Small & Beautiful
Tantia Construction (68.00) boasts of having presence in roads and highways, railways, tunnels, bridges and flyovers, urban instructure, sewerage and drainage, civil & housing construction etc. Lately, it also ventured into the lucrative marine infrastructure space, power transmission and distribution segment and aviation infrastructure. Infact, it is among the five Indian companies capable of providing ‘foundation-to-finish’ for mega railway bridges spanning 2-km or more. More importantly, company has a very strong presence in the eastern and north-eastern region which gives it an edge, as very few players are interested in bidding in these regions due to difficult terrain. Presently, it has diversified and massive order in hand position of more than 1000 cr to be executed in next 24 months. In near future company intends to foray into BOT & BOOT projects to boost up its margin. For Q1FY09 it recorded 40% rise in topline as well as bottomline to Rs 99 cr and Rs 5 cr respectively. Hence for entire FY09 it may clock a turnover of more than Rs 450 cr and profit of Rs 20 cr i.e. EPS of Rs 12 on diluted equity of Rs 16.30 cr. Relatively, a safer bet in infrastructure space.
Hitachi Home & Life Solutions (110.00), a 68% subsidiary of Hitachi-Japan is amongst the top airconditioning companies in India with an installed capacity of 250,000 units per year. It maufactures high technological home and commercial air conditioners like window AC, split AC, concealed splits, ductables, chillers and specific telecom cooling solutions. To capitalize its brand equity and strong distribution network in India. company has also ventured in the business of trading for the refrigerators and washing machines. Its plant at Kadi, Gujarat is among the seven Hitachi room air conditioner facilities worldwide. Being a technology driven company, it has introduced several innovative products such as “ACE, IOTA, ATOM Square, Takumi” which are doing extremely well in the market. Its refrigerator and washing machines sales are also picking up. On the other hand its commercial air conditioning division is also on a rampant growth mainly due to the retail sector and mall culture expanding in a big way. A trend of having BPOs and R&D centers is also picking up in India. Although its June quarter nos were not that encouraging still it is expected to end FY09 with sales of Rs 525 cr and PAT of Rs 42 cr i.e. EPS of Rs 18 on equity of Rs 23 cr. At current levels it is trading reasonably cheap and can be bought for a target of Rs 180 in medium term.
Graphite India (58.00) is one of the few players globally manufacturing graphite electrodes as it’s a closely guarded technology. With the present installed capacity of 78,000 tonne, company boasts of producing nearly 8% of the total global graphite output. To cater the rising demand, it is implementing a capex at Durgapur plant to increase the graphite electrodes capacity by 10,500 tonne to be operational by end of FY09. Being backward integrated, it has the facility to produce 30,000 mtpa of calcined petroleum coke apart from generating 33 MW of power through Hydel and Multi-fuel routes. Further it is contemplating to enhance its captive power generation by 100 MW in next two years. Earlier in Oct 2005 company raised nearly Rs 175 cr thru FCCB route which is yet to be fully converted @ Rs 55. Despite hit by forex losses it posted decent result for the June quarter and accordingly is estimated to end FY09 with consolidated sales of Rs 1500 cr and NP of Rs 155 cr which works out to an EPS of Rs 9 on fully diluted equity of Rs 36 cr having face value as Rs 2/- per share. With a dividend yield of nearly 5% this is one of the safe pick with minimal downward risk.
Although experts are skeptical about the future prospects of real estate sector due to low demand and high supply, still Kolte Patil (58.00) can be bought as a contrarian bet. It reported satisfactory nos for Q1FY09 as it earned a PAT of Rs 31.50 cr on total revenue of Rs 97 cr on consolidated basis. Company is in the midst of developing 28 projects (24 in Pune and 4 in Bangalore), with a total saleable area of around 18 million sq. ft. consisting of 10 residential complexes, 11 commercial development, 5 IT parks, 1 integrated township & 1 service apartment. In addition, it has entered into MOU or has acquired development rights for another 22 million sq. ft. of saleable area in and around Pune and Bangalore. Although the actual land bank owned by the company is less than 15 acre but the development right is equivalent to whopping 755 acres of land. With this company has a total developable space of massive 40 million sq. ft. Ironically it has chalked out a project cost of roughly about Rs 3650 cr to be spent in coming 7~9 yrs. For funding the projects KPDL has entered into a joint venture agreement with ICICI Venture Funds, K2 Properties etc. Despite the anticipated fall in real estate prices, company is estimated to maintain round about same bottomline for FY09. At current market cap of Rs 500 cr risk reward favors bull.
Hitachi Home & Life Solutions (110.00), a 68% subsidiary of Hitachi-Japan is amongst the top airconditioning companies in India with an installed capacity of 250,000 units per year. It maufactures high technological home and commercial air conditioners like window AC, split AC, concealed splits, ductables, chillers and specific telecom cooling solutions. To capitalize its brand equity and strong distribution network in India. company has also ventured in the business of trading for the refrigerators and washing machines. Its plant at Kadi, Gujarat is among the seven Hitachi room air conditioner facilities worldwide. Being a technology driven company, it has introduced several innovative products such as “ACE, IOTA, ATOM Square, Takumi” which are doing extremely well in the market. Its refrigerator and washing machines sales are also picking up. On the other hand its commercial air conditioning division is also on a rampant growth mainly due to the retail sector and mall culture expanding in a big way. A trend of having BPOs and R&D centers is also picking up in India. Although its June quarter nos were not that encouraging still it is expected to end FY09 with sales of Rs 525 cr and PAT of Rs 42 cr i.e. EPS of Rs 18 on equity of Rs 23 cr. At current levels it is trading reasonably cheap and can be bought for a target of Rs 180 in medium term.
Graphite India (58.00) is one of the few players globally manufacturing graphite electrodes as it’s a closely guarded technology. With the present installed capacity of 78,000 tonne, company boasts of producing nearly 8% of the total global graphite output. To cater the rising demand, it is implementing a capex at Durgapur plant to increase the graphite electrodes capacity by 10,500 tonne to be operational by end of FY09. Being backward integrated, it has the facility to produce 30,000 mtpa of calcined petroleum coke apart from generating 33 MW of power through Hydel and Multi-fuel routes. Further it is contemplating to enhance its captive power generation by 100 MW in next two years. Earlier in Oct 2005 company raised nearly Rs 175 cr thru FCCB route which is yet to be fully converted @ Rs 55. Despite hit by forex losses it posted decent result for the June quarter and accordingly is estimated to end FY09 with consolidated sales of Rs 1500 cr and NP of Rs 155 cr which works out to an EPS of Rs 9 on fully diluted equity of Rs 36 cr having face value as Rs 2/- per share. With a dividend yield of nearly 5% this is one of the safe pick with minimal downward risk.
Although experts are skeptical about the future prospects of real estate sector due to low demand and high supply, still Kolte Patil (58.00) can be bought as a contrarian bet. It reported satisfactory nos for Q1FY09 as it earned a PAT of Rs 31.50 cr on total revenue of Rs 97 cr on consolidated basis. Company is in the midst of developing 28 projects (24 in Pune and 4 in Bangalore), with a total saleable area of around 18 million sq. ft. consisting of 10 residential complexes, 11 commercial development, 5 IT parks, 1 integrated township & 1 service apartment. In addition, it has entered into MOU or has acquired development rights for another 22 million sq. ft. of saleable area in and around Pune and Bangalore. Although the actual land bank owned by the company is less than 15 acre but the development right is equivalent to whopping 755 acres of land. With this company has a total developable space of massive 40 million sq. ft. Ironically it has chalked out a project cost of roughly about Rs 3650 cr to be spent in coming 7~9 yrs. For funding the projects KPDL has entered into a joint venture agreement with ICICI Venture Funds, K2 Properties etc. Despite the anticipated fall in real estate prices, company is estimated to maintain round about same bottomline for FY09. At current market cap of Rs 500 cr risk reward favors bull.
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