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Wednesday, June 24, 2009

Operators paradise,Investors nightmare.Stay away from these craps

1)Scripscan:Simplex Trading & Agencies Ltd

Story:This company’s operations are a joke. In the June, September and December 2008 quarters, this company posted an operating loss of Rs1.01 crore, Rs10,000 and Rs1 lakh, respectively, whereas in the March 2009 quarter, it has posted an operating profit of Rs10 lakh. There were no revenues in the September and December 2008 quarters! The promoters hold only a 0.07% stake. It was listed on 17 July 2006 at Rs1.68 and ended up hitting a high of Rs152.20 by the end of November 2008 – a jump of 8960%. In December 2008, it issued bonus shares in the ratio 4:1 and the stock crashed hitting a low of Rs96 on 21 May 2009.

2)Scripscan:Softpro Systems Ltd

Story:Hyderabad-based Softpro Systems Limited claims to be a business-solutions provider in banking, finance, insurance, retail, telecom services and manufacturing industries delivering a wide range of leading–edge technology solutions like enterprise portals, application software development and technology integration, ERP, business intelligence and e-learning solutions. Their client list includes names of ICSA (India) and BRG Energy. Well, such an impressive range of services fetched the company pathetic revenues. In the March and December 2008 and March 2009 quarters, the revenues were Rs1.27 crore, Rs1.67 crore and Rs1.81 crore, respectively, whereas in the June and September 2008 quarters, revenues were as low as Rs15 lakh and Rs8 lakh. With such paltry revenues, it is not surprising that ‘profits’ have been completely erratic. In the June, September and December 2008quarters, the company posted an operating loss of Rs41 lakh, Rs28 lakh and Rs73 lakh, respectively. But in the March quarters of 2008 and 2009, it posted operating profits of Rs1.03 crore and Rs1.22 crore, respectively. Clearly, the businesses are only in name. But the price trend of this scrip is a different story altogether. Between 2 May 2008 and 27 March 2009, it declined 79% but since 2 April 2009 until 9 June 2009, it has surged 225%. As usual, it is listed only on the BSE. Are the BSE authorities watching?

3)Scripscan:Switching Technologies Gunther Ltd

Story:Chennai-based Switching Technologies Gunther Limited claims to manufacture miniature reed switches for the automobile, power, telecommunications, aircraft and industrial control industries and tilt switches. It is a 100% export-oriented unit (EOU) and has a buy-back arrangement with its promoter company, W Gunther GmbH, Germany. If all this is true, how come revenues range only between Rs2 crore-Rs3 crore every quarter? Besides, how can this company continue to run, since it makes consistent losses? In the March, June, September and December 2008 quarters, it reported operating losses of Rs72 lakh, Rs58 lakh, Rs10 lakh and Rs22 lakh, respectively. As usual, all this has nothing to do with its stock price. Between 6 March 2009 and 9 June 2009, the scrip of this company has surged a massive 255%.

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