STOCK WATCH

Diamond Power Infrastructure Ltd (90.00) registered 10% rise in sales to Rs 140 cr and 20% jump in NP to Rs 16 cr for the Dec’08 qtr. However the nine months figures are much encouraging as sales are up by 60% to Rs 493 cr and profit before tax has shot up by 70% to Rs 56 cr. However company hasn’t made any tax provision and will do at the end of the year. It is a leading manufacturer of transmission & distribution conductors, power & control cables & speciality cables. After the acquisition of Western Transformers in March’07 and Apex Electricals in July’07, company has also ventured into transformer production with installed capacity of 7500 MVA for power transformer and 5000 MVA for distribution transformer. To cater the rising demand and increase it export revenue, company is setting up power equipment park spread across 110 acre in Vadodara which would have manufacturing facilities for 50,500 Mt of conductors, 48000 Mt transmission tower plant, 25,000 kms of LT cables, 3200 kms of HT cables and 3000 kms cables of EHV cables. The park expected to go on stream by Dec 2009, will also have space for setting up 50 ancillary units for power equipment manufacturers. Company has already achieved the financial closure for this 260 cr capex plan. Partners. Meanwhile for FY09 it may clock a turnover of Rs 675 cr and profit after tax of Rs 60 cr i.e. EPS of Rs 29 on current equity of Rs 21 cr. Incidentally, company has recently repaid the short term loan to the tune of Rs 40 cr to Clearwater Capital.

As TATA group is witnessing some liquidity crunch, share price of all group companies are trashed like anything. Share price of TRF Ltd (230.00) which is a pioneer in providing solutions for bulk material handling/ processing systems and equipments and port and yard equipments has also been reduced to one tenth from the high of Rs 2100 in Jan 2008. For Dec’08 qtr it reported excellent set of nos as its sales zoomed up by 140% to Rs 141.50 cr and PBT shot up by 190% to Rs 24 cr. However due to extraordinary item of Rs 13.30 cr on reversal of earlier sales its net profit recorded only 20% growth to Rs 6.70 cr. Else it would have recorded a PAT of Rs 16.50 cr i.e. EPS of Rs 30 for the single quarter. Despite slowdown company has been regularly bagging huge order and recently got Rs 100 cr order from Andhra Pradesh Power Generation Corporation Ltd. Few months back it was awarded more than Rs 400 cr order by Damodar Valley Corporation. Presently company boast of having a very strong order book position of more than Rs 750 and hence it has set a vision to grow five times in next five years. It also owns a subsidiary, York TEA-Singapore, which produces and distributes trailer undergears, and has a market presence in 27 countries. A solid bet.

In the current sentiment even the blue chips are getting hammered badly. Share price of Thermax Ltd (155.00) which hit a high of Rs 950 during early 2008 is now available for Rs 150. Company is a global solution provider in energy and environment engineering. It offers products and services in heating, cooling, waste heat recovery, captive power, water treatment and recycling, waste management and performance chemicals. It caters to host of key industries and has presence across the globe. Financially company has been doing satisfactorily and reported marginal decline in sales and NP for the Dec’08 qtr. Thus, for first three quarters it has reported flat sales of Rs 2309 cr and marginal fall in net profit to Rs 193 cr. Recently company has won a Rs 450 crore order for setting up a 60 MW captive power plant in AP. Energy intensive industries such as iron & steel, petrochemicals, paper and cement, are increasingly utilizing the company's waste heat recovery expertise to keep their energy costs down. It may end FY09 with EPS of Rs 22 on current equity. Once the situation improves, the share price can shoot up by 50% in short term. Keep accumulating at declines.

Techno Electric (60.00) is a large engineering, procurement and construction (EPC) contracting company primarily focused on the Indian power sector. Ironically, it has worked in one capacity or other in setting up of more than 50% of the power generating capacity in the country i.e. more than 50,000 MW. It has presence in all the three segments of power sector i.e. generation, transmission and distribution. It is among the very few Indian companies to have license to execute electrical installations upto 400 kV. As a part of its diversification strategy, TEECL has ambitious plan to be a major power producer in the field of non-conventional energy through setting up of biomass power generating units all over the country. Presently it boast of having an unexecuted order book position of more than Rs 600 cr. For FY09, TEECL is expected to report total revenue of Rs 500 cr and PAT of Rs 55 cr i.e. EPS of Rs 10 on equity of Rs 11.42 having face value as Rs 2 per share. It is not only a debt free company but a cash rich company having liquid investment worth Rs 150 cr and cash balance of Rs 25 cr as on 31st March 2008 which is equivalent to almost Rs 30 per share. Investors can safely buy this scrip at current levels