SCHNEIDER ELECTRIC INFRASTURUCTURE LTD - UPDATE

Further to my BUY recommendation on Schneider Electric Infrastructure @ Rs.69/- (Current Price Rs.93.50), Click HERE for the latest investor presentation released by the company .

Disc: I have vested interest in SEIL

NATIONAL BUILDINGS CONSTRUCTION CORPORATION LTD ( NBCC ) - BUY

NATIONAL BUILDINGS CONSTRUCTION CORPORATION LTD. is a newly listed PSU company. operating in Project Management consultancy (PMC), Real estate development and Civil infrastructure.It is one of the rare listed companies concentrating in PMC.Almost 85% of its total turnover is from PMC which is a high margin business compared with the rest.Under the PMC segment , company is offering management and consultancy services for civil construction projects related with road,water,Hospitals ..etc.Company having proven experience in this field and many reputed names in their client list includes   Ministry of Defense, Ministry of Home Affairs  Ministry of External Affairs, MoUD, Ministry of Commerce and Industry, Ministry of Corporate Affairs, Ministry of Finance, Haryana Urban Infrastructure Development Board, IIT Roorkee, IIT Kharagpur, IIT Patna,BHEL,NTPC..etc. In real estate segment,company having 125 Acre land assets in prime locations across 10 states and 9 projects are under various stages of executions.Since it is a PSU under Ministry of Urban Development company is getting priority from Government undertakings which is big positive especially at a time of slow growth  in infrastructure sector.At present ,company having an order book of more than Rs.10000 Cr. It is a debt free company with a cash reserve of Rs.1360 Cr t as on March 2011. On the other hand ,there may be delay in receiving payments due to the over dependency on Government orders. In the last FY , company posted a turnover of Rs.3126 Cr and a net profit of Rs.140Cr.On the post issue equity ,last year EPS is Rs.12/-. Considering all these factors reasonable appreciation is possible from current level of Rs.95/-

KALYANI FORGE LTD - BUY

Auto industry is one of the fastest growing sector in India.Many foreign companies considering India as a main market as well as a production hub for their international operations.Auto component industry is also moving in tandem .Pune based Kalyani Forge is a well managed company manufacturing forged components for auto industry. It is manufacturing high quality close tolerance die forgings in a wide range from 0.1kg to10kgs.Company is making Engine Parts,Transmission parts, Steering Parts..etc Almost all major auto producers are in the customer list of Kalyani forge which includes Ashok Leyland,Tata Motors,M&M,TVS Motor Company,Hero Motocorp..etc.Company also supplying its products to international  customers like  RENAULT SAS, LOMBARDINI S.R.L, VCST DE MEXICO..etc .In recent times company is moving out of low margin products and concentrating in niche high margin forgings segment.Effect of this shift is visible in recent financial performance.Company is also planning to reduce its debt.For the nine month ended December 2011,Company posted a sales of Rs.206 Cr v/s Rs.168 Cr and a net profit of Rs.11.5 Cr v/s Rs.5 Cr .For the full year March 2012, company is expected to post an EPS above Rs.42 (last year Rs.18). Considering company’s future plans and the vast opportunity available in this segment ,trading at a P/E multiple of just 4 on expected full year EPS ,Kalyani forge is a good BUY at CMP of Rs.177/-. Stock is trading both in NSE and BSE.

GRANULES INDIA - REPEAT

I have recommended a BUY on Granules India on 24 March 2012 @ Rs.79 ,which is currently trading @ Rs.86/- .Reiterating BUY at CMP.

For old posting Click HERE

CLARIS LIFESCIENCES - RE-RATING ON CARDS ?

We have discussed about CLARIS LIFE SCIENCES earlier and mentioned that the history of its promoters ( related with Core Healthcare issue )as one of the big negative factor.During the last one year some positives happened for Claris. First one is the approval of the Medicines and Healthcare Product Regulatory Agency (MHRA-UK) which enables the company to relaunch its Bag Products in European Union. EU is the second largest market for injectable products.Its Ahmadabad facility is also expecting positive outcome from the recent inspection of USFDA.Both these approvals will help the company to improve its sales.Another factor is the possibility of a re-rating in Parenteral manufacturers after the acquisition of Ahlcon Parenterals by the German healthcare products major B Braun at a valuation of Rs.331 Cr which is at 23x its trailing EBITDA and over 57x its trailing net profit.Third point is the recent entry of some institutional investors and individual investors with repute ,in this company.Morgan Stanley recently bought 5 lac shares of Claris @ Rs.155.50/- and Shivanand Shankar Manekar bought 7 lac shares@Rs.140/-. If there is no negative surprise from recent  USFDA authoritie's visit  and good standard of corporate governance by the company may help it to re-rate in medium to long term .CMP is Rs.158/-

For old posting on this company,Click HERE

WISHING A HAPPY EASTER TO ALL MY READERS ....

FAIRFIELD ATLAS - REPEAT

I have recommended a BUY on Fairfield Atlas @ Rs.69 on September 24,2011.Thereafter company reported better than expected number in all quarters. It is expected to grow even faster due to an early revival in US economy and a favorable exchange ratio of  Rupee/Dollar .Reiterating a BUY @ Rs.139/-

For Old Posting on this Company Click HERE

SCHNEIDER ELECTRIC INFRASTRUCTURE LTD - WILL IT MOVE TO THE BIG LEAGUE ?

Schneider Electric Infrastructure , an associate company of the French Energy management conglomerate  Schneider Electric is  a newly listed  stock in our stock exchanges.This company originated by the  Areva T&D’s global take over by the Alstom-Schneider consortium and subsequent de -merger of Transmission business to Alstom and  distribution business  to Schneider.The global takeover happened in 2010 at a cost of EUR 2.29 billion.Later the high voltage business allotted to Alstom and Medium and low voltage business allotted to Schneider to align with their global status.The Indian business of erstwhile Areva T&D also shared in the same manner here.In the initial stage its name was  SMARTGRID AUTOMATION DISTRIBUTION AND SWITCHGEAR LIMITED and changed its to Schneider Electric Infrastructure Limited in December 2011. Its ultimate parent company Schneider Electric is one of the world's largest manufacturers of equipment for electrical power distribution, industrial control and automation.Its nearest rival is ABB , but if we take the growth in Asia region business Schneider outpaces  with a 21%sales growth compared to 5% of ABB. Even in other parameters too Schneider showing better prospects as in the case of operational  margins for low voltage business where its is 20.5 % for Schneider and 16% for ABB (Asian business) .At present Schneider’s revenue share from Asian region is about 37% and it is growing very fast mainly due to some aggressive acquisitions made in last few years. In India , parent company made some big ticket acquisitions in recent past which includes Conzerv Systems, Meher Capacitors, Zicom's electronic security systems integration business(Rs.225 Cr),Uniflair India, APW President Systems( Rs.70 Cr approx.),Digilink(Rs.500 Cr) and Luminous ( Rs.1400 Cr)..etc.These figures clearly indicates their commitments to India . Coming back to the business of the listed entity ,it is in MV/LV Distribution business which includes Protection relays , control panels and other accessories.Even if there is some slowness in power generation and distribution policies by government in recent times , we all know there is huge scope remaining and it is inevitable in a country like India.I believe , with superior technology ,aggressive marketing strategies and vast experience Schneider having big opportunity in India for their Distribution business going forward.For the nine month ended December 2011  Schneider Electric Infrastructure posted a turnover of Rs.1054 Cr and a net profit of Rs.33Cr .In the latest December quarter alone it  posted a sales of Rs.409 Cr and a net profit of Rs.18 Cr .Margins are not great  at present but it is expecting to improve after the full control  of Schneider in the management .SEIL listed last week and this FV Rs.2 stock is currently trading around Rs.70/- .I feels the major selling happening in these days are from some Institutional share holders. As a matter of policy ,generally some funds/institutions are not interested to hold de-merged pieces and this may be an offloading because of this reason. I strongly believe whenever this supply ends this stock will move to the next level  and may turn as a dark horse in coming years.Risk takers may enter in it @CMP of Rs.69.60/- and hold for long term.With effect from,  April 3, 2012 this will come out of ' T ' group and shifted to 'B' Group.

* Since it is a newly listed stock ,only limited information is available now

* Disc: I have vested interest in SEIL

GRANULES INDIA LTD - BUY

Granules India is  Hyderabad based integrated pharmaceutical outsourcing manufacturer mainly in Active Pharmaceutical Ingredients (API), Pharmaceutical Formulations Intermediates(PFI) and  Finished Dosages (FD ). Company having three API manufacturing facilities located in Bonthapally,and  Jeedimetla  in Andhra Pradesh and Hubei in China.All these three facilities are approved by USFDA and other authorities like WHO ,EDQM..etc. Its API portfolio includes Paracetamol ,Ibuprofen,Metformin HCl,Guaifenesin,Methocarbamo,Oxymetazoline and Phenazopyridine HCl. Granules’ PFI facilities are located at Gagillapur and Jeedimetla both in Andhra Pradesh. Company also have six billion tablect capacity FD plant in Gagillapur. Company having strong outsourcing tie-ups with world pharma majors. Now company is moving gradually to high margin PFI and Fd segment from API .Last year Granules expanded its capacity in both these segments. Company having good R&D and got approvals for two ANDA’s in last year.Outside India, company having marketing presence in US,China,UK and Colombia.After receiving recent FDA approvals and capacity expansion company is expected to perform well going forward.Last FY , Granules posted a turnover of Rs.475 Cr and a net profit of Rs.21 Cr .With the aggressive expansion ,marketing initiatives,and introduction of new products and favorable exchange value ( about 80% of sales coming from exports.) Granules is expected to  post decent growth in coming years.It is one of the good pharma picks from small cap space at CMP of Rs.79/-