STOCK WATCH

Accurate Transformers (90.00) is engaged in manufacturing of power as well as distribution transformers ranging from 1 MVA to 160 MVA - in up to 220 KV class. It also carries out rural electrification project which involves the complete setting up of electricity in remote areas including the laying of lines, poles and substations. Unfortunately, despite having installed capacity of more than 8000 MVA company is working at very low capacity utilization of less than 50% due to mounting debtors and shortage of funds. However on the back of ongoing boom in power sector and robust demand for transformers, situation has now improved considerably. Due to better operating efficieny and higher realization company company is expected to improve its profit margin going forward. It may even grow at CAGR of 50% for next three years as far as bottomline is concerned. On a conservative basis, it can clock a turnover of more than Rs 200 cr and PAT of Rs 8 cr for FY08. This works out to an EPS of Rs 27 on current equity of Rs 2.96 cr. As per unconfirmed reports, SEBI has halted its preferential issue of 31 lac warrants @ 56 Rs, hence now it has to go for fresh fund raising program as per SEBI guidelines. Scrip has nearly become one third from its high of 240 Rs. A screaming buy.

Spanco Telesystem’s (160.00) core competency lies in offering telecom systems integration which includes implementation of multi-location, multi-services converged networks for carrying diverse multimedia traffic (voice, data & video) based on latest technologies like ATM, MPLS, Frame Relay, TCP/IP etc. On the other hand it has bagged a 10-year contract to set up, operate and maintain Interactive Voice Response System (IVRS) and Regional Call Centres (RCC) for the Indian Railways in join venture with Spice group. Moreover it has ventured into RFID space by acquiring 51% stake in Skandsoft Technologies - a pioneering software solutions company which is dedicated to revolutionize the upcoming world of automated business processes through technologies like Radio Frequency Identification (RFID) & Automatic Identification and Data Capture systems (AIDC). It has even formed a joint venture “Spanco-GKS” with Golden Key Solutions of Oman to replicate its Indian business in the gulf region as well. For FY08 it may clock a turnover of Rs 625 cr and profit of Rs around Rs 48 cr on a standalone basis i.e. EPS of Rs 23 on current equity of Rs 20.65 cr. A solid bet

ANG Auto (85.00) is among the few companies in the world to be completely integrated – from the manufacture of components to sub-assemblies and assemblies and finally to vehicles. Today it the largest trailer manufacturing company in India with a capacity of 3600 trailers per year and will soon be No. 1 in Asia as it is augmenting the capacity to 6000 trailers. Notably, company has entered into a five year contract with Ashok Leyland for trailers, which is valued at 1500-1800 cr. Secondly, its patented automatic slack adjuster and the single piece dummy axle is witnessing strong demand from all over the world. Going ahead, it intends to manufacture suspension systems and is also setting up a forging unit at Bhiwadi, Rajasthan at capex of Rs 37. To consolidate its operations company has merged ANG Auto Tech, its 75%subsidiary with itself. On a standalone basis for FY08, it is expected to clock a turnover of Rs 120 cr cr and profit of Rs 16 cr i.e. EPS of Rs 13.50 on current equity of Rs 11.90 cr. Being the conversion price as high as Rs 325, its FCCB of Rs 50 cr may not get converted into equity. Moreover, finding the valuation very cheap, management has got the approval for buy back of equity shares up to 24.30% of the total paid up equity capital at a maximum price of Rs 215 per share. A golden opportunity to buy at such mouth watering level

Part of B M Thapar group, Greaves Cotton (205.00) is enaged in production of diesel/petrol/LPG engines for power generation, agro equipment & atumotive apart from manufacturing gensets, agro equipment and construction equipment Besides, it is also engaged in marketing high technology systems for marine, aviation and electronic applications. Last year, to increase its presence in global market it acquired, Bukh Farymann Diesel GmbH (renamed as Greaves Farymann Diesel GmbH) which is engaged in the manufacture and marketing of single cylinder diesel engines and parts for Rs 25 cr. For FY08 it may clock a turnover of Rs 1400 cr and PAT of Rs 115 cr i.e. EPS of Rs 24 on current equity of Rs 48.80 cr. Importantly, few weeks back Piaggio Group's Indian subsidiary signed a 8 year agreement with the company for purchase of mono-cylinder diesel engines for application on the three-wheeled vehicles manufactured by them. This implies that company will continue to be a single source supplier of such mono-cylinder diesel engines to Piaggio. A solid bet for long term