Analysts' corner: Timex Watches

Stratcap Securities, initiating coverage on Timex Watches, rates it as a "market outperfomer". The report states that the company has more than a century old long history that is studded with innovative and best-selling timepieces. It has a sizeable 26 per cent market share in the US market.

In India, Timex never really clicked due to a variety of reasons. The company is now restructuring its existing operations and simultaneously preparing to make a retail foray by setting up its own retail chain.

The company plans to set up 120 retail chains across the country and sell Timex and other brands licensed by the parent such as FCUK, Opex, Guess and Nautica.

This would help drive the topline from Rs 82.1 crore in FY05 to Rs 150 crore in FY08. On the cost side, while it will save on the distribution margin, it has facilities in tax free areas in Himachal, which will ensure savings in excise and income tax.

Subros

Angel Broking recommends a "buy" on Subros. The report states that the company is the largest and only integrated manufacturer of automobile air-conditioning systems in India. It has three plants in Noida and one in Gurgaon, with a total manufacturing capacity of five lakh AC units annually.

Its key clients include Maruti Udyog and Tata Motors. The demand for automobile ACs is expected to be robust going ahead on the back of buoyant demand expected from the automobile industry and an increase in the fitment ratio.

The company is expanding its capacity to 10 lakh units annually to cater to the incremental demand arising from the OEM industry. Additional capacities are being set up at Manesar (Haryana) and Pune, in two phases of equal capacity. The first phase will be ready by April '06 and second by April '07.

The company aims to maintain its numero uno position in the Indian auto AC market and increase its market share to more than 50 per cent from 42 per cent in FY05.

Emco

Brics PCG Research, in its report on Emco, has revised its FY07 estimates for the company in view of the company's strong order book position and in anticipation of additional orders by Q4 FY06.

The company currently holds a strong order book of Rs 430 crore against about Rs 150 crore as on April 1, 2004. The scope to improve the order book is high since the company records more orders in Q3 and Q4. The report maintains its FY06 topline and profitability estimates, while increasing its FY07 numbers.

The company is planning to venture into the medium and high-end switchgear business and the final framework regarding this is likely to be finalised by the end of Q4 FY06.

The company has entered into an MoU with Tamco Systems in Malaysia (Asia's largest switchgear company) for this purpose. The company is also considering the acquisition of a small switchgear plant or may set up its own manufacturing capacity by FY07 end.