STOCK WATCH
For the June’08 quarter, Jupiter Bioscience (120.00) reported 20% growth in sales to Rs 29 cr and 10% rise in NP to Rs 7 cr. Notably it registered an operating margin of 53% for the quarter. Company is operating in a very niche segment and is among the few companies in the world to have competency in synthesis of peptides. It is poised to become a global peptide solutions group having a broad canvas of peptide chemistry products, peptide reagents, coupling reagents, protective agents and supplier of key ingredients used in peptide based pharmaceuticals. Earlier company entered into a 10-year product purchase agreement with Ranbaxy on peptide pharmaceutical for gloabal market and as per contract allotted 31.77 lakh warrants @ Rs 147. It has also finalized to acquire a manufacturing facility of Merck Life Sciences, Switzerland and has even signed a long term business contract with them. Recently it has entered into licensing agreement with California based GI Logics Inc for development/sales for the use of Diamox for diagnostic & eradication of H. pylori bacterium. Last fiscal it raised 100 cr thru QIP route @ Rs 153 per share. Further it cancelled the 27.50 lakh equity shares allotted to promoters and instead issued 40 lakh warrants @ Rs 182 to strategic investors. For FY09, on a standalone basis it is estimated to clock a turnover of Rs 175 cr and PAT of Rs 40 cr which works out to an EPS of Rs 18 on fully diluted equity of Rs 22.50 cr. One of the safest bet in current market sentiment.
Post the amalgamation of Rain Calcining with itself, Rain Commodities (220.00) has been posting encouraging nos on a consolidated basis. Currently, it is one of the largest producers of Calcined petroleum coke with 7 plants in USA and one plant in India and having total installed capacity of 2.40 million tonne of CPC. Besides, it also produces cement at its 1.60 million tonne cement plant in South India and sells it under the “PRIYA” brand. For the Q2 ending June’08 it posted a net profit of Rs 94 cr on net sales of Rs 1081 cr. This is despite the fact company provided Rs 42 cr on restatement of foreign currency loan as per June exchange rate. Remarkably, its OPM stood at more than 25% and with CPC price trading above US$ 350 per tonne its margin are expect to increase in H2FY08. In order to maintain its growth momentum in future and cash on the robust CPC demand, company is setting up two additional facilities for another 0.6 million tonne of calcined coke which will be operational by 2010. Meanwhile for CYFY08, it may report consolidated sales of Rs 4250 cr and NP of Rs 350 cr i.e. EPS of Rs 46 on fully diluted equity of approx Rs 76 cr. Keep accumulating at sharp declines.
Belonging to FAG group of Germany, FAG Bearings (390.00) is among the largest player in the Indian Bearing industry commanding nearly 13% share of total bearing market. It is a leading OEM supplier to the automotive industry, mechanical and electrical engineering industry, besides the Railways. Notably, company is the market leader in the spherical roller bearing segment with a market share of nearly 60%.Despite rising input cost and slowdown in auto industry, for the June’08 quarter its sales improved by 15% to Rs 179 cr and PAT grew by 10% to Rs 23 cr. To maintain its market share company, company is contemplating Rs 350 cr expansion plan for needle bearing in near future. Although no spectacular growth is expected in coming years, still this debt free MNC is available at a cheap valuation compare to its fundamentals. For CY08 it is estimated to report a topline and bottomline of Rs 700 cr and Rs 85 cr respectively which leads to an EPS of Rs 51 on equity of Rs 16.60 cr. Hence at current market cap of Rs 650 cr scrip is discounted by less than 8x times although historically it hasn’t traded much below 14x times. So, it seems all the negatives have been factored in the CMP and the share price is poised to move upwards only as and when the general sentiment improves. Secondly, company is having free reserves of more than Rs 300 cr on such a tiny equity which makes it bonus candidate as well.
Remarkably from the last three quarters, HBL Power System (275.00) has been posting excellent set of nos. Even for the latest June’08 quarter, its sales shot up 130% to Rs 316 cr whereas NP zoomed up by 450% to Rs 33 cr registering a whopping EPS of Rs 14 for the single quarter. More importantly it reported a very healthy OPM of more than 20%. Company is the engaged in design, development and manufacture of industrial & specialized batteries, allied electronic products and DC systems in India. Infact it is the market leader in VRLA (valve regulated lead acid) and NCPP (nickel cadium pocket plate) batteries and enjoys 50% market share of domestic telecom market. Moreover it is among the very few companies in the world making ultra high specialties batteries for military use like thermal, reserve and torpedo batteries. Ironically, it stands 3rd globally for Nicad Passenger aircraft batteries and ranks 2nd for industrial alkaline batteries. 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. Recently company has put up two new factories at Vizianagaram and SEZ Vizag in Visakhapatnam under a capex of Rs 150. After posting an EPS of Rs 28 for FY08, company is set to clock an EPS of Rs 45 for FY09 with sales of around Rs 1250 cr and PAT of Rs 110 cr. It’s a screaming buy at current levels.
Post the amalgamation of Rain Calcining with itself, Rain Commodities (220.00) has been posting encouraging nos on a consolidated basis. Currently, it is one of the largest producers of Calcined petroleum coke with 7 plants in USA and one plant in India and having total installed capacity of 2.40 million tonne of CPC. Besides, it also produces cement at its 1.60 million tonne cement plant in South India and sells it under the “PRIYA” brand. For the Q2 ending June’08 it posted a net profit of Rs 94 cr on net sales of Rs 1081 cr. This is despite the fact company provided Rs 42 cr on restatement of foreign currency loan as per June exchange rate. Remarkably, its OPM stood at more than 25% and with CPC price trading above US$ 350 per tonne its margin are expect to increase in H2FY08. In order to maintain its growth momentum in future and cash on the robust CPC demand, company is setting up two additional facilities for another 0.6 million tonne of calcined coke which will be operational by 2010. Meanwhile for CYFY08, it may report consolidated sales of Rs 4250 cr and NP of Rs 350 cr i.e. EPS of Rs 46 on fully diluted equity of approx Rs 76 cr. Keep accumulating at sharp declines.
Belonging to FAG group of Germany, FAG Bearings (390.00) is among the largest player in the Indian Bearing industry commanding nearly 13% share of total bearing market. It is a leading OEM supplier to the automotive industry, mechanical and electrical engineering industry, besides the Railways. Notably, company is the market leader in the spherical roller bearing segment with a market share of nearly 60%.Despite rising input cost and slowdown in auto industry, for the June’08 quarter its sales improved by 15% to Rs 179 cr and PAT grew by 10% to Rs 23 cr. To maintain its market share company, company is contemplating Rs 350 cr expansion plan for needle bearing in near future. Although no spectacular growth is expected in coming years, still this debt free MNC is available at a cheap valuation compare to its fundamentals. For CY08 it is estimated to report a topline and bottomline of Rs 700 cr and Rs 85 cr respectively which leads to an EPS of Rs 51 on equity of Rs 16.60 cr. Hence at current market cap of Rs 650 cr scrip is discounted by less than 8x times although historically it hasn’t traded much below 14x times. So, it seems all the negatives have been factored in the CMP and the share price is poised to move upwards only as and when the general sentiment improves. Secondly, company is having free reserves of more than Rs 300 cr on such a tiny equity which makes it bonus candidate as well.
Remarkably from the last three quarters, HBL Power System (275.00) has been posting excellent set of nos. Even for the latest June’08 quarter, its sales shot up 130% to Rs 316 cr whereas NP zoomed up by 450% to Rs 33 cr registering a whopping EPS of Rs 14 for the single quarter. More importantly it reported a very healthy OPM of more than 20%. Company is the engaged in design, development and manufacture of industrial & specialized batteries, allied electronic products and DC systems in India. Infact it is the market leader in VRLA (valve regulated lead acid) and NCPP (nickel cadium pocket plate) batteries and enjoys 50% market share of domestic telecom market. Moreover it is among the very few companies in the world making ultra high specialties batteries for military use like thermal, reserve and torpedo batteries. Ironically, it stands 3rd globally for Nicad Passenger aircraft batteries and ranks 2nd for industrial alkaline batteries. 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. Recently company has put up two new factories at Vizianagaram and SEZ Vizag in Visakhapatnam under a capex of Rs 150. After posting an EPS of Rs 28 for FY08, company is set to clock an EPS of Rs 45 for FY09 with sales of around Rs 1250 cr and PAT of Rs 110 cr. It’s a screaming buy at current levels.
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