STOCK WATCH
Last week Ind Swift lab (48.00) came out with encouraging set of nos for the March qtr. Although its sales declined marginally to Rs 123 cr but its net profit shot up 70% to Rs 11.25 cr on back of higher operating margin. Surprisingly it recorded highest OPM of 21% for March’08 qtr against an average of 18% for the preceeding three quarters. For the entire year it recorded 30% growth in sales to Rs 455 cr and 60% increase in PAT to Rs 31 cr threby posting an EPS of Rs 13 Rs on equity of Rs 24 cr. But company declared only 10% dividend which shows non investor freindly attitude of the pomoters and make the experts doubt over the genuinity about companys financials. However, last year company received the USFDA approval for its API manufacturing facility at Derabassi Punjab for Clarithromycin. As of now it has successfully filed over 72 DMFs with the US, Canadian, UK and European Drug Authorities. To fund its growth plan, company made a pref allotment of 28 lac warrants @ Rs 70 in March 2007 and lately allotted another 25 lac warrants @ 70 to promoter group. With a book value of whopping Rs 100 and CEPS of 20 Rs, scrip is trading reasonably cheap.
NCL Industries (40.00), the flagship company of the NCL group is engaged in four business segments namely cement, cement bonded particle boards, prefab and hydel power. Presently cement contributes 75% of revenue board and prefabs contribute 20% and balance comes from hydel power. On the back of agressive expansion company has doubled its cement manufacturing capacity to 630,000 TPA and is further looking to triple it to 20 million TPA within couple of years. It has also set up a new particle board manufacturing facility in Himachal thereby taking the total capacity to 80,000 TPA. On the other hand, its prefabricated structures division is witnessing good demand and has bagged huge order worth 50 cr couple of months back. Fundamentally, it recorded 30% growth in sales to Rs 193 cr whereas PBT grew by 45% to Rs 43 cr. Due to high tax provisioning its NP improved marginally by 7% to Rs 29.50 cr posating an EPS of Rs 9 on current equity of Rs 32.50 cr. With rising input cost and interfearance of govt on cement prices, company is estimated to report a topline of Rs 275 cr and maintain its profit of around Rs 30 i. e EPS of Rs 9 on fully diluted equity of Rs 34.90 cr.
For the latest March’08 quarter, Godawari power & Ispat (190.00) registered a growth of 140% for sales as well as profit to Rs 263 cr and Rs 28.80 cr respectively posting an EPS of Rs 10 for the quarter. For the full year its sales was up by 90% to Rs 829 cr and net profit increased by 80% to Rs 95 cr. This translates into EPS of Rs 34 on current equity of Rs 28 cr. Notably, company has completed its Phase-II expansion in Sept 2007 and presently it boasts of having an installed capacity of 495,000 TPA for sponge iron, 400,000 TPA for steel billets, 120,000 TPA for HB wire rod alongwith 53 MW of captive power plant. Importantly company has been awarded two iron ore mines in Chattisgarh with estimated reserves of 15 million tonne and coal mines with its share of reserves of 63 million tones. Recently it has also been allotted prospective license for iron ore mines over 754 hectares. For future growth company is planning to build an iron ore crushing plant, a beneficiation plant and a pelletization plant at a cost of Rs 235 cr. For FY09 it is expected to clock a turnover of Rs 1200 cr and PAT of Rs 125 cr i.e. EPS of Rs 45 on current equity.
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
NCL Industries (40.00), the flagship company of the NCL group is engaged in four business segments namely cement, cement bonded particle boards, prefab and hydel power. Presently cement contributes 75% of revenue board and prefabs contribute 20% and balance comes from hydel power. On the back of agressive expansion company has doubled its cement manufacturing capacity to 630,000 TPA and is further looking to triple it to 20 million TPA within couple of years. It has also set up a new particle board manufacturing facility in Himachal thereby taking the total capacity to 80,000 TPA. On the other hand, its prefabricated structures division is witnessing good demand and has bagged huge order worth 50 cr couple of months back. Fundamentally, it recorded 30% growth in sales to Rs 193 cr whereas PBT grew by 45% to Rs 43 cr. Due to high tax provisioning its NP improved marginally by 7% to Rs 29.50 cr posating an EPS of Rs 9 on current equity of Rs 32.50 cr. With rising input cost and interfearance of govt on cement prices, company is estimated to report a topline of Rs 275 cr and maintain its profit of around Rs 30 i. e EPS of Rs 9 on fully diluted equity of Rs 34.90 cr.
For the latest March’08 quarter, Godawari power & Ispat (190.00) registered a growth of 140% for sales as well as profit to Rs 263 cr and Rs 28.80 cr respectively posting an EPS of Rs 10 for the quarter. For the full year its sales was up by 90% to Rs 829 cr and net profit increased by 80% to Rs 95 cr. This translates into EPS of Rs 34 on current equity of Rs 28 cr. Notably, company has completed its Phase-II expansion in Sept 2007 and presently it boasts of having an installed capacity of 495,000 TPA for sponge iron, 400,000 TPA for steel billets, 120,000 TPA for HB wire rod alongwith 53 MW of captive power plant. Importantly company has been awarded two iron ore mines in Chattisgarh with estimated reserves of 15 million tonne and coal mines with its share of reserves of 63 million tones. Recently it has also been allotted prospective license for iron ore mines over 754 hectares. For future growth company is planning to build an iron ore crushing plant, a beneficiation plant and a pelletization plant at a cost of Rs 235 cr. For FY09 it is expected to clock a turnover of Rs 1200 cr and PAT of Rs 125 cr i.e. EPS of Rs 45 on current equity.
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
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