Research Calls: Sharekhan has put a buy on ORG Informatics

ORG Informatics, through its wholly-owned subsidiary ORG Telecom, has bagged a $5 million order to roll out the network for a CDMA-based wireless telecom service operator in Tanzania. It will set up an arm in Tanzania to execute the order and tap the huge market potential in the region.

The company has been largely focused on the domestic market and neighbouring countries like Afghanistan, Bangladesh and Nepal. This is its first fairly sized order from the African region.

The management believes that Africa has a huge business potential as the continent is one of the most under-served markets globally due to the perceived business and political risks associated with the region.

In addition to this, ORG has also announced bagging of some orders in Maldives, which include content aggregation for a telecom operator and a vessel tracking solution.

The other significant orders that it has bagged recently include the Rs 425-crore sub-contract to implement convergent billing system at Mahanagar Telephone Nigam and a Rs 65-crore order to supply telecom solutions to Telecommunication Consultants of India.

The total order backlog is estimated to be around Rs 550-570 crore, which amounts to around 3.5 times the company's revenues in FY2006.

At the current market price, the ORG stock trades at 11.1x FY2008 earnings.

BRICS PCG has put a buy on Rico Auto

Rico Auto (RAL) is one of India's largest manufacturers of aluminum and ferrous components, with integrated facilities (casting as well as machining), unlike its peers. It is the largest supplier to automobile manufacturers in north India.

The company is a critical component supplier to Hero Honda Motors and Maruti Udyog, the market leaders in their respective product segments comprising two-wheelers and passenger cars.

RAL is focusing on de-risking its business model through addition of new clients and an added thrust on exports, in which a stupendous three-digit CAGR of 103.3 per cent is expected over the next two years.

The company is moving up the value chain by emerging as an FSP (full service provider). This will provide the company with high value-addition, high capability and high margin business.

The company is likely to post a strong topline CAGR of 22.4 per cent and bottomline CAGR of 23 per cent during FY05-08E on a consolidated basis, led by a strong growth in exports and the sustained momentum of its domestic and joint venture (FCC Rico) businesses.

The company is a leading aluminum and ferrous auto component manufacturer in India with a strong presence in the two-wheeler and passenger car segments. It manufactures more than 200 varieties of products for two-wheelers, passenger cars and trucks.

RAL has two manufacturing facilities with a total capacity of producing 36,000 TPA of aluminum foundry and 40,000 TPA of ferrous foundry. The company has two wholly-owned subsidiaries (located in the US and UK) and a 50 per cent joint venture in Manesar with FCC of Japan "� the global leader in clutch and flywheel manufacture.

At the current market price, the stock is discounting its FY08E earnings by 11.2x and cash earnings by 7.1x on a consolidated basis.