Monday, May 31, 2010

MICRO FINANCE -PART 2



Other than SE Investment and Capital Trust , ARMAN FINANCIAL SERVICES is the third player from this space.This Ahmedabad based company having two divisions -Loans and Microfinance.This company is chaired by Mr . C R Shah (Former MD of Ahmedabad Electricity Co.) and managed by Mr.Jayendra B Patel.Last year  company decided to concentrate in Micro finance and planning to expand its operations.Company has posted a turnover of Rs.5.53 Cr and and an EPS of Rs.2/-in last financial year. For the last ten years company never posted any loss .Raising sufficient funds and proper analysis of the re-payment capacity of customer are the two key pillars of success in micro finance business.Promoters having reasonable experience in selling loan based product is a point to note.Only ,very  high risk takers can BUY in limited quantity ,till promoters prove themselves in new business.Currently it is trading at Rs.21/- with a P/E multiple around 10.

MICRO FINANCE - THE NEW THEME


Micro finance is developing in India and
in Indian stock market as a new theme.
In a country like India with huge rural
population ,significance and scope of
micro finance is vast. Unfortunately ,
the main microfinance companies are still
unlisted and no scope for retail investors.
But it is a fact that a number of
foreign funds and P/E players are already
invested in such unlisted entities. We have
also three listed players in this sector
even they are not big in size. One such known
name is SE Investment. This company was in
news recently that its 40 Mn GDR issue
subscribed in just 8 hours.This clearly shows
the appetite of foreign investors in companies
from this sector. SE investment already given
almost 1000% return in two years.So let us
check other two companies from this space ,
First is Capital trust and next will be
discussed later. 
 
Capital trust

Earlier I have recommended this scrip
through MMB when it was  @ RS.13/- and
recommend a profit booking around Rs.30/-.
At present it is quoting around Rs.70/-.
Since there is lot of happenings in the company
and this sector after that now it need re -looking
into it. Capital Trust is a Delhi based company
started its operations way back in 1985.
It was jointly promoted by Mr. K. R. Puri
(Former Governor, Reserve
Bank of India), Justice M. H. Beg
(Former Chief Justice of India), Mr. S. D. Varma
(Former Chairman, Allahabad Bank) and
Dr.A.M.Khusro (Former Member
Planning Commission). Its operations were
only as an NBFC till 2009.Now there was a
change in management after the promoter
holding bought out by IC Constructions 
Services Ltd.They also came out with
an open offer at a price of Rs.10/-, and now they
holds about 70% stake in this company.
After the take over by new management ,now company
ceased all other financing
operations and started Grameen based joint
liability based microfinance. Company is now
operating on the rural markets in UP, Rajasthan
and Madhya Pradesh and Chattisgarh.
It has 23 branches and 150 staffs as on date.
Now the new management seems to be taking serious
efforts to grow this company in microfinance sector.
As part of their efforts in this line, now they are
inducting experienced hands from banking sector in
their board. Recently company inducted Mr.J S Tomar
in the board who served Oriental Bank of Commerce
for 34 years and rose to the position of
General Manager, holding charge of the departments
of Rural Development and Priority Sector,
Planning & Development and Recovery Management.
He also  pioneered the first pilot in Grameen based
microfinance launched by any commercial bank
in India in 1995. He also headed the Microfinance
Department of the Reserve Bank of India as Officer
on Special Duty.(from company web site)
 
          Again, the company has taken lot of
steps to improve the business which
includes writing off of Rs.1.6 Cr NPA generated
in old business to clean the balance sheet,
fresh fund raising for business expansion..etc.
Now capital trust is expanding
into five more states  and targeting
a mini branch network of 1585 and loan
outstanding of Rs.13700 mn
by 2015.Company has recently appointed
New York based Cedar Street Capital, to raise
Rs 200 million foreign equity and Rs 360 million
debt for its expansion plans.
Considering the efforts and signals from
the new management Capital Trust is expected
to be a  money spinner even from this level.
Risk takers can buy in small lots.
 
Coverage on the other company in next two days

MULTIBASE INDIA - THE KID OF DOW CHEMICALS





Multibase India Ltd is originally started operations
as Synergy Poly in 1992. Company’s main product is
thermoplastic elastomeric compounds includes master
batches of synthetic resin, polypropylene, rubber
compounds, thermoplastic master batches, silicone
rubber ..etc.Company came through a two step change
in management control and now a part of Dow-Corning
(France)which is a subsidiary of
Dow Corning Corporation USA ,a joint venture of
American chemical giant Dow Chemicals and
Corning Inc ., a world leader in specialty glass
and ceramics.Company’s products are
used mainly in sectors like Automotive,
Personal Care, Personal hygiene,Stationery
,Telecommunications etc.
It is unfortunate to see that ,even if the
current promoters behind this company are world
leaders in their respective fields and the
products having good potential in a country
like India,they are not giving sufficient
priority to this company.As a result of their
negligence and overall recessionary
situation in past few years led the company
into a loss of Rs.2 crore in last year.But in
FY 2009-10 ,company posted a profit of Rs.2.69 Cr
and an EPS of Rs.2.13.If the promoters are really
interested in this company ,
the potential is huge for this MNC with the patronage
of conglomerates like DOW Chemicals and Corning Inc.
Keep an eye on the developments in this company
which may be a multi bagger ,only moot question
is the attitude of promoters. Currently it is quoting
around Rs.35, where even huge loss making MNC’s
are trading in three digits.

Sunday, May 30, 2010

ENKEI CASTALLOY - CORRECTION IN RECO.

Due to my oversight one important factor omitted while recommending  this scrip .Hence I am withdrawing my earlier recommendation on this scrip.My sincere thanks to one of the reader(Mr.Mahesh Joshi) for pointing out the same.

Wednesday, May 26, 2010

FORTIS HEALTHCARE -BUY

Considering the huge potential of the Industry ,capable and experienced management with aggressive growth plans through inorganic route ,Fortis Health care id a decent BUY at CMP of Rs.138/-. Even if ,expansion in equity is a concern in short term ,groups efficiency to utilize the same very effectively is giving confidence in its long term prospects.

Monday, May 24, 2010

VXL INSTRUMENTS - Changing trends ,Changing fortunes.


 
 
 
VXL Instruments is a known name in Thin client
devices globally. Thin clients are computing
devices that function as an access
device on a network. These solid-state devices
connect over a network to a server where the bulk
of the processing takes place.
Thin clients have no hard drive, allowing for more
secure storage of data and applications on the
server. In fact,keystrokes, mouse events and screen
images are all that is sent between the client
and server. This makes the device much more secure
than a standard desktop or notebook computer.
With no hard drive,fan or other moving parts,
thin clients have a much
longer lifespan than standard computers and use
significantly less power. Lower maintenance costs
are another benefit as software application updates,
virus scanning and patches can be executed on the
server.Deployment costs are also reduced as thin
clients can be remotely configured and do not
need to be set up individually. Break-fix simply
requires replacing the thin client.
 
The main reason thin clients are better than PCs
is because they offer ‘lower Total Cost of Ownership
(TCO)’. By reducing maintenance and installation time,
thin clients keep downtime to an absolute minimum .
Thin clients can be used anywhere one
would normally have a PC. With thin clients being
less expensive on a per-seat basis, more seats can
be made available.Since servers usually have large
hard drives, the user hard drive space is considerable,
and data backup is simple.
 
Nowadays acceptability of thin client  devices
are improving in India and worldwide . Even if well
known companies like HP are present, VXL claiming
an 11% share of thin client market world wide.
Company’s latest ‘ITONA’ edition is a hit in
this sector. In the marketing front company having
channel partners in almost all major countries and
it planning to double this number by year end.
In the past company faced a lot
of troubles like low acceptability of product ,
some personnel problems of MD, which eventually led
to his resignation ,working capital crunch ..etc.
But now,company is returning to profitability after
the re-entry of MV Nagaraj as MD and fresh infusion
of funds(company recently issued 66 lakhs shares
to four entities)and appointment of executives
with repute in its international marketing wing.
After a very long period,in December
qtr company back to black.Considering the efforts
taken by the management and changing interest
of customers in favor of its product,it is a
company to watch in the days ahead.
Currently it is quoting around Rs.32/- 

Saturday, May 22, 2010

POLY MEDICURE - A DARK HORSE IN MAKING




Indian healthcare sector going through rapid changes
mainly due to increasing awareness of health , greater
thrust of government and penetration of health insurance
companies in rural areas. All these factors makes it a
sunrise sector in a country like India with huge
population. At present Indian healthcare a US$ 35 billion
industry and is expected to reach over US$ 75 billion
by 2012 and US$ 150 billion by 2017. Corporatisation of
hospitals is the new trend and big business groups are
all set to tap this huge opportunity. Apart from hospitals ,
medical disposables are another booming side of health care
industry.The Medical Device Industry in India is estimated
currently at about US$ 2.17 billion and according to
Industry experts, it is expected to reach a level of
around US$ 4.97 billion by 2012.
Poly medi-cure is one of the few listed players from
medical disposable space. This company manufacturers medical
devices and disposables under the brand name, Polymed.
Company’s products include different types of IV Cannulae,
IV infusion sets ,catheters and lot of other products
used for Anaesthesia, Urology, Gastroenterology,
blood management , dialysis ..etc. Poly medi cure is one
of the biggest exporter of these products from India.
Company is selling its products in almost 30 countries
at present. Most of its products are patented and
manufactured from US FDA approved plants. Recently company
won a patent litigation against German major
B Braun Melsungen AG in India and Germany.  Last year company
signed a supply agreement with Apollo group of hospitals.Company’s R&D
division is very active in inventing new products and
obtaining patents , which is very important for a
company like this. Now Company is planning to spend
Rs.250 mn each for the up gradation of its Faridabad plant
and also for starting a new plant in Jaipur which is mainly
meant for exporting. At present company having two
subsidiaries - US Safety Syringes Co., LLC, USA and
Poly Medicare (Laiyang) Co. Ltd, China .It also has a joint
venture in Egypt, Ultra for Medical Products, Egypt which
came to profit path last year.

Financials

Poly medicure has posted excellent results for the full year.
Company posted a sale of Rs.136 Cr v/s Rs.112 Cr and a net
profit of Rs.16.4 Cr v/s Rs.6 Cr last year . Company recently
rewarded the share holders with a bonus in 1:1 ratio and also
maintained the same dividend level (25%) even in expanded equity.
Company having a good history of setting targets and
achieving it. Now management targeting a sale of Rs.175 Cr
by 2011 and Rs. 350 Cr by 2013.

Conclusion

Considering the potential of the industry ,pace of growth
of company ,ability of the promoters and their attitude
towards share holders-it is expected to make POLYMEDICURE
a dark horse even from this  level. Currently it is
trading around Rs.130/-

Thursday, May 20, 2010

JSW ENERGY

Earlier I have recommended a BUY on JSW energy @ Rs.115 on 29 March 2010 .After touching a high of Rs.131.50/- ,now it came back to the previous level due to overall negative sentiment in the Market.I reiterate a BUY on this at current level. Try to catch it in lots due to extreme volatility in the market.

old report is reproduced below:

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JSW ENERGY Ltd is originally promoted by Sajjan Jindal

Group and Belgium based Tractebel S.A in 1994.Later

in 2001 Tractebel sold its stake and exited from

the company.It started commercial production of

power in the year 2000 and now it has two thermal

power plants with a total capacity of 860 MW.

These two plants are in vijayanagar ,Karnataka and

one of these can run with dual fuel(gas and coal)

and the other one is coal based.

It also have another 1200 MW capacity plant under

construction at Rathnagiri which is expected to fully

operational by October 2010.Another 1080 MW capacity

Lignite based plant is also under construction

(Raj West Power) in Barmer ,Rajastan which is expected

to fully commissioned in the beginning of 2011.

Some of the other plants-RWPL Phase 2 (270MW by 2013,)

Kutehr Hydro power project(240 MW by 2015),

Chhattisgarh (1320 MW by 2014)Maharastra

(3020 MW Coal based), West Bengal(1600 MW coal based),

Jharkhand(1620 MW) are also under various phase of

implementation. For most of the projects which are

going to be commissioned in near future ,company

already signed power purchase agreements .

To part finance its various projects company came

out with an IPO in December

2009 and collected 2143 crore. To ensure the supply

of coal for its various project company already signed

agreements with various agencies mainly with Sungai

Belati Coal, Indonesia. Company also formed another

joint venture company with Toshiba Corporation in the

name of Toshiba JSW Turbine and Generator Private

Limited.This company is meant for the design,

engineering, manufacture, assembly and sale of

sub-critical and super-critical steam turbines

and generators which will

range in capacity from 500 MW to 1,000 MW.

Major risk of project execution

is applicable to JSWEL as in the case of any

large project. But considering the facts that,

it already implemented and started production from

some of its plants and the experience got from it

along with the strength of the group gives

sufficient confidence in this company. Also ,

the commissioning of its various projects

in near future gives revenue

visibility which is a major positive for the company.

Investors expecting low risk with steady return can

BUY JSW Energy at current market price of Rs.115/-

WINDSOR MACHINES LTD - Results Update.

I have recommended a BUY on Windsor Machines Ltd on 1 March 2010 ,when it was trading at Rs.35/-.Yesterday it closed in at Rs.56/-/- ,which means almost 70% return in 2.5 months .Recently company declared excellent results .For the full year ended March 2010 company posted a sale of Rs. 206 Cr v/s Rs.93 Cr and a net profit of Rs 13 Cr as against a loss of Rs 1.3 Cr posted in same period last year. Full year EPS is around 11/- .After this 70% return in short period one may book partial profit (30% of total holding) and keep the balance.


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old report is reproducing below:
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Monday, March 1, 2010
WINDSOR MACHINES - REVIVING HOPES
Windsor Machine (Formerly Klocknor Windsor) is a Thane based company engaged in the manufacturing of Plastic Processing machinery.It has three plants in India at Thane, Chhatral and Vatva.. Windsor Machines has grown to become the largest manufacturer of Plastic Processing Machinery in India .Its customers includes large companies like Nilkamal,Supreme,Milton,Cello ,VIP..etc..This company started in 1964 and after more than one hand overs now jointly owned by DGP Windsor of UK and Dilip G Piramal Group. Severe working capital crunch followed by labour problems led the company into deep trouble and it end as a BIFR case. In 2009 company initiated a massive restructuring exercise and the result of the same is started to visible now.After a gap of more than 10 years company posted healthy profit in this financial year so far.It already posted an EPS of Rs.5.54 for the nine month period .Considering the revival in the economy and management efforts to revive the company itself, it is a risk less buy @ Rs.35/-

Tuesday, May 18, 2010

KULKARNI POWER TOOLS Ltd - Powering Ahead


 
 
Kulkarni power tool is an established and well known brand in Electric
Power Tool Industry. This Kolhapur based company is established
in 1976.KPTL operating mainly in three
segments viz Power Tools,Blowers and control motors.
Its power tools are finding applications in Metal working,
wood working and general construction .Blowers are
used in Water, Effluent and Sewage treatment plants.
Its control motors are used in high voltage circuit breakers,
control panels etc.Earlier company was distributing
its products through third parties which severely affects
its margins .But from last year company itself started to
distribute its products which changes its fortunes.
Last financial year company posted a turnover
of Rs.61 Cr. and a net profit of just 2.7 Cr. .For the nine month
ended Dec qtr KPTL reports a sale of Rs.47 Cr
and a net profit of Rs.3.5 Cr and expected to end
this FY with a profit of Rs.5.5 Cr . On an equity base
of 1.7 Crore (Rs.5 FV shares) Company is
expected to post an EPS above Rs.15 /- .KPTL
is trading @ RS.83/- with
a P/E of 5.5 to the expected full year EPS. Considering
the prospects of the
industry KPTL is a decent BUY around Rs.75/-

Monday, May 17, 2010

ITL INDUSTRIES -RESULT UPDATE

I have recommended a  BUY on ITL INDUSTRIES Ltd  on 1 March 2010 ,when it was trading at Rs.54/-.Today it closed in upper circuit at Rs.76.9/-  ,which means almost 50% return in 2.5 months .Saturday  company declared excellent results .For the full year ended March 2010 company posted a net profit of Rs 5.2 Cr as against just 1.18 Cr posted in same period last year. Full year EPS is Rs16/- v/s Rs.3.6.Performance is really good and further upside seen .So, HOLD at current level and BUY on any decline .Company is expected to cross  its lifetime high in near future.

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Old Report is reproducing below:
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Monday, March 1, 2010

ITL INDUSTRIES - A Small Wonder

ITL Industries (BSE CODE 522183) is a small but rapidly growing company from Industrial Machinery sector. Company started its operations in 1986. In 1996 company entered a technical collaboration agreement with KASTO Maschinenfabrik GmbH Germany for manufacturing state-of-the-art High Speed Power Hacksawing Machines in India, with a buy back arrangement. In addition to its sales points across India, it has representative sales offices in US and Germany. Its product list includes Band Saw Machine, Circular sawing Machine,Tube and Pipe making machine,Blades,special purpose machines ..etc.
In the year 2004, ITL introduced India’s first indigenously designed and developed CNC Carbide Tip Circular Sawing Machine and displayed the same in EMO Show at Hannover, Germany in September 2005 & 2007 with very good global response. Today ITL offers wide range of Circular Sawing Machine for cutting ferrous and non-ferrous Bars, Sections, Profiles and Tubes. In a growing economy like India, there is large scope for company`s products.
ITL is located at Plot of approx. 4 Acres having covered area of about 108,000 square feet and additional land available for shed expansion approx. 44,000 square feet. To cater overseas requirements ITL has acquired additional land in Special Economic Zone and expects to start production by end of 2009. Company`s Customers include Steel Plants, Forging Industries, Defense Establishments, Railways Workshops, Bharat Heavy Electrical Units, Steel Tube Plants, Research Organizations like BARC, NFC, DMRL, ISRO, MIDHANI and HINDALCO etc.
On a tiny equity base of just 3.25 crore ITL is expected to post an EPS of Rs15 + in the current fiscal. In the first nine month itself ITL posted an EPS of Rs10.12 which is almost three times than the last full year EPS of Rs.3.64.It also declared a dividend of 10%. Considering the growth of the company there is fair chances for good appreciation. ITL is trading at Rs.54 which is at a P/E multiple of less than 4 to the expected EPS of current year which is really a valuepick.

Sunday, May 16, 2010

SPICE MOBILES LTD-RESULT UPDATE

I have recommended a strong BUY on Spice mobile on 28th February ,when it was trading at Rs.40/-.It closed at Rs.72.80/- on Friday ,which means almost 80% return in 2.5 months .Saturday company declared excellent results .For the full year ended March 2010 company posted a net profit of Rs 70Cr as against just 1 Cr(For 15 months) posted in same period last year. Full year EPS is Rs.9.45 .Even at current level ,I really feels that the real story will unfold only after the proposed merger  ,which will be completed in the near future.So i recommend a HOLD even at current price.

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Old Report is reproducing below:
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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 2009 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, May 15, 2010

VELJAN DENISON Ltd - An unknown Gem



As in the case of Tasty Bite one year back ,some companies are
silent performers overlooked by investors and analysts community.
When such a company identified by some strong hands it will move
like rocket and multiplied in few trading sessions. Veljan Denison
seems to be such a company ,unknown to most of the investors.
Veljan is formerly known as Denison Hydraulics . This Company
is located at Hyderabad and promoted by Sri. V C Janardan Rao.
Mr Rao,is a qualified and experienced Engineer with
specialization in the area of Fluid Power.Weljan has promoted
with technical and financial assistance of Abex Corporation,
USA .In 1987 parent company ie, Abex corporation transferred
their interest in the Hydraulic Division to M/s. AB Hagglund & Soner
of Sweden and since then the Hydraulic Division came to be know
as Hagglunds Denison worldwide .This Swedish company is still
holding 13% shares in Veljan through Incentive Fastighet A B.
Indian promoter is holding 73.10% stake .This makes the total
promoter holding is 86.1% in this tiny capital company with total
capital of just 1.8 crore.This low equity base may be a reason
for the overlooking of investors towards this wonderful company.
Later the name of Indian company changed to Veljan Denison to
reflect the interest of Indian promoter too .


Denison is a well known name in hydraulic Industry. Its products span across Hydraulic Valves,Cylinders,Vane pumps and Pneumatic equipments.In reality this small company is the only one listed player offering a product list of more than 200 products related with hydraulic and pneumatic sectors.We may have another listed players like Kirloskar pneumatic,Atlas Copco,Yuken India,Dynamatic technologies ..etc making these type of products .But none of this single company offering this much products under single fold.Company is producing these products from its three manufacturing units in an around Hyderabad.Veljan has its own in-house R & D for product development , enhancement and expansion of product range.Growth of company’s products are closely related with the growth in industrialization. After a not so good year due to recession ,now company is returned to strong growth path.Company’s Financial year ending is in September.Last FY ,Veljan posted a turnover of Rs.41 crore net profit of Rs.4.46 Cr.and an EPS of Rs.26/- .After this bad performance of last year now in half year March itself company already posted an EPS of Rs.20/-. In march qtr itself Veljan posted an EPS of Rs.11/- v/s Rs.3/- in last year same qtr.In September full year it is expected to post an EPS more than Rs.50/-.Notable point is that ,company’s performance is improving steadily in each year(except last year).Company also increasing dividend payout and last year paid 50%on FV 10 shares.Its share price is now ruling around Rs. 375.Five year high is Rs.1044/ - touched in 2007 and lowest is Rs.160/- in last bear phase of 2009.Even from current level this may surprise,which is now trading at a P/E of 7 to the expected full year EPS v/s industrial average P/E of 30.

Friday, May 14, 2010

SANKHYA INFOTECH - SOMETHING COOKING ??

There was some unusual volume and price movement in Andhra  based Sankhya Infotech today.In the morning trade it was up 20% and touched the upper circuit.Volume also surged to 2.2 lakhs against two week average of just 7500 shares.About one month back another Hyderabad based listed company HBL power system (FV Rs.1/-) acquired almost 10% stake in this company through bulk deals.Sankhya is specializing in sectors related with Oil and gas,Aviation.Energy ..etc.Customers of HBL is also from these sectors ,even if they are making Batteries and other products.This really make sense for the management of HBL to increase their stake in this company and utilize its relations with its customers from these sectors.Sankhya's business has been affected last year due to overall negative sentiment in IT sector.It is a fact that about 66% of the promoter holding of Sankhya is already pledged.All together it is a counter to watch,but at present it is not clear whether it will end in a take over.Currently it is trading around Rs.35/-

Thursday, May 13, 2010

PIRAMAL GLASS (REPEAT)

Piramal Glass once recommended at Rs.78/- on March 25.Current market price is Rs.97/-.Recently company declared its March qtr result which is as our expectation ( profit of Rs.12 cr v/s a loss of 40 Cr.) Company's U S unit shows turnaround performance and expected to perform even better in Current FY. Hence long term investors can BUY even at current level.
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Reproducing our earlier report below :
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Thursday, March 25, 2010

PIRAMAL GLASS -MOVING TO PROFIT
Piramal Glass (Formerly Gujarat Glass) is a company de-merged from Nicholas Piramal Ltd in 1998.Later it merged with Kojam Finvest ,a BSE listed company from the same group and changed the name to Piramal Glass Ltd. This company is a leading global manufacturer of flaconnage (glass containers) for pharmaceuticals, foods & beverages and cosmetics and perfumery industries. The Company is also the largest producer of nail-polish bottles globally, with more than 30% market share.Company has manufacturing facilities in India, Sri Lanka and USA and it markets its products to more than 54 countries.It has two plants in India at Kosamba and Jambusar in Gujarat and three in US and one plant in Sri Lanka. Company is growing at a very good pace and the end of political problems in Sri Lanka is expected to improve its sales in the years to come.For FY 2009 company posted a turnover of 1030 Crore and a a net loss of Rs.107 cr. In August 2009 company came out with a massive Rights Issue and its share capital is now stands at Rs.80 crore.Using this funds,company cleared a large portion of its debts which were a major dampener in its profitability .Latest financial results for December 2009 qtr clearly indicates the effect of reduction in debt and improved business prospects.Company posted a profit of Rs.11 cr for Dec qtr as against a loss of 38 cr posted in the same qtr of last year. Investors with sufficient patience can take exposure in this Nicholas Piramal Group company at CMP of Rs.78.

Wednesday, May 12, 2010

MEDIAONE GLOBAL - Smart Promoters ,Poor Retailers

Media one Global is an example how promoters can make money in a bull market.Its name was Rajmatha Investment in its earlier avatar.There was about 1000 share holders all together for this company earlier .Shri Pathee Investments Pvt Ltd made an open offer at a price of Rs.11/-to this finance company and after that changed its name to the current one. Then they issued shares in the ratio of 5 shares for every one held (almost fully held by the promoters itself at that time ) and a right issue at cheap rate. Then they started to rig the share price from Rs.8/- to Rs.181/- in just one year accompanied by a lot of announcements on a daily basis to lure the retailers.After that they have started to offload the shares .
Want to make money in this method -Only cost is some money for
arrangements for open offer for any junk company ,some announcements,few lakhs to bribe authorities(if there is any inquiry during price rigging),link with some operators and lot of guts. Trying this ???

Tuesday, May 11, 2010

SANGAL PAPERS


 
Paper prices are ruling steady and it is expected to do
so in near future. So there is a strong chance of
re-rating in the price of the paper manufacturers
from current level. Sangal paper is a small un-noticed
player in paper segment. Company’s plant is located at
Meerut in UP.Though this company is small in size,
it is present in almost all varities like Newsprint,
writing ,colour paper..etc.For the full year ended
March 2009 ,company posted a turnover of Rs.58 crore
and an EPS of Rs.9/- .Company is expected to post
an EPS of Rs.13/- for the full year ending March 2010
on its tiny equity base of 1.3 crore. At CMP of Rs.17/-
it is trading at a P/E multiple close to just 1 .
Nothing to lose. 

Monday, May 10, 2010

TALWALKAR BETTER VALUE FITNESS




It is not very easy to put a BUY/HOLD /SELL tag on a company before it stabilizing somewhere ,especially if there is no other comparable companies in that particular space. Anyway let us look at some points.



Positives 


* Talwalkar is the leader in a sector with huge potential and relatively untapped.

* Non promoter share holders in this company includes some smart guys like R.Damani and Shivanand Shankar Manekar ,both are well known for their smart moves and wealth creation in stock market.

*There was no 'offer for sale' from these non promoter holders in IPO ,which means they are expecting better days ahead.

* Most of the funds raised through IPO is going for expansion of business and repayment of loans

* Since 'Talwalkar' the brand name is well known,possibility of brand extension to other related products and services related with fitness segment is easy.

* Because of its financial strength ,company is in a better position to compete with un- organised players.

* Post listing ,Mutual fund are showing interest and Reliance Mutual fund bought about 15 lakhs shares today  ( Total shares offered in IPO was 60 lakhs)


Negatives

Since there is no clarity about the usage of brand name among promoters and their  relatives , disputes may arise in future.


Company may forced to raise further  funds  for expansion in not so distant future either through debt or equity.

Conclusion

 * A theme + growth stock will not come at a cheap rate.
 * Very big chance to outperform the market ,considering the potential of the industry and the position of the company in it.

So I recommend a HOLD at current level and a BUY on decline for medium to long term investors having some appetite for risk  .CMP is Rs.162 /-

Sunday, May 9, 2010

UT Ltd - At last Some Efforts

UT LTD is a manufacturer of Hydraulic Pumps, Hydraulic valves and cylinders and tipping gears .This company  is located in Kolkata.Company’s products are mainly used in industries like Earth moving equipments,Material handling , mining ..etc. Company was in red for the past two years mainly because of working capital crunch and Laziness of management. But now there is some early signs of good days are visible. Recently company made some changes in its board,bring new funds through preferential issue of shares to the promoter group and others, selling of some unutilized  land to raise working capital ,re-location of another plant ,restructuring of loans to reduce cost of interest, modernization and quality up gradation of plants and introduction of new products ..etc.On the other side there is strong revival in the industries where its products are used. Considering all the above factors ,UT is expected to return to black by next year. The three other listed companies from the hydraulic space(Dynamatic Technologies ,Denison and Yuken India) are performing very well in their working results.  Risk takers can try UT with minimum quantity. Currently it is quoting around Rs.17/-.

Thursday, May 6, 2010

ASTEC LIFE SCIENCE - Patience will Pay


Astec Lifescience is promoted by Mr Ashok
Hiremath and Dr.P L Tiwari. Ashok is the
brother of Jay Hiremath , the main promoter
of  another listed company HIKAL Ltd.In the
early stages, Ashok was also a
joint promoter of Hikal but later he came
out of Hikal and promoted this company.Astec is
a producer of active ingredients such as
Hexaconazole, Propiconazole, Metalaxyl,
Tebuconazole and Dicap which are used
for manufacturing fungicides and anti-fungal
drugs.Company’s major customers
includes Syngenta ,Indofil ..etc.Last year
company came out with an IPO to fund its
expansion plan .This expansion
will be completed in 2010-11 and capacity will
be expanded to 4000 tons.At present ,company is
running in existing full capacity. Agrochemical
industry is expected to perform well in future and
company is alls set to tap the opportunities in export
market for selling its products
after the expansion. Investors with patience
can buy at CMP of 57/- for a 100% return in two
year time frame.

Wednesday, May 5, 2010

NILE LTD - WATCHOUT THE RESULT

I have covered NILE Ltd on March 7 th @Rs.115 /- Company is going to declare its last qtr and full year results on 8th May .Company has two divisions viz Glass lined equipment and Lead. Company is making Lead through re-cycling method.Last year company posted a loss of Rs.2  crore due to lower price of lead in international as well as local market.After the revival in lead prices , NILE has posted a profit of 4.34 Cr for the nine month period ended in Dec.2009..On an equity base of just 3 Cr ,nine month EPS is Rs.14.5.If there is no negative surprise from the glass lined division, NILE is expected to post strong results.Comparing to last year ,commencement of its new plant at Tirupathi with 20000 tonnes per annum  lead making capacity is also expected to boost its bottom line.Currently it is quoting at Rs.152.60. Keep an eye on it  and take decision according to the results to be published on Saturday.

Tuesday, May 4, 2010

ACRYSIL -SECTOR IS RE-RATING

Acrysil is a known name in Kitchen Sink and Food Waste
Disposer.Recently company launched Kitchen Sinks made
from granite and Quarts ,which is getting good response
from the market.CARYSIL is the brand name of company's
new series of Kitchen sinks. Company also manufacturing
Kitchen Sink accessories like taps ,crockery basket..etc.
Acrysil has recently floated a new subsidiary to start the
production of stainless steel kitchen sinks.Considering
the revival in construction sector especially in housing sector ,
company is expected to perform well ahead.Company is
showing consistent growth over the past many years.
For the full year ended March 2009 company posted a
turnover of Rs.50 Cr and a net profit of 7 Cr .
This translate into an EPS of Rs.27/- on its tiny equity
base of just 2.8 Cr. Company also paid a dividend of 40%
in last year. For the nine month ended Dec ''09 Acrysil
posted an EPS of Rs.17/-(equity has slightly expanded
due to warrant convertion ).Now household appliances
and related sectors are going through a re-rating in
stock market.Keep an eye on this .CMP is Rs.128.25/-

Monday, May 3, 2010

TIMKEN INDIA - Bright Prospects.


Timken India Limited was jointly promoted
by The Timken Company, USA and Tata Iron
and Steel Company Limited in 1987 as Tata
Timken Limited. In 1999, Timken acquired
inter-alia Tata Steel's 40% equity holding
and consequently the company's name was
changed to Timken India Limited.
Timken Inc, the parent company of Timken
India Ltd is one of the world's
leading producers of highly engineered
antifriction bearings and related products
and services and alloy steel and components.
The company has operations in 26 countries
in six continents.

Timken India manufactures Tapered Roller
Bearings in its Jamshedpur plant.
These bearings cater to medium and heavy
trucks,railways and Timken company’s
global requirements. The company meets
the requirements of all other types of
bearings such as cyclical, roller and
needle bearings by sourcing these from
other Timken company’s plants globally.
Timken India Limited uses cellular manufacturing,
giving the plant, flexibility to produce
any part with a short lead time.
The company became the first company in
India to get QS 9000 3rd edition accreditation.
Timken India has network of 555 associates.
The company’s last year financial results
were bad with a 52% fall in the exports.
While domestic sales fell marginally.
The recession of US Automakers was the prime
reason for the sharp fall in the export front.
However, the company continued its effort to
diversify the product portfolio. In 2009, the
company started another new plant.
In the same year, Timken launched high
performance non- TRB products.
Company is in growing sectors viz.
Company's products are used for heavy trucks,
railway, steel, cement and heavy industries

Timken India has reported a substantial
rise in standalone net profit for the first
quarter ended March 2010. During the quarter,
the profit of the company rose 44.13% to Rs 11.5
crore from Rs 8 crore in the same quarter
previous year. Net sales for the quarter rose
13.15% to Rs 95.75 crore, while total income
for the quarter rose 11.27% to Rs 98 crore
compared with the prior year period. On an equity
capital base of Rs. 63.7 crore, the first
quarter EPS stood at Rs 1.81.

The company, being part of global
bearings major, considers India as a strategic
market for growth. Timken’s strong brand image,
large networks in India, more over the growing
business environment; one can consider
an investment on this stock for a decent
return in medium term perspective.CMP is Rs.125/-

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