maverick
19-12-2007, 06:59 AM
Rajapalyam Mills-Weaving Fibre
BSE 532503;
It is incredible that while the textile producers seek sops from the GOI to survive, there remain isolated pockets down South which outperform in adversity. Look at Rajapalayam Mils as a sparkling starting point.
-Rajapalayam Mills is a spinning mill producing yarn of different counts.
-The corporate has undertaken a technology upgradation programme under which old machines have been replaced with modern ones.
-Rajapalayam supplies high quality yarn to Mitsubishi amongst other large global players.
-As a unique diversification Rajapalayam has moved into tissue culture for ornamental and orchard plants. However, this segment has not begun contributing as yet even though the core business remains strong.
-For FY07 Rajapalayam reported Revenues of Rs 182 crore (Rs 147 crore), with after tax profits of Rs 17 crore (Rs 11 crore).
-The corporate has an Equity of Rs 3.5 crore and free reserves of Rs 104 crore, which translates into a book value of Rs 356 per share.
-For the first half to September 2007 Rajapalayam reported Revenues of Rs 100 crore, with after tax profits of Rs 6.26 crore.
-The EPS for FY07 worked to Rs 47, aided by an abnormal increase in Other Income. For FY08 normalised EPS could work out to Rs 40 per share valuing the scrip at 20 times its expected FY08 earnings.
-The Equity ownership is concenterated with the Promoter PR Ramasubhramaneya Raja and associates directly owning 53 per cent of the stock and buying more stock from the open market, and Sri La Shanmuka Desika Gnanasambanda Paramacharya Swamigal owning another 1.46 per cent. The public interest is small.
-The corporate has gone in for tax saving measures by putting up Windmills, but the bigger story is the land bank with the company.
-It is whispered that Rajapalayam Mills too could become a land bank play making the stock attractive even at current levels.
-What should enthuse investors is that against fixed investment of Rs 400 crore, Rajapalyam Mills fetches a market cap of Rs 290 crore and given the small equity and a building land bank story this stock could do well in the medium term.
BSE 532503;
It is incredible that while the textile producers seek sops from the GOI to survive, there remain isolated pockets down South which outperform in adversity. Look at Rajapalayam Mils as a sparkling starting point.
-Rajapalayam Mills is a spinning mill producing yarn of different counts.
-The corporate has undertaken a technology upgradation programme under which old machines have been replaced with modern ones.
-Rajapalayam supplies high quality yarn to Mitsubishi amongst other large global players.
-As a unique diversification Rajapalayam has moved into tissue culture for ornamental and orchard plants. However, this segment has not begun contributing as yet even though the core business remains strong.
-For FY07 Rajapalayam reported Revenues of Rs 182 crore (Rs 147 crore), with after tax profits of Rs 17 crore (Rs 11 crore).
-The corporate has an Equity of Rs 3.5 crore and free reserves of Rs 104 crore, which translates into a book value of Rs 356 per share.
-For the first half to September 2007 Rajapalayam reported Revenues of Rs 100 crore, with after tax profits of Rs 6.26 crore.
-The EPS for FY07 worked to Rs 47, aided by an abnormal increase in Other Income. For FY08 normalised EPS could work out to Rs 40 per share valuing the scrip at 20 times its expected FY08 earnings.
-The Equity ownership is concenterated with the Promoter PR Ramasubhramaneya Raja and associates directly owning 53 per cent of the stock and buying more stock from the open market, and Sri La Shanmuka Desika Gnanasambanda Paramacharya Swamigal owning another 1.46 per cent. The public interest is small.
-The corporate has gone in for tax saving measures by putting up Windmills, but the bigger story is the land bank with the company.
-It is whispered that Rajapalayam Mills too could become a land bank play making the stock attractive even at current levels.
-What should enthuse investors is that against fixed investment of Rs 400 crore, Rajapalyam Mills fetches a market cap of Rs 290 crore and given the small equity and a building land bank story this stock could do well in the medium term.