2012

Vol.-2

Dividend Achievers Additions for 2012

Its far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

- Warren Buffett

Chirag Gothi
Research Analyst E-mail Id: research@lalkar.in

Lalkar Securities Pvt. Ltd.

5th Floor, Crescent Chambers, Tamarind Lane, Fort, Mumbai - 400 001. Tel: 91-22-2265 2626

www.lalkar.in

26th March, 2012

-2626, F: +91 22 2265-1642. Page 1 of 8

Three Months ago (on 20th December 2011), we recommended 20 Dividend paying stocks that can sustain and raise their dividends on a regular basis. These 20 dividend stocks have given excellent returns. We have identified 7 more stocks by focusing in on a select universe of well-financed companies that have the following characteristics: A long history of earnings and dividend growth Positive free cash flow Low to reasonable valuations Plus, a solid outlook for both price appreciation and higher dividends in the future.

Performance review after three months

Return (%)
Sr. No.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Name
Wheels India Ltd Tata Motors-DVR Kennametal India Zylog Systems Ltd. VST Industries Repro India Bharat Bijlee Ltd. Grindwell Norton Ltd. Deepak Fertilisers Hawkins Cooker Ltd Coromadel Int. TVS Srichakra Balmer Lawrie & Co Hero Motocorp Ltd VST Tillers Tractors Bajaj Holdings & Invest Tata Chemicals LG Balakrishnan eClerx Services Hinduja Global Sol

CMP
591.7 150.7 1012.0 589.0 1439.0 185.6 625.0 261.1 146.1 1503.1 288.1 338.0 541.0 2017.8 455.0 809.3 347.4 310.0 723.9 300.2

Recomm. Price
242.4 87.3 653.1 393.6 1026.7 148.7 529.9 209.9 122.8 1219.0 256.5 286.5 481.8 1811.1 412.0 697.6 315.5 282.6 682.1 297.9

High After Recomm.

642.9 173.3 1198.0 605.0 1506.0 218.0 759.4 292.7 170.0 1595.0 313.9 350.0 587.0 2200.0 499.0 831.0 373.5 330.0 790.0 344.0

on CMP
144.1 72.6 55.0 49.6 40.2 24.8 17.9 24.4 19.0 23.3 12.3 18.0 12.3 11.4 10.4 16.0 10.1 9.7 6.1 0.8

on High
165.2 98.5 83.4 53.7 46.7 46.6 43.3 39.4 38.4 30.8 22.4 22.2 21.8 21.5 21.1 19.1 18.4 16.8 15.8 15.5

We continue to recommend buying above 20 stocks# at current level. The 7 stocks recommended are an addition to the class of 20 stocks above.

# - Refer "20 Dividend paying stocks" dated 20th December, 2011 Detailed Report Click Here

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7 Dividend Yield Stocks

Dividend per Share Sr. No.
1

Dividend Payout Ratio (%) FY11

42.1

Name
Andhra Sugars

FV
10

CMP
129.6

M-Cap (Rs. Cr)

351.3

TTM EPS
34.1

P/E
3.8

BV
173

P/B
0.75

FY11
5.5

FY10
5

FY09
6

FY10
20.3

FY09
35.9

Div Yield
4.24

Bimetal Bearings

10

297.0

113.6

35.1

8.2

347

0.86

11

46.0

35.8

36.4

3.70

Hyderabad Ind.*

10

328.0

244.8

71.2

4.6

443

0.74

16

16

16

23.6

13.3

16.9

4.88

Mangalam Cement

142.0

379.1

21.5

6.6

162

0.88

5.5

41.9

13.5

16.0

4.23

NIIT Technologies

10

240.8

1431.2

30.5

7.9

140

1.72

7.5

6.5

24.6

32.6

33.2

3.11

NCL Industries

10

48.1

167.9

18.0

2.7

56

0.85

1.5

2.5

22.4

29.5

27.7

3.12

Wim Plast

10

197.6

118.6

35.3

5.7

166

1.19

4.5

3.5

14.8

14.1

26.3

2.28

*Note: Rs.6 Interim Dividend already paid for FY12

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Market Data
CMP EPS (TTM) P/E 52 Week High 52 Week Low Mcap (Rs Cr.) Equity (Rs Cr.) Face Value BSE Code NSE Code

Rs. 129.60 34.11 3.80 159.80 85.65 351.30 27.11 10 590062 ANDHRSUGAR

Andhra Sugars Ltd.

Company Overview

Sector: Sugar & Chemical

Relative Performance
150 125 100

SENSEX

The Andhra Sugars Ltd (ASL) is engaged in manufacture and sale of sugar, organic and inorganic chemicals and non conventional power. The company is currently focusing on expansion of its plants and is also looking for diversification into pharma segment. The Company is setting up a Hi-strength Hypo-Plant in Saggonda to produce Calcium-Hypochlorite. Chlorine, which is the main raw-material for the product would be internally sourced. This product is extensively used in the Water Treatment plants, Aqua culture, Dairy, Textile, Leather, paper and host of other industries. The company is also marketing aspirin in the overseas market, in order to increase the export possibilities of the product as the domestic price realization has been very low. The company has already successfully executed orders from reputed clients from USA, Germany, Mexico, Spain and Bulgaria. With more and more focus on the export market, the company intends to increase its overseas sales in the future. The Company has got a very attractive investment portfolio. Investments in JOCIL Ltd. (55.02%holding) and Andhra Petrochem (28.98% holding). JOCIL, which is a subsidiary of Andhra Sugars, is in the business of manufacturing Fatty Acids, Glycerine, Toilet soap, Industrial oxygen, etc. Andhra Petrochem Ltd., which is an associate company of Andhra Sugar, is mainly engaged in the manufacturing of petrochemicals such as NButanol, I-Butanol, etc. Year Net Sales (Rs. Cr.) FY09 603.78 580.53 521.77 142.08 PAT (Rs. Cr.) 45.28 66.84 35.38 15.94 EPS Rs. 16.7 24.65 13.05 26.55 DPS Rs. 6 5 5.5 DP ratio % 35.9 20.3 42.1 BVPS Rs. 120 139 146 173 ROE % 14.48 18.98 9.36 ROCE % 15.60 19.80 10.89

75 50 Apr-10

Andhra Sugars

Apr-11

Oct-10

Oct-11

Jan-11

Jan-12

Jul-10

Jul-11

FY10 FY11 9mFY12

Source: BSE

Bimetal Bearings Ltd

Company Overview

Sector: Auto Parts & Equipment

Market Data
CMP EPS (TTM) P/E 52 Week High 52 Week Low Mcap (Rs Cr.) Equity (Rs Cr.) Face Value BSE Code NSE Code

Rs. 297.00 35.12 8.50 347.50 221.00 113.60 3.83 10 505681 BIMETAL

Bimetal Bearings Ltd (BBL), an Amalgamations group company, started operations in 1961 in collaboration with Clevite Ince, USA and Repco Ltd, Australia. The company manufactures engine bearings for all segments of automobile industry, apart from catering to requirements of defence and railways. Market size of such engine bearings is approximately Rs.2.8bn, with BBRG having an estimated 55-60% market share. The industry is estimated to be growing at 20%, fueled by both domestic and export demand. BBL provides copper alloy powders, sintered copper alloy strips and aluminium alloy strips under the brand, BIMITE. Its offers its products for use in passenger cars, multi utility vehicles (MUVs), light commercial vehicles (LCVs), medium and heavy commercial vehicles, tractors, industrial engines and two wheelers. BBL is the only fully integrated domestic manufacturer of engine bearings, thrust washers, alloy powder, and bimetallic strips. It has inhouse facilities to manufacture non-ferrous powder, sintered metal strips, fully value added finished products, and machines required for manufacturing bearings. BBRG caters to 100% requirement of Hyundai, and has significant business of Ashok Leyland, Tata Motors, and Maruti. And others are Mahindra, Swaraj Mazda, Yamaha, Escorts and many others.

Relative Performance
150 125 100

SENSEX

Year

Net Sales (Rs. Cr.)

PAT (Rs. Cr.) 7.35 8.55 9.14 15.94

EPS Rs. 19.21 22.37 23.89 26.55

DPS Rs. 7 8 11

DP ratio % 36.4 35.8 46.0

BVPS Rs. 304 318 329 347

ROE % 6.43 7.51 7.38

ROCE % 10.29 11.07 11.67

75 50 Jun-11

Bimetal Bearings

FY09 FY10 FY11 9mFY12

128.66 119.56 153.76 142.08

Dec-11

Source: BSE

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Aug-11

Feb-12

Oct-11

Apr-11

Market Data
CMP EPS (TTM) P/E 52 Week High 52 Week Low Mcap (Rs Cr.) Equity (Rs Cr.) Face Value BSE Code NSE Code

Rs. 328.00 71.15 4.60 424.00 255.00 244.80 7.46 10 509675 HYDRBADIND

Hyderabad Indsutries Ltd

Company Overview

Sector: Cement & Cement Products

Relative Performance
150 125 100 75 50 25 Dec-10 Mar-11 Dec-11 Mar-12 Apr-10 Sep-10 Sep-11 Jun-10 Jun-11 Hyderabad Industries SENSEX

Hyderabad Industries Ltd. (HIL) - the flagship Company of the CK Birla group - was incorporated in 1946. HIL is engaged in the production and distribution of Fibre Cement Sheets, Green Building Products like Auotoclaved Aerated Concrete Blocks (AAC Blocks) & Aercon Panels, Blocks Material Handling and Processing Plant & Equipment and Thermal Insulation Products (Refractories). HIL is the market leader in the asbestos-based roofing industry, with an estimated market share of 21% and its famous brand Charminar established over six decades and enjoys a premium over others in the market. It is also introducing value- added products under Charminar to leverage the brand value. HIL has pan India manufacturing footprints with 9 plants across the country, two each in the North and East, three in the South and two in the west. HIL has set up a 3.60 megawatts Wind power project in Vandhiya Village, Gujarat. The two wind turbines had been commissioned in March and April 2011, respectively. The demand for Green Building Products is increasing globally given the increased focus on environment protection and hence HILs green products division is expected to do well in future. Also the demand for AAC blocks is directly related to the growth in the construction industry, which is seeing signs of revival and in turn enable rapid growth for HILs Green Building Products. Year Net Sales (Rs. Cr.) FY09 FY10 FY11 9mFY12 622.71 710.44 733.97 615.15 PAT (Rs. Cr.) 44.09 89.72 50.61 42.59 EPS Rs. 59.08 120.22 67.81 57.06 DPS Rs. 10 16 16 6 DP ratio % 16.9 13.3 23.6 BVPS Rs. 250 351 400 443 ROE % 27.00 41.00 18.39 ROCE % 31.62 48.74 22.73

Source: BSE

Mangalam Cement Ltd

Company Overview

Sector: Cement

Market Data
CMP EPS (TTM) P/E 52 Week High 52 Week Low Mcap (Rs Cr.) Equity (Rs Cr.) Face Value BSE Code NSE Code

Rs. 142.00 21.52 6.60 156.45 76.00 379.10 26.70 10 502157 MANGLMCEM

Mangalam Cement Ltd. (MCL) is the flagship company of the B.K Birla group, engaged in the business of manufacturing and selling cement and clinker. It has a capacity of 2 million tonnes per annum (MTPA) along with 48.65 MW of captive power plant. Its cement and power plants are located at Morak, Rajasthan and MCL sells its product under the brand name of Birla Uttam Cement. Company has strong distribution network in northern states Haryana, Madhya pradesh, Rajasthan, Uttar pradesh and Delhi. Companys main market is in North India. It has a significant presence in Delhi. The company is implementing a Greenfield expansion of 1.25 mtpa clinker grinding unit at Aligarh, Uttar Pradesh at an investment of INR 4 billion which is expected to be completed by last quarter of FY13. This would entail a capex of Rs.400cr to be spent by next financial year. This would enable MCL to maintain its market share and will lead to volume growth from FY14. The funding for the same will be done through a mix of internal accruals and debt in the ratio of 1:3. Along with that, MCL also plans to augment the clinker capacity by 0.5 mtpa at its existing facility at Morak, Rajasthan. Going forward, MCL plans to reduce its consumption of high grade lime stone to 6 per cent from current 17 per cent by using pet coke, leading to cost savings. Year Net Sales (Rs. Cr.) FY09 FY10 FY11 9mFY12 589.91 633.70 503.81 428.62 PAT (Rs. Cr.) 97.16 118.81 38.24 37.95 EPS Rs. 34.41 44.38 14.33 14.25 DPS Rs. 5.5 6 6 DP ratio % 16.0 13.5 41.9 BVPS Rs. 103 143 146 162 ROE % 38.42 35.43 9.92 ROCE % 45.54 53.44 10.96

Relative Performance
150 125 100 75 50 25 Sep-10 Dec-10 Mar-11 Sep-11 Jun-10 Jun-11 Dec-11 Mar-12 Apr-10 Mangalam Cement SENSEX

Source: BSE

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Market Data
CMP EPS P/E 52 Week High 52 Week Low Mcap (Rs Cr.) Equity (Rs Cr.) Face Value BSE Code NSE Code

Rs. 240.80 30.50 7.90 285.35 166.00 1431.20 59.43 10 532541 NIITTECH

NIIT Technologies Ltd

Company Overview

Sector: IT Consulting & Software

Relative Performance
150 125 100 NIIT Tech

NIIT Technologies Ltd (NTL) was spun off from NIIT Ltd. It is a mid tier IT services company got a strong prowess in application development & maintenance, system integration and enterprise solutions including managed services and BPO. NTL headcount stood at 6,978 people catering to clients across insurance, financial services, travel, transportation & logistics, manufacturing, retail and healthcare. Its marquee client list includes British Airways, Saber, Changi Airport, ING Group, Amlin, AXA, SEI, Deutsche Bahn, Holcim and Thrivent. It has also entered into distributorship alliances with global software leaders such as Information Builders Inc., Sybase etc. Company has formed a joint venture (60-40) with US-based media company Morris Communications, a move that will help the Indian firm strengthen its foothold in the media sector. Going forward revenue contribution from the JV is likely to increase up to US$5mn per quarter. Learning curve benefits of the JV will help in winning more such deals in the media space, moreover, Morris Communication has offices across the US, UK, France and Asia, which will act as a near shore centers. NTL has acquired Madrid-based software services firm Proyecta Sistemas for USD 7 million to enhance its European footprint with Proyecta's successful experience in servicing industry leaders in the travel and financial services segments. Year Net Sales (Rs. Cr.) FY09 994.62 921.35 1245.16 607.4 PAT (Rs. Cr.) 114.84 994.62 994.62 82.95 EPS Rs. 19.56 21.44 30.52 13.98 DPS Rs. 6.5 7 7.5 DP ratio % 33.2 32.6 24.6 BVPS Rs. 66 99 126 140 ROE % 27.2 26.1 27.5 ROCE % 30.0 29.7 30.3

75 50 Sep-10

SENSEX

Sep-11

Jun-10

Jun-11

Dec-10

Mar-11

Dec-11

Mar-12

Apr-10

FY10 FY11 9mFY12*

Source: BSE

*Note: 9mFY12 on standalone basis

NCL Industries Ltd

Company Overview

Sector: Cement & Cement Products

Market Data
CMP EPS (TTM) P/E 52 Week High 52 Week Low Mcap (Rs Cr.) Equity (Rs Cr.) Face Value BSE Code NSE Code

Rs. 48.10 18.00 2.70 53.20 25.60 167.90 34.94 10 502168 NCLIND

NCL Industries Ltd has been a unique company among Mini Cements, right since its inception the company was focused on establishing a premium image for its brand Nagarjuna cement. Its this effort which has enabled it to command a premium over all other brands in coastal district of AP, till date. It engages in the manufacture and sale of various building materials. It operates in four divisions: Cement, Boards, Prefab, and Energy. The Cement division offers ordinary Portland cement for high-rise buildings, bridges, flyovers, chimneys, and prestressed concrete structures; pozollona Portland cement for water retaining structures and marine works, as well as for mass concreting, such as dams, dykes, retaining walls, foundations, and sewage pipes; and special cement for railway sleeper manufacturers. The Boards division provides cement bonded particle board. This divisions products are used in partitions, false ceilings, doors, wall claddings, flooring, kitchen platforms, table tops, stair case, lockers, cabinets, cabins, booths, stands, sheds, building facades backups for roof elements, outdoor flooring, compound walls, and backups for hoardings. NCL is also the largest player in building Prefab shelter used in Military, Industries and for temporary structures in catastrophe. NCL also owns two mini hydel projects - one on right main canal of Srisailam dam (7.5 MW) and other on the right high level canal of Tungabhadra dam (8.25 MW). Year Net Sales (Rs. Cr.) FY09 FY10 FY11 9mFY12 305.80 234.71 366.12 352.42 PAT (Rs. Cr.) 29.85 11.71 23.41 42.01 EPS Rs. 9.04 3.39 6.70 12.02 DPS Rs. 2.50 1.00 1.50 DP ratio % 27.7 29.5 22.4 BVPS Rs. 36.9 39.5 44.5 56.5 ROE % 25.87 8.78 15.97 ROCE % 16.76

Relative Performance
150

125

SENSEX

100 NCL

75

Jun-10

Sep-10

Jun-11

Dec-10

Mar-11

Sep-11

Dec-11

13.40

Source: BSE

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Mar-12

Apr-10

10.11

50

Wim Plast Ltd

Company Overview

Sector: Plastic Products

Market Data
CMP EPS (TTM) P/E 52 Week High 52 Week Low Mcap (Rs Cr.) Equity (Rs Cr.) Face Value BSE Code NSE Code

Rs. 197.60 35.29 5.60 231.70 162.20 118.60 6.00 10 526586 NA

Wim Plast is in the business of plastic moulded furniture (brand cello) and into extruded cello bubble guard sheets which have multiple applications such as false ceiling, signage etc. The company has been in this business for the last 20+ years and is part of the cello group. The Company has acquired land of 8092 sqmt at Haridwar, for setting up of manufacturing unit of Plastic Moulded Products. The Company also setting up of new extrusion plant at Daman for manufacturing of Flutted & S-flutted polypropylene sheets. The sheets will mainly used for packaging and advertisement. While the company faces stiff competition from Supreme Industries and Nilkamal when it comes to moulded furniture, Wim Plast however has the distinction of being a monopoly player manufactures wall panels (Cello bubble guard board). Cello Bubble Guard is a Division of WIM Plast Ltd. a project of which has been set up in Baddi Himachal Pradesh with a most Sophisticated & Modernized Plant with State-of-Art Technology from Italy, offering International quality standards. It is an Asias 1st plant and 3rd of its kind in the World having an Installed Capacity of 8000 MTA. Presently the Company has manufacturing units at Daman, Baddi and Chennai also have Depots in Gujrat, Rajasthan, Andhra Pradesh, Haryana and Punjab and have strong consumer base throughout the country. Year Net Sales (Rs. Cr.) FY09 FY10 FY11 9mFY12 92.24 130.86 159.47 142.08 PAT (Rs. Cr.) 8.00 17.01 18.25 15.94 EPS Rs. 13.33 28.35 30.41 26.55 DPS Rs. 3.5 4.0 4.5 DP ratio % 26.3 14.1 14.8 BVPS Rs. 90 114 139 166 ROE % 15.56 27.74 24.02 ROCE % 21.46 36.94 34.63

Relative Performance
150 Wim Plast 125

100

75

SENSEX

50

Sep-10

Dec-10

Mar-11

Sep-11

Jun-10

Jun-11

Dec-11

Source: BSE

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Mar-12

Apr-10

Stock Ratings Positive Ratings

Buy (B) This rating means that we expect the stock price to move up and achieve our specified price target, if any, over the specified time period. Buy at Declines (BD) This rating means that we expect the stock to provide a better (lower) entry price and then move up and achieve our specified price target, if any, over the specified time period. Outperform (OP) This is a relative rating, which means that we expect the stock price to outperform the specified market/sector index over the specified time period.

Neutral Ratings
Hold (H) This rating means that we expect no substantial move in the stock price over the specified time period. Market perform (MP) This is a relative rating, which means that we expect the stock price to perform in line with the performance of the specified market/sector index over the specified time period.

Negative Ratings
Sell (S) This rating means that we expect the stock price to go down and achieve our specified price target, if any, over the specified time period. Sell into Strength (SS) This rating means that we expect the stock to provide a better (higher) exit price in the short term, by going up. Thereafter, we expect it to move down and achieve our specified price target, if any, over the specified time period. Underperform (UP) This is a relative rating, which means that we expect the stock price to underperform the specified market/sector index over the specified time period. Avoid (A) This rating means that the valuation concerns and/or the risks and uncertainties related to the stock are such that we do not recommend considering the stock for investment purposes.

ANALYST DISCLAIMER
This document has been prepared by Lalkar Securities Pvt. Ltd. This report is the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. This document does not constitute an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. We, at Lalkar Securities Pvt. Ltd., have prepared this report based on the data we consider reliable, but we do not vouch it to be accurate or complete, and it may not be relied upon as such. Lalkar Securities Pvt. Ltd. does not in any way be responsible for any loss or damage that may arise to any person due to the content in the report. Each recipient of this document should make an independent valuation of their own in the securities referred to in this report. Besides, the data in this document is subject to change without prior notice and is intended only for the person or entity to which it is addressed to and may contain confidential and/or privileged material and is not for any type of circulation. Any review, retransmission, or any other use of the report and the content within, is prohibited. For detailed disclaimer please visit http://www.lalkar.in.

Disclosure of Interest
1. The analysts who have prepared the report have in no way received or are expected to receive any compensation from the subject company. 2. The analysts may or may not hold any position in the subject companys stock, as on the date of release. 3. Neither the company nor an affiliate company Lalkar Securities Pvt. Ltd. has received a mandate from the subject company. 4. Lalkar Securities Pvt. Ltd., or its affiliates do not hold any paid up capital in the company

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