Chemfab Alkalis Ltd

LAST TIME WE RECOMMENDED AT 56.00 IT WENT TO 70.00 NOW IT IS 67.00 CAN GO TO 85.00 IN A MONTH TIME WATCH AND BUY ON DECLINE

http://www.chemfabalkalis.com/AUD_Result_September.pdf

Kuantum Papers Ltd (31.00) BUY

Kuantum Papers Ltd    (ABC Paper Limited)

The ABC Paper has in-built capacity of 100 TPD of finished paper. The pulping & finishing section and ancillary facilities (steam, power, bleach and storage) is over 150 TPD equivalent of paper. The pulping section, in addition to facilities for straw and bagasse is equipped with a jute street to handle upto 10% usage in the raw material furnish at 150 TPD paper production levels. The paper making capacity is reckoned on 52 gsm output basis. The first two Paper Machines (PM I & II) have a capacity of 15 TPD each an the third machine (PM III) has a capacity of 70 TPD. 

http://cmlinks.com/moneypore/profilenew/financial.asp?mainopt=8&cocode=27640

MCAP OF THE COMPANY 25CR ASSETS AT  275 CR EXPECTING 10CR PROFIT FOR FULL YEAR. BUY FOR LONG TERM . LAST 5YEARS DIV PAID

(  7.00%

10.00%

10.00%

25.00%

25.00%)

PRAMOTERS HOLD 70% PUBLIC HOLDS 10% (6.5LAKS) STOCK EASYLY DOUBLES IN A NEXT SIX MONTHS TIME 

CAUTION : LOW LIQUIDITY 

J B Chemicals & Pharamaceuticals Ltd (BUY AT 77.00)

The latest quarterly results of JB Chemicals indicate progress made by the company in improving the margins as well as in expanding the business:

The company’s net revenue grew by 32% yoyto Rs212 crore adjusting to other operating income in Q2 FY2013;–PBIT came at Rs25.7 crore as compared to Rs.40.7 crore during Q2FY2013. This is very impressive considering that the company registered Other Operating Income (OOI) of Rs.5.12 crore in Q2FY2013 as compared Rs.32.9 crore in Q2FY2012. If we adjust for the variation in OOI, the PBIT has grown by 87% yoy Net profit was Rs.39 crore during Q2FY2013 –quarterly EPS is alone Rs.4.6;

The company has net cash of Rs.469 crore (cash & current investments of Rs.515 crore minus debt of Rs.46 crore), which is 3.1times its Net Enterprise Value of Rs.152 crore (Current market Cap of Rs.621 crore less net cash of Rs.469). Its book value is at Rs.997 crore as of September 2012, which is Rs.117.7 per share or 1.6 times the current market price;

Considering current margin and growth, the company can achieve Rs.10 EPS in FY2013, implying a P/E of 7.3x at current market price. Further, its has cash and equivalents of Rs55 per share which is 76% of current stock price. The stock can easily double in a year’s time. - My target for JB Chemicals is Rs 150 for the long term

SOURCE : DUKE

Steelcast Ltd (53.00) BUY

Steelcast Ltd. is India’s leading steel castings manufacturing company in the earthmoving equipment sector. Strong demand from user industries in India and globally has put the company on a high growth trajectory. Steelcast Ltd. is expected to post revenues of over Rs 2.20bn in FY12, with nearly 45% coming from exports to several countries globally, including USA and Germany.  Steelcast’s manufacturing capacity is in excess of 24,000 tons per annum and further expansion is planned in the coming few years. Some of the company’s major clients are Caterpillar, Komatsu, ThyssenKrupp, JCB, Tatas, L&T, Essar, BEML and BHEL. It will soon be adding two major clients, the Indian Railways as well as the US Railways for freight-related castings supplies. Being an ISO: 9001-2008, ISO: 14001-2004 and OHSAS 18001-2007 certified company; it has norms and systems for quality assurance covering all stages. Kurimoto Ltd. of Japan continues to hold a 2.5% stake in the company.

JV in US with Michigan Steel to tap this huge market

HIghlights:

• Gujarat-based Steelcast Ltd. and Michigan Steel of USA have formed a 50:50 JV, Steelcast LLC, to tap the huge US castings market
• Inspection team from the US Railway to come within a month to give final approval for supplies from Steelcast’s manufacturing facilities at Bhavnagar
• Steelcast JV in the USA has potential to generate Rs 200 crore revenues over next five years from US Railways demand only

 The company can now tap huge castings demand from US Railways Steelcast has received quality assurance certification from the Association of American Railroads. This certification will help the company to tap the huge US Railways demand for steel castings. Steelcast has thus achieved the distinction of becoming only the second castings company in India to have got this accreditation

http://cmlinks.com/moneypore/profilenew/financial.asp?mainopt=8&cocode=3496 

STEELCAST EXPECTED TO POST 13 EPS FOR FY13

BUY ON EVERY DECLINE FOR A TARGET OF 75RS IN NEXT SIX MONTHS

http://www.steelcast.net/Q_Result.pdf 

 

Sarda Energy & Minerals Ltd (BUY- 131.00)

Company Profile:
Sarda Energy & Minerals Ltd (Formerly Raipur Alloys & Steels Limited). is a major player in the field of manufacturing of Ferro Alloys, Steel billets & ingots and Sponge Iron backed with its own Power Plant and Coal, Iron ore and Manganese ore mines. This is a Public Limited Company which is listed in Bombay Stock Exchange. The Group had mainly two big companies viz. Raipur Alloys & Steel Ltd. and Chhattisgarh Electricity Co. Ltd. On 1st July 2007, CECL has merged with RASL, which has subsequently changed its name to 'Sarda Energy & Minerals Ltd.'. Our future projects are Integrated Steel Plant at Mandhar,Raipur, 1100 mega power project at Champa, Power Plant at Kollam,Raigarh and Coal Washery Plant at Karwahi,Raigarh(CG).Raipur Alloys & Steel Ltd. was incorporated in 1973. This is ISO 9001:2000 certified company. The Company was taken over by the present management in 1978-79 as a sick unit with a meager steel ingot making capacity of 18,000 MT per annum. The Company had continuously modernized & expanded its production facilities, bringing up the steel making capacity to 1,40,000 MT per annum. The Company went into backward integration in the year 1991 with installation of Sponge Iron Plant of 30,000 MT per annum capacity, which was further expanded in 1995 to 60,000 MT. Presently the plant produces 3,60,000 MT of sponge iron per annum with its Two 100 TPD Kiln and two 500 TPD Kiln. Chhattisgarh Electricity Co. Ltd.(CECL) commenced production in 2001. The company has an integrated state of the art Ferro Alloys plant with an installed capacity of 66,000 tonnes of Ferro alloys production annually backed with its own captive Thermal Power Plant of 50 MW. The company has five 9 MVA closed top submerged Arc Furnaces equipped with pan casting facility for slag and tramp free tapping, ensuring cleaner product.

 

 

 COMPANY POSTED GOOD RESULTS FOR LAST TWO QUARTERS SEE RESULTS

 

http://www.seml.co.in/Financials/Quartely%20Results/2012-13/results_1213q2.pdf 

 

 http://cmlinks.com/moneypore/profilenew/financial.asp?mainopt=8&cocode=1140

 

 

EXPECTING 35 EPS FOR FULL YEAR   BUY FOR A TARGET OF 200 IN NEXT 6 MONTHS STOCK HAS LOW DOWN SIDE RISK IN LAST 6 MONTHS STOCK LOW WAS 112.00RS HIGH 145.00 ONLY .BOOK VALUE AT 225.00RS

 

 

 

TCPL Packaging Ltd BUY AT 52.00

TCPL Packaging Ltd., (formerly known as Twenty-First Century Printers Ltd) was promoted by the Kanoria family, and began commercial production in April 1990. It is one of India's largest manufacturers of printed folding cartons, and one of the few listed packaging companies in India.

Today, TCPL Packaging Ltd. operates out of its six manufacturing units ; three in Silvassa, 180 kms from Mumbai in Western India ; two in Haridwar, 200 kms from Delhi in Northern India ; and one in Goa, 600 kms from Mumbai in Western India. All the plants are ISO 9001: 2008, ISO 22000 : 2005 certified and are also compliant with BRC/IoP Global Standard-Packaging Issue 3, which is suitable for direct food contact. In addition, plants at Silvassa and Haridwar are also FSC certified & SEDEX Compliant.

TCPL is one of the largest exporters of printed cartons from India. It regularly caters to consumers in countries like UK, The Netherlands, UAE, Bangladesh etc. Exports constitute about 17% of TCPL's annual revenues.

For the financial year ended 31st March 2012, TCPL's revenues were Rs.295.68 crores (US$ 59 million) registering a CAGR in excess of 20% over the past five years. TCPL is currently converting approx. 3500 tons of paperboard every month, making TCPL one of India’s largest converters of paperboard.

TCPL manufactures following range of products :
Printed blanks & outers, Folding cartons, Litho Lamination, Plastic cartons, Blister paper, Shelf ready packaging.
 LAST 6 YEARS POSTED CONSISTENT GROWTH OF 20-25% AND PAID CONTINUE DIVIDEND 20-15 %

http://cmlinks.com/moneypore/profilenew/financial.asp?mainopt=3&opt=P&cocode=1764 

LAST QUARTER IT HAS POSTED 100% PROFIT GROWTH AND 40% SALES GROWTH . EXPECTING BIG CHANGE IN THE COMPANY . ITS A JSW STEEL (SAJAN JINDALS)COMPANY 

BUY FOR A TARGET 75RS IN NEXT 3 MONTHS
 http://www.indiaprwire.com/downloads/document/201207/31315.pdf

Unichem Laboratories Ltd BUY CMP-175.00

Unichem Laboratories: On a healthy track

Besides branded formulations, which are at the core of it business, Unichem alsomanufactures active pharmaceutical ingredients (APIs or bulk actives) and has strongpresence in niche therapy areas of cardiology, neurology, and anti-infectives. Currently,the top 25 brands contribute approximately 67% of the company’s domestic revenue. Itsdomestic formulations’ portfolio revenue comprises 63% from chronic therapies and 37%from acute therapies. It entered into two new therapeutic segments, i.e., hospitalproducts and gynecology in the financial ended March 2012 (FY 2012).

Unitech launched 12 new products in various therapeutic segments like cardiology andneurology in the last financial year. Cardiology continues to be the dominant segment.Approximately 75% of its revenue comes from cardiology, anti-infectives, and neurologytherapeutic formulations. The top 10 brands of the company are Ampoxin, Losar, Losar H,Linox, Serta, Telsar, TG-Tor, Trika, Unienzyme and Vizylac.

  Unichem’s twin focus in the API business is contract development and manufacturingat a reasonable margin and backward integration with its formulation business throughcost-effective processes. There are strategies in place to expand customer base in newgeographies, which should drive growth in the coming years.

  Backed by a highly capable and motivated team of nearly 3,000 people, Unichem isheadquartered in Mumbai, India, and has six drug manufacturing locations across thecountry. In keeping with its commitment to benchmark quality standards, several of thecompany’s facilities have been accredited by international regulators such as the USFDA, ISO, UK MHRA, MCC (South Africa), WHO (Geneva), and TGA (Australia).

  Unichem has presence in over 20 countries across five continents. It has fourwholly-owned subsidiaries in UK, USA, Brazil, and South Africa. Apart from this, thecompany has a network of distribution and marketing alliances in the, Nepal, South-EastAsian region, Europe and Latin America.

  Unichem has expanded its R&D facility in Mumbai to spearhead research in novel drugdelivery systems (NDDS) and chemically synthesize non-infringing routes for themanufacture of medical products directed at regulated markets. In its effort to driveinnovation, the company has established a proprietary pharma technology development centrein Goa to focus on the development of generic formulations comprising immediate release aswell as NDDS and abbreviated new drug applications (Andas) exclusively for the US market.The facility has also been equipped to handle the development of formulation for newchemical entities (NCEs). Further, it has also established Biotech facility in Goa toinvent, design, develop and commercialize biotech and biosimilar products.

  To expand its global footprint, Unichem has actively undertaken efforts to developstrategic alliances and partnerships with companies where there is a clear synergy. Thecompany works with multinational pharmaceutical research organisations to developformulations. It is also in collaboration with generic companies to fulfill their APIneeds and develop formulations for them to be supplied in regulated markets. There areseveral development programs running to supply cost-effective advance intermediatesrequired for NCEs. Several dossiers have been filed on behalf of multinational genericcompanies. Unichem has also obtained approvals and supplied formulated products from theirmanufacturing plants for regulated markets.

  Unichem’s sales jumped 40% to Rs 264.86 crore and the operating profit marginimproved 380 basis points to 18.0% from 14.3%, taking OP up 78% to Rs 47.802 crore and PAT112% to Rs 33.14 crore in the quarter ended June 2012. Domestic branded formulationsrevenue grew 21.0% to Rs 168.49 crore compared with the corresponding quarter of theprevious year an51.4% on a sequential quarter. The increase was largely driven by thechronic segment, cardiac and neurology, which brought in around 65% of revenue.

  The international formulation business income spurted 162.4% to Rs 65.62 crore over ayear ago, led by commercialisation of the Ghaziabad (Uttar Pradesh) plant in the thirdquarter of the fiscal ended March 2012 (FY 2012) and favourable currency movements and by20.7% over the quarter.

  The domestic API business jumped 74.2% to Rs 7.63 crore in the June 2012 quartercompared with the corresponding quarter of the previous year and 33.3% over the March 2012quarter. The international API sales expanded 19.5% to Rs 21.57 crore over the yearcompared with a corresponding quarter of the previous year and 13.3% over the quarter.

  We expect Unichem to register sales of Rs 1032.91 crore and net profit of Rs 132.7crore in FY 2013. EPS works out to Rs 14.7. The share price trades at Rs 175. P/E worksout to 12.2
 

 Table


 

Unichem Lab: Standalone financials
	1003(12)	1103(12)	1203(12)	1303(12P)
Sales	690.6	764.74	803.19	1032.91
OPM (%)	26	21.1	15.9	18.8
OP	179.77	161.18	127.47	193.73
Other inc.	6.58	7.96	9.39	17.83
PBIDT	186.35	169.14	136.86	211.56
Interest	0.51	1.95	3.3	4.81
PBDT	185.84	167.2	133.56	206.75
Dep.	21.47	27.22	28.29	35.21
PBT	164.37	139.98	105.27	171.54
Tax	30.43	31.48	22.81	38.84
PAT	133.94	108.5	82.46	132.7
EPS (Rs)*	14.8	12	9.1	14.7
*Annualised on equity of Rs 18.07 crore: Face value of Rs 2 each. (P): Projections. Figures in crore.
Source Capitaline Databases

Weizmann Forex Ltd (BUY- CMP-80.00)

Weizmann Forex Ltd. is a part of the Rs. 35 billion Weizmann Group that has diverse interests in Textile Manufacturing, Exports, Hydro and Wind Power generation, Foreign Exchange transactions, Inward Money Transfer and other financial services.

Weizmann Forex Ltd. with a modest beginning of four branches in 1993, has grown multifold to become a leading player in the foreign exchange and remittance market with a network of 500 plus locations spread all over India. On the basis of its track record on compliance and size, Weizmann Forex has been upgraded to the status of Authorized Dealer Category-II by RBI, permitting it to undertake a large number of activities for the benefit of its customers.

Our staff is professionally committed to offer you the most competitive exchange rate accompanied with fast, friendly and efficient service. We deal in Foreign Currency Cash, Foreign Currency - Demand Draft (DD) and Telegraphic Transfer (TT), Prepaid Travel Cards, Traveller's Cheque, Travel Insurance, General Insurance, Tours and Travel – International and Domestic Air Tickets, Mobile and DTH recharge and Inbound Money Transfer - "Western Union Money Transfer", thereby offering you an entire basket of products and services under one umbrella. You have the convenience to order your foreign exchange requirements online by clicking on the "ORDER FOREX ONLINE" link below and we will be pleased to assist you at the fastest 'Turn around Time'. Make Weizmann Forex the first choice for your forex needs and other financial product requirements. 

http://cmlinks.com/moneypore/profilenew/financial.asp?mainopt=8&cocode=41315

 BUY ON EVERY DIP  ITS GENERATING GOOD CASH FLOW YEAR ON YEAR AND PAYING 20% DIV. EXPECTING 30% THIS YEAR. BUY THE STOCK ON EVERY DIP IT'S TRADING ON BOTH EXCHANGES .

coal india

http://www.2shared.com/document/LLHfj78X/coalindia.html


A SPECIAL REPORT


SOURCE: EQUITYMASTER

Gujarat Automotive Gears Ltd cmp (926.50)

expecting 150 eps for full year see this quarter results . expecting price target 1300 shortly

http://www.bseindia.com/xml-data/corpfiling/AttachLive/Gujarat_Automotive_Gears_Ltd_041012_Rst.pdf

BEST BUY'S FOR 2ND QUARTER RESULTS

   1.National Peroxide Ltd   C.M.P     510.00

 http://cmlinks.com/moneypore/profilenew/financial.asp?mainopt=8&cocode=409
  
2.Mastek Ltd                C.M.P      140.00
  
http://cmlinks.com/moneypore/profilenew/financial.asp?mainopt=8&cocode=2732


  3. Mindtree Ltd             C.M.P      660.00


http://cmlinks.com/moneypore/profilenew/financial.asp?mainopt=8&cocode=20581 

  4.Parekh Aluminex Ltd   C .M.P     348.00
  http://cmlinks.com/moneypore/profilenew/financial.asp?mainopt=8&cocode=7902


5. Aegis Logistics Ltd      C.M.P    154.00

http://cmlinks.com/moneypore/profilenew/financial.asp?mainopt=8&cocode=9

LAST QUARTER THESE STOCKS REPORTED GOOD RESULTS . EXPECTING THIS QUARTER RESULTS TO BE GOOD. SO BUY FOR A MONTH . EXIT AFTER RESULTS. IF U WANT.

Chemfab Alkalis Ltd BUY AT 56.00

In India, CHEMFAB ALKALIS LIMITED [CAL] were the FIRST to introduce MEMBRANE CELL TECHNOLOGY in 1985. CAL set up the FIRST MEMBRANE CELL CAUSTIC SODA Plant in the Union Territory of Pudhucherry and commenced production in 1985. The Company is the first in the country to introduce Pollution-free Membrane Cell Technology which became the trendsetter in the Chlor-Alkali Industry. The Company started with 25 TPD capacity in 1985, expanded its capacity in two phases in 1988 and 1996 and today the present installed capacityis106 tons Caustic Soda production per day. The investment for the project is in the order of about Rs.70Crores.

The Company is promoted by M/s Titanium Equipment and Anode Manufacturing Company Limited. The Chairman of the Company, Dr C H Krishnamurthi Rao, is a self-made entreprenur. The Company is a professionally managed one and technology driven. The Company's success story in technological dynamism and commercial affordability made the Government of India to take a policy decision that only MEMBRANE Cell Technology will be adopted in the Country after the success of Chemfab Alkalis Limited. The Company has made outstanding contribution in the field of Environmental protection and energy Conservation and the Company has to its credit awards given by distinguished Institutions, Government of India and others for its contribution in the field of environmental protection, energy conservation and now getting the awards for its contribution and achievements has become a matter of routine of the Company.

CAL, is the FIRST Company in the country to manufacture Barium Sulphate from solid waste and we hold a patent for manufacture of the same.

http://cmlinks.com/moneypore/profilenew/financial.asp?mainopt=8&cocode=1216 

http://www.bseindia.com/xml-data/corpfiling/AttachHis/Chemfab_Alkalis_Ltd_060712_Rst.pdf 

CMC Ltd cmp 1120.00

    Capitaline Corner: CMC



Well positioned


 

Capitalising on opportunities in IT infrastructure management services andembedded systemsA 51% subsidiary of Tata Consultancy Services, CMC is a leading systemsengineering and integration company in India, offering application design, development,testing services and asset-based solutions in niche segments through turnkey projects. Thecompany has over 10,700 employees spread across India, the US, the UK, Europe, MiddleEast, Africa, and Asia-Pacific. Its business is structured around four strategic businessunits (SBUs): customer services (CS), IT-enabled services (ITeS), systems integration(SI), education and training (E&T).

  

The CS SBU focuses on creating solutions and providing services for theIT infrastructure requirement covering infrastructure architecture, design and consultingservices; turnkey system integration of large network and data centre infrastructures. Thescope of services includes supply of associated equipment and software, on-site and remotesupport services at multi-locations for IT infrastructure of domestic and internationalclients.

   

The SI SBU undertakes solution deployment including embedded systems,software development, software maintenance and support, turnkey project implementation,and systems consultancy. It has been one of the key drivers of the transformation towardsmore value-added business with a view to improve overall margin. The SI SBU continues toinvest and grow its solution asset base so that it can offer innovative solutions aroundthe core intellectual properties of these assets. These include enhancements ofbiometrics-based assets for identity management, mining assets for mining solutions,transportation assets, insurance and financial solution assets, and e-governance assets.
  

The ITeS SBU provides a variety of ITeS including business processoutsourcing and knowledge process outsourcing for front-end and backoffice. This SBU hascreated specific business domain expertise such as on-demand software services; officerecords digitisation and document management; recruitment and examination resultsmanagement; legacy data migration management. Also, the ITeS SBU continues to work for theElection Commission as a state-level agency. The ITeS SBU has taken initiatives toleverage its experience in handling large national projects for more rewardinginternational geographies and has over the years been one of the main drivers to increaseinternational revenue of the company.

  The E&T SBU offers education and training solutions for corporateorganisations, government institutions, and individuals.Revenue increased by 48% to Rs 452.28 crore due to 55% increase inrevenues from (SI) to Rs 264.38 crore (58% of total revenue) and 66% increase in revenuesfrom ITeS business to Rs 71.35 crore (16% of total revenue) in the June 2012 quarter overthe June 2011 quarter. The operating profit margin was flat at 16.6%. Net profit grew 68%to Rs 58.43 crore and the profit after tax margin increased 150 basis points to 10.92%. About 64.9% of revenue were from the international business, growing16% over the March 2012 quarter and 66% over the June 2011 quarter. North Americas grew 8%over the quarter and 40% over the year in dollar terms. Services grew 10% over the quarterand 52% over the year contributing 91% of revenue.

 

CMC added 20 clients in the June 2012 quarter. These clients are in ofinsurance, transportation, energy, resource and utilities and the government sector. Theseare all strategic long-term clients.

In India, higher growth is expected to come from two and three tiercities and the small and medium enterprise sector. CMC’s countrywide presence andpartner network can be leveraged to capitalize on this growth. The company’se-Pragati initiative started in 2010 specifically targets this opportunity. Cloudcomputing and virtualisation is proving to be disruptive change in IT business. It isadapting this technology for its own use as well as a part of its offerings.
 

 Convergence of mobility and web is opening several opportunities fornew applications for mobile access to the system particularly in the area of businessintelligence and reporting. Existing applications also need enhancements to incorporatethese technologies. With core competency in mobile technology as well as embedded systems,CMC will tap these opportunities.

 

CMC continues to look forward to building a momentum in product-basedsolutions and services and at the same time it is looking at how it can addressopportunities in the emerging geographies like Middle East and Africa, where the companysees considerable replication potential for its products and solutions developed forIndian markets.

 We expect CMC to register EPS of Rs 73.8 in the fiscal ending March 2013. The share price trades at Rs 968. P/E works out to 13.

 Table


 

CMC : Consolidated Financials
	1003 (12)	1103 (12)	1203 (12)	1303 (12P)
Sales	870.73	1084.4	1469.34	1965.17
OPM (%)	18.6	19.4	15.3	15.4
OP	161.73	210.71	224.32	302.17
Other inc.	18.88	11.8	17.46	25.7
PBIDT	180.61	222.51	241.78	327.87
Interest	3.3	0.22	0.02	0.04
PBDT	177.31	222.29	241.77	327.83
Dep.	9.85	10.46	21.37	29.22
PBT	167.45	211.83	220.4	298.61
Tax	24.23	32.42	68.59	75.09
PAT	143.23	179.41	151.81	223.52
EPS (Rs)*	47.3	59.2	50.1	73.8
* Current equity of Rs 30.30 crore. Face value: Rs 10.
Figures in Rs crore.
Source: Capitaline Databases

Gillanders Arbuthnot & Company Ltd BUY (62.00)

Gillanders Arbuthnot & Co. Ltd. (GACL) 

Several Companies have amalgamated with the Company from time to time. In the recent past, GIS Ltd. which had two major Divisions / businesses viz.

1. Textile Division engaged in the production of Cotton and Man made fibre/yarn and blends thereof.
2. Engineering Division engaged in the business of structural engineering, steel fabrication, execution of turn-key projects and other engineering work under the name ‘Modern India Construction Company’ (MICCO) was amalgamated with the Company.

The Company primarily deals in tea, textiles, engineering, chemical and trading business activities. GACL has a diversified business portfolio which has helped it in achieving a steady performance by overcoming adverse cyclical fluctuations to which its various businesses may be exposed from time to time.

EARLIER IT'S   A GOOD DIVIDEND YIELD COMPANY LAST YEAR POSTED LOSS BUT FIRST QUARTER THEY POSTED GOOD RESULTS 

SEE BELOW LINKS AND DECIDE .

http://cmlinks.com/moneypore/profilenew/financial.asp?mainopt=8&cocode=2415 

http://cmlinks.com/moneypore/profilenew/financial.asp?mainopt=3&opt=P&cocode=2415 

 

Nesco Ltd (BUY) cmp 654.00

Nesco Ltd was established in 1939 as New Std Engg and operated in the capital goods business. The company had plants in multiple locations in Mumbai which it finally consolidated at a single location in Goregaon on the Western suburbs of Mumbai with a 70 acre plot.

The company started incurring losses in its capital goods business and gradually shifted to the business to Gujarat and converted the Mumbai land bank into a exhibition and convention centre. The size of the land bank coupled with close proximity to the airports and the national highway has enabled it to become one of the premier exhibition centres in the country and has conducted over 500 exhibitions and events at the location. The closest competitor in Mumbai, Nehru Centre is less than 1/15^th the size in terms of exhibition space.

The company has also converted its old plant sheds into IT parks and is in the process of constructing a large IT park ( IT park 3). IT park III will have nearly 8,00,000 sq feet of space and the company has leased  out a significant chunk of this project which is under construction and should be ready for fit outs in the next couple of months. 

The management has been conservative and has repaid the debt on the books and has used the internal accrual route to fund expansion for the IT park that it is setting up. The management has clearly stated plans for IT park IV and IT park V where it intends to use the cash flow generated out of the exhibition business and rental income to fund construction of the remaining IT parks.

Financials

FY 2011

a) Income

1)       Convention Business -  65.62 crores ( up 21% over previous year)

2)       IT Park ( rent Income ) – 51.61 crores

3)       Capital Goods business -  16.82 crores ( Down from 24.8 crores in the previous year)

4)       Income from investments and other income -  10 crores

b) Cash/ Investments on Balance sheet -  168 crores

c) Net Profit -  68 crores

d) Cashflow from operations -  78 crores

HY -  2011 -2012

a) Income

1) Convention Business -  25 crores ( HY 2011 -  21 crores )

2)       IT Park ( rent Income ) – 51.61 crores

3)       Capital Goods business -  15.29 crores (HY 2011 -  6.61 crores )

4)       Income from investments and other income -  3.15 crores (  HY 2011 -  3.63 crores )

b) Cash/ Investments on Balance sheet -  215 crores

c) Net Profit -  25 crores

Dividend policy

The dividend payout ratio has been poor because the management has chosen to reinvest the cashflow in construction of the new IT building. The management intends to maintain the same as it is averse to taking debt and will use internal accrual to fund further construction over the next four to five years. One can’t argue against this thought process of the management considering the high operating margin and ROCE.

Valuation

The company is currently available at a market cap of Rs 800 crores with no debt on books. Against which we have

Cash / Investment on Books -  215 crores

Net Profit – 68 crores ( Last year) 

IT Park III should start contributing from next year and on a conservative estimate of Rs 80 per sq feet should generate an additional Rs 50 crores of revenue in FY12-13. 

So net cash of the company is available at 5-6 times and which would appear low for a company with high ROE and with steady cashflow and huge entry barrier to the business.

Risks

1)       Though cashflows over the next 4- 5 years are slated to be lined up for construction of IT park IV and V, subsequent to which there is lack of clarity on what the management intends to do with the cashflow going forward. The bladder problem of management either earmarking the cash for its capital good business or blowing it up into unrelated diversifications exists.

2)       The historical low dividend payout ratio though can be argued as logically correct at this stage of the business could however turn out to be a constant thought process for the management.

3)       The biggest risk that I perceive is that the entire business model is constructed around a piece of land in a single location in Mumbai. Mumbai is currently the most expensive city in this country with respect to real estate prices. There is a situation of oversupply of commercial property in Mumbai. The company stands exposed to not just a generic correction in real estate prices ( hence associated rent income )  but more importantly derating of the Mumbai real estate market. There is a increasing trend of companies shifting their IT / ITES operations out of Mumbai to other locations like Bangalore/ Pune/ Gurgaon etc. Case in point is that Intelenet which occupies one of the building did shift a significantly large process of over 2000 ppl to Aurangabad. TCS Eserve which occupies one of the other buildings is expanding its operations in Ahmedabad and other Tier II cities. Considering the 4- 5 year window when shareholders could possibly look at actual cashflow, this is a large risk that the business carries.

 My viewpoint

Prima facie the company appears to be cheap with relatively steady cashflows. I intend to look at company from a different angle.

Is Nesco a cash bargain / holding company and hence should be valued accordingly?

Lets examine the management competency variables

1)       The biggest achievement of NESCO is the piece of land at Goregaon which it fortuitously acquired a long time back.

2)       The current business model and cashflows are dependent on this piece of land.

3)       Can we say the management has competency in the real estate business and can take up more projects beyond this piece of land like any other real estate developer. 

4)       Is the same true about the Convention business? Do we think the management has competency to set up x more convention centres across the country and run it?

5)   The only operating business that management is running which is the capital good business has a chequered past track record.

So lets flip the coin and look at NESCO as a holding company / cash bargain opportunity.  We have a plot of land which on a conservative basis can be valued at RS 2000 crores + 200 crores ( Cash on balance sheet) = Rs 2200 crores.

This piece of land through rent and the convention centre generated about  68 crores of net profit last year . (I m keeping the calculations simple at this point of time without valuing the capital goods business separately) 

Effective yield of 3.4%. This yield should go up to about 5 % with the IT building III coming to play.

The market today values

Holding companies -  25% of intrinsic value

Cash bargains  -  40-50% of cash on balance sheet

 ( One can argue on the merits and demerits of these discounts but if one feels otherwise clearly there are better managements who could  be looked at for cash bargains)

 Considering the relatively lower yield being earned as compared to other cash bargains and management risk we can value the company at about 40% holding value.

 Value of the company -  40%* Rs 2200 crores -  880 crores

Current market cap  - Rs 800 crores.

Conclusion

Considering the lack of visibility of cashflow payout to the shareholders over the next 4- 5 years, I would like to look at this opportunity a couple of years down the line as clarity emerges on the management’s thought process and visibility on dividend payout and deployment of future cashflows.

source :-     investingvalues.blogspot

HeidelbergCement India Ltd

Giving his view on the dynamics of the cement sector, Ashish Guha, CEO & MD, Heidelberg Cement explained that in order to put up a cement plant today, one will have to spend about USD 140 a tonne, which would take 3.5-4 years.

"There have been some deals in the market for a long time and none of these are coming from some stretched assets. None of them were particularly interesting. They had started up a few years back and then wanted to get out. So probably, we may see some more deals happening but it depends on the appetite of the people," said Guha.

"At about USD 140 per tonne, if you were to build up a plant and take 4 years to service that interest, if you take debt equity of 1:1 on an assumptive basis then you would look to sell cement bags at about Rs 350 plus for an average distance of 500 km. We are 20% lower than that today." Guha clarified.

Besides, Guha added that there is headroom for cement companies to raise prices further.

Here is the edited transcript of the interview on CNBC-TV18.

Q: There is an impending deal in the cement sector at this point in time. How exactly is the dynamics of the cement sector playing out? What sort of capacity utilization are you currently working at and how difficult is it possibly for companies to service debt?

A: Personally, I don’t want to comment about anyone else’s transaction because they know best why they are doing it or if they are doing it at all. So, I have no comments on that.

As far as capacity utilization goes, it varies from region to region. In central India, we are currently around 100%. In south India, we are about 85%, and in western India, we are about 85%. So that is our capacity utilization and that’s generally the trend in most places except the south where I am told the capacity utilization is around 60-65% for the other companies. But we are small in south and our capacity utilization actually doesn't imply any kind of increase in capacity utilization for the other companies.

Q: If the deal happening at these prices, it works out to about USD 160 per tonne economic value. Is this an attractive price and can we, therefore, expect more deals? After all, it's quite a bit of return of value to the table. Do you think that you can see more deals?

A: You have to compare it. Let me clarify myself with all the caveats. I am not talking about any particular transaction which is being reported in some parts of the press. I am talking generally about cement industry and what is the replacement cost etc. To put up a cement plant today, you will have to spend about USD 140 a tonne and then that takes about 3.5-4 years to put up a plant.

If there are targets which are coming at less than that or around that, it would make sense for some. If there is some synergistic value and if they are not making losses, then you can add the cash flows for the next four years and probably can justify a higher price. So it depends from case to case. But for setting up a Greenfield plant, it will take you about USD 130-140 per tonne and about 3-4 years to set up a plant.

Q: If someone is able to do a deal for a company with cash flows as USD 160/tonne, does it give you a sense that there could be more deals in the offing?

A: There have been some deals in the market for a long time and none of these are coming from some stretched assets. None of them were particularly interesting. They had started up a few years back and then wanted to get out. So probably, we may see some more deals happening but it depends on the appetite of the people.

At about USD 140 per tonne, if you were to build up a plant and take 4 years to service that interest, if you take debt equity of 1:1 on an assumptive basis then you would look to sell cement bags at about Rs 350 plus for average distance of 500 kms. We are 20% lower than that today.

D-Link India Ltd (26.00) BUY

D-Link (India) Limited is a part of D-Link Corporation and one of the largest networking company in India. The Company is engaged in Marketing and Distribution of Networking products in India and SAARC Countries. The Equities of D-Link (India) Limited are listed in NSE & BSE Stock exchanges. D-Link Holding Mauritius Inc which is 100% subsidiary of D-Link Corporation is holding 60.37% shareholding in D-Link (India) Limited.

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LAST TWO YEARS COMPANY POSTED 100% GROWTH .STOCK TRADING AT 26.00 Rs  EXPECTING  EPS  3.50 FOR FULL YEAR. EXPECTING PRICE TARGET 35 IN NEXT 6 MONTHS.BUY ON EVERY DECLINE.