Small & Beautiful
Tera Software (22.00) is one of the leading e-governance solution providers, undertaking data entry/scanning works for digitization of information maintained under Right to Information Act. It also undertakes short-term projects like issue of photo ID cards, ration cards and election commission cards. Last year company successfully executed Maharashtra Vikri Kar Seva Project in Maharashtra State (VAT Implementation of Maharastra sales tax department) on BOOR (Build own operate and refresh) model as the scope of work was computerization of sales Tax department in the entire state of Maharashtra. Of late company has been able to procure additionally six new projects of the State Government of Andhra Pradesh, Karnataka, Rajasthan, West Bengal and Himachal Pradesh. It also ventured into imparting computer education in more than 225 schools in Goa and AP by establishing the computer labs with Computers and providing the teaching staff and maintenance of systems. In the first two quarters, company has already posted an EPS of more than Rs 4 and is expected to end FY09 with topline of Rs 75 cr and PAT of Rs 10.50 cr i.e. EPS of Rs 8 on equity of Rs 12.50 cr. It may declare 15% dividend for FY09 which gives a yield of 7% at CMP. Moreover company has few acres of surplus land in Hyderabad, which it can either sell or enter into JV with infrastructure company. Scrip can double in 12~15 months.
Jupiter Bioscience (40.00) 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. It is operating in a very niche segment and is among the few companies in the world to have competency in synthesis of peptides. The technology focus of the company has enabled it to develop more than 400 products in its catalogue and establish a leadership position in the peptide business internationally. For H1FY09 it has already clocked an EPS of Rs 9 as it reported 15% growth in sales to Rs 60 cr and 10% increase in PAT to RS 14 cr. Last year company invested considerable resources in developing the processes for manufacture of generic peptide APIs. 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. Besides 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. Last fiscal it raised 100 cr thru QIP route @ Rs 153 per share. Further it has allotted 40 lakh warrants to be converted @ Rs 182 to strategic investors. For FY09 on a standalone basis, it can report sales of Rs 150 cr and NP of Rs 30 i.e. EPS of Rs 20 on current equity of Rs 15.40 cr. A strong buy.
Orient Papers & Industries (21.00) is a diversified company engaged in manufacturing of cement, paper and electrical appliances. It derives 60% of total revenue and 90% profit from cement segment which has an installed capacity of 3.40 million tonne. With its popular brands 'BIRLA A1’ and ORIETAL GOLD’ and having main market as Maharashtra and AP, company’s cement division is reportedly doing well. Infact to increase its market share, company is in the midst of augmenting its capacity to 5 million TPA by April 2009. It is also setting up a 50 MW captive power plant to bring down its power cost. At the same time on the back of strong demand for tissue paper, it is expanding its tissue paper manufacturing capacity from current 10,000 TPA to 30,000 TPA by April 2009. Having a market share of over 17% in the organized sector, its ORIENT PSPO brand of fans are quite popular. To cash on this brand, company has ventured into lighting products also and is now setting up a up a modern manufacturing facility for Compact Fluorescent Lamps at its Faridabad. Financially, in the last two years company has repaid most of its loan and has significantly brought down its total debt to Rs 165 cr from Rs 435 cr in 2006. As a result, it has a very healthy debt equity ratio of 0.16x times. For FY09, it may clock a turnover of Rs 1350 cr and PAT of Rs 150 cr i.e. EPS of Rs 8 on equity of Rs 19.30. Scrip can easily appreciate 50% within a year.
Blue Bird (18.00) is one of the leading manufacturers of paper based notebook products and office stationery. Although notebook forms the core business, company has also ventured into publishing academic textbooks and self study books for children apart from general publications in subjects such as ayurveda and biographies. It also offers end to end solutions for commercial printing. The marketing and sales team at company supports the distribution network of over 600 dealers and distributors spread across 18 cities in India, as also overseas representatives in many countries. In order to cater the central and south India market efficiently, company has put up two new plants at Indore and Bangalore apart from having its main plant in Pune. Financially, company is weak in managing receivables as it has very high debtor equivalent to four months of sales. This has led to huge debt of its book to the tune of Rs 325cr. Hence its annual interest cost (approx Rs 45 cr) is the biggest drag on company’s financial. For H1FY09, it registered marginal 5% growth in sales to Rs 254 cr whereas NP declined by 10% to Rs 12.50 cr posting half yly EPS of Rs 3.50. Accordingly, it may clock a turnover of Rs 500 cr and profit of Rs 19 cr for FY09 i.e. EPS of Rs 5 on current equity of Rs 35 cr. Scrip can double in 12~15 months.
Jupiter Bioscience (40.00) 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. It is operating in a very niche segment and is among the few companies in the world to have competency in synthesis of peptides. The technology focus of the company has enabled it to develop more than 400 products in its catalogue and establish a leadership position in the peptide business internationally. For H1FY09 it has already clocked an EPS of Rs 9 as it reported 15% growth in sales to Rs 60 cr and 10% increase in PAT to RS 14 cr. Last year company invested considerable resources in developing the processes for manufacture of generic peptide APIs. 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. Besides 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. Last fiscal it raised 100 cr thru QIP route @ Rs 153 per share. Further it has allotted 40 lakh warrants to be converted @ Rs 182 to strategic investors. For FY09 on a standalone basis, it can report sales of Rs 150 cr and NP of Rs 30 i.e. EPS of Rs 20 on current equity of Rs 15.40 cr. A strong buy.
Orient Papers & Industries (21.00) is a diversified company engaged in manufacturing of cement, paper and electrical appliances. It derives 60% of total revenue and 90% profit from cement segment which has an installed capacity of 3.40 million tonne. With its popular brands 'BIRLA A1’ and ORIETAL GOLD’ and having main market as Maharashtra and AP, company’s cement division is reportedly doing well. Infact to increase its market share, company is in the midst of augmenting its capacity to 5 million TPA by April 2009. It is also setting up a 50 MW captive power plant to bring down its power cost. At the same time on the back of strong demand for tissue paper, it is expanding its tissue paper manufacturing capacity from current 10,000 TPA to 30,000 TPA by April 2009. Having a market share of over 17% in the organized sector, its ORIENT PSPO brand of fans are quite popular. To cash on this brand, company has ventured into lighting products also and is now setting up a up a modern manufacturing facility for Compact Fluorescent Lamps at its Faridabad. Financially, in the last two years company has repaid most of its loan and has significantly brought down its total debt to Rs 165 cr from Rs 435 cr in 2006. As a result, it has a very healthy debt equity ratio of 0.16x times. For FY09, it may clock a turnover of Rs 1350 cr and PAT of Rs 150 cr i.e. EPS of Rs 8 on equity of Rs 19.30. Scrip can easily appreciate 50% within a year.
Blue Bird (18.00) is one of the leading manufacturers of paper based notebook products and office stationery. Although notebook forms the core business, company has also ventured into publishing academic textbooks and self study books for children apart from general publications in subjects such as ayurveda and biographies. It also offers end to end solutions for commercial printing. The marketing and sales team at company supports the distribution network of over 600 dealers and distributors spread across 18 cities in India, as also overseas representatives in many countries. In order to cater the central and south India market efficiently, company has put up two new plants at Indore and Bangalore apart from having its main plant in Pune. Financially, company is weak in managing receivables as it has very high debtor equivalent to four months of sales. This has led to huge debt of its book to the tune of Rs 325cr. Hence its annual interest cost (approx Rs 45 cr) is the biggest drag on company’s financial. For H1FY09, it registered marginal 5% growth in sales to Rs 254 cr whereas NP declined by 10% to Rs 12.50 cr posting half yly EPS of Rs 3.50. Accordingly, it may clock a turnover of Rs 500 cr and profit of Rs 19 cr for FY09 i.e. EPS of Rs 5 on current equity of Rs 35 cr. Scrip can double in 12~15 months.
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