Results Season Over: Identifying Potential Winners.

Quarterly results give long term investors an opportunity to analyse companies and to pick up potential winners from the lot. I have identified 5 such winners from the Mid cap space which have a potential to give 40-50% returns over a one year period. The benchmarks for selecting winners are:

• Consistent growth, based on past one year figures, and future growth potential.
• Decent turnover, consistent profit margins.
• Reasonable trading volumes.
• Consistent growth in EPS, and a reasonable PE as compared to peers.

1. APOLLO TYRES (Rs.48): The Auto ancilliary industry is expected to do well as India prepares to become the export hub for small cars, and apollo tyres is poised to take advantage of this scenario. Commercial vehicle sales are also likely to pick up. Trailing 12 month turnover and net profir are Rs.3604 cr. and Rs.202 cr. respectively, giving an EPS of Rs.4.4. It trades at a PE of 11.2.

2. SU-RAJ DIAMONDS (Rs.66): Suraj Diamonds is one of the few companies with integrated spectrum of gems and jewellery business. Its wholly owned subsidiary located in Antwerp, Belgium ensures consistent diamond supply chain. It has reported turnover and profits of Rs. 1838 cr. and Rs. 58 cr. respectively for the trailing 12 months ending Dec. 2007, giving a healthy EPS of 14.4. It trades at a ridiculously low PE of 4.7 and the potential for gains is tremendous.

3. KEI INDUSTRIES (Rs.87): It is one of the largest cable manufacturing companies in India, and an established player in the power cable segment, where the growth prospects are temendous. Its new unit at Bhiwadi, Rajasthan has been commisioned recently, which will add over Rs. 300 cr. to the annual turnover of the company. Trailing 12 month turnover and net profit are Rs. 823 cr. and Rs. 48 cr. respectively, giving an EPS of 8.4. The stocks trades at a PE of only 10.4, which is low for a stock in a high growth sector.

4. PARSVANATH DEVELOPERS (Rs.270): It is the most diversified realty player with a presence in 48 cities spread over 17 states. It is executing 11 approved SEZ's. The stock is quoting at a 10% discount to its issue price. Trailing 12 month turnover and net profit is Rs. 1600 cr. and Rs. 432 cr. respectively, giving an EPS of 23.3. The stock trades at a PE of 11.6, as compared to very high PE's of other realty stocks. The above factors make the stock a bargain pick.

5. INDIA CEMENTS (Rs.204): It is the largest producer of cement in South India with a 28% market share. It caters to the markets in Southern states and Maharashtra. Companies in the cement industry are favourably placed as per supply-demand scenario for atlest the next 2-3 quarters, and a strong performance is expected from them. Trailing 12 month turnover and net profit of the company is Rs. 3020 cr. and Rs.663 cr. respectively, giving a healthy EPS of 26. It trades at a trailing PE of 7.9, which is lower than its pears, giving it a decent upside potential.

You can identify many such winners after analysing the latest results announced by the companies.