Best Small Cap Stocks

Following companies belong to small cap category stocks and have been filtered based on following parameters

1. Cash rich companies - Companies that possess a lot of cash or cash equivalents are placed at a huge advantage as compared to others and tend to perform well during tough times like the current ones. This is because, it helps them tide over tight credit conditions, provides them ammunition to acquire assets at cheap valuations or use this surplus cash in a shareholder friendly manner viz. to buy back shares or pay dividends.
2. Currently Stocks are in low valuation taking into consideration future growth prospects.
3. The valuation ratios are also mentioned.

Ingersoll-Rand
Ingersoll Rand (IRL) is one of India`s leading engineering companies. IRL`s product portfolio includes compressors (centrifugal, reciprocating, screw etc.), mining and construction equipment (blasthole drills, compactors etc) and production equipment (pumps).

CMP - Rs 255
Buying price - Below Rs 200
PE Ratio - 2.88
EPS - 88.86 (as on Mar 08)
Returns - 40 to 60 %
Duration - 2 to 3 years

Lakshmi machine works
Lakshmi Machine Works Limited (LMW) is a leading textile machinery manufacturer in India and one among the three in the world to produce the entire range of spinning machinery. The company was founded in 1962 to provide the Indian textile mills with the latest spinning technology. Today, it caters to around 60% of the domestic market and has emerged as the leader in the export of textile machinery in the country.

CMP - Rs 652
Buying price - Near Rs 400
PE Ratio - 3.38
EPS - 196.05 (as on Mar 08)
Returns - 40 to 60 %
Duration - 2 to 3 years

Merck
Merck, the Indian arm of the Merck KgaA (Germany), is a relatively smaller player among MNC pharma majors in the country (market share estimated at around 1.5%). Merck's businesses can be broadly divided into two segments i.e., pharmaceuticals and chemicals (73% and 27% of revenues respectively). Ethicals used in the treatment of cardiovascular and metabolic diseases and vitamins are the core focus areas of the pharma division. It is the only manufacturer of Vitamin-E and 'Guaiazulene' in the country.

CMP - Rs 301.75
Buying price near Rs 200.
PE Ratio - 7.38
EPS - 40.82 (as on Mar 08)
Returns - 40 to 60%
Duration - In next 2 to 3 years.

VST Inds -Consumable
VST Industries (VST) manufactures and distributes cigarettes sold under the brand names "Charminar" & "Charms. The company commands a 13% share of the domestic market. Cigarettes account for nearly 93% of its turnover while unmanufactured and cut tobacco accounts for the rest. The company is the largest exporter of cigarettes to the Middle East from India.

CMP - Rs 217
Buying price - Below Rs 150
PE Ratio - 5.77
EPS - 37.79 (as on Mar 08)
Returns - 40 to 60%
Duration - 2 to 3 years

Apar Industries Ltd
Apar Industries Ltd. (formerly known as Gujarat Apar Polymers Ltd.) was incorporated on 28 September 1989. The main objective of the company is to set up a project for manufacture of Acrylonitrile Butadiene Rubber (N.B.R.) and latexes,at Village Dungri, Taluka Valia, District Bharuch in Gujarat. The company is promoted by Apar Limited (APAR) the flagship company of the Apar Group (Apar Group means Apar Ltd. and its associated companies) and Gujarat Industrial Investment Corporation Ltd.,(GIIC). At present the company manufactures transformers under the brand name "POWEROIL" and the well known `CEMA` brand lamps.

CMP - Rs 97
Buying price - Near Rs 50
PE Ratio - 3.85
EPS - 26.43 (as on Mar 08)
Returns - 40 to 60%
Duration - 2 to 3 years

Honda Siel Power Products Ltd
Honda Siel Power Products Limited (formerly Known as Shriram Honda Power Equipment Ltd.), a joint venture between Honda of Japan and the Shrirams, is the market leader in the manufacture of portable gensets with the lion`s share of roughly 58% and a 500 strong dealer network.

CMP - Rs 150
Buying price - Rs 100
PE Ratio - 6.61
EPS - 24.39 (as on Mar 08)
Returns - 40 to 60%
Duration - 2 to 3 years

Pratibha Industries Ltd
Pratibha Industries Ltd. (PIL) is engaged in the infrastructure development business with a niche in the water segment, providing one stop solution for design, engineering, construction, commissioning and operation of water supply projects. In FY07, water segment accounted for about 70% of the company's revenues. Besides, PIL also has presence in mass housing projects, commercial complexes, airport terminals, railway stations, road construction and tunneling projects. The company is setting up a saw pipes manufacturing facility with an initial capacity of 90,000 TPA (tonnes per annum). The facility is expected to become operational by July 2007 and will supplement PLL's ongoing water projects.

CMP - Rs 79
Buying price - Below Rs 50
PE Ratio - 3.92
EPS - 20.53 (as on Mar 08)
Returns - 40 to 60%
Duration - 2 to 3 years

Following small cap stocks are scanned based on,
1.Increase in net profit and sales
2.High dividend yield
3.Low PE and P/BV value.

These stocks have potential to grow further and provide good returns to investors.

Sr.No	Name of Company	Current Market Price in Rs	Buying Price in Rs	Dividend Yield % (as on 21July 2008)	PE Ratio	P/BV ratio (as on 21 July 2008)	EPS (Earning per share) (as on march 2008)
1	Precision Pipes	33.75	Near 20	6.79	2.44	0.40	13.85 (Mar, 08)
2	Sai Service	Rs.209	Near 150	6.05	5.37	1.74	28.46 (Mar, 08)
3	MRO-TEK	Rs.44.55	Below 15	6.03	6.46	0.49	8.25 (Mar, 08)
4	Atul	Rs.59.70	Near 20	5.68	4.13	0.41	12.34 (Mar, 08)
6	Banco Products	Rs.29.55	Below 15	5.50	4.59	1.50	6.10 (Mar, 08)
7	First Leasing	Rs.40	Near 20	5.48	3.02	0.40	13.58 (Mar, 08)