<b>Mudar Patherya:</b> Five gems in the making

The author is talking about stocks of Emami Infrastructure, Shilp Gravures, Haldyn Glass

This column is my answer to all those people who draw me conspiratorially to a corner at cocktail parties with the classically whispered “Kaai leva jevu? (What to buy)”

Emami Infrastructure: There is nothing in the numbers to suggest a simmering volcano. But, remember the principal behind this company, Rs 394 crore in customer advances on its books likely to become revenues in FY17, an impending net worth-enhancing Zandu Realty merger (with a disproportionately lower increase in equity capital), asset-light pan-Indian project launches — and a market cap of only Rs 165 crore at a time when the illustrious parent is valued at Rs 23,500 crore. Opportunity.

Shilp Gravures: The company is a leading Indian engraving house with a chemical etching facility, offering electronic engraving for gravure printing, specialised coating applications and flexo printing. The third quarter results were a downer: Ebitda precipitated from Rs 4.19 crore in the second quarter to Rs 2.76 crore. This is why I would back the management: The company reported 23 per cent Ebitda margin in the second quarter and 17 per cent in the disastrous third; in the worst quarter, interest cover was in excess of 9x. If (big if) the company can merely replicate Q2 across the four quarters of 2016-17, that would be an Ebitda of Rs 17 crore. A steady other income indicates around Rs 10 crore cash on the books against a market capitalisation of less than Rs 50 crore. By jove.

Haldyn Glass: Revenues across the last two quarters increased Rs 3.46 crore; Ebitda increased Rs 3.58 crore. Interest cover in excess of 55x indicates the company is funds-flush in a capex-intensive business. Consider the Ebit momentum across five quarters: Rs 3 crore – Rs 3.37 crore – Rs 2.96 crore – Rs 4.89 crore – Rs 8.38 crore. Market cap around Rs 235 crore. There is a new twist to the story: Haldyn Glass is on the verge of commissioning a joint venture with Heinz Glas International GMBH, Germany, for the manufacture of perfume and cosmetic glass bottles, benefits of which should reflect from 2017-18.

Webel SL Energy: The company is engaged in the manufacture of solar photovoltaic cells and modules. Ebitda increased from Rs 4.58 crore in Q2 to Rs 7.97 crore in the third quarter. This is what I like: Capacity increased from 120 Mw to 200 Mw effective December 2016; it is virtually zero-debt following financial restructuring; it is adequately de-risked from sectoral price meltdown; interest outflow was negligible, order book is multi-month, production take-off has commenced and this is perhaps the only listed presentable post-restructured balance sheet in a loss-laden sector passing through its biggest expansion phase in its history. Market cap: Rs 113 crore.

Asian Oilfield: The new management assumed control in the second quarter of FY17. The management turned the company around in Q3 (its first in control). I have three broad clues on the way forward: Bullish downstream prospects, dearth of listed seismic exploration players and a hefty inflow of maintenance orders. The stock did a rope trick on Friday, so I am keeping vigil for an opportune decline.

In the meantime, can anyone lend me some punt money?

The author is a stock market writer, tracking corporate earnings and investor psychology to gauge where markets are not headed