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Monthly Archives: April 2007 EQUITY WATCH
Lanco Industries on a growth path APRIL 28, 2007 | ASHOK DHINGRA | LEAVE A COMMENT Ductile Iron ( DI ) Pipes are the preferred pipes for drinking water infrastructure.Lanco Industries is the only fully backward integrated producer of DI Pipes. It has capacity of 90,000 tonnes of spun DI Pipes, 150,000 tonnes of Pig Iron , 90,000 tonnes of Slag Cement,and 51,000 tonnes of Castings.Besides these it also owns captive Iron Ore Mines and that way its a fully backward integrated DI Pipes producer in India. Electrosteel castings another major DI Pipe producer owns 57 % of Lanco’s Rs. 39.7 crore equity. Market cap. of Lanco is just about Rs. 160 crores. Over the last 3 years Lanco has installed 150,000 tonnes capacity Coke Oven Plant and 12 MW Power Plant based on Waste Heat Recovery from Coke Oven Plant. Replacement costs of all its plants excluding Captive Iron Ore mines will be above Rs. 500 Crores. Co’s top line for FY 07 is expected to be more than Rs. 425 crores ,growth of about 30 % YOY. Hoewever its bottom line is expected to be Rs. 18 crores a growth of 350 % over FY 06 PAT of Rs. 4.1 crores.Results for FY 07 and Q4 are expected on 30th April . Co. may also declare dividend. At Rs. 40, share seems to be highly undervalued and is available at P/E of just 4.5 based on its future FY 08 PAT of Rs. 36 crores or an EPS of RS.9 .All other producers of DI Pipes are quoting at P/E of 10+ includig its parent Electro Steel Castings. Demand for DI Pipes is expected to grow at more than 30 % as Govt. has set aside Rs. 25,000 crores for Drinking Water Infrastructure because of growing urbanisation and inadequate existing infrastructure. Besides domestic demand there is growing overseas demand too for DI ppes. Most important for Lanco is its parentage in Electrosteel Castings and there is a distinct possibility of Lanco mergig with its parent. In that scenario the share will be re-rated and will quote at P/E of about 10. Buy is recommended on Monday the 30th April at CMP, before declaration of FY 07 results and dividend, and HOLD for atleast one year to see a price close to 3 digits. This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security (http://www.delhiplanet.com/#). The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision
EQUITY WATCH
SRF LTD. a blue chip in the making APRIL 20, 2007 | ASHOK DHINGRA | 3 COMMENTS A major player (http://www.netequityresearch.com/blog/www.srf.com) in refrigerant gases, coated fabrics,industrial synthetics,packaging films,belting,pharma chemicals etc. with expected turnover of Rs. 2000 crores for FY07, PAT of Rs. 310 crores, EPS of Rs. 48 is available at a P/E of just 3.1. Co’s top line growth rate YOY is more than 40% and its bottom line growth is expected to be 200%.Time to pick up this undervalued share is NOW, before 25th April.On 25th April, the co’s board will meet to declare final dividend along with the audited accounts for FY07.It has already declared 40% interim dividend and may declare another 40% thus making it 80% or more than 5% dividend yield. Catch it first thing on 23rd April, before it takes a quantum jump from its CMP of Rs. 148.
EQUITY WATCH
Jupiter Biosciences gets engaged to Ranbaxy Labs APRIL 7, 2007 | ASHOK DHINGRA | 1 COMMENT Ranbaxy Laboratories, the country’s top drug maker, plans to acquire 14.9 per cent stake in Jupiter Bioscience Ltd, a manufacturer of specialised organic compounds, through preferential warrants. Jupiter Bioscience today informed Bombay Stock Exchange it plans to allot preferential equity share warrants to Ranbaxy. The company, however, did not mention the price at which it will allot the warrants. Jupiter would seek the approval of its board of directors in their April 12 meeting. This equity stake would take shape only after the Qualified Institutional Placement and conversion of promoter warrants into equity shares, it added. On March 30, when reports first emerged about a possible stake-sale to Ranbaxy, shares of the peptide maker jumped 10 per cent (its maximum permissible limit for one day) on BSE. The proposed warrant allotment is a part of the term sheet signed between the companies earlier which includes forging a strategic business tie-up on peptide pharmaceuticals for the global market. Jupiter Bioscience has a wholly owned US subsidiary Jupiter Bioscience Inc, to cater to markets of peptides and peptide components in the US, Europe, Canada and Japan. Its other 100 per cent subsidiary Sven Genetech is engaged in making nutraceuticals, cosmoceuticals and unnatural amino acids for India and unregulated markets. In the regulatory filing on the BSE, the company said it is going to decide on the date for convening the extraordinary general meeting for considering the terms of strategic business alliance with Ranbaxy. Source: Business Standard Jupiter Biosciences is a 22 year old company and has R & D as its Core Competence. With Peptide and Chiral Chemistry as the main focus , company over the years has set up huge capacities of 156 MT of Peptide , 96 MT of Drug Intermediate and 120 MT of specialty Chemicals. But only 30 % is being used at present. Even at 30 % capacity usage Co. is making an EPS of Rs. 26 per share on an Equity Capital of Rs. 8.8 crores BV of Rs. 150 and Debt : Equity of only 0.5, share is available at BV and is doscounted ( P/E ) by 6 vs. P/E of 30 for Ranbaxy.Peptide and Chiral Chemistry caters to US $ 50 billion drug industry with Peptide Precursors in Diognostics , generic peptides, vaccines and Peptide Antibiotics.Jupiter has joint marketing relations with Clariant and R & D ties with MIT (Boston ) USA and University of Toronto Canada. Share of Jupiter Biosciences is recommended as long term BUY, and can turn out to be a Multibagger. This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security (http://www.delhiplanet.com/#). The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision
EQUITY WATCH
Teledata Infomatics keep it on your Radar APRIL 1, 2007 | ASHOK DHINGRA | 13 COMMENTS
Teledata Informatics Ltd has announced that, it plans to split the Company into three separate entities, focusing on specific businesses. The demerged entities will be Teledata Marine Solutions Ltd, Teledata Technology Solutions Ltd and Teledata Informatics Ltd (the Company). Explaining the logic for the demerger, the Company’s Managing Director, Mr. K Padmanabhan said that each business was distinct and had significant potential for growth “The de-merger will ensure better operational management and focus on accelerated growth of individual units and will also ensure higher returns. The restructuring will enable greater focus on the respective business operations and products and provide scope for independent collaboration and expansion,” he said. Moreover, the de-merger will create potential to attract different set of investors, strategic partners and lenders for each business, thereby unlocking and enhancing value for shareholders and other stakeholders, Mr. K Padmanabhan said. The scheme has been filed with the Chennai High Court for its approval. The process is expected to be completed in three to four months time, and the shares of the demerged entities are expected to be listed by April, 2007. 1. Activities of Demerged divisions: A. Teledata Marine Solutions Ltd: – Logistics Software Products and solutions – Marine software solutions – E learning solutions – Ship owning & Ship management – Logistics management – Environmental pollution certification – Port management & LPG distribution – Marine Insurance Services B. Teledata Technology Solutions Ltd: – ERP (Oracle, SAP, JD Edwards, Navision) – CRM (Clarify) The above include projects, consulting and recruitment C. Teledata Informatics Ltd: – Education – Utility – Communication – Agro Biotech 2. Subsidiaries in each de-merged entity: A. Teledata Marine Solutions Ltd: – ECM Maritime Services – Sirius Marine Services Pte Ltd – Sirius shipping Company Ltd – Picnic Marine Co Ltd – Navakun Transport Ltd – SBC Data systems B. Teledata Technology Solutions Ltd: – Transworld Information Systems – Bitech International LLC, Dubai – Alphasoft Services corporation – Datamethods – Bitech International Pte Ltd, Singapore – Nemera International Co Ltd – Netsol Technologies Ltd – Vanguard Technologies Pvt Ltd – Daan Consulting Inc C. Teledata Informatics Ltd: – Hyper Sascom Ltd – Teledata Education Management Systems Ltd – Insoft Systems Pte Ltd – iMax Networks Ltd – Voicetec International – Kryptos Networks Pvt Ltd Transfer of Assets & Liabilities to Teledata Marine Solutions Ltd: Part A Fixed Assets : 41.43 Crores Current Assets : 213.64 Crores Investments : 14.59 Crores Part B Liabilities : 56.04 Book Value of Assets over liabilities aggregates to Rs 213.62 crores Transfer of Assets & Liabilities to Teledata Technology Solutions Ltd: Part A Fixed Assets : Nil Investments : 76.57 Part B Liabilities : Nil Book Value of Assets over liabilities aggregates to Rs 76.57 crores Balance With Teledata Informatics Ltd: Part A Fixed Assets : 65.45 Crores Current Assets : 174.34 Crores Investments : 15.23 Crores Part B Liabilities : 51.49 Book Value of Assets over liabilities aggregates to Rs 203.49 crores Equity Share Capital (Post Demerger) Teledata Informatics Ltd – Rs 39.33 Crores 19.66 Crore equity shares of Rs 2 each Teledata Marine Solutions Ltd – Rs 29.49 Crores 14.748 Crore equity shares of Rs 2 each Teledata Technology Solutions Ltd – Rs 29.16 Crores 14.58 Crore equity shares of Rs 2 each How many shares, the present share holders will get after the demerger After the demerger, for 100 shares of Teledata Informatics Ltd, Shareholders will get: After the Demerger – No of Shares Teledata Informatics Ltd – 100 Teledata Marine Solutions Ltd – 50 Teledata Technology Solutions Ltd – 50
Buying 100 shares of Teledata Infomatics @ Rs. 58 will result in 100 shares of Teledata Infomatics , 50 shares of TD Marines and 50 shares of TD Technology.For FY 08 Expected EPS of Teledata Infomatics is Rs. 12 , of TD Marine Rs. 30 and of TD Technology is Rs. 20. Even at P/E of 5 the share appears to be a multibagger.Buy is recommended. This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision
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