Other Sectors
Welspun Gujarat Stahl Rohren Ltd (welguj)
Returns
CMP - Rs.79.5
Buying Price - Below Rs.65 (It went down till Rs.45)
Returns - 40% to 60%
Duration - 2 to 3 years.
(Updated date - Dec 2008)
About Company
It is the one of the top three pipe companies in India which manufactures pipes like longitudinal Submerged Arc Welded pipes (LSAW) and Helical Submerged Arc Welded pipes (HSAW). These types of pipes are used for transportation of oil, gas and water.
Financial Earnings
Future Potential
1. Globally there is a robust investment plan for pipelines and replacement in USA, Canada and
Europe. Approximately $88 billion investment in pipeline infrastructure is planned for the next 5 to 7
years.
2. Also about one million miles of pipelines are due for replacement over next couple of years whose
estimation is around $400 billion.
3. Adding to this global demand and requirement, there is going to be strong demand for pipes in India.
Expansion Plans
By March 2009 the capacities of LSAW pipes from 3.5 lakh tones will be increased to 6.5 lakh tones and HSAW pipes from 4 lakh tones to 8.5 lakh tones.
Sintex Industries
(Researched date - Oct 2008)
Returns
Buy below or near Rs 150 (It went down till Rs.70.50)
Returns - above 40%
Duration - 2 to 3 years
Taking into consideration Rs.70.50 as buying price following are the returns
236% Target acheived in month of 21 May 2009. It went high till Rs.237 (Updated - May 2009)
About company
Sintex Industries is not only produces water storage tanks but also plastic products such as custom mouldings and prefabricated and monolithic structures which find wide applications in different industries and construction of temporary and permanent housing.
The company has acquired several domestic as well as overseas companies.
Company’s Custom Moulded Business
1. Sintex generates majority of its revenue (about 40 per cent) from sale of custom moulded products, for users in the electrical, auto
and other ancillary segments. In these segments, the company is expanding through the organic and inorganic routes: Sintex plans
to invest about Rs.730 crore over the next two to three years.
2. Over the last 15 months, the company has completed five acquisitions including in overseas markets. With these acquired
companies which posses’ different technologies, Sintex has extended its product portfolio to cater to the needs of sectors like
aerospace, wind power, defence and consumer durables.
3. These acquisitions will also help the company to leverage the formers client base and global foot print in big markets like US, France
and Germany.
Company’s Monolithic Construction Business
1. A large part of growth would come from the construction division, which includes monolithic construction division, which includes
monolithic construction (low cost housing) this segment merely accounted for about nine per cent of total income in FY08. however,
on the back of strong order book and better industry outlook, revenues from this segment is expected to grow at 90 per cent over the
next two years.
2. Since its start about two years back, this business has been growing fast and has an order book of about Rs.1,400 crore, which is
6.6 times the FY08 revenues of Rs.220 crore from this business.
3. Sintex being the first entrant and the only player in the segment, has been the major beneficiary of growing demand on the back of
different state government’s thrust on low cost housing.
4. The company is already executing an Rs.750 crore project for building 50,000 low cost houses in Gujarat which could just be a
beginning as other states follow suit.
5. The company is investing about Rs.780 crore in monolithic construction business to enhance its execution capabilities as well as tap
new opportunities.
Company’s Prefabricated Construction Business
1. Another emerging and growth driver is the company’s prefabricated structure business.
2. The company was the first to come out with a plastic-based prefabricated product range in the country. These structures find diverse
applications for erecting schools, kiosks, temporary tents, hospitals, police stations, offices and so on.
3. The segment has grown at 42 per cent annually over the last two years.
4. In this direction, the company is investing Rs.480 crore to expand its prefab manufacturing capacities.
Indraprastha Gas Ltd (IGL)
(Researched date - Oct 2008)
Returns
Buy around Rs. 90
Returns - above 65%
Duration - 2 to 3 years
Company profile
1. A Delhi based company involved in providing Compressed Natural Gas (CNG) and Petroleum natural Gas (PNG).
2. IGL has been initiated by the government to provide CNG (which is environment friendly and cost efficient fuel.
3. Initially IGL converted entire public transport vehicles (PVT) (in Delhi) to CNG then the company started concentrating other segments
like cars, LLV (Light Commercial Vehicles) in and outside of Delhi.
CNG conversion and expansion details
1. As of now (13th Oct 2008 operational cost of CNG vehicles is 73 per cent lower than those using petrol and 45 per cent lower than
diesel vehicles). Taking into consideration the low cost the automobile manufacturers are also introducing car models with factory fitted
CNG - kits, which is bound to accentuate growth in future as well.
2. Earlier, IGL had primarily focused on conversion of public transport vehicles driven by the government’s mandate. But now, it is heeding
to the increasing demand from the private cars space, too. The total car base, which uses CNG as a fuel, has jumped nearly four times
to 140,000 in the last two years (recent conversions have been around 5,000 cars/month).
3. To meet this growing demand, the company is planning to set up additional 50 gas stations in the next two years, which would further
strengthen its existing network of 163 stations.
4. The company is also looking to expand its network to other neighbouring cities like Panipat, Sonepat and Rohtak apart from Greater
Noida.
5. After PTV’s, the government is looking at converting diesel LCV’s to CNG in the next phase.
PNG conversion and expansion details
1. The company is doing well in the fast growing PNG segment as well. In fact, the growth potential in this segment is immense with a
huge target market.
2. PNG grew at 21 per cent compared to overall business growth of 18 per cent in Q1 FY09, besides gross realisations for PNG (Rs
17.8/scm) has been greater than CNG (Rs 14.3/scm), thus indicating their respective profitability.
3. IGL is targeting at increasing the share of PNG in the revenue pie to around 8 per cent from 7 per cent currently.
4. The company is planning to set up 50,000 connections in FY09, and expects to reach one lakh connections per year thereafter, as part
of its expansion plans in PNG.
5. In order to achieve its plans, the company is scaling up infrastructure to cater to up to four lakh connections.
Future Estimation
1. Delhi will host commonwealth games in 2010 and Government will be introducing around 2,000 high capacity buses and 20,000 radio
taxis.
2. IGL being the sole provider of CNG to the PTV’s in the city will benefit from this additional demand.
3. As part of its preparations for the games, the company will be setting up 15 CNG stations.
Two wheeler segment
1. A high growth potential segment is two wheelers (more than 60 per cent of the total vehicles in Delhi), which could be a future driver as
tests on CNG variants of two wheelers have been successful.
2. The launch of CNG-fitted two wheelers should accelerate the future demand.
Company margins
IGL has delivered consistent operating margins of around 40 per cent and is a debt free company.
Returns
CMP - Rs.35.5
Returns above 40% in next 2 to 3 years.
Taking into consideration Rs.35.50 as buying price following are the returns
54.92% Target acheived in month of 21 May 2009. It went high till Rs.55 (Updated - May 2009)
About company
Cord Cable Industries (CCIL) manufactures special cables, control and instrumentation cables (communication) and power cables, which are sold mainly to industrial consumers including power utilities.
Future development
1. The company is now setting up an Rs.57 crore Greenfield facility in Rajasthan to manufacture high tension and rubber based power
cables while high tension power cables find application in power generation and distribution, rubber cables are used in railways,
shipping, aviation and wind power sectors.
2. The new plant is expected to start commercial production by March 2009, will help sustain growth rates in future.
Its power sector
1. With power generation capacity estimated at 212,000 MW by 2015 from 126,000 MW currently, the same is likely to generate
demand for high and low tension cables.
2. It is estimated that the market size for power cables manufactured by CCIL is in the range of Rs.3,500 crore, in the next three years.
3. The company’s cable solutions are also used by the infrastructure sector, which are in expansion mode. On the back of orders from
power and infrastructure projects, CCIL’s order book stands at Rs.77 crore.
Cord Cable Industries Ltd
(Researched date - Oct 2008)
Important note - Still Indian Markets are directionless and indecisive due to which any further market correction may bring some more pressure on all researched stocks mentioned in following subsections.
The market volatility situation is for short term duration and in long term the markets will recover as Indian companies are having good fundamentals and good growth prospects.
Taking into consideration current market situation it is advisable to buy stocks in steps rather than buying in bulk in single trade.
Financial ratios
2007/03
2006/03
2005/03
2004/03
Sales
(Figures in crores)
2,678.48
1,829.77
1,038.49
831.77
Net Profit
(Figures in crores)
142.59
61.37
33.83
71.98
Debt to equity
ratio
(Figures in crores)
2.26
1.39
1.19
0.51
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Your Way To Earn
Taking into consideration Rs.45 as buying price following are the returns
255% Target acheived in month of 21 May 2009. It went high till Rs.160 (Updated - May 2009)
