Ashish Maheshwari, MD of India Capital Markets feels that Bilpower is a good pick in the power ancillary business. He expects an EPS of around Rs 68 in FY09 for the stock.

Maheshwari informed that Bharati Shipyard's current order book is at Rs 4,200 crore. He sees a price target of around Rs 750 for this stock in a year's time.

Excerpts from CNBC-TV18's exclusive interview with Ashish Maheswari:
 
Q: First one being Bilpower - you expect sales to be to the tune of about Rs 223 crore in FY09, PAT of about Rs 17 crore. What do you like so much about the stock and what do you foresee on the margin front?

A: Bilpower is a company which has an expertise in transformer core and lamination business. This company has diversified into three line of businesses - stamping of rotating machine, transformer repairing and maintenance and EPC contracts of laying transmission lines.

So now having been a 17-year old company, it has a proven track record and I am expecting a CAGR in topline of around 60% and CAGR in bottomline of around 70% for the next three years. So looking at the financials, I am expecting an EPS of around Rs 68 in FY09. So this stock is available at a very throwaway price and very low price-earning multiple of 3.5 only, looking at FY09 earnings. So this is a very good pick in power ancillary business.     

Q: Bharti Shipyard is the other stock that you like. What's the price target and why do you like this stock?

A: Bharati Shipyard is a multilocational shipmaking company. One good thing about this shipmaking company is their order book. If we see the order books of ABG Shipyard or Bharati Shipyard, they are full till 2012. So whether a recession comes or not they are having good visibility of their earnings at least for the next three-four years.

This company is having an order book of Rs 4,200 crore, so I am expecting even good order flow coming in this year maybe in this month or so Rs 800 crore odd orders might also flow in. So this company will do a CAGR of around 40% for the next four years and in bottomline, I am expecting 50% CAGR growth for next four years.

Besides this company has also diversified into manufacturing oil rigs and they are already working on one oil rig for Great Offshore. So all this adds to a lot in the valuation for this company and this company is currently available at a price earning multiple of 12 and I see a price target of around Rs 750 going forward in this stock in 12 months time.

Disclosures:

We have recommended Bilpower and Bharati Shipyard to our clients.