DP Money Watch – Marson Limited, Catering To The Expanding Power Sector

Marson Ltd is a ISO-9001-2000 certified,52 year young company in the power infrastructure sector having state of the art manufacturing and testing facilities for almost all kinds of transformers ranging from 25KVA to 100 MVA. This stock is our recommendation for the year 2009.The stock was earlier recommended in 2007.

The Company has so far supplied more than 100,000 transformers to companies like Siemens, NTPC, State Electricity Boards,CESC, Hydel Power plants, GRIDCO, Ordinance factories etc.

The Company’s equity capital has increased from Rs.10.8 crores with 5.4 crore shares of Rs.2 FV to Rs. 17.1 crores with 8.55 crore shares, as the company has merged with Marson Transformers Limited with Marson Ltd. and allotted 3.15 crore shares to the promoters of Marson Transformers ltd.This has increased promoters stake in the company to 46.8% from just 16% a year back.

Market capitalization is just about Rs. 20 crores. The Company has its manufacturing units in almost 4 lakh sq ft area in proximity to port and is the largest manufacturer in Eastern region. It also has its own Transformer Oil Plant , Copper wire and Strip plant. Replacement cost of such a strategically located plant will not be less than Rs. 100 crores.With unsecured loans of about Rs. 10 crores the share at CMP of Rs. 2 appears to be undervalued, and can prove to be a multibagger.

Buy at CMP is recommended with atleast one year HOLD

This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision.

FDC Limited, A Safe Bet In Uncertain Times

FDC Limited is one of India’s leading Pharmaceutical companies and was set up in 1936. The company operates a number of world class manufacturing and R &D facilities at multiple locations like Aurangabad, Jogeshwari, Roha, Sinnar, Verna and Baddi in India and exports to 50 countries including US, Japan, Europe and many more.

USFDA, WHO-GMP and UNICEF approved FDC controls 70% of the Oral Rehydration Salt (called Electral) market in India. It makes formulations and Active Pharma Ingredients in the Pharmaceutical space. It also has presence in various therapeutic segments such as anti-infectives, dermatologicals,respiratory and haematinics. FDC has launched new products and line extensions of its existing products like Zifi for treating lower respiratory tract infections.

For the quarter ended Sept.2008, sales grew by 15% to Rs. 157 crores compared to Q3, FY-07.PAT grew by 44% to Rs. 26 crores (See the financials below).

Scrip Code : 531599 Company : FDC Ltd

Type Un-Audited Un-Audited Un-Audited Un-Audited Un-Audited Audited Period Ending 30-Sep-08 30-Jun-08 31-Mar-08 31-Dec-07 30-Sep-07 31-Mar-08 No. of Months 3 3 3 3 3 12 Description Amount(Rs. million) Net Sales / Interest Earned / Operating Income 1,574.85 1,592.92 888.35 1,215.00 1,358.40 4,896.67 Other Income 26.71 38.81 33.17 88.10 56.30 191.42 Total Income 1,601.56 1,631.73 921.52 1,303.10 1,414.70 5,088.08 Expenditure -1,251.59 -1,161.99 -856.77 -1,021.30 -1,169.40 -4,182.12 Interest -3.72 -4.09 -5.38 -2.50 -2.50 -14.81 Profit Before Depreciation and Tax 346.25 465.65 59.37 279.30 242.80 891.15 Depreciation -28.71 -27.46 -32.29 -26.80 -26.20 -111.51 Profit before Tax 317.54 438.19 27.08 252.50 216.60 779.65 Tax -55.00 -91.20 10.91 -41.00 -34.80 -122.09 Net Profit 262.54 346.99 37.99 211.50 181.80 657.56 Equity Capital 191.46 191.46 191.46 191.50 191.50 191.46 Basic And Diluted EPS after Extraordinary item 1.37 1.81 0.20 1.10 0.95 3.43 Nos. of Shares – Public 68,956,446.00 68,956,446.00 68,956,446.00 - 68,956,446.00 68,956,446.00 Percent of Shares-Public 36.02 36.02 36.02 - 36.02 36.02 Operating Profit Margin 22.22 29.49 7.29 23.19 18.06 18.50 Net Profit Margin 16.67 21.78 4.28 17.41 13.38 13.43 Cash EPS 1.52 1.96 0.37 1.24 1.09 4.02

Financials reproduced from BSEINDIA

Latest quarter EPS stands at Rs. 1.37 for Re.1 FV share. FDC is buying back its share at a price not exceeding Rs.40 from the market. This will help support its share price in these uncertain times. After the completion of buyback its equity will reduce to Rs.17 crores from the present Rs.19 crores, thus increasing the EPS from Rs. 1.37 to 1.5. At CMP of Rs. 30 the share is available at P/E of just about 5.

Buy at CMP is recommended for long term

Note:This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision.