STOCK WATCH
Although J Kumar (90.00) reported lower top line as well as bottom line for the June qtr in comparison to preceding March qtr, still it’s a good bet to buy at declines. For the June qtr its revenue and net profit stood at Rs 89 cr and Rs 7.60 cr respectively. It’s a Mumbai based small EPC company with a primary focus on construction of roads, flyovers, bridges, railway over bridges, subways, irrigation projects, commercial and residential buildings, railway buildings and piling works. It also has a ready mix concrete plant for captive use. Its operations are largely confined in the state of Maharashtra with majority in Mumbai itself. The company is a class I A contractor with PWD, Government of Maharashtra. Importantly, company owns a large fleet of modern construction equipments like Hydraulic piling rigs, Putmiester Mobile boom placer concrete pump and stationery concrete pumps, RMC plants, transit mixers, various capacity cranes, poclains, front end loaders, JCBs and tippers. Due to govt’s special focus & aggressive spending on infrastructure, company is witnessing best of its time and boast of having an all time high order book position to the tune of Rs 700 cr executable in next two years. Accordingly for FY09, it is estimated to report total revenue of Rs 400 cr and PAT of Rs 28 cr which leads to an EPS of Rs 14 on current equity of Rs 20.70 cr. In the beginning of the year, company raised more than Rs 70 cr thru IPO route @ Rs 110 per share. Investors can safe accumulate this scrip between Rs 75~80 levels.
Being a 55% subsidiary of Charter Plc, Esab India (360.00) is the leader in Indian welding and cutting industry with a market share of 20% in industry and 40% in organized market. Notably, it is now the only major international brand with a manufacturing, selling and distribution network across the broad range of welding products in the Indian market. It has a wide and comprehensive range which includes welding consumables, reclamation consumables, arc equipment, industrial gas equipment, cutting machines and working environment products. For the June qtr, it reported 30% increase in sales as well as profit to Rs 114 cr and Rs 18.50 respectively. Of late company has set up a new facility for manufacture of flux cored wires and stick electrodes at its site in Irungattukottai. It is also undertaking significant expansion of capacities at its Nagpur and Khardah Plants for Wires and Electrodes. Last fiscal company made Esab Welding and Cutting Systems Limited as its wholly owned subsidiary and is further contemplating to merge that with itself. For the year ending Dec 2008, this MNC is expected to clock a turnover of Rs 425 cr and profit of Rs 65 which translates into EPS of Rs 42 on equity of Rs 15.40 cr. Hence a reasonable discounting by 12x times scrip can move up to Rs 500 in 12~15 months.
Ratnamani Metals (775.00) is a Tier 1 project pipe player and draws demand from large scale industrial investment in sectors like oil & gas, petrochemicals, power, fertilizer, pharmaceuticals, sugar, etc where the pipes are used in high temperature and highly corrosive environment. About 50% of its turnover comes from oil, gas, petrochemical industry followed by 20% from power and rest from others. So it’s basically engaged in manufacturing welded and seamless stainless steel (SS) pipes & tubes, carbon steel (CS) LSAW, HSAW and ERW pipes. To cater the rising demand company is adding 3,000 TPA of capacity in stainless steel tubes and pipes segment, which is to be operational shortly thereby taking the total stainless steel capacity to 21,900 tonne. In carbon steel segment, it is adding 100,000 tonne of HSAW capacity through brown field expansion in current fiscal, which will double its HSAW capacity of 200,000 TPA and take the total carbon steel capacity to 400,000 TPA. For the latest June’08 quarter its sales grew by 30% to Rs 250 cr and NP increased by 15% to Rs 25 cr posting an EPS of Rs 28. Considering company’s order in hand of Rs 650 cr as on date it may clock a turnover of Rs 1100 cr and net profit of Rs 100 for FY09. This works out to an EPS of Rs 106 on diluted equity of Rs 9.45 cr. However last fiscal company provided whopping Rs 27.50 as mark to market loss on derivative instruments. Secondly, the rising steel price may affect its profit margin to some extent. Hence investors are advised to accumulate only at sharp declines.
Gandhi Special Tube (70.00) is engaged in the manufacture of small diameter welded and seamless tubes, which act as an import substitute. In the seamless tube segment, GSTL faces virtually no competition as the technology required to produce this is highly specialized. The welded tubes primarily find application in the Refrigerator, Automobile and general engineering industry and the seamless tubes are used in Diesel based automobiles and Hydraulic equipment. Importantly company derives more than 65 % revenue from seamless tubes which have higher profit margin. The company also manufactures tubular components like condensers, compressor parts, fuel injection tube assemblies, hydraulic tubes etc. In Nov 2007 it completed its Rs 35 expansion plan of increasing the capacity by 2400 tonne. Interestingly, for its power requirement company has put up 5 wind mills generating 5.35 MW of power. Despite the rise in raw material prices, company posted excellent performance for the June quarter as sales grew by 30% to Rs 23 cr whereas net profit shot up 60% to Rs 6.80 cr registering an EPS of Rs 5 for the single quarter. On a conservative basis it is expected to end FY09 with sales of Rs 100 cr and PAT of Rs 21 cr i.e. EPS of Rs 14. Scrip can easily appreciate 50% in a years time.
Being a 55% subsidiary of Charter Plc, Esab India (360.00) is the leader in Indian welding and cutting industry with a market share of 20% in industry and 40% in organized market. Notably, it is now the only major international brand with a manufacturing, selling and distribution network across the broad range of welding products in the Indian market. It has a wide and comprehensive range which includes welding consumables, reclamation consumables, arc equipment, industrial gas equipment, cutting machines and working environment products. For the June qtr, it reported 30% increase in sales as well as profit to Rs 114 cr and Rs 18.50 respectively. Of late company has set up a new facility for manufacture of flux cored wires and stick electrodes at its site in Irungattukottai. It is also undertaking significant expansion of capacities at its Nagpur and Khardah Plants for Wires and Electrodes. Last fiscal company made Esab Welding and Cutting Systems Limited as its wholly owned subsidiary and is further contemplating to merge that with itself. For the year ending Dec 2008, this MNC is expected to clock a turnover of Rs 425 cr and profit of Rs 65 which translates into EPS of Rs 42 on equity of Rs 15.40 cr. Hence a reasonable discounting by 12x times scrip can move up to Rs 500 in 12~15 months.
Ratnamani Metals (775.00) is a Tier 1 project pipe player and draws demand from large scale industrial investment in sectors like oil & gas, petrochemicals, power, fertilizer, pharmaceuticals, sugar, etc where the pipes are used in high temperature and highly corrosive environment. About 50% of its turnover comes from oil, gas, petrochemical industry followed by 20% from power and rest from others. So it’s basically engaged in manufacturing welded and seamless stainless steel (SS) pipes & tubes, carbon steel (CS) LSAW, HSAW and ERW pipes. To cater the rising demand company is adding 3,000 TPA of capacity in stainless steel tubes and pipes segment, which is to be operational shortly thereby taking the total stainless steel capacity to 21,900 tonne. In carbon steel segment, it is adding 100,000 tonne of HSAW capacity through brown field expansion in current fiscal, which will double its HSAW capacity of 200,000 TPA and take the total carbon steel capacity to 400,000 TPA. For the latest June’08 quarter its sales grew by 30% to Rs 250 cr and NP increased by 15% to Rs 25 cr posting an EPS of Rs 28. Considering company’s order in hand of Rs 650 cr as on date it may clock a turnover of Rs 1100 cr and net profit of Rs 100 for FY09. This works out to an EPS of Rs 106 on diluted equity of Rs 9.45 cr. However last fiscal company provided whopping Rs 27.50 as mark to market loss on derivative instruments. Secondly, the rising steel price may affect its profit margin to some extent. Hence investors are advised to accumulate only at sharp declines.
Gandhi Special Tube (70.00) is engaged in the manufacture of small diameter welded and seamless tubes, which act as an import substitute. In the seamless tube segment, GSTL faces virtually no competition as the technology required to produce this is highly specialized. The welded tubes primarily find application in the Refrigerator, Automobile and general engineering industry and the seamless tubes are used in Diesel based automobiles and Hydraulic equipment. Importantly company derives more than 65 % revenue from seamless tubes which have higher profit margin. The company also manufactures tubular components like condensers, compressor parts, fuel injection tube assemblies, hydraulic tubes etc. In Nov 2007 it completed its Rs 35 expansion plan of increasing the capacity by 2400 tonne. Interestingly, for its power requirement company has put up 5 wind mills generating 5.35 MW of power. Despite the rise in raw material prices, company posted excellent performance for the June quarter as sales grew by 30% to Rs 23 cr whereas net profit shot up 60% to Rs 6.80 cr registering an EPS of Rs 5 for the single quarter. On a conservative basis it is expected to end FY09 with sales of Rs 100 cr and PAT of Rs 21 cr i.e. EPS of Rs 14. Scrip can easily appreciate 50% in a years time.
No comments:
Post a Comment