Small & Beautiful
Despite other construction companies going thru a rough patch and liquidity crunch, J Kumar (55.00) has posted decent result for the Dec qtr. It registered total revenue of Rs 90 cr and PAT of Rs 7.13 thereby posting an EPS of Rs 3.40 for the quarter. Accordingly for first three quarters it has clocked a turnover of Rs 265 cr and profit of Rs 20.85 cr. Company is a Mumbai based EPC company with a primary focus on construction of roads, flyovers, bridges, railway over bridges, subways, irrigation projects, commercial and residential buildings, railway buildings and piling works. It also has a ready mix concrete plant for captive use. Its operations are largely confined in the state of Maharashtra with majority in Mumbai itself. The company is a class I A contractor with PWD, Government of Maharashtra. Due to govt’s special focus & aggressive spending on infrastructure, company is witnessing best of its time and boast of having an all time high order book position to the tune of Rs 1200 cr executable in next two years. It is expected to report a topline of Rs 350 cr and bottomline of Rs 25 cr for FY09 which translates into EPS of Rs 12 on current equity of Rs 20.70 cr. Scrip can be bought at current levels for short term gain.
Oil Country Tubular (40.00) is one of the leading companies in processing a range of oil country tubular goods required for the oil drilling and exploration industry. Its wide product range covers drill pipe, heavy weight drill pipe, drill collars, production tubing, casing, tool joints, couplings, pup joints, nipples, subs and cross overs. It has an installed capacity for manufacturing & processing 50,000 MT of casing pipes, 10,000 MT of drill pipes and 15,000 MT of production tubing. Financially company made a smart turnaround last year and since then has been reporting encouraging performance. Even for the Dec’08 quarter its sales improved by 30% to Rs 120 cr and profit zoomed up 130% to Rs 24 cr posting an EPS of more than Rs 5 for the single quarter. Remarkably it has been maintaining the operating margin of around 30% and NPM of 20% from last few quarters and with the recent fall in steel and other metal prices it may improve it further. Currently Company is concentrating on the drill pipes and has planned to double the installed capacity of drill pipe manufacture from 10,000 MT to 20,000 MT from internal accruals. For entire FY09 it may clock a turnover of Rs 375 cr and PAT of Rs 65 cr i.e. EPS of Rs 15 on equity of Rs 44.30 cr. However the drastic fall in crude oil price and eventual reduction in E&P activities is a big cause of concern. Only aggressive investors can buy for short term gains.
For the latest Dec’08 quarter, Tilaknagar Industries (75.00) registered 50% growth in sales to Rs 63 cr and 30% increase in profit to Rs 6 cr. Even for nine months ending Dec’08 its sales is up by 45% to Rs 152 cr and PAT has increased by 30% to Rs 14 cr posting an EPS of Rs 25 for the first three quarters. Company is basically engaged in manufacturing, marketing and selling of Indian Made Foreign Liquor (IMFL) encompassing the brandy, whisky, gin, vodka and rum segments. It derives more than 60% revenue from whisky and nearly 35% from brandy. As a part of its growth strategy, company is in the midst of doubling its capacity in Shrirampur, Maharashtra from 50,000 liters of alcohol per day to 1,00,000 liters of alcohol per day, together with investments in cost saving equipments. The entire project is expected to be financed by a capital outlay of Rs. 70 cr. Notably, company is present in 15 states with 19 operating units. Last year it took over Surya Organic Chemicals in Karnataka and Prag Distillery in Andhra Pradesh. Besides this, it has 4 lease arrangements and 12 tie-up arrangements across for carrying out manufacturing and bottling activities, ensuring proximity to large markets. Company had issued 45 lac warrants to promoter group @ Rs 157 which may simply lapse by May 2009 considering the CMP. It may end current year with sales of Rs 210 cr and PAT of Rs 18 cr i.e. EPS of Rs 31 on current equity.
Although not so encouraging but still Mazda Ltd (30.00) has declared satisfactory result for the Dec quarter. Sales declined marginally by 7% to Rs 17 cr and net profit fell by 12% to Rs 2 cr. Despite this its year to date figures look encouraging with 30% growth in topline as well as bottomline. 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. However, due to ongoing slowdown globally as well as domestically, most of the industrial units are either postponing their capex plan or putting it under back burner. This may hamper the future growth of the company. But fundamentally, company is on a strong footing with very low debt equity ratio and good reserves leading to a book value of Rs 61. On a conservative basis, for FY09 it is slated to register sales of Rs 70 cr and profit of Rs 7.50 cr. This works out to an EPS of Rs 18 on current equity of Rs 4.25 cr. At an Enterprise value of merely Rs 20 cr scrip and at a P/E multiple of less than 2x times, scrip is trading damn cheap.
Oil Country Tubular (40.00) is one of the leading companies in processing a range of oil country tubular goods required for the oil drilling and exploration industry. Its wide product range covers drill pipe, heavy weight drill pipe, drill collars, production tubing, casing, tool joints, couplings, pup joints, nipples, subs and cross overs. It has an installed capacity for manufacturing & processing 50,000 MT of casing pipes, 10,000 MT of drill pipes and 15,000 MT of production tubing. Financially company made a smart turnaround last year and since then has been reporting encouraging performance. Even for the Dec’08 quarter its sales improved by 30% to Rs 120 cr and profit zoomed up 130% to Rs 24 cr posting an EPS of more than Rs 5 for the single quarter. Remarkably it has been maintaining the operating margin of around 30% and NPM of 20% from last few quarters and with the recent fall in steel and other metal prices it may improve it further. Currently Company is concentrating on the drill pipes and has planned to double the installed capacity of drill pipe manufacture from 10,000 MT to 20,000 MT from internal accruals. For entire FY09 it may clock a turnover of Rs 375 cr and PAT of Rs 65 cr i.e. EPS of Rs 15 on equity of Rs 44.30 cr. However the drastic fall in crude oil price and eventual reduction in E&P activities is a big cause of concern. Only aggressive investors can buy for short term gains.
For the latest Dec’08 quarter, Tilaknagar Industries (75.00) registered 50% growth in sales to Rs 63 cr and 30% increase in profit to Rs 6 cr. Even for nine months ending Dec’08 its sales is up by 45% to Rs 152 cr and PAT has increased by 30% to Rs 14 cr posting an EPS of Rs 25 for the first three quarters. Company is basically engaged in manufacturing, marketing and selling of Indian Made Foreign Liquor (IMFL) encompassing the brandy, whisky, gin, vodka and rum segments. It derives more than 60% revenue from whisky and nearly 35% from brandy. As a part of its growth strategy, company is in the midst of doubling its capacity in Shrirampur, Maharashtra from 50,000 liters of alcohol per day to 1,00,000 liters of alcohol per day, together with investments in cost saving equipments. The entire project is expected to be financed by a capital outlay of Rs. 70 cr. Notably, company is present in 15 states with 19 operating units. Last year it took over Surya Organic Chemicals in Karnataka and Prag Distillery in Andhra Pradesh. Besides this, it has 4 lease arrangements and 12 tie-up arrangements across for carrying out manufacturing and bottling activities, ensuring proximity to large markets. Company had issued 45 lac warrants to promoter group @ Rs 157 which may simply lapse by May 2009 considering the CMP. It may end current year with sales of Rs 210 cr and PAT of Rs 18 cr i.e. EPS of Rs 31 on current equity.
Although not so encouraging but still Mazda Ltd (30.00) has declared satisfactory result for the Dec quarter. Sales declined marginally by 7% to Rs 17 cr and net profit fell by 12% to Rs 2 cr. Despite this its year to date figures look encouraging with 30% growth in topline as well as bottomline. 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. However, due to ongoing slowdown globally as well as domestically, most of the industrial units are either postponing their capex plan or putting it under back burner. This may hamper the future growth of the company. But fundamentally, company is on a strong footing with very low debt equity ratio and good reserves leading to a book value of Rs 61. On a conservative basis, for FY09 it is slated to register sales of Rs 70 cr and profit of Rs 7.50 cr. This works out to an EPS of Rs 18 on current equity of Rs 4.25 cr. At an Enterprise value of merely Rs 20 cr scrip and at a P/E multiple of less than 2x times, scrip is trading damn cheap.
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