- Development Credit Bank (DCBA.NS)
- ITD Cementation India (ITCM.NS)
- Selan Exploration Technology (SELA.NS)
- Mangalam Cement (MGLC.NS)
- Petronet LNG Ltd (PLNG.NS)
- Persistent Systems (PERS.NS)
- Ingersoll-Rand (India) (INGR.NS)
- Astra Microwave Products (ASTM.NS)
- PNB Gilts (PNBG.NS)
- Gujarat Alkalies and Chemicals (GALK.NS)
1. Selan Exploration Technology Ltd. is engaged in exploration and production of Crude Oil and Natural Gas. During Last Quarter they reported a Net profit of Rs. 114.80 millions, CAGR of 48.70%. Revenues and earnings are expected to grow at a CAGR of 20% for the next 3 years. Company is in the process of monetizing of oil and gas assets, have started drilling for the Lohar, Bakrol oilfield. Company’s valuation are cheap relative to its peers and makes it an attractive investment opportunity.
2. ITD Cementation India is a part of Italian Thai Development Public Company (ITD), Thailand. ITD has expertise in design and construction of large infrastructure projects and delivers key technical solutions provide solutions in the field of Civil Engineering. ITDCIL focuses on projects involving higher degree of engineering skills and by identifying and forming strategic JV’s for mutual benefit through sharing of resources and business skills. ITDCIL operates in 3 business divisions: 1. Construction of flyovers & bridges, steel & petrochemical plants. 2. Marine division which undertakes the construction of quays which handle cargo at ports. 3. Specialist engineering division which constructs railways and roads, power stations. Company exemplify good earnings growth rate, available at low valuation, expects re-rating of its multiple soon.
3. Mangalam Cement is a strong player in the cement sector with a strong foothold in Northern & Central India, is well placed to benefit from growth opportunities in the regions. Capacity expansion plans lined up along with self sufficiency in power coupled with usage of petcoke as fuel will enable it to continue its growth momentum. Company reported good numbers due to increase in volumes and significant improvement in operational parameters. EBIDTA/tn improved by 48.2% QoQ to INR 790/tn mainly on account of higher realisations and lower operating cost. Due to delay in monsoons, MCL witnessed a sharp increase of 45% in volumes to 0.52 mt. Future growth will be driven by expansion in capacity of it’s new clinker and cement plants. Overall a good value and growth opportunity.
4. Petronet LNG Ltd. was formed as a joint venture between Oil and Gas PSU’s like HPCL, IOCL, GAIL and ONGC each owning 12.5% equity in the company. Company currently has a regasification and LNG import terminal at Dahej in Gujarat with 10.0 mn tonnes p.a. capacity while the one in Kochi with 5.0mn tonnes p.a. capacity is under construction and will be ready by end of FY2013. PLNG is well-poised to benefit from gas demand-supply mismatch in the country. Company has planned for 75% capacity expansion from 10.0mn tonnes to 17.5mn tonnes over the next three years. PLNG provides an opportunity for investors who wants to benefit from the increasing gap in between India’s natural gas suppy and demand. GOI is making efforts to maintain long-term viability of LNG in the overall gas mix of the country.
5. Development Credit Bank came out with good last quarter results, a net profit of Rs. 18.9 crs in Q1FY2013 CAGR 114%. Non Interest Margins improved with a stable outlook for next few years. The bank’s core fee income increased 19% YoY to Rs. 20.2 Cr. Ratio of NII/Total Income stands at 30%. Management expects the momentum in fee income to continue going forward. Loan book shows good growth scenario. This was mainly due to increase in the corporate banking segment & growth in the bank’s mortgage book. Good pipeline for the SME book continues to remain strong. Improving fundamentals will lead to a re-rating of it’s multiple and expect company to reach it’s intrinsic value soon.
Disclaimer: This is for information purpose only and express our views, not an offer to buy or sell. Risks involved in investing is not suitable for all kinds of investors. Past performance is no guarantee of future performance. Seek professional advice if this research is suitable for you.
Indian Equity Research Advisory, Century Partners
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