Two great picks

1)Scripscan:Deccan Gold Mines Ltd
Cmp:14
Code:512068

Story:Deccan gold mine is the only listed company engaged in the gold exploration sector.Deccan gold has got close to about 10,000 square kilometer of prospective blocks in different states.India produces just 3 tonne of gold per annum as compared to 300 tonne, produced by Australia.Gold mining business is just like the oil exploration business, where there is a high degree of uncertainty involved. Nobody knows whether the amount that is being spent for the exploration process will really yield any results or will have to be written off.But these company is something which can yield windfalls of gains in the long run.Even if deccan gold gets no mines people would always look at it to be the proxy play.The management has guided a revenue figure of around 300-400crs for 10-11.As the industry has got a very high operating margin even if deccan gold delivers half of that revenue it would attract tremendous buying attetion from all sorts of investors fraternity.So a company which would reward you on hope and if its gets any gold mines,be rest assured this would be your next multibagger then.A great buy at 14rs.


2)Scripscan:Sumedha Fiscal Services Ltd
Bse code:530419
Cmp:6
Target:15
Duration:9-12 months

Story:-Sumedha Fiscal Services is a member stock broker of the NSE-Capital Market and FNO segments.At Rs 4 crore of market capitalisation,Sumedha is perhaps the cheapest broking outfit quoting on the BSE.At present, apart from its Calcutta office, the firm runs 8 other branch offices across the length and breadth of the country.Sumedha Fiscal is currently empanelled with most of the FIs, MFs, Banks and Corporate Groups which implies the scalability of business and growth in the coming years.With increased focus on arranging corporate finance, IPO management and Advisory Services, the corporate seems willing to broaden the Revenue stream.Sumedha Fiscal came onto the Dividend list last year with a 5 per cent dividend pay-out and with better business growth should raise this pay-out in this year.The company ended fy 07-08 with revenues of around 8crs but this year the same should reach to 14crs.Profit after tax is expected to escalate to 3.25crs from 1.80crs last year.At curent price of 6 its quoting at a PE of just 1.2 times its 6 months forward earnings.There seems little reason to believe that Sumedha will not be able to scale up and grow its business in the coming years and from a price of Rs 6, there would seem to be little downside but huge upsides would be there once market stabelizes and market man gets the reliking to the brokerage stocks.Not to forget the dividend yield of nearly 8.5%-ICING ON THE CAKE RIGHT?A great penny stock to opt for.


Regards,
ARUN
I can be reached at:arunanalyst@rediffmail.com