Small & Beautiful
Indo Asian Fuse Gear (35.00) manufactures wide range of electrical circuit protection equipment including distribution boards, switch boards, switch panels, fuse switches, MCCBs, HRC Fuses, MCBs, RCDs, etc. Besides, it’s one of the largest manufacturers of CFLs and MCB’s in India. With having 8 manufacturing units its products are available in more than 80 countries around the world. Domestically, it has pan-India presence with 30 offices, 550 authorized distributors and over 15000 retailers selling its products across the length and breath of the country. To capitalize the ongoing boom, it is diversifying into power distribution business on behalf of state electricity board on franchise basis. Lately, it has forayed into cables & wires manufacturing business as well with a planned investment of 100 cr in phases. For the higher end segment, company is setting up a plant in Haridwar under a joint venture with Simon Holding (Spain) for manufacturing home and building automation products for the first time in India. At the same time it is putting up a facility in Saudi Arabia thru a tie up with Saudi National Glass for production of Compact Fluorescent Lamps (CFLs) and High Intensity Discharge Lamps (HID Lamps). For FY09 it is expected to clock a turnover of Rs 300 cr and PAT of Rs 10 cr on a conservative basis which works out to an EPS of Rs 7 on current equity of Rs 15.30 cr. The recent fall in copper and other metal prices will have a positive impact on the bottomline going forward. So although it has a bit high debt equity ratio coupled with longer cycle of receivable, still it’s a value buy at an EV of Rs 150 cr.
Patels Airtemp (30.00) is engaged in the manufacture and sale of extensive range of heat exchangers such as shell & tube type, finned tube type and air cooled heat exchangers, pressure vessels, air-conditioning and refrigeration equipments and turnkey HVAC projects in India & marketing of equipments even outside India. It has technical collaboration with M/S. TEK FINS Inc. USA for design and manufacture of air cooled heat exchangers. It supplies to core industrial sectors like power, refineries, fertilizers, cements, petrochemicals, pharmaceuticals, textiles and chemical Industries. For future growth company is concentrating more on high value added engineering products and has even got its product the coveted ASME `U' Stamp authorization. Few months back it bagged an order of Rs 16 cr from Essar oil and presently boasts of having an order book of nearly Rs 50 cr. For H1FY09, company has done exceedingly well as its sales jumped up 40% to Rs 35 cr whereas profit shot up 50% to Rs 3.40 cr. Accordingly for entire year it may report sales of Rs 65 cr and PAt of Rs 5 cr leading to an EPS of Rs 10 on equity of Rs 5 cr. At a modest discounting by 5x times scrip can easily appreciate 50% within a year.
Gujarat Apollo Industries (60.00) is into manufacturing and after sales service of equipments for road building industry like asphat plants, pavers finishers, wet mix plants, bitumen sprayers, compaction equipment, road making machineries, crushing & screeing machines etc. It controls more than 60% of the market in the product segments in which it operates, with over 1,400 customers and an equipment population of around 3,500 units. Besides it also regularly exports to countries like Saudi Arabia, African countries, Afganistan, Australia, Bangladesh and Sri Lanka. Due to robust demand company has been regularly expanding its capacity and earlier has even entered into a technical collaboration agreement with a German company to manufacture Jaw Crushers, Impact Crushers, Wheeled/ Crawler mounted/ Skid mounted Crushing plants, Grizzly Feeders, Screens, Conveyors, etc. Although insignificant currently, company also undertakes construction activity. To consolidate its position, it has been making investments in its associate companies and has already made Apollo Earthmovers and Apollo Industrial Products Ltd as its subsidiaries. In current fiscal, another group company called Apollo Construction Equipments Ltd is expected to come under its fold. Hence on a consolidated basis for FY09 it may clock a turnover of Rs 275 cr and NP of Rs 32 cr which translates into EPS of Rs 20 on expanded equity of Rs 15.75 cr. A strong buy as share price can easily appreciate 50% within a year.
With more than dozen of popular brands, JK Paper (17.00) is India’s largest producer of branded papers and commands 40% market share in branded cut size papers. It is engaged in production of writing & printing paper and has recently ventured into high-end coated packaging boards. It operates two integrated plants in India with an total installed capacity of 180,000 TPA. Of late it has setup Rs 300 cr state-of-the art multi layer packaging board plant with an installed capacity of 60,000 TPA, thereby taking the total installed capacity to 240,000 TPA. Notably, company has one of the strongest distribution networks which include 11 warehouse, 140 distributors & 2500 Dealers covering the remotest corners of India. Moreover, it is exporting to more than 40 countries including Sri Lanka, Bangladesh, Middle East, Africa, Australia, Singapore, Malaysia etc. For H1FY09 it has reported 40% growth in sales to Rs 546 cr but PAT remained flat at Rs 19 cr due to provisioning of unrealised foreign exchange loss of Rs 8.40 cr. At the same time company didn’t recognize Mark to Market unrealised gains on currency and interest rate swaps amounting to Rs 13.50 cr. Accordingly for FY09 it may clock a turnover of Rs 1100 cr and net profit of Rs 35 cr leading to an EPS of Rs 4.50 on current equity of Rs 78.20 cr. Although its debt equity ratio and interest cost is alarmingly high, investors can accumulate at sharp declines as it can appreciate 50% within a year.
Patels Airtemp (30.00) is engaged in the manufacture and sale of extensive range of heat exchangers such as shell & tube type, finned tube type and air cooled heat exchangers, pressure vessels, air-conditioning and refrigeration equipments and turnkey HVAC projects in India & marketing of equipments even outside India. It has technical collaboration with M/S. TEK FINS Inc. USA for design and manufacture of air cooled heat exchangers. It supplies to core industrial sectors like power, refineries, fertilizers, cements, petrochemicals, pharmaceuticals, textiles and chemical Industries. For future growth company is concentrating more on high value added engineering products and has even got its product the coveted ASME `U' Stamp authorization. Few months back it bagged an order of Rs 16 cr from Essar oil and presently boasts of having an order book of nearly Rs 50 cr. For H1FY09, company has done exceedingly well as its sales jumped up 40% to Rs 35 cr whereas profit shot up 50% to Rs 3.40 cr. Accordingly for entire year it may report sales of Rs 65 cr and PAt of Rs 5 cr leading to an EPS of Rs 10 on equity of Rs 5 cr. At a modest discounting by 5x times scrip can easily appreciate 50% within a year.
Gujarat Apollo Industries (60.00) is into manufacturing and after sales service of equipments for road building industry like asphat plants, pavers finishers, wet mix plants, bitumen sprayers, compaction equipment, road making machineries, crushing & screeing machines etc. It controls more than 60% of the market in the product segments in which it operates, with over 1,400 customers and an equipment population of around 3,500 units. Besides it also regularly exports to countries like Saudi Arabia, African countries, Afganistan, Australia, Bangladesh and Sri Lanka. Due to robust demand company has been regularly expanding its capacity and earlier has even entered into a technical collaboration agreement with a German company to manufacture Jaw Crushers, Impact Crushers, Wheeled/ Crawler mounted/ Skid mounted Crushing plants, Grizzly Feeders, Screens, Conveyors, etc. Although insignificant currently, company also undertakes construction activity. To consolidate its position, it has been making investments in its associate companies and has already made Apollo Earthmovers and Apollo Industrial Products Ltd as its subsidiaries. In current fiscal, another group company called Apollo Construction Equipments Ltd is expected to come under its fold. Hence on a consolidated basis for FY09 it may clock a turnover of Rs 275 cr and NP of Rs 32 cr which translates into EPS of Rs 20 on expanded equity of Rs 15.75 cr. A strong buy as share price can easily appreciate 50% within a year.
With more than dozen of popular brands, JK Paper (17.00) is India’s largest producer of branded papers and commands 40% market share in branded cut size papers. It is engaged in production of writing & printing paper and has recently ventured into high-end coated packaging boards. It operates two integrated plants in India with an total installed capacity of 180,000 TPA. Of late it has setup Rs 300 cr state-of-the art multi layer packaging board plant with an installed capacity of 60,000 TPA, thereby taking the total installed capacity to 240,000 TPA. Notably, company has one of the strongest distribution networks which include 11 warehouse, 140 distributors & 2500 Dealers covering the remotest corners of India. Moreover, it is exporting to more than 40 countries including Sri Lanka, Bangladesh, Middle East, Africa, Australia, Singapore, Malaysia etc. For H1FY09 it has reported 40% growth in sales to Rs 546 cr but PAT remained flat at Rs 19 cr due to provisioning of unrealised foreign exchange loss of Rs 8.40 cr. At the same time company didn’t recognize Mark to Market unrealised gains on currency and interest rate swaps amounting to Rs 13.50 cr. Accordingly for FY09 it may clock a turnover of Rs 1100 cr and net profit of Rs 35 cr leading to an EPS of Rs 4.50 on current equity of Rs 78.20 cr. Although its debt equity ratio and interest cost is alarmingly high, investors can accumulate at sharp declines as it can appreciate 50% within a year.
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