Small & Beautiful (Guj)

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Simplex Casting (72.00) is engaged in manufacturing of heavy engineering castings in various grades for industries like steel, rail, mining, cement, power and other engineering sectors. To derisk its business model company is now moving up the value chain and is venturing into the machined castings. This will improve the margins going forward and will also lead to addition of new clients which seek the machined components. For the March qtr although its sales improved by 10% to Rs 44 cr but PAT declined marginally to Rs 2 cr. However for the full year it recorded 10% and 30% growth in sales and NP to Rs 150 cr and Rs 7.40 cr respectively. Hence it posted an EPS of more than Rs 12 on equity of Rs 6 cr. Couple of month back it bagged a prestigious order worth Rs 14 cr from Indian railways for supply of coco bogies and expects to get more such order in future. Currently it has a very healthy order book position of Rs 120 cr which includes export orders worth Rs 30 cr. Interestingly it has plans to venture into project execution and turnkey business of steel plants and also intends to forward integrate into valve manufacturing business, which is a very high margin business. Although rising input cost is a cause of concern, still it’s a decent buy at current levels.

Amar Remedies (31.00) is one of the well known manufacturer of ayurvedic, herbal and cosmetic dental care, personal care, skin care, beauty care & health care products like tooth paste, toothpowder, shampoo, creams, lotions, shaving gel, balm & pain relieving ointment. Besides, it has successfully developed 24 different ayurvedic and herbal medicines and has also obtained the FDA approval for the manufacture and sale of these medicines, which include medicines for hypertension, diabetes, and heart ailments. It reported excellent figures for the March qtr as sales jumped up 70% to Rs 73 cr and PAT increased by 40% to Rs 5.60 cr. Unfortunately company is yet to start commercial production at its newly set up Dehradun facility as it is awaiting the clearance certificate from pollution control authorities. On the back of aggressive capex it has tripled its gross block from Rs 35 cr to almost Rs 100 cr now. For FY08 ending June 2008, it is expected to register sales of Rs 300 cr and PAT of Rs 20 cr i.e. EPS of Rs 8 on equity of Rs 26.20 cr. A safe bet in current market sentiments.

Bihar Caustic (78.00) recorded disappointing nos for the March qtr as sales increased by 25% to Rs 47.50 cr but PBT improved by only 5% to Rs 13.70 cr. It seems company is facing the heat of rising input cost of coal etc as it recorded lower OPM of 37% for the quarter. It declared 15% dividend for FY08 which was again below expectation. However due to lower tax cost company has been able to report healthy bottomline. For entire FY08 sales grew by 20% to Rs 174 cr whereas PAT shot up 45% to Rs 49 cr posting an EPS of Rs 21 on equity of Rs 23.40 cr. To maintain its growth, company is in process of expanding capacity of its caustic soda plant by 20% to 265 TPD by addition of electrolysers as well by de-bottlenecking. It has recently commissioned the stable bleaching powder plant with installed capacity of 60 TPD. Moreover its aluminium chloride project with a capacity of 12000 TPA is doing extremely well. In future company is expected to reduce its total debt which will bring the interest cost substantially. To conclude, company is still expected to maintain its EPS of Rs 20 for FY09 and is trading extremely cheap with Cash EPS of Rs 30, EV/EBIDTA of less than 4x times and expected book value of more than Rs 75. Only long term investors should accumulate at declines.

Ansal housing (205.00) has been the pioneer to introduce the concept of large integrated residential townships in the country and also the first to enter Tier - II & III cities like Ghaziabad, Noida, Allahabad, Lucknow, Ludhiana, Agra, Bhopal, Haridwar etc. Till now company has constructed massive 67.6 million square feet of commercial and residential project across India. Further, it has lined up gigantic 56.10 million sq. ft of development (80% in the residential segment) spread over 22 cities in the next five years. Recently, it has launched residential townships branded as “Ansal Town” across several cities. It will also be developing an I.T. Park in Bangalore apart from venturing into construction of budget hotels and serviced apartments. Currently, company has a rich land bank of 2500 acres with about 50% under its own name while the rest under firm collaborators agreement. Notably, the total value of the projects with the company and under joint ventures is massive 6000 crores. Of late company has made a pref allotment of 17 lac warrants to promoters @ 208 Rs and 29.50 lac warrants @ Rs 225 to others. For FY08 on a standalone basis it may register a topline of Rs 260 cr and bottomline of Rs 55 cr i.e. EPS of Rs 31 on current equity of Rs 17.50 cr. A good bet in real estate sector.

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