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Lanco Industries to take a U turn after bottoming out last year

Lanco Industries producer of Ductile Iron ( DI ),the preferred pipes for drinking water infrastructure is the only fully backward integrated producer of DI Pipes. It has capacity of 90,000 tonnes of spun DI Pipes, 150,000 tonnes of Pig Iron , 90,000 tonnes of Slag Cement,and 51,000 tonnes of Castings.Besides these it also owns captive Iron Ore Mines and that way its a fully backward integrated DI Pipes producer in India.

Lanco Industries Ltd has informed BSE that the Board of Directors of the Company at its meeting held on July 28, 2014, inter alia, has approved capex plan of Rs.325 crores to set up a Small Dia Pipe (SDP) Plant of 1,00,000 TPA for sizes ranging 100mm to 300mm dia with increased capacity of Blast Furnace and other facilities.

The Board has also approved the change of name of the Company from LANCO INDUSTRIES LIMITED to SRIKALAHASTI PIPES LIMITED which is subject to shareholder’s approval in general meeting and other statutory approval.

Financial Results
View in (Million) Prior Period
(in Cr.) 2014 2013 2012 2011 2010
Income Statement
Revenue 989.40 863.89 787.00 728.10 691.30
Other Income 7.24 10.02 8.42
Total Income 996.64 873.91 795.42 728.10 691.30
Expenditure -872.38 -812.64 -721.74 -638.87 -564.76
Interest -54.90 -60.42 -57.86 -14.67 -20.62
PBDT 69.36 0.86 15.83 74.56 105.92
Depreciation -27.94 -22.18 -19.99 -18.72 -17.95
PBT 41.42 -21.33 -4.17 55.85 87.98
Tax -2.72 8.23 0.22 -13.82 -30.04
Net Profit 38.70 -13.10 -3.95 42.03 57.94
Equity 39.76 39.76 39.76 39.76 39.76
EPS 9.73 -3.29 -0.99 10.57 14.57
CEPS 16.76 2.29 4.03 15.28 19.08
OPM % 12.56 7.09 9.36 12.26 18.30
NPM % 3.91 -1.52 -0.50 5.77 8.38
Detailed Detailed Detailed Detailed Detailed

Company is likely to make Net profit of Rs. 60 crores for FY15 , a 50 % jump over FY14 ..This will give an EPS of Rs. 15 for the year ending 31st March 2015..

At Rs. 50 share seems to be undervalued  and is available at P/E of  just 3.5 based on its future FY 15 PAT of Rs. 60  crores or an EPS of RS.15 .All other producers of DI Pipes are quoting at P/E of 10+  including its parent Electro Steel Castings. Demand for DI Pipes is expected to grow at more than 30 % as Govt. has set aside Rs. 75,000 crores for Drinking Water Infrastructure because of growing urbanisation and inadequate existing  infrastructure. Besides domestic demand there is growing overseas demand too for DI ppes. Most important  for Lanco is its parentage in Electrosteel Castings and there is a distinct possibility of Lanco merging with its parent. In that scenario the share will be re-rated and will quote at P/E of about 10.

Buy is recommended on declines near to Rs. 45-50, as the share has appreciated by 25% during the last 2 months

Note : Lanco Industries was recommended by us in April 2007 and again in 2010 at Rs. 35

This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision

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Uncategorized

Arrow Textiles may turn out to be a multibagger like Arrow coated products

Arrow Textiles a  company that resulted from demerger of Arrow Webtex in November 2008 is about to take off into a new trajectory more or less like Arrow Coated Products which was recommended in this column some 3 years back .

Arrow Textiles customers  are well known names in undergarments sections of textile industry namely :

Customers
(in alphabetical order)
Woven Labels Fabric Printed Labels Woven Elastic Tapes Woven Rigid Tapes
AMUL Brand Hosiery
Colorplus
Hennes & Mauritz
Indian Terrain
Jockey
LUX Brand Hosiery
Fila
Cubus
Rupa Brand Hosiery
Several Exporters & Domestic Brands
VIP brand Hosiery
Turtle

And over the last five years  the company’s Financial performance has improved considerably and presently EPS is close  2 and P/E of less than 5.

(in Cr.) 2014 2013 2012 2011 2010
Annual Trends
Revenue 41.90 36.87 31.94 29.31 23.43
Other Income 0.84 0.48 1.40 0.04 0.01
Total Income 42.74 37.35 33.33 29.36 23.44
Expenditure -32.70 -29.99 -25.84 -23.22 -20.60
Interest -1.60 -2.85 -4.31 -1.45 -1.30
PBDT 8.45 4.50 3.18 4.68 1.54
Depreciation -3.17 -3.03 -2.89 -1.88 -1.42
PBT 5.27 1.47 0.29 2.80 0.12
Tax -1.69 1.52 -0.56 -1.43 -0.56
Net Profit 3.57 2.98 -0.27 1.38 -0.44
Equity 19.04 19.04 19.04 13.60 13.60
EPS 1.88 1.56 -0.14 1.01 -0.32
CEPS 3.54 3.15 1.38 2.39 0.72
OPM % 23.96 19.94 23.46 20.91 12.11
NPM % 8.53 8.07 -0.85 4.69 -1.88
Detailed Detailed Detailed Detailed Detailed
View in (Million) Prior Period
Quarterly Trends

  • (in Cr.) Jun-14 Mar-14 Dec-13 Sep-13 Jun-13 Mar-14
    Income Statement
    Revenue 10.92 11.83 11.44 9.42 9.21 41.90
    Other Income 0.01 0.17 0.02 0.21 0.45 0.84
    Total Income 10.93 12.00 11.46 9.63 9.66 42.74
    Expenditure -8.57 -8.51 -9.47 -7.51 -7.21 -32.70
    Interest -0.27 -0.32 -0.35 -0.41 -0.52 -1.60
    PBDT 2.09 3.17 1.65 1.71 1.93 8.45
    Depreciation -0.80 -0.80 -0.80 -0.79 -0.78 -3.17
    PBT 1.29 2.36 0.85 0.91 1.15 5.27
    Tax -0.53 -0.75 -0.34 -0.27 -0.34 -1.69
    Net Profit 0.76 1.62 0.50 0.64 0.81 3.57
    Equity 19.04 19.04 19.04 19.04 19.04 19.04
    EPS 0.40 0.85 0.26 0.34 0.43 1.88
    CEPS 0.82 1.27 0.68 0.75 0.84 3.54
    OPM % 21.57 29.46 17.42 22.47 26.57 23.96
    NPM % 6.96 13.66 4.41 6.84 8.79 8.53
  • Given the growth in  user Industry like Page , Rupa, TT, Maxwell etc, its just a matter of time that Arrow Textile might follow the same trajectory like that of Page .

Buy is recommended at CMP ..

This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision. Neither the author nor his firm accepts any liability arising out of use of the above information

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Equity Watch

CHENNAI MEENAKSHI MULTISPECIALITY HOSPITAL Likely to take a u-turn after bottoming out

Chennai Meenakshi Multispeciality Hospital (CMMH), formerly known as Devaki Hospital, is a 100-bedded hospital located in the heart of Chennai at Mylapore..It is headed by its CEO, Dr.V.Krishnamurthy, an eminent Rheumatologist.Financial performance of the hospital has improved during the last Q ended March 2012 and is expected to take a U-turn during the next few years .

 
Scrip Code : 523489      Company : CHENNAI MEENAKSHI MULTISPECIALITY HOSPITAL LTD.-$
Type Un-Audited Un-Audited Un-Audited Un-Audited Un-Audited Un-Audited
Period Ending 31-Mar-12 31-Dec-11 30-Sep-11 30-Jun-11 31-Mar-11 31-Mar-11
No. of Months 3 3 3 3 3 12
Description Amount(Rs. million)
Net Sales / Interest Earned / Operating Income 40.04 33.73 35.47 36.62 33.74 124.06
Other Income 0.73 0.50 0.52 0.39 0.46 1.58
Expenditure -31.74 -28.80 -35.33 -29.19 -31.02 -115.71
Interest -3.84 -3.93 -3.92 -3.95 -3.88 -14.76
Profit Before Depreciation and Tax 5.19 1.50 -3.26 3.87 -0.70 -4.83
Depreciation -1.15 -1.83 -1.81 -1.77 -1.55 -6.20
Profit before Tax 4.03 -0.34 -5.06 2.11 -2.25 -11.03
Net Profit 4.03 -0.34 -5.06 2.11 -2.25 -11.03
Equity Capital 74.69 74.69 74.69 74.69 74.69 74.69
Reserves 5.98 5.98 5.98 5.98 5.98 5.98
Basic EPS after Extraordinary items 0.54
Diluted EPS after Extraordinary items 0.54
Nos. of Shares – Public 3,517,362.00 3,517,362.00 3,517,362.00 3,517,362.00 3,517,362.00 3,517,362.00
Percent of Shares-Public 47.10 47.10 47.10 47.10 47.10 47.10
Operating Profit Margin 22.55 16.10 1.86 21.35 9.43 8.00
Net Profit Margin 10.06 -1.01 -14.27 5.76 -6.67 -8.89
Cash EPS 0.69 0.20 -0.44 0.52 -0.09 -0.65
  Notes Notes Notes Notes Notes Notes
  Detailed Detailed Detailed Detailed Detailed

The company’s market cap. at CMP is less than Rs. 6 crores ( equity of Rs. 7.5 crFV Rs.10 and CMP @ Rs. 8) and with loans amounting to about Rs.18 crores(see annual report ) .the enterprise value is much less than even the land cost on which the 100 bedded hospital is standing.Management have plans to start a medical college next to the hospital and expand the hospital to 200 beds. 

Buy at CMP is recommended for a term of 3-4 years.

This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision. Neither the author nor his firm accepts any liability arising out of use of the above information

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Equity Watch

Pochiraju Industries -great potential ahead

 

 
Pochiraju Industries Ltd (PIL) , established in 1995, was initially incorporated as Pochiraju Flori Tech Ltd with the main business of cultivation and marketing of cut flowers. During the last 16 years ,the Corporate strategy of the company has changed  to create multiple drivers of growth anchored on its core competencies .The company is currently focusing on three business segments – Agri Business, Pharmaceuticals and Bio-Technology & Life Sciences. The organizational structure of the company is designed for effective management of multiple business.Presently only the Agri Businesses of cut flowers ,fruits and vegetables  is contributing Rs. 55 crores to the top line and Rs. 11 crores as PAT thus giving an eps of Rs. 6 + and P/E of less than 2.5. With the commissioning of Pharma and Bio-Tech businesses the profitability is expected to take a  quantum jump.On the Financial front, the Market cap. of the company is just about Rs. 27 crores ( CMP =Rs.13.5 and 1.9 crore shares ) while the BV is close to Rs.45.The total market cap is equivalent to the share premium account lying as cash ..The company is a debt FREE company..

Scrip Code : 532803      Company : POCHIRAJU INDUSTRIES LTD.
Type Un-Audited Un-Audited Un-Audited Un-Audited Un-Audited Un-Audited
Period Ending 30-Jun-11 31-Mar-11 31-Dec-10 30-Sep-10 30-Jun-10 31-Mar-11
No. of Months 3 3 3 3 3 12
Description Amount(Rs. million)
Net Sales / Interest Earned / Operating Income 96.76 199.87 140.76 120.05 93.72 554.39
Expenditure -67.62 -150.01 -108.72 -89.47 -66.14 -414.32
Interest -0.30 -0.51 -0.52 -0.50 -0.53 -2.06
Profit Before Depreciation and Tax 28.84 49.35 31.52 30.08 27.05 138.01
Depreciation -4.32 -4.32 -4.32 -4.32 -4.32 -17.29
Profit before Tax 24.52 45.03 27.21 25.76 22.73 120.73
Tax -1.45 -0.50 -1.05 -0.66 -1.30 -3.51
Net Profit 23.07 44.53 26.16 25.10 21.43 117.22
Equity Capital 189.07 189.07 179.07 179.07 179.07 189.07
Reserves 813.93 696.77 696.71 605.63 696.71 696.71
Basic EPS after Extraordinary items 1.22 2.49 1.46 1.40 1.20 6.54
Diluted EPS after Extraordinary items
Nos. of Shares – Public 12,584,411.00 12,584,411.00 12,584,411.00 12,584,411.00 12,584,411.00 12,584,411.00
Percent of Shares-Public 66.56 66.56 70.28 70.28 70.28 66.56
Operating Profit Margin 30.12 24.95 22.76 25.47 29.43 25.27
Net Profit Margin 23.84 22.28 18.58 20.91 22.87 21.14
Cash EPS 1.45 2.58 1.70 1.64 1.44 7.11
  Notes Notes Notes Notes Notes Notes
  Detailed Detailed Detailed Detailed
 Analysing the different businesses that the company is in and its financial position, there is a lot of scope for the company to take a quantum jump in its Revenue and PAT.

BUY  is recommended at CMP with a 2 year HOLD..

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Made for Each Other :Bharati Shipyard and Great Offshore,a blue chip in the making

Bharati Shipyard began its operations in 1973,at Ratnagiri.Over the years Bharati has expanded its capacity, capability and product range of its vessels exponentially. The Ratnagiri shipyard, started as a small shop has grown several times during the last 38 years, and is today one of the most advanced shipyards of the company. The yard is now building sophisticated vessels required for the offshore industry including offshore vessels( OSV’s), Multipurpose support vessels(MSV’s),Plateform Supply Vessels( PSV’s), Anchor handling cum Tugs cum Supply Vessels ( AHTS’s) etc.The quality, size and the level of sophistication of the vessels built by Bharati has also grown manifold.

In 2010 , Bharati Shipyard took over Great Offshore , prominent integrated offshore oilfield services provider offering a broad spectrum of services to upstream oil and gas producers  to carry out offshore exploration and production (E&P) activities.This gave  forward integration to Bharati Shipyard.The resultant union is expected to make Bharati Shipyard  an all weather company .

During the last year , the combined entity has achieved top line of more than Rs. 2300 crores and PAT of more than 210 crores.This has neen achieved  inspite of the most difficult market conditions.Combined EPS is close to Rs. 30..Revenues and PAT are going to take a quantum jump in the years to come.

Inspite of all the positives for Bharati Shipyard, market cap. of the company is just about Rs. 400 crores at CMP of Rs. 130, which is very very low.Some vested interests are trying to spread rumours ( read here) and sensing the low share price, promoters are buying to the maximum permissible limit.Also the company continues to be on Inorganic Growth path with latest acquitition of Temba,  from ICICI Ventures.This nullifies all the rumours that promoters want to exit .Even if they decide to exit , the price will be in 4 figures and not 3.

Buy is recommended at CMP of Rs. 130 for a 2 year HOLD..

This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision. Neither the author nor his firm accepts any liability arising out of use of the above information

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Grauer and Weil:a small cap today,a large cap tomorrow

Grauer and Weil is one of the very few metal finishing houses the world over, capable of offering an integrated package of chemicals, plants, effluent treatment systems and waste recovery techniques from spent solutions – Truly a ONE-STOP-SHOP for end-to-end solutions.

Started in 1957 as a Plating Co., today its a diversified company with interests in Paints (acquired  Bombay Paints in 2008 ), Special Chemicals,Effluent Traetment Plants,Recovery from Waste spent Chemicals, Lubricants ( in collaboration with SIDASA Spain)and property Development with 750,000 sq.ft of commercial space in the heart of Mumbai.Commercial space known as Growel101 isshopprs delight …

Promoters hold 68% of the Rs. 22 crore equity, and 50 % of the equity has come from Bonus shares.Co.’s Management have decided to split Rs. 10 paid shares to Re. 1 paid up share(see here) , thus increasing the liquidity in the market.

Company has 7 plants located at different parts in India and Shpoppertainment commercial space in the haert of Mumbai..

Valuation of 750,000 sq. ft of commercial space in Mumbai will be no less than Rs. 1500 crores while the market cap. of the company is less than 1/10th or  Rs. 150 crores at CMP of Rs.67 …With Rs. 128 crores of loans the whole company is highly undervalued and the share price can shoot up once the real value of the company is known.

Results for FY11 are good with EPS of 6.7(see  here) and are likely to take a quantum leap once all the 750,000 sq. ft of commercial space is leased out..

Buy is recommended for a  LONG term.

This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision. Neither the author nor his firm accepts any liability arising out of use of the above information

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Equity Watch

PAPER PRODUCTS REVISITED: following excellent Q1 results

Paper Products is a 59% holding subsidiary of world renowned Euro 2.1 billion collapsible packaging wonder hUHATAMAKI ..Company specialises in Flexible packaging,Labelling Technologies,Specialised Cartons,Packaging Machines, Holographic options etc..

In India the average age of the growing population is only 27 years,and its imperative that for this age group  27 +/- 10 years excellwnt packaging of any consumer product is of paramount importance.Companies business is sustainable over the next many  years with 2 digit consumption growth..

With three state of the art, fully integrated manufacturing facilities at Thane, Silvassa and Hyderabad; highly skilled and experienced staff, PPL is capable of working with the customer from product inception to the super market and with complete control and confidentiality.

Today, PP very much  matter to those, for whom packaging matters most. And this is reflected in the impressive client list that includes, Levers, Nestle, Cadbury, Britannia, Glaxo Smithkline, Coca Cola, Perfetti, Dabur, Marico, P&G and many others 

For a ZERO debt Co. with paid up share capital of Rs.12.5 cr ,a decent turn-over of more than 600 crores ( expected  Rs. 750 crs for FY10 ending Dec2010)   see actual here .. Latest Q1 results for  FY11  declared today are excellent,  see HERE .

With EPS  more than Rs. 10 for FY11, the share is going very cheap  @ CMP of Rs. 57.. Expected price 3 digits in a year time..

Buy recommended with one year Hold ..

This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision. Neither the author nor his firm accepts any liability arising out of use of the above information

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