Suzlon Energy has annouced that Suzlon Wind Energy Corporation, the US-based step-down wholly owned subsidiary of the company has signed a contract for a 400 MW of wind turbine capacity with Horizon Wind of Houston, Texas, one of the largest wind power developers in the United States and also owned by portuguese utility EDP (energias de portugal, S.A.), a leading renewable energy developer in the world. The contract calls for delivery of 200 MW of turbine capacity in 2008 and another 200 MW of capacity in 2009.
Month: October 2007
Forthcoming IPOs in India
With the primary market extremely vibrant and encouraging, 100s of companies have lined up in front of the SEBI for approval to raise money.
Some of the forthcoming big ticket IPOs (more…)
Rajesh Exports Q2 Results
Rajesh Exports’ net profit rose 156.33% to Rs 54.24 crore on 19.38% rise in sales to Rs 2044.21 crore in Q2 September 2007 over Q2 September 2006.
The mid-cap jewellery retailer has an equity capital of Rs 7.39 crore. Face value per share is Rs 2. Rajesh Exports manufactures and sells gold jewellery. It imports raw gold from mines across the world. The jewellery manufactured is exported across the world, and distributed all over the country.
Small Cap Multibaggers – Part 2
Check out the Small Cap Multibaggers in our Stock Research Section. Here are 3 more small cap stocks added to the same coverage.
Gujarat Apollo Industries:
Gujarat Apollo Industries (GAI), holds ~30% market share in the domestic road construction equipment industry. It is a key beneficiary of investments being made for up gradation and widening of roads and expressways under the National Highway Development Programme (NHDP), golden quadrilateral etc. A large part of these investments, estimated to be in excess of INR 2.2tn
Till date, only 15% of the total targeted roads under NHDP are complete, implying that a huge chunk of the budgeted investments are yet to be expended. This means that apart from the existing pent up demand, there is a good demand visibility for GAI over the next few years. Moreover, the company’s venture into new geographies through exports is likely to de-risk it from the rising interest rate concerns in India. With the capacity expansions in place, we expect GAI to achieve a turnover of INR 2.8 bn by FY10, with an improved product mix favouring better margins. At 11.1x its FY07 earnings, we consider GAI as the best proxy to the Indian road and infrastructure boom.
International Travel House:
The USD 53.5 bn Indian tourism industry (2006) is slated to grow to USD 128 bn by 2016 (Source: World Travel & Tourism Council (WTTC)), led by Government of India’s (GoI’s) tourism promotion efforts through “Incredible India” campaign, strong economic growth, rising income levels, consumerism, and increasing business, and domestic travel.
Given the booming tourism sector, the ITC pedigree, launch of portal, and strong focus on the car rental industry, the prospects of ITHL appear extremely bright. We expect ITHL’s revenues and profits to grow at 28% and 29.7% CAGR, respectively, between FY07 and FY09E. At the CMP of INR 165, the stock trades at 9.9x FY08E EPS of INR 16.7 and 7.7x FY09E EPS of INR 21.4.
Phoenix Lamps:
The Indian market for compact fluorescent lamps (CFLs) has been growing at ~40% over the past few years and is currently valued at INR 7 bn. India produced 44 mn CFLs in FY06, a mere 6% of the total number of traditional incandescent bulbs produced during that year. Phoenix Lamps, a leading player in CFLs, is looking to triple its current capacity of 25 mn units to 75 mn units by FY09E.
Phoenix Lamps’ CFL business, which has been growing at 34% CAGR over FY04-07, is likely steer the company’s growth over the next few years on the back of its leadership position in a radically changing industry. Sales and profits have grown at 23.4% and 49.4% CAGR, respectively, over FY04-07. Profits have grown at a faster pace as compared to sales over the last three years on account of lower tax rates.
Sarla Performance Fibers:
Sarla Performance Fibers (SPF) is the only producer and processor of multi-filament polyester and nylon textured yarn in India, catering to a varied set of applications and end users. As on FY07, SPF earned ~ 63% of its revenue from exports whereas the 10% was deemed exports. SPF is only export focused player has been successful in meeting and maintaining client specifications and is thus one of the preferred suppliers for most of its clientele.
Due to its focus across various geographies, SPF is well positioned to capture the huge opportunities across its product segments. Also, the Honduras JV is likely to provide an added upside to revenue growth once it is consolidated. That apart, a break through in high tenacity yarn will lead to margin expansion going forward. At CMP of INR 126, the stock trades at 8.1x its FY07 earnings.
Small Cap Multibaggers – Edelweiss
Edelweiss Capital has announced the list of Multibaggers in the Small Cap which have a growth story to beat ace investors as well. Here is the list and small coverage on the same.
ABC Bearings:
ABC Bearings (ABC) is amongst the leading players in tapered roller bearings. It supplies to most of the commercial vehicle OEM’s, who form ~45% of the total Indian bearings demand. Spurred by higher manufacturing growth and improved road infrastructure we believe demand for commercial vehicles (CVs) would continue to grow strongly in the future, in turn fuelling demand for ABC’s products as well.
ABC has the potential to double its revenues over the next 3-4 years with its capacity expansion initiatives. At the CMP of INR 105, ABC is trading at 6.0x its FY07 earnings, which is at a steep discount to the average industry P/E of 13x TTM, inspite of its high margins and return ratios.
Ador Welding:
Ador Welding (Ador), one of India’s largest welding equipment manufacturers, has over five decades of experience. Ador’s strong relationships with clients and superior product offerings place it well to exploit opportunities arising in the welding industry. At a growth of 11.3% Y-o-Y, FY07 saw the Indian IIP grow at its fastest since FY96.
Ador is targeting revenues of INR 4.5 bn over the next three years with total investments of ~INR 700 mn over FY05-FY08 to achieve this target. We expect good traction for each of Ador’s businesses, on the back of its linkages with the IIP and a robust outlook for the Indian economy. At CMP of INR 265, the stock is attractively valued at 11.1x its FY07 earnings with a 5% dividend yield.
Automobile Corporation of Goa:
Jointly promoted by Economic Development Corporation of Goa (EDC) and Tata Motors Ltd. (TML), Automobile Corporation of Goa (ACGL) started commercial production of bus bodies for TML in 1989. The company’s bus body division, which contributed 70% of FY07 sales, has registered a volume growth of 38% CAGR since FY03 on the back of strong export sales of TML’s bus division which grew at 50% CAGR over the same period. ACGL has increased its installed capacity from 1,200 units in FY04 to 4,200 units in FY07 and plans to further augment it to 10,000 units by FY10E. Since ACGL currently meets only ~35-40% of TML’s export requirements.
ACGL’s revenues and profits have grown at 43% and 31% CAGR respectively over FY04-07. We expect the company to post a 22.2% CAGR growth in revenues over FY07-10E. At the CMP of INR 385 the stock trades at 9.4x FY07 EPS of INR 41.1.
Bajaj Electricals:
Bajaj Electricals (BEL) is among the leading providers of home appliances, high masts and poles, luminaries, and fans in India. It commands a 65% market share in the high masts and poles segment and is a market leader in OTG, water heaters, and irons segments. BEL is primarily focused on marketing and believes in creating a strong distribution network rather than investing in manufacturing facilities. The company has a strong marketing and distribution network comprising 19 branch offices with over 120,000 retail outlets in India.
BEL is on a high growth trajectory, given its dominant position in most of the product segments, strong distribution network, and focus on high-margin premium products. Post the “Odyssey 1001”, through which the company embarked its journey to achieve sales of INR 10 bn in FY07, the company has now set its eyes to achieve sales of INR 20 bn by 2009-10 through the theme “Zoom ahead”.
Fem Care Pharma:
Fem Care Pharma (Fem), has been one of the pioneers in the domestic women’s bleach market. Fem currently controls ~ 90% of the INR 460 mn women’s bleach segment in India, which is expected to grow by ~15% over the next three years. The company has recently launched its premium variant Oxybleach at the retail level, which contributed ~12% of bleach sales in FY07.
The company expects to triple its turnover over the next four years on the back of expanded capacities coming on stream, cashing in on its dominant position in the women’s bleach market, and new product launches, thereby expanding its addressable market. Also, there will be tax benefits accruing from its Himachal plant, and excise benefits accruing from its export focused unit at Nashik which would enhance its net margins and EBITDA margins, respectively. At CMP of INR 505, the stock is trading at just 13.4x its FY07 earnings.
Tamil News Channel approval for Raj TV
Raj Television Network has got approval from Ministry of information and broadcasting for launching of one 24×7 Tamil news channel.
The Company is proposing to start the new channel on 14 November 2007.
The new channel shall be a seven days per week news channel in Tamil language covering all types of general news, business news and other news both national and international. Our readers can recall that Raj TV has become the official news channel of ruling DMK party in Tamil Nadu after the split in Maran and Karunanidhi family.
The company is hopeful that the market share of the company shall be increased after the launch of the new channel