STOCK WATCH

Cera Sanitary (110.00) is the third largest company in the organized sanitaryware segment with over 20% market share in domestic market. It has wide product range including WC’s, wash basins, whirlpools, bath tubs, shower panels, shower cubicles, shower temples, bath fittings, kitchen sinks, tiles etc. It even has a strategic tie-up with Pozzi-Ginori, an Italian designer sanitaryware for importing premium sanitaryware and marketing it in India. Presently, companys derives 40% revenue from intitutional sales whereas the major 60% comes from retail sales. Hence company has a strong distribution network with 400 dealers, 4000 retailers, 9 depots and 14 zonal offices across the country along with CERA bath studios at eight locations. To take the benefit of rapidly increasing demand, it has recently expanded its production capacity to 24,000 MTPA from 16,500 MTPA. And interestingly, company is not only planning to increase its own production of sanitaryware, it is also planning to establish itself as bathroom solutions provider, by offering all durables that go into a bathroom. For FY08, it is expected to clock a turnover of Rs 125 cr and PAT of Rs 8.50 cr on a conservative basis. This translates into EPS of Rs 14 on current equity of Rs 3.10 cr with a face value of Rs 5/- per share. Couple of months ago company made a pref allotment of 8 lac warrants @ Rs 162 to promoters. Considering the strong brand value and robust fundamentals, it is available extremely cheap at an enterprise value of Rs 100 cr.

Numeric Power (550.00) is India’s No 1 manufacturer of uninterrupted power supply (UPS) systems, stabilizers and power conditioners. It also undertakes turnkey projects and offers end to end solution for SCADA/EMS package, large network of industrial process, power transmission support systems and distribution management. Last year, company entered into a joint venture with the French UPS major SOCOMEC SA to distribute, market and service the 3 phase range of UPS systems (greater than 10 KVA) products to customers in India. Ironically, around 75% of the ATMs in the country are fitted with UPS supplied by the company. With India's significant power deficits and the ubiquitous outages and voltage fluctuations; company’s products still have significant market potential in the country. For FY08 it may report sales of Rs 375 cr and profit of Rs 38 cr i.e. EPS of 75 Rs on equity of 5.05 cr. At a reasonable discounting by 12x times, share price can shoot upto Rs 900 within a year. Secondly, with an estimated reserve of more than Rs 125 cr on tiny equity of Rs 5 cr, scrip is fully ripe for liberal bonus as well.

Asian Granito (60.00) is one of the largest producers of vitrified tiles in India under the brand name “Asian Tiles” offering a wide range including glazed, unglazed, rustic, matte, homogenous and non-homogeneous body, water jet cutting and tailor made designs as per clients requirement. In July 2007, company raised around Rs 68 cr thru IPO @ Rs 97 per share for setting up a wall tile unit and expanding its vetrified tile capacity. Accordingly, it has recently expanded its vitrified tile capacity to 16,000 sq mtr from 14,000 sq mtr tiles per day. Importantly, company has even started the trial run in Jan’08 at its new wall tile plant having a capacity of 9300 sq mtr per day. On the other hand its wholly owned subsidiary Asian Tile Ltd is into the business of manufacturing ceramic floor tiles with a capacity of 7,000 sq mt per day. Financially, it is expected to clock a turnover of Rs 200 cr and net profit of Rs 26 cr i.e. EPS of Rs 12 for FY08. For FY09 it is estimated to post 15 Rs EPS. Considering its brand value and future prospects, it is available fairly cheap at an EV of Rs 175 cr.

Led by Mr Malvinder Singh- “Mushroom Rattan” award winner, Agro Dutch (28.00) is the worlds largest producer and exporter of mushrooms even surpassing the Royal mushroom of France. Last year company has set up new facility to produce 14,000 tonnes of frozen mushrooms thereby taking the total mushroom capacity to whopping 50,000 tonne per annum. Remarkably, company alone accounts for nearly one fourth of total US imports of mushroom. And more importantly it is fully integrated mushroom company with inhouse composting, inhouse processing and own can manufacturing plant. Further company is setting up new easy-open-ends can unit and a six colour metal printing line in Tamilanadu with an investment of Rs 55 cr. To fund this company has already made a pref allotment of 1 crore warrants @ Rs 27.50 to promoter group. For FY08 it is estimated to clock a turnover of Rs 225 cr and a healthy PAT of Rs 26~27 cr on back of huge other income from Visheh Krishi Gram Udyog Yojana Scheme. This translates into EPS of Rs 7 on fully diluted equity of Rs 39.50 cr. Although it’s a non dividend paying company coupled with some promoter concern, still aggressive investors can take a punt on it for handsome gains in medium term.