Financial Weekly

SMART
INVESTMENT
27th Jan. 2018 to 2nd Feb. 2019 14
SMART
BUY OF THE WEEK
Dark Horse

Sree Rayalaseema
(532842 & NSE) (Rs. 152.55) (FV. 10.00
Incorporated in 2005, Kurnool based Sree Rayalaseema Hi-Strength Hypo Limited manu-
factures and sells inorganic chemicals in India. The company offers calcium hypochlorite,
stable bleaching powder, aluminum sulphate, monochloro acetic acid, sulphuric acid,
chlorosulphonic acid, hydrochloric acid, oleum, hydrogen gas, sodium hydride, and sodium
methoxide. It also generates power through wind mill power units located in Tamil Nadu; and

a 10 MW thermal power plant situated at Particular Six Month End.

Gondiparla, Andhra Pradesh. The company H1FY19 H1FY18 % Var.
also exports its products internationally. Sales 341.43 245.07 39%
PBT 21.32 12.22 74%
Company's products are used by all lead-
PAT 17.71 10.19 74%
ing manufacturers of Non-Steroid Anti-In-
flammatory Drugs, other pharmaceuticals, pesticides, organic chemicals etc.
It has an equity base of just Rs.17.16crore that is supported by reserves of around
Rs.302.39crore. It has a share book value of Rs.115.91 & price to book value ratio is around
1.31 which is impressive. The Promoters hold 61.68% while the investing public holds 38.32%
stake in the company.
Company has posted superb numbers for Q2FY19 & H1FY19. During Q2FY19, its net
profit zoomed 127.10% to Rs.11.75crore from Rs.5.17crore in Q2FY18 on 38.13% higher
sales of Rs.173.77crore in Q2FY19 fetching an EPS of Rs.6.85. During H1FY19, its PAT
soared 73.86% to Rs.17.71crore from Rs.10.19crore in H1FY18 on 39.32% higher sales of
Rs.341.43crore fetching an EPS of Rs.10.32. It has paid 20% dividend for FY18. Currently,
the stock trades at a P/E of 5.8x.
Investors can accumulate this stock with a stop loss of Rs.132. It may give very good
returns in medium to long term.

Cont...
Financial Weekly

SMART
INVESTMENT
27th Jan. 2018 to 2nd Feb. 2019 15
Aro Granite
(513729 & NSE) (Rs. 52.35) (FV. 10.00)
ARO Granite Industries started operations as a 100% Export Oriented Unit in 1991 for
processing Polished / Flamed Granite Tiles & Slabs. The company exports its products to
North America, South America, Europe and Far East markets. Aro has granite processing
plant in Hosur, near granite hub of India, as well as Chennai Port. In its plants it has process-
ing facilities for Granite slabs, Granite Tiles and Cut to Size blocks. It has state of the art
Machines imported from world class sup-
Particular 3 Monht End.
pliers. The Company has an installed ca-
Q3FY19 Q3FY18 % Var.
pacity of 7,35,000 sq mtr for Granite slabs Sales 39.78 45.73 -13%
and 3,60,000 sq mtr for Granite tiles. It has PBT 4.25 0.20 2025%
also an 11,000 sqm warehouse near to its PAT 4.16 0.14 2871%

current processing unit in Hosur. This warehouse has a storage capacity of 20,000 slabs.
It has an equity base of just Rs.15.30crore that is supported by reserves of around
Rs.155.30crore. It has a share book value of Rs.111.5 & price to book value ratio is just 0.5x
which is impressive. The Promoters hold 41.06% while the investing public holds 58.94%
stake in the company. Ace investor Dilip Lakhi holds 10.54%, Bharat Pitti hold 2.39% and
Subramanian P hold 1.29% stake in this company.
Company has posted superb numbers for Q3FY19 & 9MFY19. During Q3FY19, its net
profit zoomed 2875% to Rs.4.16crore from Rs.0.14crore in Q3FY18 on sales of Rs.39.78crore
in Q3FY19 fetching an EPS of Rs.2.73. During 9MFY19, its PAT soared 659.93% to
Rs.6.24crore from Rs.0.82crore in 9MFY18 on sales of Rs.125.47crore fetching an EPS of
Rs.4.08.
Company is aiming to establish a new granite slab processing plant in Jaipur, Rajasthan
with capacity of 1,50,000 sq mtrs per annum. This plant shall reduce the transportation cost
by more than half and make its prices and offering more competitive in the market.
Investors can accumulate this stock with a stop loss of Rs.43. It may give very good
returns in medium to long term.