buy polyplex BSE: 524051 NSE: POLYPLEX CMP : 201.40 buy below 200.00 for a short term target of 220.00 with a stoploss of 192.00
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Monday, May 30, 2011
SHORT TERM BUY - CHAMBAL FERTILIZERS
buy chambal fert BSE: 500085 NSE: CHAMBLFERT CMP: 76.65 buy below 75.00 for a short term target of 83.50 with a stoploss of 71.25.
SHORT TERM BUY - NAVIN FLUORINE
Saturday, May 28, 2011
MULTIBAGGER STOCK RECCOMENDATION - SIMPLEX CASTINGS
Simplex Castings
BSE: 513472 CMP: 83.00 BOOK VALUE : 106.00 EPS: 21.65 PE : 3.83
Simplex Casting Limited (SCL), part of 70 years old Simplex Group is a leading manufacturer of iron & steel castings in India. SCL is engaged in manufacturing of Heavy Engineering Castings in various grades for all industrial sectors like Steel plants, Power plants, Railways, Mines, Cement, Chemical, Oil, Defence, Sugar, Ship building etc. Its principle products include ingot moulds, alloy steel ingots, coco bogies, cansub bogies, blast furnace, pump casting etc. SCL has two major units-one heavy grey iron unit and other heavy steel casting foundry, both these manufacturing units are located in chhattisgarh.
Simplex Castings is one of the largest producer of Bogies frame in India supplying wide range of its products to Railways and it is one of the largest manufacturers of Zero Leakage Oven Doors. It has supplied these products to reputed units of Japan, Korea, Egypt and also to SAIL, Tata Steel Limited. SCL is the first Indian company to bring mini blast furnace concept in India and world leaders such as Nippon Steel use Simplex made Ladles.
The Company is now expanding in the field of fabrication, machining and complete equipment supply to ensure better profitability in coming years and it is regularly upgrading its manufacturing facilities. SCL has a very strong consumer base including Indian Railways, NTPC, SAIL, HEG, BHEL, Essar etc in domestic market and giants like Kawasaki, Hyundai in international market. Main positive for the company is the demand for the company`s products in railway sector is on good growth track and it is also tapping various new sectors by expanding both its customer and product base. Due to increasing level of consumption of cast iron & steel castings future outlook for the company looks pretty good.
Financials - Simplex Castings has a steady track record with consistent profits. For the financial year 2011 it recorded 25% growth in sales and 20% rise in profits. EPS stood at 21.57 and stock is trading at a P/E of just 3.9. Simplex deserves much better valuations considering their long standing operations and operational efficiency. buy on dips for long term gains.
MULTIBAGGER STOCK RECCOMENDATION - PIRAMAL GLASS
PIRAMAL GLASS NSE : PIRGLASS CMP: 119.45
EPS: 8.53 BOOK VALUE : 58.40 PE: 13.97
Piramal Glass incorporated in 1998, is engaged in the business of manufacturing packaging solutions for the perfumery and pharmaceuticals.
Company provides complete solutions including full bottle design capabilities, in-house mould design, CNC machines for mould manufacturing, high quality glass manufacturing and dedicated ancillaries for decoration and accessories like caps, cartons and brushes.
Under pharmaceuticals the company manufactures products such as moulded vials, injectables and bottles. In domestic market PGL enjoys about 40% market share. Further in cosmetics and perfumery segment the company manufactures glass containers for nail polish, perfumes, foundations, attars, etc.
The company is the one of the largest manufacturers of flacconage glass for two segments namely pharmaceutical and perfume. It has an installed capacity of 1,115 tonnes per day, and sales of more than $200 million worldwide. Further the company also manufactures glass bottles for specialty food and beverages.
Company’s manufacturing facilities is located at India and Sri Lanka which makes it a low cost glass manufactures giving it edge above its competitors.
Major customers of containers for pharmaceutical industry are Glaxo Smithkline, Pfizer, E-Merck, Alembic, Aventis, Dabur (India), Ranbaxy, Cipla, Himalaya drugs, Dr. Reddy's Laboratories, and Piramal Healthcare.
Major customers of containers for cosmetics and perfumery business are Dumak LLC, LOreal, Erkui Kozmetic, Compagnie De Diffussion, Niasi, Expak, Baralan International, S F Patel & Sons, Estico and Revolline.
Globally, the company has network of distributors spread across in countries namely Netherlands, Belgium, Thailand, Spain, Columbia, Denmark, Turkey, Indonesia, Mexico, Italy, Russia and Brazil.
The Company has ISO 9001, ISO 14001 certification and OHSAS (Occupational Health, Safety Analysis Series) i.e. ISO 18001 certification.Milestone1984-Piramal Group acquired Gujarat Glass.
1990-The company was merged with the group company Nicholas Piramal India leading to forming of business division of group.
1998- The glass division was demerged from the group leading formation of Piramal Glass which was incorporated in same year.
1999-Company acquired Ceylon Glass Company, Sri Lanka.
2003-Nicholas Piramal India demerged its 54 % holding to Kojam Fininvest.
2005- The company acquired a part of the Glass Group earlier known Wheaton Glass. This led the company to foray into the US market.
2008-Kojam was merged into Gujarat Glass, now known as Piramal Glass
Future Prospects
Piramal Glass plans to raise upto Rs 200 crore through rights issues for further expansion of its business.
Piramal Glass has reported excellent results. the Q4 results, the top-line, on consolidated as well as on standalone basis, grew by about 15%. But, on a standalone basis, the bottom-line grew by about 535%. That means the Indian operations have been doing very well.
Even if we take the consolidated operations for Q4, the bottom-line grew by about 200%. That is the reason that the company or the board has increased the dividend also for this year to 35%, last year it was at 10%.
If you see by the overall performance for FY11, top-line is close to about Rs 1,250 crore with profit after tax (PAT) of about Rs 93 crore and cash profit of about Rs 200 crore which resulted into an EPS of about Rs 11.50 and cash EPS of close to about Rs 24.
Their US and Sri Lanka operations have been doing well. Domestic operations have performed better since last year. Going forward, I won’t be surprised to see EPS of close to Rs 16 to Rs 18 for FY12. Going by these, I think share available on a forward earning PE multiple of less than eight can give you a 30% return from these levels.
MEDIUM TERM BUY - TNPL
TNPL NSE : TNPL BSE : 531426 CMP : 130.00
Tamil Nadu Newsprint and Papers Limited manufactures newsprint, printing and writing paper. The Company also owns and operates a wind power farm, which is used primarily for captive consumption. Tamilnadu Newsprint manufactures Eco friendly papers, by adopting innovative technologies for sustainable development.
TNPL is a value buy in mid-cap space trading at a P/E of little less than 5. Pretty high dividend yield of almost 3.50% in the last 12 months. Liabilities are a little high, but is backed up by strong business model with solid revenue growth and consistent profits. Bottom-line growth of over 50% in FY11 is a surprise surge from its routine 20% growth in the last 5 years. NPM of 15% has grown from its routine 10 - 12% in the last 5 years. Buy, accumulate on dips and hold for long term growth.
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