Narmada Gelatines Ltd (526739) C.PRICE: 67.45 Rs

The Company also proved its dedication to Research and Development by continuously innovating and discovering new processes and products. In 1988, SWGL developed Industrial Gelatine Protein Colloid (IGPC) as an import substitute for the defence sector. This resulted in the Company getting the prestigious National Award for Import Substitution from the Government of India in 1992. In 1990, it improved its liming technology, a major step towards rationalisation and reduction of cost. In 1991, it established the photographic grade gelatine and in 1992 it developed two new products, namely-Haemaccell-a plasma expander used for surgical purposes, and Spray-Dried Gelatine, thus gaining an edge over its competitors. Also in 1991, it started exporting gelatine in a small way to countries like United Kingdom, Switzerland, Germany and Bangladesh.

The Company has diversified into vermiculture. It has upgraded its effluent treatment plant for constraining the odour of the raw material used in the production of gelatines.

The Shaw Wallace group, after the demise of its founder Mr. Manu Chabbria has been in the process of selling off its businesses and has already exited the flagship company ShawWallace & Company Ltd., which has been bought by Vijay Mallaya's UB Group.

The other companieswhich have been sold off include Hindustan Dorr Oliver Ltd., and Mather & Platt Pumps Ltd.. Recently they sold Falcon Tyres Ltd to wealth sea pte ltd at a price of 151.70 currently stock is trading at 850 rs. The next company in line for the sell off could be Narmada Gelatines Ltd.

The company has an installed capacity of 2750 mtpa for Gelatine,4200 mtpa for Ossein, 10,500 mtpa for Dicalcium Phosphate and 2500mtpa for Bone Meal, on a single shift basis.

Gelatine & its Consumers

Gelatin is a niche product industry derived from the protein, collagen.The Gelatin industry at present consists of three large players whocontrol 58% of the world market and a small group of about 25companies who share the balance of the world market. More than 80%of gelatin production is undertaken in high cost continents andcountries such as North America, Europe and Japan.

The principal end-users of gelatine are the food, pharmaceutical, photographic industries, with users in technical applications.

The largest market for gelatine is the food and food processing industry. The consumption of gelatine for this industry (ediblegelatine) is estimated to represent some 61 % of the total market. This market also includes the nutraceutical segment, which is the market for health supplements, vitamin capsules and tablets.

The second largest market for gelatine is the pharmaceutical industry with an estimated consumption of around 21 % of the total market.

The photographic industry is the third largest consumer of gelatine, absorbing some 13% of the total market in various applications. In addition to the three types of gelatine produced for the above-mentioned industries, technical gelatine is also produced. This is used in the manufacture of abrasive papers, in sizing paper and textiles, and in the production of printer's rollers and matches.

COMPANY FIN DATA:

Equity Share Capital 4.03 Book Value 95.23

DIVIDEND 25% Market Cap 27.2 cr

Share holding: Promoters hold 75% Private Corporate Bodies holds 7.01% public holds 17.47%

DEBIT: it has only 1.8 cr debit

LAST 5 YEARS FINANCIAL DATA

	Mar ' 09	Mar ' 08	Mar ' 07	Mar ' 06	Mar ' 05
Sales	68.98	56.22	52.86	50.33	46.11
Other Income	1.03	1.37	1.19	1.26	1.87
Stock Adjustment	0.94	-2.38	0.25	-0.99	-0.79
Raw Material	30.92	27.71	25.58	25.54	22.82
Power And Fuel	12.16	11.39	9.87	9.90	9.35
Employee Expenses	6.97	6.90	6.59	7.51	6.20
Excise	0.00	0.00	0.00	0.00	0.00
Admin And Selling Expenses	0.00	0.00	0.00	0.00	0.00
Research And Development Expenses	0.00	0.00	0.00	0.00	0.00
Expenses Capitalized	0.00	0.00	0.00	0.00	0.00
Other Expenses	7.16	5.43	5.85	5.26	5.27
Provisions Made	0.00	0.00	0.00	0.00	0.00
Operating Profit	10.83	7.17	4.72	3.11	3.26
Interest	0.46	0.29	0.27	0.41	0.69
Gross Profit	11.40	8.25	5.64	3.96	4.44
Depreciation	1.48	1.36	1.30	1.58	1.27
Taxation	3.49	2.48	1.76	0.14	1.20
Net Profit / Loss	5.86	4.34	2.38	0.93	1.87
Extra Ordinary Item	0.00	-0.07	-0.20	-1.31	0.10
Prior Year Adjustments	-0.57	0.00	0.00	0.00	0.00
Equity Capital	4.03	4.03	4.03	4.03	4.03
Equity Dividend Rate	25.00	20.00	15.00	11.00	0.00
Agg.Of Non-Prom. Shares (in Lacs)	10.08	10.08	9.43	8.43	8.43
Agg.Of Non PromotoHolding(%)	25.00	25.00	23.39	20.91	20.19
OPM(%)	15.70	12.75	8.92	6.17	7.07
GPM(%)	16.28	14.32	10.43	7.67	9.25
NPM(%)	8.37	7.53	4.40	1.80	3.89
EPS (in Rs.)	14.54	10.77	5.91	2.31	4.64

Conclusion: last year company has invested 3.28 cr for expansion, which resulted first quarter (June 09) performance jumped to2.18 cr as compared to 1.27cr last year. sales also jumped to 20.49 cr compared to last year sale of 15.86 cr. We expect company my post 12 cr (30 Rs e.p.s) for full year and pay dividend 40 %. Current price is at 67.45 rs . we expect a price target of 125 Rs in next six months time. If promoters sells the company price may go to 150 levels (After sale of falcon tyres, stock jumped from 150 to 850).

CAUSION: LIQUIDITY IS MAIN CONCERN FOR THE STOCK

Uni Abex Alloy Products Ltd.

Uni Abex Alloy Products Ltd. produces static, centrifugal castings and assemblies in heat and corrosion resistant alloys. Manufacturing quality alloy products is its prime focus. As a leader in alloy steel castings, Uni Abex has made a significant contribution to various industries in the last three decades.

PIONEERING ACHIEVEMENTS

1976 : Reformer tubes for a fertilizer plant in India. 1983 : Bimetallic Run Out Transport Roll for an integrated steel plant in India. 1989 : Air Injection Tubes as per Lurgi design for a large sponge iron plant in India. 1989 : 50Cr-50Ni-Nb alloy components for Indian Navy for service against Fuel-Ash corrosion. 1991 : Critical components by Vertical Centrifugal Casting process for a Decanter manufacturer in Europe. 1992 : Glendon coils for a pig iron plant using Mini Blast Furnace in India. 2001 : 35Cr-50Ni-Nb alloy components for a Hot Briquette Iron Plant in India for resistance against metal dusting. 2003 : Duplex Stainless Steel alloy components by Vertical Centrifugal Casting process for a decanter manufacturer in Europe. 2006 : Developed TX-63 for Air Injector tube for high temperature application upto 1010°C.

Product range
	Refinery, Petrochemical & Fertilizer industry		Sponge Iron industry		Decanter Manufacturers
	Reformer tubes/ Catalyst tubes Harp Assemblies Hot Collectors/ Headers		Air Injection Tubes Feed Tubes Heat Protection Tubes		Bowl Cylinders Bowl Cones Conveyor Cylinders Hubs
	Iron & Steel industry		Galvanizing Plants		Metal Gasket Manufacturers
	Glendon Coils ROT Rolls Normalizing Furnace Rolls		Sink Rolls Stabilizer Rolls Entry Seal Roll		Ring Segments
	Furnace Manufacturers		Valve Manufacturers
	Radiant Tubes / Hearth Rollers Water Cooled Rolls		Cages / Seat Rings / Balls

RESULTS :- RS IN CR

NET	March 2009	December 2008	September 2008

Sales	19.13	13.87	15.38
Profit	4.53	2.23	2.48

Financial Snapshot (Rs.in millions)
Mkt. Cap	275.91
P/E *	3.92
Div	0.00
EPS (TTM) *	35.63
Book Value	105.76
Debt Equity Ratio	0.90
Return On Networth	26.55
Current Ratio	2.35
Quick Ratio	1.26

* Calculated on adjusted profit after extra-ordinary items

JOINT VENTURE WITH MANOR INDUSTRIES, FRANCE

Our Company along with Neterwala Group of Companies has formed a Joint
Venture Company (JVC) with Manoir Industries SAS, France in respect of
marketing and manufacture of reformer tubes and allied products
business for the petrochemical industries. The new Company to be named
"Manoir Petro India Ltd." will be a 60:40 JVC between Manoir Industries
and Uni Abex Alloy Products Ltd. / Neterwala Group of Companies. Our
Company will hold 20% shares in the New JV Company and the remaining
20% will be held by Neterwala Group of Companies.

Manoir Industries, France is a manufacturing company with a broad
capability in specific sectors of Chemical, Petrochemical and Refinery
markets and operates 6 foundries and 5 forging plants throughout the
world. They are the second largest producers of radiant tubes, midrex
tubes, reformer tubes, steam cracking coils and reformers for large gas
producers in the world and currently do business worth about Rs. 30
Crores in India with year on year growth. With 10 manufacturing
facilities (8 in France, 1 in Belgium 1 in UK) and joint ventures in
China and now India, they employ over 3,000 personnel and produce more
than 6000 metric tonnes per annum of centrifugally cast tubes and
static cast components in heat- resistant alloys and is worlds largest
supplier of furnace components to petrochemical, refineries,
fertilizer, direct iron reduction and galvanizing industries. The
Company should benefit considerably through this association in the
coming years.

Main highlights of the JV are:

1.  Uni Abex has entered Into a commercial rights agreement where by
Unl Abex will receive a lumpsum amount from Manoir of 425,000 Euros.

2.  In Phase-I extending over a period of three years, Unl Abex will
get guaranteed volume of orders for reformer tubes and allied products
business for the petrochemical industries failing which proportionate
margins have also been guaranteed. During this initial stage, JVC will
market Reformer Tubes and allied products and our company will receive
orders placed by JVC and Manoir (France).

3.  In Phase-ll which should commence within a period of three years,
JVC will set its own fabrication shop with advanced technology and know
how of Manoir and purchase cast tubes from Uni Abex.

4.  In Phase-Ill after successful implementation of Phase-ll resulting
in reasonable profitability and positive cash flow, JVC will set up a
full fledged Casting facility. At this stage Uni Abex would no longer
produce components / castings in competition with the JVC.

Given the fact that in the past two years, Uni Abex cumulative business
in the Petrochemical segment field was a paltry sum of Rs. 5.68 crores,
it was felt that Uni Abex would have much to gain in forming the JV
with Manor, the world leader in cast parts for the Petrochemical
Industry

note : it has small equity so don't buy for speculation buy for long term investment.

STOCK MARKET

POSITIVE FACRTORS IN THE MARKET
1) biggest factor is liquidity. There seems to be quite a bit of
liquidity in the market which is keeping it from falling and pushing
it higher.
2) Much better than expected Q1 results. The early results show an
encouraging trend. India Inc. has done a much better job in managing
their finances, especially costs. Let’s see if this trend continues for
the remaining companies.
3) A re-rating on the valuations looks likely. It seems the market is
betting on this.
4) Expectations of a big push on reforms and disinvestment. Let’s hope
the government delivers on this.
5) Moderate crude prices.
6) Benign interest rates for the time being.
7) India being a primarily a domestic consumption story, there is a
feeling that it should be de-coupled from developed markets.

NEGITIVE FACTORS IN THE MARKET
1) Valuation is quiet rich. Sensex is at more than 18 times trailing
12m earnings.
2) The bounce of almost 85% from lows has been quiet rapid.
Individually many stocks have tripled or more. Any big correction can
be violent.
3) Interest rates though currently are probably going to inch upwards
in the second half.
4) Possible downgrade of the country due to HIGH FISCAL DEFICIT in the
near future.
5) US and Europe downturn to continue for a prolonged time (maybe well
into 2010). US unemployment rate expected to cross 11% (which is
probably as high as the Great Economic Depression of 1930s) in 2010.
6) The government is burdened by huge expectation on reforms and
disinvestment. Any slippage on this front will be a big negative.
7) Government and PSU borrowing to suck out a lot of liquidity from
the markets. Will India Inc. be left with left with enough liquidity
for their capex programs. A rough calculation leads to a shortfall of
Rs. 70000-80000 crore for India Inc. ECB norms need to be relaxed for
bridging this shortfall.
8) Effect of India signing global emission norms on Indian industry to
be evaluated.
9) Deficient MONSOON can really spook the market. This needs to be
closely watched.
10) Is Adani Power IPO a pointer to market peaking out for the near
term a la Reliance Power IPO? On the face of it the IPO looks
expensive, though not as stretched as Reliance Power IPO.

stock to watch

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