LOW P/E STOCKS, STRONG BUYS

1] Kalindee Rail Nirman:

It is engineering and construction company mainly specializing and
executing rail projects. The company is likely to be a major
beneficiary of the investment projects announced in the Railway Budget
like construction of new tracks, modernization of platforms, and
commencement of work on dedicated freight corridors. The company
already has a very strong order book of around Rs 500 crore and is
likely to get another Rs 200-300 crore worth of orders in the next few
months. It came out with fantastic results for the last December
quarter with net profits nearly doubling at around Rs 6.2 crore. The
expected EPS for FY09 would be Rs 29. It is thus available at multiple
of 10 times FY09 earnings. I expect the company to achieve a target of
Rs 550 in the next 12 months

2] Jyoti Structures
"JSL reported a top line jump of 35% YoY to Rs 4.1 billion. On a
12MFY08 basis, top line growth was a healthy 41% YoY. EBIDTA for JSL
during 4QFY08 jumped 33% to Rs 515 million. Also, on a 12MFY08 basis,
the company reported a 37% YoY growth to Rs 1.72 billion. Net profit
for JSL during 4Q, grew by 21% to Rs 193 million. On a 12MFY08 basis,
the company saw a net profit jump of 33% to Rs 724 million. JSL
currently derives 84% of its order book from the domestic market (of
which 65% is from PGCIL). Also, 65% of its order book comes from
Transmission line projects, 20% from REC and 15% from substation
projects. The company witnessed, Rs 4 billion+ of order inflows during
4QFY08."


Below are some analysis of my portofolio picks...These are
favourites . Few group members requested them

1.      Avon Organics Ltd(/): This Hyderabad based company is in the
manufacturing and marketing of Diketene with installed capacity of
2000 tpa. It also has Bio-tech division manufacturing Ephedrine HCL.
Equity is approx Rs 12.69 crs. Last year, company had incurred heavy
losses due to various factors. Due to cheaper imports from China,
selling price of Diketene had come down and on the other hand, price
of raw-material had gone up. However, promoters have been inefficient
and not investor-friendly (allegations of siphoning off funds).
Recently, promoters of ARCH PHARMALABS have acquired controlling stake
in the company by buying-out exisitng promoters. Earlier, Arch was
know as Merven drugs. ARCH is a highly profitable company in which
ICICI Venture holding approx 14% equityand ILFS holding around 5%
equity(stake acquired at Rs 150/ perhaps). It is reliably learnt that
ARCH maybe listed on BSE/NSE next year at around Rs 450-500/.
Promoters are following Matrix Lab model (acquiring companies with
different portfolio). Some pharma analyst are confident that under new
management, Avon will make a sharp turnaround in its performance and
should post profits in near future. Further, Avon has received USFDA
approval for its Biotech division and will be able export Ephedrine to
regulated markets where profit margins are much higher. Moreover, with
small capex, Avon can go for forward integration which will enable it
to produce value-added biotech products. Some knowledgeable investors
are extremely bullish on Avon Organics with price target of rs 90-110/
in less than 15 months. There is a possibility that once Avon
performance improves, it may be merged with ARCH. A riskfree
turnaround scrip for multibagger returns. Buying in big quantity
recommended

2. Garware Polyester Ltd(/): This mumbai based company has recently
signed OTS agreement with IDBI under which IDBI is being alloted
shares at rs 59/. For 06-07, company had achived CASH EPS of 15.24 on
equity of 21.78 crs. During the year, company had paid interest
charges amounting to 46.30 crs. Now, company has been performing
extremely well. In Q2, it has achieved NP of 2.60 crs as against 19
lacs in corresponding quarter of previous year. In H1, its CASH PROFIT
is 21.90 crs after providing 27 crs for interest charges. Company is
likely to finalise sale of its Mumbai property for Rs 280 in next few
weeks. In fact, now company may get much higher price as recently,
Bandra Kurla Complex has witnessed more than 100% rise in land prices.
Company will use part of proceeds to settle OTS with IDBI. Thereafter,
company is likely to save Rs 35 crs in interest cost alone which means
in 08-09, company can achieve CASH profit of more than 70 crs and PAT
of at least 40 crs. Scrip is being accumuated by knowledgeable
investors. Value of property sale alone will work out to Rs 130/ per
share. A leading BSE broker has reportedly cornered big chunk of its
shares with price target of Rs 150-175/ in less than 9-12 months.

3. Kamanwala Housing (/):Share price of this Mumbai-based real-estate
company may cross Rs 275-300 mark in next few weeks. For 06-07,
company had achieved EPS of 23.80. In 07-08, its performance is
bumper. For Q2, its NP has zoomed by 440% to 6.84 crs H1 EPS is 18.75.
On small equity of 5.29 crs, company is sitting on highly valued
properties. Company is constructing 75000 sq ft commercial complex in
BKC where prevailing commercial property prices are around Rs 40,000
per s.f. However, after more than 100% rise in land prices in latest
auction, marketmen are predicitng that commercial space prices in BKC
can go upto Rs 50,000-60,000 per s f. Kamanwala will be hige
beneficiary of such surge in property prices. Further, company is also
implementing several other projects in Andheri area(very very close to
international airport), Santacruz, Opera House. It has also partnered
with Prajay for a big project in Hyderabad. Company should report EPS
of Rs 45 in 07-08 which can flare to Rs 60-65 in 08-09. It is one of
the cheapest stocks in real estate sector. Share price had touched Rs
320/ last year. Investment at CMP can yield more than 100%
appreciation in less than 1 year. Buy aggressively.

4. Eco Board Ind Ltd(This Pune based company is engaged in the
production of pre-fabricated Boards made out of husk, used for office
furniture/partitions and residential furniture as well. Recently,
company has completed CDR with FIs. Equity is 17.08 crs. For Q2,
company has achieved NP of 1.61 crs as against Loss of 1.25 crs in
corresponding quarter of previous year. Company has achieved sharp
turnaround due to lower raw material cost. Now, company plans to go
for Furniture manufacturing and is scouting for some MNC for this
purpose. Moreover, company is trying to get Carbon Credit as well.
Some positive developments/announcement from the company are expected
in coming months. This low-priced pick can provide more than 100% in
less than 15 months. Buy large quantity and have patience.

5. JRG Securities(/): This appears to be the cheapest scrip in
brokerage/financial services sector. This South-based brokerage firm
has equity of 12.79 crs (which will go up after equity allotment to
BARING). In H1 , it has reported Np of 3.31 crs. However, in near
future, company will no longer be known as an Indian brokerage outfit.
Rather, it will be an MNC's associate. Recently BARING SECURITIES(Thru
Duckworth) has acquired controlling stake in JRG by picking up 1.0382
cr shares and also 1.33 cr warrants. Now, Baring holds majority stake
in the JRG. Baring is investing nearly USD 35 million Now it is felt
that JRG will go for aggressive branch expansionwith All-India
presence. At present , brokerage scrips are commanding mind-boggling
valuations.
Edelweiss scrip(Rs 5 FV) is likely to be listed at rs 1500/ Geojit is
enjoying PE ratio of 45-48. PE multiple of India Infoline is around 85
and that of EMKAY is 38-40. Recently listed Religare is quoting at
multiple of nearly 180. In such a scenario, JRG is going dirt-cheap.
Once, Baring is in full command management of the JRG, scrip will
definitely be rerated as company can go for NBFC, Asset Manageent
activities also. Ever since BNP took stake in Geojit, valuations of
Geojit have gone up by nearly 300%. Investors should not be surprised
if JRG quotes above Rs 250/ in just 18 months. An excellent with
almost sureshot multibagger retuns

GKW Ltd (Scrip is being accumulated by knowledgeable circles as its
surplus assets are valued nearly 1500 crs. Company has more than 30
acrs land in Mumbai, around 75 acres just outside Calcutta and also in
Bangalore. Company is likely to settle its dues by selling Bangalore
property for around 250 crs. Thereafter, company may develop IT Park
and commercial space in MumbaI land. Some punters are projecting price
of Rs 150-175/ in less than 6 months

3. Lok Housing(Company has very big land bank in and around Mumbai
acquired at very lowrates. However, its share price had fallen due to
exit of some operator and not-so-good image of the promoters. However,
now some big investors/FI have accumulated large chunk of its equity.
If marketmen are to be believed, company will make equity placement in
next 2-3 months at Rs 550-600/ and hence, its share price is tipped to
be Rs 600/ in just 6-8 weeks.

4. N R Agarwal(This mumbai based company is engaged in the production
of packaging paper and boards. Company also has 8mw power plant. It
has been paying 15% dividend for last 2 years. From dividend yield
point of view, scrip looks a good investment for risk-averse
investors.

5. Tyche Industries ltd(/): This Hyderabad based pharma company is
expanding its production capacity, supplying some big names in India
and also in exports. Company has paid 15% dividend and is looking for
US FDA approval for its plant. It is a risk free investment for
investors with low-risk appepite who are content with reasonable
capital appreciation. Scrip can go up by 30-40% in 6 months

6. Katwa Udyog /): This Belgaum based company has 50,000 tonnes cement
plant. Recently, promoters have allotted to themselves shares at Rs
25/ per share. Recently, company acquired another cement plant through
auction. Plant is being refurbished and commercial production likely
to start by Jan 08. Thus, production capacity will stand doubled.
Then, company plans to further expand its capacity to total 2.50 lakh
tonnes by Dec 08. It is lowest priced cement stock which can go up 50%
in next 4-6 months.

7. Axtel Industries ltd (/) This Gujarat based company is
manufacturing Food Processing Machineries for food & beverage
industry. Company claims to have some the most reputed clients. There
are reports that company has bagged some big orders recently and its
performance for 07-08 may show 70-100% growth. A risk free investment.
If company really succeeds in posting such growth in current year,
share price can double in 6 months

8. Pioneer Distilleries ltd (/).It is reliably learnt that 2 leading
brokerage houses have visited the company and are impressed and will
come out buy report with 1 price target of Rs 250/. Moreover, company
may get much higher carbon credit money as compared to earlier
projections. Its Q3 profit may be 4.25 crs. Negotiations to place
shares at Rs 200/ for expansion needs are at advanced stage. Stay
invested. Share price can be Rs 150/ in just 4-6 weeks although for
medium-term also, it is an excellent pick.

9. Tera Software ltd(/): Scrip is being accumulated by knowledgeable
circles as company has bagged some big lucrative Govt contracts/
orders. With expected EPS of 12-13 in current year and 18 in 08-09,
scrip has potential to go up by 100%. Company has surplus in
Hyerabad , market value of which works out Rs 38-40 per share. Company
develop an IT Park on this land for which it place shares at Rs 150/.
Buying strongly recommended. Company is not at all affected by strong
rupee as it has nil presence in export market.

Shreyans Ind. Ltd. (BSE Code No. 516016-)
A Good Medium Term Buy
Demand for paper which at present is approx. 8.0 mn tons is expected
to grow to 14 mn tons by 2015 and 20 mn tons by 2020. Indian GDP
maintained healthy growth of 9% and demand of paper generally follows
the GDP growth. Hence, demand of paper is likely to outstrip the
supply of paper in India. Although, Indian Paper Ind. suffers from
disadvantages like shortage and high cost of wood pulp. higher energy
cost, still Shreyans is being recommended, as company has different R/
M and is going for captive power generation.

Shreyans is engaged in manufacture of writing and printing paper with
total installed capacity of 66,000 tons p.a. spread over 2 locations
called Shreyans Paper and Shree Rishabh Papers. It is Agro based
company in the sense that instead of wood pulp, it uses straw/grass as
its main R/M.

Financial Performance:
Year Ended
       31/3/2007       31/3/2006
Sales   214.33  193.11
PBIDT   25.18   24.64
Interest        7.43    8.23
Depriciation    5.84    5.65
Net profit before Tax   11.92   10.77
Net Profit      11.01   10.47
Equity  11.07   11.07








2006-07: During the year, company produced 58954 tons against 58775
tons last year. However, turnover increased by 11% due to higher input
costs and higher realization. PBT increased to 11.92 crs. as against
10.77 last year. NP during the year is 11.01 crs. Company made
provision of 4.39 crs. for deferred tax which is just an accounting
entry and hence, it has been included in the NP Figure. EPS stands at
10.00. Stock is trading at 6.50 x FY07 Earnings.

Future Plans: During the year, Bio-Methanation Plant to treat R/Ms
Wash Water was commissioned. This project has been registered under
CDM of United Nation and company will be eligible for carbon credits.

During the year, company started work to set up 3.5 MW Cogen Power
Plant which is likely to be commissioned by Feb 08. It is being
financed through Rs. 10 cr. bank loan. Impact of cogen will be felt in
08-09 and company is likely to save atleast Rs. 3 crs. per year in
power cost alone.

Company is setting up another 5.5 MW Cogen Power Plant at its other
factory at a cost of Rs. 24.56 crs. This Plant is likely to be
commissioned by Dec. '08. Impact of the same will be felt in Q4FY09
and company will save more than Rs. 5 crs. p.a. in power cost from the
same. To part finance this project, company has issued 6.90 lakh
warrants to promoters and 20.60 lakh warrants to non-promoters @ Rs.
32.50. Each Warrant can be converted into an Equity Share within 18
months. Allotment to promoters will be locked in for 3 years and for 1
year to non-promoter.

Future Prospects:
Year Ended
       31/3/2008E      31/3/2009E
Sales   225.00  245.00
Net Profit      13.50   17.50
Equity  11.07   13.82
EPS (Rs)        12.10   12.66





In terms of R/M, company is at advantage because wood pulp prices are
continuously rising whereas, good monsoon makes straw prices very
affordable. In our estimates, we have not taken into account monetary
gains which will accrue from sale of carbon credits although company
should gain atleast Rs. 2 crs. p.a. from the same. In near future, it
will be out of BIFR. COMPANY HAS CHALKED OUT AN EXPANSION PLAN COSTING
Rs 180 CRS TO SET UP A NEW UNIT WITH CAPACITY NEARLY 500 TPD. In our
projections, we have not taken into consideration financing/impact of
proposed expansion as exact details of same are not available still

Valuations: Stock is trading at just 5.41 x FY08E EPS. By any standard
it is extremely low considering that it is Agro based Industry and
will have Captive Power Generation Plant and also entitled for carbon
credit. Our price target:

1) Rs. 90/ in 3-4 months.

2) Rs. 125/ in 12 months.

Sooner or later, it is bound to catch attention of investing community
and share prices may surpass our estimates.
VBC Industries Ltd. (
A Good Medium Term Buy


Belonging to VBC Ferro Group, VBC Inds. has at present investment
activities. Its Equity is 17.48 crs. Book Value is Rs. 18.90. Company
has following investments:

1) Orissa Power Corporation: OPC is implementing 100 MW Hydel Power
Plant in Orissa. VBC is holding 1.40 cr. shares in OPC which is nearly
45% of OPC's total Equity. 20 MW of OPC is scheduled to start in Jan
08. To implement balance 80 MW, OPC may, after 6 months place Equity
with some FII at Rs. 60-80 per share. Thus, value of VBC's investment
in OPC will stand multiplied minimum 6 times to nearly Rs. 85 crs.
These days, scrips of Power Sector (particularly Alternate Energy)
have highest fancy in the market. For Example, Energy Development has
P.E. Ratio of 85, quoting at Rs. 285. J P Hydro is quoting at P/E
multiple of 70-75

In fact, when Orissa Power Corpn comes out with IPO after 1 year, IPO
may be at Rs. 100-130. It means, Equity Holding of VBC in OPC can be
worth Rs. 140-180 crs. after 1 year or so.

2) Konaseema: VBC Ind. isalso holding 1.40 cr. shares in Konaseema.



Profile of Konaseema
KGPL is gas based power project which has, in Phase-I, already
implemented 445 MW Power Plant. Plant for the same has been supplied
by Siemens. EPC is by L&T and O&M is by NTPC. Other share holders of
KGPL are:
Name    Equity
L&T     5.06
ILFS    6.75
LIC     4.82
GIC     4.82
IDBI    8.43
International Power Vision      2.01
TIFOI   8.89







Project cost of Phase-I was 1383 crs. Phase-I is ready to become
operational but gas supplies did not start yet. As a result, project
cost stands increased to around 1700 crs. Now, KGPL has embarked on
Phase-II which involves setting up of 820 MW Plant at a cost of Rs.
2782 crs. which works out to Rs. 3.39 cr. per M.W.. D.E. Ratio will be
4:1.

Phase-II is likely to be implemented by April 2010. Phase-II is being
erected at the existing site to avail of ready infrastructure.

L&T is providing 66 cr. deferred payment credit. It is reliably learnt
that for Phase-II, KGPL may make pre-IPO placement of Equity at Rs.
55-60 per share. Once KGPL gets gas supply and power generation starts
in June-08, company may come out with IPO at Rs. 150/- per share.
Considering that Reliance Power may price its IPO of Rs. 2/- at Rs.
80/- per share (Rs. 400/- for Rs. 10/- F.V.) although, its Power Plant
will be commissioned in 2012, KGPL IPO at Rs. 150/- should be a big
success.

Thus, again value of VBC Ind. investment in KGPL can easily be Rs. 200
crs.

COMBINED VALUE OF ABOVE 2 INVESTMENTS OF VBC IND. SHOULD BE NEARLY RS.
350 CRS.

New Trigger: Unlisted Group Company of VBC Group is likely to be
merged with VBC Ind. This unlisted company holds 3 cr. shares of
Konaseema. Market Value of these 3 cr. shares will be nearly Rs. 450
crs.

Post Merger, Equity of VBC Ind. will rise to Rs. 35 crs. which means,
around 3.50cr. shares. And, its investments post merger will be:

1) 4.40 cr. shares of Konaseema, market value of which can be Rs. 650
crs.

2) 1.4 cr. shares of Orissa Power, market value of which can be Rs.
140-150 crs.

Thus, combined value (post merger of VBC Ind. investments can be Rs.
800 crs. or even more. It gives market value of more than Rs.
200-230/- per share. After giving 50% discount to NAV, its share
prices should be Rs. 100/-. Its share price can double in just 3-6
months. As and when IPO of KGPL and OPC hit the market, share prices
can be Rs. 120/-. Buying recommended in large quantities. Share Price
of Group Co. VBC Ferro has crossed Rs. 400/- and looks set to cross
Rs. 600/-. In such a scenario, VBC Ind. can go upto Rs. 45/- in just
3-4 weeks. BUY IN BIG QUANTITY. Our recent recommendation on Futura
Polyester went up non-stop upper circuit from Rs 32 to Rs 46 in just 1
week. VBC INDUSTRIES may also follow same pattern if marekts dont fall
Fundamental View
Kamadgiri Synthetics Ltd
A Good Medium Term Buy

Kamadgiri Synthetics Ltd. (Rs.52-): Promoted by Mr. Pradeep Kumar
Goenka, this Mumbai based Textile Company has its Plant in Umergaon
with most modern 120 looms like; Somet, Sulzer, Dornier etc. with
production capacity of nearly 0.6 mn meters. Company owns the brand
'True Value'. Now, company is undergoing major restructuring,
acquisition, expansion plans etc.

Under first scheme of restructuring, Stripes Apparels (A Pantaloon
Group Company which is having capacity of manufacturing approx. 1 lakh
garment pieces per month) will be merged with Kamadgiri. Kamadgiri has
unlisted group company called 'Innovative Fabrics' having turnover of
approx. 27 crs. Innovative Fabrics has already been merged with Stripe
Apparels. Now, in near future, Stripe Apparels will be merged with KSL
and for the same, KSL will allot Equity Shares to Pantaloon Inds.
Thus, Pantaloon Inds. will be holding Equity Stake in KSL. Perhaps,
Pantaloon Group is exiting manufacturing operations. Group has another
2 garment factories. In next few months, these 2 garment factories
will be bought out by KSL as lump sale. After that, KSL will have
production capacity of more than 3 lakh garment pieces per month.
These garment factories are supplying garments mainly to Pantaloon
Retail and also doing some business for Raymond as well. Hence, KSL is
getting ready platform in garment business under which it will have
own garment making facilities and as well as assured market.
Y E A R E N D E D
       31/03/07
(cr.)
Sales   24.85
Gross Profit    2.82
Depreciation    1.81
PBT     1.00
PAT     0.65
Equity  3.00
EPS (Rs.)       2.17
Cash EPS (Rs.)  8.17









Another big trigger is Retail foray. For this purpose, company is
opening retail showrooms under the name 'BANGKOK FASHION'. It is a new
concept in India wherein, customers will have the choice to buy the
fabrics or get shirts, trousers, suits, tailor-made within 24 hours.
This concept is very popular in Thailand, Hong Kong etc. For this
also, Pantaloon has tied-up with KSL (store-in-store) concept. Under
this scheme, KSL will open retail stores inside Big Bazaar Stores.
FIRST RETAIL STORE ALREADY OPENED AT MUMBAI CENTRAL WHERE RESPONSE HAS
BEEN VERY GOOD Reputation of Big Bazaar will immediately rub-off on
KSL's Bangkok Fashion as well (due to huge footfalls, KSL is confident
of attracting large number of customers from day one, without spending
any money on publicity). This apart, company will also open some
retail stores independently in different shopping malls to attract
other customers also. It is learnt that 3 retail show rooms should be
operational as early as Dec '07. Company plans to open upto 100 retail
show rooms all over India in next 2 years. It is estimated that KSL
may achieve topline of 125-150 crs. in 08-09. Thus, company will have
its own textile and garment units and retail show rooms.

Valuations: There may be small equity dilution in 2008 as company will
need funds to buy out remaining 2 garment units of Pantaloon and for
investment in Retail stores. Scrip will be re-rated completely in near
future due to following factors:

1) Company will have own garment manufacturing units with capacity of
more than 3 lakh pieces per month (nearly 3.6 mn pieces p.a.).

2) These garment units have ready business as already selling to
Pantaloon, Raymond etc.

3) Gestation Period in Retail business will be much shorter as its
stores inside Big Bazaar will get the customers immediately.

4) Pantaloon Inds. will also be share holder of the company.

Considering extremely high valuations for retail sector wherein even
loss making retail chains are quoting at Rs. 80-90, KSL appears
extremely cheap. Scrip is lying low due to extremely low promoter
profile, so far, small size of the company and investor ignorance.
Share price had gone upto Rs 78/ just 2 months ago but fell
subsequently due to delay in allotment of shares to Pantaloon.
However, now allotment of shares should be finalised in next few
weeks.

Share Price can go up by 50% in next few weeks. If, investors have
patience to hold for 18-24 months, scrip appears set to provide
multibagger gains. Buying strongly recommended.
Fundamental View
Twilight Litaka Pharma Ltd.
A Good Medium Term Buy

Rationale for Recommendation:

1) Company has doubled its turnover and increased the profitability 7
times in 2 years since its merger with Care.

2) Company is in all 3 segments namely, Exports, Own Domestic
Marketing and Crams.

3) Domestic Sales are growing at whopping 60-65% which is main profit
driver.

4) Acquired 17 brands from Sami Labs.

5) Signed Agreement with global nutraceutical giant (USD 3 bn.)
Herbalife for minimum offtake of Rs. 50 cr. p.a.

6) Commenced supplies to a Malaysian Co. (USD 250 mn sales).

7) Signed an Agreement with Art Life Science of Russia.

8) Registration of its products in more than 35 countries.

9) Confident to achieve 30-35% topline growth and minimum 50%
bottomline growth for next 3 years.

10) Looking to acquire an injectible unit.

11) Planning to set up a new factory in Sikkim.

12) Recently commissioned group factory in Baddi entitled for
significant tax incentives.

13) Market Cap is just 0.5 x FY08E Sales as against 1.00 - 1.50 x
sales of Peer Group Companies.

14) Stock is trading at 6.96 x FY08E EPS, 5.63 x FY09E EPS and 4.14 x
FY10E EPS.

15) Present M.D. is a former CIPLA man and is an aggressive
enterpreneur with a vision to make it Rs. 3000 cr. company by 2015.


TLPL is engaged in the manufacture and marketing of Pharmaceutical
Formulations. Company presently owns and operates three factories,
namely Vadgaon Maval, Pune, MIDC Pimpri, Pune and Vasai, Mumbai. All
the factories are state of the art manufacturing units and are WHO-GMP
and Schedule-M compliant. All the factories have facilities for
manufacturing tablets, liquids, capsules, ointment and powder/creams.
Vadgaon factory has an added feature being that it is one of the
largest manufacturer of Anti-TB products in India. Huge capital
investment has been made for the same. Company is having more than two
decades association with Multinational Pharma Companies as a contract
manufacturer.

Company had strong presence in following segments:

1) Gynae.
2) Dermatology.
3) General Physician.
4) Paediatrics.
5) Cardiology.

Company has special facilities for manufacturing the following:

a) Anti - T.B.
b) Dietary Food Supplements.
c) Veterinary.
d) Nutraceuticals.

Company is exporting to other 30 countries in African Continent, CIS,
S.E. Asia, West Indies, South America etc.

Company is doing contract manufacturing for reputed companies like;
Novartis, Pfizer, Wockhardt, Lupin, Cipla, Dupont, Herbalife etc.

Company is growing and will continue to grow atleast for next 3 years
at a scorching pace (much higher than Industry growth rate) and hence
the recommendation:
Y E A R E N D E D
       30/09/07
(cr.)   30/09/06
(cr.)   Up By
(%)     31/03/07
(cr.)
Net Sales       141.10  94.47   49%     198.64
EBIDTA  17.81   11.28   58%     26.72
PBT     13.08   7.45    76%     19.09
Net Profit      10.13   6.21    63%     14.09
Equity  10.64






Company changed its business model during the last two years by giving
maximum emphasis on development of sales of own products, and also
launching new products in different therapeutic segments and thereby
increasing the overall productivity. This has been the major
contributor in the revival strategy of the company. The company will
now give focused attention for strengthening domestic marketing and
exports and will gradually reduce its dependence on Loan Licence and
Contract Manufacturing activities. The greater emphasis on domestic
sales and export will enable the company to improve its sales as well
as profitability due to excellent margins in these segments. Since the
production capacity vacated due to reduction in Loan Licence and
Contract Manufacturing activities can be utilized for additional
production in domestic marketing and export segments, the Company will
not be required to make any major additional investment in its infra-
structure.

The audited financial results of the Company reveal that the sales
turnover has increased to Rs. 202.30 cr. as compared to Rs. 162.95 cr.
in the previous year recording a net rise of 27%. The domestic
marketing segment of the company has shown growth in excess of 67%
when the Pharmaceutical Industry in general witnessed growth of about
14%. Similarly, there is a corresponding 47% rise in the net profit
i.e. Rs. 14.09 cr. from Rs. 9.56 cr. in the previous year. The EPS of
the company has increased to Rs. 6.62 per share to Rs. 5.00 each from
Rs. 4.49 per share of Rs. 10 each in the last year. The company has
virtually doubled its turnover and increased the Profitability 7 times
in 2 years since its merger with Care Unipac Pvt. Ltd. during 2005.
The Company expects the trend in the growth and sales to continue in
future and targetting to achieve total sales in excess of Rs. 500 crs.
by 2010 and is expected to achieve a minimum growth rate at 40% during
the current financial year.

For a company whose growth got stunted due to perennial shortage of
working capital and accumulated losses, it is a major turnaround and a
paradigm change. The higher profitability was due to the strategy
adopted by the company to focus on own sales by expanding product base
as well as marketing base.

The increased profitability is also the result of achieving critical
mass in the turnover of the Company. Joint marketing arrangements and
promotion of products with Twilight Mercantiles Ltd. has also
supported the growth of the Company. The remarkable increase in the
Domestic Marketing Segment of 67% recorded by the Company was due to
the synergies derived from the merger of the company together with an
overall improvement in the economic conditions prevailing in the
country and the sharp increase witnessed by the Pharma Sector in
particular. The Company has improved its performance in the Domestic
Marketing Segment substantially and has spread its marketing network
all over India.

Business development continues to be the major growth strategy for the
company since 2005. New products launched since 2005 have contributed
around 20% of the company's incremental sales in the year under
review. TLPL will be focusing on the needs to broad-base its basket of
products by launching latest molecules and cater to the therapeutic
areas like Nutraceutical, Dermatological, and newer Antibiotics. The
Company has applied for registrations of its products for exports in
several countries and the gestation period is over and the
registrations have now started materializing.

For 06-07, company paid 10% dividend (immediately after Networth
becoming positive) which is a sign of investor friendly attitude of
the promoters.

Recent Developments:

TLPL has signed an agreement with a subsidiary of a U.S. based
Nutrition Company, a $3 billion direct selling company, specializing
in nutrition, skincare and weight-management products. TLPL will
develop new products of Herbalife for its business in India and will
also manufacture its food supplement products for the Indian market at
the newly commissioned Twilight Group facility at Baddi, Dist. Solan,
Himachal Pradesh. Under this arrangement, technical know-how will be
supplied by the said Company. The volumes are expected to be minimum
Rs. 50 cr. p.a. and will add substantially to the TLPL's prospects in
the coming years. TLPL is associated with this Company as Contract
Manufacturer since 1999.

Revenues from Herbalife in current year can be 60-70 crs. Recently,
company has made presentation to Herbalife for exploring the
possibility of supplying to other countries of Herbalife markets. In
Asia, Herbalife sales are USD 700 mn. If, TLPL succeeds and Herbalife
agrees to outsource for other countries, it can be a huge trigger for
TLPL as its sales will zoom.

The Company has also signed an M.O.U. with Sami Labs Ltd., a Bangalore
based company engaged in Nutraceuticals having proprietary rights over
certain patents for the purchase of 17 brands (Trade Marks). With the
addition of these brands, the Company expects to increase its turnover
substantially in the financial year 2007-08. As per the agreement
executed with Sami Labs Ltd., TLPL has acquired ownership of these
brands and will have the exclusive rights to manufacture and market
the Nutraceutical products under these brands in India. Sami Labs will
also continue to support the Company's foray in the domestic Nutra
segment with more research based new products in the Nutraceutical
segment. Considering the huge potential in Nutraceutical business in
India in the near future, TLPL has set up a separate Nutraceutical
Division under the name "NUTRA" and has already launched a few
nutraceutical products in the market. All these products will have
some unique feature. The nutraceuticals food supplement is fast
growing in the domestic market in India, with the growth outpacing the
Pharma segment. TLPL will make these products at the newly
commissioned Nutra facility at Baddi, Himachal Pradesh.

The Company recently signed an Agreement with the Indian arm of a
Malaysian Company engaged in the marketing of Nutraceutical products.
This company is carrying on its business in 6 countries besides India,
and TLPL will be manufacturing their products catering to the needs of
the Asian markets besides their domestic requirements of Indian
market. TLPL will get the products manufactured at newly set up
manufacturing facility of Twilight Group located at Baddi, Himachal
Pradesh. This arrangement will add substantially to TLPL's prospects
in the coming year.

This Malaysian Company has USD 250 mn sales and will give a big boost
to revenues of TLPL.

4) Company has also signed an agreement with Art Life of Russia and
currently new products for this company are under development. This
agreement can contribute 20-30 cr. worth turnover in 08-09.

Future Prospects:

Y E A R E N D E D
       30/03/08 E
(cr.)   31/03/09 E
(cr.)   31/03/10 E
(cr.)
Sales   295.00  380.00  480.00
PBT     28.00   40.00   55.00
Net Profit      22.00   31.00   42.00
Equity  10.64   12.14   12.14
EPS (Rs.)       10.34   12.77   17.35






ICICI Bank has given Rs. 40 crs. as an Structured Finance to the
company. These funds will be used for expansion of market terrorists,
acquisition of brands and also to meet capex for upgradation of
factories.

Company is targetting to achieve turnover of Rs. 500 crs. in 09-10. It
will be achieved through doubling of the sales force from 800-1600,
expansion of New markets, introduction of new products and big thrust
on Nutra Division. This 500 cr. turnover will comprise domestic sales
200 crs., exports 50 crs. and Crams 250 crs.

Valuations:

Stock is trading at:

1) 6.96 x FY08E EPS.

2) 5.63 x FY09E EPS.

3) 4.14 X FY09E EPS.

Company is planning to set up a new factory in the State of Sikkim. It
is also looking to acquire injectible unit costing approx. Rs. 20 crs.

Stock deserves much higher valuations considering:

1) There is possibility of Global Giant Herbalife outsourcing from
TLPL for entire Asian markets.

2) Company is confident of bagging many more big contracts from
countries like Australia.

3) Company does not need additional infrastructure to achieve 500 cr.
sales.

4) Company is in all the fields, namely; own domestic marketing,
exports and Crams.

Promoters Holding is 63.70% which is under lock-in upto Oct. '09. If,
stock has modest discounting of 12 times, its share price should be
Rs. 160/- based upon FY09 EPS. Our price target as under:

i) Rs. 115/- by Feb. '08.

ii) Rs. 175/- by Feb. '09.

Buying strongly recommended.
FUTURA POLYESTERS LTD.
A Good Medium Term Buy


Futura Polyesters Ltd. (Rs. 33/-): Belonging to Sonata Software Group,
FPL is engaged in the production of Polymers, PET, Preforms and
Polyester Fibre with installed capacity of 57,000 tons, 20,000 tons
and 39,000 tons respectively.

Its focus is on Speciality Products. In Fibre Business, it has
launched more than 300 shades of Dope Fibre which is in good demand,
apart from PTTV-Flex, Flame Retardent, High Shrink Fibre etc. PET
Business is also growing rapidly due to increase in capacity by MNC
Companies. Here also, company is focussing more on new products like
Beer PET, Hotfil PET, High-Heat PET etc.

Financial Performance:
Y E A R E N D E D
       31/03/07
(cr.)   31/03/06
(cr.)
Sales   563.30  521.40
Depreciation    24.79   23.92
PAT     10.62   -11.40
Equity  52.42   52.42










In 06-07, Polymer Operations were more profitable. Company has
received U.S. Patent for Antimony free resins which has big potential.
Fibre Operations were also better due to higher result.

Its performance has been reasonable and company is likely to report
steady improvement in its performance in coming year. Based upon its
financial performance, scrip is fairly priced.

However, FPL is being recommended as there will be value unlocking for
its share holders in near future. FPL has a Chemical Division which in
2002 was renamed Innovassynth.

PROFILE OF INNOVASSYNTH

Innovassynth Technologies (I) Ltd. came into existence since 1st
August 2002. The company is catering to the needs of customers in the
area of 'knowledge based R & D services' for the last 5 years, which
include:

- Contract R & D
- Custom Synthesis
- Contract Manufacture

In a very short period the company has established its name as a
reliable partner in above area of activities and has joined hands with
many prestigious companies in the field. The company has identified
NUCLEOSIDES as a niche area and earned reputation as a supplier of
various protected Nucleosides and a partner for Process research.

The company is involved in business with well-known companies in
various fields like pharmaceuticals, perfumes, agro chemicals, and
fine and speciality chemicals. With two sites at its disposal, one
already active at Khopoli near Mumbai and the other in the development
stage at Chennai, it has chalked out ambitious plans to move in to
cGMP and FDA approved facilities and is on a fast track to achieve
them.

The company has also formed a Limited Liabilities Company named
"Austin - Innovassynth Technologies LLC." in USA in collaboration with
Austin Chemicals Company INC., USA for strategic business development
and project management processes. Austin Chemicals Company is a 130
million dollar U.S. based Company mainly involved in business of
development and implementation for supply of intermediates and raw
materials to major pharmaceutical companies in USA and Europe. This
joint venture company will help Innovassynth in their business
development and marketing effort for catering to major pharmaceutical
companies across the world.

BUSINESS SEGMENTS

1. Pharma Intermediates: Company offers intermediate products required
for bulk drugs as well as New Drugs under development. Being a service
company, Innovassynth has no issues with regard to Intellectual
property rights. Moreover, it has formed a joint venture company in
USA with Austin Chemicals Inc., U.S., which acts as a marketing arm
for Innovassynth.

2. Nucleosides and Nucleotides: Company has identified this as the
'Niche' area. It has been working in this field since last 4 years and
developed the skill sets for handling mostly all types of compounds.
Specialization is in the scaling up of the various reactions. Column
chromatography on kilo scale is a special feature of our pilot plant
for Nucleosides and Nucleotides.

3. Flavour and Fragrance Chemicals: Innovassynth has an established
base in USA to market the Flavour & Fragrance chemicals in U.S. and
European markets. Innovassynth products fulfill the odour demands of
the products, which is a primary requirement in this field.

4. Nutraceutical Products: Innovassynth has recently made a foray into
this area. It has identified a few products which are of synthetic and
standardized herbal extracts. A full-fledged laboratory has been set
up to develop the products. In the meantime, a synthetic product is
already in production and being marketed in USA through its associate
company in U.S. Another herbal based product is in the final stage of
commissioning. A few more products are in the pipeline.

5. Fine Chemicals / Intermediates: Innovassynth is dealing with big
U.S. catalog companies to develop and provide high value fine
chemicals and intermediates. It is also negotiating with European Fine
Chemicals companies to participate in the outsourcing program of these
companies.

In a recent interview, CEO of Innovassynth Mr. B Sahu said:

"Nucleosides are used for making amidites, which, in turn, are used
for synthesising oligo-nucleotides, which have potential to become the
final medicines. Nucleosides are a totally new area and highly
technology driven. It has the potential to become a very lucrative
segment. With the advances in genetics, it would be possible to
predict at what age one would get a disease. The new generation of
medicines would be able to block the appropriate part of the DNA or
RNA and completely cure these diseases. Till now, no medicines based
on this therapy have come to the market, but there are about 16
products in the phase II and III clinical trials. A lot of research,
worth-bns of dollars, is happening in this field.

The two leading research organisations in this area are US-based lsis
Pharmaceuticals & Geron Corporation and both have been working with us
for the last three years. We work as if we are their extended research
arm, for developing raw materials for the final product. We are the
only company in India manufacturing a wide range of protected
nucleosides amidites - both general purpose and specialised - at plant
level in kilo-scale for Geron and others. We will be exclusively
working on developing amidites for lsis and Geron for all their future
compounds.

The other area include fragrance and perfumery chemicals, in which we
basically undertake synthetic chemistry work for companies in the U.S.
and Europe. In pharma intermediates, we have a joint venture 'limited
liabilities company' with Austin Chemical Company, U.S.. Under this
venture, we are involved in supplying raw materials for Phase 1, Phase
2 and Phase 3 trials and also for replacing present commercial
suppliers of raw materials.

In Speciality Chemicals, we work with many leading companies like
Sigma Aldrich, Honeywell, Mitsubishi, etc. for chemicals used in a
wide range of applications, ranging from digital photography to
various biomedical applications. Apart from these areas, we are also
into nutraceuticals - an area in which very few chemical and
pharmaceutical companies have ventured into. We have already developed
2 - 3 products, which are being marketed in U.S. One is synthetic
gugglesterone (having cholesterol reducing property), which we
manufacture at 98.6% purity level and at 100 kg. scale. Another
product developed by us in this area is hydroxyisoleucine (it
increases insulin level). We are the only company manufacturing this
product at 75% purity. We have a tie-up with a U.S. company, which
does exclusive marketing for these products in the U.S.

We have five manufacturing facilities, apart from a plant
manufacturing coloured chemicals. We also have a large contract
manufacturing facility for Ciba Speciality Chemicals (Switzerland), in
which we manufacture a speciality chemical exclusively for them since
the last four years. We have five laboratories at Khopoli - one is for
necleosides, one for nutraceuticals and the rest are for pharma and
other chemicals. We also have two 'kilo-labs' - one for nucleosides
and the other for non-nucleosides.

Innovassynth, along with Shasun Chemicals and Drugs Ltd. and Suven
Pharmaceuticals Ltd., have joined with Austin Chemical Company to form
the 'Life Sciences Alliance'. The alliance helps us to jointly offer
our services whenever a global pharmaceutical company scouts around to
outsource some of its activities. The basic reason for this alliance
is to present a complete package of capabilities and facilities to a
foreign customer. For example, while Innovassynth provides its R&D
based non-GMP capabilities, Shasun provides its GMP infrastructure and
expertise and Suven its clinical facilities. Similarly, the exclusive
capabilities at each are shared for a common goal."

Rationale to buy FPL: With above credentials and business model,
Innovassynth has a good future. In 07-08, Innovassynth is likely to
achieve of Rs. 60 crs. We are unable to estimate profit figures for
the company.

Now, share holders of FPL will get 5 shares of Innovassynth against
every 11 shares of FPL. Share Holders will not be required to make any
payment for this allotment which means, shares of Innovassynth are
free of cost. RAKESH JHUNJHUNWALA AND RAHEJA GROUP ARE HOLDING APPROX.
20% EQUITY OF INNOVASSYNTH. HENCE, IT IS ESTIMATED THAT INNOVASSYNTH
WILL BE LISTED AT BSE ANWHERE BETWEEN RS. 60-80.

Suppose, investor buys 110 shares of FPL for Rs. 3800/-, he will get
50 shares of Innovassynth which should sell for more than Rs. 3000/-.
Thus, investor will be able to recover his original investment by
selling Innovassynth Shares. But, he will be still left with 110
shares of FPL. Record Date is around 4-6 weeks away. We estimate that
before Record Date only, share price of FPL may go upto Rs. 45-50.
Thereafter, on ex-basis, FPL may quote at minimum Rs. 28-30. Further,
FPL will issue 8:10 Rights Shares at par (after writing out Face Value
of Rs. 6/-). Thus, Rights Issue is also very attractive which will be
additional bonanza for FPL share holders.

Giving the fact that R J is invested in Innovassynth since 5 years,
there may be big hype at the time of Innovassynth listing and
investors will reap rich harvest. In sum, investment in FPL at current
levels should give minimum 100% - 150% appreciation in coming months.
Buying strongly recommended. Lastly, Zenotech is a loss making company
with big Equity of 28 crs. and still, share price is Rs. 170-180
mainly because R J is share holder of the company.
AVON ORGANICS LTD (RS 52/)
A Good Medium Term Buy



Originally promoted by Agarwal family, this Hyderabad based company
has 2 factories with DIKETENE division situated in Medak and BIO-TECH
division situated at Solapur. Until, 2005-06, company had been
performing reasonably well but in 2006-07, it reported disastrous
performance:
Y E A R E N D E D
Year Ended
       31/3/2007
(Crs)   31/3/2006
(Crs)
Total Income    78.05   106.66
Net Profit/Loss -18.82  3.98
Equity  12.69   12.39
Segment-wise Performance in 200-07:
Segment Turnover        PBIT
DIKETENE        41.80   -15.05
BIO-TECH        35.95   8.55








In 2006-07, company suffered huge losses in Diketene division due to
reduction in domestic selling prices, Exorbitant increase in Platinum
prices,increase in crude oil prices, severe pressure on selling prices
of Diketene due to imports from China. As a result, it led to
substantial loss of sales. However, Biotech division had shown profits
during the year.

Company had incurred capex of 7.70 crs towards creation of facilities
for addition of high value derivatives, backward integration of some
of the finished products and also for various fixed assets of Diketene
and Biotech division. Acetic Acid is one of the major R/M, prices of
which went very high. Now, company plans to introduce some high value
products in which cost component of acetic acid will be lower.

Company, at its Solapur factory, has creeated a most modern factory
for Biotech products which is capable of producing STATINS (SAME AS
BIOCON)with small additional capex/balancing equipments. Its exports
had suffered last year but now exports will pick up sharply as plant
has received USFDA approval. It is also believed that erstwhile
promters were not efficient managers and there were allegation of
siphoning off funds as well.

NEW MANAGEMENT: Recently, promoters have sold their equity stake Arch
Pharmalabs who have, now, acquired controlling stake in the company.
Initially, Arch was known as Merven Drugs Ltd which had turnover of
hardly 60 crs but when Merven was acquired by Kamath family, its
turnover has already zoomed to 350 crs last year. Now, ICICI Venture
holds approx 14% stake in Arch and ILFS holds around 5% stake
(acquired at Rs 150/ per share).Marketmen expect that in coming year,
Arch Pharmalab may get listed at bourses at around Rs 450-500(and Avon
has become arm of Arch). It is fairly certain that Avon organics will
make a sharp turnaround in near future under leadership of new
management. Some signs are already visible.

Arch has entered a partnership with DSM, which is a part of Euro 9
billion, Netherland based DSM Group. Under this agreement, Arch group
will produce DSM products at its plants and DSM will provide access to
global markets. The first products resulting from the partnership
would belong to the statins (biotech products used for the treratment
of lifestyle ailments like diabetes and high blood pressure) and
immuno-suppressives. These products will be manufactured at USFDA
facilities of Avon. Arch group is targetting turnover of 1000 crs by
2010.

From above development, it is clear that Avon is poised for leap in
its performance. These days, Biotech companies enjoy very high
valuations and Avon will be no exception. Scrip is being accumulated
by knowledgeable circules who are aware of the strength of Arch
promoters and of strong financials/gowth of Arch which is bound to rub
off on Avon also in immediate future. In a leading English daily, Mr
Kamath of Arch has confirmed that Arch would like to acquire majority
stake in Avon either by buying out balance 15% stake of erstwhile
promoters and or making a revised open offer at Rs65/ or so. Further,
it is almost a certainty that Avon will be merged with Arch as carry
forward losses of Avon will provide big tax shelter to ArchInvestors
can buy big quantity with medium/long term perspective. With downside
of hardly 10%, Avon scrip has potential to go up by 50% in less than 6
months and can deliver more than 200% appreciation in 12-15 months.
Early Bird gets the Worm.BUY NOW AVON ORGANICS WHICH MAY BE KNOWN AS A
BIOTECH COMPANY IN NEAR FUTURE


Reasons to buy following stocks
1. Low price to book value ratio.
2. Companies posted good consistent annual earnings.
3. Good fundamental and future growth potential.

Returns
Taking into consideration all fundamentals and current low valuations,
the following stocks may provide returns as follows,
12 months to 18 month - 60% to 70%.
18 months to 24 month - 70% to 80%.
Invest Low PE Stocks
Sr. no.           Stock            CMP                   PE Ratio
  1.               Paramount
      Communication Ltd          Rs.24.50           5.44
  2.       Royal Orchid Hotel Ltd        Rs.95.05           7.85
  3.           Clutch Auto Ltd   Rs.63.50           5.15
  4.      Financial Technology Ltd       Rs.1655            7.86
 
5.         Shreyas Shipping &
          Logistics Ltd          Rs.76.15           5.87
  6.   Godawari Power & Ispat Ltd        Rs.179.45          5.74

  7.   Teledata Informatics Ltd          Rs. 20.35          0.93
  8.   JK Lakshmi Cement Ltd     Rs.117.60          2.73
  9.                 SRF         Rs.126.60          6.21
10.          Birla Corporation Ltd        Rs.214.70          4.04
11.       Varun Shipping Company          Rs.78.90           4.14
12.            JK Cement Ltd      Rs.152             3.96
13.          Gujarat Alkalies and
        Chemicals Ltd    Rs.180.55          3.94
14.             Allahabad Bank    Rs.84.35           4.12
15.            Vardhman Textiles          Rs.120.95          4.81

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