dkishore
01-01-2008, 06:44 AM
Investment Calls
* Kolkata-based Balmer Lawrie & Co. manufactures industrial packaging, barrels and drums, LPG cylinders, greases and lubricants, leather chemicals, functional additives and marine freight containers. It also undertakes tea exports and trading, travel, tours, cargo and engineering services such as turnkey projects, energy-audit, consultancy and freight-container repairs. It is the largest manufacturer of steel barrels in India and has a tie-up with Fuchs Petrolub, Switzerland, to market industrial and automotive lubricants.
For H1FY08, the company’s topline was up by 13% at Rs.710.25 cr. largely driven by the grease & lubricants business. Sale of greases & lubricants rose by 45% to Rs.109.24 cr. representing 15% of its total sales. Sale of industrial packaging increased by 13% to Rs.140.84 cr. representing 20% its total sales. Sale of Logistics infrastructure & services rose by 9% to Rs.156.14 cr. representing 22% of its total sales. Travel & tours segment grew by 13% to Rs.273.62 cr. representing 38% of its total sales.
For H1FY08, it earned a net profit of Rs.46 cr. on its equity of Rs.16.29 cr. yielding an attractive EPS of Rs.28.
It is the largest manufacturer of mild steel (MS) barrels and drums in India with a market share of around 60%. MS barrels are an eco-friendly packaging medium for storing and transporting a variety of items including petroleum products, lubricating oils, chemicals, food and pharmaceutical products, hazardous and waste materials.
The company has century-old expertise in Logistics infrastructure & services industry with a modern infrastructure to provide solutions that address each client’s critical requirement. The infrastructure include: container freight stations in Chennai (40,000 sq. mt), Kolkata (37,000 sq. mt) and Mumbai (80,000 sq. mt.) with covered warehouses and its own critical equipment.
Long-term outlook of the company is said to be encouraging. If H1FY08 profit is any indication, it is likely to post full year EPS of above Rs.55. Investors can accumulate this stock between Rs.570 to Rs.600 level for good long-term growth.
* Khoday India (formerly known as Khoday Distilleries), is engaged in the manufacture and distribution of high quality Alcoholic Beverages in the domestic and overseas markets. The company also manufactures high quality Glass bottles and Printing & writing papers through separate divisions. The company's portfolio includes some premium brands like Red Knight Malt Whisky, Peter Scot Malt Whisky, Hercules XXX Rum, Honeywell Brandy, etc.
The gross sales turnover of the company in FY07 at Rs.168.10 cr. registered an increase of about Rs.13.63 cr. over FY06. It made a turnaround and registered a profit after tax of Rs.10.03 cr. on the back of improved business performance and effective cost control measures.
In the domestic market, Peter Scot sells about 85,000 cases (12 bottles of 650 ml each) per year and Red Knight sells about 2 lakh cases per year. The management expects to sell three times the current sales in another two years. An amount of Rs.200 cr. has been earmarked for expanding the capacities of its five distilleries, one brewery as well as 11 bottling plants. A vodka brand in the premium segment and a beer brand from Germany will also be launched soon. The Rs.200-cr. investment will be spread over a period of two-three years.
The capacity of its brewery in Bangalore will be expanded to 5 lakh cases per year from 2 lakh cases.
It is also planning to export two of its whiskies, Peter Scot and Red Knight, to Italy, marking its foray into international markets. In the beginning, it plans to export around eight containers of Red Knight Whisky and two containers of Peter Scot Whisky every month. The revenues generated on each container of Red Knight would be around Euro 30,000-35,000 while the same for Peter Scot would be in the range of Euro 60,000-70,000. Besides this, the company is also scouting for a bottling unit in Scotland.
The management plans to hire more professionals and hopes to capture a major share of the market.
The company has reported 51% higher sales of Rs.82 cr. in H1FY08 and a loss of Rs.3.1 cr. After providing Rs.3.1 cr. of depreciations, which was higher by 41% over the previous corresponding period.
Besides having plan to increase sales to Rs.200 cr. in the core business, the company is said to have huge land bank of around 2000 acres, the valuations of which is said to be very high.
Investors should add this stock in small quantities for good long-term growth.
Market Guidance
* English Indian Clay (Rs.1770.20) - In last week’s write-up, there was an error in mentioning the following points:
H1FY08 profit may be read as Rs.9.46 cr. and not Rs.0.46 as wrongly mentioned.
The company also holds 29,55,173 shares a of Greaves Cotton, the cost price of which was Rs.45 cr. while the market value today is Rs.114 cr. (in this line word Greaves Cotton was missing).
* Patel’s Airtemp India (Rs.110.95) - The company is engaged in the manufacture and sale of extensive range of Heat Exchangers such as Shell & Tube type, Finned tube type and Air cooled Heat Exchangers, Pressure Vessels, Air-conditioning and Refrigeration equipments and Turnkey HVAC Projects in India and marketing of equipments even outside India. We had earlier advised this stock around Rs.55/58 level in this column a few weeks back.
There are indications that the company is likely to get some good orders in the near future. The stock is attracting support from good knowledgeable investors. Stay invested for good long term targets of Rs.175.
* After a long consolidation Nirlon Ltd. (Rs.137.65) is likely to see higher levels in the near future. Long-term target can be much higher as per informed sources.
* DIC India’s (Rs.227.10) recent rights issue at Rs.225 per share is said to have been oversubscribed. The merger of its subsidiary is also over and future outlook is said to be encouraging. This is a safe stock to accumulate around Rs.220 level.
* Investors can take a small exposure in Nelco (Rs.155.40). The company is expected to do well in coming years.
* Some fund managers & high networth investors are very bullish on KCP Ltd.. Stay invested. This stock is under regular recommendation in this column from Rs.95 onwards.
* Zenith Fibres (Rs.34.10) Q3 results likely to be better compared to Q1 and Q2. Investors can take exit at higher levels.
* Indiabulls Finance (Rs.981.15) is likely to see a further upside before the demerger date. The stock has already given superb return to investors in the last one year. The stock was advised last year at Rs.400 levels before demerger of Indiabulls Realty with regular updates in this column.
* Bombay Dyeing (Rs.748.65) - Stronger reports are pouring on its real estate business. The stock is likely to see better valuations. Stay invested.
* There is talk that Surana Telecom (Rs.45) is entering into solar energy. Stock is likely to see higher levels.
* Madhucon Projects (Rs.620) has gone up by 2.6 times from Rs.243 level when it was strongly recommended in this column about a few weeks back. Book part profits and switch to Khoday India /ECE Industries for good long term gains.
* Jenson & Nicholson (Rs.18.5) was advised around Rs.7/8 levels a few weeks back. Book 50% profits.
* Stronger reports are pouring in about the valuation of Rajasthan Spg. & Wvg. Mills (Rs.227). Stay invested for target above Rs.300.
* First two quarter results of Savera Industries (Rs.104) are very encouraging. Stock is likely to see higher levels. Capital is Rs.5.96 cr. Book value is Rs.36. Stay invested.
* Artefact Projects (Rs.167) has consolidated itself as a sizeable Infrastructure & Consultancy Services Company. Keep a watch on this stock for investment on reactions.
* Rohit Ferro (Rs.102)/ Ferro Alloys (Rs.42) have given good breakout for a further upside. Sector is doing well. Stay invested.
* Hind Constructions (Rs.221)/Hind Dorr Oliver (Rs.169) are yet to participate fully in this mid-cap rally of infrastructure stocks. Stay invested. These are few of the best stocks in the sector for investment.
* Nuchem Ltd. (Rs.25) was recommended earlier in this column long back around Rs.8 level. It is attracting attention on its real estate story. Book part profit around Rs.32/35 level.
Note: Investors should avoid buying if a stock flares up sharply. Above updates are provided for investors holding from lower levels.
* Kolkata-based Balmer Lawrie & Co. manufactures industrial packaging, barrels and drums, LPG cylinders, greases and lubricants, leather chemicals, functional additives and marine freight containers. It also undertakes tea exports and trading, travel, tours, cargo and engineering services such as turnkey projects, energy-audit, consultancy and freight-container repairs. It is the largest manufacturer of steel barrels in India and has a tie-up with Fuchs Petrolub, Switzerland, to market industrial and automotive lubricants.
For H1FY08, the company’s topline was up by 13% at Rs.710.25 cr. largely driven by the grease & lubricants business. Sale of greases & lubricants rose by 45% to Rs.109.24 cr. representing 15% of its total sales. Sale of industrial packaging increased by 13% to Rs.140.84 cr. representing 20% its total sales. Sale of Logistics infrastructure & services rose by 9% to Rs.156.14 cr. representing 22% of its total sales. Travel & tours segment grew by 13% to Rs.273.62 cr. representing 38% of its total sales.
For H1FY08, it earned a net profit of Rs.46 cr. on its equity of Rs.16.29 cr. yielding an attractive EPS of Rs.28.
It is the largest manufacturer of mild steel (MS) barrels and drums in India with a market share of around 60%. MS barrels are an eco-friendly packaging medium for storing and transporting a variety of items including petroleum products, lubricating oils, chemicals, food and pharmaceutical products, hazardous and waste materials.
The company has century-old expertise in Logistics infrastructure & services industry with a modern infrastructure to provide solutions that address each client’s critical requirement. The infrastructure include: container freight stations in Chennai (40,000 sq. mt), Kolkata (37,000 sq. mt) and Mumbai (80,000 sq. mt.) with covered warehouses and its own critical equipment.
Long-term outlook of the company is said to be encouraging. If H1FY08 profit is any indication, it is likely to post full year EPS of above Rs.55. Investors can accumulate this stock between Rs.570 to Rs.600 level for good long-term growth.
* Khoday India (formerly known as Khoday Distilleries), is engaged in the manufacture and distribution of high quality Alcoholic Beverages in the domestic and overseas markets. The company also manufactures high quality Glass bottles and Printing & writing papers through separate divisions. The company's portfolio includes some premium brands like Red Knight Malt Whisky, Peter Scot Malt Whisky, Hercules XXX Rum, Honeywell Brandy, etc.
The gross sales turnover of the company in FY07 at Rs.168.10 cr. registered an increase of about Rs.13.63 cr. over FY06. It made a turnaround and registered a profit after tax of Rs.10.03 cr. on the back of improved business performance and effective cost control measures.
In the domestic market, Peter Scot sells about 85,000 cases (12 bottles of 650 ml each) per year and Red Knight sells about 2 lakh cases per year. The management expects to sell three times the current sales in another two years. An amount of Rs.200 cr. has been earmarked for expanding the capacities of its five distilleries, one brewery as well as 11 bottling plants. A vodka brand in the premium segment and a beer brand from Germany will also be launched soon. The Rs.200-cr. investment will be spread over a period of two-three years.
The capacity of its brewery in Bangalore will be expanded to 5 lakh cases per year from 2 lakh cases.
It is also planning to export two of its whiskies, Peter Scot and Red Knight, to Italy, marking its foray into international markets. In the beginning, it plans to export around eight containers of Red Knight Whisky and two containers of Peter Scot Whisky every month. The revenues generated on each container of Red Knight would be around Euro 30,000-35,000 while the same for Peter Scot would be in the range of Euro 60,000-70,000. Besides this, the company is also scouting for a bottling unit in Scotland.
The management plans to hire more professionals and hopes to capture a major share of the market.
The company has reported 51% higher sales of Rs.82 cr. in H1FY08 and a loss of Rs.3.1 cr. After providing Rs.3.1 cr. of depreciations, which was higher by 41% over the previous corresponding period.
Besides having plan to increase sales to Rs.200 cr. in the core business, the company is said to have huge land bank of around 2000 acres, the valuations of which is said to be very high.
Investors should add this stock in small quantities for good long-term growth.
Market Guidance
* English Indian Clay (Rs.1770.20) - In last week’s write-up, there was an error in mentioning the following points:
H1FY08 profit may be read as Rs.9.46 cr. and not Rs.0.46 as wrongly mentioned.
The company also holds 29,55,173 shares a of Greaves Cotton, the cost price of which was Rs.45 cr. while the market value today is Rs.114 cr. (in this line word Greaves Cotton was missing).
* Patel’s Airtemp India (Rs.110.95) - The company is engaged in the manufacture and sale of extensive range of Heat Exchangers such as Shell & Tube type, Finned tube type and Air cooled Heat Exchangers, Pressure Vessels, Air-conditioning and Refrigeration equipments and Turnkey HVAC Projects in India and marketing of equipments even outside India. We had earlier advised this stock around Rs.55/58 level in this column a few weeks back.
There are indications that the company is likely to get some good orders in the near future. The stock is attracting support from good knowledgeable investors. Stay invested for good long term targets of Rs.175.
* After a long consolidation Nirlon Ltd. (Rs.137.65) is likely to see higher levels in the near future. Long-term target can be much higher as per informed sources.
* DIC India’s (Rs.227.10) recent rights issue at Rs.225 per share is said to have been oversubscribed. The merger of its subsidiary is also over and future outlook is said to be encouraging. This is a safe stock to accumulate around Rs.220 level.
* Investors can take a small exposure in Nelco (Rs.155.40). The company is expected to do well in coming years.
* Some fund managers & high networth investors are very bullish on KCP Ltd.. Stay invested. This stock is under regular recommendation in this column from Rs.95 onwards.
* Zenith Fibres (Rs.34.10) Q3 results likely to be better compared to Q1 and Q2. Investors can take exit at higher levels.
* Indiabulls Finance (Rs.981.15) is likely to see a further upside before the demerger date. The stock has already given superb return to investors in the last one year. The stock was advised last year at Rs.400 levels before demerger of Indiabulls Realty with regular updates in this column.
* Bombay Dyeing (Rs.748.65) - Stronger reports are pouring on its real estate business. The stock is likely to see better valuations. Stay invested.
* There is talk that Surana Telecom (Rs.45) is entering into solar energy. Stock is likely to see higher levels.
* Madhucon Projects (Rs.620) has gone up by 2.6 times from Rs.243 level when it was strongly recommended in this column about a few weeks back. Book part profits and switch to Khoday India /ECE Industries for good long term gains.
* Jenson & Nicholson (Rs.18.5) was advised around Rs.7/8 levels a few weeks back. Book 50% profits.
* Stronger reports are pouring in about the valuation of Rajasthan Spg. & Wvg. Mills (Rs.227). Stay invested for target above Rs.300.
* First two quarter results of Savera Industries (Rs.104) are very encouraging. Stock is likely to see higher levels. Capital is Rs.5.96 cr. Book value is Rs.36. Stay invested.
* Artefact Projects (Rs.167) has consolidated itself as a sizeable Infrastructure & Consultancy Services Company. Keep a watch on this stock for investment on reactions.
* Rohit Ferro (Rs.102)/ Ferro Alloys (Rs.42) have given good breakout for a further upside. Sector is doing well. Stay invested.
* Hind Constructions (Rs.221)/Hind Dorr Oliver (Rs.169) are yet to participate fully in this mid-cap rally of infrastructure stocks. Stay invested. These are few of the best stocks in the sector for investment.
* Nuchem Ltd. (Rs.25) was recommended earlier in this column long back around Rs.8 level. It is attracting attention on its real estate story. Book part profit around Rs.32/35 level.
Note: Investors should avoid buying if a stock flares up sharply. Above updates are provided for investors holding from lower levels.