Stocks watch as on April 8, 2008

The small-cap universe is a treasure trove of bargains — provided you can spot them. We tie up with Trisys Research to identify stocks that aren't in the limelight, but have the potential to give high returns.

Print Edition: 01 May, 2008

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The small-cap universe is a treasure trove of bargains — provided you can spot them. MONEY TODAY ties up with Trisys Research to identify stocks that aren't in the limelight, but have the potential to give high returns.

ZYLOG SYSTEMS

Increased billing rates at $68.27 per hour along with a growth in volumes for Apr-Dec 2007 reinforced the top line and bottom line by 27% and 33% respectively (over Apr-Dec 2006). IPO in July 2007 raised Rs 126 crore; partly used in building an 85,000 sq ft offshore development centre.

Core business: Provides client-specific business and technological solutions; operates in industry verticals like telecom, banking, financial and retail services.

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What makes it attractive

Apr-Dec total income: Rs 448.49 crore

EBITDA: Rs 84.55 cr (up 171%); EBITDA margin: 18.85%

Acquired two firms — in UK and in Chennai. Partnering with a US firm to offer voice over IP services. Initiatives expected to increase revenue by 35% in 2008-9.

Stock price as on 8 April: Rs 201. Market cap: Rs 331 crore

MANAKSIA

Multi-location company across India, Nigeria, Nepal and Ghana. Entered the capital markets in December 2007 raising Rs 284 crore. Vertical integration of operations has resulted in quality control, competitive costs and expansion. A subsidiary in Dubai will provide marketing support in West Asia, East Africa, CIS countries and Europe.

Core business: Manufactures value-added metal products and metal packaging products like caps, crowns and metal containers; also mosquito coils.

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What makes it attractive

Consolidated Jan-Dec 2007 net income: Rs 822 crore (11% increase over Jan-Dec 2006)

EBITDA: Rs 96 crore (30% increase)

PAT: Rs 89 crore (39% increase)

Expansion projects will push up revenues to around Rs 1,400 crore by 2008-9. Projected EPS of Rs 25

Stock price as on 8 April: Rs 76. Market cap: Rs 529 crore

ELDER PHARMACEUTICALS

In November 2007 the company ranked in Forbes list of "Asia's 200 Best Under A Billion". Product introductions like Hibor, Shelcal-CT and Phytomega and sustained performance of brands like Shelcal, Widcef and Eldervit are expected to result in sales of around Rs 550 crore for 2007-8. The company made two strategic acquisitions in Europe in 2007.

Core business: Manufacturing and marketing of pharmaceutical products in niche therapeutic areas. Alliances with 28 international pharmaceutical and health care companies to launch products in India.

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What makes it attractive

Apr-Dec 2007 net sales: Rs 391.74 crore (19% increase)

EBITDA: Rs 81.51 crore; EBITDA margin 21%

New product launches, in-licensing deals and expected increase in overseas sales will help the firm achieve a 20-25% growth in net sales in 2008-9.

Stock price as on 8 April: Rs 380. Market cap: Rs 714 crore

PIONEER DISTILLERIES

Capacity expansions commissioned in January 2007 have driven both the top line and bottom line. The second phase of expansion — a 5 MW biogas power plant for exporting power to the state grid and also qualifying for carbon credits will increase income driving the top line to Rs 90 crore by 2008-9.

Core business: A distillery manufacturing rectified spirit (RS), extra neutral alcohol (ENA), special denatured spirit and ethanol.

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What makes it attractive

Oct-Dec '07 net turnover: Rs 21.54 cr (98% increase over Jan-Dec '06)

EBITDA: Rs 6.96 cr (158% increase)

PAT: Rs 4.45 crore (255% increase)

The company plans to increase its RS capacity to 2 lakh klpd, ENA capacity by 50 klpd and ethanol capacity to 1 lakh klpd; also add value-added products like acetic acid and ethyl acetate.

Stock price as on 8 April: Rs 70. Market cap: Rs 78 crore

Stocks watch as on April 8, 2008

The small-cap universe is a treasure trove of bargains &mdash; provided you can spot them. We tie up with Trisys Research to identify stocks that aren&#39;t in the limelight, but have the potential to give high returns.

The small-cap universe is a treasure trove of bargains — provided you can spot them. We tie up with Trisys Research to identify stocks that aren't in the limelight, but have the potential to give high returns.