SPECIALITY RESTAURANTS LTD - BUY

Speciality Restaurants Ltd , owner of India’s largest Fine Dining restaurant chain listed in stock exchanges today .Due to negative market sentiment and wide criticism of over pricing for the IPO ,retail portion of the issue subscribed only upto 50 % of the offer .But I feel  many analysts and broking houses paid much attention to the pricing side and ignored the other .Company having many positives like a professional management under the leadership of Anjan Chatterjee with vast experience in this field,proven execution skills,rapid expansion ,asset light business model with good cash flow,excellent brand loyalty( Mainland China),low debt ..etc.As mentioned above it may seems fully priced in current market situation based on parameters like P/E ,but I don’t think  stocks of companies with  good growth potential  will come at low P/E at any point of time rather higher P/E will be justified in future with good growth.Hence one with some risk appetite may go for it at CMP of Rs.156/-

Disc : I have vested interest in SRL

KERALA AYURVEDA LTD - TURNAROUND TIME ?

KERALA AYURVEDA Ltd - As  the name suggests it is a Kerala based company operating in Ayurveda based products and services..Company manufacturing  Ayurvedic medicines,running Ayurvedic Hospital and Clinics,operating Ayurveda based wellness centers and Resorts.KAL running an Ayurvedic Hospital at Aluva in Kerala and running more than 30 Ayurvedic clinics . Company selling its products through Ayurvedic Medical shops established in franchise model throughout India.  Recently its ‘ AyurvedaGram ‘  located in Bangalore selected as the  ‘ Wellness services provider company of the year 2011’ by  Frost and Sullivan’ .In 2006.KAL taken over by Katra Group headed by Ramesh Vangal. He is well known  in India as the person who brings  Pepsi  to our country and also his business Interests in Tamilnadu Merchantile bank and Scandant group.Even after the takeover by Vangal ,there is any substantial improvement in Company’s performance so far .In an interview,he explained that the company is in the process of establishing some base and standards and making some re arrangements in its business strategy.Anyway  in recent times company streamlined the operations of its overseas subsidiaries and exited from some non performing assets.The business of Ayurveda having tremendous potential in India and abroad especially at a time there is more and more discussions  about the side effects of Allopathy medicines.In medical tourism segment ayurvedic wellness centers having huge potential .Being a pioneer in all these segments  KAL having very good future if it utilised properly.Vangal is a shrewd business man with great deal making skills and I don’t think he will waste the opportunity available in front.Recently KAL signed an agreement with Banaras Hindu  University to undertake research and development in areas like geriatric care, cancer, anemia, metabolic diseases, diabetes and epidemic prevention, etc. In another important development KAL signed a Memorandum of Understanding with Tata Global Beverages  to explore formation of a joint venture.Purpose of this JV will be to focus on development of a range of beverages and food products based on proven ayurvedic recipes and formulations for the global market.For the latest March quarter company posted sharp improvement on its performance. Turnover  almost doubled and loss reduced substantially .Actually if we exclude a one time expenditure ,company posted a profit of Rs.2 Cr .Considering the history of promoter ,potential of the industry ,lack of other listed companies in this sector and its improving financial performance ,it is surely a company to watch .

CMP is Rs.40/-

LINK to company Website 

NITTA GELATIN INDIA LTD - BACK TO BLACK

Nitta Gelatin( Formerly Kerala Chemicals) is a 46 % subsidiary of Japan based Nitta Glatin Inc.Kerala State Industrial Development Corporation (KSIDC) is the joint promoter with 34% stake .Company is manufacturing Edible and Pharmaceutical grade Gelatine,Ossein,Di Calcium Phospate ..etc.Company along with its subsidiary having three manufacturing facilities in India – Two in Kerala and One in Maharastra.Its products are mainly used in the processing of Confectionery,Diary products ,Beverages and for manufacturing gelatine Capsules.Last year company diversified into value added products like GELIXER COLLAGENPEP , SEEDAID, NUTRIGOLD, MEAT MEAL, CHITOSAN..etc . Due to unprecedented rise in its raw materials  (Crushed Bone and Hydrochloric Acid ) and increased advertisement cost  for  new products, company reported lower profit  in last year .But now it is slowly coming out of red and posted good profit in latest quarter by passing on its increased raw material cost to consumers and successful diversification into value added products..Due to pollution issues chances of substantial  new capacity addition is very low in the country.For the latest quarter ended March 2012, Nitta posted a turnover of  Rs.68.73 Cr v/s Rs.49 Cr and a net profit of Rs.4.57 Cr (excluding other income) v/s a loss of Rs.1.67 Cr .For the full year Consolidated EPS is Rs.5.58/-. If company can exhibit the same performance shown in latest quarter,chances for strong re rating can’t be ruled out for this investor friendly company from current level of Rs.87/-

ADVANTA INDIA - RESULT UPDATE

On a consolidated basis company posted a turnover of Rs.255 Cr v/s Rs.176 Cr and a net Profit of Rs.13 Cr v/s a Loss of Rs.3.45 Cr .EPS is Rs.7.9/  , for March quarter. Recommending to HOLD

HEG LTD - BUY

HEG Ltd  - one of the largest producers of Graphite Electrodes in Asia ,is a member of LNJ Bhilwara Group.Graphite Electrode is using to produce Steel through Electric Arc Furnace Route .Needle Coke is the raw material for producing Graphite Electrode.Company having a manufacturing capacity of  66,000 MT P/A and about 80 % of this is exporting to various countries.Company is supplying about 8 % of total world production of Graphite Electrode.Worldwide 35% of steel is produced through Electric Arc Furnace Route.Its customer list includes include Arcelormittal, Nucor ,Posco, Megasa Evraz,Hyundai Steel ,Tata Steel ..etc It is a  power intensive industry where 5000 unit power is needed to produce one ton of graphite electrode.In such an industry HEG’s 77 MW captive power plant is a big positive. Due to revival in demand and price in recent times , HEG is now increasing its production capacity from 66000 ton to 80000 ton P/A.The demand scenario is improving worldwide and company is expected to benefit a lot going forward.For the December quarter HEG Posted a sales of Rs.418 Cr and a net profit of Rs.25 Cr .Recently company concluded a Buy Back of its own shares at a cost of Rs.67 Cr.In addition to this buy back ,promoters are hiking their stake very aggressively through open market purchases.Considering HEG’s leadership position in this industry and improving prospects of business ,recommending a Buy at CMP Rs.218/- for long term investment.

NITCO - SELL

I have recommended a BUY on NITCO last year @ Rs,62/-. After hitting a high of Rs.71/- ,currently it is trading around Rs.40/-. Due to poor fourth quarter performance , recommending to SELL at CMP and book loss.

EPC INDUSTRIE Ltd - RESULT UPDATE

For the latest March quarter , company posted a turnover of  Rs.39 Cr v/s Rs.20 Cr and a net profit of Rs.2.76 Cr v/s Rs.19 Lakhs .In 2011-12 full year company recorded a sale of Rs.125 Cr v/s Rs.87 Cr and a net profit of Rs.6.66 Cr v/s Rs.1.43 Cr .Today EPC quoted Ex-Rights basis @ Rs.115/- .Recommending to HOLD for long term.