Conclusion: Allied Digital Services Ltd, trading at Rs.27 is a screaming buy for today’s trade, expected to hit upper circuit today (10%), as the transition phase of the services is almost over and expect stunning results from the company in the coming quarters , the company is expected to cross price of Rs.300 in 3 years of time, Catch the running train immediately before it runs out.
Check the detail analysis report of the company below:
Allied Digital Services Ltd (Allied) provides a range of IT Infrastructure services and solutions including managed services and physical and information security solutions to leading Indian and global corporations. The company has a presence in over 132 locations in India, and over 40 states in the USA, through its acquisition of Enpointe Global Services.
In February 2010, Allied Digital Servises Ltd received 4 awards in a ceremony conducted by Data Quest Channel (DQC) in Bangkok – the awards were for : most successful solutions provider, best automated managed service provider, fastest growing solutions provider and for best service provider. The awards were presented to Mr.Nitin Shah, Chairman & Managing Director of Allied Digital.
Allied Digital Services Ltd came out with an IPO in July 2007 at Rs.190/share. At today’s price of Rs 27 it is a screaming buy!
The impressive top line and bottom line growth over the last six years coupled with improving PAT margins on a y-o-y basis can be seen from its financial results.
From the results seen there is no doubt that Allied Digital Services Ltd has done a great job in last six years despite global financial woes and inflation in India.
The company’s topline has grown at a CARG of 44.83 per cent whereas the bottom line has grown by a whopping CARG of 104.7 per cent.
Considering an EPS of Rs.25.55 and a conservative PE 15, we arrive at a target price of around Rs.380 – 390 per share in a very short term.
Well, investors normally look at the 52 week high in order to figure out the maximum returns they can generate by taking a call on a stock, Considering the company’s financial performance over the years I won’t be surprised if the stock breaches its life time time in the time to come.
Those who have it should just hold it. Those who don’t have it should get it before it becomes costlier by the day. For good returns it would be necessary to hold on to the stock for over a year.
sr – hbjc
Paushak Limited having a Marketcap of Rs.17 crores is a specialty chemicals company belonging to the Alembic Group from Baroda, India. Paushak has mastered the Production of phosgene gas and phosgene based specialty Chemicals / intermediates through indigenously developed Technology. These chemicals are used in diverse fields such as Pesticides, pharmaceuticals, dyes, plastics, perfumeries etc.The company also undertakes Custom Synthesis and Contract based research. Paushak has an annual capacity of 1800 M.T. to manufacture phosgenes and does an annual turnover of around Rs.30 crores per annum.
Despite being a small company, it seems to be managing its affairs pretty well if we consider the following figures :
1.The company generated PAT of Rs.3.70 crores on a total revenue of Rs.30.8 crores in FY2011
2.The Net Profit margins post tax hover around 8 to 14 per cent
3.ROE stands at 13 per cent and ROCE is around 18 per cent
4.Marketcap to Sales ratio is 0.55 which is a positive indicator
5.Paushak is virtually debt free, the Debt Equity ratio being 0.08
6.Valuations are low at PE is 6.03 spiced with a Dividend Yield of 3.59 per cent.
7.Price to Book Value stands at 0.59
8.EPS is Rs.9.23 and LTP of the scrip on BSE was Rs.55.65/ share. [ 52 week high Rs.122.70 ]
9.Considering the above and the fact that the promoters hold 66.70 per cent and the scrip looks interesting but please be forewarned that the floating stock is just around 21.4 lakhs shares.
Invariably you need to consult experts before buying scrips like Paushak which can go up very fast and can come done pretty fast as well.
Pennar Industries Limited having a Marketcap of Rs.458 crores is engaged in manufacturing of steel products, such as Cold Rolled Steel Strips (CRSS) and Cold Formed Metal Profiles. Its heavy engineering products division manufactures floors, side walls, roofs, end walls and doors, as well as under-frame parts for railway wagons and coaches. Its infrastructure division manufactures building products, which include purlins, roofing sheets and deck plates; road safety systems, which include crash barriers for road safety; fabricated products, such as fabrication of heavy structures for industrial buildings, conveyors, racking systems and boilers.
Its building and construction division is engaged in the design, manufacture, supply and installation of pre-engineered steel buildings and building components for industries, warehouses, commercial centres, multi-storied buildings, aircraft hangars and stadiums.
Five year topline CARG was 26.14 pc and bottomline was 36.7 per cent. Total revenues which were Rs.335 crores in FY07 shot up to Rs.1070 crores in FY2011. PAT which was Rs.14.87 crs zoomed to Rs.70.98 crores in FY2011.
Pennar Industries has a asset light business model and hence its Sales/Fixed asset ratio hovers around 4.21. The company is doing annual business in excess of Rs.1000 crores on an Equity base of Rs.61 crores and a Net Fixed Asset base of Rs.155 crores.Moreover the company’s Debt-Equity ratio is 0.51 and it has cash and cash equivalent to the tune of Rs. 29.9 crores as at end fiscal 2011.
The company’s ROE stands at 35 pc while its ROCE is 38 pc. The company has good working capital management in place. Promotors stake stands at 39.13 pc whilst Institutional holding is 23.79 per cent.
Considering the business model and the above numbers, the company is likely to do well going forward especially if we take into account that its EPS is around Rs.5.85 which is growing at around 38 per cent p.a.and it pays a dividend too, the dividend yield being 3.3 per cent !
Jay Shree Tea & Industries Limited having a Market Cap of Rs. 326 crores belonging to the B.K.Birla Group is engaged in the manufacture of tea, sugar and chemicals / fertilizers. The principal business of the Company is tea. The company also manufactures super phosphate and sulphuric acid. The company recently acquired a 100% interest in M.P.Chini Industries Ltd located at Majhaulia, Bihar with a capacity of 4600 tons crushed per day (TCD) for Rs.112 crores versus replacement value of Rs.168 crores. Thus it’s a 3-in-1 type of business.
The company derives about 75 pc of its revenues from tea and balance fro chemicals/fertilizers, sugar etc. The company is likely to benefit significantly on the tea front because:
1.Output has been decreasing by about 50 pc in North East every year due to heavy rainfall and low sunlight hours
2.Tea consumption in our country is increasing by about 5-10 pc every year
3.Going forward, considering stagnant production and increasing consumption, tea prices are bound to increase
4.The company has an Equity base of Rs.11 crores on which it does business of close to Rs.500 crores. In FY2011, the company generated total revenues of Rs.491 crores and a PAT of Rs.46.3 crores. In Q1FY12, the company generated a Net Profit of Rs. 18.12 crores as against a Net Loss of Rs.22.43 crores.
Recently the company has ventured into the African continent and is expecting revenues as under:
1. 2 Tea Gardens in Uganda 1.2 mn. kgs Est, Net Profit Rs. 5 crores
2.1 Marketing Agreement in Rwanda 4.0 mn. kgs Est. Net Profit Rs.15 crores
The company enjoys a Net Profit margin of around 11 to 19 pc and its ROE and ROCE is 16 and 11 per cent respectively. Promotors’ holding in the company is 40.8 pc and Institutional holding is 15.44 pc.
Jay Shree Tea & Industries Limited is a dividend paying company whose PE is 5.47, EPS is Rs.26.72 and Book Value is Rs.166 as against CMP of Rs.146.25. The 52 week range was Rs.210-118.50 and as such the stock could be interesting to look at if the markets crash and Jayshree goes down to its 52 week low!
And one good thing about companies like Jay Shree is that, whether it’s a bull market or a bear market, people drink tea all over the world and that’s the first thing that visitors are offered by guests unless the guest happens to be a born miser who may at best offer just one glass of unfiltered water – after all filtering water entails costs!
Sterling Tools Limited [ STL ] having a Marketcap of around Rs.71 crores is engaged in the manufacturing and marketing of cold forged fasteners. The products manufactured by the Company include special fasteners, standard fasteners, chassis fasteners, engine fasteners and nuts. Standard fasteners include socket head cap screws, hexagon nuts and weld nuts. Chassis fasteners include hub/wheel bolts and two wheeler spindles/wheel axles. Engine fasteners include cylinder head bolts/screws and fly wheel nuts/bolts.
In March, 2010, Company entered into a joint venture agreement with Borstlap Masters in Fasteners Group B.V. (Fabory) to form Sterling Fabory India Private Limited, which focuses on the business of wholesale distribution, supply chain and vendor management of non-automotive and automotive fasteners and standard and no-standard, non automotive electronic and other components, assemblies and sub-assemblies and fittings for range of industries and components.
The domestic and international market is demanding more and more sophisticated fasteners and STL as an OEM continues to meet the needs of its demanding clients across the globe. Moreover, warranty and environmentally emission control requirements will drive this demand phenomena. Making these sophisticated components will help in moving up the value chain and at the same time improve the topline and bottomline of the company.
On the financial front the company has been doing pretty well:
1.Five year topline CARG is 10.88 – total revenues which were Rs.162.5 crores in FY2007 shot up to Rs.272.4 crs in FY2011
2.Five year bottomline CARG is 18.22 pc – PAT which was Rs.6.8 crores in FY2007 zoomed to Rs 15.7 crores in FY2011.
3.During Q1FY12, the company’s topline increased by 29.17 pc to Rs.69.86 crores compared to Rs.54.08 crores in FY2011. PAT increased moderately by 9.8 pc to Rs.4.12 crores in Q2FY12 over corresponding period of previous fiscal.
The company is a bit leveraged, the Debt-Equity ratio being 1.08 though its working capital management is good and Interest Cover is 4.7 and ROE and ROCE is a tad bit above 24 pc and 22 pc respectively..
It may be noted that the company is growing moderately without diluting its Equity base and consequently it’s able to generate EPS of around Rs.23.52 and reward its shareholders with handsome dividend on a y-o-y basis. Sterling Tools Limited is an investo friendly company – the last dividend paid was Rs.5 per share.
Considering the above factors and the fact that the shares are available at PE of around 4.64 and taking into cognizance the Promotors strong holding of 69.19 pc the scrip looks pretty interesting and that too when the LTP is close to its yearly low.
You bet, those who love dividends will love to embrace this scrip and hold it tight for years so long as the dividends keep flowing lovingly!
Surya Pharmaceutical Limited (SPL) having a Marketcap of Rs321 crores is an integrated pharmaceuticals company. It is engaged in manufacturing and marketing of pharmaceuticals products and services. Its product and services portfolio includes a range of active pharmaceutical ingredients, intermediates, phyto pharmaceuticals, and contract research and manufacturing services. Its divisions include Surya Life, Surya Naturals, Alexus and Aegis, Surya Care, and Eureka.
During the fiscal year ended March 31, 2010 (fiscal 2010), it launched 12 brands of formulations. Its formulations division named Alexus, Diagnostics and Devices division named Altair, and Generic division named Aegis. Its optimal treatment guidelines division includes products in healthcare and fast moving consumer goods category. In fiscal 2010, it had production of 2119.43 metric tons of bulk drugs and intermediates; 143.6.19 million tablets and caps, and 6832.5 metric tons of menthol/derivatives. In December 2010, the Company acquired ActivOn in the U.S. and has been opening several stores in the retail front. Surya has increased its exposure to Andhra Pradesh recently by acquiring Medimart retail shop chain.
To know how smartly the company is growing, just look at the last 3 years fiscal figures from FY07 through FY11:
1.Total Revenues Rs.751 crs, Rs.1157 crs, Rs.1633 crores
2.PAT Rs.56 crs, Rs.76 crs, Rs.100 crores
Company has good PAT margins, ROE and ROCE is 24 and 18 per cent respectively and company had around Rs.15 crores cash in the kitty as at end fiscal FY2011. For the past 3 fiscals topline has been growing at 40 pc plus whereas PAT has been growing at 30 per cent plus. However the company is leveraged significantly at 2.19 and promoters holding is a bit on the lower side at 38.11 per cent which makes it a ripe candidate for a takeover.
At a PE of just 3 and EPS of around Rs.5.2, the stock looks interesting at a price of around Rs.15 per share.
Goa Carbon Ltd, a Demp Group company having a Marketcap of Rs.78 crores is engaged in manufacturing and selling of Calcined Petroleum Coke (CPC). The company is a supplier to aluminium smelters, graphite electrode and Titanium Dioxide manufacturers, as well as other users in the matallurgical and chemical industries.
The Company also has 3 plants totaling 240000 mtpa capacity:
1.Goa 75000 TPA
2.Bilaspur in Chattisgarh 40000 TPA
3.Paradeep in Orissa 125000 TPA
4.Goa Carbon also manufactures products like Recarburiser, Laddle additive and Carbon raiser. Besides selling its products in the domestic market, exports are made to Australia, Egypt, Dubai, France, Kuwait, Iran, Saudi Arabia, Singapore, Malaysia, Indonesia, Thailand, South Africa, Russia, Wales and England. It has port facilities in Mormugao (Goa) and Paradip Port (Orissa) making exports more cost effective.
In FY2011, the company’s topline increased by a mere 6.7 pc to Rs.270 crores but PAT shot up by an astounding 2141 pc – PAT which was Rs.0.41 crores in FY10 shot up to Rs.9.19 crores in FY2011.
The Q2FY12 results were also spectacular – total revenues increased by 118.2 pc to Rs.130.79 crs compared to Rs.59.94 crs in Q2FY11. PAT increased by 46.4 pc to Rs.2.78 to Rs.4.07 in the stated quarters.
While all this may sound sweet there are a few things that are sour :
1.Low net profit margins that fluctuate wildly between 0.15 pc to 6.6 pc
2.High inventory holding period that’s around 4-5 months
3.High Debt Equity ratio of 2.35
4.But considering the fact that the company pays Rs.4/share as dividend, a low PE of 7.08 and EPS of around Rs.12 and promotors holding of 59 pc, the stock looks interesting.
Balaji Amines Limited having a Marketcap of around Rs.116 crores is a leading manufacturer of aliphatic amine and derivatives and speciality and fine chemicals. These amines and their derivatives find application in pharmaceuticals, agri-chemicals, paints, rubber chemicals, water treatment and lube extraction. In FY10, the company diversified into hospitality.
The company also manufactures speciality chemicals such as N-methyl-2pyrrolidone (NMP) and morpholine. It is the sole manufacturer of these products in India. The company also has a presence in the ethyl amines segment. BAL has a global footprint — the company exports to more than 90 clients spread across 40 countries.
The company has 3 manufacturing facilities :
1.at Tuljapur (Maharashtra)
2.at Bollaram (Andhra Pradesh)
3.a third unit for R&D set up sometime back at Solapur (Maharashtra)
The following aspects about Balaji Amines reflects the greatness of small companies in our country that are destined to go places in the years to come :
1.Balaji Amines is a distinguished and internationally recognized manufacturer of amines and speciality chemicals.
2.Manufacture of amines is a closely guarded secret the world over and Balaji Amines manufactures all its products independently without any domestic/foreign technical collaboration.
3.The company is the lowest cost producer of methylamines in the world.
4.Company manufactures import substitutes like morpholine, hydroxylamine, N-Methyl Pyrrolidone [ NMP ] etc thus helping our country to conserve precious forex.
In FY10, BAL diversified into the hospitality sector, by leasing out land for development of a hotel on a profit-sharing basis. The company has finalised a deal with the Sarovar group for managing the hotel, which is being set up on 1.5 acres in Solapur (Maharashtra). This hotel will have 100 rooms and banquet facilities. BAL’s contribution towards the project is approx Rs 4 mn. The hotel is expected to be completed by FY12.
Some of the major risks that company is exposed to are :
1.volatility in price of raw materials such as methanol, ethanol, ammonia etc
2.foreign exchange fluctuations — exports contributed ~25% to total revenues in FY10
On the financial front the company is doing pretty well:
Five year topline CARG was 15.32 pc – total revenues which were Rs.176 crs in FY07 shot up to Rs.359 crs in FY2011.Five year Profit CARG stood at 20.88 pc – PAT which was Rs.10.31 crs in FY07 zoomed to Rs.26.61 crs despite the ongoing global turbulence
On the quarterly front, Balaji Amines has done exceedingly well :
1.Q1FY12 total revenues increased by 56.76 pc at 115.47 crores compared to Rs.73.66 crores in Q1FY10
2.Q1FY12 PAT increased by 86.71 pc at Rs.7.17 crores compared to Rs.3.84 crores in Q1FY10
The company has strong ROE and ROCE in the range of around 5 pc but company is leveraged at 1.46 but none the less the Interest cover stands at an impressive 4.17 times. Balji Amines has cash and cash equivalents close to Rs.17 crores compared to its Equity base of Rs.6.4 crores. The promotor’s stake stands at 53.97 pc and Institutions have yet not taken any position in this stock as yet.
At a PE of around 4 and EPS of about Rs.8.5, Balaji Amines appears to be an interesting stock.
sr – hbjc
I know most folks give up when they realize that majority of websites just talk about what happened today, yesterday, the last week and then tell you that markets will go up or down based on results of this company and that company and of course based on how the Dow will fare.
Nobody tells you how you could have caught the Nifty low today at around 4920 and made a profit or nobody would have told you to buy Infosys today at around 2540 to end up with a nice profit of around 50 points. And its obvious that nobody knows how to really make money in the markets or its just that if somebody knows then that’s not for free!
But we at HBJ Capital know some simple ways of how money can be made and we at times believe that like free air, the investor community should be entitled to receive some free stuff once in a way. So, here’s the free stuff – the name of the company is Lloyd Electric and Engineering Limited it’s a good medium to long term bet.
Lloyd Electric and Engineering Limited having a Marketcap of Rs.148 crores is the leading and largest producer of Coils / Heat Exchangers (Fin and Tube type) in India, serving the entire spectrum of HVAC & R industry in the country as well as OEM’s in North America, Europe, Middle East and Australia. Lloyd Electric manufactures various products at the following two factories :
1.Plant I Bhiwadi, Rajasthan – Production lines include Coil Shop, Rail Coach, A/C Shop, Sheet
2.Plant II Kala Amb, Himachal Pradesh – Production lines include Coil Shop and Window A/c
3.Lloyd Electric and Engineering LTD. acquired Lloyd coils Europe s.r.o.. (formerly known as Luvatat Czech, SRO) facility in Czech Republic in May, 2008. With this strategic acquisition the company has entered the European Market.
If we look at last 3 fiscals from FY09 through FY11, the company’s topline and bottom line has been growing pretty well:
1.Topline figures are Rs.587 crs, Rs.680 crs and Rs.787 crs
2.Bottomline [ PAT ] figures are Rs.20.37 crs, Rs.39.17 crs and Rs.38.53 crores
3.Even in Q1FY12, topline increased by 19.21 pc over Q1FY11 and 15.06 pc over Q4FY11.Net Profit in Q1FY12 stood at Rs.10.91 crores.
Some of the factors that could drive the stock price higher are :
1.Like most stocks, this stock too has been hammered and its now a tad bit higher than its 52 week low of Rs.43.50, CMP being Rs.47.85. The 52 week high was Rs.93.80.
2.The company has an asset light business that is very much dependent on commodities whose prices are gradually cooling off
3.The company has a pretty broad range of product portfolio which will help drive topline as well as bottomline
4.The Llyod brand A/C sold by the company are well marketed through showrooms like Vijay Sales which is having a pan India presence
5.The company is very moderately leveraged at 0.47 and as such won’t find expanding and funding its business a problem
the Price/Book value is attractive at 0.32, PE is just 3.9 and EPS is around Rs.12 and the stock comes with icing on the cake in the form of dividend yield of 2.11 per cent.
Should the Indian Stock markets come under a hypnotic spell of a bear market in next 2 months then expect Lloyd Electric and Engineering Limited to go below Rs.30 in which case the stock will look more charming and attractive!
sr – hbjc