70,000 tonne to 260,000 tonne by Q4FY08 and paper capacity from 230,000 tonne to 400,000 tonne expected to be commissioned by June 2010. These expansions will help the company to effectively manage input costs and simultaneously sustain growth rates.
Savita Chemicals
On the back of higher product prices and stable base oil prices, Savita Chemicals, a manufacturer of petroleum specialty products, recorded better than expected results for FY08.
It reported a 13 per cent improvement in net sales to Rs 919 crore and over 30 per cent increase in net profit to Rs 62 crore. Their operating profit margin of about 10 per cent is likely to come down as high crude oil prices could increase the price of its raw material-base oil.
A 20 per cent growth rate in the transformer oil market of Rs 1,500 crore should benefit Savita Chemicals as this segment accounts for 65 per cent of its revenues.
The company is expanding capacity by 50,000 kilo litres (kl) to 2.6 lakh kl at a cost of Rs 10 crore. The entry of new transformer manufacturers and the planned capacity additions on the power generation side is expected to increase demand for transformer oil, which augurs well for the company. At Rs 253, the stock is available at an attractive 6 times it’s FY09 estimated earnings of Rs 44 and should fetch decent returns.
These stocks can be a safe bet in such turbulent times. These companies have strong fundamentals and future growth potential. The dividend yield ensures that your investments keep giving you returns while you wait for a bull run in the stock market.
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