dkishore
25-05-2008, 06:45 PM
Market Guidance
* Shree Bhawani Papers (Rs.10.51) Q3FY08 results were not good in view of the teething problems of the expansion being implemented, which continued even in Q4FY08. It is possible that the company may skip the dividend. The stock, if it reacts to Rs.8 level, can be a good investment. The company has already earned Rs.2 cr. by way of carbon credits and is likely to get Rs.2 cr. over the next few years. Stay invested.
* Rainbow Paper (Rs.157) - Investors can take a small exposure to this stock. The company has a small equity base of Rs.5.47 cr., expected EPS for FY08 is likely to be around Rs.16/17, which is likely to go up sharply with the benefit of expansion in coming years.
* Net profit of Kesar Enterprises (Rs.67.20) rose 2925% to Rs.8.47 cr. in Q4FY08 as against Rs.0.28 cr. in Q4FY07. Sales rose 3.18% to Rs.44.80 cr. in Q4FY08 as against Rs.43.42 cr. during in Q4FY07. Its equity is just Rs.6.79 cr. and restructuring is likely to create greater value for long-term investors.
* JK Paper (Rs.39) undertook a Rs.300-cr. capacity expansion last year. Its 60,000-tonne packaging board facility has started production. The company has increased prices of its product by Rs.2000 per tonne recently.
Riding on the demand from sectors like media, manufacturing, retail and FMCG, JK Paper is upbeat on the growth of the paper industry. The company is consolidating its presence in the packaging board segment, which is one of the fastest growing categories.
The company has been paying 20% dividend over the last few years and its share has a strong book value of around Rs.48. With the expected benefit of expansion in the current year, the stock looks attractive at Rs.39/40 level. It is a safe investment bet at current levels.
* Sirpur Paper Mills (Rs.88.25) - The Income Tax Appellate Tribunal (ITAT) has accepted the company's claim for a tax holiday on its power generation undertaking for FY01 to FY03. Therefore, excess provision for income-tax and deferred tax amounting to Rs.5.5 cr. and Rs.13.29 cr. respectively provided in earlier years have been written back.
The Mill Development and Expansion project has been commissioned w.e.f. 1st May 2008.
For FY08, net profit rose 144.89% to Rs.32.62 cr. as against Rs.13.32 cr. in FY07. Full year EPS is around Rs.21. Dividend declared is 35%. The stock looks attractive at Rs.88 level.
* Reliance Mutual Fund bought 3.73 lakh shares of Kirloskar Pneumatic (Rs.433) at Rs.421 per share on 13th May, which amounts to 2.9% of the company's stake. It already holds around 7.04% and its total holding is now around 9.94%.
* Andhra Sugar (Rs.103.15) is into caustic soda, sugar and power. Since caustic soda prices have firmed up, investors can look for better times ahead. The dividend yield is also good in this stock.
* Ramsarup Industries (Rs.164.70), the second largest steel wire manufacturer in the country after Tata Steel, hopes to save an estimated Rs.275 cr. per annum in raw material costs after merging its group company Lohh Udyog with itself as per the management. It will save an additional Rs.200 cr. by sourcing one third of its power need of 60 MW from its new captive power plant at Kharagpur. It generates unit will generate power from the gas emitted by blast furnaces and waste heat from the sponge iron unit.
It has also obtained the Clean Development Mechanism clearance and hopes to earn Rs.69 cr. over seven years by selling carbon credits from its power plant.
These are very favourable factors for the company. Investors can look forward to good times ahead.
* IL&FS Investment (Rs.281.25) is under accumulation by informed sources. Stay invested as offer for purchase may get revised to Rs.250 per share or higher.
* Ashiana Housing (Rs.76.70) - Fundamentals of the company are intact as per company sources and is said to be faring very well. For FY08, profits are likely to be around Rs.40 cr., which may go up to Rs.50/55 cr. by FY09. Investors can accumulate this stock as downside is 10/12% while there is good chance of 100% upside over the next 18 months.
* TIPS Industry (Rs.56.15) - Investors can continue to hold this stock or even add at current levels.
Note: Industries with raw material derived from crude oil are likely to suffer due to the sharp rise in crude prices and also by the weakening rupee. Investors need to be cautious of such investments. Supreme Industries, Garware Wall Ropes, DIC India are dependent on crude based raw materials.
* Shree Bhawani Papers (Rs.10.51) Q3FY08 results were not good in view of the teething problems of the expansion being implemented, which continued even in Q4FY08. It is possible that the company may skip the dividend. The stock, if it reacts to Rs.8 level, can be a good investment. The company has already earned Rs.2 cr. by way of carbon credits and is likely to get Rs.2 cr. over the next few years. Stay invested.
* Rainbow Paper (Rs.157) - Investors can take a small exposure to this stock. The company has a small equity base of Rs.5.47 cr., expected EPS for FY08 is likely to be around Rs.16/17, which is likely to go up sharply with the benefit of expansion in coming years.
* Net profit of Kesar Enterprises (Rs.67.20) rose 2925% to Rs.8.47 cr. in Q4FY08 as against Rs.0.28 cr. in Q4FY07. Sales rose 3.18% to Rs.44.80 cr. in Q4FY08 as against Rs.43.42 cr. during in Q4FY07. Its equity is just Rs.6.79 cr. and restructuring is likely to create greater value for long-term investors.
* JK Paper (Rs.39) undertook a Rs.300-cr. capacity expansion last year. Its 60,000-tonne packaging board facility has started production. The company has increased prices of its product by Rs.2000 per tonne recently.
Riding on the demand from sectors like media, manufacturing, retail and FMCG, JK Paper is upbeat on the growth of the paper industry. The company is consolidating its presence in the packaging board segment, which is one of the fastest growing categories.
The company has been paying 20% dividend over the last few years and its share has a strong book value of around Rs.48. With the expected benefit of expansion in the current year, the stock looks attractive at Rs.39/40 level. It is a safe investment bet at current levels.
* Sirpur Paper Mills (Rs.88.25) - The Income Tax Appellate Tribunal (ITAT) has accepted the company's claim for a tax holiday on its power generation undertaking for FY01 to FY03. Therefore, excess provision for income-tax and deferred tax amounting to Rs.5.5 cr. and Rs.13.29 cr. respectively provided in earlier years have been written back.
The Mill Development and Expansion project has been commissioned w.e.f. 1st May 2008.
For FY08, net profit rose 144.89% to Rs.32.62 cr. as against Rs.13.32 cr. in FY07. Full year EPS is around Rs.21. Dividend declared is 35%. The stock looks attractive at Rs.88 level.
* Reliance Mutual Fund bought 3.73 lakh shares of Kirloskar Pneumatic (Rs.433) at Rs.421 per share on 13th May, which amounts to 2.9% of the company's stake. It already holds around 7.04% and its total holding is now around 9.94%.
* Andhra Sugar (Rs.103.15) is into caustic soda, sugar and power. Since caustic soda prices have firmed up, investors can look for better times ahead. The dividend yield is also good in this stock.
* Ramsarup Industries (Rs.164.70), the second largest steel wire manufacturer in the country after Tata Steel, hopes to save an estimated Rs.275 cr. per annum in raw material costs after merging its group company Lohh Udyog with itself as per the management. It will save an additional Rs.200 cr. by sourcing one third of its power need of 60 MW from its new captive power plant at Kharagpur. It generates unit will generate power from the gas emitted by blast furnaces and waste heat from the sponge iron unit.
It has also obtained the Clean Development Mechanism clearance and hopes to earn Rs.69 cr. over seven years by selling carbon credits from its power plant.
These are very favourable factors for the company. Investors can look forward to good times ahead.
* IL&FS Investment (Rs.281.25) is under accumulation by informed sources. Stay invested as offer for purchase may get revised to Rs.250 per share or higher.
* Ashiana Housing (Rs.76.70) - Fundamentals of the company are intact as per company sources and is said to be faring very well. For FY08, profits are likely to be around Rs.40 cr., which may go up to Rs.50/55 cr. by FY09. Investors can accumulate this stock as downside is 10/12% while there is good chance of 100% upside over the next 18 months.
* TIPS Industry (Rs.56.15) - Investors can continue to hold this stock or even add at current levels.
Note: Industries with raw material derived from crude oil are likely to suffer due to the sharp rise in crude prices and also by the weakening rupee. Investors need to be cautious of such investments. Supreme Industries, Garware Wall Ropes, DIC India are dependent on crude based raw materials.