BHAGIRADHA CHEMICALS AND INDUSTRIES - Cheaply Valued

Bhagiradha Chemicals & Industries was incorporated

in 1994 by Mr Koteswara Rao and D Sadasividu ,both

were previously working at Indian Institute of 

Chemical Technology.Company produces high quality

basic pesticides includes Chlorpyrifos Ethyl, 

Chlorpyrifos Methyl,Clodinafop-Propargyl and 

Triclopyr Butoxy Ethyl Ester ..etc. Such pesticides

are used on a wide variety of crops such as cotton,

chilly, rice, sorghun, soyabean, sugarcane, groundnut,

vegetables, and flowers. The company has a 

state-of-the-art R&D center at Hyderabad, 

which employs 30 scientists.It has a contract 

manufacturing agreement with Dow AgroSciences 

for the herbicide Fluroxypyr. Dow AgroSciences  

is the original inventor of Fluroxypyr.

With an increasing trend of MNCs to outsource

molecules that have gone off patent, opportunity 

of Bhagiradha is very large.At the end of last

financial year company started the production

of a new product ‘clodinafop’.Company’s financials

are also improving every year.Last year company

posted a turnover of 104 crore and a net profit

of 9.5 crore which translates into an   EPS 

of Rs.19/- .It also declared a dividend of 30%. 

Bhagiradha is now trading at a price of Rs 70/- 

which is at a P/E multiple of  just 3.5.

Sales growth in recent qtrs are subdued but 

company sources claims that the same will pick up

in near future. Agrochemical companies are started

to re-rated in stock market.So keep an eye on this.

APAR INDUSTRIES - Turn around Story

Apar Industries is a multi-product company established in 1958.Broadly its product line can be classified into two viz, speciality oils and Aluminium conductors. Under the speciality oil division it produces Transformer oil, Industrial oil, Rubber processing oil, liquid paraffin ..etc. Its products are used in sectors like Power, Rubber, Tyre, Ink, Cosmetics, Food, Pharmaceutical, Health Care, Steel, Aluminium, Petrochemical, Plastic, Paper, Sugar, Cement and Automotive.It has two aluminium conductor plants each in Silvassa and Himachal Pradesh.Apar is the largest exporter of aluminium conductors from India under the brand name ‘POWERLINE’. All together ,company is getting almost 75% of its income from power related sectors. Power generation and Rural electrification efforts by government gives tremendous opportunities for the company going forward. Due to unexpected fall in the price of base oil resulted in loss on inventories and lower margins company posted a loss of 3.5 crore(1.7 crore VRS expense)on a sale of 2643 crore in last FY. But now ,Apar Industries made a strong come back with a nine month NP of 69 crore . Company is expected to post an EPS around Rs.30/- in FY2010.This is one of the decent midcap turnaround story of this year .A hold at CMP Rs.198/- and a good buy on dip around 150/-

ABM KNOWLEDGEWARE LTD - opportunities unlimited

Computerization of all government offices and projects will be a reality by not so distant future. So the scope for e-governance is very vast in a country
like India. For a certain extent this sector of
IT may be called as recession proof because the
spending is coming mainly from state and central
government,local bodies and autonomous government
institutions. ABM Knowldgeware is a pioneer in
this field.Company came into this field in 1998
and empanelled as a Turnkey solution provider for
E-governance project by Maharastra Government,in that
year.In 2000, It successfully implemented e-governance
project for various govt institutions like Housing
Department Mantralaya, Municipal Corporation of
Greater Mumbai, Thane Collectorate..etc.In 2003 ,ABM
launched ABM MAINet® in Kalyan Dombivili Municipal
Corporation(KDMC) as the first comprehensive e-governance
solution for Urban Local Bodies in India.In ,2005 company
entered into North India through a major order for complete
automation for Engg Dept of Municipal Corporation
of Delhi. In 2006 ,Govt. of India, Ministry of Urban
Development has short-listed MAINet® for empanelment
for implementation in Municipal Bodies all over India
after detailed process of evaluation of Functionalities
and Product Quality at an all India selection process.
Company also spread it wings beyond India and completed
various projects for some emirates of UAE.During this
period company won a number of prestigious awards from
various agencies.Lastly it won NASSCOM’s ‘Emerging 50 Leaders’
award in 2009.Company’s products include
ABM MAINet®(Municipal Administration Information Network),
ABM CARE® (Software for Grievances Management and Time
bound Redressal), ABM MOIS 2000® and CRM for Power
Distribution Utilities . ABM, in consortium with
HCL Technologies, has successfully implemented SAP HRMS
(Human Resources Management) in KDMC in June 2008.
In 2006 company implemented ABM AQUA® at Municipal
Corporation of Greater Mumbai (MCGM).Earlier in 2006
ABM Knowledgeware along with Siemens Information
systems Ltd (SISL) and SAP have bagged an e-governance
contract worth Rs 40 crore from the Municipal Corporation
of Greater Mumbai (MCGM),which is one of the most
ambitious e-governance projects in India span over 5 years.
Later the company taken over management of some key
large ERP projects from consortium partners and the
cost involved for such a takeover causes for a reduction
in profit in last year,but expected to improve in the
years to come. Moreover, successful execution of such
large projects alone will help the company to pre-qualify
for large projects in future.

Company has posted a turnover
of 40 crore and a net profit of 6 crore in last year .
For the nine month ended Dec .2009 ,it posted 27 crore
turnover and a net profit of Rs.5 crore and expected
to post an EPS of Rs.7/- for the full year.Out of
the 10 crore equity ,promoters are holding around 60%
and another 21% with large share holders .
P.E player Indiaman fund Mauritius which is a sub
account of Warburg bank has taken 3% stake in ABM in December qtr.
Company is also paying dividend for the last 3 years.
In nutshell ABM is a pioneer in a field with huge opportunity
trading at a P/E of just 6 ,can be bought by long
term investors. Possible delay in payments because of
the nature of its customers is  the only major concern.
CMP is around Rs.45/-

JSW ENERGY-A COOL PICK

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/-

ACCENTIA TECHNOLOGIES LTD -Is Every thing OK ???

Sometimes we wonder how some companies are showing mind boggling financial performance when all others from the same sector are struggling and there is bad times even for the peers in the same industry. There is more and more mystery when we study such companies in detail. Common features of such companies are the difficulty of getting touch with the management ,no information about the customers of such companies ,having a wonderful website where there is lot of sensational and exaggerated news about the industry in which company supposed to be operating but nothing about the activities of the company, a posh office in an area with high repute,frequent announcements of take overs of tiny companies with no business and very huge percentage stake of unknown institutions in more than 1% public category..etc. But past experience shows that ,it is better to book profits in such companies in bull markets especially at a time when promoters itself are exiting from it. Otherwise you can hold ,if you are a believer of operator play and not a believer in fundamentals.CMP of Accentia is Rs.307.60 /-

GUJARAT RECLAIM AND RUBBER PRODUCTS LTD.

Companies making products through recycled method catching
attention every time when the price of such products making
new highs. Natural rubber prices are inching ahead and chances
of its prices coming down is very little mainly because of various
reasons like labour shortage,climatic change..etc in Kerala from
where more than 90% of NR is sourced. Latest reports showing
that production is also shrinking in global level too .On the other
hand synthetic rubber prices are also moving up in tandem with
crude prices ,since its raw material is crude derivative.In this
background let us keep an eye on GUJARAT RECLAIM 
AND RUBBER PRODUCTS LTD(GRRP).GRRP is the
largest producer of Reclaimed Rubber in Asia and one of
the top five producer in the world.This company was started
in 1974, making Reclaimed rubber from scraps of tyres,
tread peelings, natural rubber tubes, butyl tubes and
moulded rubber products.This is the first company introduced
surface treated crumb rubber manufacturing facility in India.
It also producing synthetic rubber reclaims such as
Butyl reclaim, Nitrile reclaim, EPDM reclaim, Latex reclaim,
Fluro-elastomer reclaim, etc. Company has captive power
plants which reduces its cost for energy.For the FY 2009
company posted a turnover of Rs.130 crore and NP of Rs 13.5 cr
.On a tiny equity base of Just 1.3 crore EPS was Rs.101/-.
For the nine month ended in FY 2010 company posted
an EPS of Rs.81/-.GRRP already paid a dividend of Rs.17/- in
this financial year and expected to pay even more. Along with
promoter stake of 47 %, persons related with MRF group is
holding substantial stake in this company. Over all, current
situation is very favorable for a company like this and
competition is expected to minimum from new plants going
forward mainly because of enviournmental problems associated
with this industry. Since this counter is illiquid, it is not advisable
for frequent traders. Investors having pure long term mentality
can take minimum exposure at CMP of Rs.730/- which is
trading at a P/E multiple of around 7 for last year EPS.

GOA CARBON - BETTER DAYS AHEAD

Goa Carbon is a Dempo group company and one of the largest manufacturer of Calcined Petroleum Coke (CPC)in India.CPC is mainly used in Aluminium Industry. Company exporting major portion of its production and ‘Pechiney’the French aluminium major(Now part of Alcan Group) is the major customer of it.Due to sharp crash in metal prices worldwide on account of economic recession ,company has some bad quarters.But it returned to profitability in December qtr with an EPS of Rs.10/- in that single qtr.CPC demand is expected to improve further which will help the company in future.Goa carbon is planning to came out with a rights issue to part finance its new project in China .On completion of this project company will be one of the largest player in this region itself. Watch it.CMP is Rs.111/-

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.

MAZDA LTD - ANOTHER VALUE PICK

MAZDA LTD(Formerly Mazda Controls) is promoted by
Sorab R Mody with technical, Marketing and financial
collaboration with US based CROLL-REYNOLDS.This US company
holds about 12% in Mazda. Company has two divisions
viz Engineering division and Food division.Under
the engineering division,company producing
various types of valves,steam jet thermo
compressors,Air jet ejectors,Evaporators
and Air pollution control equipments.Most of
these products finds applications in sectors
like ,refinery, power,petrochemical ,sugar ..etc .
Croll Raynolds using Mazda as a sourcing hub
to meet its international demand which helps
the company a lot and expected to strengthen
this relations going forward.
Company  has another technical
collaboration with Germany based Kauer
Engineering for Turbine Bypass
Valves and Evaporators. Almost all sectors where
companies products are using, are coming out of
recession globally.This situation will certainly help
the company going forward.

Mazda also having a food division
in which company makes products like
Instant powder drink ,fruits jams,squash,
custad powder,baking powder ,food colour ..etc
under the brand name ‘BCOOL’.
Comapany is growing rapidly in this sector and expected
to grow 100% each in next few years even the base
is low at present. Company is now widening its
portfolio by launching Soya sauce, Tomato sauce,
Tomato ketchup and distilled vinegar..etc .
After a critical level achieved we can’t rule out
a de-merger of food division from the company to
unlock value for the share holders.

Even in a difficult situation like
last FY company posted a sale of Rs.80 crore
and a net profit of 9 crore. For the nine month
ended in Dec qtr company posted a sale of Rs.56 crore
and a NP of 7.67 crore. Normally company is making
substantial profit from last qtr.On this basis company
is expected to post an EPS more than Rs.30/-
in FY 2010, which was Rs.22/- in last year.
Company paid a dividend of 20% last year and expected
to pay more this time.Last year promoter actively
purchased shares from the open market which is also a
confidence booster. At CMP of Rs.98/- it is trading
at a P/E of just 3 on the expected full year EPS
which leaves ample scope for appreciation.

YUKEN INDIA - BUY Even at current level

THIS SCRIP ONCE RECOMMENDED ON MARCH 2 ,2010@ Rs.140/-.Even at Current Price of Rs.160,it is an attractive BUY




YIL a Bangalore based company from hydraulic space, promoted by   Yuken Kogyo Company Ltd  Japan in 1976. Its products are well known in the Industry mainly due to its quality standards. YIL’s product line includes various type of pumps,valves and controllers. Demand of hydraulic products are highly correlated with the over all industrial growth of the economy and it is highly sensitive. Due to sluggish growth in last year company could manage just 1 crore profit in March 2009 full year which converted into an EPS of Rs.3.3 on its small equity of  3 crore. But things changed rapidly with the growth of economy in this year and YIL posted an EPS of Rs.Rs.12/- for the nine month itself which is a four fold rise even  from last full year. Interesting fact is that the peek time of demand for the product of YIL is last quarter and traditionally company posting  major profit from fourth qtr  itself. Considering this fact , YIL is expected to post an EPS close to  Rs.20/- for the full year compared with RS.3/- last year. A clean and share holder friendly management  makes it a riskless buy even at Rs.140/-(now @160/-)

ADANI POWER - GOOD FOR LONG TERM INVESTORS.

Adani Group is a conglomerate having varied 

interest in the field of Coal Mining,Coal

Trading,Shipping,Power generation ,Power 

trading,Power transmission…etc.

Adani Power Ltd(APL)is a company under this 

fold which is developing operate and maintain

power projects in India. APL has four power 

projects under various stages of 

implementation with a total capacity of 6600 MW

.It is expected to complete 9900 MW by

2013 and 20000 by 2020.It is currently 

operating with a capacity of 330 MW 

(Mundra unit -1).Recent IPO proceeds 

are using to fund projects like Thiroda,

Mundra Phase 4,Dahej and Kawai.There is lot of 

companies came out with public issues from

power generation sector recently but

APL has some uniqueness .First of all , Most 

of the capacity is expected to come up in the

Western region, which now has an energy deficit of

16 per cent and peak deficit of 19 per cent.

Secondly, the Adani group has  dedicated transmission

lines to evacuate power, the opportunity for higher

realisations from merchant power agreements and tax

benefits due to its SEZ status.Thirdly,APL can easily

access fuel for power (mainly coal) due to its 

parent’s vertical integration.Again,the company 

already signed Power Purchase Agreement for its Mundra

and Thiroda projects.Even the execution risk is there,

considering the above facts and strength of the group ,

it is one of the best play from the power sector.

Currently it is quoting around Rs.114/-

KLRF - BACK TO BLACK

KLRF( Formerly Kovilpatti Lakshmi Roller Flour Mill) is known for its ‘KUTHUVILAKKU’ brand wheat flour in South India.Company has three divisions – Food Products ,Textiles and Engineering. Half of the turnover is coming from its food division .Its textile division is making cotton yarn and engineering division is making foundry and sheet metal products along with machinery for flour Industry .Due to sluggish demand for the products of its Textile and Engineering division ,company posted a loss in last financial year.Now company has taken various initiatives for modernization and expansion of its all divisions with a capital outlay of 6.5 crore. It also offered VRS from all these three divisions .Company’s efforts are showing good results and it came back to black in last two qtrs. Company is expected to turnaround in this FY . But the industry in which KLRF is operating is enjoying lower P/E in stock market. So it is a BUY only for low risk low profit seekers expecting dividend each years.CMP is around Rs.23/-

SIKA INTERPLANT SYSTEMS-A NICHE PLAY IN AERONAUTICS SECTOR.

Sika Interplant System is one of the few listed players in Aeronautics and defense arena .Government's move to bring more privatization in these sectors will improve the prospects of companies like Sika Interplant. This Company is primarily engaged in the business of manufacturing and rendering of services in engineering products, projects and designs for aeronautics and marine sectors. Company’s niche product and service portfolio is really a good point to note. With the growing Indian market in Aerospace and Defence, India is seen as one of the target business markets for the international Aerospace and Defence industry. In this scenario international Aerospace and defence companies want to gain a competitive edge by outsourcing jobs to Indian industry and also provide Indian customers with MRO support in India. Sika’s wide network and  good relations with international Aerospace and defence companies is an  added advantage for this potential business. SIKA would be able to capitalise on these opportunities. It has two subsidiaries Nfotec Digital Engineering and Micronel .Both are operating in related fields. Now SIKA is going for upgradation and expansion of its facilities at Bangalore for Design, Supply, certification and MRO(maintenance, repair and overhaul) for Aerospace and Defence. Financial closure of this project is already completed.Even though the current business is small in size Over next 5-10 years, there would be at least 500 aircrafts and 1,000 helicopters flying in the country ,this will brighten the prospects of a niche company like SIKA Interplant. Sika has obtained Industrial License for Government of India for Defence Production. Leading Multi National Companies have also approved SIKA for Aerospace a Defence production and MRO.

SIKA has an equity base of 4.2 crore and more than 75% of this is held by the promoters itself ,which makes it a low liquid counter. Last year company posted an EPS of Rs.6 and declared a dividend of 6%.Even if the performance in the nine month period of this FY is not encouraging ,Company’s dedicated efforts for expansion and upgradation of its Bangalore facility and ongoing developments in aeronautics and defense sector will bring more business forward.This is a niche unknown company and most of the investors are not familiar with its activities. When this story unfold and if things are moving as per the expectations of the management,this will be a multi bagger even from current level. CMP Rs.69
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INVESTORS ARE REQUESTED TO MAKE A DETAILED STUDY ABOUT THIS COMPANY ,SINCE IT IS A NICHE ,UNIQUE AND UNKNOWN PLAYER AND IN AN INDUSTRY WITH HUGE POTENTIAL IN FUTURE.

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KAVERI TELECOM -- ??????????

Some promoters are very smart to make money not from the business of their company but by playing on their own scrips in stock market.If they want to rig the prices up they will show excellent results for few quarters , after selling the cornered shares through various entities at higher prices they will show pathetic result to bring back the share price to bottom level to collect the same again and the play will go on like this. One speciality of such companies are, they will not pay or pay very little dividend even if company’s reported profit is very high. In most of such cases company will declare very low dividend but it never send dividend warrants unless the share holders sending complaints to SEBI or so. Take utmost care before investing in such mid cap companies where profit is very high and promoter holding is very less and flooding the street with announcements on daily basis.Price rigging may happen periodically and share price may touch even higher level but retail investors will be the looser in these kind stocks.Current price is Rs.80

APCOTEX INDUSTRIES

Apcotex Industries(AI ) is a group company of  Asian Paint  headed by Mr.Atul Choksi ,the former MD of Asian Paints Ltd.It was started in 1980 as a unit of Asian Paints and later de-merged into a separate company in 1991.AI is one of the largest manufacturer of synthetic rubber and allied products in India .Its products list also  includes Vinyl Pyridine  Latex, SB latex, Nitrile latex..etc. Company’s plant is located at Taloja near Mumbai. Its products finding applications in industries like Paper and Paper board, Tyre Cord dipping, Paints ,Gasket, Construction, Footwear, Automotive Components…etc. Company’s main raw material is petrochemicals and prices of the same is related with crude prices. Since the industries consuming its products are booming ,company can easily pass on the price rise of its raw materials to its customers to a certain extend.On the other side Natural Rubber prices are ruling at higher levels and expected to rule firm in future. In this scenario ,to a certain extend consumers of natural rubber are  shifting to  synthetic rubber as an alternative. This situation is very helpful for a company like Apcotex.

                    For the nine months ended in December 2009 ,company posted an EPS of Rs.12/- as against last full year EPS of Rs.8/-.Company also declared a buy back of shares from open market. AI is very liberal in its dividend policy and giving dividend in every year, last year it paid 40% on Rs.10 FV shares..At CMP of Rs.112 ,not much risk left in this counter.

ARIES AGRO - For a Fertile Portfolio

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 Boidegradable 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. Company’s share price improved sharply in recent days and now quoting around Rs.108/- .This is expected to consolidate around Rs.100/- level which may take as an entry point in an emerging star from the agri-related space.

ORIENTAL CARBON AND CHEMICALS

Oriental carbon and chemicals is a Duncan Goenka group company headquartered at Kolkatta .It is one of the largest producer of Insoluble sulfur in India with the brand name Diamond Sulf. Insoluble sulfur is mainly used in automotive tyre industry .It also used in industries such as conveyer and transmission belts, hoses and other rubber products that require green tack and adhesion, extended compound storage and prevention of premature vulcanization.It also produces sulfuric acid as a bi-product.OCCL recently increased the production capacity of Insoluble sulfur by 15% by adding some balancing equipments in their existing plants.Company is also planning to start a new plant in Mundra SEZ.Most of the consumers of the company showing growth momentum which will help OCCL to perform better in near future. Company has posted a net profit of 20 crore in nine month period of this FY as against a profit of 8 crore in last full year ,and expected to post a full year EPS close to Rs.25/-.OCCL already declared two interim dividends so far in this year. At CMP of Rs.93/- company is trading at a P/E of below 4 on expected full year EPS ,which looks very cheap

MEDICAMEN BIOTECH - Small is Beautiful

Medicamen Biotech is a pharma company having two units located at Bhiwandi in Rajastan and Haridwar in Uttarakhand. Medicamens main strength is in antibiotic and anti bacterial segment.It manufactures and exports tablets, Capsules, Liquid Syrup and Dry Syrup for various applications.Its manufacturing units are approved by overseas authorities like National Drug Authorities- Kampala, Uganda,Food & Drug Board, Ghana. ,. Ministry of Health (NAFDAC), Nigeria,. Ministry of Health, Zimbabwe,. Brazilian Sanitary Vigilance Agency, Brazil,. Board of Drugs & Medical Appliances, Ministry of Health, Republic of Yemen,.Tanzania Food & Drugs Authority- Tanzania ,.Pharmacy, Medicines & Poison Board- Malawi,.Ministry of Health- Ivory Coast ,.Bureau of Food & Drugs- Philippines ,Cosmetics, Devices & Drugs Authority- Srilanka ,.Drugs Administration of Veitnam- Veitnam ,.Pharmacy & Posion Board- Zambia ..etc. Its concentration in less developed countries gives immense scope for growth. Company’s decision to moving into retail segment is started to paying off . For the nine month ended company posted a sale of 74 crore and NP of Rs.3 crore which is higher than the last fullyear sales figure of 86 crore sale and NP of 1.3 crore .Medicamen is expected to cross 100 crore sales in full year .On an equity base of 7.7 crore, company can post an EPS about Rs.6/- . At current market of Rs.25/- there is not much risk in this counter especially at a time promoters are acquiring shares from open market.

INFOTREK SYSCOM LTD - Will E- Waste Change its fortune ?

Everybody knows that E-Waste recycling is a sunrise industry and the potential of same in a growing country like India is very vast. But unfortunately we have not much options to invest in companies from this industry. There is not any pure play having significant business from this sector is listed so far. Infotreck Syscom (Formerly Sony Corporation) is the only listed company having at least some plans to develop this business in near future. One of its subsidiary Eco Recycling limited is claiming a peer position in e-waste recycling in India ,even though the depth of their business is not known so far. Tomorrow ( on 10/03/2010) the board of Infotrek is going to meet  to consider and approve the Draft Scheme of Amalgamation of a Company's subsidiary -. Eco Recycling Ltd. with itself. It is very difficult to predict the future of this company, mainly because of the track record of its promoters. But there is no doubt that if they succeed in this venture this will attract huge market fancy and may get even  three digit P/E valuation.  Promoters actively bought  shares from the open market from May 2009 to December 2009 , which remains as a silver lining. High risk takers with sufficient patience may try their luck.Currently it is quoting at Rs.25/-

KIRLOSKAR PNEUMATIC - A STRONG BET

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Kirloskar Pneumatic is a Pune based company established in  1958. It has mainly three divisions  viz Air and Gas compressor, Air-conditioning and Refrigeration compressors  and hydraulic power transmission. It is one of India’s largest company in these related combined segments. It has four manufacturing units ,three in Maharastra and one in Haryana.Its products find applications in almost all core sectors like  Power,Refinery,Steel,Automobile ,Petrochemical ,thermal , Mining ..Etc.This clearly means company’s prospects are directly related with the overall revival in the world  economy which is happening now. Company is posting excellent growth even in tough times and expected to continue this trend going forward. Governments new thrust on renewable energy sector is also helping the company a lot ,since it is one of the largest producers of wind mill gearboxes in the range of 1 to 1.6 MW category. 

                                                                KPCL is expected to become a 1000 crore company by next year .Compared with the size of the company, its equity base is very small (12.8 crore ) and book value of above 125 make it a possible bonus candidate in future.Promoter are holding above 55% of the equity and company posted an EPS of Rs.32/- for the last full year and paid a dividend of 75%.

In nutshell it is a strong company which can be include even in a conservative portfolio.CMP Rs.402

MAKERS LAB

Makers Laboratories Ltd( Bse Code -506919) is a small pharma company promoted by the same promoters of IPCA Laboratories ltd.Company’s performance is improving after the disposal of its loss making unit at Palghar and efforts taken by improving the the sales of generic formulations. For a management like IPCA there is not much difficulty to revive this company, only their willingness is the moot point. Their recent efforts are positive indications towards this company .Makers Lab is expected to post an EPS of Rs.5/- for the full year .At current market price of Rs.35/- there is nothing to loose but IPCA fold and their new initiatives giving some confidence of better days ahead.

CHOLAMANDALAM DBS FINANCE-Returning to Past Glory

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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 with the strong support  of its foreign equity partner DBS Bank of Singapore. 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 ,good support from the foreign partner 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. Buy @ CMP Rs.82.

NILE LTD - Aftermath of Takeover Attempt.

NILE is a Hyderabad based multi division company.It is in the field of Glass lined equipments,Pressure vessels and lead and lead alloys. In glass lined equipments sector company is competing with GMM Pfaudler and recently escaped from a hostile takeover attempt by GMM. Major chemical and pharma companies including Cydus,Cipla,Aarti,Atul ..etc are company’s customers in this segment. Now company is paying much attention to lead and lead alloy segment and commissioned a new plant at Thirupathi in last qtr. NILE is making lead through recycling method and Amar Raja Battery is the major customer of NILE in this segment. Now company is going to start commercial production in its new lead plant in Republic of Georgia which is a joint venture with a local company.

                                                     It has an equity capital of just 3 crore and promoters are holding 46 %. Recently main promoter is actively buying from open market to increase his stake. Due to sharp crash in lead prices company has posted a loss of 2.2 crore in FY 08-09,where it posted 6.5 crore profit in 07-08.Now lead prices improved sharply and due to this company posted an EPS of Rs.10/- in December qtr. Adding the small loss posted in first qtr company posted 9 month EPS of 14.47 and expected to continue good performance in last qtr too .Considering the company’s recent capacity addition and improvement in the price of it products due to the recovery in global economy, it is expected to post excellent results ahead and post an EPS around Rs.25/- for the full year .
                                                          Recently, in a verdict to settle the legal dispute between GMM Pfaudler, Andra Pradesh high court directed GMM to sell all the acquired shares of NILE (as part of its takeover attempt) in open market within a period of 48 months. Watching the counter of NILE, it is evident that someone is trying to keep the share price at lower level. This may be an attempt by the management of NILE to buy the shares at lower level when GMM started selling in the market Keep an eye on the bulk deal data and quarterly share holding pattern to enter into the scrip at appropriate time.Currently it is quoting  around Rs.115/-

SUMEDHA FISCAL SERVICES -WORTH WATCHING

Recommending a  small stock from the financial service sector is always associated with high risk, because of the nature of this business.But Kolkata based Sumedha Fiscal Services deserves a close look.This small but growing company is in various financial services like Stock broking,Commodity Broking,Depository Services,Equity Placement,Financial re-structuring,Merchant Banking,Debt syndication, and Marketing of various financial products.This company has an equity base of 6.7 crore with almost 53% promoter holding and posted an EPS of Rs.5.25 for the 9 month Period of this fiscal.It also paid dividend for that last 3 years .Promoters buying from open market is giving more comfort. Now it is quoting at  just Rs.24/- No need to rush into it.But keep a close watch.

Yuken India Ltd - A Quality Pick

YIL a Bangalore based company from hydraulic space, promoted by   Yuken Kogyo Company Ltd  Japan in 1976. Its products are well known in the Industry mainly due to its quality standards. YIL’s product line includes various type of pumps,valves and controllers. Demand of hydraulic products are highly correlated with the over all industrial growth of the economy and it is highly sensitive. Due to sluggish growth in last year company could manage just 1 crore profit in March 2009 full year which converted into an EPS of Rs.3.3 on its small equity of  3 crore. But things changed rapidly with the growth of economy in this year and YIL posted an EPS of Rs.Rs.12/- for the nine month itself which is a four fold rise even  from last full year. Interesting fact is that the peek time of demand for the product of YIL is last quarter and traditionally company posting  major profit from fourth qtr  itself. Considering this fact , YIL is expected to post an EPS close to  Rs.20/- for the full year compared with RS.3/- last year. A clean and share holder friendly management  makes it a riskless buy even at Rs.140/-

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.

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/-

AVOID -COMPACT DISC

Some companies are paying much attention to their advertisement rather than their business. They are spending lot of money for multicolour advertisement in financial dailies and business channels .Various announcements regarding the commencement of projects and filing of it on a daily basis to stock exchanges are their hobby. But normally there is no announcement about the completion of such projects. They are ready to spend lot of money for this type of advertisement activities but do not pay even Rs.1/- for its share holders as dividend or do not spend anything for buyback of shares .Only motive is to attract the attention of investors and rig the share prices inorder to raise further fund or to exit from the company.They may even announce dividends but do not pay it.After the case of Satyam computer, investors are more vigilant about such companies and their share prices are normally in single digit P/E even they are showing EPS like Rs,30.40,or 50. Retail investors having low risk appetite should exit from such counters even if they are showing growth in financial front.Check the history of promoter group and the trend in their shareholding pattern before investing in over advertising companies.