STOCK WATCH

Aegis logistic (152.00) owns and operates one of India’s largest private sector liquid terminal located on a 20-acre plot at Trombay having storage capacity of 165,000 KL. With two other terminals it boasts of having a total capacity of around 290,000 KL. Considering the robust future outlook, it is setting up a third terminal in Trombay with a capacity of nearly 55,000 KL by FY10. On the other hand it also imports, markets and distributes bulk propane, propylene and LPG to a variety of industrial customers in the western region and is one of the largest private sector suppliers in India. Lately company has ventured into lucrative business of marketing and retailing of LPG thru auto gas dispensing stations under the brand name ‘AEGIS Autogas’. From the present 38 retail outlets across five states, company intends to open 100~150 more such stations in next couple of years. Recently company took over Hindustan Aegis LPG and became the owner of 20,000 MT fully refrigerated LPG terminal. For FY09 it may clock a turnover of Rs 475 cr and profit of Rs 35 cr i.e. EPS of Rs 18 on equity of Rs 19.90 cr. Accumulate at declines.

Being the Asia’s largest manufacturer of air compressors Elgi Equipment (48.00) is involved with the design, development and production of exhaustive range of electric and diesel powered, centrifugal, reciprocating, borewell, railway air compressors etc. As air compressors are used in a wide range of applications, company caters to almost all sectors of industry. Besides it also derives 20% revenue from providing total service station solutions through the supply of a range of equipment and tools for two, three & four wheelers. Ironically company deals in or manufactures more than 128 equipments generally required by full-fledged garage. Of late to cash on its rich experience company also started offering end to end mechanical engineering solutions and contract manufacturing services of precision engineered part to clients who are looking for cost-effective, subcontracting solution. For FY09 it is expected to report a topline of Rs 485 cr and bottomline of Rs 36 cr i.e. EPS of Rs 6 on equity of Rs 6.30 cr having face value of Rs 1/- per share. To concentrate on each business segment company is hiving off its automotive equipment business into a separate wholly owned subsidiary called ATS-Elgi Ltd. Keep accumulating at sharp declines.

Part of B M Thapar group, Greaves Cotton (158.00) is enaged in production of diesel/petrol/LPG engines for power generation, agro equipment & atumotive apart from manufacturing gensets, agro equipment and construction equipment Besides, it is also engaged in marketing high technology systems for marine, aviation and electronic applications. Last year, to increase its presence in global market it acquired, Bukh Farymann Diesel GmbH (renamed as Greaves Farymann Diesel GmbH) which is engaged in the manufacture and marketing of single cylinder diesel engines and parts for Rs 25 cr. For FY08 it may clock a turnover of Rs 1400 cr and PAT of Rs 115 cr i.e. EPS of Rs 24 on current equity of Rs 48.80 cr. Of late Piaggio Group's Indian subsidiary signed a 8 year agreement with the company for purchase of mono-cylinder diesel engines for application on the three-wheeled vehicles manufactured by them. This implies that company will continue to be a single source supplier of such mono-cylinder diesel engines to Piaggio. Secondly few months ago company inaugurated its new manufacturing facility for compaction equipment at Gummidipoondi, Tamil Nadu. Recently it has also formed a 100% subsidiary to take up some new business in future. For FY09 it may clock a turnover of Rs 1500 cr and NP of Rs 100 cr i.e. EPS of Rs 20 on equity of Rs 48.85 cr. Only long term investors are advised to buy at declines.

Hind Rectifiers (140.00) is one of the leading manufacturers of locomotive transformers, rectifiers, inverters, and power electronics like diodes and thyristors (types of semiconductor devices) etc which are basically used in converting the current from AC to DC and vice versa. Incidentally, it derives more than 50% of its revenues from railways and 20% from power industry. Offlate, company has set up two new units in tax free zone of Uttranchal, which started commercial production only from June 2008. Moreover, in Oct 2007 company has signed a technical collaboration agreement with M/s. Infineon Technologies AG, Germany for manufacturing of IGBT based primeSTACK which will complement its existing products. Although company didn’t report encouraging nos for the June quarter still it is expected to register sales of Rs 125 cr and profit of Rs 15 cr i.e. EPS of Rs 20 on tiny equity of Rs 1.51 cr with face value as Rs 2/- per share. Company has recently declared 1:1 bonus and the scrip is still trading cum bonus. Investors can buy at current levels as it can appreciate 50% in 12`15 months.