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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 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.
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(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.
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)isRanade 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 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 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.
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/-
