Small & Beautiful (Guj)
Shree Ganesh Forgings (91.00) specializes in producing complete line of stainless steel, carbon steel and alloy steel forgings for various industries including automotive. Infact it boasts of making more than 2500 varieties of specialized items on piecemeal production and manufactures different variety of flanges and fittings weighing from 0.5 kg to 1000 kg. Recently company has acquired 100% stake in Hertecant N V Belgium & ELFE France from Outo Kumpu – Sweden which are reportedly doing well. Importantly its project to double the capacity from 11,000 tonnes to 22,800 tonne is almost completed and expected to commence production soon. Two press machines with 2500 tonne and 4000 tonne capacity and 48 computer numerically controlled (CNC) robotic machining lines has been already installed. On a consolidated basis company is estimated to clock a turnover of Rs 225 cr and bottomline of 20 cr thereby posting an EPS of Rs 16 on current equity of Rs 12.50 cr. Scrip has consolidated for long time and is poised to move up sharply post Q3 nos.
Orient Ceramics (64.00) produces wall as well as floor tiles under the brand name “Orient” and offers one of the largest range by way of designs, colors, sizes, choice of surface finishes etc. It also makes special tiles under various collections branded as Artline, Midline, Vivaldi, Novista, Goemetricos & Egyptian Rustic collection which are unique and based on some theme, finish, pattern, cost etc. Besides, company has created a niche for itself thru “Rangoli” - its designer collection which is fusion of tradition with modernity. With the introduction of latest machinery, it has started producing high value glazed and polished vitrified tiles from current fiscal. Further, it has converted all manufacturing lines to fuel saving single fast firing technology. To increase the presence in south, it has opened a regional distribution centre in Bangalore apart from strengthening its dealership network. Fundamentally also company has been successful in maintaining its profit margin despite intense competition. On the back of expanded capacity to 220,000 TPA, it is estimated to clock a turnover of 240 cr and NP of 11.50 cr i.e. EPS of Rs 11 on equity of 10.50 cr. Moreover, a company having a gross block of 157 cr; is available at an enterprise value of merely 125 cr which is extremely cheap by any standards. It’s an indirect bet on infrastructure play.
South India Paper mills (85.00) is having strong presence in packing paper and paper boards apart from manufacturing writing and printing paper. On back of robust demand for packaging grades of paper, company is implementing a brown field expansion with an investment of about 110 cr. It will more than double its paper manufacturing capacity to 105,000 TPA from 55,000 TPA currently. To support the enhanced energy requirements, it will also be augmenting its captive power generation capacity by 3.50 MW. Besides expansion, company is going for forward integration into high quality corrugated boards and intends to have at least one 100% owned facility and possibly one facility under joint venture near Chennai. However, the new paper capacity is expected to be commissioned by December 2008 and corrugated boards’ facility to start by June 2008. Meanwhile, company continues to report decent set of nos and is expected to end FY08 with sales of 125 cr and net profit of 12.50 cr. This translates into EPS of 17 Rs on equity of 7.50 cr. Considering company’s aggressive expansion plan and strong fundamentals, the share price can move up to 120 Rs at a modest discounting by 7x times. A slow but steady performer.
Although share price of Andhra Petrochemicals (32.00) has doubled in the recent rally, still investors can accumulate this scrip at declines for further gains. It is the only producer of Oxo-Alcohols in India with a production capacity of 42,000 MTPA. The market demand for Oxo-Alcohols is currently estimated at 143,000 MTPA, out of which company caters to 30% demand and the balance 70% is met through imports. To secure a greater share of the market and meet the growing demand, company is in undergoing expansion and modernization programme to increase its production capacity to 73,000 MTPA. However, the enhanced capacity is expected to be operational only by Sept 2009. Importantly, company has been able to save a massive Rs 12 cr per annum only on power cost as it has installed and commissioned 2400 KVA uninterrupted power supply system and discontinued the operation of D.G.Sets from last fiscal. For FY07 company made a strong turnaround as sales increased by 35% to Rs 266 cr but NP zoomed up to Rs 36 cr compared to Rs 2 cr in FY06. It even gave 10% as maiden dividend. On the back of higher realizations and better efficiency, it has reported encouraging nos for the first two quarters as well and is expected to end FY08 with sales of Rs 300 cr and PAT of Rs 48 cr i.e. EPS of Rs 6 on equity of Rs 85 cr. As per grapevine, India’s leading corporate entity is eyeing to acquire this company. At the same time promoters i.e. Andhra Sugars have increased their stake by 4% in last one year thru creeping acquisition.
Orient Ceramics (64.00) produces wall as well as floor tiles under the brand name “Orient” and offers one of the largest range by way of designs, colors, sizes, choice of surface finishes etc. It also makes special tiles under various collections branded as Artline, Midline, Vivaldi, Novista, Goemetricos & Egyptian Rustic collection which are unique and based on some theme, finish, pattern, cost etc. Besides, company has created a niche for itself thru “Rangoli” - its designer collection which is fusion of tradition with modernity. With the introduction of latest machinery, it has started producing high value glazed and polished vitrified tiles from current fiscal. Further, it has converted all manufacturing lines to fuel saving single fast firing technology. To increase the presence in south, it has opened a regional distribution centre in Bangalore apart from strengthening its dealership network. Fundamentally also company has been successful in maintaining its profit margin despite intense competition. On the back of expanded capacity to 220,000 TPA, it is estimated to clock a turnover of 240 cr and NP of 11.50 cr i.e. EPS of Rs 11 on equity of 10.50 cr. Moreover, a company having a gross block of 157 cr; is available at an enterprise value of merely 125 cr which is extremely cheap by any standards. It’s an indirect bet on infrastructure play.
South India Paper mills (85.00) is having strong presence in packing paper and paper boards apart from manufacturing writing and printing paper. On back of robust demand for packaging grades of paper, company is implementing a brown field expansion with an investment of about 110 cr. It will more than double its paper manufacturing capacity to 105,000 TPA from 55,000 TPA currently. To support the enhanced energy requirements, it will also be augmenting its captive power generation capacity by 3.50 MW. Besides expansion, company is going for forward integration into high quality corrugated boards and intends to have at least one 100% owned facility and possibly one facility under joint venture near Chennai. However, the new paper capacity is expected to be commissioned by December 2008 and corrugated boards’ facility to start by June 2008. Meanwhile, company continues to report decent set of nos and is expected to end FY08 with sales of 125 cr and net profit of 12.50 cr. This translates into EPS of 17 Rs on equity of 7.50 cr. Considering company’s aggressive expansion plan and strong fundamentals, the share price can move up to 120 Rs at a modest discounting by 7x times. A slow but steady performer.
Although share price of Andhra Petrochemicals (32.00) has doubled in the recent rally, still investors can accumulate this scrip at declines for further gains. It is the only producer of Oxo-Alcohols in India with a production capacity of 42,000 MTPA. The market demand for Oxo-Alcohols is currently estimated at 143,000 MTPA, out of which company caters to 30% demand and the balance 70% is met through imports. To secure a greater share of the market and meet the growing demand, company is in undergoing expansion and modernization programme to increase its production capacity to 73,000 MTPA. However, the enhanced capacity is expected to be operational only by Sept 2009. Importantly, company has been able to save a massive Rs 12 cr per annum only on power cost as it has installed and commissioned 2400 KVA uninterrupted power supply system and discontinued the operation of D.G.Sets from last fiscal. For FY07 company made a strong turnaround as sales increased by 35% to Rs 266 cr but NP zoomed up to Rs 36 cr compared to Rs 2 cr in FY06. It even gave 10% as maiden dividend. On the back of higher realizations and better efficiency, it has reported encouraging nos for the first two quarters as well and is expected to end FY08 with sales of Rs 300 cr and PAT of Rs 48 cr i.e. EPS of Rs 6 on equity of Rs 85 cr. As per grapevine, India’s leading corporate entity is eyeing to acquire this company. At the same time promoters i.e. Andhra Sugars have increased their stake by 4% in last one year thru creeping acquisition.
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