STOCK WATCH

IMP Power (125.00) has come out with good set of nos for the June’09 quarter. Sales as well as PBT increased by 70% to Rs 52 cr and Rs 7.2 cr respectively. Due to lower tax provisioning its PAT quadrupled to 6.30 cr for the quarter. Thus for the full year ending June 2009 it recorded 40% growth in sales to Rs 190 cr and 70% increase in NP to Rs 15.70 cr posting an EPS of Rs 19 on equity of Rs 8.10 cr. Company is engaged in manufacturing of entire range of power & distribution transformers, electrical & digital measuring instruments, testing equipments etc. It has vendor approval from almost all the State Electricity Boards, major turnkey EPC contractors and the only transformer company in India to be in zero sales tax zone enjoying 15 year sales tax holiday which shall continue till year 2012. Secondly, it has achieved backward integration through manufacturing of OLTC & RTCC in house thereby emerging as one of the lowest cost manufacturer of transformers. To cater to the rising demand and increase its market share, company has last year doubled its production capacity from 3,600 MVA to 7,000 MVA. Further its in the midst of expanding it to 10,000 MVA in the current fiscal itself. Post this completion, company will be among the very few transformer manufacturers having the capability to make EHV power transformer up to 200 MVA in 330 kV class. Besides, company has also upgraded its Kandivali plant to manufacture complete range of analog meters in addition to high end meters like maximum demand indicator, trivector meter, multifunctional and kWh Meters. Recently company converted the preference share into equity shares @ Rs 161 per share thereby diluting the equity by 20% to Rs 8.14 cr. For FY10 ending June’10 it may report sales of Rs 250 cr and NP of Rs 18.25 cr i.e. EPS of Rs 22 on current equity. For FY11 it has the potential to post an EPs of Rs +30. A good bet for medium to long term.

For the June’09 quarter Vivimed Lab (90.00) has reported decent set of nos as sales was up 45% to Rs 48 cr and profit doubled to Rs 4.70 cr, thereby registering an EPS of Rs 5 on a standalone basis. Even on a consolidated basis its performance was encouraging with an EPS of Rs 7.40 for the quarter. Company is a speciality chemical manufacturer catering to segments including oral care, sun care, skin care, hair care, natural extracts, preservatives, anti microbial, anti oxidants, anti-aging molecule etc. Infact it is world’s 2nd largest manufacturer of Triclosan - an antibacterial used for oral care and one of the top three companies for Avis – a chemical which improves UV absorbing ability of Sunscreen. Earlier it acquired 100% stake in M/s James Robinson,UK which is an international manufacturer and supplier of speciality chemicals used in hair dyes, pharmaceuticals and photographic films/prints to ophthalmic sunglasses thereby making it a multinational company. Of late to increase its global presence, it has decided to acquire Har-met International Inc a small importer of pharmaceutical & cosmetic product, based in USA. Organically as well company has been expanding its capacity and has chalked out Greenfield expansion plan in Uttaranchal and Hyderabad. Presently it boasts of having five manufacturing facilities spread across Karnataka, Andhra Pradesh & Uttaranchal. For FY10 on a consolidated basis it may report a topline of Rs 325 cr and bottomline of Rs 25 cr i.e. EPS of Rs 25 on current equity of Rs 10 cr. Last month in Aug 2009, company completed the buy back of US$ 12.50 million FCCB and issued 5.6 lac equity shares for the balance US$ 2.50 million FCCB @ Rs 185 per share leading to equity dilution to Rs 10 cr. A solid bet.

Having an equity venture with Specialty Process LLC of USA and technical collaboration with Lubrizol Inc (formerly known as BF Goodrich), Astral Polytechnik (120.00) is the leading manufacturer of CPVC (chlorinated poly vinyl chloride) & PVC (lead free) pipes & fittings India. Due to inherent better properties, CPVC is replacing various traditional piping systems like galvanized iron and other metal pipes world over. Company being the pioneer in India and backed by reputed international brands like FlowGuard, Corzan etc is all set to rule the Indian market. Infact all the frontline organized players like DLF, Sobha, JP group, Kalpataru, Unitech, Parsvanath, etc are its regular customers. To cater the rising demand company has last fiscal doubled its pipe manufacturing capacity from 11,800 to 26,000 TPA. Further to enhance its product range company has recently launched underground drainage pipes, foam core pipes, drinking water pipes etc under various brand names. It is also planning to add Blazemaster Fire Sprinkler System, SWR Variants, Manholes and Inspection chambers in the current fiscal. Meanwhile company is also thriving to increase its export revenue and has even formed a JV with a Kenyan company. For FY09, company’s bottomline was hit due to rupee depreciation but for FY10 it may clock a turnover of Rs 275 cr and PAT of Rs 22.50 cr. This translates into EPS of Rs 20 on current equity of Rs 11.24 cr. Scrip can shoot up to Rs 200 within a year

Ratnamani Metals & tubes (110.00) has emerged as a single stop provider for the steel piping solutions for an array of applications required for the large projects in oil & gas and power sector in India as well as internationally. Further it is striving to be a major player for the titanium welded tubes which find applications in power plants, desalination plants and various other critical applications. Thus company is basically engaged in manufacturing welded and seamless stainless steel (SS) pipes & tubes, carbon steel (CS) LSAW, HSAW and ERW pipes. Apart from being a active player in domestic market, it also exports to USA, Canada, Chile, Germany, France, Japan, South Korea, Saudi Arabia, Oman, Qatar, UAE, Egypt, Kuwait, Italy, etc. Last fiscal company added 3,000 TPA of capacity in stainless steel tubes and pipes segment and 50,000 TPA of HSAW capacity through brown field expansion. It is further adding 50,000 TPA of HSAW in the current fiscal to take the total installed capacity to 4,20,000 TPA. Besides, as a part of forward integration, company has already set up a 3 layer polyethylene and epoxy coating line with capacity of 2.7 million sq mtrs. For FY10 company is expected to clock a turnover of Rs 900 cr and PAT of Rs 75 cr i.e. EPS of Rs 17 on equity of Rs 9 cr having face value as Rs 2/- per share. Keep accumulating at sharp declines.