STOCKS AT A GLANCE

* Gulshan Polyols Ltd. (GPL) (Rs.60.60) is an industry leader operating in two business segments of inorganic
chemicals. It is the market leader in 70% Sorbitol globally besides being a major producer of Calcium Carbonate. Sorbitol is a water soluble polyhydric alcohol having sweet taste and high stability besides properties of humectancy and plasticizing. It finds application as input material in various industrial sectors such as Tooth Paste, Pharmaceuticals, Vitamin-C, Cosmetics, Paper and Paints etc. Calcium Carbonate (CaCO3) finds application as input material in various consumable segments such as Tooth Paste, Pharmaceuticals, PVC products, Rubber, Plastic, Polymers, Cable, Leather, Paper and Paints etc. The company has taken steps to reduce operational costs such as power costs and boost the yield, which makes its products more competitive. Its customers have reposed confidence in the quality of its products and service. The per capita consumption of Sorbitol and Calcium Carbonate in India is very low compared to the global average. But
the new usage of Sorbitol in replacing the alternate mix of Glycerin has opened new growth prospects for the industry. It is also used as a low calorie sweetener, which enjoys growing demand as people are becoming calorie conscious. Sorbitol is globally acceptable now and the company exports it to 14 countries.
For Q1FY13, GPL reported a net profit of Rs.5.65 crore after providing depreciation of Rs.3.52 crore on its equity of Rs.4.22 crore yielding a quarterly EPS of Rs.6.7. The company has been a consistent performer over last few years as its products are related with consumable segments that are doing well because of which the stock is attracting the attention of investors. Another interesting point is that the promoters have increased their stake in the company by 4.89% over the last one year.
With a book value of Rs.150, estimated EPS of Rs.25 and dividend of 25%, the stock looks attractive at Rs.61 level. Investors can continue to hold the stock or even accumulate it on dips for a long-term target of Rs.125.
* Somany Ceramics (Rs.43.75) plans to invest Rs.200 crore over the next five years in Gujarat and Karnataka for expanding capacities. The company is also exploring possibilities of acquiring a tile-making firm at Morvi in Rajkot district of Gujarat this year. It has also acquired about 50 acres in Karnataka for setting up a new plant. It would invest Rs.100 crore on this facility after launching the 80x80 glazed vitrified tiles (GVT) manufactured digitally at its Kadi (Mehsana) facility. Another Rs.100 crore will be invested for expanding capacities at Kadi. The new product priced Rs.50M per sq. ft. is expected to double the company’s profit margins. The company enjoys ROCE of 26.22%, with a share book value of Rs.36.
* Kesar Terminals (Rs.62.50): With the growing demand for Petroleum products, Petrochemicals, Chemicals and Crude Oil, the outlook for the company looks good. The revenue from tankage is expected to rise considering the firming up of the terminal cargo business. The company is pursuing a high growth strategy and is focused on expansion with projects at various locations. The company’s market cap is just Rs.34 crore while the stock is available cum dividend 25% at current rate. Long-term investors can accumulate this stock.
* EID Parry (India) (Rs.215.50) is one of the big business groups in the country. The company is engaged in the
manufacture and marketing of a wide range of products that includes Sugar, Bio-Pesticides and Neutraceuticals.
Starting with its first unit at Nellikuppam in Tamil Nadu, the company along with its subsidiaries has 9 units and is one of the largest producer of sugar in South India with a total crushing capacity of around 34,750 TCD. Importantly, as it enters the next sugar year, its total sugar production capacity together with its subsidiaries will rise to 750,000 TPA because of the longer period it can engage in crushing.
The consolidated sales of the company stand at Rs.12,335 crore while its equity base is just Rs.17.37 crore. It made investments worth Rs.205 crore in group companies whose market value is around Rs.5100 crore. It also has unlisted investments of Rs.360 crore whose market value is said to be very high. Dividend for last year was 400%. Investors who want to benefit by the upturn in the sugar cycle and are looking for a stable stock in their core portfolio, can accumulate this stock at every dips for decent long-term growth.
* Anil Ltd. (Rs. 212.50) stock corrected from its 52-week high of Rs.305 to the current level of Rs.212. With an anticipated EPS of Rs.48, book value of Rs.178, the stock looks attractive at the current price, which is cum dividend. Long-term investors can accumulate this stock on dips.
* Relaxo Footwears (Rs.630) is the second largest footwear company in terms of value and brands viz. Relaxo, Flite and Sparx and has enormous potential for growth in coming years. To create strong brand visibility, the Relaxo Retail Shoppe has also played an imperative role in the growth of the company, which is expanding its geographic footprint to boost exports. Overall outlook of the company is encouraging as raw material prices have fallen. It has reported encouraging results for Q1FY13 as sales rose by 15% to Rs.248 crore while net profit shot up by 40% to Rs.15.09 crore. The company is aiming for sales of Rs.1000 crore in FY13. Investors can continue to hold this stock for higher targets.