STOCK WATCH
Once again Shakti Metdor (155.00) has come out with encouraging set of nos for the March quarter. Sales improved by 25% to Rs 21 cr and PAT shot up 40% to Rs 3 cr. For the entire year it registered a growth of 15% in sales to Rs 73 cr and 20% rise in profit to Rs 12.50 cr thereby registering an EPS of Rs 45 on a very tiny equity of Rs 2.75 cr. However, for FY08 company has announced a dividend of 30% same as last year with a poor divided payout ratio of less than 7%. Company is a market leader in making special scientific doors, fire doors, stainless steel doors and general doors. In short it is one shop stop for total door solutions. It primarily caters to infrastructure industry, information technology, ITES, BPO, pharma and healthcare sector. To maintain its leadership, company is regularly expanding its manufacturing capacity and is contemplating to triple its capacity to 200,000 units of door from 60,000 units currently. On the export front, company is looking at South Asia, among other regions, as a possible growth area for its product and is actively exploring it. Despite the rise in steel prices, company is estimated to maintain its bottomline to around Rs 13 cr on sales of Rs 85 cr i.e. EPS of Rs 47 for FY09. Secondly with a huge reserve of around Rs 35 on such a small equity, scrip is ripe for bonus as well. Accumulate at declines.
Last week International Combustion (375.00) announced decent set of nos for the March quarter as sales grew by 20% and profit increased by 25% to Rs 29 cr and 3.50 cr respectively posting an impressive EPS of Rs 14.50 for the single quarter. For the entire year sales was up by 20% to Rs 95 cr and PAT was up by 40% to Rs 11.75 cr. This translates into EPS of Rs 49 on a very small equity of Rs 2.40 cr. It has declared 50% dividend same as last year. Company is recognized as a leading manufacturer of sophisticated plant and machinery for core sector industries such as mining, steel, cement, petrochemical, construction, sugar, power, textile, paper, rubber, pharma, chemicals etc. It is engaged in manufacturing of heavy engineering equipment, geared motors and gear boxes, vibrating screens and feeders, bulk material handling equipment, rubber/polyurethane screen decks and liners, Raymond grinding mills, air classifiers and flash drying system etc. On the back of its wide product range and high engineering skill, it is contemplating to enter the lucrative turnkey project segment in foreseeable future. It may end FY09 with sales of Rs 110 cr and NP of Rs 13.50 cr i.e. EPS of Rs 56 on current equity. Besides being a debt free, it also has an impressive ROCE of 40% and ROE of 25%. At a reasonable discounting by 12x times scrip can shoot up Rs 675 in 12~15 months.
Couple of days back HBL Power (248.00) declared excellent result for the March qtr. Sales shot up 70% to Rs 287 cr and PAT more than doubled to Rs 22.50 cr. Although it reported lower profit on QOQ basis but importantly company has been able to achieve and maintain the higher operating margin of 19% due to lower production cost. Even on the full year basis, company has more than doubled his bottomline to Rs 67 cr on 90% higher sales of Rs 973 cr. Hence it posted an EPS of Rs 28 on equity of Rs 24.30 cr and declared only 15% dividend, as last year which is below expectation. At the same time company has announced a right issue in the ratio of 1:25 at a concessional rate of Rs 150 only. However, it doesnt make any rationale for the company to raise such a minscule amount nor its going to benefit shareholders in significant way. Incidentally, company has put up two new factories at Vizianagaram and SEZ Vizag in Visakhapatnam under a capex of Rs 150. Apart from supplying various batteries for train lighting, air conditioned coaches etc, of late company has designed and developed wide range of microprocessor based signaling products and power systems to cater to the needs of Indian Railways. For FY09, it is expected to clock a turnover of Rs 1350 cr and NP of Rs 95 cr leading to an EPS of Rs 39 on current equity of Rs 24.30 cr. A scrreaming buy.
For the latest March’08 quarter Roto Pumps (48.00) registered 30% growth in sales to Rs 14 cr whereas its net profit zoomed up 80% to Rs 1 cr. For the twelve months ending March 08 its turnover grew by 25% to Rs 42 cr and PAT jumped up 50% to Rs 3 cr on back of better price realization. Notably, company recorded a remarkable improvement in OPM to 15% in FY08 from 12% last fiscal. It even declared high dividend of 20% for FY08. Company is a reputed manufacturer of progressive cavity pumps and twin screw pumps which have very wide application in agriculture, domestic and industrial sector. Besides India, it has warehouse cum marketing office in Australia and U.K. and also good network of distributors spread across the globe. Company is in the midst of expanding its manufacturing facility and may register a topline of Rs 50 cr and bottom-line of Rs 3.75 cr for FY09. This translates into EPS of Rs 12 on a small equity of 3.09 cr. At the current enterprise value of Rs 20 cr, scrip is trading fairly cheap. Scrip can double in medium term.
Last week International Combustion (375.00) announced decent set of nos for the March quarter as sales grew by 20% and profit increased by 25% to Rs 29 cr and 3.50 cr respectively posting an impressive EPS of Rs 14.50 for the single quarter. For the entire year sales was up by 20% to Rs 95 cr and PAT was up by 40% to Rs 11.75 cr. This translates into EPS of Rs 49 on a very small equity of Rs 2.40 cr. It has declared 50% dividend same as last year. Company is recognized as a leading manufacturer of sophisticated plant and machinery for core sector industries such as mining, steel, cement, petrochemical, construction, sugar, power, textile, paper, rubber, pharma, chemicals etc. It is engaged in manufacturing of heavy engineering equipment, geared motors and gear boxes, vibrating screens and feeders, bulk material handling equipment, rubber/polyurethane screen decks and liners, Raymond grinding mills, air classifiers and flash drying system etc. On the back of its wide product range and high engineering skill, it is contemplating to enter the lucrative turnkey project segment in foreseeable future. It may end FY09 with sales of Rs 110 cr and NP of Rs 13.50 cr i.e. EPS of Rs 56 on current equity. Besides being a debt free, it also has an impressive ROCE of 40% and ROE of 25%. At a reasonable discounting by 12x times scrip can shoot up Rs 675 in 12~15 months.
Couple of days back HBL Power (248.00) declared excellent result for the March qtr. Sales shot up 70% to Rs 287 cr and PAT more than doubled to Rs 22.50 cr. Although it reported lower profit on QOQ basis but importantly company has been able to achieve and maintain the higher operating margin of 19% due to lower production cost. Even on the full year basis, company has more than doubled his bottomline to Rs 67 cr on 90% higher sales of Rs 973 cr. Hence it posted an EPS of Rs 28 on equity of Rs 24.30 cr and declared only 15% dividend, as last year which is below expectation. At the same time company has announced a right issue in the ratio of 1:25 at a concessional rate of Rs 150 only. However, it doesnt make any rationale for the company to raise such a minscule amount nor its going to benefit shareholders in significant way. Incidentally, company has put up two new factories at Vizianagaram and SEZ Vizag in Visakhapatnam under a capex of Rs 150. Apart from supplying various batteries for train lighting, air conditioned coaches etc, of late company has designed and developed wide range of microprocessor based signaling products and power systems to cater to the needs of Indian Railways. For FY09, it is expected to clock a turnover of Rs 1350 cr and NP of Rs 95 cr leading to an EPS of Rs 39 on current equity of Rs 24.30 cr. A scrreaming buy.
For the latest March’08 quarter Roto Pumps (48.00) registered 30% growth in sales to Rs 14 cr whereas its net profit zoomed up 80% to Rs 1 cr. For the twelve months ending March 08 its turnover grew by 25% to Rs 42 cr and PAT jumped up 50% to Rs 3 cr on back of better price realization. Notably, company recorded a remarkable improvement in OPM to 15% in FY08 from 12% last fiscal. It even declared high dividend of 20% for FY08. Company is a reputed manufacturer of progressive cavity pumps and twin screw pumps which have very wide application in agriculture, domestic and industrial sector. Besides India, it has warehouse cum marketing office in Australia and U.K. and also good network of distributors spread across the globe. Company is in the midst of expanding its manufacturing facility and may register a topline of Rs 50 cr and bottom-line of Rs 3.75 cr for FY09. This translates into EPS of Rs 12 on a small equity of 3.09 cr. At the current enterprise value of Rs 20 cr, scrip is trading fairly cheap. Scrip can double in medium term.
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