SECTORS TO WATCH OUT FOR

In this entire bull run two of the sectors which have been totally ignored for some reason or other is Textiles and Paper.Though some of the reasons have been fundamental in nature i think the bear run in these stock to a large extent has been overdone.Textiles happens to be one of the largest contributors to the GDP and also one of the largest employers in the organised sector.Post the Quota removal there was much hope and hype around this sector but soon this has evaporated due to slimmer margins in the export markets primarily due to competition from China.If one has to look at the growing domestic markets then the opportunity for better margins exist here and the companies which are building brands in the domestic market are better placed to leverage the growing market.

The paper sector grows in tandem with the GDP (growing consumption of paper and related products) in tune with increasing focus on education.Per capita consumption is way behind other developing economies in India.This sector is vastly fragmented which provides scope for consolidation and unlocking of values.

In coming days I will be posting some long term picks from these sectors.So Keep logging in to check for the same.

INDIAN HUME PIPE CO-BUY

Indian Hume Pipe Co is engaged in India's infrastructure development specifically in the field of Water infrastructure.With an increasing population and development of all infrastructure the area of water management is set to grow at a rapid clip in the years to come.The company makes custom designed pipes for water industry,irrigation,sanitation,sewage system and solid waste managment system.There is a huge untapped potential in terms of water management both at urban and rural areas and given that water is already scare good efficient managment of th same will only come to the fore in years to come.Public-Private partnerships in these areas will provide a huge filip to this business.

For the current year 2006-07 the company is expected to record a sales turnover of Rs.360 crores and a net profit of Rs.19 crores which gives an Earnings Per share of Rs.40.At the current price of Rs.380 the P/E works out to close to 10.The equity of the company is Rs.4.8 Crores.Excellent Long term pick at cheap valuations.