dkishore
14-01-2008, 04:59 AM
Supreme Industries (Rs.324.30) made an investment plan of Rs.240 cr. for FY07 and FY08 of which Rs.132 cr. has been spent on:
1) A mega plastics product complex at Gadegaon near Jalgaon to manufacture varieties of plastics pipe products, Pallets, Crates, Furniture and Fabricated products from Cross laminated film.
2) A new facility at Urse- near Pune - to produce high technical protective packaging products.
3) To enhance the Injection Moulding capacity at its plants in Durgapur, Lalru, Talegaon, Pondicherry, Noida and Khushkheda.
4) Acquiring moulds for new products in Furniture and Crates.
5) To boost the capacity of Cross laminated films and products at Halol and Silvassa.
It is building a ten storey commercial complex with an office space of around 2,10,000 sq. ft. with a two level of basements for parking 350 cars at Veera Desai Road, Andheri West. Two level basement areas are nearing completion. The whole complex should be ready for occupation by the last quarter of 2008.
The company has sold the development rights of Salt Lake area and received Rs.12.03 cr. received for the same.
It has also decided to quit from segments where its product range is not differentiated, viz. Rigid PVC film at Malanpur and FSW division at Daman. This restructuring should improve its working in FY08.
The company is also exploring the possibility of disposing off some units, which do not give adequate returns and may realize a good amount if it decides to divest these assets. These divestments will also release the working capital blocked in these product segments.
The company expects to accelerate its presence in the segments where the ‘Supreme’ brand commands high respect.
Company's Strength & Growth Drivers:
1) Manufacturing sites: The company has 16 manufacturing sites widely spread in the country. Supplies from Urse and Gadegaon will further strengthen its ability to provide cost effective solutions for its customers.
2) Distribution Network: The company has built up an excellent distribution team and trains them to ensure proper service to its ultimate customers.
3) Growth Drivers: The company is continuously innovating to increase the share of its speciality products in each segment to meet the demanding specifications of its end users. The proportion of such business is growing in each product segment.
Plastics Piping Systems:
The company categorizes piping products into two broad categories:
a) Building and Installation: It has products used above the ground level including SWR System, Aqua gold system, PPR system, ASTM Threaded Pipe, Plumbing Pipes used for hot and cold water connections. It is adding two new systems, one for rainwater harvesting and one for Hot and Cold water plumbing in the current year.
b) Civil & Infrastructure: It comprises mainly products used below ground level and includes pipes for drinking water, irrigation, casing and submersible pipes, underground drainage, storm water system and sewage system. It will add two new systems, one for Gas distribution and the other for Industrial usage.
The company has already reported improved working for H1FY08 ended on 31st December 2007. Sales were up by 10% at Rs.542 cr. while net profit was up by 15% at Rs.22.81 cr. This is despite the shut down for a few weeks in November/December 2007 and loss of sales for discontinuing of some of the businesses.
The company had jointly promoted Supreme Petro, where it holds investment at cost value of Rs.33 cr. whose market value is Rs.125 cr. With expanded capacity in operation, H2FY08 results should be very encouraging, which is normally better than H1.
At present, stocks related with water sectors are much sought after by informed investors. Since products of the company are water related and also pertain to the infrastructural sector, the stock is likely to attract the attraction of fund managers and market players.
Investors with long-term view can add this stock on reactions for good long-term growth.
* Ion Exchange (Rs.277.95) - The Government plans to privatise drinking water and sanitation projects will also open up drinking water purification and operation & maintenance business for water treatment companies.
The expansion of company's solutions portfolio for entire environment management-water, waste water, solid waste, air and renewable energy and diverse sectors in infrastructure, industrial, municipal and household are expected to result in its significant growth.
Significant increase in its company's presence overseas and the global acceptance of its products and services are expected to drive its export business. The company views the future with optimism.
It has already reported encouraging H1FY08 results with sales going up by 30% to Rs.220 cr. and net profit higher by 129% at Rs.2.79 cr.
ICICI Prudential Mutual Fund hold 5 lakh shares from lower levels and recently Rakesh Jhunjhunwala is said to have taken a good investment position in the company.
With a strong order position, the company is expected to report sharp improvement in coming years. We have been strongly recommending this stock from Rs.110/120 level. Stay invested or add on dips only for good long-term growth.
* Ansal Housing & Construction Ltd. (Rs.310) - The Ansal group is a reputed real estate developer predominantly in North India. The company’s future strategy is to focus on development of integrated townships in the suburbs. This will help the company acquire land at relatively low cost and get better realizations and higher returns over time as prices in the townships appreciate faster than inflation.
Despite the residential segment being the biggest contributor, AHCL is now seeing increased activity in commercial division since it has aggressively forayed into shopping malls and retail space. In collaboration with Radisson Worldwide, it is setting up chain of restaurants across India with "The Great Kebabs Factory" and "Superstars" already operational in Noida.
The company has land bank in 22 cities across India and has plans for hotels wherever they have townships. The total value of the projects is close to Rs.6,500 cr. Currently, AHCL has access to an extensive land bank of about 2,600 acres (67.6 mn. sq. ft. of saleable area with AHCL share being 54.6 mn sq. ft.) either directly or through subsidiaries or through joint developments, majority of which is located in Tier II and III cities primarily in North India. Importantly, the acquisition cost of these lands is reasonably low, for which company has been able to register better profit margin compared to its peers.
For H1FY08, it has clocked a growth of about 30% in sales revenues and 57% growth in profit after tax. For full year FY08, it may achieve a profit after tax of about Rs.65 cr. which would translate into an EPS of Rs.40. The total value of projects is about Rs.6,500 cr., but its market cap is just Rs.520 cr., and stock is trading at a price to earning ratio of about 8 on its current FY08 earnings. Development work has started on about 2,000 acres of land bank and work on the remaining land bank will start within a year. Considering the company’s strong project pipeline, we estimate revenues and PAT to grow at a CAGR of 40% to 50% over the next 4-5 years.
In this current market, it’s difficult to find such undervalued real estate stocks. Add on reactions around Rs.300 level.
Market Guidance
Grauer Weil (Rs.167.80) had given 1st phase at Rs.36/37 per sq. ft. about three years back or so. Current rates are around Rs.150 per sq. ft. Moreover, Big Bazar and Cinemax pay a comparatively lower rate but attract huge crowds which will help the second phase of the project of approx. 3,00,000 sq. ft. at much higher rates
The 2nd phase will be ready by 31st March 2008 and lease rental income will come from Q2FY09 onwards.
Existing rates, too, come for renewal at much higher levels, which will bring about a sharp improvement in sales & margins over the next few years. IT park approval is expected any time for its Pune unit.
A group company has real estate of around 3.5 acres at Mumbai and there is possibility of a merger once it comes out of BIFR.
Its core business is also said to be doing well.
There is selling in the counter above Rs.180 level. Sustained closing above Rs.190 level can give good breakout. It’s a good stock to add around Rs.160/165.
* Paper stocks are expected to do very well in future in view of firming paper prices. Sirpur Paper (Rs.123.10) recommended as a safe investment around Rs.60/63 level is catching fancy and has reached the levels of Rs.150 before reacting to Rs.122. The company will get good benefit of expansion, which it has completed timely. This benefit will come next year only. Investors are advised to stay invested.
* Ballarpur Industries ((BILT) Rs.169.35), which was recommended at Rs.120 level is also good to hold for good long-term growth.
* Finolex Cables (Rs.118.85) - There is unconfirmed news that the company is likely to list one of its subsidiaries in which it holds a good stake indirectly. The stock is good portfolio choice. Stay invested.
* Jetking (Rs.331.75) investors can continue to hold this stock.
* Nile Ltd. (Rs.272.85) is another good stock which investors can think of adding on reactions.
* Cairns India (Rs.240), MTNL (Rs.188.70) and GTL (Rs.275.05) are good for investors looking for speculative cum investment buying for good targets over next few months.
* Tata Metaliks (Rs.187.80) reported a net profit of Rs.15.86 cr. in Q3FY08 as a against net loss of Rs.1.12 cr. during Q3FY07. Sales rose 83.74% to Rs.271.92 cr. in Q3FY08 as against Rs.147.99 cr. during Q3FY07. For the first 9 months of the current year, its EPS is Rs.17.46 while full year estimated EPS is likely to be in the region of Rs.25/26. The stock is available at a P/E ratio of less than 8. The company has formed Tata Metalik Pipes as a subsidiary to make pipes, which are in good demand. Invest in this stock for good long-term growth.
* Hindusthan National Glass & Industries (Rs.1330.50) manufactures glass containers with a capacity at an average of 6.5 million pieces per day. The growth in Beer, Pharma, Food, Liquor and other high-end sectors will drive the growth in revenue and profitability of the company.
Its H1FY08 EPS was Rs.31.6 up by 320% compared to the previous corresponding period. Promoter holding is 91%. Stay invested or add on reactions.
* English Indian Clay (Rs.2807.25) - Though the stock has shot up recently from Rs.1700 to Rs.2800 while other mid-caps were falling. Investors can continue to hold this stock for further gains with long-term view in mind.
* Ashiana Housing (Rs.698.65) though the stock has given superb returns over the last 24 months but long-term investor likely to see further good appreciations. Stay invested.
* Shree Ram Urban (Rs.389.80), Tyche Peripherals (Rs.102.55) and Advanced Micro (Rs.101.55) are likely to see higher levels as per informed sources. Stay invested.
1) A mega plastics product complex at Gadegaon near Jalgaon to manufacture varieties of plastics pipe products, Pallets, Crates, Furniture and Fabricated products from Cross laminated film.
2) A new facility at Urse- near Pune - to produce high technical protective packaging products.
3) To enhance the Injection Moulding capacity at its plants in Durgapur, Lalru, Talegaon, Pondicherry, Noida and Khushkheda.
4) Acquiring moulds for new products in Furniture and Crates.
5) To boost the capacity of Cross laminated films and products at Halol and Silvassa.
It is building a ten storey commercial complex with an office space of around 2,10,000 sq. ft. with a two level of basements for parking 350 cars at Veera Desai Road, Andheri West. Two level basement areas are nearing completion. The whole complex should be ready for occupation by the last quarter of 2008.
The company has sold the development rights of Salt Lake area and received Rs.12.03 cr. received for the same.
It has also decided to quit from segments where its product range is not differentiated, viz. Rigid PVC film at Malanpur and FSW division at Daman. This restructuring should improve its working in FY08.
The company is also exploring the possibility of disposing off some units, which do not give adequate returns and may realize a good amount if it decides to divest these assets. These divestments will also release the working capital blocked in these product segments.
The company expects to accelerate its presence in the segments where the ‘Supreme’ brand commands high respect.
Company's Strength & Growth Drivers:
1) Manufacturing sites: The company has 16 manufacturing sites widely spread in the country. Supplies from Urse and Gadegaon will further strengthen its ability to provide cost effective solutions for its customers.
2) Distribution Network: The company has built up an excellent distribution team and trains them to ensure proper service to its ultimate customers.
3) Growth Drivers: The company is continuously innovating to increase the share of its speciality products in each segment to meet the demanding specifications of its end users. The proportion of such business is growing in each product segment.
Plastics Piping Systems:
The company categorizes piping products into two broad categories:
a) Building and Installation: It has products used above the ground level including SWR System, Aqua gold system, PPR system, ASTM Threaded Pipe, Plumbing Pipes used for hot and cold water connections. It is adding two new systems, one for rainwater harvesting and one for Hot and Cold water plumbing in the current year.
b) Civil & Infrastructure: It comprises mainly products used below ground level and includes pipes for drinking water, irrigation, casing and submersible pipes, underground drainage, storm water system and sewage system. It will add two new systems, one for Gas distribution and the other for Industrial usage.
The company has already reported improved working for H1FY08 ended on 31st December 2007. Sales were up by 10% at Rs.542 cr. while net profit was up by 15% at Rs.22.81 cr. This is despite the shut down for a few weeks in November/December 2007 and loss of sales for discontinuing of some of the businesses.
The company had jointly promoted Supreme Petro, where it holds investment at cost value of Rs.33 cr. whose market value is Rs.125 cr. With expanded capacity in operation, H2FY08 results should be very encouraging, which is normally better than H1.
At present, stocks related with water sectors are much sought after by informed investors. Since products of the company are water related and also pertain to the infrastructural sector, the stock is likely to attract the attraction of fund managers and market players.
Investors with long-term view can add this stock on reactions for good long-term growth.
* Ion Exchange (Rs.277.95) - The Government plans to privatise drinking water and sanitation projects will also open up drinking water purification and operation & maintenance business for water treatment companies.
The expansion of company's solutions portfolio for entire environment management-water, waste water, solid waste, air and renewable energy and diverse sectors in infrastructure, industrial, municipal and household are expected to result in its significant growth.
Significant increase in its company's presence overseas and the global acceptance of its products and services are expected to drive its export business. The company views the future with optimism.
It has already reported encouraging H1FY08 results with sales going up by 30% to Rs.220 cr. and net profit higher by 129% at Rs.2.79 cr.
ICICI Prudential Mutual Fund hold 5 lakh shares from lower levels and recently Rakesh Jhunjhunwala is said to have taken a good investment position in the company.
With a strong order position, the company is expected to report sharp improvement in coming years. We have been strongly recommending this stock from Rs.110/120 level. Stay invested or add on dips only for good long-term growth.
* Ansal Housing & Construction Ltd. (Rs.310) - The Ansal group is a reputed real estate developer predominantly in North India. The company’s future strategy is to focus on development of integrated townships in the suburbs. This will help the company acquire land at relatively low cost and get better realizations and higher returns over time as prices in the townships appreciate faster than inflation.
Despite the residential segment being the biggest contributor, AHCL is now seeing increased activity in commercial division since it has aggressively forayed into shopping malls and retail space. In collaboration with Radisson Worldwide, it is setting up chain of restaurants across India with "The Great Kebabs Factory" and "Superstars" already operational in Noida.
The company has land bank in 22 cities across India and has plans for hotels wherever they have townships. The total value of the projects is close to Rs.6,500 cr. Currently, AHCL has access to an extensive land bank of about 2,600 acres (67.6 mn. sq. ft. of saleable area with AHCL share being 54.6 mn sq. ft.) either directly or through subsidiaries or through joint developments, majority of which is located in Tier II and III cities primarily in North India. Importantly, the acquisition cost of these lands is reasonably low, for which company has been able to register better profit margin compared to its peers.
For H1FY08, it has clocked a growth of about 30% in sales revenues and 57% growth in profit after tax. For full year FY08, it may achieve a profit after tax of about Rs.65 cr. which would translate into an EPS of Rs.40. The total value of projects is about Rs.6,500 cr., but its market cap is just Rs.520 cr., and stock is trading at a price to earning ratio of about 8 on its current FY08 earnings. Development work has started on about 2,000 acres of land bank and work on the remaining land bank will start within a year. Considering the company’s strong project pipeline, we estimate revenues and PAT to grow at a CAGR of 40% to 50% over the next 4-5 years.
In this current market, it’s difficult to find such undervalued real estate stocks. Add on reactions around Rs.300 level.
Market Guidance
Grauer Weil (Rs.167.80) had given 1st phase at Rs.36/37 per sq. ft. about three years back or so. Current rates are around Rs.150 per sq. ft. Moreover, Big Bazar and Cinemax pay a comparatively lower rate but attract huge crowds which will help the second phase of the project of approx. 3,00,000 sq. ft. at much higher rates
The 2nd phase will be ready by 31st March 2008 and lease rental income will come from Q2FY09 onwards.
Existing rates, too, come for renewal at much higher levels, which will bring about a sharp improvement in sales & margins over the next few years. IT park approval is expected any time for its Pune unit.
A group company has real estate of around 3.5 acres at Mumbai and there is possibility of a merger once it comes out of BIFR.
Its core business is also said to be doing well.
There is selling in the counter above Rs.180 level. Sustained closing above Rs.190 level can give good breakout. It’s a good stock to add around Rs.160/165.
* Paper stocks are expected to do very well in future in view of firming paper prices. Sirpur Paper (Rs.123.10) recommended as a safe investment around Rs.60/63 level is catching fancy and has reached the levels of Rs.150 before reacting to Rs.122. The company will get good benefit of expansion, which it has completed timely. This benefit will come next year only. Investors are advised to stay invested.
* Ballarpur Industries ((BILT) Rs.169.35), which was recommended at Rs.120 level is also good to hold for good long-term growth.
* Finolex Cables (Rs.118.85) - There is unconfirmed news that the company is likely to list one of its subsidiaries in which it holds a good stake indirectly. The stock is good portfolio choice. Stay invested.
* Jetking (Rs.331.75) investors can continue to hold this stock.
* Nile Ltd. (Rs.272.85) is another good stock which investors can think of adding on reactions.
* Cairns India (Rs.240), MTNL (Rs.188.70) and GTL (Rs.275.05) are good for investors looking for speculative cum investment buying for good targets over next few months.
* Tata Metaliks (Rs.187.80) reported a net profit of Rs.15.86 cr. in Q3FY08 as a against net loss of Rs.1.12 cr. during Q3FY07. Sales rose 83.74% to Rs.271.92 cr. in Q3FY08 as against Rs.147.99 cr. during Q3FY07. For the first 9 months of the current year, its EPS is Rs.17.46 while full year estimated EPS is likely to be in the region of Rs.25/26. The stock is available at a P/E ratio of less than 8. The company has formed Tata Metalik Pipes as a subsidiary to make pipes, which are in good demand. Invest in this stock for good long-term growth.
* Hindusthan National Glass & Industries (Rs.1330.50) manufactures glass containers with a capacity at an average of 6.5 million pieces per day. The growth in Beer, Pharma, Food, Liquor and other high-end sectors will drive the growth in revenue and profitability of the company.
Its H1FY08 EPS was Rs.31.6 up by 320% compared to the previous corresponding period. Promoter holding is 91%. Stay invested or add on reactions.
* English Indian Clay (Rs.2807.25) - Though the stock has shot up recently from Rs.1700 to Rs.2800 while other mid-caps were falling. Investors can continue to hold this stock for further gains with long-term view in mind.
* Ashiana Housing (Rs.698.65) though the stock has given superb returns over the last 24 months but long-term investor likely to see further good appreciations. Stay invested.
* Shree Ram Urban (Rs.389.80), Tyche Peripherals (Rs.102.55) and Advanced Micro (Rs.101.55) are likely to see higher levels as per informed sources. Stay invested.