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Wednesday, February 17, 2010

Hot Pick : Facor Alloys Ltd. Bse Code: 532656

Facor Alloys Ltd. is one of India's largest producers and exporters of Ferro Alloys, an essential ingredient for manufacture of Steel and Stainless Steel. It exports to several countries like Korea, Japan, Italy, Netherlands, USA, Turkey, China and Taiwan. Post trifurcation of the Facor group into 3 independent entities in 2004 under a demerger scheme, FACOR has the capacity to produce 65,000 TPA of Charge Chrome / Ferro Chrome and 2,50,000 TPA of Chrome Ore at its Plant in Orissa. It has also established a mining complex at Bhadrak in Orissa for the mining of Chrome Ore, the main raw material for the production of Charge Chrome/ Ferro Chrome. FACOR has been accredited with ISO 9001:2000 standard, which coupled with other control measures adopted by the Company, enables it to maintain its world wide status as a producer of quality products.

The stock has seen highs of around Rs.21 before the crash happened in 2008. At current price of just around 4.9, the stock is available at a good discount to its Book Value of nearly 5.86. The company is also looking at acquisitions of Chrome Ore mines abroad to expand its capacity. Once the acquisition is made, the stock can see a complete re-rating. At current valuations the stock looks very cheap and the future looks good for this stock.


Friday, February 5, 2010

Hot Pick : GHCL Ltd. Bse Code : 500171

GHCL Ltd. is a leading Chemicals & Textiles company. The company is amongst the global leaders in manufacture and development of different varieties of Soda Ash. Soda Ash is an essential ingredient in the manufacture of detergent, soap, glass, sodium salts and dyes. It is widely used in textiles, paper, metallurgical industries and desalination plants. The Textile division at GHCL is a vertically integrated operation that manufactures premium quality Yarn, Griege Fabric and Home Textile products like Bed Linen, Curtains, Madeups and Cotton Yarn.

The two Spinning units located in Tamil Nadu have an installed capacity of 125,000 spindles manufacturing 100% Cotton and Polyester Cotton yarns. The manufacturing units at the Textile Company have state-of-the-art textile machinery from Reiter, Switzerland and Schlafhorst, Germany, among others to lend that cutting edge to Quality.

The production facilities are ISO 9001-2000 certified and also have been awarded the OKO-TEX certification from CITIVE, Portugal. Wind-power is used for generating and meeting out the energy requirement for the spinning operations, which is not only cost effective but also eco-friendly. See the company website:

The stock is giving a very high dividend yield consistently, and at current market price of just 44.15, this stock is available at a steal. The PE ratio is just around 4. The Book Value as of March, 09 is a whopping 121.38 (source: religare technova) The stock has seen highs of around 185 in the December, 2007 Bull run and used to trade consistently around that level in the years 2006 & 2007. At current price this stock is trading at a deep discount to its peers like Tata Chemicals, United Phosphorus etc. and merits an investment buy.