Small & Beautiful (Guj)

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Although share price of Anjani Portland (50.00) has moved up smartly in recent past still it has lot of steam left. Under the leadership of Mr. K V Vishnu Raju, company has made a strong turnaround in FY07 and is further growing at a healthy pace in FY08. Notably, it has a captive limestone mine, captive power generation unit and state-of-the-art technology from Nihon of Japan. In line with its modernization and diversification plans, company acquired a grinding unit in an open auction conducted by A.P.I.D.C which has further augmented its grinding capacity. On the back of robust performance, company gave maiden dividend of 10% for FY07. For H1FY08 it registered 50% growth in sales to 59 cr and 60% rise in NP to 8.60 cr. On an estimated OPM of around 26~27%, it can record a PAT of 16 cr on topline of 125 cr for FY08. This works out to an EPS of 9 Rs on equity of 18.40 cr. Buy for a target of 75 Rs in a year’s time

Post its recent merger with two group companies M/s N.R. Paper and Boards Limited and Suman Paper and Boards Ltd, NR Agrawal Industries (34.00) has become one of the largest manufacturer of double coated duplex boards (heavy weight coated) and newsprint with total installed capacity of 130,000 MTPA for duplex board and 40,000 MTPA for news print. Besides, to diversify its product range, company has started manufacturing cream wove i.e. writing & printing paper form this fiscal. Moreover, as per unconfirmed reports it has acquired 90 acres of land near Vapi to set up a 125,000 MTPA Greenfield plant for newsprint cum writing and printing paper. Despite company facing some pressure on its margin, it may end FY08 with sales of Rs 325 cr and PAT of Rs 9 cr. This translates into EPS of little more than Rs 5 on current equity of Rs 17 cr. Accumulate at declines.

Aro Granite (95.00) 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 is in the midst of expanding its tile capacity to 5,40,000 sq mtr from 1,80,000 sq mtr, whereas slab capacity will be enhanced to 3,90,000 sq mtr from 2,95,000 sq mtr. To meet its raw material requirement company has started importing rough granite blocks from Saudi Arabia, Norway, Brazil & Finland etc. As company has reported lacklustre performance for first two qtr its share price hasn’t moved for quite long time. For FY08 it is expected to report a topline of Rs 110 cr and PAT of Rs 14 cr i.e. EPS of 19 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 from April.2007. On the back of huge expansion, FY09 is expected to be much better and share price can appreciate by 50% in 12~15 months.

Belonging to Aditya Birla group, Bihar Caustic (90.00) is among the leading manufacturers of caustic soda, chlorine and hydrochloric acid. After increasing its caustic soda capacity by 50% last year, company is now further expanding it from 225 to 265 TPD by addition of electrolysers as well by debottlenecking. Besides, it is putting up a stable bleaching powder plant at an estimated cost of Rs.7.50 cr to be operational by mid 2008. But most importantly, company has recently set up an aluminium chloride project and expects to produce and sell about 12000 MT of aluminium chloride in FY08. On the margin side, company is consistently reporting an OPM of around 45% and NPM of more than 20% which is excellent as per any standards. For FY08 it is estimated to clock a turnover of 185 cr and profit of 40 cr which leads to an EPS of 17 Rs on equity of 23.40 cr. Fundamentally, the scrip can move upto Rs 120 in six months. Moreover, there are also rumors of company getting merged with Hindalco which can trigger the share price further.

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