Which smallcap stock is Sunidhi Sec betting for 33% gains?

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Which smallcap stock is Sunidhi Sec betting for 33% gains?

Sunidhi Securities is bullish on Rama Phosphates (RPL) and has recommended buy rating on the stock with a target of Rs 100 in its April 28, 2011 research report.

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Sunidhi Securities is bullish on Rama Phosphates (RPL)  and has recommended buy rating on the stock with a target of Rs 100 in its April 28, 2011 research report.

"Rama Phosphates (RPL) (Incorporated in 1984) is one of the leading fertilizer manufacturers in India. Rama Phosphates is in existence for last 27 years and one of its units at Pune is in existence for last 40 years and pioneer in India. RPL has two manufacturing wings viz., Fertilizer and Edible oil. It is engaged in manufacturing phosphatic fertilizers viz. Single Super Phosphate (SSP) (Powder as well as Granule), mixed fertilizers namely NPK and chemicals like Sulphuric Acid (SA), Oleum etc. Total capacity of SSP is 4.62 lakh tpa and SA is 1.83 lakh tpa. RPL sells its fertilizer products under the Girnar and Suryaphool brand names."

"The company's oil division also has capacity of seed crushing of 1, 65, 000 tpa at an average of 600 tpd. The company's plant is fully integrated plant with all requisite facilities for storage of seeds in silos, crushers, expanders, flakers, storage godown for de-oiled cake and tanks for storing crude oil. The main highlight of its oil plant is that it has been awarded ISO-140001 from Japan for environment protection in the factory premises. Parallel to crushing plant, company is also having its own refinery plant with Alfa Laval technology for refining crude soya oil of 33,000 tpa at 100 tpd. The company's brand "Sufla" is one of the most popular brands in Madhya Pradesh and other Northern parts of India."

"The availability of Railway siding and strategic locations of the plants has put the company in most advantageous position as it can transport its basic raw material Rock Phosphate from the mines located far away in Rajasthan as also imported Rock phosphate from nearby ports of Mumbai and also transportation of its finished goods by rail to strategic locations situated in different parts of the country. With the establishment of its brand leadership in Madhya Pradesh and Maharashtra states, RPL would be in a position to reap benefits in the days to come. The company is also planning to plunge in a big way in Uttar Pradesh, Karnataka and Andhra Pradesh markets.  With the implementation of NBS policy, which envisages at-par treatment with other complex fertilizers, will help in improving capacity utilization and performance of the company in the years to come.  RPL is likely to post an EPS of Rs 20 in FY11 and Rs 23 in FY12. At the CMP of Rs 75, the share is trading at a P/E of 3.7x on FY11E and 3.3x on FY12E. We recommend BUY with a target of Rs 100 in the medium term," says Sunidhi Securities research report.

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To read the full report click on the attachment