STOCK WATCH

Manugraph (85.00) 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.

Lokesh Machines (65.00) is engaged in the design, development and manufacture of custom built special purpose machines and general purpose CNC (computerized numerical controls) machines along with their components. Presently, it derives 70% revenue from machining division whereas rest 30% comes from auto component division. Company primarily caters to customers in the auto OEM, auto ancillaries and general engineering space. Hence it supplies mainly to Tata Motors, Bajaj Auto, Force Motors, Cummins, Bharat Forge, Kirloskar Oil Engines, Everest Kanto Cylinders etc with separate dedicated facilities for M&M and Ashok Leyland. Off late, it has also made a foray in the overseas markets with good orders. On the back of encouraging performance for first three quarters, it is estimated to register sales of Rs 105 cr and net profit of Rs 13 cr for FY08. This works out to an EPS of Rs 11 on equity of Rs 11.80 cr. Considering its IPO price of Rs 140 in Arpil 2006 and 52 week H/L as 168/60 Rs it’s a screaming buy.

Being the market leader in High Tension XLPE power cables, Torrent Cables (200.00) manufactures XLPE insulated cables in the voltage range of 1.1KV to 132 KV, Low-Tension power cables up to 1.1KV and High-Tension power cables up to 11KV. It also produces EHV, TRS flexible cables, welding cables, lift cables, colliery cables and specialty cables in the form of fire resistant low smoke cables (FRLS), railway-signalling cables, mining and trailing cables. It has a very exhaustive customer base spread over State Electricity Boards, Utilities, EPC Contractors, government/semi-government companies, private companies, dealer network, consultants and many more. Apart from the SEBs, its clientele includes biggies like Tata Power, L&T, BHEL, ABB, Siemens, Alstom, Jindal, Reliance, Essar, Suzlon, NTPC, Railways, Powergrid, SAIL, Torrent Power etc.The rural electrification plans, APDRP programs and govt’s aim to achieve power for all by 2012 has resulted in increased in demand for power related products including cables. Hence, for FY08 company is estimated to clock a turnover of Rs 225 cr and net profit of Rs 30 cr i.e. EPS of Rs 40 on small equity of Rs 7.50 cr. With 52 week H/L as Rs 440/143 it’s a screaming buy as it can easily appreciate 50% within a year.

Patels Airtemp (55.00) is engaged in the manufacture and sale of extensive range of heat exchangers such as shell & tube type, finned tube type and air cooled heat exchangers, pressure vessels, air-conditioning and refrigeration equipments and turnkey HVAC projects in India & marketing of equipments even outside India. It has technical collaboration with M/S. TEK FINS Inc. USA for design and manufacture of air cooled heat exchangers. It supplies to core industrial sectors like power, refineries, fertilizers, cements, petrochemicals, pharmaceuticals, textiles and chemical Industries. For future growth company is concentrating more on high value added engineering products and has even got its product the coveted ASME `U' Stamp authorization. For the Dec’07 quarter company’s net sales declined by 15% to 10.50 cr but NP shot up to Rs 1.40 cr due to delay in dispatches and lower depreciation cost. Hence it is expected to register a topline of Rs 50 cr and profit of Rs 5 cr for FY08. This leads to an EPS of Rs 10 on current equity of Rs 5 cr. Technically, scrip seems to have bottom out and can shoot up 50% in 6~9 months.