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Stock watch as on March 25, 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: April 17, 2008

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. Between the four stocks listed on this page and the one that Mudar Patherya analyses in detail in his column Under the Radar, we track five small-cap stocks in every issue.

GARWARE OFFSHORE SERVICES  

Fast growing offshore logistic service company. Capacity expansion by five new vessels within 18 months. Platform supply vessels (PSVs) added 105% to its revenues to Rs 107 crore for the period December 2006-December 2007.

Core business: Sole marketing agents in India for Hayward, a Norwegian shipyard. Own and operate four 60-tonner anchor handling cum tug vessels (AHTSV) and three PSVs.

For current stock prices and more details, click here

 
What makes it attractive
Jan-Dec 2007 EBITDA: Rs 73.29 crore (138% increase); EBITDA margin: 68.24%
PAT: Rs 40.22 crore (171% increase); net profit margin: 39.22%
Increasing offshore drilling, firm day rates and expanded capacity to generate revenues of Rs 170 crore in 2008-9 and Rs 220 crore in 2009-10
   
EURO CERAMICS  

The company has a strong position in the vitrified tiles space. Location of plants in backward region, proximity to raw material and captive power provides cost advantage. Foray into engineered marbles in June 2007 leading to better realisations and margins. Entry into sanitaryware and wall tiles will accelerate growth.

Core business: Manufacturer of vitrified and calcareous tiles for bathroom, kitchen and floor.

For current stock prices and more details, click here

 
What makes it attractive
Apr-Dec 2007 (consolidated) net sales: Rs 215 crore (45% increase); EBITDA: Rs 68 crore (46% increase); net profit: Rs 26 crore (30% increase)
Strong industry growth (25-30% annually), increased revenues from value-added calcareous tiles segment expected to result in sales of Rs 275 crore in 2007-8 and Rs 450 crore by 2008-9
   
RAMKRISHNA FORGINGS  

This machining facility extended into value-added precision forged components in 2007-8. It commissioned its fully automated ringrolling production line. The company reported a 25.69% and 32.50% increase in its nine month sales (Apr-Dec 2007) and EBITDA respectively. A decline in PAT was due to higher depreciation of the new production line.

Core business: Manufacturer of blank and machined forgings, dies, critical safety components and ready-to-use forgings catering to auto components, automobiles, railways and mining sectors.

For current stock prices and more details, click here

 
What makes it attractive
Apr-Dec 2007 net sales: Rs 134.51 crore
EBITDA: Rs 26.28 crore; EBITDA margin 19.54%
The ring rolling facility will help generate volumes, improve yields and increase average realisations up to Rs 90 a kg. Expected revenues of Rs 500 crore with an EBITDA margin of about 21% in 2008-9
   
EASTERN SILK INDUSTRIES  

Graduation in product mix towards valueadded fabrics (average realisations: $28 a metre) as against plain fabrics (average realisations: $5 a metre) and revamp of design team leading to commercialisation of 230 designs per annum as against 100 designs earlier. Result: enhanced top line and bottom line of this vertically integrated company.

Core business: Manufacturer of silk products that include silk yarn, fabric and home furnishings.

For current stock prices and more details, click here

 
What makes it attractive
Apr-Dec 2007 net sales: Rs 444.83 crore
Export sales: 95% of total sale
EBITDA: Rs 82.94 crore (31.61% increase)
Net profit: Rs 65.72 crore (34.31% increase)
New designs increased average realisations. Expected sales of Rs 500 crore in 2007-8. Joint ventures will facilitate a larger product reach. Decline in stock has enhanced attractiveness
   
Stock prices as on March 25, 2008.

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