Grauer & Weil (Rs.120) - *The main business of the company is to
manufacture and sell:
a. Chemicals required for metal finishing, their intermediates and other
specialty chemicals.
b. Electroplating plants, their components, effluent treatment plants and
other engineering products.
c. Development and management of properties.
In FY07, it recorded a healthy all round growth in sales & profits.
Aggregate revenues rose by 20% and Net Profit rose 79% from Rs.63.644million to
Rs.113.660 million. Work on the second phase commenced last year on a total
area of 2.5 lakh square feet, which is likely to be completed in the last
quarter of FY08. Thus full revenue from lease rental will come next year,
which will be a big trigger for investment buying in this stock. After
completion, the company will go in for the Third phase of the project.
For H1FY08, net profit of the company rose 55% to Rs.8.8 cr. as against
Rs.3.86 cr. in H1FY07. Sales rose by 30% to Rs.88 cr. as against Rs.68 cr.
during H1FY07 while operating margins improved from 13.15% to 15.08%. There
are indications that the 2nd half growth rate is likely to be maintained at
the same level as of the first half. As per unconfirmed reports, a group
company having with good real estates is likely to be merged with the
company.
1. The company's 100% subsidiary, Poona Bottling Company, which was a
bottler for Coca-Cola with its plant on
operations a few years back. Poona Bottling Company has 4 acres of prime
land opposite Alfa Laval in Pune. The company intends to develop this Pune
property as an IT Park. The company has a good track record regular dividend
payment and liberal bonus issues. Seeing to its past track of growth record
and current valuations of its real estate worth, its market cap of around
Rs.217 cr. is very low. Even on a conservative basis, its market cap
should be around Rs.450/500 cr. Thus, the scrip has good scope for the
upside. Investors can keep accumulating this stock for target of Rs.500 over the next two years.
Grauer Weil (Rs.120) had given 1st phase at Rs.36/37 per sq. ft.
about three years back or so. Current rates are around Rs.150 per sq. ft.
Moreover, Big Bazar and Cinemax pay a comparatively lower rate but attract
huge crowds which will help the second phase of the project of approx.
3,00,000 sq. ft. at much higher rates . *
*The 2nd phase will be ready by
come from Q2FY09 onwards. *
*Existing rates, too, come for renewal at much higher levels, which will
bring about a sharp improvement in sales & margins over the next few years.
IT park approval is expected any time for its Pune unit. *
*A group company has real estate of around 3.5 acres at Mumbai and there is
possibility of a merger once it comes out of BIFR. *
*Its core business is also said to be doing well. *
*There is selling in the counter above Rs.180 level. Sustained closing above
Rs.190 level can give good breakout. It's a good stock to add around
Rs.120/125.
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