Small & Beautiful
Once again Shakti Metdor (150.00) 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.
After hitting a new low of Rs 49 last week, share price of Quitegra Solutions Ltd (62.00) has recovered somewhat by 30% to current levels. Company’s broad capabilities include application management, product engineering, enterprise solutions such as SAP, testing & validation, technology consulting, professional services and proprietary product suites. Presently, company focuses on six main business verticals including BFSI, Heatlhcare, Education & Training, Engineering Services, Logistic and Telecom. Unlike other companies, Quintegra has invested in creating products in its chosen verticals. Importantly in Oct 2007, it acquired M/s. PA Corporation, Virginia, USA (PAC) which specializes in high end IT consulting and leadership in middle-space IT services such as enterprise application services, date architecture & data validation, audit compliance documentation, business process management, integration architecture & deployment and testing & configuration management. Financially, for FY08 Quintegra’s top line as well as bottom-line has increased by five times to Rs 390 cr and Rs 35 cr respectively thereby posting an EPS of Rs 13 on equity of Rs 26.80 cr. For FY09 it is expected to earn a NP of Rs 42 cr on revenue of around Rs 600 cr i.e. EPS of Rs 14 on diluted equity of Rs 29.50 cr. However company is looking to raise Rs 400 cr thru equity route which will dilute the share capital significantly.
Kamat Hotels (115.00) primarily operates a 245 room five star Ecotel hotel “The Orchid” near Mumbai domestic airport and 190 room service apartment ‘Lotus Suites’ (now renamed as VITS) near Mumbai international airport. In Dec’07 cmpany has opened another 100 rooms five star hotel called “Garh Heritage” in Pune and a 200 room “Orchid Hotel” in Vaishnodevi. Besides it runs around 10 highway restaurants which contribute less than 5% of turnover. Notably, company is adding 130 rooms to “The Orchid” with an investment of Rs 80 cr and has a capex of Rs 250 cr for setting up various properties under VITS brand at Aurangabad, Nagpur, Pune, Nashik, Goa, Baroda etc. To fund its expansion plan, last year company raised a capital of Rs 80 cr thru FCCB route to be converted into equity shares @ Rs 225 per share. For FY08, it reported 30% growth in topline as well as bottomline to Rs 148 cr and Rs 27 cr respectively. This translates into EPS of Rs 20 on current equity of Rs 13.80 cr. Incidentally, foreigners contribute around 40% of the total revenue but company follows single-rupee tariff system. Although company boasts of very aggressive expansion plan but is actually slow in execution. Hence on a conservative basis for FY09 it may report total revenue of Rs 175 cr and net profit of Rs 30 cr which works out to an EPS of Rs 17 on diluted equity of around Rs 18 cr. A strong buy for 50% gain in 12~15 months.
3i Infotech (100.00) is the fourth largest Indian software products company offering a comprehensive range of software products & solutions primarily for banking, insurance, capital markets, mutual funds, telecom, manufacturing, retail & distribution industries. For the latest March qtr its revenue increased by 70% to Rs 352 cr and net profit jumped up 60% to Rs 50 cr. With significant growth anticipated in the transaction services business in India, company has set up a hub and spoke model spanning across the country with cost efficient delivery capabilities and is into processing of credit cards, insurance applications, contact point verification, soft collections, cheque clearing services, reconciliations, etc. As on date company is having a very healthy order book position of Rs 865 cr. For entire FY08 it recorded 80% and 75% growth in sales and NP to Rs 1223 and Rs 183 cr respectively. This translates into EPS of Rs 14 on current equity of 130.50 cr. However the EPS works to Rs 11 on fully diluted equity (conversion of all FCCB) of Rs 165 cr. Recently company has acquired a strategic stake of 26% in Hyderabad-based Locuz Enterprise Solutions Ltd for an undisclosed amount, with a commitment to acquire remaining stake over a period. A strong and a safe bet.
After hitting a new low of Rs 49 last week, share price of Quitegra Solutions Ltd (62.00) has recovered somewhat by 30% to current levels. Company’s broad capabilities include application management, product engineering, enterprise solutions such as SAP, testing & validation, technology consulting, professional services and proprietary product suites. Presently, company focuses on six main business verticals including BFSI, Heatlhcare, Education & Training, Engineering Services, Logistic and Telecom. Unlike other companies, Quintegra has invested in creating products in its chosen verticals. Importantly in Oct 2007, it acquired M/s. PA Corporation, Virginia, USA (PAC) which specializes in high end IT consulting and leadership in middle-space IT services such as enterprise application services, date architecture & data validation, audit compliance documentation, business process management, integration architecture & deployment and testing & configuration management. Financially, for FY08 Quintegra’s top line as well as bottom-line has increased by five times to Rs 390 cr and Rs 35 cr respectively thereby posting an EPS of Rs 13 on equity of Rs 26.80 cr. For FY09 it is expected to earn a NP of Rs 42 cr on revenue of around Rs 600 cr i.e. EPS of Rs 14 on diluted equity of Rs 29.50 cr. However company is looking to raise Rs 400 cr thru equity route which will dilute the share capital significantly.
Kamat Hotels (115.00) primarily operates a 245 room five star Ecotel hotel “The Orchid” near Mumbai domestic airport and 190 room service apartment ‘Lotus Suites’ (now renamed as VITS) near Mumbai international airport. In Dec’07 cmpany has opened another 100 rooms five star hotel called “Garh Heritage” in Pune and a 200 room “Orchid Hotel” in Vaishnodevi. Besides it runs around 10 highway restaurants which contribute less than 5% of turnover. Notably, company is adding 130 rooms to “The Orchid” with an investment of Rs 80 cr and has a capex of Rs 250 cr for setting up various properties under VITS brand at Aurangabad, Nagpur, Pune, Nashik, Goa, Baroda etc. To fund its expansion plan, last year company raised a capital of Rs 80 cr thru FCCB route to be converted into equity shares @ Rs 225 per share. For FY08, it reported 30% growth in topline as well as bottomline to Rs 148 cr and Rs 27 cr respectively. This translates into EPS of Rs 20 on current equity of Rs 13.80 cr. Incidentally, foreigners contribute around 40% of the total revenue but company follows single-rupee tariff system. Although company boasts of very aggressive expansion plan but is actually slow in execution. Hence on a conservative basis for FY09 it may report total revenue of Rs 175 cr and net profit of Rs 30 cr which works out to an EPS of Rs 17 on diluted equity of around Rs 18 cr. A strong buy for 50% gain in 12~15 months.
3i Infotech (100.00) is the fourth largest Indian software products company offering a comprehensive range of software products & solutions primarily for banking, insurance, capital markets, mutual funds, telecom, manufacturing, retail & distribution industries. For the latest March qtr its revenue increased by 70% to Rs 352 cr and net profit jumped up 60% to Rs 50 cr. With significant growth anticipated in the transaction services business in India, company has set up a hub and spoke model spanning across the country with cost efficient delivery capabilities and is into processing of credit cards, insurance applications, contact point verification, soft collections, cheque clearing services, reconciliations, etc. As on date company is having a very healthy order book position of Rs 865 cr. For entire FY08 it recorded 80% and 75% growth in sales and NP to Rs 1223 and Rs 183 cr respectively. This translates into EPS of Rs 14 on current equity of 130.50 cr. However the EPS works to Rs 11 on fully diluted equity (conversion of all FCCB) of Rs 165 cr. Recently company has acquired a strategic stake of 26% in Hyderabad-based Locuz Enterprise Solutions Ltd for an undisclosed amount, with a commitment to acquire remaining stake over a period. A strong and a safe bet.
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