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Indo Asian Fuse Gear (155.00) manufactures wide range of electrical circuit protection equipment including distribution boards, switch boards, switch panels, fuse switches, MCCBs, HRC Fuses, MCBs, RCDs, etc. Besides, it’s one of the largest manufacturers of CFLs and MCB’s in India. To capitalize the ongoing boom, it is diversifying into power sector business and will undertake distribution projects on behalf of state electricity boards, corporations and utilities on franchise basis. Meanwhile, it has forayed into cables & wires manufacturing business as well with a planned investment of 100 cr in phases. For the higher end segment, company is setting up a plant in Haridwar under a joint venture with Simon Holding (Spain) for manufacturing home and building automation products for the first time in India. On the other hand it is putting up a facility in Saudi Arabia thru a tie up with Saudi National Glass for production of Compact Fluorescent Lamps (CFLs) and High Intensity Discharge Lamps (HID Lamps). On the back of not so encouraging nos for FY07 and H1FY08, the share price is still available at 50% discount against its high of Rs 320 in May 2006. For FY08 it is expected to clock a turnover of Rs 300 cr and PAT of Rs 18.50 cr which works out to an EPS of Rs 12 on equity of Rs 15.05 cr. However company has the potential to post an EPS of around Rs 18 for FY09. At a modest discounting by 12x times against FY09 earning share price can move upto 220 Rs in medium term.
Belonging to the respected BC Jindal group, Jindal Polyfilms (275.00) is India’s largest manufacturer of flexible packaging films. It makes polyester films (BOPET), polypropylene films (BOPP), metallised films and coated films with in house ability to produce polyester chips for captive consumption. With its new unit at Silvassa becoming operational recently, the current production capacity of the company stands enhanced to BOPET (111000 tpa), BOPP (90000 tpa), metalized film (40000 tpa), coating (18000 tpa) and polyester chips (70000 tpa). Importantly, JPL’s export of high value BOPET film to European union doesn’t attract anti dumping duty although it’s imposed on other manufacturers in India. Moreover it also has a foreign subsidiary company viz. Rexor SAS, a leading metallised and coated film producer in France. Company has posted excellent set of nos for H1FY08 as sales grew by 35% to 613 cr but PAT jumped up 180% to 68 cr which is more then entire FY07 profit of 65 cr. Accordingly it is estimated to end FY08 with topline of 1350 cr and bottomline of 130 cr i.e. EPS of 46 Rs on equity of 28.10 cr. Notably company is having massive reserves of 760 cr leading to a book value of 280 Rs. Although scrip has seen a smart run up in recent past, still it has lot of steam left. Accumulate at sharp declines.
Belonging to BK Birla group, Mangalam Cement (185.00) is one of the leading cement manufacturers with an installed capacity of 1.8 million tonne. Its “Birla Uttam” brand is quite popular in western India as company derives 30% revenue from Rajasthan, 35% from UP, 25% form Delhi and balance form Haryana. Due to buoyancy in market, company is implementing Rs 75 cr capex plan which will enhance its production capacity by 0.50 million tonne thereby taking the total installed capacity to 2.30 million tonne. The project is near completion and expected to commence shortly. For future growth, company intends to setup another 1.5~2 million tonne plant either at same location or at Chittod where company has applied for a mining lease. But most importantly, company has installed 17.50 MW captive thermal power plant which started generating power only from August 2007. Earlier company was buying power from grid at Rs 4.06/unit. Thus, apart from preventing production loss, the power plant is likely to result into saving of Rs 120/tonne i.e. round about 15 cr per year. Hence for FY08 ending March 2008 it may report a turnover of Rs 525 cr and PAT of Rs 95 cr i.e. EPS of Rs 34 on equity of Rs 28.25 cr. Investor can buy at current levels with a price target of Rs 240 in medium term. Meanwhile BIFR has discharged the company from the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 and hence it ceases to be a sick unit.
As the demand for housing as well as housing loan continues to rise due to strong economic growth, Canfin Homes (78.00) is still one of the decent bet considering its cheap valuation. Apart from housing loan it also offers other personal loans like mortgage loan, loan against rent receivable etc. To provide free insurance to its client along with housing finance, it has tied-up with Aviva Life Insurance. It has a pan India presence with four zonal office and 43 branch offices across the country. However, because of stiff competition the net interest margin of the company is under pressure. For the first six month its revenue increased by 20% to Rs 109 cr but net profit declined by 20% to Rs 12 cr. Thus it may report total revenue of 225 cr and net earning of Rs 28 cr i.e. EPS of Rs 14 on equity of 20.50 cr. As company is having huge reserves of 177 cr i.e. book value of 97 Rs, the share price can shoot up Rs 120 in a year’s time. Moreover, to consolidate their position Canara Bank - the parent company has come out with open offer to acquire nearly 21% stake @ Rs 78 per share. That means the downfall is negligible.
Belonging to the respected BC Jindal group, Jindal Polyfilms (275.00) is India’s largest manufacturer of flexible packaging films. It makes polyester films (BOPET), polypropylene films (BOPP), metallised films and coated films with in house ability to produce polyester chips for captive consumption. With its new unit at Silvassa becoming operational recently, the current production capacity of the company stands enhanced to BOPET (111000 tpa), BOPP (90000 tpa), metalized film (40000 tpa), coating (18000 tpa) and polyester chips (70000 tpa). Importantly, JPL’s export of high value BOPET film to European union doesn’t attract anti dumping duty although it’s imposed on other manufacturers in India. Moreover it also has a foreign subsidiary company viz. Rexor SAS, a leading metallised and coated film producer in France. Company has posted excellent set of nos for H1FY08 as sales grew by 35% to 613 cr but PAT jumped up 180% to 68 cr which is more then entire FY07 profit of 65 cr. Accordingly it is estimated to end FY08 with topline of 1350 cr and bottomline of 130 cr i.e. EPS of 46 Rs on equity of 28.10 cr. Notably company is having massive reserves of 760 cr leading to a book value of 280 Rs. Although scrip has seen a smart run up in recent past, still it has lot of steam left. Accumulate at sharp declines.
Belonging to BK Birla group, Mangalam Cement (185.00) is one of the leading cement manufacturers with an installed capacity of 1.8 million tonne. Its “Birla Uttam” brand is quite popular in western India as company derives 30% revenue from Rajasthan, 35% from UP, 25% form Delhi and balance form Haryana. Due to buoyancy in market, company is implementing Rs 75 cr capex plan which will enhance its production capacity by 0.50 million tonne thereby taking the total installed capacity to 2.30 million tonne. The project is near completion and expected to commence shortly. For future growth, company intends to setup another 1.5~2 million tonne plant either at same location or at Chittod where company has applied for a mining lease. But most importantly, company has installed 17.50 MW captive thermal power plant which started generating power only from August 2007. Earlier company was buying power from grid at Rs 4.06/unit. Thus, apart from preventing production loss, the power plant is likely to result into saving of Rs 120/tonne i.e. round about 15 cr per year. Hence for FY08 ending March 2008 it may report a turnover of Rs 525 cr and PAT of Rs 95 cr i.e. EPS of Rs 34 on equity of Rs 28.25 cr. Investor can buy at current levels with a price target of Rs 240 in medium term. Meanwhile BIFR has discharged the company from the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 and hence it ceases to be a sick unit.
As the demand for housing as well as housing loan continues to rise due to strong economic growth, Canfin Homes (78.00) is still one of the decent bet considering its cheap valuation. Apart from housing loan it also offers other personal loans like mortgage loan, loan against rent receivable etc. To provide free insurance to its client along with housing finance, it has tied-up with Aviva Life Insurance. It has a pan India presence with four zonal office and 43 branch offices across the country. However, because of stiff competition the net interest margin of the company is under pressure. For the first six month its revenue increased by 20% to Rs 109 cr but net profit declined by 20% to Rs 12 cr. Thus it may report total revenue of 225 cr and net earning of Rs 28 cr i.e. EPS of Rs 14 on equity of 20.50 cr. As company is having huge reserves of 177 cr i.e. book value of 97 Rs, the share price can shoot up Rs 120 in a year’s time. Moreover, to consolidate their position Canara Bank - the parent company has come out with open offer to acquire nearly 21% stake @ Rs 78 per share. That means the downfall is negligible.
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