U B Engineering Ltd–a hidden gem from Vijay Mallya pack…..
Published on Friday, December 26th, 2008 at 12:15 AMAuthor: suman2008s (14 Articles)
U B Engineering Ltd (BSE Code: 509992): UB Engineering Ltd., is the flagship Company of UB Group’s Engineering Business having multinational operations in construction activities. The UB Group is one of the largest corporate conglomerates in India with a widespread international network of 24 countries and widely diversified and well balanced portfolio of business activities.
The UB Group maintains market leadership in its traditional lines of business spanning alcoholic beverages, spirits, life sciences, etc.
The UB Group has significantly strengthened its business through Strategic investments in the areas of Engineering, Fertilizers, Petrochemicals and Electronics, Infrastructure, Airlines & Biotechnology.
The Group’s objective is to position itself as the leader in each of its field of activity.
The strategic decision of the UB Group to enter the engineering business through acquisition is now beginning to yield results.
Shareholding Pattern: The promoters hold 40.74% shares of the company while the general public holds 59.26%. Among the promoters, McDowell Holdings Ltd holds 2.65% and United Breweries Holdings Ltd hold 37.18 % shares of the company. Among the non-promoters, Ambitious Computech Mumbai Pvt holds 2.04% and Life Insurance Corporation of India Ltd holds 2.84% of the shares of the company.
Investment Rationale:
1. The company came out with scintillating numbers for the September, 2008 quarters. The total income of the company for Q2FY08 came out as Rs.91.6 Cr as against Rs.40.7 Cr–almost double considering Q-o-Q. The net profit of the company even after providing higher depreciation and higher interest company came out as Rs.6.32 Cr in Q2FY09 as against Rs. 1.5 Cr in the same period previous year. The EPS of the company for Q2FY09 jumped to Rs.3.42 as against Rs.1.18 in the same period previous year.
2. UB Engineering Ltd at its meeting held on December 12, 2008, has considered and approved the “Scheme of Arrangement” under sections 391-394 of the Companies Act, 1956, between WIE Estate Development Ltd (‘WIE’), its wholly owned subsidiary and UB Engineering Ltd (‘UBEL’ or ‘the Company’). The Scheme of Arrangement envisages the following -Merger of WIE Estate Development Ltd with the Company. Pursuant to the merger, no shares will be issued as, WIE is a wholly owned subsidiary of the Company. The Appointed Date for the Scheme of Arrangement will be January 01, 2009
3.UB Engineering Ltd has also informed that in response to the Letter of Offer dated December 28, 2007 for issue and allotment of 47,40,819 Equity shares Rs 10 each for cash at a price of Rs.126(including a Share Premium of Rs. 116) per equity share aggregating to Rs 59,73,43,194 on Rights basis to the Existing Equity Shareholders of the Company in the Ratio of 5 (five) Fully paid-up Equity Share for every 13 fully paid up Equity shares held on the Record date i.e. December 26, 2007. The Issue is subscribed fully. THE CURRENT PRICE OF THE SHARES OF THE COMPANY IS EVEN LESS THAN THE PRICE MENTIONED ABOVE.
In terms of the “BASIS OF ALLOTMENT” approved by the Stock Exchange, the Committee of Directors (CoD) of the Company at its meeting held on February 26, 2008, has allotted 47,40,819 Equity Shares of Rs 10 each for Cash at a Price of Rs 126/- per Equity Share Aggregating to Rs 59,73,43,194/- to the shareholders as on the Record Date on Rights basis.
4. Consequent upon the successful conclusion of Rights Issue of Rs. 59.73 crores debt burden (and the interest company for Q2FY09 was less compared to the same period previous year) has been reduced considerably. The Company is now well poised to bid for big projects with higher margins and take advantage of the present infrastructure development in the Country. With
significant orders in hand Company expects to substantially improve turnover and profits in the coming years.
5. Steady growth of GDP, increased investment in Power and other infrastructure sectors, boom in industry globally offers excellent opportunities for continued growth of the Company.
Considering all the factors mentioned above and taking into consideration, that the stock is in the highly oversold territory, the shares of U B Engineering Ltd could be purchased at the CMP of Rs.40, with a Strict SL of Rs.37. MACD, Stochastic and Bollinger Bands are in buy mode.
Meanwhile ASM Technogies Ltd which was recommended here is continuously hitting buyer freezes. There is mini-report on the company at www.sumanspeaks.blogspot.com.
Other stocks which could be boughts are: Vijay Shanti Builders Ltd, Srinivasa Shipping and Property Developmement Ltd, Phoenix International Ltd, Alchemists Ltd, Expo Gas Containers Ltd, Premier Explosives Ltd, Dolat Investments Ltd, English India Clays Ltd, etc.
Best wishes,
Suman Mukherjee
India.
Subscribe to my newsletter filling the form below. I'll try to make you happy.
Related Posts :
|
|
|
Market Live |
|
|
Loading ...