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Glodyne Technoserve

I am holding 3500 shares of Glodyne Technoserve bought at Rs 129 per share. I can hold these for another three to five years, provided the company stays in existence. Please guide me as to what I should do with these.

- Ajay Sood, Via Email

Glodyne Technoserve, BSE/NSE Code 532672/GLODYNE, with a face value of Rs 10, is currently trading at Rs 59. Its 52-week high/low stand at Rs 441 and Rs 52 respectively. The stock is currently trading at a 54 per cent discount to your acquisition cost.

Glodyne (formerly Paradyne Infotech) provides technology infrastructure management services (IMS) and application software services in India, Canada and the United States. It provides E-governance, financial inclusion, project management, education and human resource management services. Glodyne Technoserve serves the government/PSU, IT/ITES, banking financial services insurance, manufacturing, retail, media, telecom, education, travel and healthcare sectors.

On the financial front, the company has put up a good performance for Q1FY13. At Rs 678 crore, its topline witnessed a growth of 13.29 per cent on a YoY basis as against Rs 598 crore for Q1FY12. The bottomline was slightly flat, having gone up by 6.55 per cent YoY to Rs 59.71 crore against Rs 56.04 crore in Q1FY12.

On the valuations front, the stock trades at a PE of merely 1.23x. The EV/EBITDA stands at 2.55x and the dividend yield on the stock is a healthy 7.15 per cent. However, the company has a debt-to-equity ratio of 1.08x, which is not often the case with IT companies. We suggest that you hold on to the counter for a couple of quarters more and then take a call.

Indowind Energy

Is it the right time to buy the stock of Indowind Energy at its current price with a two-year time horizon?

- M S Edwin Innocent, Tamil Nadu

Indowind Energy, BSE/NSE Code 532894/INDOWIND, with a face value of Rs 10, is currently trading at Rs 3.95. Its 52-week high/low stand at Rs 9 and Rs 3 respectively.

Indowind Energy operates as an independent power producer in the field of renewable energy in India. The company is involved in developing, setting, operating, managing and maintaining wind farms primarily in Karnataka and Tamil Nadu. It generates wind power for utilities and corporate customers, and also provides turnkey project management and asset management services.

On the financial front, the first half of the present fiscal has not been very great for the company. Its topline witnessed a growth of 11.04 per cent on a YoY basis, standing at Rs 18.11 crore as against Rs 16.31 crore for H1FY12. The bottomline dropped by 15.48 per cent in H1FY13 to Rs 2.84 crore as against Rs 3.36 crore in H1FY12.

On the valuations front, the stock discounts its trailing 12-month earnings by 10.09x and the EV/EBITDA stands at 14.75x. The company’s debt-to-equity ratio stands at 1.18x. The fall in the PAT levels can be attributed to rising Other Expenses and depreciation, which have gone up by 36 per cent and 31 per cent respectively. At present, we suggest that you avoid the stock and look to other investment options that can be value accretive in the true sense.[PAGE BREAK]

Aarti Drugs

Do you recommend the scrip of Aarti Drugs as a ‘buy’ at its current market price?

- Dilip Kumar Manna, Kolkata, West Bengal

Aarti Drugs, BSE/NSE Code 524348/AARTIDRUGS, with a face value of Rs 10, is currently trading at Rs 172. Its 52-week high/low stand at Rs 180 and Rs 73 respectively.

The company has established a strong presence in the anti-diarrhoeal and anti-inflammatory therapeutic groups. Its manufacturing facilities are located at Tarapur and Sarigam. The company is engaged in the manufacture of vitamins, anti-arthritics, anti-fungals, antibiotics and ACE inhibitors, besides a range of products in anti-diabetics, anti-cholinergics, sedatives and anti-depressants. All its manufacturing units are GMP certified. The company is also in the process of acquiring ISO 9002 compliance for all its units, one of which has already been approved.

On the financial front, its results for Q1FY13 have been good. The topline witnessed a growth of 28.28 per cent on a YoY basis to stand at Rs 189.95 crore as against Rs 148.08 crore for Q1FY12. The bottomline witnessed a growth of 92.21 per cent YoY to stand at Rs 8.88 crore as against Rs 4.62 crore as of Q1FY12. On the valuations front, the stock trades at a PE of 7.73x. The EV/EBITDA stands at 5.92x and the dividend yield stands at 2.91 per cent. The company has a debt-to-equity ratio of 1.59x.

You may look to enter the counter in a staggered manner rather than making a lump sum investment.

Jammu & Kashmir Bank

I am holding 250 shares of Jammu & Kashmir Bank purchased at Rs 900 per share. What should my next step be with regard to these?

- Amit Goenka, Kolhapur, Maharashtra

Jammu & Kashmir Bank, BSE/NSE Code 532209/J&KBANK, with a face value of Rs 10, is currently trading at Rs 1156, which is at a 28.44 per cent premium to your acquisition cost. Its 52-week high/low stand at Rs 1190 and Rs 645 respectively.

Jammu & Kashmir Bank provides various banking products and services primarily in India. It offers a range of deposit products and services, including savings bank deposits, term deposits and current accounts. The company also provides home, education, automobile and specialised finances, as well as other finance products. In addition, it offers tax products and planning services, life and non-life insurance products and non-resident banking services, as well as distributes mutual fund products. As of June 30, 2012, the bank operated a network of 611 branches.

On the financial front, the company has posted good results for Q1FY13. On a YoY basis, the topline witnessed a growth of 39.80 per cent to stand at Rs 1476.16 crore as against Rs 1055.91 crore for Q1FY12 and the bottomline witnessed a growth of 35 per cent to stand at Rs 246.09 crore as against Rs 182.29 crore as of Q1FY12.

On the valuations front, the stock trades at a P/BV of 1.37x. The dividend yield stands at 2.92 per cent. The Capital Adequacy Ratio stands at 12.53 per cent. We suggest that you hold on to the stock from a longer term perspective.

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