Operator calls:-

Got some operator calls recently from various sources.Let me pen down the same for you people:-

Markets are lacklustre due to various domestic and global concerns. Investors had lost huge amounts and are adopting cautious approach. Under normal circumstances, when any company reports bumper results, share price zooms. However, for Q1, many companies have reported wonder results and still, their share prices are languishing due to fear psychosis. However, if, investors with patience of 2-6 months muster up the guts to buy such scrips, they may stand to gain significantly. Giving hereunder few ideas:

1) Orient Abrasives (Rs. 25, Re. 1/- F.V.):
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Q U A R T E R E N D E D Y E A R E N D E D
30.06.08 30.06.07 31.03.08
cr. cr. cr.

Sales 78.46--54.34--229.00
PAT 11.30--3.29--19.48
Equity 5.98--5.98--5.98

OAL is the manufacturer of grains for abrasive industry. Company enjoys dominant share in India, and has customers like Grindwell Norton. Company has investor friendly track record as it had issued 1:1 bonus last year. For year ended 31/03/08, it had achieved PAT of 19.48 crs. with EPS of 3.26. Recently, company had commissioned 9MW Power Plant. Product is power intensive and captive power has led to significant savings. As a result, company will report all time high results in current year. For Q1, its sales stands at 78.46 crs. (54.34 crs.) and PAT has flared by 244% to 11.30 crs. (3.29 crs.). Q1 alone EPS is 1.90. Due to expensive imports from China, company has been successful in raising its product prices which has led to such marvellous performance. It may report EPS of 7.20 for 08-09. Stock is trading at less than 4.00 x FY09E EPS which is extremely low for a company which is leading player in the Ind. Our price target Rs. 48/- in 3-6 months.

2) Nagpur Power (Rs. 63/-):
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Q U A R T E R E N D E D
30.06.08 30.06.07
cr. cr.

Sales 16.32--1.76
PAT 12.57--0.30
Equity 13.10--13.10

This Nagpur based company is engaged in the manufacture of Ferro Manganese, prices of which are ruling all time high. For Q1, company has reported bumper results as its sales have gone upto 16.32 crs. as against 1.76 crs. in corresponding quarter of previous year. PAT stands at 12.57 crs. (30 lakhs). Q1 alone EPS is 9.60. Company may report EPS of 23-24 for 08-09. Stock is trading at 2.67 x FY09E EPS. Prices of its product are likely to remain firm for next 3 quarters atleast. Moreover, it is reliably learnt that company has huge surplus land. Investors can expect minimum 50% appreciation in 6-9 months.

3) Aarti Industries (Rs. 42/-, Rs. 5/- F.V.):
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Q U A R T E R E N D E D Y E A R E N D E D
30.06.08 30.06.07 31.03.08
cr. cr. cr.

Net Sales 378.00--194.00--939.00
PAT 33.23--5.22--36.68
Equity 36.40--36.40--36.40

AIL is one of the biggest chemical companies in India. Its main products are:

PNCB
ONCB
DNCB
ODCB
Chloro Phenols
Agro Chemicals.
Fluoro Compounds.
API/Speciality Chemicals.
Nitro Benzeme.

End users for its products are:

Speciality Chemicals.
Agro Chemical Intermediates.
Pharma & Pharma Intermediates.
Dyestuff & Dyestuff Intermediates.
Pigment Intermediates.

For Year Ended March 08, company had achieved PAT of 36.68 crs. on 939 crs. sales. In last few months, imports of above products from China have come down heavily with negligible imports. Reason is that, firstly, production cost in China have gone up. Secondly, China Govt. has tightened its pollution control norms which has led to closure of 100s of such factories in China. This development enabled Aarti to achieve higher volume sales and raise its product prices significantly. Impact of same is visible in Q1 wherein, its sales have almost doubled to 378 crs. and PAT has pole vaulted by 540% to 33.23 crs. Q1 alone EPS is 4.56. For 08-09, company is likely to achieve all time high sales of 1500 crs. with PAT of 120 crs. which will give EPS of 16.50. Stock is trading at less than 3 x FY09 EPS. Considering big size of the company, scrip is available dirt cheap by now with target of 60% appreciation in less than 6 months.

Regards,
ARUN
I may be reached at-arunanalyst@rediffmail.com