Small & Beautiful
SEAMEC (118.00) is expected to register good growth in coming quarter as all the vessels have deployed at healthy charter rate and there won’t be any dry dock in foreseeable future. Its first vessel is deployed with Dolphin offshore for two years @ US$ 23,333 per day, second vessel with CONDUX SA DE, Mexico @ US$ 56,000 per day, third vessel is hired by M/S Superior Offshore @ US$ 55,555 per day whereas fourth vessel has been let out @ US$ 105,555 per day to M/s Sime Darby Engineering, Qatar. Meanwhile company has reported poor performance for H1FY08 as couple of its vessels was under dry dock and its second vessel met with an fire accident. Hence it reported a loss of Rs 9 cr with a decline in revenue by 7% to Rs 96 cr. Still it is expected to register total revenue of Rs 250 cr and PAT of Rs 45 cr for CY08 i.e. EPS of Rs 13 on equity of Rs 33.90 cr. However for the year ending Dec 2009, it has the potential to clock an EPS of around Rs 24. Hence the scrip is currently trading at a PE ratio of less than 5x times against its CY09 earnings. On the back of robust outlook company is planning for 1 more acquisition of vessel by end of this calendar year. Due to strong cash flow and debt free status funding the acquisition is not an issue for the company. Although company is operating in a cyclical industry, still it deserves much better valuation. A solid bet at current levels.
Andhra Petrochemicals (17.00) is the only producer of Oxo-Alcohols in India with a production capacity of 42,000 MTPA. The market demand for Oxo-Alcohols is currently estimated at 143,000 MTPA, out of which company caters to 30% demand and the balance 70% is met through imports. To secure a greater share of the market and meet the growing demand, company is in undergoing expansion and modernization programme to increase its production capacity to 73,000 MTPA. However, the enhanced capacity is expected to be operational only by Sept 2009. Incredibly, company has been able to save a massive Rs 12 cr per annum only on power cost as it has installed and commissioned 2400 KVA uninterrupted power supply system and discontinued the operation of D.G.Sets from last fiscal. Despite considerable rise in input cost company was able to maintain its bottomline for FY08 on reported sales of Rs 281 cr. Although it announced poor performance for Q1FY09 but it has the potential to report healthy margins once the crude oil prices cools off. On the optimistic front, it may clock a turnover of more than Rs 300 and PAT of Rs 35 cr posting an EPS of Rs 4 for FY09. Can be bought at sharp declines.
Belonging to diversified Aditya Birla group, Tanfac Industries (55.00) is one of the largest suppliers of fluorine chemicals in India. It is mainly engaged in the manufacture of inorganic chemicals and fluorine based chemicals such as aluminium fluoride (ALF3), anhydrous hydro fluoric acid (AHF), sodium silico fluoride, ammonium bifluoride, sulphuric acid, potassium fluoride, cryolite and various chemicals. Besides it also produces organic fluorides & speciality fine chemicals which are used as intermediates in the manufacture of pharmaceuticals and agrochemicals. For June’08 quarter it reported excellent result as sales jumped up 50% to Rs 47 cr whereas PBT more than tripled to Rs 5.20 cr. But due to high tax provisioning its net profit zoomed up by 150% to Rs 3.30 cr. Company is estimated to perform better in FY09 as it has undertaken new market initiatives, new products launch, capacity expansion of existing production and cost savings from process improvement schemes. Moreover, company has also got its CDM project approved and is expected to generate additional revenue from carbon credits this fiscal. Accordingly for FY09 it may clock sales of Rs 200 cr and profit of Rs 13.50 cr i.e. EPS of Rs 14 on equity of Rs 9.98 cr. Scrip can shoot up 50% as and when market sentiment improves.
Krone Communications (110.00) is a 62% subsidiary of US based ADC Telecommunications, which is world leader in communications network infrastructure and has presence in over 150 countries worldwide. Thus, Krone provides the connections for wireline, wireless, cable, broadcast and enterprise networks in India. Its innovative network infrastructure equipment and professional services enable high-speed Internet, data, video, and voice services to residential, business and mobile subscribers. Besides structured cabling solution, it also offers Wi-Fi and Wi-max solutions. In addition, the company enables wireless carriers to get more from their networks with its Digivance™ radio frequency transport solutions and ClearGain® tower-mounted amplifiers. Because of its hi-tech professional service its clientele includes corporate giants like Bharti Televentures, Reliance Infocom, Tata Teleservices, Siemens, HFCL Infotel, TCS, Alcatel, Cognizant, Lucent, etc to name a few. For Q3FY08 i.e. quarter ending July 2008, its topline grew by 35% to Rs 29 cr but profit declined by 10% to Rs 2 cr. Hence for entire FY08 ending Oct 2008 it may register revenue of Rs 100 cr and PAT of around Rs 8 cr i.e. EPS of Rs 17 on tiny equity of Rs 4.60 cr. That means this debt free MNC is available at a very cheap discounting of 6x times. Buy at current levels.
Andhra Petrochemicals (17.00) is the only producer of Oxo-Alcohols in India with a production capacity of 42,000 MTPA. The market demand for Oxo-Alcohols is currently estimated at 143,000 MTPA, out of which company caters to 30% demand and the balance 70% is met through imports. To secure a greater share of the market and meet the growing demand, company is in undergoing expansion and modernization programme to increase its production capacity to 73,000 MTPA. However, the enhanced capacity is expected to be operational only by Sept 2009. Incredibly, company has been able to save a massive Rs 12 cr per annum only on power cost as it has installed and commissioned 2400 KVA uninterrupted power supply system and discontinued the operation of D.G.Sets from last fiscal. Despite considerable rise in input cost company was able to maintain its bottomline for FY08 on reported sales of Rs 281 cr. Although it announced poor performance for Q1FY09 but it has the potential to report healthy margins once the crude oil prices cools off. On the optimistic front, it may clock a turnover of more than Rs 300 and PAT of Rs 35 cr posting an EPS of Rs 4 for FY09. Can be bought at sharp declines.
Belonging to diversified Aditya Birla group, Tanfac Industries (55.00) is one of the largest suppliers of fluorine chemicals in India. It is mainly engaged in the manufacture of inorganic chemicals and fluorine based chemicals such as aluminium fluoride (ALF3), anhydrous hydro fluoric acid (AHF), sodium silico fluoride, ammonium bifluoride, sulphuric acid, potassium fluoride, cryolite and various chemicals. Besides it also produces organic fluorides & speciality fine chemicals which are used as intermediates in the manufacture of pharmaceuticals and agrochemicals. For June’08 quarter it reported excellent result as sales jumped up 50% to Rs 47 cr whereas PBT more than tripled to Rs 5.20 cr. But due to high tax provisioning its net profit zoomed up by 150% to Rs 3.30 cr. Company is estimated to perform better in FY09 as it has undertaken new market initiatives, new products launch, capacity expansion of existing production and cost savings from process improvement schemes. Moreover, company has also got its CDM project approved and is expected to generate additional revenue from carbon credits this fiscal. Accordingly for FY09 it may clock sales of Rs 200 cr and profit of Rs 13.50 cr i.e. EPS of Rs 14 on equity of Rs 9.98 cr. Scrip can shoot up 50% as and when market sentiment improves.
Krone Communications (110.00) is a 62% subsidiary of US based ADC Telecommunications, which is world leader in communications network infrastructure and has presence in over 150 countries worldwide. Thus, Krone provides the connections for wireline, wireless, cable, broadcast and enterprise networks in India. Its innovative network infrastructure equipment and professional services enable high-speed Internet, data, video, and voice services to residential, business and mobile subscribers. Besides structured cabling solution, it also offers Wi-Fi and Wi-max solutions. In addition, the company enables wireless carriers to get more from their networks with its Digivance™ radio frequency transport solutions and ClearGain® tower-mounted amplifiers. Because of its hi-tech professional service its clientele includes corporate giants like Bharti Televentures, Reliance Infocom, Tata Teleservices, Siemens, HFCL Infotel, TCS, Alcatel, Cognizant, Lucent, etc to name a few. For Q3FY08 i.e. quarter ending July 2008, its topline grew by 35% to Rs 29 cr but profit declined by 10% to Rs 2 cr. Hence for entire FY08 ending Oct 2008 it may register revenue of Rs 100 cr and PAT of around Rs 8 cr i.e. EPS of Rs 17 on tiny equity of Rs 4.60 cr. That means this debt free MNC is available at a very cheap discounting of 6x times. Buy at current levels.
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