-rated sooner or later. Hold it patiently.
Panoramic Universal (103.00) erstwhile IT Microsystem derives more than 80% of revenue from hospitality business as it 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. It also manages India’s largest discotheque as well biggest revolving entertainment lounge called ‘Area 51’ in Pune. On the back of rising ARR & occupancy level, company has implemented aggressive expansion plan and is coming up with hotels / resorts at Thane, Pune, Durgapur, Jaipur, Hyderabad, Kerala, and Goa. Earlier in May’07 its subsidiary in USA has purchased 79 acres land in Fort Drum at Watertown, New York, USA for commercial and residential project. In short, from the present 918 rooms under operation, the company targets to own and operate 1846 rooms in the next two years. To fund its growth plan, company is raising 55 cr thru 1:2 right issue @ 85 Rs per share and is also slated to come out with FCCB, QIB placement etc. Meanwhile it acquired 4.46% stake in Inter-connected Stock Exchange of India Ltd (ISE) at a bid price of Rs 250/- per share. For FY08 it is estimated to register total revenue of 150 cr and PAT of 36 cr i.e. EPS of 28 Rs on current equity of 6.50 cr having a face value of 5/- Rs per share. However the huge equity dilution and appreciating rupee is cause of concern.
On the back of boom in housing sector and strong demand for commercial property, Ansal Housing (190.00) is aggressively expanding and has launched residential townships branded as “Ansal Town” across seven cities namely Agra, Indore, Jammu, Rewari, Karnal. Meerut and Ghaziabad which are spread over 1400 acres. In all, company has lined up gigantic 56.10 million sq. ft of development (80% in the residential segment) spread over 22 cities in the next five years. It will also be developing an I.T. Park in Bangalore apart from venturing into construction of budget hotels and serviced apartments. Currently, company has a rich land bank of 2500 acres with about 50% under its own name while the rest under firm collaborators agreement. On a standalone basis it may end FY08 with total revenue of 275 cr and profit of 50 cr i.e. EPS of 29 Rs on fully diluted equity of 17.50 cr. Notably, the total value of the projects with the company and under joint ventures is around Rs. 6000 crores. Against this, the company is available at a market cap of merely 350 cr. It’s a screaming buy.
Purely on the fundamental basis, GM Breweries (95.00) is trading fairly cheap at the current enterprise value of 100 cr. Company enjoys virtual monopoly in country liquor in the districts of Mumbai, Navi Mumbai and Thane. Infact, it is the single largest manufacturer of country liquor in the state of Maharashtra. With the installation of additional bottling lines last fiscal, company now has the capacity to process 8.26 crores bulk litres of country liquor per annum. However the capacity utilization was little over 60% which means company has got tremendous potential to utilize the balance capacity by penetrating into interior districts of Maharashtra taking advantage of its brand image. Besides it also has the facilities to manufacture IMFL, which is not being utilized currently. With 68% holding promoters are investor friendly and has an uninterrupted record of dividend payment from the day of listing. It is expected to end FY08 with sales of 190 cr and NP of 15 cr which means an EPS of 16 Rs on equity of 9.40 cr. Having a gross block of whopping 68 cr, low debt equity ratio, strong cash flow, decent margins etc, the company deserves much better discounting. Scrip is bound to get re-rated sooner or later. Hold it patiently.
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