STOCK WATCH

Krone Communications (128.00) is a 62% subsidiary of US based ADC Telecommunications, which is world leader in communications network infrastructure and has presence in over 150 countries worldwide. Thus, Krone provides the connections for wireline, wireless, cable, broadcast and enterprise networks in India. Its innovative network infrastructure equipment and professional services enable high-speed Internet, data, video, and voice services to residential, business and mobile subscribers. Besides structured cabling solution, it also offers Wi-Fi and Wi-max solutions. In addition, the company enables wireless carriers to get more from their networks with its Digivance™ radio frequency transport solutions and ClearGain® tower-mounted amplifiers. Because of its hi-tech professional service its clientele includes corporate giants like Bharti Televentures, Reliance Infocom, Tata Teleservices, Siemens, HFCL Infotel, TCS, Alcatel, Cognizant, Lucent, etc to name a few. For FY07 ending Oct 2007, it is expected to report a topline of 90 cr and bottomline of 7.50 cr which translates into EPS of 16 Rs on small equity of 4.60 cr. That means this debt free MNC is available at a very cheap discounting of 8x times. In future, the parent company may also opt for delisiting which will trigger the share price to its real worth.

ANG Auto (170.00) is among the few companies in the world to be completely integrated – from the manufacture of components to sub-assemblies and assemblies and finally to vehicles. Today it the largest trailer manufacturing company in India with a capacity of 3600 trailers per year and will soon be No. 1 in Asia as it is augmenting the capacity to 6000 trailers. Notably, company has entered into a five year contract with Ashok Leyland for trailers, which is valued at 1500-1800 cr. Secondly, its patented automatic slack adjuster and the single piece dummy axle is witnessing strong demand from all over the world. Going ahead, it intends to manufacture suspension systems and is also setting up a forging unit at Bhiwadi, Rajasthan at capex of Rs 37. To consolidate its operations company has decided to merge ANG Auto Tech, its 75%subsidiary with itself. For FY08, it is expected to clock a turnover of 175 cr and profit of 25 cr on a standalone basis. This works out to an EPS of 19 Rs on fully diluted equity of 13.40 cr. Because of sharp rupee appreciation scrip is hitting 52week low, thereby giving good opportunity for long term investors to accumulate at declines.

Steel Cast (175.00) is a leading manufacturer of carbon steel, low alloy steel, high alloy steel, hadfield manganese steel and other superior grades of wear and abrasion resistant steel castings by sand molding and shell molding process. It basically supplies to host of OEM’s in segments like construction equipments, cement machinery, steel plant manufacturing, mining, aerobridge industry, shipping, power etc. In order to cater the increasing demand, company has expanded its capacity to 10,000 TPA in March 2007 and has recently enhanced it to 13000 TPA in Sept 2007. Ironically, it is among the very few firms deploying 6-Sigma methodology and philosophy in the organizational working of the company in association with M/s. Caterpillar. However, due to sharp rise in nickel and other ferro alloys prices, company’s margin has been impacted in last 3 quarters. That’s why the share price has tumbled down from a high 325 and is hitting 52 week lows. But from early June nickel prices have cooled down more than 35%, which will again improve the company’s margin in coming qtrs. Hence, on an estimated OPM of 17% for FY08 it may register sales of 125 cr and PAT of 10 cr. This leads to an EPS of 28 Rs on small equity of 3.60 cr. At a reasonable discounting by 8x times, scrip may cross 225 Rs in medium term.

Shakti Metdor (180.00) is a market leader in making special scientific doors, fire doors, stainless steel doors and general doors. In short it is one shop stop for total door solutions. It primarily caters to infrastructure industry, information technology, ITES, BPO, pharma and healthcare sector. In addition to performance door, company is examining the feasibility of introducing new products to cater to the building industry which are wood substitutes and would also compliment the current products. Apart from having an ISO 9001: 2000 certifications, it is stream lining its operations by implementing ERP from SAP business software. To maintain its leadership, company is regularly expanding its manufacturing capacity. Last fiscal only it commissioned the R&D centre and facilities training centre. On the export front, company is looking at South Asia, among other regions, as a possible growth area for its product and is actively exploring it. For FY08 it is estimated to clock sales of 75 cr and profit of 12.50 i.e. EPS of 45 Rs on a very tiny equity of 2.75 cr. Scrip has the potential to touch 250 Rs in short to medium term.