Small & Beautiful
Last week Vakrangee Software (48.00) announced encouraging set of nos for the Sept’08 quarter. Revenue shot up 60% to Rs 91 cr whereas profit increased by 50% to Rs 19 cr posting an EPS of Rs 9 for the single quarter. Accordingly for H1FY09, it has registered 70% growth in topline to Rs 153 cr and 65% rise in profit to Rs 30 cr. Despite such impressive performance its share price has tumbled down to sub Rs 50 levels from high of Rs 300 in May’08 due to distress selling by FII’s. Company has emerged as the only provider of document management and printing management solutions in the organized sector. With more than 15 years of experience in servicing various government organizations, company forayed into the private sector for the first time during last fiscal, which includes large companies from the BFSI, retail and telecom sector in both its DMS and PMS vertical. It digitized various inbound documents (including application and KYC forms) and developed customized software for each project. To meet the growing customers need in the print management segment, it tied up with Eastman Kodak and installed Asia’s biggest large scale variable color data printers. It is setting up a new hub office at Gurgaon equipped with second printer of same type. Last year it opened 32 new offices and has plans to open 100 more in couple of years. Meanwhile, India is reporting the fastest global growth in e-governance, catalyzed by the implementation of the RTI Act, which makes it mandatory for all government departments to digitize their physical documents. It may end FY09 with sales of Rs 300 cr and profit of Rs 58 cr leading to an EPS of Rs 27 on current equity of Rs 21.40 cr. As FII’s hold huge chunk scrip may continue to underperform in short term.
For the latest Sept’08 quarter, sales of Ind Swift Lab (25.00) increased by 35% to Rs 146 cr and PAT improved by 45% to Rs 10.50 cr. Hence it has already posted a NP of Rs 20.50 for six months ending Sept’08 against a PAT for Rs 31 cr for entire FY08. Notably, company has started exporting to USA in a big way after getting USFDA approval in Sept 2007 for its API manufacturing facility at Derabassi Punjab for Clarithromycin. It is now expecting to get a second USFDA approval in 2009 which will further boost the export revenue. Presently, exports constitute around 40% of sales with company having presence in 45-50 countries across globe. For future growth the company has a robust product pipeline of 25 products which includes few blockbuster drugs as well. It has successfully filed over 72 DMFs with the US, Canadian, UK and European Drug Authorities. Hence company has been aggressively expanding its capacity and has increased the gross block by almost five times to Rs 470 cr from 100 cr in 2005. For FY09 it may report sales of Rs 550 cr and NP of Rs 30 cr i.e. EPS of Rs 11 on diluted equity of Rs 27.50 cr. To fund its growth plan, company made a pref allotment of 28 lac warrants @ Rs 70 in March 2007 and recently allotted another 25 lac warrants @ 70 to promoter group. With a book value of whopping Rs 97 and expected CEPS of 18~20 Rs, scrip is trading relatively cheap at a P/E ratio of less than 2~3x times. Although company has an high debt on its books, still it a good bet at current levels
In the recent meltdown, share price of TIL Ltd (165.00) has been reduced to just 20% from its high of Rs 825 in Jan 2008. Company is engaged in three business segment namely construction and mining solutions (55%), material handling solutions (25%) & power systems solutions (20%). It has long term technical and strategic alliances with leading equipment manufacturers in the world- Caterpillar Inc, Manitowoc crane Group, USA Famak S.A, Poland and Paceco Corp, USA. Pioneering the manufacture of mobile cranes in India, company produces rough terrain, truck mounted, yard and industrial cranes, reachstackers, electric level luffing cranes, articulated lorry loaders, equipment for specialized Defense applications at its Kolkatta plant apart from marketing imported equipment and spares of reputed global manufacturers. Under the power system, it sells generator sets in the 180 KVA-2250 KVA range, using Caterpillar diesel engines and Hindustan Power Plus engines as a base. For the Sept’08 qtr, it reported 50% growth in sales and PAT to Rs 264 cr and 9 cr respectively. To cater the global clients effectively it has set up subsidiaries in Singapore, Nepal, Myanmar etc which are doing well. Further company is setting up a Greenfield plant in West Bengal under a capex of Rs 175 cr for which it has made a pref allotment of 30 lac warrants to promoters and others to be converted into equity @ Rs 326 per share. On a consolidated basis company is estimated to clock a turnover of Rs 1400 cr and PAT of Rs 50 cr. This translates to an EPS of Rs 50 on current equity of Rs 10 cr whereas the diluted EPS works out to Rs 39 cr on enhanced equity of Rs 12.75 cr. A solid bet.
Once again Mazda Ltd (35.00) has come out with flying colours for the Sept’08 qtr. Its net sales as well as net profit grew by 40% to Rs 22 cr and 2.30 cr respectively. It has already posted an EPS of more than Rs 10 for H1FY09. So for entire FY09, it is slated to register sales of Rs 80 cr and profit of Rs 8 cr i.e. EPS of Rs 19 on small equity of Rs 4.25 cr. Company is among the few engineering companies in the world, manufacturing very specialized, high technology and critical equipments for various industries like power, refineries, fertilizers, chemicals, nuclear, sugar, paper, food, pharma etc. Broadly its product profile is segmented into vacuum system, valve division, air pollution control equipment, crystallizers and evaporators. Notably, it has a technical collaboration with world renowned Croll-Reynolds Inc. USA, who holds 12% stake in the company. Fundamentally, company is on a strong footing with very low debt equity ratio and good reserves leading to a book value of Rs 61. Moreover HSBC is holding nearly 8% stake even as on 30th Sept and hasn’t sold any share in this carnage. At an Enterprise value of merely Rs 20 cr scrip and at a P/E multiple of harly 2x times, scrip is trading damn cheap. A screaming buy.
For the latest Sept’08 quarter, sales of Ind Swift Lab (25.00) increased by 35% to Rs 146 cr and PAT improved by 45% to Rs 10.50 cr. Hence it has already posted a NP of Rs 20.50 for six months ending Sept’08 against a PAT for Rs 31 cr for entire FY08. Notably, company has started exporting to USA in a big way after getting USFDA approval in Sept 2007 for its API manufacturing facility at Derabassi Punjab for Clarithromycin. It is now expecting to get a second USFDA approval in 2009 which will further boost the export revenue. Presently, exports constitute around 40% of sales with company having presence in 45-50 countries across globe. For future growth the company has a robust product pipeline of 25 products which includes few blockbuster drugs as well. It has successfully filed over 72 DMFs with the US, Canadian, UK and European Drug Authorities. Hence company has been aggressively expanding its capacity and has increased the gross block by almost five times to Rs 470 cr from 100 cr in 2005. For FY09 it may report sales of Rs 550 cr and NP of Rs 30 cr i.e. EPS of Rs 11 on diluted equity of Rs 27.50 cr. To fund its growth plan, company made a pref allotment of 28 lac warrants @ Rs 70 in March 2007 and recently allotted another 25 lac warrants @ 70 to promoter group. With a book value of whopping Rs 97 and expected CEPS of 18~20 Rs, scrip is trading relatively cheap at a P/E ratio of less than 2~3x times. Although company has an high debt on its books, still it a good bet at current levels
In the recent meltdown, share price of TIL Ltd (165.00) has been reduced to just 20% from its high of Rs 825 in Jan 2008. Company is engaged in three business segment namely construction and mining solutions (55%), material handling solutions (25%) & power systems solutions (20%). It has long term technical and strategic alliances with leading equipment manufacturers in the world- Caterpillar Inc, Manitowoc crane Group, USA Famak S.A, Poland and Paceco Corp, USA. Pioneering the manufacture of mobile cranes in India, company produces rough terrain, truck mounted, yard and industrial cranes, reachstackers, electric level luffing cranes, articulated lorry loaders, equipment for specialized Defense applications at its Kolkatta plant apart from marketing imported equipment and spares of reputed global manufacturers. Under the power system, it sells generator sets in the 180 KVA-2250 KVA range, using Caterpillar diesel engines and Hindustan Power Plus engines as a base. For the Sept’08 qtr, it reported 50% growth in sales and PAT to Rs 264 cr and 9 cr respectively. To cater the global clients effectively it has set up subsidiaries in Singapore, Nepal, Myanmar etc which are doing well. Further company is setting up a Greenfield plant in West Bengal under a capex of Rs 175 cr for which it has made a pref allotment of 30 lac warrants to promoters and others to be converted into equity @ Rs 326 per share. On a consolidated basis company is estimated to clock a turnover of Rs 1400 cr and PAT of Rs 50 cr. This translates to an EPS of Rs 50 on current equity of Rs 10 cr whereas the diluted EPS works out to Rs 39 cr on enhanced equity of Rs 12.75 cr. A solid bet.
Once again Mazda Ltd (35.00) has come out with flying colours for the Sept’08 qtr. Its net sales as well as net profit grew by 40% to Rs 22 cr and 2.30 cr respectively. It has already posted an EPS of more than Rs 10 for H1FY09. So for entire FY09, it is slated to register sales of Rs 80 cr and profit of Rs 8 cr i.e. EPS of Rs 19 on small equity of Rs 4.25 cr. Company is among the few engineering companies in the world, manufacturing very specialized, high technology and critical equipments for various industries like power, refineries, fertilizers, chemicals, nuclear, sugar, paper, food, pharma etc. Broadly its product profile is segmented into vacuum system, valve division, air pollution control equipment, crystallizers and evaporators. Notably, it has a technical collaboration with world renowned Croll-Reynolds Inc. USA, who holds 12% stake in the company. Fundamentally, company is on a strong footing with very low debt equity ratio and good reserves leading to a book value of Rs 61. Moreover HSBC is holding nearly 8% stake even as on 30th Sept and hasn’t sold any share in this carnage. At an Enterprise value of merely Rs 20 cr scrip and at a P/E multiple of harly 2x times, scrip is trading damn cheap. A screaming buy.
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