Recommendations From Auto Ancillaries And Construction Sector

Dalal Street Investment Journal India's No 1 investment magazine selects two aggressive stock picks in every issue, with a 15 day horizon based upon the bullish trend during that period. For this issue, we are recommending companies from the Auto Ancillaries and Construction Sector  in Hot Chips Column

PPAP Automotive

BSE Code: 532934 CMP: Rs 165.00 Volume: 2,608

PPAP Automotive which is formerly known as the Precision Pipes and Profiles Company, a leading manufacturer of automotive sealing systems, interior and exterior automotive parts has its core competence in polymer extrusion based automotive sealing system and injection moulded products. In H1FY6, the company reported 52.74 per cent jumped in net profit to Rs 7.53 crore as compared to Rs 4.93 crore of a year ago period. EBITDA rose 28.65 per cent at Rs 26.94 crore with an EBITDA margin improved to 347 bps to 17.5 per cent in H1FY16. However, total income of the company is reported 3.11 per cent to Rs 153.91 crore as against Rs 149.27 crore in the previous year. As far as leverage is concern, debt to equity ratio is hovering at 0.28x as on September 30, 2015 which means it’s on a comfort zone. Currently the stock is trading at P/E multiple of 15.8x and P/BV multiple of 1.12x.

MBL Infrastructures

BSE Code: 533152 CMP: Rs 218.20 Volume: 64,627

MBL Infrastructures (MBL) is an integrated infrastructure company with execution skills in roads & highways and railway infrastructure. On the back of revival in NHAI and MoRTH award activities, MBL has won fresh orders worth Rs 415 crore and Rs 609.12 crore during last fifteen days and for the full year of FY16, the company has given a guidance for order inflows of Rs 2,500 crore, which gives increased comfort towards strong uptick in execution. Additionally, MBL has five projects in hand on a BOT basis (two operational and three under construction), which are likely to be completed by FY17. Therefore we can expect a possible eased out situation in its balance sheet stress. Going forward, the company may take up contracts in the rail and urban infrastructure segments, which are key growth areas now. We believe the company will bag more orders in the next three to four quarters, as the infrastructure sector finds itself parked on a stronger ground.