Undervalued mid/small cap stocks

The recent sale out has left many small and mid cap companies greatly undervalued in comparison to their large cap peers. Many such companies were dumped by investors who thought its either safe to be out of the market or buy large cap stocks available a discount (are they really at discount). This caused small/mid caps to become more undervalued. Lets discussion those stocks here.

Friends, please list the mid/small caps with good fundamentals and available very cheap right now which come to your mind.

friend , nothing is cheap or high priced...
its just our emotions which make them so.....
if this is not the case , then why is the same rnrl which was considered dirt cheap @ 250 levels now appears fully priced @ 150 ?to cite a eg.
@ 250 , targets for 500 were in the air for a co which is yet 2 commence operations.....
now @ 150 , street is sceptical whether it will reach its recnt top....

Although the name sounds like that of a pan-beeri shop, VAKRANGEE SOFTWARE nonetheless seems to have all FIIs under the sun invested in it!

ANG Auto seems to be such a value buy to me. Please correct if i'm wrong.

Find the details here. http://www.stockhive.com/company/show/10660005.0

COMPACT DISC (again the name is a little misleading)

By SP Tulsian



· Jindal Poly Films, of B. C. Jindal Group, is India’s largest producer of Polyester Film, commonly known as PET Film and Polypropylene Film, also known as BOPP Film, used for food packaging.



· The present capacity of the company is 86,000 TPA of PET Films, 90,000 TPA of BOPP Film, 26,000 TPA of Metalliser, 1,00.000 TPA of Polymer Chips and 9,000 TPA of Coating Plant.



· Two Metallisers of 2,850 mm width, with an annual capacity of 20,000 TPA, is under commissioning and would stablilise by March 08, thus increasing capacity of Metalisers to 46,000 TPA.



· Two lines of 8.7 meter width, with an annual capacity of 90,000 TPA is under implementation which shall be operational by September 08, thus raising capacity of BOPP Films to 1,80,000 TPA. All the production line of the company has been sourced from Dornier of Germany, the leading supplier of Polymer Film plants.



· The company has been posting robust financial performance. For FY 07, the total income of the company was at Rs.1,032 crores with EBITDA of Rs.168.41 crores, resulting into a margin of 16.30%. PBT for the year was Rs.90.30 crores, while PAT was at Rs.64.96 crores, resulting in an EPS of Rs.23.12, for the year. Cash profit for the year was at Rs.138.09 crores, resulting in a cash EPS of Rs.49.15.



· For quarter ending December 07, total income was at Rs.317 crores with PAT of Rs.26.69 crores, resulting in an EPS of Rs.9.50. Cash profit for the quarter was at Rs.43.32 crores giving a cash EPS of Rs.15.42. For 9 months ending December 07, total income was at Rs.932 crores with PAT of Rs.94.77 crores, giving an EPS of Rs.33.73 for the period. Cash profit was at Rs.144.50 crores, resulting in a cash EPS of Rs.51.40 for the period.



· FY 08 is likely to have a topline of Rs.1,250 crores, PAT of Rs.120 crores, giving an EPS of Rs.42.70 and cash profit would be Rs.180 crores, resulting into a cash EPS of Rs.64.



· Since the expansion in capacity of BOPP Films by 90,000 TPA, would be completed by September 08 and Metalliser Plant by 20,000 TPA, by March 08, EPS of the company for FY 09 is likely to be close to Rs.60, with cash EPS of Rs.70.



· The book value, per share of the company, as at 31-03-07 was at Rs.280, which would rise to Rs.320 by March 08.



· The share is presently ruling at Rs.205, which is available at a price to book of 0.65 : 1 or at 65% of its book value. PE multiple on historic earning is below 5 times, while on future earnings of FY 09 at 3.50 times. This kind of valuation, leaves no downward risk. Also, other small size packaging films companies are discounted at a PE of about 10 times.



· A safe and excellent bet at Rs.205 for a reasonable gain of 30% per annum, over the next 2 – 3 years. The company and sector would get re-rated sooner or later.

Can also consider CONSOLIDATED FINVEST - the holding company for the group.

My 2 cents.
Scrip Reasons
Rama Paper Mills: Captive Power unit, Expansion and P/E less than 3
DCM Sriram Constructions: Order Book, cash

Plz share your thoughts.

I personally feel that Punj Lloyd, UTV Software and Core Projects will see a very huge uptrend in the medium term. My money is blocked with RNRL and GMR else I feel they are pretty cheap at 380, 842 and 210 levels. An analyst Arun pointed out the prospects of the latter two.

SRF LTd

http://www.stockhive.com/company/show/12170004.0

Growth Average 7 yr CAGR
Sales 12.5% 15.3%
EPS 30.7% 39.5%
BV 11.0% 14.9%

EV/Sales 0.7
EV/EBITDA 2.2
EV/Book Value 1.6
PBT Margin 25.3%
ROE 37.6%
ROCE 38.4%
Debt/Equity 0.59

There is a catch. Its profit has been declining by almost 50% quarter after quarter. On the other hand, various projects are being implemented which might change its finances. However, at present it looks underpriced (or overpriced given the kind of decline in profits its showing).