Stock tips - MIC Electronics

Stock Tips of Indian stocks
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Stock/ Company: MIC Electronics Recommendation: Buy
Date: 16th July 08
Face value per share: Re 2
Current Market Price : Rs 106 as on 15th July 08
Target Market Price : Rs 200 in 12 – 18 months

Business description:
. MIC mainly has 2 business divisions, the communication software division and LED display division. The company is focusing on the LED signage ( outdoor and indoor advertising ) business and it is giving a major thrust to it. The consolidated business turn over in 2006 – 07 ( June end ) is Rs 477 Cr. This stock tip is a good tip for medium to long term

Positives/ Strengths/ Opportunities for this share:
- The LED signage industry is a fast growing industry globally. In addition, MIC is also in an advanced stage to release LED based conventional lighting systems for commercial use.
- The current order book for lighting division alone is Rs 250 crores. MIC is the only Indian company in this business and is a monopoly in India.
- The global LED based lighting market is expected to record a 20% CAGR between now and 2011 to reach USD 11 Bn..

Negatives/ weakness/ threats for this share:
- Entry of several other new players due to the attractiveness of the business.

Summary:
Company year ends on: June 08, Turn over 08E=Rs330Cr,09E =Rs 484Cr,10E=725 Cr
Turn over – expected Compounded Annual Growth Rate CAGR ( 08 – 10 ) = 48 %
Net profit 08E = Rs 61.30Cr – expected Compounded Annual Growth Rate CAGR ( 08 - 10 ) = 56%
Earning Per Share expected on FV of Re 2/- ( 08,09,10 ) = Rs 5, Rs 8, Rs 12
Discounts 2009 estimated eps by a measly 13 times and 10 eps by 9 times
Return on Equity ( 09 E ) = 25%, Return on Capital Employed (09E ) = 28%

This stock tip is a Buy for a minimum of 50 % gain over a 12 to 18 month period
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Disclaimer: Investment in shares are subject to market risks. This is a free advice given to the readers and the readers shall consult their financial advisors before making an investment. The author may or may not have this stock in his portfolio. The readers indemnify the author against any or all damages including loss of their invested money