STOCK WATCH
For the March’09 quarter, Jupiter Bioscience (48.00) reported very flat nos as its sales as well as PAT grew marginally to Rs 47 cr & 10 cr respectively. Hence for the full year ending March 2009 it clocked 10% rise in sales to Rs 143 cr and 20% increase in profit to Rs 32 cr thereby posting an EPS of Rs 20 on equity of Rs 16 cr. Company is operating in a very niche segment and is among the few companies in the world to have competency in synthesis of peptides. The technology focus of the company has enabled it to develop more than 400 products in its catalogue and establish a leadership position in the peptide business internationally. It is poised to become a global peptide solutions group having a broad canvas of peptide chemistry products, peptide reagents, coupling reagents, protective agents and supplier of key ingredients used in peptide based pharmaceuticals. Despite having such strong credential, scrip is trading grossly cheap at P/E ratio of merely 2.5x times against its FY09 earnings. Company may declare 25% dividend which gives a yield of more than 5% at current levels. A risk free bet in a defensive sector.
Despite reporting sharp decline in net profit for the March’09, share price of C&C Construction (100.00) hasn’t fallen. It seems the scrip is held by stronger hands apart from 70% being held by the promoters themselves. For Q3FY09 ending March’09 its revenue jumped up 70% to Rs 283 cr but Net profit declined by 35% to Rs 8 cr due to substantial rise in interest cost. Thus for the first three quarters its sales has almost doubled to Rs 575 cr but PAT has declined by 15% to Rs 21.50 cr. Company is primarily engaged in construction of airfield pavements-rigid and flexible, state and national highways, city and rural roads, bridges and culverts and other infrastructure projects in India & Afghanistan. Importantly, company has a huge consolidated order book position to the tune of Rs 3000 cr. Out of this 55% is independent contracts and the balance 45% represents the share of contract under joint venture. Last year it bagged few important contracts which include Rs 300 cr BOT project to develop Inter State Bus Stop in Mohali, Rs 120 cr under ground Car parking projects, Rs 635 cr order to construct Afghanistan parliamentary bldg and a new Indian Chancery bldg in Kabul, Rs 780 cr orders from Railway for construction of dedicate freight corridor etc. Interestingly, company has entered into Bihar state in a big way and is implementing nearly Rs 1200 cr order in this single state. For FY09 ending June 2009, it may clock a turnover of Rs 875 cr and PAT of Rs 25~28 cr i.e. EPS of Rs 14~15 on current equity. Although it seems fully priced at current levels, long term investors can buy at sharp declines.
It seems perhaps for the first time Micro Tech (95.00) has recorded de-growth YOY basis. For last several quarters company was reporting impressive growth consistently. But for the latest March’09 it reported marginal 7% rise in topline to Rs 55 cr and nearly 20% decline in net profit to Rs 13 cr. But again this fall is wholly due to sharp rise in depreciation cost. Accordingly for the entire FY09 it reported 35% growth in revenue to Rs 230 cr and 20% increase in net profit to Rs 62.50 cr. This translates into an EPS of Rs 57 on equity of Rs 11 cr. On a consolidated basis it has fared even better with sales of Rs 290 cr and profit of Rs 70 cr. Notably, during the April’09 month, company signed 2 yearly contract– one with TWI International for nearly 30 cr and another with FN system Japan for approx Rs 25 cr. Moreover during the April month only company launched a new product Micro Power Sinewave Home UPS. Investors can buy at sharp declines. At the same time investors are cautioned, that few experts have apprehension about the actual working of company. Last week company also appointed new Company Secretary.
No wonder the share price of Indag Rubber (36.00) shot up 50% in a weeks time, as company has declared stunning performance for the March’09 quarter. Its sales improved by only 10% to Rs 19 cr but PBT more than doubled to Rs 3.20 cr. Due to lower tax provisioning, PAT further swelled by 150% to Rs 3.15 against 1.30 cr in the corresponding period last year. Notably, company registered an very healthy OPM of 19% due to low raw material cost. Despite such rocking performance, for the entire FY09 its sales marginally grew to Rs 76 cr but net profit declined by 10% to Rs 7.60 cr posting an EPS of Rs 15 on equity of Rs 5.25 cr. It declared 20% dividend for FY09 which leads to a dividend yield of more than 5% at CMP. Company is one of the reputed players in tyre retreading business and has been benefitted to the drastic fall in prices of raw material like poly butadiene rubber, natural rubber, carbon black and rubber chemicals. Due to high prices of tyres, retreading of tyres has become all the more necessary as tyres retreaded with quality material give about the same mileage as new tyres and that to at a much lower cost per mile. On the other hand the concept of retreading will grow being environmentally friendly. However the performance of the company will be vulnerable to commodity prices and hence scrip wont command very high premium. Being a good bet for dividend yield buy at sharp declines.
