Low Priced Scrip Indo Borax & Chemicals Has High Chances of Better Valuations
With the investor sentiment taking a hit in 2008 many scrips across the board have fallen like a pack of cards. The fall has been so severe that not only the froth has vanished but the scrips are well below their true value. One such counter, we feel, is Indo Borax & Chemicals (IBCL), which has fallen by more than 77 per cent from its peak it made in January 2008. And with the scrip trading at CMP of Rs 43.95 close to its 52 week low of Rs 38, we feel it is right time to recommend this scrip to investors.
IBCL is basically in to manufacturing of pharmaceutical grade Boric Acid and Borax, which is manufactured at the Food and Drug Administration-approved plant at Pithampur, Madhya Pradesh. The company’s products are used as inputs in various pharma and healthcare products such as eye wash, ointments, skin creams, mouth wash and shampoos.
We believe this company would continue to do well as firstly, on dip in raw material costs, as discussed earlier and secondly, better realizations. The prices of Boric Acid in the last one year have increased by as much as 84 per cent. Even if we assume these prices stay at these levels it could still help IBCL to drive its revenues better in the coming quarters. IBCL is almost a zero-debt company; hence its profits wouldn’t be affected by the higher interest outgo due to hardened interest rates. However, the tax outgo has increased by 57 per cent in the H1FY09, which is a good indicator of better expectations of profits in the coming quarters. For FY09 on annualized basis IBCL could post estimated revenues of around Rs 46.48 crore, while the estimated profits could be around Rs 10.54 crore. Thus at these estimates IBCL gives an EPS of Rs 30.28, thereby resulting in to PE of 1.35x, which we feel is very low. But the real value for investors comes from the fact that IBCL has cash and liquid investments worth Rs 19 crore, which is more than the entire market cap of Rs 14 crore. Thus investors can buy this scrip at current levels as the probability of this scrip catching up with the valuations is much high.
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- Low Priced Scrip MTNL - Steal to Gain 20% within a year
Low Priced Scrip - IMP Powers by Dalal Street
The economic slowdown, which finds its origin to financial meltdown and has led to the demand destruction, has its silver lining. There is general consensus building in the country that to stimulate the demand, the government needs to speed up its spending on infrastructure, in general and power sector, in particular, which plays a pivotal role in demand acceleration. IMP Powers (IMPP), which is into manufacturing of entire range of power and distribution transformers, electrical meters and testing equipments, is in a right position to exploit this opportunity.
IMPP has manufacturing facility at Silvassa and Mumbai. It manufactures transformers ranging from 10MVA to 150MVA in 220 KV class at Silvassa plant with installed capacity of 3600MVA. For meters it has installed capacity of 214400 units. Recently the company has taken an expansion plant of Rs 30 crore after which installed capacity of transformers will increase to 6000MVA and meters to 314400 units by the end of FY09. (The company has June as year ending). It has already secured funding for this expansion plan. Motilal Oswal Venture Capital Advisors Private Limited have invested Rs 19 crore and the balance is financed by promoters of the company and Brescon Corporate Advisors by subscribing to warrants at a rate of Rs 164. Apart from increasing the capacity the company plans to enter higher range of transformers up to 400 KV class. This will help the company to target new sets of clients. It earns 96 per cent of its revenue from the transformer business and the rest from meters. IMPP also exports its product to various countries and 30 per cent of the total revenue is earned from this market.
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Educomp Solutions - With volumes gaining momentum investors can make most of this opportunity in the short term
Educomp Solutions: BSE code:532696 Volume: 952463 CMP: Rs 2434.30
For investors in volatile times, Group A makes sense to invest in and in that we feel Educomp Solutions seems to be a stock that many a investors are talking about. The feature of the scrip is that though it sheds points during the fall, the bounce back is similarly stronger and hence giving investors an opportunity for making a quick buck. After a good short run up in the market, it is currently witnessing some selling pressures, which is inline with global cues. But once the value buying takes place we expect Educomp Solution to bounce back sharply and investors having exposure to this counter will benefit. Hence with volumes gaining momentum investors can make the most of this opportunity in the short term
- Jubilant Organosys - Medium Term Investment for 25% Profit
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Tata Steel - Accumulate the scrip for quick buck in short term
Tata Steel: BSE code: 500470 Volume: 17113125 CMP: Rs 186.25
Despite steel prices softening globally, the Indian steel giant - Tata Steel - continued to impress its investors with its Q2FY09 results. However, the scrip somehow isn’t finding any takers and has continued to correct on the bourses and the rumor in the market is that it might fall further and hence it creates an opportunity for short to medium term investors. The fact remains that Tata Steel has outperformed the India Inc overall results by quite a while and with such strong fundamentals it is difficult for it to stay low for long. And with expectation of stronger numbers in the coming quarters also, it makes sense to accumulate the scrip at these levels for quick buck in short term.
- Tata Steel Limited Rights Issue Allotment Status
- Technical Picks: GMR Infrastructure
- Educomp Solutions - With volumes gaining momentum investors can make most of this opportunity in the short term
- Exide Industries - Accumulate at the Current Levels
- Buy Company with Strong Fundamentals in Turbulent Market
Religare Enterprises - Hot Chip can jump up in short term
Religare Enterprises BSE code: 532915 Volume: 22327 CMP: Rs 330.00
Religare Enterprises (REL) has agreed to acquire Lotus India Asset Management Company from the majority shareholders viz. Alexandra Fund Management, an affiliate of the Singapore-based Fullerton Fund Management Company Ltd and India-based Sabre Capital. Lotus India Mutual Fund’s assets under management are worth Rs 5,457 crore (at the end of October). The asset base for the mutual fund fell by more than 30 per cent in the October quarter. Religare Enterprises has a mutual fund joint venture called Religare AEGON Mutual Fund, which is yet to launch its first scheme. In the short term this stock can jump up with the finalization of the announcement hitting the markets.
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Low Priced Scrip MTNL - Steal to Gain 20% within a year
The financial world is a mess, both in India and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. During such unsteady markets, where investors are looking for a safe bet, here is company which is and has been a debt free company for the last five years, a cash rich company (Rs 3369 crore) and to top it all the scrip is available (Rs 68.25) at a discount to its book value of Rs 189. Additionally, it is a PSU with the GoI holding a major stake in the company. MTNL is one such company and hence it is a safe heaven for investors at this
point in time.
On the CMP of Rs 68.25 the scrip is available at a PE of 8.19x its trailing four quarters earnings.Having a market cap-to-sales (trailing) of 0.91x the scrip is a steal at the current valuations. we strongly suggest a buy on this counter with an upside appreciation of 20 percent within a year.
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- Low Priced Scrip Indo Borax & Chemicals Has High Chances of Better Valuations
- Hot Chips Buy Call: Sterlite India
- Punj Lloyd - Hot Chip Pick for This Week
- Value Buy: Infosys Technologies - with One year perspective
Valecha Engineering to Allot Bonus Issue
The company’s board of directors had recommended issue of bonus shares in the ratio of one share for every two shares held. The meeting of board of directors was held on 30 July 2008.
Valecha Engineering will allot the bonus shares now to the shareholders.
The company is primarily a player in the road construction business, from which it derives 70% of its revenues. Its road projects are present across many states in the country.
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Skyline Millars Stock Split Record date
Skyline Millars has fixed 05 November 2008 as the record date for the purpose of stock split of shares from the face value of Rs 10 to Re 1. The company made this announcement during the trading hours today, 08 October 2008.
The company is engaged in manufacturing crane and construction equipments. The company operates in three segments viz. crane, construction equipment and real estate development. It manufactures concrete mixers, electric overhead traveling (EOT) cranes and gas generators.
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Record date for Madras Cements stock split & bonus issue
Madras Cements has fixed 10 October 2008 as the record date for the sub-division of 1 equity share of Rs 10 each into 10 equity shares of Re 1 each and for the issue of bonus shares in the ratio of 1:1.
The company is engaged in manufacturing cements. The product includes blended cement, ready-mix concrete and dry mortar mix. The company also generates power from windmills.
- Tayo Rolls Rights Issue Record date
- Stock Split Record Dates: Eastern Silk Industries and MIC Electronics
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Tayo Rolls Rights Issue Record date
Tayo Rolls has fixed 10 October 2008 as the record date for the rights issue of equity shares in the ratio of 7:8.
Tayo Rolls had surged 4.12% to Rs 126.40 on 30th Sept on BSE. It has fixed 10 October 2008 as the record date for issue of equity shares on rights basis in the ratio of 7:8.
Tayo Rolls is one of the leading roll manufacturers and suppliers in India. The steel industry is the key user-industry for the company’s rolls. The company’s rolls also find wide application in paper, rubber, textile and food processing sectors.
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