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Shreyas Shipping & Logistics - PYT.com

Deven Choksey, KR Choksey Securities

Shreyas Shipping & Logistics is at an inflexion point and transforming itself from shipping to logistics company. We feel the valuations from this level are scalable once its capex in the area of setting up logistic parks are commissioned. We thus opine Strong buy on the scrip. Shreyas Shipping, promoted by Late R. Sivaswamy
and family, is the only container feeder service provider in the country with 7 vessels having total capacity of 4575 TEUs (Twenty Feet Equivalent). The company plans to spend about Rs 350 crore in next 18-24 months in vessel acquisition (Rs 250 crore) and in setting up of logistic parks (Rs 100 crore). The company has set up
Warehousing and logistics facilities at Kandla and an enclosed storage & handling facility at Ahmedabad. It is in the process of setting up similar facilities in North, South and Central India.

These logistic parks will enable it to create a synergy of its existing expertise to land transportation. The Company plans to aggressively expand its multimodal logistics operations which includes, among other things, aggregation, consolidation and segregation of cargo and value addition. This will enable the Company to provide end-to-end solutions to all its clients. More over it would also shield the company's revenue and bottom line from
any slump in the freight rates. We believe the company is at an inflexion point and transforming itself from shipping to logistics company. We feel the valuations from this level are scalable once its capex in the area of setting up logistic parks are commissioned. We thus opine Strong buy on the scrip. Financials and Valuation At
CMP of Rs 156, Shreyas is currently quoting at a PER multiple of 7.8x its Sept'05 ttm earnings. On the basis of EV to Sales and EV to Ebidta basis, the company is quoting at 2.8x and 6.7x its Sept'05 ttm results. On the forward basis, the stock is quoting at an attractive valuation of PER of just 7.1x its FY06 EPS of Rs 21.8.

Courtesy : Sarvar

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Software : It is Fast Growing!

Software: It is fast growing!

Well, the quarterly ritual has come and gone, well almost! Software majors have announced their December quarter results amidst much hype and expectations. To put it in perspective, the performance has been impressive. The offshoring momentum continues unabated. But the stockmarket, as usual seems to have mixed views!

The 'Top 4' software companies continue to recruit in thousands, with TCS adding over 6,000 employees this quarter alone. The other 3 companies also saw a healthy addition, with TCS now having nearly 60,000 people on its rolls, Wipro over 50,000 and Infosys just under 50,000. Satyam also had nearly 25,000 employees on its rolls at the end of December 2005. Therefore, these numbers suggest that companies have a strong order pipeline in hand.

In terms of operating metrics, topline growth was fairly robust, both on a sequential as well as on a year-on-year basis. Margins saw an impressive expansion as well, as these players start to effectively leverage on their sales and marketing costs incurred in previous years. However, due to forex losses that adversely affected the other income component, the profit growth at the net level was not quite in sync with that seen at the operating levels, albeit healthy.

Indian IT: 3QFY06 performance…*

(Rs m)	2QFY06	3QFY06	Change
Net sales	88,944	98,270	10.5%
Expenditure	64,383	70,205	9.0%
Operating profit (EBDITA)	24,561	28,065	14.3%
Operating profit margin (%)	27.6%	28.6%
Other income	1,341	259	-80.7%
Depreciation	2,648	2,874	8.5%
Interest	10	45	354.7%
Profit before tax	23,244	25,405	9.3%
Tax	3,171	3,419	7.8%
Profit after tax/(loss)	20,073	21,986	9.5%
Extraordinary items	(10)	-
Minority interest	102	114
Profit/(loss) in earnings of affiliates	66	69
Net profit **	20,027	21,941	9.6%
Net profit margin (%)	22.5%	22.3%

* The above numbers include the results of Infosys, Satyam, TCS and Wipro.
** Excluding an extraordinary item of sale of stake in associate company by Satyam.

What has driven growth in 3QFY06?
Volumes continue to enthuse: This quarter saw a decent volume growth for all the major software companies. Wipro was by far, the best among the lot, posting double-digit volume growth for both onsite as well as offshore volumes. The fact that volume growth has been the main driver of topline growth for the past few quarters is a clear indication of the fact that the offshoring story continues to gather momentum.

This quarter however, also saw the rupee being fairly volatile against the dollar. Depreciation of the rupee early in the quarter led to topline benefits. Billing rates were flat, with companies like Wipro actually witnessing a decline. Going forward, these companies have said that they do not see too much action on this front. New clients have been coming in at 3% to 4% higher rates, and a few contracts are also coming up for re-negotiation. Better billing rates could also come from an increase in higher-end businesses like package implementation and consulting in the total business mix.

An interesting trend seen has been the slow but sure winning of larger-sized deals by Indian companies. We had the ABN Amro deal and then the DSG deal of US$ 330 m won by HCL Technologies, the largest-ever IT services deal won by any Indian software company. In such deals, which are by definition competitive, rates could be below the average rates, which would impact the margins to some extent. But winning these deals is an absolute necessity in order to sustain growth rates between 25% and 30%. Therefore, it is a sort of toss-up between growth and profitability.

Strong margin expansion: This quarter saw the 'Top 4' software companies witness a near-100 basis points margin expansion collectively. This was possible mainly due to impressive cost control as well as leverage on selling, general and administrative (SG&A) expenses by these companies. As regards a company-specific scenario, Infosys saw an impressive 200 basis points expansion, while Satyam also witnessed a near-100 basis points improvement. Wipro witnessed a strong 145 basis points expansion, despite a hike in salaries of its offshore staff. This was due to productivity improvements and cost rationalisation carried out. TCS, however, saw a marginal 11 basis points contraction in margins.

Good bottomline performance: The performance of these companies at the net level has also been enthusing, with net profits showing a decent 9.5% sequential growth. It must be said here that the bottomline did not grow at quite the same pace as the operating profits. This was mainly due to the considerably lower other income component reported.

What to expect?
At current valuations, these companies appear to be fairly valued from a medium-term perspective. But we firmly believe that, as a long-term investor, there is a lot of steam left in these companies. There is strong visibility for the top-tier companies over the next 2 to 3 years. At a recent analysts' conference organised by Wipro, the company said that NASSCOM's target for software and BPO exports is US$ 60 bn by 2010. From the FY05 levels of US$ 17.2 bn, this represents a compounded annual growth rate (CAGR) of over 28%.

While the macro-fundamentals are good, of course, one must always take into account the risks that these companies face. These include rupee appreciation, MNC competition, the emergence of other cost-competitive nations for offshoring, wage inflation and employee attrition. In the last five years, many software companies have faltered and even the likes of Infosys have had employee-related problems. So, choose your pick!

Sharekhan Report - Investor's Eye

Transport Corporation of India
Cluster: Cannonball
Recommendation: Buy
Price target: Rs420
Current market price: Rs362

Price target revised to Rs420

Result highlights

• Transport Corporation of India Ltd's (TCIL) Q3FY2006 pre-exceptional net profit of Rs3.6 crore is in line with our expectation. The performance was primarily driven by the performance of TCIL's transport division, which contributed around 60% to the total revenues.
• The net sales for the quarter stood at Rs224 crore, registering a growth of 15.6%.
• The operating profit margins (OPMs) for the quarter improved by 10 basis points, and consequently the operating profit for the quarter was up 16%.
• The earnings before interest and tax (EBIT) margins of the transport division improved by an impressive 90 basis points. However, the EBIT margins for the express cargo division declined by 130 basis points.
• During the quarter TCIL made a gain of Rs2.11 crore on the sale of its long-term investments. We have treated this as extraordinary other income and accounted for it below the line.
• The pre-exceptional net profit stands at Rs3.6 crore, up 15%, and the reported net profit stands at Rs5.2 crore, up 68%.
  

Aditya Birla Nuvo
Cluster: Apple Green
Recommendation: Buy
Price target: Rs1,031
Current market price: Rs716

Good results

Result highlights

• The consolidated revenues of Aditya Birla Nuvo (ABN) grew sharply by 41.5% year on year (yoy) to Rs1,150.2 crore. The growth was driven by the increase in the revenues of the businesses of garments (up 31.5% yoy), carbon black (up 25.5% yoy), textiles (up 18.0% yoy), insurance (up 37.3% yoy) and telecom (up 24.2% yoy).
• The contribution of the high-growth businesses—garments, insurance, business process outsourcing (BPO), software and telecom—to the total revenues improved to 60.5% in Q3FY2006 from 52.2% in Q3FY2005.
• The margins in all the businesses except that of rayon improved sharply yoy: garments (up 500 basis points), BPO (up 1,410 basis points), insulators (up 990 basis points), textiles (up 430 basis points yoy) and telecom (up 290 basis points).
• Telecom business was the pick of the performers—with the revenues growing by 24.2% yoy, the PBIT rising by 43.3% yoy and the PBIT margins expanding by 290 basis points yoy to 21.9%.
• Driven by the strong performance of all the business segments (except rayon), the company's operating profit margin (OPM) expanded by 410 basis points to 12.1% and its net profit grew by 481.9% yoy to Rs32.9 crore.
• Based on the sum-of-parts valuation of the merged entity, we estimate the fair value of ABN at Rs1,031 per share. The stock is available at a 44% discount to its fair value and we maintain a Buy recommendation on ABN with a 12-month price target of Rs1,031.
  

Omax Auto
Cluster: Apple Green
Recommendation: Buy
Price target: Rs178
Current market price: Rs143

Profit margins below expectations

Result highlights

• Omax Auto's Q3FY2006 net sales grew by 16% year on year (yoy) to Rs164.7 crore. For the 9MFY2006 the sales have registered a growth of 18% to Rs459.0 crore. Export sales for the nine-month period touched Rs19.0 crore as compared to Rs10.0 crore in the corresponding period of FY2005.
• The operating profits for the quarter declined by 4.7% yoy to Rs12.1 crore. This was on the back of a 160-basis-point decline in the operating margins to 7.4%, which were affected by higher other expenses and staff costs that negated the savings on the raw material costs.
• The net profits declined by 7.1% yoy to Rs5.0 crore, as there was a higher interest charge of Rs2.3 crore, but was somewhat aided by a lower effective tax rate of 35.1%.
• We are downgrading the earnings for FY2006E by 13% at Rs9.6 and for FY2007E by 2% at Rs13.9.
• At the current market price of Rs143, the stock trades at 11.1x its FY2007E earnings. We maintain our Buy on the stock with a price target of Rs178.
  

Alok Textile Industries
Cluster: Emerging Star
Recommendation: Buy
Price target: Rs120
Current market price: Rs72

Consolidating its position

Result highlights

• The net sales of Alok Industries (Alok) for the quarter were up by 10.7% year on year (yoy) to Rs366.4 crore from Rs330.9 crore in Q3FY2005 on the back of a 61.4% year-on-year (y-o-y) jump in its home textile sales. The home textile sales grew from Rs46.5 crore in Q3FY2005 to Rs75 crore during the quarter.
• The operating profit for the quarter was up 31.8% yoy to Rs81.0 crore as against Rs61.5 crore in Q3FY2005 on the back of a 352-basis-point jump in its operating profit margin (OPM). The OPM increased from 18.6% in Q3FY2005 to 22.1% in Q3FY2006.
• Depreciation for the quarter was up by 38.6% yoy to Rs19.8 crore in Q3FY2006 from Rs14.3 crore in Q3FY2005. The interest cost for the quarter stood at Rs18.1 crore as against Rs15.8 crore in Q3FY2005, a jump of 14.2%.
• The profits before tax (PBT) during the quarter were up by 16.8% yoy to Rs40.4 crore as against Rs34.6 crore in Q3FY2005. The net profits jumped by 18.6% yoy to Rs29.5 crore in Q3FY2006 from Rs24.9 crore in Q3FY2005.
  

Sun Pharmaceutical Industries
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs810
Current market price: Rs725

Price target revised to Rs810

Result highlights

• Sun Pharma's net sales on a consolidated basis were up 37.1% year on year (yoy) from Rs309.9 crore in Q3FY2005 to Rs424.7 crore in Q3FY2006 due to a good performance in the domestic and international formulations business.
• The operating margins saw a decline in the quarter due to a change in classification of the revenues. The operating profit saw an increase of 24% yoy to Rs138 crore.
• The net profit in the quarter stood at Rs146.4 crore as against Rs106.9 crore in Q3FY2005, a rise of 36.9% yoy. The net profit was boosted by the interest income obtained from the foreign currency convertible bond (FCCB) proceeds. The net profit margins were maintained at 34.5%.
• At the current market price of Rs725, the stock is trading at 18x its FY2008 earnings estimate. We are revising our estimates for FY2006 and FY2007 upwards and maintain our Buy recommendation on Sun Pharma with a revised price target of Rs810.

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Sharekhan Stock Idea - Nelco

Nelco
Cluster: Vulture's Pick
Recommendation: Buy
Price target: Rs216
Current market price: Rs144

In the army now

Key points

Defence orders: Nelco is benefiting immensely from its past initiatives to focus on the niche market of security and surveillance systems for the defence forces. Given its alliances/tie-ups with leading global majors, the company has been able to establish itself as a reliable supplier of superior technology products. On the demand side, the government has considerably enhanced its spending on electronic communication warfare systems and is encouraging private participation. Consequently, the strategic electronic business of Nelco is poised to grow at a compounded annual growth rate (CAGR) of 40% over the next three years.

Robust industrial demand: In the light of the increased investments by the key user industries, such as steel, cement and utilities, the company is witnessing a robust growth in its other businesses of SCADA and power drive systems. It has built a robust order pipeline, which has improved the growth visibility of these businesses significantly. Another key business division of VSAT-based network systems is also growing at a steady rate.

Margins to firm up: The margins have improved significantly in the last fiscal to double-digit levels. The operating profit margin (OPM; excluding the real estate inflow) is likely to improve further and stabilise around 20-22% on the back of a higher contribution from the high-margin defence orders and service business.

Realty gains: It will further unlock the value in its real estate business by developing 50,000 square feet (sq. ft.) of saleable area in each of the next three years. We estimate the fair value of the cash flows from the real estate business at Rs10 per share.

Attractive valuations: At the current market price of Rs144, the stock trades at a discount of 9.9x its FY2007 estimated earnings. We initiate coverage on Nelco with a Buy recommendation and a 12-month price target of Rs216.

GVK Power and Infrastructure- IPO

Giant offer price

GVK Power & Infrastructure (GVKPIL) is the holding company of the power businesses of GVK and also provides operations and maintenance services to its power assets. G V Krishna Reddy controlled GVK is a diversified business group with interests in power, roads, urban infrastructure, bioscience, hotels and manufacturing. The group has identified power and infrastructure as focus areas.

GVKPIL presently owns a 53.96% stake in GVK Industries (GIL), which has two power plants: (i) the operational 216-MW Jegurupadu Phase I, and (ii) the 220-MW Jegurupadu Phase II project, to be commissioned by mid February 2006.

In addition, GVKPIL currently owns a 47.47% equity stake in Gautami Power (GPL), which is developing a 464-MW combined cycle power plant that is expected to be commissioned by September 2006. GVKPIL will increase its ownership in GPL to 51% by subscribing to the equity of GPL. Once all the three plants become operational, the total capacity of the three plants will be 900 MW. All the three plants are independent power plants (IPP) and supply, or will supply, their output to Andhra Pradesh power distribution companies (APDISCOMs) under their respective long-term power purchase agreements

GVKPIL proposes to utilise the funds raised through this issue to contribute part of the equity required by GPL to establish a 464-MW duel fuel combined cycle plant located in Andhra Pradesh and repay the bridge finance availed for funding the equity of GPL. The equity investment in GPL is estimated at Rs. 95.3 crore and the repayment of loan is estimated at Rs 60 crore.

The initial public offer (IPO) is of 8,275,556 equity shares of Rs 10 each through 100% book-building process. The price band has been fixed at Rs 260 to Rs 310 per equity share of Rs 10 each. The issue opens on 2 February and closes on 7 February 2006. It will constitute 35% of the fully diluted post-issue paid-up capital of the GVKPIL.

Strengths

• Each of GVKPIL’s generation facilities has an assured source of revenue under a take- or- pay power purchase agreement(PPA) with APDISCOMs. The power distribution companies are required to pay for the plant's output at an agreed plant load factor (PLF), regardless of whether or not APDISCOMs actually takes delivery of the power generated. APDISCOMs’ payment obligations to GVKPIL, as per PPAs, are secured by letters of credit, escrow arrangement and the state government’s guarantee covering all of APDISCOMs’ payment obligations. According to GVKPIL’s management APDISCOMs has never defaulted on their monthly payment obligations even by a signal day.

• It is expected that GVKPIL will benefit from economies of scale through the use of shared facilities between Jegurupadu Phase I and Jegurupadu Phase II. These shared facilities include using the approach roads to the projects, sharing the use of the demineralised plant capacity, raw water storage reservoir and potable water, staff quarters, and the administrative building and the compound walls.

Weaknesses

• Currently there is shortage in the availability of gas in Andhra Pradesh. The shortage is likely to persist at least in FY 2007. As a result, operations of the existing Jegurupadu phase I as well as proposed phase II and GPL will be adversely affected.

Valuation

The FY 2005 EPS of GVKPIL (standalone) stands at Rs 0.7 on post-issue equity. The company’s net profit in the first half of FY 2006 has been inflated by Rs 2 crore by the one-time technical services fees received from subsidiary and interim dividend of Rs 5 crore received form the subsidiary. Thus, the net profit of Rs 4.23 crore in the first half of FY 2006 cannot be annualised. Here it will be more appropriate to consider the consolidated results, which shows a net profit of only Rs 48 lakh. On annualising it, the consolidated EPS is just Rs 0.4. Th offer price band is Rs 260-310. Naturally, the price band factors in the company’s expected full earnings from the two proposed new power projects. However, considering the state of natural gas availability, these projects are likely to fully reflect earning only from FY 2008.

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20th-Jan-2006

Zensar Technologies Rajen Shah, Angel Broking


Zensar Technologies is into IT services and belongs to RPG Goenka group. It is a strong buy. Most of the mid size software companies are trading at a PE mutiple of 18-20, on the basis of that Zensar will trade at Rs 400. Even, a conservative PE Multiple of 15 is taken, Zensar's price will go to Rs 300, which is an upside of 15% from its current level of Rs 195. Having its presence across the world it has opened a world class development centre in Pune and a BPO centre in Hyderabad. The BPO centre will add to the company's topline and bottomline next year. Business is expected to grow by 30% plus in FY07. The company is expected to give a consolidated turnover of Rs 500 crore, profit of Rs 47 crore and EPS of Rs 20 in FY07.



Multibaggers 05th-Jan-2006


Upper Ganges Sugar

S.P.Tulsian, Investment Advisor

A cheapest sugar stock .
Introduction: - Upper Ganges Sugar Industries Ltd. is a KK Birla
Group company having two sugar units and one distellery. One sugar
mill is at Seohara in U P with 10,000 TCD and a Distellery of 55
KL/Day (capacity being enhanced to 100 KL/Day ) and second sugar
mill is at Sidhwalia in Bihar of 2,500 TCD (expandable to 5,000
TCD). The company is also setting up a Greenfield Sugar Mill at
Kushinagar in UP with capacity of 7,000 TCD, which will be
commissioned for sugar season 2006-07 (to be completed by Sept'06).
The company is also setting up 24 MW co-generation project to be
operational by Feb'07 with an outlay of Rs.100 crores. Total capex
plans of the company is in excess of Rs.350 crores which will
qualify the company for UP state subsidy scheme.
FY 05, Results: - The Company has recently extended its financial
year from June ending to December end and results for 18 months
ended 31.12.05 shall be presented very soon. However, during 15
months ending 30.9.05 (1.7.04 to 30.9.05) the total sales was Rs.422
crores while EBITDA was Rs.86.96 crores. Interest for the period was
Rs.20.29 crores while depreciation was Rs.9.69 crores. Profit before
exceptional items & tax was at Rs.56.98 crores. While all other
major sugar companies in UP have charged cane-arrear liability of
sugar seasons 96-97, 02-03 and 03-04 to Reserves and Surplus, this
company charged this liability of Rs.33.26 crores to the Profit &
Loss account.
Due to this, PBT for the period was placed at Rs.24.68 crores .
After providing tax liability of Rs.6.96 crores (including deferred
tax of Rs.3.03 crores) net profit was at Rs.17.72 crores translating
into an EPS of Rs.25.30 (annualised Rs.20.25).The company has
already declared and paid interim dividend of 40% for the year
04-05.
New Units in Bihar: - The Company has taken over a sugar mill in
Bihar from its group company New India Sugar Mill, with a capacity
of 2,500 TCD (expandable to 5,000 TCD) for which legal process has
been completed. With Mr.Nitish Kumar, assuming charge of Bihar as
CM, he is very keen to develop and revive sugar industry in Bihar.
At one time, Bihar and UP had almost equal sugar production , but
over a period (in last 25 years) Bihar now produces about 5% of
sugar produced in UP. So, an incentive package is assured by the CM
to Sugar Mills in Bihar to set up new units as also to improve the
productivity and increase sugar production. KK Birla Group is a
prominent player in Bihar with Oudh Sugar, another group company
also having its unit in Bihar. So, the earlier plan of Upper Ganges,
to shift unit from Bihar (of New India Sugar) to UP has been kept on
hold and the same is being made operational in Bihar. Even sugar
mills located in Eastern UP are keen to set up mills in Bihar, due
to its logistic advantage, as also access to Pakistan, which is a
big market in time to come.
Rights Issue: - To meet the finance requirement of capex plans of
Rs.350 crores, the Board of the company has in principle approved a
rights issue for which basis, price and terms have not yet been
approved. The net worth of the company as at 30.9.05 was about Rs.84
crores (equity of Rs.7 crores Free Reserves Rs.77 crores) while term
loan as at that date was about Rs.40 crores. Hence, the company may
meet its capex requirement by term loan and rights issue at a
premium, which will be investor friendly.
Sugar Season 04-05 working:-
Though the company has not yet released its accounts the summarised
working of the company for Sugar season 04-05 is assumed to be as
under :-
1) Opening Stock 1-07-04 11.28 lakh Qtl.@ Rs.11.95/kg
Rs.13484 lakhs
2) Production 04-05 16.07 lakh Qtl.@Rs.15/kg
Rs.24100 lakhs
27.35
lakh Qtl. Rs.37584 lakhs
3) Cost of goods sold in 04-05 23.60 lakh Qtl.
Rs.31800 lakhs
(upto 30.9.05 at selling price of approx
Rs.16.70/kg for Rs.394 crores)
4) Closing stock on 1.10.05 3.75 lakh Qtl. Valued @
Rs.15.40/kg Rs. 5784 lakhs


Season 05-06 working:-
Due to better crop availability and more crushing days available
Seohara is likely to produce 16 lakh Qtl. Sugar and Sidhwalia in
Bihar about 2.40 lakh Qtl. with aggregate sugar production of 18.40
lakh Qtl. in season 05-06. Due to reduction in the working capital,
interest burden is also likely to fall to about Rs.12 crores
annually. Interest burden has been falling quarter on quarter for
the last six quarters. Interest for 12 months ending 30.06.04 was
Rs.22.73 crores which fell to Rs.17.41 crores for 12 months ended
30.6.05. Interest for quarter ended 30.9.05 was Rs.2.89 crores.
Hence working for sugar season 05-06 is likely to improve vastly
because of reduction in interest, increased production and better
product realisation.
Financial Performance: - As stated, net profit for 15 months ending
30.9.05 was Rs.17.72 crores. If cane-arrear liability of Rs.33.26
crores is added back, this would have been Rs. 51 cores translating
in an EPS of Rs.72. However in next 12 months (1.10.05 to 30.9.06 )
the company is likely to have PBT of Rs.54 crores (excluding
interest of Rs.12 crores). After providing for tax of Rs.12 crores
PAT should be Rs.42 crores resulting in an EPS of Rs.60. However,
post expansion, post rights though equity will increase but
profitability will also improve.
Lowest Market cap per TCD:-
Upper Ganges probably has the lowest market Cap per MT crushing per
day, as revealed from the Table below: -
Sl. No Company Name Capacity TCD Equity Rs./Crores Share Price
Rs. Mkt Cap Rs./Crores Rs.Lakh Per TCD
1. Bajaj Hindustan54000 TCD 12.00 317 3800 7.04
2. Balrampur Chini48000 TCD 23.18 120 2780 5.80
3. Triveni Engg40000 TCD 25.80 81 2090 5.20
4. Dhampur Sugar 30000 TCD 34.85 213 750 2.50
5. Mawana Sugar18000 TCD 42.50 140 600 3.33
6. KCP Sugar 15000 TCD 11.34 595 675 5.87
7. Oudh Sugar 15000 TCD 18.18 119 216 1.44
8. Upper Ganges 12500 TCD 6.98 274 190 1.52

Conclusion: -
Since the company has not yet published its annual accounts as also
due to charging of cane arrears to P & L A/c. the results were not
understood correctly by the market . Also the company has
investments in listed stocks having market value of Rs.75 crores .
This translates into value per share at Rs. 107. Even giving
discount of 50 per cent to group company investment net value of
investment works out to above Rs.50. Current year EPS is likely to
be above Rs.60. Hence share at Rs. 275 is an excellent buy with a
potential to rise by 100 % in next 12 months.
Disclosure - Writer may deemed to be concerned or interested in this
investment.



Multibaggers 19th-Jan-2006


Reliance Industrial Infrastructure

S.P. Tulsian, Investment Advisor

Reliance Industrial Infrastructure - Rs.330.
An excellent Infrastructure Play.
Reliance Industrial Infrastructure Ltd. (RIIL) became Reliance
Industries Ltd.(RIL), (Mukesh Group) group company about a week
ago.
RIL holds 46.23 % stake while erstwhile promoters Mr.Satyapal Jain
(Brother of Mr.Anand Jain) holds 19.87% stake. Hence total
Promoters stake works out to 66.10%.
Total paid up equity capital of the company is Rs.15.10 crores and
book value as at 31.3.05 was Rs.62.10 per share (net off
Revaluation Reserve)
During FY05 the total income of the company was Rs.68.67 crores
while net profit was Rs.17.47 crores resulting in an EPS of
Rs.11.57 Dividend of 32% was declared for the year.
During H1 of FY 06 total income was Rs.38.05 crores while net
profit was Rs.8.88 crores resulting in an EPS of Rs.5.88 for the
period.
During FY 06 total income is expected to be Rs.80 crores and net
profit of Rs.20 crores giving an expected EPS of Rs.13.25.
Reliance Group is setting up Special Economic Zones (SEZ's) near
Navi Mumbai (Maharashtra) as also in Haryana and Andhra Pradesh on
land Area of approx. 25,000 Acres for each SEZ. This type of SEZ's
are also likely to come up in other states. All these SEZ's are
likely to be put up by this company which will improve the
business profile of the company.
Reliance Group is also foraying into Realty and Retail sector and
these business may also be taken up by this company.
After splitting up Telecom, Energy and Finance Business by Mukesh
Group to Anil Group, this remains the only company in Mukesh Group
after RIL (as IPCL is likely to be merged with RIL very soon)
which may take up infrastructure related projects.
KG Basin gas pipeline from east coast to west coast may also be
taken up by this company.
As RIL is holding entire Promoters stake, total funding for these
projects will come from RIL, which may also increase its stake in
the company beyond 51% to enable RIL to make the company as its
subsidiary. By this relationship, RIL shall be able to consolidate
the company's working in its financials.
FY07 EPS could be over Rs.20, and in view of huge discounting
enjoyed by peers (Mahindra Gesco P/E of above 100) the share can
touch four digit marks in next 12 months.
The Reliance Group's huge and massive plans in Infrastructure
Sector with Investments of over Rs.25,000 crores lined up in next
3 years, major flow of this will come to this company.
One can safely buy this share for over 100 % gain in next one
year. The share is presently available at forwarding earning
multiple of about 17 while peers command an average P/E of above
40 and Industry P/E of above 30.
S.P.TULSIAN
19.1.06.
Disclosure:- The writer may deemed to be concerned or interested in
this recommendation as he and his clients are invested in this
scrip.



Multibaggers 12th-Dec-2005


Crew B.O.S Products Ltd - In vogue

Nirmal Jain, India Infoline.

Crew B.O.S products is one of India's leading exporter of fashion
and home accessories. The company earns more than 95% of its
revenues from the US and the European market. Its clientele include
some of world's big retailers namely Next, GAP, Fossil, Chico,
Tesco, Laura Ashley and many others among its clientele.
The company has performed consistently in the past with revenue CAGR
of 46% and earnings CAGR of 44%over the last five years. Post its
recent GDR issue, the company is poised to expand its operations and
also enter the leather-finishing segment.
We expect the company to post revenue CAGR of 55% and earnings CAGR
of 60% during FY05-08. We initiate coverage on the company with a
buy rating with a 12-15 month horizon and a price target of Rs251.
This implies a potential upside of around 50% from the current
market price of Rs167


Courtesy : DP Visitor - Sarvar