Sunday, February 28, 2010

SPICE MOBILES LTD. – A COMPELLING BUY

Spice Mobiles is a BK Modi group company which makes ‘SPICE’ brand mobile handsets. Recent budget proposals and latest happenings in the company makes it a must buy for everyone’s portfolio. Finance minister’s proposal to reduce tax on imported components for making handsets is very helpful for a company like Spice Mobile. In another development company decided to merge the unlisted Spice Televenture (STV) with itself .Spice Televenture having interest in communications,technology and entertainment through its various arms. Now they decided to merge STV into
this company and make it a fully integrated player .
Spice digital is one of such arm
which is the second largest mobile Value Added Services provider in the country, reaching almost 500 million mobile subscribers. It has deployments across all the carriers and as of December 2009 had an active subscriber base of over 31 million mobile subscribers using its services. In the first 9 months of this current financial year Spice Digital has revenues close to 135 Crore with an EBITDA margin of around 30%. With the introduction of 4G technology internet services through mobile phones are expected to grow many fold.

The second company under Spice Televenture is Spice Retail. Spice Retail is the first national chain in the telecom retail business, retailing multi-brand mobiles, accessories, connections,content, and music and after sales service. With over 700 stores across 139 cities it is the second largest player in the organized mobile retail market. In the 9 months of the current financial year Spice Retail had revenues close to Rs. 500 Crore with an
average store base of 550 stores. In the last quarter ending December 209 the business turned EBITDA positive at the store level and the company expect the operations to achieve EBITDA breakeven in 2011.
The third company under Spice Televenture is Spice Labs which is a technology incubator operating in the rapidly growing area of mobile internet and applications. It is one of the leading innovators in the mobile internet space, spanning technology platforms, application stores and enterprise applications

All these four verticals makes Spice Televenture as an integrated player in telecom sector . On merger company name will be changed to Spice Mobility. Since Spice Televenture is already the holding company of Spice Mobile equity expansion is very low due to this merger ,which is really notable. In the financial front company already posted an EPS of Rs.6.36 v/s a loss in last year same period.Company’s future plans and already improved financials makes it a compelling buy at Rs.40/-

Saturday, February 27, 2010

Sri Adhikari Brothers Television Network-Phoenix from the Ashes

Sri Adhikari Brothers Television Network (BSE CODE 530943) is the first listed media software company in India . Started by brothers Mr. Gautam Adhikari and Mr. Markand Adhikari in 1985, Sri Adhikari Brothers Television Network Ltd. and has successfully transformed from a small family owned business to one of the big names in the television entertainment industry.A number of popular programmes produced by SAB between 1995 to 2005 which includes Made in India, Tea Time Manoranjan, Suraag, Sunhare Pal, All the Best, Commander, Waqt Ki Raftar ,Shriman Shrimathi and many more for various TV Channels. Company was performed exceedingly well till 2001 and its share price touched Rs.2350/- in February 2000.Company’s misfortune starts with the launch of its own TV Channel SAB TV ,which turn as a disaster .In order to launch this channel company raised huge debt which it could not serviced and its content development business affected severely. The new TV Channel too didn’t pick up and ultimately sold it to Sony for 57 crore.

Now after many years , Promoters understood the factors led to the failure of their business and decided to revitalise the content production business .Earlier they splitted the face value of shares and now again it consolidated to Rs.10/-.In February 2010 company allotted 2925000 warrants to promoters which will be converted into shares @ 31.85.Recently company bought back its entire outstanding FCCB (Total value 10 crore ) which was allotted in 2007. In financial front too company’s performance improved and it posted 60% growth in turnover and net turn to positive after many many years in this December qtr. Now company is planning to develop a production studio in Mumbai to reduce the cost of production of content and land is already with the company.All these are positive signs and considering the experience of promoters and their new initiatives , this company may turn to be a phoenix from the ashes . CMP is Rs.27/-

Tasty Bite Eatables (BSE CODE 519091) - A Worth Buy













Media and analysts are often give publicity to a company only after it has grown substantially and leave very little on the table for retail investors. We have seen this many times in the past like in the case of TRF , Bajaj Electricals .etc. Tasty Bite Etables (TBE) seems to be such a story which is yet to be unfold. TBE (BSE CODE -519091) is now promoted by Preferred Brand Foods India Pvt.Ltd which is the Indian arm of US based Preferred Brand Foods Inc. Promoters hold close to 75% share in this microcap (total equity is just 2.56 crore) Two Hyderabad based investors also holding another 6% in this company.Total share holders of this company altogether is only 1648 as per December share holding pattern ,which makes it a low liquid counter.

The company is based in Pune, India,manufactures and markets a range of shelf stable, all-natural, ready-to-serve ethnic food products under Tasty Bite brand name. The company offers Indian and Thai food products, including entrees, meals, rice, and sauces. It also produces special diets, such as vegetarian, gluten-free, kosher, and vegan foods.95% of its income coming from exports . In India the company markets its products to institutional users, including hotels, quick-service restaurants, and other retail and corporate customers. .
Company is performing exceedingly well in recent years and its product getting very good response from US customers. Now ,Tasty Bite is the largest selling Indian Ethnic Food Brand in US.
Even in a difficult qtr for almost all export companies due to unfavorable $ value ,company could post more than Rs.7 /- EPS in December qtr v/s a loss in last year same qtr. For the nine months ended December ,company posted an EPS close to RS.20 v/s a loss of Rs.2/- in last year.

At a time of rising food prices world over ,cost of raw materials is playing a major role in food companies profit. Tasty bite is procuring more than 60% of vegetables from company’s own farms which is located in Pune , is an added advantage for the company.
Company is expected to post an EPS more than Rs.25/- in the full year v/s Rs.5.5 in last year. Tasty Bite is lead by Ashok Vasudevan and Ravi Nigam both having vast experience in this field and headed companies like Pepsico and Britannia in India. Considering the pace of its growth and commitment shown by the management it should be a dark horse and should touch atleast Rs.400 – 500 in future.CMP is 165

More details about the company is available from :

For US operations : www.tastybite.com

For Australian operations : www.tastybite.com.au/

KOPRAN - This old Lion may roar again

Price when posted : BSE: Rs 29.00 ( 4.88 % ), NSE: Rs. 28.95 ( 5.08 % )

Once Kopran was the largest manufacturer of Amoxicillin in India and it was the feather in the cap of Parijat Group led by somanis . In 1994 its share price touched a high of Rs.830/-.Its name later heard in association with KP stocks scam along with other companies like Ranbaxy,Cadilla, Nirma ..etc.Anyway after that Kopran sold off its prestige brands like `Smile` to other companies and its share price nosedives even to Rs.6/- .
Later all Parijat group companies (Oricon Enterprises,Kopran and Excel Glasses) goes through severe working capital crunch . In 2007 Parijat group started its efforts to revive their companies one by one with the help of Clearwater capital partners (a P/E fund specializing in reviving ailing companies due to lack of sufficient working capital)and fresh fund infusion by promoters . As aresult of these efforts On better financial performance , share price of Oricon Enterprises moved from a one year low of Rs.20/- to the current level of Rs.360/-. After the case of Oricon , Kopran is now showing signs of some revival.After a long time company has posted some promising results in December qtr. Company posted a turnover of Rs.40 crore v/s 30 crore and net profit of Rs.1.12 crore v/s a loss of 6.6 crore in this December qtr compared with last year same qtr. It seems to be an early indication of some good days ahead .Now company decided to focusing on international markets through its formulations and API`s business. If you have some patience ,add some doze of Kopran in your portfolio.This may turn to be another multibagger....

Friday, February 26, 2010

Modi Naturals - P/E Players may change its Future

At a time of rising food prices ,everyone is searching for cheapest and healthy food items. Modi Naturals (Foemerly AnilModi Oil) is a company producing rice bran oil since 1974 and it is the largest producer of rice bran oil in India since 2003.Due to High quantities of anti-oxidants and vitamin E ,Rice bran oil is considered as the cheapest and healthiest edible oil. Even though Modi Naturals is the largest company in this field its profit margins are very thin since company sells its entire products to re-sellers and doesn’t own any brand name. Creating a brand name requires huge outlay mainly for advertising .So, till recently company was selling its products in bulk to re-sellers.

Now company decided to move into the retail segment by introducing branded products. This will improve the margins of the company and help to earn substantial profit. In order to augment fund for this expansion company decided to issue 2640000 Convertible warrants to three foreign investment funds (India Max Investment Fund,Prime India inv.Fund and Rahn and Bodmer Co) ,which will completed by March 2010.



In last financial year company posted a turnover of Rs.120/- Crore and a Net Profit of Rs.3 Crore (EPS Rs.7.27) .It already issued a bonus issue in the ratio of 1:1 in September 2009.Currently it is quoting at a price of just Rs.14/- .This low P/E may be re-written with the success of its brand building efforts and funds interest in this company,like JVL Agro (Jhunjhunwala Vanaspathi)

Thursday, February 25, 2010

Interlink Petroleum - A Multibagger in Making (CMP .Rs.32/-)

Interlink petroleum was a closed chapter till 2008. In 2008 Singapore based Jit Sun Investment took over this company from the earlier promoters. Jit Sun is the investment arm of Singapore based Ezra Holdings. Ezra is an integrated offshore support solutions provider for the oil and gas industry and is listed in Singapore Stock Exchange.
After the takeover the new management is taking sincere efforts to bring back the company into the right direction. They have infused the much needed fund to the company by way of taking 10310000 equity shares at a price of Rs.16.72 in 2008 inorder to restart the production in the two fields allotted to the company years before.After this issue they came out with an open offer @17.25 which is mandatory by laws. They have also revived the board by inducting some of the the best brains of the oil and gas industry in India.This include Mr. B. C. Bora (Ex Chairman and Managing Director (CMD), Oil and Natural Gas Corporation Ltd. (ONGC) and Chairman and Managing Director, Oil India Ltd ) and Mr Vijay Misra (having more than 24 years experience in the exploration & production industry with Oil India Ltd. and Oil and Natural Gas Corporation (ONGC).)

After strengthening the board by experienced persons ,IPL conducted new seismic survey in their already allotted fields ,since the old one is outdated. This seismic survey done by Alphageo India Ltd and completed in November 2009 at a cost of Rs.6.66 crore. Eventhough the result of this latest survey is not available to public domain,Company’s latest plan to issue 6520000 equity shares at a price of Rs. 33/- To 4 foreign citizens(Probably the nominees/associates of its foreign promoters) indicates that the result of this survey is fruitful and proven reserves are there.
In nutshell,Even if there is no working results as of now ,new promoters experience in this field and their sincere efforts to revive the company through well planned strategies makes it a possible multibagger, if you have sufficient patience .

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