Small Cap Pick-Edserv Soft Systems

It is small cap company listed on BSE and NSE engaged in the business of education ,training and developing learning systems. The company has progressed very fast in last 2 years and has 60% top line growth projected in FY2012.The company is planning to raise 35m dollars through GDR route shortly.The funds to be raised will be utilised in expansion of its activities

The market capitalisation of the company is Rs.200.79 crores and has PE of 4.81 against the industry PE of 21.98.The current market price of share is Rs.128.90 on 29.07.2011 on NSE.The financials of company can be gauged as the revenues of the company grew fromRs.3.96 crores in FY2008 to Rs.107.77 crores in FY 2011 and net profit the company grew from Rs.2.53 crores to Rs. 41.74 crores during the period.EPS of the company has also increased from Rs.3.07 in FY2009 to Rs.26.80 in FY2011.

It is one of the fastest growing companies in small cap sector and after raisng additional funds, the company can achieve really faster growth.The stock is under valued in education sector and should be accumulated at every decline. The volatality in the share prices of the scrip will be sharp on all the news as it is small cap scrip and hence one should plan ro purchase the shares on shap falls. However the growth of the company appears to be fast paced and available at attractive prices compared to educomp and everonn systems in the same sector.

Potential Multibagger-Time Technoplast

It is market leader in industrial packaging with more than 75% share in the market. The company has made tie up with Mauser-Werke of GmbH of Germany, which is one of the largest producers of intermediate bulk containers,plastic, steel and fibre drums in Europe and US.The company could produce innovative polymer based products like Anti-spray devices,Plastic fuel tanks, OT safe Masks, High presuure pipes, Pre fabricated shelters and sound barriers etc.

The company has also forayed into telecom battery business with acquisition of Hyderabad based NED Energy and successfully launched UPS and automative batteries.It has made several acquisitions in Europe, Taiwan and Egypt. The company has succeessfully produced prototype composite cylinders approved as per European standards,for which commercial production has begun in June 2011.

The market capitalisationof the company is Rs.1441.81 crores having PE Ratio of 15.99 higher than industry average of 6.14. The higher PE does not deter further growth as the company is constantly innovating new products and applications and gradually acquiring smaller companies which will increase its market share and entering into JV with some companies to manufacture and supply goods globally. It is one of the companies for medium to long term bets for investment.

The financials of the company are also sound as the revenue of the company grew from Rs.535.23 crores in FY2008 to Rs.821.89 crores in FY2011 and net profit of the company has also risen from Rs.63.52 crores in FY2008 to Rs. 90.14 crores in FY2011. EPS of the company has increased from 2.78 in FY2009 to 4.31 in FY 2011.The current market price of the stock is Rs.68.80 as on 29.07.2011.

Top mutual funds in the country have acquired 22.834,987 shares of the company during the quarter ending June 2011 showing confidence in the growth potential.