Two rocket stocks
Profit Track
18 June 2010
Oriental Carbon and Chemicals:
DOCCL has reported excellent results for year ended March 2010 wherein its PAT has zoomed by nearly 300%. EPS for Q4 alone is Rs 10. Stock is trading at just 4.62XFy10 EPS which is extremely low considering that OCCL is operating in a seller's market.
Further, OCCL has started implementation of new factory in SEZ in Gujarat which should be completed in 12 months. OCCL may achieve EPS of Rs 36-38 in 2010-11 and EPS of Rs 42-44 in 2011-12. Although, share price has touched a new high, still fundamentally OCCL is underpriced considering that company will continue to do well due to buoyant demand from tyre industry, expansion underway and payment of 3 dividends in 2009-10. Book Value is Rs 90 which should rise to above Rs 120/ as on March 2011.
Our price target Rs 175 in less than 6 months and investors holding it for medium term may get much higher appreciation.
Nahar Spinning Mills
Nahar has achieved phenomenal turnaround in 2009-10 wherein Nahar has achieved PAT of 53.49 cr and CASH Profit of Rs 123 cr (after paying income tax of Rs 27 cr). At PBT level, Nahar has achieved turnaround of Rs 105 cr as its PBT in 2009-10 stands at 80.60 cr as against loss of 25 cr in previous year.
Nahar is likely to earn Cash Profit of Rs 265-270 cr in 2 years (09-10 and 10-11) and current market cap is just Rs 290 crores. One of the top picks in booming textile sector. Investors may reap more than 50% appreciation in next few months. Scrip can even double in 12-15 months.
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