Wednesday, 30 April 2014

ARSS infra result impact - a strong buy

ARSS Infrastructure Projects Ltd is an ISO 9000:2001 certified company, which is engaged in construction activities in India. The company undertakes construction of railway infrastructure, roads, highways, bridges and irrigation projects. The company has developed expertise in railway construction projects, which includes earthwork, major and minor bridges, supply of ballast, sleepers, laying of sleepers and rails, linking of tracks etc. The construction projects are typically awarded through competitive bidding process to bidders with certain eligibility requirements based on their past experience, technical capabilities and financial strength. They bid for projects both on a standalone basis as well as through project specific joint ventures. The company's clients include Ministry of Railways, State Government of Orissa, Rail Vikas Nigam Ltd, RITES Ltd, IRCON International Ltd, National Thermal Power Corporation, Hindustan Steel Corporation Ltd, PWD - Orissa, IOCL, National Highway Authority of India, Vedendata, Nalco, Jindal Steel & Power Ltd, etc. The company has their presence in Eastern India, particularly in the state of Orissa. However, in recent years they have pursued opportunities in other parts of India including states of Chhattisgarh, Rajasthan, Jharkhand, Haryana, Kerala, Andhra Pradesh, Assam, Maharashtra, Tamil Nadu, Gujarat, Uttar Pradesh and Madhya Pradesh. ARSS Infrastructure Projects Ltd was incorporated on May 17, 2000 as ARSS Stones Pvt Ltd. The company started as a construction company in the field of railway infrastructure development, mainly in the state of Orissa and subsequently expanded their business activities in the zonal jurisdictions of East Coast Railway, South Eastern Railway, South East Central Railway, Southern Railway and North Western Railway. Over the years, the company diversified their field of activities into other construction segments such as development and construction of roads, highways, bridges, irrigation projects, EPC activities for railways. Today, the company has emerged as one of the pioneer construction agency in regard to Infrastructure development activities and the 'Infrastructure' brand has become synonymous with ARSS within and outside the State of Orissa In the year 2000, the company established crusher unit at Nityananpur, in the district of Dhenkanal, Orissa. In the year 2002, they established two more crusher plants, one at Rambha in the district of Ganjam, Orissa (which was subsequently shifted to Champajhar) and other at Champajhar situated in the district of Khurda, Orissa. In the year 2003, the company diversified into the field of earthwork, rock excavation, construction of bridges & roadways and boring piles of large diameter. Also, they were awarded projects for constructing 5 major bridges at Bhubaneshwar. In the year 2004, the company entered into the first joint venture with Triveni Engicons Pvt Ltd to undertake and execute railway project. In the year 2005, they entered into joint ventures with other domestic and international partners, namely Harish Chandra (India) Ltd, Kalindee Rail Nirman (Engineers) Ltd, PT Adhikaria (Persero) etc for executing road and railway projects. In May 20, 2005, the name of the company was changed from RSS Stones Pvt Ltd to ARSS Infrastructure Projects Pvt Ltd. In the year 2006, the company received ISO 9001:2000 rating from Moody International in relation to construction of civil work like Road projects, Major Bridges, Minor Bridges, Earthwork, railway track linking work. Also, they established another crusher unit, at Chhatrama in the district of Khurda. In April 3, 2006, the company converted into public limited company and the name was changed to ARSS Infrastructure Projects Ltd. In the year 2007, the company entered into a joint venture agreement with Niraj Cement Structural Ltd and the said joint venture was awarded the project for reconstruction rehabilitation of Cuttack- Paradeep road (SH- 12) from 0 to 43 km and 43 to 82 km. During the year, the company established a crusher unit at Bhanjnagar in Ganjam. Also, they expanded the business into other parts of India, namely Rajasthan, Jharkhand, Haryana and Tamil Nadu for undertaking project work of railways and roadways. In January 28, 2008, the company entered into a joint venture agreement with Somdatta Builders for the construction for widening and strengthening of existing carriage way to 2-lane for Chandbali- Bhadrak- Anandpur road (km 0/0 to 45/0 of SH-9 and km 0/0 to 50/0 of SH-53) work under world bank assisted project to government of Orissa. Also, they received Trade mark registration from the Registrar of Trade Mark during the year. As of January 10, 2010, total value of the company's order book is Rs. 287,753.11 lakh, which consists of the unexecuted portions of the ongoing projects and new confirmed projects awarded to them, which are yet to commence construction

Result impact - 

company posted a decent profit after consecutive loss from couple of quarters...
Hence, company sharply fell from the levels  of 1200 to sub 25...and similar stories like HCC is repeating here.

After a couple of loss making quarters company is back on track with the whoppy 30 Rs. quarterly EPS. and  considering book value of the company as 250+ I do not see that this stock will settle anywhere below 50.

With the continuous upper ckt of 5% we strongly recommend ARSS infra to buy tomorrow morning if you can...

Granules lndia buy

Granules India is  Hyderabad based integrated pharmaceutical outsourcing manufacturer mainly in Active Pharmaceutical Ingredients (API), Pharmaceutical Formulations Intermediates(PFI) and  Finished Dosages (FD ). Company having three API manufacturing facilities located in Bonthapally,and  Jeedimetla  in Andhra Pradesh and Hubei in China.All these three facilities are approved by USFDA and other authorities like WHO ,EDQM..etc. Its API portfolio includes Paracetamol ,Ibuprofen,Metformin HCl,Guaifenesin,Methocarbamo,Oxymetazoline and Phenazopyridine HCl. Granules’ PFI facilities are located at Gagillapur and Jeedimetla both in Andhra Pradesh. Company also have six billion tablect capacity FD plant in Gagillapur. Company having strong outsourcing tie-ups with world pharma majors. Now company is moving gradually to high margin PFI and Fd segment from API .Last year Granules expanded its capacity in both these segments. Company having good R&D and got approvals for two ANDA’s in last year.Outside India, company having marketing presence in US,China,UK and Colombia.After receiving recent FDA approvals and capacity expansion company is expected to perform well going forward.Last FY , Granules posted a turnover of Rs.475 Cr and a net profit of Rs.21 Cr .With the aggressive expansion ,marketing initiatives,and introduction of new products and favorable exchange value ( about 80% of sales coming from exports.) Granules is expected to  post decent growth in coming years.It is one of the good pharma picks from small cap.

Result impact-

Granules India reported  good numbers for the quarter ended March .Company's top line is Rs.317 Cr v/s Rs.204 Cr and net profit is Rs.24 Cr v/s Rs.12 Cr .Full year EPS is Rs.37.20 v/s Rs.17.21 .Company also declared a dividend @ 35 % . Company recently acquired Actus Pharma which owns  a USFDA approved facility .Turn around of Actus Pharma and commercial operations of its joint venture with Ajinomoto Omnichem ..etc are expected to keep the growth momentum of the company in the years to come.

We recommend to buy at current market price 350 Rs. for medium to long term.