STOCK WATCH
Although Accurate Transformers (125.00) is unable to fully capitalize the boom in power sector and is registering normal growth still it’s a value buy at current levels. For the recent March quarter it posted 10% rise in sales as well as NP to Rs 95 cr and Rs 3.40 cr respectively. Accordingly for entire FY08, sales improved by 15% to Rs 197 cr and PAT grew by 25% to Rs 7.90 cr. Incidentally, this translates into an healthy EPS of Rs 27 on a very tiny equity of Rs 2.97 cr. Due to shortage of funds for working capital company is running at very low capacity utilization. Earlier it tried to raise the capital by making preferential allotment of around 31 lac warrants @ 56 Rs to promoters. But it seems company didn’t get SEBI approval to some technical issue. Coimpany has huge manufacturing facilities spread across Ghaziabad, Sikandrabad, Greater Noida, Dehradun & Haridwar with an installed capacity to manufacture nearly 8000 MVA of transformers. At a very modest discounting by 6x~7x times share price can move up Rs 175 in 6~9 months.
On year on year basis, March’08 quarter nos of Tera Software (54.00) looks very disappointing as revenue declined by nearly 50% to Rs 16 cr and PAT fell by 40% to Rs 3 cr. But if we see quarter on quarter basis it reported highest sales among all the four quarters of FY08. So it implies that company may have completed some big e-governance project in last March ’07 quarter. Still for the entire FY08 company has posted marginal growth in revenue to Rs 59 cr and 15% increase in PAT to Rs 12.25 cr after making highest tax provisioning of 38%. It reported an EPS of Rs 11 on equity of Rs 12.50 cr and is expected to declare 25% dividend for the fiscal. Of late, company has been selected as empanelled vendor for rollout of IT services in govt sector through National Informatics Centre Services Inc. for a period of one year which can be extended for another one year. Looking at its strong order book position it may end FY09 with sales of Rs 75 cr and profit of Rs 16 cr i.e. EPS of Rs 13. Secondly, as per reliable source company is looking to dispose off its 20 acre surplus land in Hyderabad which is worth Rs 40 cr. Once the deal is finalized, share price will shoot up vertically.
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. Recently it came out with excellent set of nos for Dec 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.
Mazda Ltd (80.00) 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. Broadly its product profile is segmented into Vacuum system, Valve division, Air pollution control equipment, Crystallizers and Evaporators. It came out with satisfactory nos for the March qtr and ended FY08 on quite a buoyant note. For the full year its sales improved by 15% to Rs 60.50 whereas its profit increased by 30% to Rs 6.60 cr. Hence it registered a very healthy EPS of Rs 15.50 on a small equity of Rs 4.26 cr. Importantly, company has a technical collaboration with world renowned Croll-Reynolds Inc. USA, who holds 12% stake in the company. To cater the increasing demand, it is setting up a third unit with an investment of approximately 5 to 6 crores. Despite having promising future, this hi-tech engineering company is available very cheap at an enterprise value of around Rs 40 cr. It’s a screaming buy.
On year on year basis, March’08 quarter nos of Tera Software (54.00) looks very disappointing as revenue declined by nearly 50% to Rs 16 cr and PAT fell by 40% to Rs 3 cr. But if we see quarter on quarter basis it reported highest sales among all the four quarters of FY08. So it implies that company may have completed some big e-governance project in last March ’07 quarter. Still for the entire FY08 company has posted marginal growth in revenue to Rs 59 cr and 15% increase in PAT to Rs 12.25 cr after making highest tax provisioning of 38%. It reported an EPS of Rs 11 on equity of Rs 12.50 cr and is expected to declare 25% dividend for the fiscal. Of late, company has been selected as empanelled vendor for rollout of IT services in govt sector through National Informatics Centre Services Inc. for a period of one year which can be extended for another one year. Looking at its strong order book position it may end FY09 with sales of Rs 75 cr and profit of Rs 16 cr i.e. EPS of Rs 13. Secondly, as per reliable source company is looking to dispose off its 20 acre surplus land in Hyderabad which is worth Rs 40 cr. Once the deal is finalized, share price will shoot up vertically.
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. Recently it came out with excellent set of nos for Dec 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.
Mazda Ltd (80.00) 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. Broadly its product profile is segmented into Vacuum system, Valve division, Air pollution control equipment, Crystallizers and Evaporators. It came out with satisfactory nos for the March qtr and ended FY08 on quite a buoyant note. For the full year its sales improved by 15% to Rs 60.50 whereas its profit increased by 30% to Rs 6.60 cr. Hence it registered a very healthy EPS of Rs 15.50 on a small equity of Rs 4.26 cr. Importantly, company has a technical collaboration with world renowned Croll-Reynolds Inc. USA, who holds 12% stake in the company. To cater the increasing demand, it is setting up a third unit with an investment of approximately 5 to 6 crores. Despite having promising future, this hi-tech engineering company is available very cheap at an enterprise value of around Rs 40 cr. It’s a screaming buy.
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