INDSIL HYDRO POWER AND MANGANESE LTD.-Booming Business

Fortunes of Ferro alloy makers are always associated with the growth of Metal Industry,especially steel.India’s steel production is expected to touch record level in this year.This will surely help ferro chrome companies too.Indsil Hydro power and Manganese is a well managed mid size company from this sector.Indsil has two ferro chrome units ,one in Kerala and the other in Chattisgarh.Since it is a power intensive industry ,company also operating one mini hydel power plant and another coal fired power plant to reduce power cost .Earlier company took 50% stake in an Indonesian Manganese mining venture but later drops this plans and sold the stake due low quality of Manganese from that mine.Now company has signed an agreement for a 50:50 joint venture for the purpose of setting up a 75,000 tpy ferro chrome smelter in the Sultanate of Oman .This project is at a cost of Rs. 140 crores and is expected to operational by end of 2011.Due to crash in metal sector ,last year company posted muted result (NP of 2.8 crore.) With the revival in steel sector, now company is performing well and already posted a NP of 8.41 crore in the first nine month period of this FY which translates into an EPS of Rs.9/- ,full year EPS is expected @ 14/- .At CMP of Rs.76/- ,it is a decent BUY

ARIES AGRO - MUTUAL FUNDS HIKING STAKE.

Increasing stake of mutual funds and big well known Investors in a company is always considered as positive .Aries agro is one such small cap where mutual funds increased their stake in latest March Qtr. Comparison with September qtr showing SBIMF - Magnum Comma Fund now holding 180,455 shares against 144,457 shares ,and a new scheme of SBI MF Magnum Sector Fund Umbrella Emerging Business Fund bought 314,068 shares as against NIL shares in September qtr.Along with this Birla Sun Life holding 334,298 shares in this small cap.Keep an eye on ARIES AGRO .

RUNGTA IRRIGATION Ltd. - In a Space with Huge Potential.

                                               
About the Industry 
---------------------------

Micro irrigation technology is rapidly expanding all

over the world especially in the water scarce areas

of developing  countries.This system is best utilized

in India and China but still there is ample market

potential with changing trend in agriculture. 

Water scarcity is the most important driving

factor of the Micro Irrigation Systems (MIS)industry

in India. Along with this ,the area available for

crop production,growing population in the country

and GDP of the agriculture sector also contributes

to the growing demand for MIS.
The water use efficiency under conventional  method 

of irrigation, which is predominantly practiced in

Indian agriculture, is very low due to substantial

conveyance and distribution losses. Recognizing the

fast decline of irrigation water potential and

increasing demand for water from different

sectors, a number of demand management strategies

and programmes have been introduced to save water

and increase the existing water use efficiency in

Indian agriculture. One such method 

introduced relatively recently in Indian

agriculture is micro-irrigation, which includes

both drip and sprinkler method of irrigation.

Micro-irrigation is proved to be an efficient method

in saving water and increasing water use efficiency as

compared to the conventional surface

method of irrigation, where water use efficiency 

is only about 30 percent. Micro-irrigation is also

found to be reducing energy (electricity) requirement,

weed problems,soil erosion and cost of cultivation. 

Investment in microirrigation also appears to be
economically viable .Despite this, as of today, the coverage
of drip (2.13 percent) and sprinkler (3.30 percent) method
of irrigation is very meager to its total potential, which is 
estimated to be 21.01 million hectares fordrip and 50.22 million
hectares of sprinkler irrigation method.

About the Company
--------------------
There are mainly three listed players in this space, 
JAIN IRRIGATION ,EPC INDUSTRIES and RUNGTA IRRIGATION.
There is also some other small players like Sturdy 
Industries,Tulsi Extrusion ..etc.But these two can be
avoided - first one due to lack of quality of
management and Tulsi Extr.due to the small share 
of micro irrigation products to its total turnover.
There is no justification for comparing an elephant
with an ant ,so no question of comparing 
Jain Irrigation and  Rungta.Incorporated
in 1986, Rungta Irrigation Ltd
is engaged in manufacturing, designing, assembling
and marketing of Micro irrigation systems 
(including sprinkler and drip irrigation systems). 
Rungta’s Manufacturing units located in the Sirmour
district of Himachal Pradesh,Ghaziabad in 
Uttar Pradesh, and in the Yanam district
within the Union Territory of Pondicherry with 
combined installed capacities of 4,500 MTPA HDPE
pipes, 200,000 HDPE pipes with couplers, 
5,000 MTPA rigid PVC pipes and profiles, 
750 MTPA linear low density polyethylene tubes,
and 350,000 aluminum pipes with couplers.The company
is focused on PVC Pipes as well as its core product
Sprinkler Irrigation System and Drip Irrigation
System to the retail segment, were margins
are high.It is expected  that recovery  in economy
and thrust of  the  government in agriculture area
will together result in ample business opportunities
for the  company.



Recent Developments
-------------------
Rungta Irrigation Ltd has at its meeting
held on January 12,2010 has allotted 20,50,000
equity shares of Rs. 10/-each at a premium
of Rs. 25/-each against the conversion of 20,50,000
convertible warrants.Samara Realty Pvt.Ltd got
9,50,000 shares and Pleasure Investment Pvt.Ltd to
allotted 11,00,000 Number of shares. Moreover
the main promoter of the company Mr M P Rungta is
consolidating his holdings through off market
transactions within the promoter group itself.
Such activities can be taken as a  proof of the
management’s confidence in the growth potential
of the company’s business.


Financials
-------------
For the last FY, the company has reported a sales income of Rs. 35 crore and net profit of Rs. 63 lakhs. For the nine month ended Dec.2009 company already  posted a NP of 77 lakhs and expected to post more than 1 crore in this full year. At present the results are not encouraging but the notable point is that ,for the last three years company’s NP is growing steadily. Considering the immense thrust of the government in agriculture sector and huge potential for  the company’s products along with increasing promoter/big share holders commitment, we can expect a bright future for Rungta Irrigation. Currently it is trading at Rs.58/-

STERLING TOOLS -IMPROVING BUSINESS

Sterling Tools is one of the largest suppliers

of fasteners to the OEM ‘s in automobile industry.
Company’s products list includes hub/wheel bolts, hub nuts,
wheel studs,suspension bolts, propeller shaft bolts/nuts,
centre bolts,track shoe bolts/nuts, rivets and two
wheeler spindles.Apart from OEM supply company also
having a wide marketing network for selling its products
to non OEM customers.Sterling has four plants ,one each
at Faridabad,Ballabhgarh, Prithla and uttaranchal.Company
 is also exporting its products to major automakers in U.S.,
UK,and Europe.Company has recently signed an agreement
with Netherland based Fabory B.V for setting

up a plant in India for non automotive 

fastners.This is a 50:50 joint venture with this giant
which having presence in 16 countries worldwide.
Last year company’s performance was poor due to
sluggish demand in auto and related sectors.

With the revival in demand, now company 

is again returned to high growth phase. In last FY
company posted a turnover of 151 crore and a net
profit of 1.7 crore.For the nine month

ended in this FY, company already 

posted a turnover of 123 crore and a net profit
of Rs.7.6 crore and expected to post an EPS of Rs.18/- for
the full year.Company has a  very liberal dividend history and
already declared  30% interim dividend

in this FY.In 2005 company declared

a bonus in 1:1 ratio. Currently it is trading around Rs.97/-
A good BUY on dips.

VESUVIUS INDIA - A WORLD CLASS COMPANY

Vesuvius India is a part of U K based COOKSON group 

and one of the largest manufacturer of Refractories in India .

In 2008 Cookson aquires foseco hence

two companies (Vesuvius India and Foseco India) are
operating in India under the same parent. But the product line
of these two companies are different and
are not competing each other. Vesuvius India makes high-end
refractory products,flow control systems and services.
These products are used by steel manufacturers using the
continuous casting process for manufacturing steel.
Since most of the steel producers have switched to this
technology company’s products are in good demand and the
increase in steel production due to the revival in core sector will
help the company a lot in future.Cement,glass,foundry  and
petrochemical industries are also using company’s products.
Company’s main plants are located in Kolkatta and visakapatanam.
Strength of parent  and its leadership position in refractory
 products with strong R&;D is expected to help the company
to add more products to its portfolio.Company has posted
 a turnover of Rs.364 crore and a net profit of 37 crore last
year.company’s year ending is in December .Next financial year
Vesuvius is expected to perform even better mainly because
of the improvement in steel production where its products
are used.Vesuvius is an excellent MNC company available
at a P/E of just 13 which is at the lower end for a
company like this.CMP is Rs.251/-

BHARAT RASAYAN - BUY

Bharat Rasayan is a member of Bharat Group and one of the leading Manufacturer and Exporter of large range of Pesticides, Formulations and Intermediates for Crop Protection and Pharma Industry. Currently company exporting its products to more than 55 countries across the world.Bharat has a large domestic presence too with 18 branch offices, 18 depots and 1200 dealers.Company’s products includes Insecticides,Herbicides,Fungicides and Intermedites.It is one of the few companies manufacturing its own technical grade pesticides from basic raw materials with storng R &D.Due to governments thrust on agriculture sector company’s like Bharat Rasayan is expected to perform well in future.Last year company has posted a turnover of 106 crore and a net profit of 5 crore which translates into an EPS of Rs.11.5 .For the nine month ended Dec 2009 ,company already posted an EPS of Rs.11.5 and expected to post Rs.15/- for the full year. Company has an equity base of just 4.25 crore and out of this 75 % is held by the promoters itself. A decent BUY at CMP of Rs.80/- which is at a P/E multiple of 5 on expected full year EPS.

CHOLAMANDALAM DBS FINANCE LTD

------------------------------------------------------------------------------------
THIS SCRIP WAS EARLIER RECOMMENDED ON MARCH 8,2010 @ Rs.82/- .NOW IT IS QUOTING AT Rs.103 .AFTER THE RECENT DEVELOPMENTS IN THIS COMPANY ,IT IS WORTH BUYING EVEN AT CURRENT LEVEL .HENCE IT IS THE SECOND TIME .....
------------------------------------------------------------------------------------

Cholamandalam DBS ,the financial service arm of Murugappa Group is a well known name in South India . During last two years company was in trouble due to mounting NPA in its consumer finance business and posted huge loss in 2009 which forced the company to skip even the dividend. In order to bring back the company into past glory, management decided to stop the consumer finance business and asset management business (where it was the sponsor).After streamlining the product line company is now focusing in vehicle finance,corporate mortgage finance and home loan segment . It also planning to develop factoring business in a big way.All of its dedicated efforts are showing good signs. For the last nine months company’s disbursements up almost 80% over previous year and company back to black . Considering the history of group ,its recent repurchase of stake held by the DBS group and the proposed entrance of  International Finance Corporation into this company and lessons it learned from the past ,company’s performance is expected to improve significantly in future. Moreover ,management is very liberal in dividend payment – normally paying 40-45% (except last year) which ensures reasonable dividend yield too.

RISHI LASER - Back To Black

Rishi Laser is one of the largest listed player from the metal
fabrication sector in India. It has operations in five states
with 13 units with most modern facilities like CNC Laser
Cutting Machines, Horizontal Milling/Boaring Machines,
CNC 5- Axis 3D Lazer Machine,Moving Column Milling
Centre ..etc. Company’s growth is closely associated
with the growth in infrastructure sector. Its main
customers are from sectors like Power, Automotive,
Telecommunication , Railway .etc. Major companies like
L&T ,Ingersoll Rand are the customers of Rishi and it also
processing orders from abroad. Last year company started
two units- one in Bangalore and other in Savli.To cater
the demand from Railway related sectors company started
a new unit in Pune too.At present ,almost all sectors
using the service of Rishi Laser returned to growth path.
So the company is ready to reap the benefits of the boom
in these sectors. Last year company posted a loss of 1.5
crore on a sale of 115 crore.For the nine month ended
December 2009 Rishi laser posted 88 crore sales and
almost nil profit /loss . Company is expected to return to
black on full year basis and post better results in next FY.
Currently it is quoting at 58/-

ARIES AGRO

---------------------------------------------------------------------------------
THIS SCRIP WAS EARLIER RECOMMENDED ON MARCH 12,2010 AT A PRICE OF RS.108/-.NOW IT IS QUOTING AT RS 122/-.I FEELS EVEN AT CURRENT LEVEL IT IS WORTH FOR MEDIUM TERM INVESTMENT,HENCE....
---------------------------------------------------------------------------------




Mounting food inflation is a serious threat to the economies worldwide. But some companies are benefiting from this situation .All governments are forced to take steps to improve food production using scientific methods and most modern techniques. Companies from the agri- related sectors are the major beneficiaries of government’s such efforts.In India micro irrigation sector is getting very big boost in every budget .Even though fertilizer companies are also important in this perspective ,government control on fertilizer prices limiting their potential. Along with fertilizers, micronutrients are also gaining acceptance among Indian farmers. Moreover micronutrients are not subject to the regulatory constraints that fertilizers face. The micronutrients business has considerable potential in the Indian context. Factors such as low yields of major food grains and horticultural crops, high soil alkalinity and intensive cultivation are the key demand drivers for micronutrients. The market for micronutrients such as zinc, iron and copper in India, is expected to double over the next two decades. ARIES AGRO is the largest player in micronutrients from the organised sector in India. The other two players in this sector(from organized space) is Ranade Nutrients and Karnataka Agrochem ,but both are only regional players. Aries has 65 branded products coming from six manufacturing units in India , one each at Mumbai, Kolkatta, Hyderabad , Bangalore ,Ahmedabad ,Lucknow and one new factory in UAE which is mainly for catering middle east region and North Africa .Aries is in the process of launching new products which include Natural amino acid chelates,Boidegradable chelates and Bio-degradable plant protection products. With the inauguration of its Ahmedabad factory company entered into a new space of Bio fertilizers too. Company’s largest distribution network of 5500 distributors and 76500 (seventy six thousand five hundred) retail outlets across India is the main attraction for a rural centric business like this. In future company can easily roll out allied products throughout this network without much marketing efforts. In addition to this distribution points company has added a fleet of 100 rural retail vehicles called ‘Krishi Vinjan Vahan ‘ in 9 states in India.This is mainly for improving company’s rural reach and advisory services.

Financial Perfomance

For the nine month ended in December 2009 Aries posted a net profit of Rs.10 crore which is more than 300 % increase from the last full year figure(3.1 crore).Company is expected to post an EPS of Rs.12/- for this financial year and an EPS above Rs.20 for FY 2011. Going forward big corporates are expected to coming into the farming sector of India in a big way. This will surely improve the prospects of the products of companies like Aries along with the initiatives of governments to increase food production.