SALONA COTSPIN REVISITED

Action seems to be returning in Salona Cotspin (bse code : 590056). The textile industry as a whole has underperformed the market for the past one year or so due to the appreciation of the rupee against the dollar. Govt. seems to be genuinely concerned about the hardships being faced by the exporters and is taking steps to help them. Salona Cotspin has a good track record of consistently growing Net Profit figures and regular dividend payouts. Watch out for this counter, volumes are picking up. Cheers!

JAYASWALS NECO

Any level is a good entry level in Jayaswals Neco. The EPS for FY08 is likely to be in 8-10 range and EPS for FY09 likely to be significantly more. Somebody has asked what is the story in this counter, the story is that the company has turned around and is now going to make very good profits. This is the next Jai Corp or next KEC International in the making. Nagpur-based Jayaswals Neco has set up a commercial power plant at Moitra village in Hazaribagh district of Jharkhand. The 270-mw coal-fired plant will have two units of 135 mw each. The company has coal mines with estimated reserves of 30 million tonnes in Moitra village itself.Jayaswals Neco has planned to sign the power purchase agreement with PTC India. The company already has a 40-mw captive power plant at Siltara in Raigarh district of Chhattisgarh where an integrated steel plant has come up.Incorporated in 1972, Jayaswals Neco essentially produces iron castings and pipes that find applications in railways and construction sectors. In 1992-93, the company diversified into the solvent extraction business. The integrated steel plant in Chhattisgarh signifies an important backward integration move. This move will bring down their costs very significantly and propel their earnings to a new level. Cheers!

POWER PLAY

The power sector is red hot right now. This sector is set to reap the rewards of major reforms initiated in the country some time back. Current events like Reliance Energy coming up with an IPO of Reliance Power and the listing of Power Grid Corp will fuel the fire in Power Stocks. PTC and NTPC are going to set up Power Exchanges to trade power. Power Grid is expected to list around rupees 80. We may see a big rally in Power stocks like PTC, NTPC, Torrent Power etc. in the near future.

GOOD BUY : HPCL

HPCL is a grossly undervalued stock in the currently hot and happening Oil & Gas sector. This has been largely due to APM (administered pricing mechanism) of the govt. Once APM is dismantled, this stock can sky rocket. Even otherwise, the stock is grossly undervalued and underowned. With previous year EPS standing at 75.65, this stock deserves a price of at least rs. 750. Compare that with its current mkt price and there is a lot of room for appreciation. Also there is a huge valuation gap between HPCL and its peers like RPL after a major rally in RPL, RNRL and other refinery/energy stocks. HPCL definitely deserves a re-rating upwards and market participants seem to be slowly realising this now.

SUPERSTAR GEM : DCM SHRIRAM CONSO

DCM SHRIRAM CONSOLIDATED Ltd. is a diversified company operating in the Agri (Fertilizers, Bioseeds, Chemicals etc.), Cement, Sugar, Rural Retail business. Fenesta Buildings systems (UPVC Window and Door systems pioneered by DSCL under the ‘Fenesta’ brand ) is a new addition to their portfolio with great growth prospects. The company has recently received Rs. 837 crores from the sale proceeds of its Mill land in Delhi to DLF. This windfall will make the company debt free. The company has cash alone of approx. rs. 100 per share. The company has also declared an interim dividend of rs. 3 per share. This stock is a multibagger in the making.

Another Gem : SHRINGAR CINEMAS

SHRINGAR CINEMAS is an excellent pick in the media sector. The Promoters holding is 48.06% qtr ending June, 2007. The EPS for June qtr was rs. 1.65 as compared to 40 paise last year. At a projected eps of rs. 6 for fiscal 2007-2008, the share trades at a PE of approx. 9. This is very low as compared to other media stocks. If the stock is brought near the PE levels of its peers, the fair value should be around rs.90. The company is adding new properties to its kitty of Multiplexes and the growth for this company's business is expected to be good. Technically, once this stock closes above 62 with good volumes, it could then go up to the next level of 75.

INVESTMENT PICK : AGRO DUTCH INDUSTRIES LTD.

Hi friends,

Presenting a gem of an investment opportunity for patient investors: Agro Dutch Ind Ltd. Agro Dutch is a premier packaged mushroom producer in the country and exports its products to many countries across the globe. The current valuations of the stock are mouth-wateringly cheap. The first quarter eps jumped from 1.37 last year to 2.89 in the current year. With projected eps of rs.10 plus for 2007-2008 fiscal, this stock trades at a PE of a mere 2.5 approx. at current price. The promoters of the company have added 4% shares to their kitty from June 2006 to June 2007. This stock can easily go over 50 rs. within a one year time frame. Strong BUY rating.