Small & Beautiful (Guj)
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Cera Sanitary (120.00) 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. To take the benefit of high demand, it has recently expanded its production capacity to 24,000 MTPA from 16,500 MTPA. For FY08, it has clocked a turnover of Rs 128 cr and PAT of Rs 10 cr leading to an EPS of Rs 16 on small equity of Rs 3.10 cr having face value as 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.
South India Paper Mills (65.00) announced disappointing nos for the March qtr as sales remained flat at Rs 29 cr and PAT fell by 25% to Rs 2.10 cr. Despite this, for entire FY08 it registered 10% growth its topline to Rs 122 cr and 15% rise in net profit to Rs 11.90 cr. Hence it posted an EPS of Rs 16 on equity of Rs 7.50 cr. It maintained the dividend at 30% which gives a yield of nearly 5% at CMP. Company is having strong presence in packing paper and paper boards apart from manufacturing writing and printing paper. On back of robust demand, company is implementing a brown field expansion with an investment of about 110 cr under which it will more than double its paper manufacturing capacity to 115,000 TPA from 55,000 TPA currently. It will also be augmenting its captive power generation capacity by 3.50 MW. Besides expansion, company is going for forward integration into high quality corrugated boards and intends to have at least one 100% owned facility and possibly one facility under joint venture near Chennai. With new paper capacity expected to be commissioned by early 2009 and corrugated boards facility to start within this calendar year the future prospect looks very promising. It can report an EPS of Rs 18 for current year. Buy with a price target of Rs 100 in 9~12 months
Because of loan waiver scheme for farmers and regular CRR hike coupled with liquidity crunch and hardening of interest rate, public sector banks has tumbled down badly in the recent past. Syndicate bank (60.00) which reported decent nos for the March’08 quarter is also hitting new lows on the bourses. For 2007-08, its total income increased by 30% to Rs 8796 cr whereas net profit increased by 20% to Rs 848 cr thereby posting an EPS of Rs 16 on equity of Rs 522 cr. It declared 28% dividend which gives a yield of nearly 5% on CMP. As on 31st March 2008, banks Gross NPA and Net NPA stood at 2.71% and 0.97% respectively. With a capital adequacy ratio of more than 11% its net worth increased to Rs 3862 cr and book value got enhanced to Rs 82. Bank is also looking to raise capital via QIP route thru allotment of 8 cr equity shares to Public Sector Enterprises and Mutual Funds. Keep accumulating at declines.
After hitting a high of Rs 40, share price of Liberty Phosphate (16.00) has crashed more than 60% in matter of few months. Company is the largest manufacture of Single Super Phosphate, commanding more than 14% market share. Presently, it has four manufacturing units having total installed capacity of 463,000 MTPA of SSP fertilizers. However it is working at nearly 75% capacity utilization. In order to fund its working capital requirement and improve the operating efficiency, company earlier allotted 20 lac shares @ Rs 25 to promoters. Further in March’08 it allotted another 5.50 lac shares @ Rs 31.60 to promoters thereby raising their stake to currently 45% from 36% in Dec’06. For FY08 it is estimated to register sales of Rs 120 cr and profit of Rs 2.50 cr i.e. EPS of Rs 4 on equity of Rs 6.70 cr. With good rainfall expected this year and loan waiver scheme for farmers, company can report an EPS between 5~6 for FY09.
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. To take the benefit of high demand, it has recently expanded its production capacity to 24,000 MTPA from 16,500 MTPA. For FY08, it has clocked a turnover of Rs 128 cr and PAT of Rs 10 cr leading to an EPS of Rs 16 on small equity of Rs 3.10 cr having face value as 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.
South India Paper Mills (65.00) announced disappointing nos for the March qtr as sales remained flat at Rs 29 cr and PAT fell by 25% to Rs 2.10 cr. Despite this, for entire FY08 it registered 10% growth its topline to Rs 122 cr and 15% rise in net profit to Rs 11.90 cr. Hence it posted an EPS of Rs 16 on equity of Rs 7.50 cr. It maintained the dividend at 30% which gives a yield of nearly 5% at CMP. Company is having strong presence in packing paper and paper boards apart from manufacturing writing and printing paper. On back of robust demand, company is implementing a brown field expansion with an investment of about 110 cr under which it will more than double its paper manufacturing capacity to 115,000 TPA from 55,000 TPA currently. It will also be augmenting its captive power generation capacity by 3.50 MW. Besides expansion, company is going for forward integration into high quality corrugated boards and intends to have at least one 100% owned facility and possibly one facility under joint venture near Chennai. With new paper capacity expected to be commissioned by early 2009 and corrugated boards facility to start within this calendar year the future prospect looks very promising. It can report an EPS of Rs 18 for current year. Buy with a price target of Rs 100 in 9~12 months
Because of loan waiver scheme for farmers and regular CRR hike coupled with liquidity crunch and hardening of interest rate, public sector banks has tumbled down badly in the recent past. Syndicate bank (60.00) which reported decent nos for the March’08 quarter is also hitting new lows on the bourses. For 2007-08, its total income increased by 30% to Rs 8796 cr whereas net profit increased by 20% to Rs 848 cr thereby posting an EPS of Rs 16 on equity of Rs 522 cr. It declared 28% dividend which gives a yield of nearly 5% on CMP. As on 31st March 2008, banks Gross NPA and Net NPA stood at 2.71% and 0.97% respectively. With a capital adequacy ratio of more than 11% its net worth increased to Rs 3862 cr and book value got enhanced to Rs 82. Bank is also looking to raise capital via QIP route thru allotment of 8 cr equity shares to Public Sector Enterprises and Mutual Funds. Keep accumulating at declines.
After hitting a high of Rs 40, share price of Liberty Phosphate (16.00) has crashed more than 60% in matter of few months. Company is the largest manufacture of Single Super Phosphate, commanding more than 14% market share. Presently, it has four manufacturing units having total installed capacity of 463,000 MTPA of SSP fertilizers. However it is working at nearly 75% capacity utilization. In order to fund its working capital requirement and improve the operating efficiency, company earlier allotted 20 lac shares @ Rs 25 to promoters. Further in March’08 it allotted another 5.50 lac shares @ Rs 31.60 to promoters thereby raising their stake to currently 45% from 36% in Dec’06. For FY08 it is estimated to register sales of Rs 120 cr and profit of Rs 2.50 cr i.e. EPS of Rs 4 on equity of Rs 6.70 cr. With good rainfall expected this year and loan waiver scheme for farmers, company can report an EPS between 5~6 for FY09.
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