The Gulf Reconstruction Play: How NRIs Can Track Indian EPC Firms Winning Overseas Contracts

Smart Scrips for smart Guys:

Ansal Buildwell Ltd. (Code: 523007) (Rs.77.20), the flagship company of the high profile Ansal Group is well-known for developing shopping complex, malls, residential townships, row houses, skyscrapers, corporate offices etc. Currently, it has ongoing residential and commercial projects at Gurgaon and Amritsar. Notably, it has a good land bank in Amritsar, Jaipur, Panipat, Faridabad and Jhansi. Recently, it acquired around 35 acres of land at Kochi for development of plots, villas and town houses. In the near future, the company is planning to construct a multi-storeyed group housing society in Faridabad. Incidentally, it is also engaged in couple of hi-tech engineering projects. For the June’07 quarter its topline grew by 30% to Rs.28 cr. but its PAT shot up by 70% to Rs.1.80 cr. Accordingly, for the full year FY08, it is expected to clock a turnover of Rs.150 cr. with profit of Rs.10 cr. This translates into an EPS of Rs.14 on its current equity of Rs.7.40 cr. Available at its 52-week low, this is one of the safest scrips and is bound to cross Rs.100 mark in 6 months.

Pochiraju Industries Ltd: Catch it young! By Suman Mukherjee BSE Code: 532803

CMP: Rs.23.65 Face value: Rs.10

52-Week High/Low: Rs.64/ Rs.20.25

Pochiraju Industries Ltd., an existing 100% EOU, floriculture company is into cultivating, processing and exporting cut flower roses. It entered the capital market with an IPO on 15th January 2007 to raise Rs.37.57 cr. The company has deployed the net proceeds of the issue to part finance its expansion plans involving an investment of Rs.47.57 cr. and has also placed a part of the proceeds into R&D. Its expansion plans included setting up of Bio Fermentation and Protein Purification unit at the Shapoorji Pallonji Biotech Park near Hyderabad. The company has set up a bio-parental unit at an investment of Rs.10 cr. The remaining funds of Rs.10 cr. were raised by term loans from banks/ financial institutions. The work on the second project started by acquiring of 5 acres of land in Secunderabad and is expected to go on stream by the end of this fiscal. Shareholding: The promoters’ hold 29.72% while the public holding is 70.28%. Among the public holding, M. S. Jhunjhunwala holds 1.74% while Chola Mutual Fund A/c Chola Multicap Fund & Lotus Global Investments Ltd hold 1.4% and 4.61% respectively. Financials: For FY07, the company came out with good results as it clocked net sales of Rs.29.4 cr. with a net profit of Rs.9.1 cr. on its equity of Rs.17.91 cr. This gave an EPS of Rs.5.06, which is excellent compared to its peer Karuturi Networks Ltd. For the June 2007 quarter, its net sale was Rs.6.4 cr. and net profit was Rs.1.9 cr., which gave an EPS of Rs.1.04, similar to Networks Ltd. For the whole year FY08, it could generate an EPS of Rs.5-6 on a turnover of Rs.30 cr. The scrip is quoting below its book building price of Rs.30 even after good results but this will change dramatically in days to come as marketmen may soon find it cheap and worthy of investment. At the CMP, the scrip has minimum downslide as it quoting near its 52-week low price. The company has also ventured into Bio-Tech space and its expansion plans are on as per schedule. It is thinking of vigorous ways to increase its export pie in the near future and is gearing up for an acquisition of a biotech company in the US or Europe. The deal could be valued at around Rs.40 - 60 cr. In future, the company also expects to generate substantial revenues from the bio-tech sectors also. The company recently started commercial production of bulk drugs from its factory in Hyderabad. The company’s products will be out in the markets in the first week of September, 2007. This will generate additional revenues for the company in addition to the Horticulture business. It already has a list of ready buyers for its High-tech Pharma products since bulk drug prices have already risen in China, this will soon percolate to India and is a major positive development for the company.

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