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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (3797)	2/24/1999 2:33:00 PM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

CompanyWatch-From The Insider FEB 22 - FEB 27 1999 The Insider / Getting stronger AMARA Raja Batteries is beginning to figure on the buy list of several big FIIs. While most analysts attribute the FII buying interest to the impressive growth in the company's business (over 40 per cent annual growth in sales) and its emergence as the leading manufacturer of telecom batteries, the market buzz is that there is a strong possibility of the company announcing a bonus at the end of this quarter. The bonus theory is supported by the strong growth in book value of the share (over Rs 100 at the end of this year) and a near doubling of profits during the first half. Analysts expect the company to post an EPS of over Rs 40 per share in the current year. Johnson Controls Inc of the US has 24 per cent equity in the company and there has been speculation about this being hiked to 30 per cent. The Insider learns that it has recently received large orders from the DoT for batteries and bulk of supplies in future will be made by the company. Industry peers like Exide attract a PE of over 20. Compared to them, Amara Raja still quotes at less than 8 times the projected earnings for the current year. Two US-based FIIs are understood to have bought heavily during the last few days. ================ A clear winner INDIAN Shaving Products Limited (ISPL), makers of the Gillette brand of shaving systems, is going to be the winner of honours this week as it announces its third quarter performance. The Insider learns that the third quarter profit is likely to be substantially higher than even the most optimistic estimates by analysts. The Insider learns that the third quarter results will show a bottomline several times higher than that of the previous year on annualised basis. This scrip attracts the highest PE ratio (over 100) in India on the strength of its strong brands and market leadership. ISPL markets brands like Gillette Sensor Excel, Gillette Presto International, Oral B and Duracell. The boom in profits accrues from the pricing power of the company, that is its ability to price products higher without losing sales. It has hiked the prices of Gillette Presto and Sensor several times during the last one year without losing its share of the market. Successful launches of new products such as the Gillette shaving foam will ensure that the bottomline keeps up the pace of growth. ==================== On the right track UNICHEM Laboratories Limited, an Indian bulk drugs and formulations maker, is set to follow the footsteps of illustrious industry cousins such as Aurobindo Pharma with strong earnings growth and an emphasis on new brand launches. It is expected to post an EPS of over Rs 40 in the current year and has a small equity base of Rs 4.6 crore and virtually no long term debts. It has commissioned new formulations plants in Goa and Himachal Pradesh. The full impact of these is being built into this year's working. It has launched three new brands in the therapeutic segments of cardiovascular, anti-inflammatory and anti-oxidants. Unichem's confidence in earnings growth is reflected in its decision last year to write off VRS expenses in just two years instead of the normal five. The impact is visible in this year's working with net profit jumping sharply during the first three quarters. The scrip is quoted at a much lower PE than its other industry peers. The Insider learns that a leading research house has put the scrip on its buy list. ==================== Welcome signals NATIONAL Radio & Electronics Ltd (Nelco), the troubled child from the Tata stable, is expected to come out of the red during the current quarter. The Insider learns that Nelco will report a net profit for the fourth quarter after losses in the first nine months. Tatas are understood to be focussing on turning around this once prestigious company through financial and strategic support. Nelco is understood to have also received an order worth Rs 60 crore for signalling equipment for supply to the telecom industry and defence establishments. This should fuel its growth in the coming year. It has also planned to launch new products in collaboration with a US major and is learnt to have sent its personnel abroad for training. Insiders claim that the company merits close watching in future.