FY09 was a tough year for the company, primarily due to the meltdown witnessed in various commodities and metals and the operations of IFGL were greatly affected too.
In spite of that, the company was able to register higher revenues of about Rs 410 crore as against Rs 393 crore for FY08 but the profits took a dive and dropped from Rs 28 crore to Rs 6 crore.
The situation after that has improved significantly and the situation in the metal space has also stabilized. If the financials for the Q1 are any indication, then the worst maybe over for the company. In Q1, the company achieved profit after tax (PAT) of about Rs 7 crore which is higher than full year profit of last year. Besides that, this company also put up a bio-ceramic plant which manufacturers substitute for human limbs. This plant manufactures products like hip joint, bone substitute, orbital implants which are used for artificial eyes and also dental implants. This is typically a business with high margin but low volume. In future, the company has plans to scale up this business. The bread and butter for the company still remains the refractory business but this could be a business where as volumes grow more profits would start coming from it. So all in all, you have a company that has got reasonable market share in the refractory business and operations in seven countries with revenues more than Rs 400 crore and a market cap of Rs 100 crore. This company had been doing operating profit of about Rs 50 crore a year and in 2009 they did about Rs 30.
So you have a business which is available at two–three years of operating profits. So given all these factors at the current price of Rs 28–29 this stock could be a value buy for investors.
About Vipul Ltd :
Vipul Limited is an ignored stock in the real estate sector. This company has its operations primarily in Gurgaon. Over the last few years this company has expanded to other cities also. They are currently executing projections in
The company in 2007 had given 15% stake to Wachovia at a price of about Rs 1,300 per share which when adjusted for the stock split translates into price of about Rs 260 per share as against that the stock is available between Rs 55 and Rs 60 and its been consolidating for a while in that range. If you look at a recent deal which has happened in Gurgaon, DLF has bought about 350 acres in Gurgaon from Haryana State Industrial Development Corporation (HSIDC) for a total consideration of Rs 1,750 crore. This deal is significant in two ways. One, it talks about the valuation of the land bank in Gurgaon and second it also talks about the change in the attitude of real estate developers. They were earlier risk averse and they were shying away from buying any fresh land bank. Now real estate developers have started buying land bank at places where they see good sales potential.
Vipul owns about 425 acres of land in Gurgaon. This land is close to
s: MC
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