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Monday, February 8, 2010

SOKHI PICK of the WEEK : Rasandik Engg CMP 65

Rationale for Recommendation : a) Company has launched 3 wheelers and thus has become, apart from Autoancilliary, an OEM also. b) Rasandik also makes Tools/Dies, a segment which is growin rapidly. c) Q3 results are a clear pointer to better performance next year.

Valuations : REL is available very cheap considering the following:

Market Cap is just Rs. 28 crores which is 13% of 09-10E Sales. · Book Value is Rs. 44/- · Stock is available at 3.56 x FY10E EPS and 1.50 x FY10E Cash EPS · Stock is trading at 2.94 x FY11E EPS and 1.35 x FY11E Cash EPS With sensex above 17,000 levels, such valuations are extremely cheap.

If, Rasandik is able to establish strong presence in 3 Wheeler Market, scrip can be multibagger. Our price target : · Rs. 95/- by May. 2010. · Rs. 145/- by Nov. 2010. Buying strongly recommended. Since depreciation is an accounting entry, without any cash outflow, Rasandik has very high cash earnings.

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All the advises,calls,tips and predictions are neither an offer nor a solicitation to purchase or sell securities.The information and views given by writer is believed to be reliable but no responsibility (liability) is accepted for error of facts and opinion.Writer may be trading in or having positions in stock markets.