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Stock watch as on Feb 27, 2008

Stock watch as on Feb 27, 2008

The small-cap universe is a treasure trove of bargains—provided you can spot them. Between the four stocks listed on this page and the one that Mudar Patherya analyses in detail in his column, we will track five small-cap stocks in every issue.

The small-cap universe is a treasure trove of bargains— provided you can spot them. Beginning this issue Money Today ties up with Trisys Research to identify stocks that aren’t in the limelight, but have potential to give high returns. Between the four stocks listed on this page and the one that Mudar Patherya analyses in detail in his column, we will track five small-cap stocks in every issue. Happy learning and earning.

 

TANTIA CONSTRUCTIONS  

The Kolkata-based company’s market cap was Rs 213 crore as on 20 February 2008 on an equity capital of Rs 16.71 crore. It has all the potential for acceleration and is projecting compounded annualised revenue growth of 40% for the next three years. At the current market price of Rs 130, the stock has given 4.7% return in the past one year.

Core business Construction in the core infrastructure sector such as the railways, road, urban, marine, power and aviation verticals.

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Consider buying because
Order book Rs 1,600 crore (as on 31 Dec 2007)
The record Oct-Dec 2007 quarter is further proof—revenues of Rs 93.81 crore
EBITDA: Rs 13.17 crore
Net profit: Rs 6.82 crore
   
KILITCH DRUGS  

This Mumbai-based company, a leader in the niche segment of injectable formulations, is on a roll. With a loyal clientele of multinational companies and large Indian pharma companies, the management is optimistic of more than doubling the revenue in two years—from Rs 120 crore in 2007-8 to Rs 250 crore in 2009-10. At Rs 129, the stock has risen 166% in past one year.

Core business Manufacturing injectable drugs for MNCs and large Indian pharma companies.

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Consider buying because
It is the largest in its space and is adding three more divisions by June 2008. It is also readying for USFDA, UKMHRA and TGA inspections in 2008.
Oct-Dec 2007 revenue: Rs 32.5 crore
EBITDA margin: 17.5%
Net profit: Rs 3.26 crore
   
ATUL LIMITED  

A growth story is cooking up in this Lalbhai Group company. It has created nine popular phosgene-based derivatives and four more are in the pipeline. Besides, it has a licenced capacity of 5,000 TPA compared to an installed capacity of 1,000 TPA—an edge in a business with protected licensing. At Rs 68, the stock has fallen 26.5% in the past one year.

Core business Manufacturing pharmaceuticals and agro-chemicals.

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Consider buying because
The company is teaming up with global majors for research and development; two contracts have been signed and more are on the anvil.
Oct-Dec 2007 revenues: Rs 307.08 crore
EBITDA: Rs 16.83 crore
Net profit: Rs 7.07 crore
   
ASIAN OILFIELDS SERVICES  

This new kid on the onland seismic services turf has bagged large orders from ONGC and Oil India. The company has embarked on a capex of Rs 25 crore for acquiring additional three crews. It plans to acquire a drilling rig and apply for exploration and production operations in marginal fields. At Rs 200, the stock has risen 478% in past one year.

Core business Provides specialist services to petroleum exploration companies.

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Consider buying because
Order book: Rs 140 crore (as on 31 Dec 2007)
Oct-Dec 2007 quarter revenues: Rs 19 crore
EBITDA margin: 40%
Net profit: Rs 6.82 cr
Ambitious growth plans; about 55% of annual revenues are expected to materialise in last quarter at existing margins
   
Stock prices are closing prices on February 27, 2008.