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Hemant K. Gupta
Centre for Development Of
financial Treasure
212, Ravi Indl. Estate., Off. Mahakali Road,
Andheri (E), Mumbai - 400093
Tel . 022 - 26873540, Fax - 022 - 26873344
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Markets are lacklustre due to
various domestic and global concerns. Investors had
lost huge amounts and are adopting cautious approach.
Under normal circumstances, when any company reports
bumper results, share price zooms. However, for Q1,
many companies have reported wonder results and still,
their share prices are languishing due to fear psychosis.
However, if, investors with patience of 2-6 months muster
up the guts to buy such scrips, they may stand to gain
significantly. Giving hereunder few ideas:
1) Orient Abrasives (Rs. 29, Re. 1/- F.V.):
----------------------------------------------------------
Q U A R T E R E N D E D Y E A R E N D E D
30.06.08 30.06.07 31.03.08
cr. cr. cr.
Sales 78.46--54.34--229.00
PAT 11.30--3.29--19.48
Equity 5.98--5.98--5.98
OAL is the manufacturer of grains for abrasive industry.
Company enjoys dominant share in India, and has customers
like Grindwell Norton. Company has investor friendly
track record as it had issued 1:1 bonus last year. For
year ended 31/03/08, it had achieved PAT of 19.48 crs.
with EPS of 3.26. Recently, company had commissioned
9MW Power Plant. Product is power intensive and captive
power has led to significant savings. As a result, company
will report all time high results in current year. For
Q1, its sales stands at 78.46 crs. (54.34 crs.) and
PAT has flared by 244% to 11.30 crs. (3.29 crs.). Q1
alone EPS is 1.90. Due to expensive imports from China,
company has been successful in raising its product prices
which has led to such marvellous performance. It may
report EPS of 7.20 for 08-09. Stock is trading at 4.00
x FY09E EPS which is extremely low for a company which
is leading player in the Ind. Our price target Rs. 48/-
in 3-6 months.
2) Nagpur Power (Rs. 66/-):
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Q U A R T E R E N D E D
30.06.08 30.06.07
cr. cr.
Sales 16.32--1.76
PAT 12.57--0.30
Equity 13.10--13.10
This Nagpur based company is engaged in the manufacture
of Ferro Manganese, prices of which are ruling all time
high. For Q1, company has reported bumper results as
its sales have gone upto 16.32 crs. as against 1.76
crs. in corresponding quarter of previous year. PAT
stands at 12.57 crs. (30 lakhs). Q1 alone EPS is 9.60.
Company may report EPS of 23-24 for 08-09. Stock is
trading at 2.87 x FY09E EPS. Prices of its product are
likely to remain firm for next 3 quarters atleast. Moreover,
it is reliably learnt that company has huge surplus
land. Investors can expect minimum 50% appreciation
in 6-9 months.
3) Aarti Industries (Rs. 46/-, Rs. 5/- F.V.):
-----------------------------------------------------------
Q U A R T E R E N D E D Y E A R E N D E D
30.06.08 30.06.07 31.03.08
cr. cr. cr.
Net Sales 378.00--194.00--939.00
PAT 33.23--5.22--36.68
Equity 36.40--36.40--36.40
AIL is one of the biggest chemical companies in India.
Its main products are:
PNCB
ONCB
DNCB
ODCB
Chloro Phenols
Agro Chemicals.
Fluoro Compounds.
API/Speciality Chemicals.
Nitro Benzeme.
End users for its products are:
Speciality Chemicals.
Agro Chemical Intermediates.
Pharma & Pharma Intermediates.
Dyestuff & Dyestuff Intermediates.
Pigment Intermediates.
For Year Ended March 08, company had achieved PAT of
36.68 crs. on 939 crs. sales. In last few months, imports
of above products from China have come down heavily
with negligible imports. Reason is that, firstly, production
cost in China have gone up. Secondly, China Govt. has
tightened its pollution control norms which has led
to closure of 100s of such factories in China. This
development enabled Aarti to achieve higher volume sales
and raise its product prices significantly. Impact of
same is visible in Q1 wherein, its sales have almost
doubled to 378 crs. and PAT has pole vaulted by 540%
to 33.23 crs. Q1 alone EPS is 4.56. For 08-09, company
is likely to achieve all time high sales of 1500 crs.
with PAT of 120 crs. which will give EPS of 16.50. Stock
is trading at just 2.79 x FY09 EPS. Considering big
size of the company, scrip is available dirt cheap by
now with target of 60% appreciation in less than 6 months.
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