STOCK WATCH
Couple of days back GM Breweries (85.00) came out with disappointing nos for March qtr. Sales improved marginally to Rs 49 cr but net profit declined by 25% to Rs 2.65 cr due to lower operating margin. Accordingly company declared 25% dividend (including 5% special dividend being silver jubilee year) which gives a yield of nearly 3% at CMP. Although the March qtr nos were below expectation still the entire FY08 figures are pretty decent as sales grew by 10% to Rs 186 and PAT increased by 25% to Rs 14.70 cr thereby registering a healthy EPS of Rs 16 on equity of Rs 9.40 cr. At the current market cap of Rs 80 cr scrip is trading at a PE ratio of merely 5x times. Having a gross block of whopping Rs 68 cr, low debt equity ratio, strong cash flow, decent margins etc, company deserves much better discounting. With 68% holding, promoters are investor friendly and have an uninterrupted record of dividend payment from the day of listing. At a modest discounting by 12x times, scrip has the potential to cross Rs 200 mark in medium to long term.
PBA Infrastructure (68.00) is engaged in execution of civil engineering projects and specializes in construction of highways, dams, runways and heavy RCC structures, bridges and other infrastructure projects of various govt bodies. It is executing projects from Kashmir to Kanyakumari and has taken up new works like toll collection and quarrying to augment its income. For the first three quarters its revenue increased by 45% to Rs 270 cr and NP increased by only 20% to 11.50 cr. Notably, company has been regularly bagging new orders and its current order book position is around 700 cr. Fundamentally, company is having a huge debt of 170 cr due to which its interest cost is very high. However, to fund its working capital requirement and reduce the high cost debt, company has finalized to make pref allotment of 30 lac warrants to promoter and promoter group. Meanwhile it is estimated to clock a turnover of Rs 375 cr and PAT of Rs 13.50 cr for FY08. This translates into EPS of Rs 10 on current equity of Rs 13.50 cr. Technically scrip seems to have bottomed out and investors should start accumulating from current levels.
Avantel Softtech (60.00) designs and manufacturers repeaters, filters, splitters, tappers, combiners, couplers & amplifiers to enhance the capacity and coverage of wireless communication networks for use in GSM, CDMA and 3G networks. Interestingly, it has developed customized solutions for INSAT based mobile satellite services with advance microwave, digital wireless communication and signal processing products for defence and commercial market. Hence it offers mobile satellite services for messaging, tracking and all locations based services with appropriate network security. Using this same technology it provides specialized products like Ship borne terminal, handheld terminal, S-band receiver, UHF transmitter, burst demodulator etc which are one of its kind. It has also signed a Transfer of Technology (TOT) agreement with ISRO for supply of hubs and satellite interactive terminals for EduSat networks. Thru its govt recognized R&D division, company has developed a number of products for defence sector by ensuring compliance of stringent defence standards. Being Q4 the best quarter for company traditionally, it may end FY08 with sales of Rs 35 cr and profit of Rs 5 cr i.e. EPS of Rs 10 on equity of Rs 5.15 cr. Buy before the nos are out.
Rohit Ferro Tech Ltd (53.00) is a leading producer of high carbon ferro chrome apart from manufacturing ferro manganese and silico manganese through submerged arc furnace route. It has set up a greenfield plant in Jajpur-Orissa thereby taking its total capacity to 165,000 MT from 55,000 MT earlier. Further it has set up fifth furnace with 15000 MT capacity in Bishnupur, which is expected to become operational shortly. To become an integrated player company has applied for mining lease to the state government of Orissa for chrome ore as well as manganese ore. Presently it is sourcing manganese ore from Australia besides local sourcing. On the other hand, due to higher production, better margins, and the better availability of raw-materials company is stressing more on production of ferro manganese in place of high carbon Ferro Chrome For future, it has chalked out a plan to setup a 110 MW captive power plant to being down its power cost. In order to fund this, it recently made a pref allotment of 80 lac convertible warrants @ 43 Rs per share to promoters as well as strategic investors like Kampani Finance, Foster Capital etc. On the back of stunning Q3 nos it may end FY08 with sales of more than Rs 500 cr and PAT of Rs 50 cr i.e. EPS of Rs 14 on current equity of 34.50 cr. Moreover company has the potential to post an EPS of Rs 20 on fully diluted equity of Rs 42.50 cr for FY09. Keep accumulating at declines
PBA Infrastructure (68.00) is engaged in execution of civil engineering projects and specializes in construction of highways, dams, runways and heavy RCC structures, bridges and other infrastructure projects of various govt bodies. It is executing projects from Kashmir to Kanyakumari and has taken up new works like toll collection and quarrying to augment its income. For the first three quarters its revenue increased by 45% to Rs 270 cr and NP increased by only 20% to 11.50 cr. Notably, company has been regularly bagging new orders and its current order book position is around 700 cr. Fundamentally, company is having a huge debt of 170 cr due to which its interest cost is very high. However, to fund its working capital requirement and reduce the high cost debt, company has finalized to make pref allotment of 30 lac warrants to promoter and promoter group. Meanwhile it is estimated to clock a turnover of Rs 375 cr and PAT of Rs 13.50 cr for FY08. This translates into EPS of Rs 10 on current equity of Rs 13.50 cr. Technically scrip seems to have bottomed out and investors should start accumulating from current levels.
Avantel Softtech (60.00) designs and manufacturers repeaters, filters, splitters, tappers, combiners, couplers & amplifiers to enhance the capacity and coverage of wireless communication networks for use in GSM, CDMA and 3G networks. Interestingly, it has developed customized solutions for INSAT based mobile satellite services with advance microwave, digital wireless communication and signal processing products for defence and commercial market. Hence it offers mobile satellite services for messaging, tracking and all locations based services with appropriate network security. Using this same technology it provides specialized products like Ship borne terminal, handheld terminal, S-band receiver, UHF transmitter, burst demodulator etc which are one of its kind. It has also signed a Transfer of Technology (TOT) agreement with ISRO for supply of hubs and satellite interactive terminals for EduSat networks. Thru its govt recognized R&D division, company has developed a number of products for defence sector by ensuring compliance of stringent defence standards. Being Q4 the best quarter for company traditionally, it may end FY08 with sales of Rs 35 cr and profit of Rs 5 cr i.e. EPS of Rs 10 on equity of Rs 5.15 cr. Buy before the nos are out.
Rohit Ferro Tech Ltd (53.00) is a leading producer of high carbon ferro chrome apart from manufacturing ferro manganese and silico manganese through submerged arc furnace route. It has set up a greenfield plant in Jajpur-Orissa thereby taking its total capacity to 165,000 MT from 55,000 MT earlier. Further it has set up fifth furnace with 15000 MT capacity in Bishnupur, which is expected to become operational shortly. To become an integrated player company has applied for mining lease to the state government of Orissa for chrome ore as well as manganese ore. Presently it is sourcing manganese ore from Australia besides local sourcing. On the other hand, due to higher production, better margins, and the better availability of raw-materials company is stressing more on production of ferro manganese in place of high carbon Ferro Chrome For future, it has chalked out a plan to setup a 110 MW captive power plant to being down its power cost. In order to fund this, it recently made a pref allotment of 80 lac convertible warrants @ 43 Rs per share to promoters as well as strategic investors like Kampani Finance, Foster Capital etc. On the back of stunning Q3 nos it may end FY08 with sales of more than Rs 500 cr and PAT of Rs 50 cr i.e. EPS of Rs 14 on current equity of 34.50 cr. Moreover company has the potential to post an EPS of Rs 20 on fully diluted equity of Rs 42.50 cr for FY09. Keep accumulating at declines
