STOCKS TO BE WATCHED ;ELECON ENGINEERING

• The recommendation for buying this stock appeared in a recent issue of Outlook Money. The company is into manufacturing of Material handling equipment.
• The link to this article http://www.outlookmoney.com/scripts/IIH021C1.asp?SectionId=1&CategoryId=132&ArticleId=6687&NoCache=8%2F2%2F2007+9%3A01%3A02+PM

• With the stock gaining over 12,000 per cent in the last 5 years and a strong order book, Elecon Engineering is set to reap profits
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  Elecon Engineering Company pioneered the manufacture of material handling equipment in India.
• In the last four decades, it has designed and implemented several landmark projects in India and abroad. Its product range and services includes design, engineering, manufacture, supply and erection. Through its equipment it has made its presence felt in core sectors like fertilizer, cement, coal, power generation, chemicals, steel plants and port mechanisation. Its business also includes providing customised gearboxes for steel mills, high-speed turbines, sugar mills, marine vessels, plastic extrusions, antenna drives as well as for satellites related to the Indian space programme.
  
  The in the financial year ending March 2007, Elecon has achieved net sales of Rs 723 crore against Rs 442 crore in the previous year,registering an outstanding growth of 63 per cent. The profit after tax for the year is Rs 54.90 crore, up 97 per cent. In the last quarter of FY07 itregistered sales growth of 52 per cent while operating profit and net profits went up by 60.22 and 69.34 per cents respectively. The company has also managed to improve its net profit margins to 6.52 per cent compared to 5.85 per cent Ianthe same quarter last year. The company’s board has recommended a bonus of 2:1.
  Investment rationale
  The robust investment capex lined up by Indian firms across industries will increase demand for the company’s products. Its material handling and power solution segments are expected to see huge inflow of investments. Elecon recently received a
  Rs 57.70-crore mechanical equipment order from Bharat HeavyElectricals Ltd. It will undertake design, engineering, civil and structural work, erection and commissioning of mechanical equipment for lignite stone handling system of Surat Lignite Power Plant of Gujarat Industrial Power Company. In April, the company bagged an NTPC contract worth Rs 229 crore for supply and installation at a coal handling plant. The stock has gained over 145per cent in last one year and over 12,000 per cent in the last 5 years. Webelieve that the company will continue to attract investors in future given its strong financial performance and healthy order book.

THIS COMPANY IS A GOOD CANDIDATE TO BE WATCHED AS A POTENTIAL MEMBER OF MY EQUITY PORTFOLIO.