KSB Pumps: Back on track

ANALYSTS' CORNER

Sharekhan recommends a "buy" on KSB Pumps. The report states that the company is back on track.

The company's March quarter net profit was in line with expectations reflecting the growth recovery in the company's topline, which in turn brought operating leverage into play and boosted its operating profit by 53 per cent. Net sales for the quarter registered a growth of 10.3 per cent to Rs 96.6 crore, driven by the execution of some high-value orders.

Operating profit margin improved sharply by 610 basis points on the back of a reduction in the raw material cost. Margins in both the businesses, pumps and valves, improved remarkably.

With a stable depreciation cost and a reduction in the tax rate, the net profit for the quarter jumped by 68 per cent to Rs13.1 crore.

Ratnamani Metals: Order flows

Sharekhan recommends a "buy" on Ratnamani Metals and Tubes. The report states that the strong order book gives visibility to earnings.

The company is expected to be one of the key beneficiaries of massive investments being made in the power, refinery, petrochemical and oil & gas sectors, currently.

The company is witnessing strong order flows from these sectors. Its current order book position stands at Rs 350 crore as compared with Rs 200 crore in Q3 FY06. It recently bagged a Rs 90 crore order from Reliance Petroleum for the supply of SS pipes/CS pipes.

Its export revenues are growing too. The company's products have been well accepted in the export markets. It recently received an export order worth Rs 30 crore to be executed in Q1 FY07.