Srikalahasthi Pipes Ltd - recommend to buy

.Company Profile -

Srikalahasthi Pipes Limited (LIL) was incorporated on 1 November, 1991 by Lanco Group of Companies to manufacture Pig Iron and Cement. The installed capacity of Pig Iron was 90,000 TPA and with similar capacity 90,000 TPA for cement.
The company is engaged in engineering, procurement, and construction (EPC); and power, natural resources,infrastructure, and property development businesses. The company operates through five segments: EPC and Construction, Power, Property Development, Infrastructure, and Resources.
• The EPC and Construction segment provides EPC services for various projects, such as thermal and hydro power projects, chimneys, cooling towers and balance of plant, and transmission and distribution projects, as well as for roads, highways and bridges, metros and railways, buildings and airports, sea ports and marine structures, and water and pipeline facilities.
• The Power segment is engaged in generation and trading of power from thermal, hydro, wind, and solar sources.
• The Property Development segment develops integrated properties comprising commercial and
residential buildings.
• The Infrastructure segment is involved in the development of civil and urban projects, such as roads,
highways, ports, airports, railway lines, etc. on build, operate, and transfer basis. The Resources segment is engaged in the exploration, mining, and marketing of coal.
• The company is also involved in the construction of water supply and irrigation projects, including dam,tunnels, etc.

Why to buy?

1. Future looks promising -

India is expected to become the second-largest steel producer in the world by 2016. Easy availability of low-cost manpower and presence of abundant iron ore reserves make India competitive in the global setup.

2. Industry to revive -
Since government of India focusing more on civil and urban projects and lanco being major player in the south India will likely to benefit in a big way from such projects. Further, company is able to reduce debt to equity ratio from 2.21 to 1.8 this fiscal year which is likely to improve southwards further to 1.5 in FY15. Net margin will likely to be around 6-7% in FY15 from current 4% which is showing healthy improvement in bottom line.

At the current market price of Rs. 72.40, the stock P/E ratio is at 4.24 x FY15E and 3.52 x FY16E respectively. Earnings per share (EPS) of the company for the earnings for FY15E and FY16E are seen at Rs. 17.07 and Rs. 20.56 respectively. Hence, we recommend to buy the stock on any decline from CMP for the target of 110 in medium to long term.

vinyl chemicals (India) - fevicol strength...

Vinyl Chemicals India Ltd is a Pidilite group company incorporated on 15th May, 1986 with the object of manufacturing Vinyl Acetate Monomer (VAM). It's a chemical company which make chemicals for textile, paints, alcohol, adhesive industries since 1991. 

Why to invest?

1. Strong promoter group - 
pidilite group is well known and market leader in their segment. They have very clean record on their balancesheets with no corporate goverance issue which can always give soothing to investors holding the group company.

2. Worst history behind - 
The Company commissioned a 10,000 TPA, Vinyl Acetate Monomer(VAM) manufacturing plant in the Raigad district of Maharashtra, in technical collaboration with Uhde GmbH,Germany, on 25th October, 1990. 
Due to some reason, the VAM plant made continuous losses and was demerged into Pidilite Industries Ltd. (PIL) in FY08. Due to the demerger, the Share Capital of the co. reduced from Rs. 18.34Cr. in FY07 to Rs.1.84Cr. in FY08. Networth reduced from Rs.30.8Cr. to Rs.2.7Cr., Debt reduced from Rs.32.4Cr. to Nil and Total Assets reduced from Rs.63Cr. to Rs.2.7Cr.
The Net Fixed Assets were reduced from Rs.39Cr. to Rs.25 lakhs and the company ceased to be a manufacturing concern.
This demerger was a boon for VCIL shareholders since the VAM plant was a liability. Today, the VAM plant which is now a part of PIL, is inoperative. The VAM plant generated revenues of Rs.93Cr, Rs.15.7Cr. & Rs.2.1Cr. in FY09, FY10 & FY11 for PIL. Clearly, the demerger was a bail out of VCIL by PIL.

3. Excellent growth and dividend - 

(in Cr.)	2014	2013	2012	2011	2010
Income Statement
Revenue	292.78	243.56	211.48	157.27	125.67
Other Income	1.04	0.84	0.21	0.15	0.19
Total Income	293.82	244.40	211.69	157.42	125.86
Expenditure	-282.45	-235.37	-204.26	-151.59	-117.13
Interest	-0.04	-0.22	--	--	-0.09
PBDT	11.33	8.81	7.43	5.83	8.64
Depreciation	--	--	--	--	--
PBT	11.33	8.81	7.43	5.83	8.64
Tax	-3.85	-2.87	-2.42	-1.89	-2.92
Net Profit	7.48	5.94	5.01	4.30	5.72
Equity	1.83	1.83	1.83	1.83	1.83
EPS	4.09	3.24	2.74	2.35	3.12
CEPS	4.09	3.25	2.74	2.35	3.13
OPM %	3.88	3.71	3.51	3.71	6.95
NPM %	2.55	2.44	2.37	2.73	4.55

In the current bull run, it's very difficult to get such good dividend paying and trustworthy management backed company to get at less than 10 PE. We expect company to do well in mid to long term. Hence, we ask our readers to take a positional call with growing company and be a part of their growth.