STOCK WATCH

Man Industries (27.00) is one of India's largest producers and exporter of large diameter Longitudinal submerged arc welded (LSAW) pipes and Helically submerged arc welded (HSAW) pipes. Infact it is the only company in India to manufacture 18 mtr long HSAW pipe. Of late, company has started a new production line for HSAW pipes with a name plate capacity of 200,000 MTPA thereby equalizing the total production capacity to 500,000 MTPA each for LSAW as well as HSAW. Remarkably it has bagged huge order to the tune of Rs 1100 cr during Sept 2008. To become a global player, company is setting up a HSAW pipe manufacturing plant with an capacity of 300,000 MTPA in USA under a capex of Rs 400~450 cr. Take the benefit of new provision, company has decided to buyback its FCCB up to USD 50 million issued in May’07 and redeemable in May’12. More importantly promoters are constantly buying the shares from open market and increasing their stake thru creeping acquisition. Although the performance of the company has reported a sharp decline in the bottomline for the first nine months still it’s a good bet for long term. Having seen a high of Rs 177 in Jan’08, scrip is now available at only Rs 25. Negligible downward risk.

Shanthi Gears (30.00) is the second largest player in industrial gear segment with 20% market share and at the same time is the undisputed leader in the customized product segment where the manufacturing is as per clients’ requirements. Of late, company has even started manufacturing gearboxes of 250 KV for windmills. Incidentally, the recent fall in steel and other metals will reduce its input cost considerably and may give a good fillip to its bottomline in coming qtrs. Its Dec quarter nos were suppressed due to onetime extraordinary expenditure of Rs 7 cr as interest and forex loss towards redemption of FCCB. For FY09 it may clock a turnover of Rs 235 cr and PAT of Rs 38 cr i.e. EPS of Rs 5 on equity of Rs 8.17 cr having face value as Rs 1/- per share. Moreover if rumors are to be believed then at one time, India’s largest windmill manufacturer Suzlon, through its subsidiary Hansen Transmission (world’s fifth largest maker of gearbox), was interested in taking a stake in the company. As of now it is heard that promoters have put the company on the block and is waiting for the right price to exit. Take your bet. But if it really happens, this may lead to re-rating of the company and share price may see a vertical rise.

JMC Projects (75.00) part of Kalpataru group, is among the top seven players for building and factory construction in India & has also been recognized as India’s sixth fastest growing company by the latest “Business Today” June’08 edition. It has successfully ventured into fields of turnkey execution involving civil, mechanical, electrical, HVAC, fire fighting, architectural and landscaping works. Lately, it has started focusing on infrastructure and power projects and is aggressively bidding for contracts to construct bridges & flyovers, roads & highways, railways stations, marine work, water supply & irrigation projects and construction of power plant. This has resulted into massive order in hand position of more than Rs 2000 cr as on March 2008 which is twice its FY08 turnover. For nine months ending Dec 08 it has already posted an EPS of Rs 11 with 60% rise in sales to Rs 636 cr and marginal decline in NP to Rs 20.50 cr. In future company intends to take up railways, airports and water management projects on an EPC basis which will further add to its bulging order book. Despite higher interest cost and depreciation charge, for FY09 it may clock a turnover of Rs 1250 cr and profit of Rs 23 cr for FY09 leading to an EPS of Rs 13 on current equity of Rs 18.14 cr. Accumulate at declines

Savita Chemicals (130.00) specializes in manufacturing of petroleum specialty products like transformer oils, .liquid paraffin, petroleum jelly, white mineral oil, automotive and other industrial lubricants. It is India’s largest exporter of petroleum specialty products to South Africa, Australia, Middle East & South East Asia. Of the total sales, transformer oil constitutes around 45%, white oil/liquid paraffin’s around 35% and lubricating oil balance 20%. As company is working at almost 100% capacity it is setting up a Greenfield project with an investment of Rs. 15-20 cr for petroleum products to augment the capacity by around 25~30%. It also has a tie-up with Idemitsu, Japan to market its “Idemitsu”range of automotive lubricant and “Daphne” range of industrial lubricants which are rated one of the best in the world. Importantly, company enjoys 40% market share in transformer oil, hence will be immensely benefitted with huge capacities planned in power generation. Secondly, the sharp fall in crude oil prices will also boost up its margin as base oil forms its major raw material. Apart from petroleum business, company has also setup wind mills with an installed capacity of 26.3 MW which will be augmented to 34.9 MW in this fiscal. For the last Dec’08 qtr it reported a loss of Rs 3 cr as it took a hit of Rs 18 cr due to forex fluctuation. Buy for long term