Small & Beautiful (Gujarati)
Manugraph (90.00) is India's largest manufacturer of web offset and sheet fed offset presses. With a whopping 70 % market share, companys presses are present in nearly all-major publication houses. Not only in India, it has worldwide presence from Latin America to Europe and from the Middle East to China. Last year it acquired Dauphin Graphic Machines Inc, the No. 1 company in the US market in four page segment for 19.20 million US $. With this acquisition it has become the world largest single width press manufacturing company. Accordingly, the US subsidiary has started outsourcing the component parts from India and even marketing of Manugraph machines in North America. But due to economic slowdown in US, the response is not as good as was anticipated earlier. Still on the back of robust domestic demand it is expected to end FY08 with sales of Rs 400 cr and PAT of Rs 50 cr on standalone basis. This translates into EPS of Rs 16 on current equity of 6.08 cr with face value as Rs 2. Scrip has been beaten down mercilessly from the recent high of Rs 205 in Nov 2007 giving a godo opportunity to buy. Besides its agreement of business co-operation for marketing, with MAN Roland-Germany, is under negotiation.
Medi Caps (65.00) is one of the largest manufacturers of empty hard gelatin capsules shells which are widely used to package drugs, vitamins, antibiotics and cosmetics. With all the major pharma companies undergoing aggressive expansion, the future prospect of downstream companies like Medi Caps is encouraging. But more importantly, it is a cash rich company and is having an investment portfolio of Rs 26 cr only in mutual funds. Ironically, against this it is available at an enterprise value of only Rs 20 cr. From the Dec’07 qtr nos it seems that management has smartly made lot of selling before the Jan’08 crash and booked a profit of whopping Rs 7 cr, only from investments in a single quarter. Hence, the recent carnage in 2008 wouldn’t have affected its portfolio to great extent. Till now, in this fiscal company has already registered a cool profit of Rs 11 cr from investments alone. However management may book some loss in this qtr to set off short term capital gains. Still it is available at decent valuation. Moreover company has entered into a joint venture arrangement with M/s. Mission Pharmaceuticals for setting up a plant at SEZ in Pithampur (Dist DHAR) for manufacturing softgel capsules with the total proposed investment of Rs 20 cr.
For the Dec’07 quarter Mazda Ltd (64.00) reported 40% rise in sales to Rs 18 cr whereas Net profit shot up 80% to Rs 2.40 cr posting an EPS of almost Rs 6 for Q3FY08 alone. Hence its nine months profit of Rs 4.90 cr has already surpassed the entire FY07 PAT of Rs 4.70 cr. Importantly, company has a technical collaboration with world renowned Croll-Reynolds Inc. USA, who holds 12% stake in the company. Besides, HSBC is holding 8% stake under FII category. To cater the increasing demand, Mazda is setting up a third unit with an investment of approximately 5 to 6 crores. It is among the few engineering companies in the world, manufacturing very specialized, high technology and critical equipments for various industries like power, refineries, fertilizers, chemicals, nuclear, sugar, paper, food, pharma etc. For FY08 it is expected to clock a turnover of Rs 65 cr and profit of Rs 6.50 cr. This works out to an EPS of whopping Rs 15 on small equity of Rs 4.26 cr. At a very modest discounting by 8x times scrip has the potential to double in a years time. A screaming buy.
In anticipation of correction in real estate prices, share price of housing construction companies have been beaten down badly and Kamanwala Housing (85.00) is no exception. From the recent a high of around Rs 210, it has tumbled down to Rs 85 in two months. However company is mainly operating in Mumbai and has few good residential projects in Malad & Santacruz and huge commercial project in Bandra Kurla complex where real estate prices are still on an upmove. Besides it has several projects lined up for future in Andheri, Mahim, Goregaon etc and even in Hydrabad. Recently it also bought 10,000 sq mtr land in Turbhe for 15 cr. It is also merging its 52% subsidiary company called “M/S. Doongursee Diamond Tools Ltd” which actually holds one lakh FSI for its Malad project. It is expected to register total revenue of around Rs 90 cr and profit of Rs 18~19 cr for FY08. This works out to an EPS of Rs 26 on fully diluted equity of Rs 7.20 cr. Hence, it is available extremely cheap at a PER of 3x with market cap of less than Rs 50 cr.
Medi Caps (65.00) is one of the largest manufacturers of empty hard gelatin capsules shells which are widely used to package drugs, vitamins, antibiotics and cosmetics. With all the major pharma companies undergoing aggressive expansion, the future prospect of downstream companies like Medi Caps is encouraging. But more importantly, it is a cash rich company and is having an investment portfolio of Rs 26 cr only in mutual funds. Ironically, against this it is available at an enterprise value of only Rs 20 cr. From the Dec’07 qtr nos it seems that management has smartly made lot of selling before the Jan’08 crash and booked a profit of whopping Rs 7 cr, only from investments in a single quarter. Hence, the recent carnage in 2008 wouldn’t have affected its portfolio to great extent. Till now, in this fiscal company has already registered a cool profit of Rs 11 cr from investments alone. However management may book some loss in this qtr to set off short term capital gains. Still it is available at decent valuation. Moreover company has entered into a joint venture arrangement with M/s. Mission Pharmaceuticals for setting up a plant at SEZ in Pithampur (Dist DHAR) for manufacturing softgel capsules with the total proposed investment of Rs 20 cr.
For the Dec’07 quarter Mazda Ltd (64.00) reported 40% rise in sales to Rs 18 cr whereas Net profit shot up 80% to Rs 2.40 cr posting an EPS of almost Rs 6 for Q3FY08 alone. Hence its nine months profit of Rs 4.90 cr has already surpassed the entire FY07 PAT of Rs 4.70 cr. Importantly, company has a technical collaboration with world renowned Croll-Reynolds Inc. USA, who holds 12% stake in the company. Besides, HSBC is holding 8% stake under FII category. To cater the increasing demand, Mazda is setting up a third unit with an investment of approximately 5 to 6 crores. It is among the few engineering companies in the world, manufacturing very specialized, high technology and critical equipments for various industries like power, refineries, fertilizers, chemicals, nuclear, sugar, paper, food, pharma etc. For FY08 it is expected to clock a turnover of Rs 65 cr and profit of Rs 6.50 cr. This works out to an EPS of whopping Rs 15 on small equity of Rs 4.26 cr. At a very modest discounting by 8x times scrip has the potential to double in a years time. A screaming buy.
In anticipation of correction in real estate prices, share price of housing construction companies have been beaten down badly and Kamanwala Housing (85.00) is no exception. From the recent a high of around Rs 210, it has tumbled down to Rs 85 in two months. However company is mainly operating in Mumbai and has few good residential projects in Malad & Santacruz and huge commercial project in Bandra Kurla complex where real estate prices are still on an upmove. Besides it has several projects lined up for future in Andheri, Mahim, Goregaon etc and even in Hydrabad. Recently it also bought 10,000 sq mtr land in Turbhe for 15 cr. It is also merging its 52% subsidiary company called “M/S. Doongursee Diamond Tools Ltd” which actually holds one lakh FSI for its Malad project. It is expected to register total revenue of around Rs 90 cr and profit of Rs 18~19 cr for FY08. This works out to an EPS of Rs 26 on fully diluted equity of Rs 7.20 cr. Hence, it is available extremely cheap at a PER of 3x with market cap of less than Rs 50 cr.
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