Balmer Lawrie & Company: Bargain Hunt begins
Balmer Lawrie & Company (BLC) is a diversified PSU having Mini Ratna status. Its business spans across
Industrial packaging – Manufacturing barrels and drums
Logistics Infrastructure – Container Freight stations and warehousing activities
Logistics Services – Air and related logistics activities
Travels and tours – Ticketing, tours and money changing activities
Greases and Lubricants
Tea blending and packaging
Leather Chemicals
Engineering and Technology services
Stock data (18 Dec 2009) BSE
Share Price (Rs.) 543
52 week high/low (Rs.) 600 / 204
Market Cap (Rs million) 8843
P/S (x) 0.54 P/E (x) 8.75
No. Of Shares (Million Nos.) 16.29
Average Daily Volume (6month) 13,471
The company is aiming to achieve Rs. 2000 crores revenues and Rs. 200 crores in PBT by the end of FY2010.
Amongst the segments, it can be seen that travel and tours contributes ~40% of the total revenues and Logistics Infra and services contribute ~24% of the total.
Considering profit margins, despite tours and travels contributing maximum to the revenues, bulk profits come from Logistics Infra and services (contributing 63% of PBT). This segment has the highest profitability (26% margins) and also the fastest growth whereas travel segment contribute only 14% of PBT and has very low margins of ~3.4%
Greases / lubes and Industrial Packaging segments are moderate growers with growth of ~7% and together contribute ~32% of the revenues.
Tea blending and engineering services are the least contributors to the revenues and profits. As tea blending division is a commodity product their returns are quite low and does not justify the capital allocation, especially for this segment. Even the revenues from this segment have declined by 15% in current financial year. The company may be planning to exit the tea business if these returns do not justify the investments
BLC has grown its sales by 13% CAGR since last 5 years and its net profits by 35% CAGR. The sales and net profits in FY09 were Rs.1636 crores and Rs.101 crores respectively. The company wants to push the sales to Rs.2000 crores by end of FY10 and is also making efforts to achieve PBT of 10% during that time frame.
Since last 5 years, Balmer Lawrie has been able to maintain ROE greater than 22% because of proper cost controls, effective working capital management and better utilization of resources. The company is also an effective cash generator and this can be seen from the fact the cash from operations is equivalent to net profits with minimal capex.
The company also has strong balance sheet with zero debt and has net worth of ~Rs. 390 crores in FY09. It also has substantial cash balance of ~Rs. 248 crores which it can use for expansions or it can payback its shareholders by increasing the dividend. BLC post an attractive dividend yield of ~3.5% and with impressive record increasing dividends.
BLC is setting up a lube and grease manufacturing plant in Indonesia through a 50:50 joint venture with a local company by investing ~US$5m (~Rs. 24 crores)
Key concerns:
BLC is diversified to various businesses and it seems that it requires focusing on its key growth drivers i.e. focusing especially on logistics infra / services, tours and travels, and industrial packaging.
The company also needs to reorganize its business units for better allocation of capital. For example: The returns generated by the tea business do not generate adequate returns on capital.
Valuation:
BLC seems fairly valued with P/E of ~9x, P/S of ~0.6x and P/B of 2.4 (the margin of safety is not there), but when the company is evaluated on segmental basis the stock is valued cheaply especially when the travel business is contributing ~40% (Rs.662 crores) of the revenues. The current IPO of Cox and Kings whose revenues were just ~Rs.155 crores is valued 17 times its sales and similar is the case of Thomas Cook also (5 times its sales). If those companies are getting valuations at this level then Balmer Lawrie should also fetch some decent valuations in the travel business. The price / sales ratio of the whole BLC is ~0.6 indicating that it is largely undervalued.
Other segments like Logistics infrastructure and services, Greases and lubes, and Industrial Packaging should be atleast valued at P/E 10-12 (Gateway Distriparks has P/E of 14, Castrol is available at P/E of 26). So by adding up the numbers, we get the fair value of ~Rs.1500 crore vs. mcap of Rs. ~900 crores for the whole company making a stock at really attractive “BUY”.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT
Monday, December 28, 2009
Saturday, December 26, 2009
10 SIMPLE RULES TO MAKE PROFIT IN 2010
THIS LONG WEEKEND HAS GIVEN EXCELLENT OPPERTUNITY TO ALL OF US TO REGROUP OUR ENERGIES TO MAKE BEST OF 2010.
As said earlier 2010 will be the most profitable year for investor’s worldwide especially in India. But most of the investors have missed the previous rally. Now it is high time to learn from past mistakes, Markets has nearly doubled in last one year, was your investment doubled? If your answer is no then go ahead and read the article.
• The most important thing: believe in the market and go along with it, never try to Predict the market.
• Pick a stock based on its future potential do not give undue importance to P/E,EPS etc
• Technical analysis works for a very short period and in a stable market
• Learn to book profit in a very strict manner and more important restrict your losses within your bearable limit with strict stop-loss.
• Never buy a stock because of a news or recommendation on TV,MEDIA as positions are built in same stocks prior to releasing the news in media in most of the cases,
• Build a wholesome portfolio so that loss will be minimal if some pick goes wrong. Never invest more than 10% of your investible fund in a single stock and 25% in a single sector.
• Invest 50% in large cap, 35% in midcap and rest keep rotating in intra or positional trade.
• Learn the art of portfolio churning at regular intervals as per your investment style and after a major event like Budget, Election etc.
• Never overtrade in margin. Ideally not more than 10% of your capital is deployed in margin trade in volatile times like this.
• Invest in sunrise sectors in 2010 like logistic, media, power, infrastructure and so on
HAPPY WEEKEND
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT
As said earlier 2010 will be the most profitable year for investor’s worldwide especially in India. But most of the investors have missed the previous rally. Now it is high time to learn from past mistakes, Markets has nearly doubled in last one year, was your investment doubled? If your answer is no then go ahead and read the article.
• The most important thing: believe in the market and go along with it, never try to Predict the market.
• Pick a stock based on its future potential do not give undue importance to P/E,EPS etc
• Technical analysis works for a very short period and in a stable market
• Learn to book profit in a very strict manner and more important restrict your losses within your bearable limit with strict stop-loss.
• Never buy a stock because of a news or recommendation on TV,MEDIA as positions are built in same stocks prior to releasing the news in media in most of the cases,
• Build a wholesome portfolio so that loss will be minimal if some pick goes wrong. Never invest more than 10% of your investible fund in a single stock and 25% in a single sector.
• Invest 50% in large cap, 35% in midcap and rest keep rotating in intra or positional trade.
• Learn the art of portfolio churning at regular intervals as per your investment style and after a major event like Budget, Election etc.
• Never overtrade in margin. Ideally not more than 10% of your capital is deployed in margin trade in volatile times like this.
• Invest in sunrise sectors in 2010 like logistic, media, power, infrastructure and so on
HAPPY WEEKEND
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT
FII’s pour 80,000 crore in 2009
FII buying over the past few days and led to Markets making new high.The foreign institutional investors (FIIs) flocked back by pouring in a record Rs 80,000 crore in domestic equities so far in 2009.
Fresh buying by FII’s led to domestic investors putting in more money even in the last 2-3 days. DII’s on the other bought shares worth 305,675 cr and made a selling of 279,051 cr in Cash Market.
February 2009 was when FII’s and DII’s remained very quiet,DII’s transactions amounted to 24,103 cr’s, where as FII’ transaction amounted to 46,966 cr’s, these were the lowest recorded numbers of Institutional investment in 2009 (cash market).
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT
Fresh buying by FII’s led to domestic investors putting in more money even in the last 2-3 days. DII’s on the other bought shares worth 305,675 cr and made a selling of 279,051 cr in Cash Market.
February 2009 was when FII’s and DII’s remained very quiet,DII’s transactions amounted to 24,103 cr’s, where as FII’ transaction amounted to 46,966 cr’s, these were the lowest recorded numbers of Institutional investment in 2009 (cash market).
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT
Thursday, December 24, 2009
With the healthy growth in the domestic business and revival in exports.....
expect Nestle to witness 17.7 per cent CAGR in revenues and 24.6 per cent in profit over CY09-11.
Reco price: Rs 2,568
Current market price: Rs 2,525.55
Target price: Rs 2,915
Upside:15.4%
Milk products and prepared dishes segments will be the key growth drivers for the company. The introduction of SKUs at low price points has helped to widen the consumer base and increase penetration of its brands. The improvement in exports from CY10 onwards is expected to fuel beverage sales that declined in the first nine months of CY09. The growth in the chocolates’ segment, that reported a muted volume growth due to sharp price hikes, is also expected to be back on track during CY10.
The strong pricing power and robust brand portfolio would help Nestle maintain operating margins despite firm raw material prices. With the increasing production from the Pant Nagar plant, Nestle would be able to save heavily on excise and tax front. Given the strong growth potential in the domestic market, the brokerage has revised its earnings estimates upwards by 3 per cent for CY09 and around 4 per cent for CY10.
At Rs 2,568, the stock is trading at 29.4 times its estimated CY10 EPS of Rs 88.3 and 24 times estimated CY11 EPS of Rs 107.2. Maintain "buy stocks" rating.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT
Reco price: Rs 2,568
Current market price: Rs 2,525.55
Target price: Rs 2,915
Upside:15.4%
Milk products and prepared dishes segments will be the key growth drivers for the company. The introduction of SKUs at low price points has helped to widen the consumer base and increase penetration of its brands. The improvement in exports from CY10 onwards is expected to fuel beverage sales that declined in the first nine months of CY09. The growth in the chocolates’ segment, that reported a muted volume growth due to sharp price hikes, is also expected to be back on track during CY10.
The strong pricing power and robust brand portfolio would help Nestle maintain operating margins despite firm raw material prices. With the increasing production from the Pant Nagar plant, Nestle would be able to save heavily on excise and tax front. Given the strong growth potential in the domestic market, the brokerage has revised its earnings estimates upwards by 3 per cent for CY09 and around 4 per cent for CY10.
At Rs 2,568, the stock is trading at 29.4 times its estimated CY10 EPS of Rs 88.3 and 24 times estimated CY11 EPS of Rs 107.2. Maintain "buy stocks" rating.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT
Monday, December 21, 2009
Short term delivery calls [1-2 months]:
Indag rubber.. target 130
Shilp Gravures.. target 100
Thinksoft.. target 350, 400
Bilpower.. target 260
Crew BOS product.. 72
Nilkamal plastic.. 200+ [1 week] PREFERED@188
Happy trading! All the best
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT
Shilp Gravures.. target 100
Thinksoft.. target 350, 400
Bilpower.. target 260
Crew BOS product.. 72
Nilkamal plastic.. 200+ [1 week] PREFERED@188
Happy trading! All the best
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT
Saturday, December 19, 2009
Rakesh Jhunjhunwala Portfolio Holdings - As on Sept. 2009
Checkout Latest Rakesh Jhunjhunwala holdings. Here is a portfolio of Rakesh Jhunjhunwala updated as per shareholding Data of September 2009 with stock trading exchanges.
Name Of Company No of Shares
. NAGARJUNA CONSTRUCTION CO. LTD 5,000,000
. AGRO TECH FOODS LTD. 1,153,700
. AGRO TECH FOODS LTD. 849,559
. ALPHAGEO (INDIA) LIMITED 125,000
. AUTOLINE INDUSTRIES LIMITED 520,000
. AUTOLINE INDUSTRIES LIMITED 731,233
. BILCARE LTD. 1,735,425
. BILCARE LTD. 267,500
. CRISIL LIMITED 550,000
. DWARIKESH SUGAR INDUSTRIES LIMITED 450,000
. GEOJIT BNP PARIBAS FINANCIAL SERVICES LIMITED 18,000,000
. GEOMETRIC LIMITED 4,465,000
. GEOMETRIC LIMITED 850,000
. HINDUSTAN OIL EXPLORATION CO. LTD 1,887,273
. INFOMEDIA 18 LIMITED 691,828
. INFOMEDIA 18 LIMITED 814,234
. ION EXCHANGE (INDIA) LTD. 650,000
. J.B.CHEMICALS & PHARMACEUTICALS LTD. 1,251,650
. KAJARIA CERAMICS LTD 2,502,642
. KARUR VYSYA BANK LTD 2,568,724
. LUPIN LIMITED 29,68,835
. MID-DAY MULTIMEDIA LIMITED 2,250,000
. PRAJ INDUSTRIES LTD 11,678,624
. PRIME FOCUS LIMITED 250,000
. PROVOGUE (INDIA) LIMITED 1,900,000
. PUNJ LLOYD LIMITED 5,040,000
. RALLIS INDIA LTD. 768,088
. RISHI LASER LTD. 380,000
. TITAN INDUSTRIES LTD. 2,590,555
. TITAN INDUSTRIES LTD. 1,113,306
. VICEROY HOTELS LIMITED 4,250,000
. ZEN TECHNOLOGIES LTD. 450,000
. ZEN TECHNOLOGIES LTD. 450,000
Checkout Latest Rakesh Jhunjhunwala holdings. Here is a portfolio of Rakesh Jhunjhunwala updated as per shareholding Data of September 2009 with stock trading exchanges.
Rakesh Jhunjhunwala is considered to be the greatest investor in Indian Stock Market. He has made Rs 5000 crores by just investing Rs 5000 in Indian Stock Market over the period of 25 years.
(a) He advises people to become interested in a stock when none is interested in the same stock. As per him BUY RIGHT & HOLD TIGHT for years to come. He has been holding few stocks for last 10 years and he is still minting money from those stocks.
(b) He further advises that one should not follow big investors blindly as their risk profile and long term goals with time frame may be difficult to be followed by retail investor.
(c) Market is supreme and every thing is reflected in the price and thus their is no point in fighting the trend as market is always right.
(d) One should be able to create a balance between the fear and greed.
(e) As per his words one has to learn the stock market trading as none can teach the market as stock market experience is the best teacher.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT
Name Of Company No of Shares
. NAGARJUNA CONSTRUCTION CO. LTD 5,000,000
. AGRO TECH FOODS LTD. 1,153,700
. AGRO TECH FOODS LTD. 849,559
. ALPHAGEO (INDIA) LIMITED 125,000
. AUTOLINE INDUSTRIES LIMITED 520,000
. AUTOLINE INDUSTRIES LIMITED 731,233
. BILCARE LTD. 1,735,425
. BILCARE LTD. 267,500
. CRISIL LIMITED 550,000
. DWARIKESH SUGAR INDUSTRIES LIMITED 450,000
. GEOJIT BNP PARIBAS FINANCIAL SERVICES LIMITED 18,000,000
. GEOMETRIC LIMITED 4,465,000
. GEOMETRIC LIMITED 850,000
. HINDUSTAN OIL EXPLORATION CO. LTD 1,887,273
. INFOMEDIA 18 LIMITED 691,828
. INFOMEDIA 18 LIMITED 814,234
. ION EXCHANGE (INDIA) LTD. 650,000
. J.B.CHEMICALS & PHARMACEUTICALS LTD. 1,251,650
. KAJARIA CERAMICS LTD 2,502,642
. KARUR VYSYA BANK LTD 2,568,724
. LUPIN LIMITED 29,68,835
. MID-DAY MULTIMEDIA LIMITED 2,250,000
. PRAJ INDUSTRIES LTD 11,678,624
. PRIME FOCUS LIMITED 250,000
. PROVOGUE (INDIA) LIMITED 1,900,000
. PUNJ LLOYD LIMITED 5,040,000
. RALLIS INDIA LTD. 768,088
. RISHI LASER LTD. 380,000
. TITAN INDUSTRIES LTD. 2,590,555
. TITAN INDUSTRIES LTD. 1,113,306
. VICEROY HOTELS LIMITED 4,250,000
. ZEN TECHNOLOGIES LTD. 450,000
. ZEN TECHNOLOGIES LTD. 450,000
Checkout Latest Rakesh Jhunjhunwala holdings. Here is a portfolio of Rakesh Jhunjhunwala updated as per shareholding Data of September 2009 with stock trading exchanges.
Rakesh Jhunjhunwala is considered to be the greatest investor in Indian Stock Market. He has made Rs 5000 crores by just investing Rs 5000 in Indian Stock Market over the period of 25 years.
(a) He advises people to become interested in a stock when none is interested in the same stock. As per him BUY RIGHT & HOLD TIGHT for years to come. He has been holding few stocks for last 10 years and he is still minting money from those stocks.
(b) He further advises that one should not follow big investors blindly as their risk profile and long term goals with time frame may be difficult to be followed by retail investor.
(c) Market is supreme and every thing is reflected in the price and thus their is no point in fighting the trend as market is always right.
(d) One should be able to create a balance between the fear and greed.
(e) As per his words one has to learn the stock market trading as none can teach the market as stock market experience is the best teacher.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT
Friday, December 18, 2009
The chartical patterns of SEL Manufacturing Ltd shows a near term upturn in the scrip price,
SEL Manufacturing Company Ltd
In case of SEL Manufacturing Company Ltd (BSE Code: 532886) the book value of the shares of the company is Rs.166.63 against the current market price (CMP) of Rs.72.15. Besides, SEL Manufacturing Company Ltd has an EPS of Rs.34.17 and Price/Book of only 0.46. It has one of the lowest P/E in the Textile sector, clocking a P/E of only 2.23 against the Industry P/E of 13. This naturally gives a rough price of around Rs.350-Rs.400 (after giving some discounts) for the scrip of SEL Manufacturing Company Ltd against the current market price of only Rs.76.15. With the US economy improving by leaps and bounds, the textile sector is expectd to get a positive kick going forward and since SEL Manufacturing Ltd is a prominent player, its share price is bound to appreciate in the days to come.
The chartical patterns of SEL Manufacturing Ltd shows a near term upturn in the scrip price, Stochastic, Bollinger Bands, MACD, RSI, CCI, etc, are all in buy mode. The Candle Stick Chart Pattern also indicates a positive trend in the scrip in the immediate short term. Moreover, moving average cross-over has taken place which further gives ammunition to the bulls to fight any bear trap. In case of Prajay Engineers Syndicate, though RSI is not in perfect buy mode, however, Bollinger Bands, MACD, Stochastic, etc. are in buy mode. A cross-over would take the scrip of Prajay Engineers Syndicate Ltd to around Rs.37.5-Rs.42, in the very short term. The weekly Japanese Candle Stick Chart Patterns of Prajay Engineers Syndicate Ltd are giving an immediate trend reversal signals.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT
In case of SEL Manufacturing Company Ltd (BSE Code: 532886) the book value of the shares of the company is Rs.166.63 against the current market price (CMP) of Rs.72.15. Besides, SEL Manufacturing Company Ltd has an EPS of Rs.34.17 and Price/Book of only 0.46. It has one of the lowest P/E in the Textile sector, clocking a P/E of only 2.23 against the Industry P/E of 13. This naturally gives a rough price of around Rs.350-Rs.400 (after giving some discounts) for the scrip of SEL Manufacturing Company Ltd against the current market price of only Rs.76.15. With the US economy improving by leaps and bounds, the textile sector is expectd to get a positive kick going forward and since SEL Manufacturing Ltd is a prominent player, its share price is bound to appreciate in the days to come.
The chartical patterns of SEL Manufacturing Ltd shows a near term upturn in the scrip price, Stochastic, Bollinger Bands, MACD, RSI, CCI, etc, are all in buy mode. The Candle Stick Chart Pattern also indicates a positive trend in the scrip in the immediate short term. Moreover, moving average cross-over has taken place which further gives ammunition to the bulls to fight any bear trap. In case of Prajay Engineers Syndicate, though RSI is not in perfect buy mode, however, Bollinger Bands, MACD, Stochastic, etc. are in buy mode. A cross-over would take the scrip of Prajay Engineers Syndicate Ltd to around Rs.37.5-Rs.42, in the very short term. The weekly Japanese Candle Stick Chart Patterns of Prajay Engineers Syndicate Ltd are giving an immediate trend reversal signals.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT
Monday, December 14, 2009
ABG Shipyard - Stock Analysis
Firstcall India equity research maintains `Buy stocks` on ABG Shipyard with a price target of Rs 242
The brokerage house pointed out at the current market price of around Rs 200, the stock is trading at a P/Ex of 5.68 times for FY10E and 5.12 times for FY11E
The EPS of the stock is expected to be at Rs 36.98 and Rs 40.98 for FY10E and FY11E respectively.
On the basis of price to book value, the stock trades at 1.04 times and 0.87 times for FY10E and FY11E respectively.
The net sales and PAT of the company is expected to grow at a CAGR of 23% and 9% respectively over FY08 to FY11E
The present macro scenario is bleak with erosion in demand for ship yards following a cyclical downturn in the shipping industry
However, ABG has not faced any cancellations or delays till date. In addition, since a
substantial part of ABG`s order backlog caters to the offshore industry, which has not seen such a steep fall as in case of shipping, it remains relatively insulated
They recommend to "buy stocks" with a target price of Rs 242 for medium to long term.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT
The brokerage house pointed out at the current market price of around Rs 200, the stock is trading at a P/Ex of 5.68 times for FY10E and 5.12 times for FY11E
The EPS of the stock is expected to be at Rs 36.98 and Rs 40.98 for FY10E and FY11E respectively.
On the basis of price to book value, the stock trades at 1.04 times and 0.87 times for FY10E and FY11E respectively.
The net sales and PAT of the company is expected to grow at a CAGR of 23% and 9% respectively over FY08 to FY11E
The present macro scenario is bleak with erosion in demand for ship yards following a cyclical downturn in the shipping industry
However, ABG has not faced any cancellations or delays till date. In addition, since a
substantial part of ABG`s order backlog caters to the offshore industry, which has not seen such a steep fall as in case of shipping, it remains relatively insulated
They recommend to "buy stocks" with a target price of Rs 242 for medium to long term.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT
Stock Tips - Buy Visa Steel For Short Term
NSEMumbaibull, independent equity research group has recommended to buy stocks of Visa steel limited (BSE Stock code: 532721) for short term investment for good returns.
The short term target for shares of Visa steel in coming days could be at Rs. 45.
Looking at the charts, Rs. 36/- level seems to be providing a strong support for stock and the upward move can be up to Rs. 44 - 45 Levels where one should sell stocks.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT
The short term target for shares of Visa steel in coming days could be at Rs. 45.
Looking at the charts, Rs. 36/- level seems to be providing a strong support for stock and the upward move can be up to Rs. 44 - 45 Levels where one should sell stocks.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
E-MAIL,sharekhan.guide@gmail.com
contact;09013177977,AMIT
Friday, December 11, 2009
Accumulate Prajay Engineers Syndicate Ltd and for some decent returns going forward.
It is to be noted that the shares of Prajay Engineers Syndicate Ltd (BSE Code: 531746) has a book value of Rs.151.09, while its current market price is only Rs.30.15—an aberration of sorts. The land holdin...gs of Prajay Engineers Syndicate Ltd spread across India, has appreciated in value in the last few months, as the real estate sector stated to recover from the slowdown blues. According to some estimates, the current land valuation of Prajay Engineers Syndicate Ltd is more than Rs.1500 Cr. This land valuation is expected to give a positive spin to the shares of the company going forward. A stock which was available around Rs.400, only a couple of years back, is now avaialable at Rs.30.15!! Can you believe??!! The current price of the shares also looks quite impossible considering the present business model of the company. According to my sources in Hyderabad, the company has completed the 3-star hotel and its operations are expected to begin in full swing in the next 6 months time frame. You have seen how the news of the brand new Hotel of NEPC India Ltd (which I broke in Face Book ahead of any Business Channels) inflated the scrip from Rs.8.50 to yesterday’s freezing price of Rs.12.06 in matter of weeks. Prajay Engineers Ltd is also expected replicate the price movements on NEPC India Ltd or Sanguine Media Services Ltd, the latter is hitting upper circuits during the last 3 days, after it was strongly recommended in Face Book.
Now coming to the Prajay Engineers Syndicate Ltd, we would find that the company is doing lot of projects both in the Real Esate/Construction and Hospitality/Leisure Sectors. Though still the core business of Prajay Engineers Syndicate Ltd is real esate, but soon the hospitality bsuiness is expected to garner sufficient revenues for the company.
Now considering the Hospitality/Leisure Business of the company here are some of its projects (Source:http://www.prajayengineers.com):
(a) Hill Springs Golf and Leisure Club: Located in Antheypalli and spread over a 130-acre area, Prajay Hill Springs is Hyderabad’s first signature 18-hole PGA Championship-class golf course with a leisure club. A BOT project developed in conjuction with the Government of Andhra Pradesh, under their tourism related development programme, it is being planned and developed by an internationally renowned golf architect from Dubai – M/s Harradine Golf.
(b) 3 Star hotel: Offers 140 rooms as part of the Celebrity Mall complex at Abids
(c) Business-class Hotel: Offers 290 rooms within the Prajay Princeton Towers complex at Dilsukh Nagar.
(d) 5 Star Business-class Hotel: Offers 400 rooms with 150 service apartments at Hitech City.
Real Estate Sector: Industry Overview: The real estate sector has witnessed tremendous growth in the last decade, especially during 2005-09. This growth is attributable to the policy and regulatory initiatives of the government. Relaxation in FDI norms as well as rationalization of a few taxes over this period has increased investor interest. Financiers on their part have supported the sector with low interest rates.
The contribution of real estate construction activity to the GDP has increased from 5 per cent in 1996-97 to 6.5 per cent in 2007-08. Further, the contribution of real estate services to the GDP has increased from 5.7 per cent to 7.6 per cent during the same period. According to industry players, housing accounts for 4.5 per cent of the GDP with urban housing accounting for 3.13 per cent. Estimates suggest that the size of the Indian real estate sector is around $ 48 billion and is growing at the rate of 30 per cent per annum. The sector is currently the second largest employer in the country after agriculture.
The IT and ITES sector alone is estimated to require 150 million sq ft of office space across urban India by 2010. Organized retail is also responsible for the growth in commercial office space requirement. The organized retail industry is likely to require an additional 220 million sq ft by 2010. Moreover, growth is not restricted to a few towns and cities but is pan-India, covering nearly all tier-I and tier-II cities. Almost 80 per cent of real estate developed in India is residential space, the rest comprising of offices, shopping malls, hotels and hospitals. According to the Tenth Five-Year-Plan, there is a shortage of 22.4 million dwelling units. Thus, over the next 10 to 15 years, 80 to 90 million housing dwelling units will have to be constructed with a majority of them catering to middle- and lower-income groups. Apart from the huge demand, India also scores on the construction front. A McKinsey report reveals that the average profit from construction in India is 18 per cent, which is double the profitability for a construction project undertaken in the US.
this scrips trading at a considerable discount to their intrinsic values and hence they should be accumulated on all declines
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Now coming to the Prajay Engineers Syndicate Ltd, we would find that the company is doing lot of projects both in the Real Esate/Construction and Hospitality/Leisure Sectors. Though still the core business of Prajay Engineers Syndicate Ltd is real esate, but soon the hospitality bsuiness is expected to garner sufficient revenues for the company.
Now considering the Hospitality/Leisure Business of the company here are some of its projects (Source:http://www.prajayengineers.com):
(a) Hill Springs Golf and Leisure Club: Located in Antheypalli and spread over a 130-acre area, Prajay Hill Springs is Hyderabad’s first signature 18-hole PGA Championship-class golf course with a leisure club. A BOT project developed in conjuction with the Government of Andhra Pradesh, under their tourism related development programme, it is being planned and developed by an internationally renowned golf architect from Dubai – M/s Harradine Golf.
(b) 3 Star hotel: Offers 140 rooms as part of the Celebrity Mall complex at Abids
(c) Business-class Hotel: Offers 290 rooms within the Prajay Princeton Towers complex at Dilsukh Nagar.
(d) 5 Star Business-class Hotel: Offers 400 rooms with 150 service apartments at Hitech City.
Real Estate Sector: Industry Overview: The real estate sector has witnessed tremendous growth in the last decade, especially during 2005-09. This growth is attributable to the policy and regulatory initiatives of the government. Relaxation in FDI norms as well as rationalization of a few taxes over this period has increased investor interest. Financiers on their part have supported the sector with low interest rates.
The contribution of real estate construction activity to the GDP has increased from 5 per cent in 1996-97 to 6.5 per cent in 2007-08. Further, the contribution of real estate services to the GDP has increased from 5.7 per cent to 7.6 per cent during the same period. According to industry players, housing accounts for 4.5 per cent of the GDP with urban housing accounting for 3.13 per cent. Estimates suggest that the size of the Indian real estate sector is around $ 48 billion and is growing at the rate of 30 per cent per annum. The sector is currently the second largest employer in the country after agriculture.
The IT and ITES sector alone is estimated to require 150 million sq ft of office space across urban India by 2010. Organized retail is also responsible for the growth in commercial office space requirement. The organized retail industry is likely to require an additional 220 million sq ft by 2010. Moreover, growth is not restricted to a few towns and cities but is pan-India, covering nearly all tier-I and tier-II cities. Almost 80 per cent of real estate developed in India is residential space, the rest comprising of offices, shopping malls, hotels and hospitals. According to the Tenth Five-Year-Plan, there is a shortage of 22.4 million dwelling units. Thus, over the next 10 to 15 years, 80 to 90 million housing dwelling units will have to be constructed with a majority of them catering to middle- and lower-income groups. Apart from the huge demand, India also scores on the construction front. A McKinsey report reveals that the average profit from construction in India is 18 per cent, which is double the profitability for a construction project undertaken in the US.
this scrips trading at a considerable discount to their intrinsic values and hence they should be accumulated on all declines
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Wednesday, December 09, 2009
The recent recovery in Indian economy has once again increased the demand for steel products.
There has been significant rise in auto sales and other consumer goods in last few months. All these factors have led to a rise in sales of flat steel products. Bhushan Steel, @1611 a leading producer of flat products, is set to benefit from all these.
This stock was recommended in Economic Times Investors’ Guide earlier. At that time the stock was trading at around Rs 1,000 per share and is up 30% since then. There is still lot of juice left in the stock and we recommend investors to stay invested. The gains will be driven by faster topline growth coupled with backward integration, which will lead to significant improvement in operating margins. Investors with a mid-term horizon of 2-3 years can add this stock to their portfolio kitty.
BUSINESS:
Bhushan Steel is a secondary steel producer and mainly produces value added flat products. It gets more than twothird of its revenue from cold rolled and galvanized steel products. Bulk of its revenue comes from the automobile and white goods sector, which uses the flat products predominantly.
It has three plants, located strategically in different parts of the country. The Dhenkanal plant in Orissa is close to the raw material source and manufacturers sponge iron and billets, the primary steel products. The Khopoli plant in Maharashtra and Sahibabad plant in Uttar Pradesh are close to the two auto hubs in India namely Pune and Gurgaon. These two plants primarily manufacture cold rolled and galvanized products used by the auto companies. It has a close to one million ton capacity for cold rolled products, which is used as a key input for other value added products.
FINANCIALS:
The company’s topline has almost doubled in last four years to Rs 5,000 crore in FY 2008-09. The net profit, however, grew at a faster rate during the same time period.
For last four years, the company has been making significant capex to link its operations backwards and to become more integrated. Bulk of this capex program is being financed through debt. As a result, its debt-equity ratio has increased close to four, from the two earlier. This is not a major concern given its higher interest coverage ratio (more than 5). The company has expanded its operating margin by around 500 basis points over last two years to 20.4% in FY 2008-09. In fact, its operating margin in September 2009 quarter increased to around 26%, thus reflecting the partial impact of backward integration. Its return on capital employed (ROCE) of 10% for last several years appear to be lower. But this is a result of higher capital expenditure made during the same time period.
GROWTH DRIVERS:
The company plans to make a structural change in its business model to become an integrated steel company. The management feels that at a time when primary steel producers are planning to produce more value added products, it is imperative for the company to integrate itself backwards to remain competitive in secondary market.
The integration process itself will be completed in two steps. In first step, the company will set up around 2 million tons of hot rolled coil (HRC) and 0.3 million tons of slab capacity by this year-end. The HRC capacity will be further augmented to 5 million tons by FY ‘13. In second step, the company will start mining iron ore and coal from the mines allocated to it. This process will take around 4-5 years.
Hence, the full impact of integration, from mining to value added steel products, can be seen from FY ‘14 onwards. The company has already spent 50% of total capex required for all these expansion programs.
VALUATION:
The full impact of first phase of expansion will start flowing into the financials of the company from FY ‘11 onwards. As a result of this backward integration, its net profit margin is expected to rise to 15-16%, from the current 9%. This will also boost the company’s operating cash flow significantly.
The earning per share (EPS) for FY ‘10 and FY ‘11 is estimated to be Rs 171 and Rs 243 respectively. At the current price level, the forward price-earning multiple works out to be 7.9x and 5.6x for FY ‘10 and FY ‘11 respectively. The company’s scrip has always traded at a P/E multiple in the range of 13-17 during good times. This provides significant upside potential for investors with a horizon of 2-3 years.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
This stock was recommended in Economic Times Investors’ Guide earlier. At that time the stock was trading at around Rs 1,000 per share and is up 30% since then. There is still lot of juice left in the stock and we recommend investors to stay invested. The gains will be driven by faster topline growth coupled with backward integration, which will lead to significant improvement in operating margins. Investors with a mid-term horizon of 2-3 years can add this stock to their portfolio kitty.
BUSINESS:
Bhushan Steel is a secondary steel producer and mainly produces value added flat products. It gets more than twothird of its revenue from cold rolled and galvanized steel products. Bulk of its revenue comes from the automobile and white goods sector, which uses the flat products predominantly.
It has three plants, located strategically in different parts of the country. The Dhenkanal plant in Orissa is close to the raw material source and manufacturers sponge iron and billets, the primary steel products. The Khopoli plant in Maharashtra and Sahibabad plant in Uttar Pradesh are close to the two auto hubs in India namely Pune and Gurgaon. These two plants primarily manufacture cold rolled and galvanized products used by the auto companies. It has a close to one million ton capacity for cold rolled products, which is used as a key input for other value added products.
FINANCIALS:
The company’s topline has almost doubled in last four years to Rs 5,000 crore in FY 2008-09. The net profit, however, grew at a faster rate during the same time period.
For last four years, the company has been making significant capex to link its operations backwards and to become more integrated. Bulk of this capex program is being financed through debt. As a result, its debt-equity ratio has increased close to four, from the two earlier. This is not a major concern given its higher interest coverage ratio (more than 5). The company has expanded its operating margin by around 500 basis points over last two years to 20.4% in FY 2008-09. In fact, its operating margin in September 2009 quarter increased to around 26%, thus reflecting the partial impact of backward integration. Its return on capital employed (ROCE) of 10% for last several years appear to be lower. But this is a result of higher capital expenditure made during the same time period.
GROWTH DRIVERS:
The company plans to make a structural change in its business model to become an integrated steel company. The management feels that at a time when primary steel producers are planning to produce more value added products, it is imperative for the company to integrate itself backwards to remain competitive in secondary market.
The integration process itself will be completed in two steps. In first step, the company will set up around 2 million tons of hot rolled coil (HRC) and 0.3 million tons of slab capacity by this year-end. The HRC capacity will be further augmented to 5 million tons by FY ‘13. In second step, the company will start mining iron ore and coal from the mines allocated to it. This process will take around 4-5 years.
Hence, the full impact of integration, from mining to value added steel products, can be seen from FY ‘14 onwards. The company has already spent 50% of total capex required for all these expansion programs.
VALUATION:
The full impact of first phase of expansion will start flowing into the financials of the company from FY ‘11 onwards. As a result of this backward integration, its net profit margin is expected to rise to 15-16%, from the current 9%. This will also boost the company’s operating cash flow significantly.
The earning per share (EPS) for FY ‘10 and FY ‘11 is estimated to be Rs 171 and Rs 243 respectively. At the current price level, the forward price-earning multiple works out to be 7.9x and 5.6x for FY ‘10 and FY ‘11 respectively. The company’s scrip has always traded at a P/E multiple in the range of 13-17 during good times. This provides significant upside potential for investors with a horizon of 2-3 years.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
I am still playing for 5500+ by Jan 2010,
This is the question that is being asked by every trader and investor. I am still playing for 5500+ by Jan 2010, although I am not too sure as to which sectors will probably take it there.
So far auto, IT and pharma have been the leaders in this rally. If this market has to go past 5500, we need some buying in stocks like Reliance, BHEL and L&T. So I’d be keeping a close eye on these stocks and will try to catch the next big wave in them( if it happens!)
Auto and banking might be a bit of a drag on the index if interest rate hikes come through earlier than expected. Although in the long term, banking is definitely looking like a star performer.If the Indian growth story returns, this is a sector that will benefit the most from any upturn. So any correction would be a good opportunity to grab these stocks.
What I like the most about current market action is the absence of widespread euphoria. The retail investor is still sceptical about this rally and is happy to earn his 6% in a fixed deposit. As long as this risk aversion prevails, this market might continue to climb slowly.
Technically, 4970-80 remains a good support in the short term. On the upside 5200 is the critical hurdle. Above 5200, we might see a lot of short term traders jumping in and chasing market momentum.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
So far auto, IT and pharma have been the leaders in this rally. If this market has to go past 5500, we need some buying in stocks like Reliance, BHEL and L&T. So I’d be keeping a close eye on these stocks and will try to catch the next big wave in them( if it happens!)
Auto and banking might be a bit of a drag on the index if interest rate hikes come through earlier than expected. Although in the long term, banking is definitely looking like a star performer.If the Indian growth story returns, this is a sector that will benefit the most from any upturn. So any correction would be a good opportunity to grab these stocks.
What I like the most about current market action is the absence of widespread euphoria. The retail investor is still sceptical about this rally and is happy to earn his 6% in a fixed deposit. As long as this risk aversion prevails, this market might continue to climb slowly.
Technically, 4970-80 remains a good support in the short term. On the upside 5200 is the critical hurdle. Above 5200, we might see a lot of short term traders jumping in and chasing market momentum.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Tuesday, December 08, 2009
NHPC should do R-Power.
In sept MF bought around 10 crore shares of nhpc read this story from moneycontrol siteMutual funds, MFs bought huge quantity of shares of India’s largest hydro power generator NHPC, technology company 3i Infotech and FMCG and tobacco major ITC, while reduced exposure to Mukesh Ambani’s Reliance Petroleum, India’s largest telecom player Bharti Airtel and AV Birla group company Idea Cellular. Oil & gas, banking & finance and auto dominated the top 50-buy list. However, selling was seen in shares of telecom, realty, shipping, construction & cement, chemical and metal companies. Stocks were re-aligned in the technology, FMCG, power, pharma and media sectors.
In terms of value, Reliance Industries, Axis Bank and Oil India were the top purchases by MFs, while Reliance Petroleum, HDFC and Bharti Airtel topped the selling list.
A study of the top ten mutual funds` equity portfolios as on September 30, which are Reliance, HDFC, ICICI, DSP BR, SBI, Tata, Templeton, UTI, Kotak and Birla Top shares traded by MFs (based on volume)
Top 5 shares bought
No. of Shares
NHPC 102865991
3i Infotech 11884118
ITC 11369062
Ashok Leyland 9485886
IDFC 8881771
Top 5 shares sold
No. of Shares
Reliance Petroleum -48195918
Bharti Airtel -11651134
Idea Cellular -10732249
Rural Electrification -10055426
Rico Auto -8552563
Sun Life reveals that seven out of eight funds bought shares of NHPC, which listed on September 01. The company raised over Rs 6,000 crore via public offering, which opened for subscription during August 7 and August 12, 2009. It was still trading below issue price while writing this article. Among these seven funds, ICICI Pru and SBI MFs bought biggest quantity of shares, which was over 4 crore shares each. Among other power stocks, Suzlon Energy and GMR Infrastructure were bought. However, PTC India, Power Grid Corporation, Adani Power, GVK Power, Areva T&D and NTPC and Rural Electrification Corporation were sold
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
In terms of value, Reliance Industries, Axis Bank and Oil India were the top purchases by MFs, while Reliance Petroleum, HDFC and Bharti Airtel topped the selling list.
A study of the top ten mutual funds` equity portfolios as on September 30, which are Reliance, HDFC, ICICI, DSP BR, SBI, Tata, Templeton, UTI, Kotak and Birla Top shares traded by MFs (based on volume)
Top 5 shares bought
No. of Shares
NHPC 102865991
3i Infotech 11884118
ITC 11369062
Ashok Leyland 9485886
IDFC 8881771
Top 5 shares sold
No. of Shares
Reliance Petroleum -48195918
Bharti Airtel -11651134
Idea Cellular -10732249
Rural Electrification -10055426
Rico Auto -8552563
Sun Life reveals that seven out of eight funds bought shares of NHPC, which listed on September 01. The company raised over Rs 6,000 crore via public offering, which opened for subscription during August 7 and August 12, 2009. It was still trading below issue price while writing this article. Among these seven funds, ICICI Pru and SBI MFs bought biggest quantity of shares, which was over 4 crore shares each. Among other power stocks, Suzlon Energy and GMR Infrastructure were bought. However, PTC India, Power Grid Corporation, Adani Power, GVK Power, Areva T&D and NTPC and Rural Electrification Corporation were sold
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Saturday, December 05, 2009
Continuing the series "Best Stocks To Buy For 2010"
here is another good stock to buy in 2010 which could fetch you excellent returns over the next one year time horizon.
Ratnamani Metals & Tubes (BSE code:520111) produces a wide range of Stainless Steel Welded / Seamless Tubes & Pipes and Carbon Steel Welded Pipes. The company caters to the niche markets of almost all the emerging sectors like oil and gas, refineries, petrochemicals, process industries, power plants and water distribution.
The company has been witnessing gradual improvement in its business environment. RMTL’s specialty products consumed in high-growth sectors like power would drive the volumes going forward. Further, meaningful revival in orders from the refinery sector could add to incremental orders
Recently, Ratnamani Metals & Tubes (RMTL) has bagged Rs 152-crore gas transmission and distribution order from Gas Authority of India. This is going to be a positive for RMTL particularly when viewed against the backdrop of slower inflow since couple of quarters. While the order inflow is positive, the same has been bit slower than analyst estimates.
In Q2FY2010, RMTL’s top line is expected to report a de-growth of 20% to Rs203.1
crore. The margins are expected to improve on year-on-year basis on the back of decline in raw material cost. On the back of fall in revenues, the adjusted profits would decline by 8.6% year on year.
Incorporating the numbers from annual accounts and slower order intake in July-September quarter, the revised revenue and profit estimates lead to earnings per share (EPS) estimates of Rs 17.4 and Rs 22.2 for FY 2010 and FY 2011 respectively.
Vital Numbers:
Market Cap 446.60
* EPS (TTM) 13.72
* P/E 7.22
* P/C 4.87
* Book Value 63.02
* Price/Book 1.57
Div(%) 90.00
Div Yield(%) 1.82
Market Lot 1.00
Face Value 2.00
Industry P/E 13.83
At the current market price of Rs. 98, the stock trades at 4.5x its FY2011 estimates, which is attractive and so one may buy stocks of the company. The stock price target could be Rs. 180 in a year's time i.e. almost double of CMP. Buy stocks on dips.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Ratnamani Metals & Tubes (BSE code:520111) produces a wide range of Stainless Steel Welded / Seamless Tubes & Pipes and Carbon Steel Welded Pipes. The company caters to the niche markets of almost all the emerging sectors like oil and gas, refineries, petrochemicals, process industries, power plants and water distribution.
The company has been witnessing gradual improvement in its business environment. RMTL’s specialty products consumed in high-growth sectors like power would drive the volumes going forward. Further, meaningful revival in orders from the refinery sector could add to incremental orders
Recently, Ratnamani Metals & Tubes (RMTL) has bagged Rs 152-crore gas transmission and distribution order from Gas Authority of India. This is going to be a positive for RMTL particularly when viewed against the backdrop of slower inflow since couple of quarters. While the order inflow is positive, the same has been bit slower than analyst estimates.
In Q2FY2010, RMTL’s top line is expected to report a de-growth of 20% to Rs203.1
crore. The margins are expected to improve on year-on-year basis on the back of decline in raw material cost. On the back of fall in revenues, the adjusted profits would decline by 8.6% year on year.
Incorporating the numbers from annual accounts and slower order intake in July-September quarter, the revised revenue and profit estimates lead to earnings per share (EPS) estimates of Rs 17.4 and Rs 22.2 for FY 2010 and FY 2011 respectively.
Vital Numbers:
Market Cap 446.60
* EPS (TTM) 13.72
* P/E 7.22
* P/C 4.87
* Book Value 63.02
* Price/Book 1.57
Div(%) 90.00
Div Yield(%) 1.82
Market Lot 1.00
Face Value 2.00
Industry P/E 13.83
At the current market price of Rs. 98, the stock trades at 4.5x its FY2011 estimates, which is attractive and so one may buy stocks of the company. The stock price target could be Rs. 180 in a year's time i.e. almost double of CMP. Buy stocks on dips.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Wednesday, December 02, 2009
The Mangalam Cement stock is possibly one of the cheapest in the cement sector right now
trading at just 2.6 times its trailing 12 months earnings. Also, the stock trades at just 1.2 times its book value for the year ended March 09, coupled with a high dividend yield of 4.6%. This stock provides an attractive investment opportunity as one of the long-term investments.
MANGALAM Cement part of the BK Birla Group has grown aggressively over the past three years, thanks to robust demand conditions. Kumarmangalam Birla, who will inherit BK Birla controlled Kesoram Industries and Century Textiles, will own a 17.7% stake in Mangalam Cement via these entities and account for a significant portion of the promoter holding.
CAPACITY & EXPANSION PLANS
Mangalams capacity was 2 million tonne at the end of FY 09, double the level from two years ago. The company invested Rs 198.6 crore as capex during this period and its cash flow was Rs 277 crore. Despite the capex, Mangalam Cements leverage ratio was just 0.17 at the end of March 09, compared to 0.48 two years earlier.
Its key markets are Rajasthan, UP and Delhi, where demand conditions have remained strong thanks to governmentfunded projects and rural housing projects, and price realisations have also remained higher on a y-o-y basis. The board of Mangalam Cement had earlier given its in-principle approval for setting up a new cement plant with a capacity of 1.5 million tonne at its existing plant site in Rajasthans Kota district. In addition, the company plans to set up a captive power plant with a capacity of 17.5 MW, for which it has placed orders.
The cost of this expansion project is estimated at Rs 750 crore, which would be financed via internal accruals to the tune of Rs 300 crore and the remainder by debt. Given the strong cash flows of Mangalam Cement, financing this project over the next two years should not be a problem.
FINANCIALS
The companys operating profit margin rose by 1,460 basis points y-o-y to 36.2% in the September 09 quarter, helped by its realisation that improved an estimated 23.2% y-o-y to Rs 3919 per tonne. However , the companys total despatches declined 2.1% y-o-y to 423,000 tonne in the second quarter of FY 10.
Compared to its peers, Mangalam Cement has handled its operational costs quite efficiently. For instance, in the year ended March 09, the company spent nearly Rs 831 per tonne on power & fuel costs. The corresponding figure for Shree Cement and JK Cement was Rs 781.6 per tonne and Rs 1,000 per tonne, respectively, for FY 09. Also, while Mangalam Cement has reported a decline in its power cost over last three years, its other two peers have reported a rise.
Market Cap: 336.61
EPS (TTM): 46.76
**P/E: 2.70
P/C: 2.26
* Book Value: 107.79
* Price/Book: 1.17
Div(%): 55.00
Div Yield(%): 4.36
Market Lot: 1.00
Face Value: 10.00
Industry P/E: 9.20
VALUATIONS
At Rs 127, Mangalam Cement trades with a P /E of just 2.6 times its trailing earnings. Binani Cement, on the other hand, trades at 5.4 times while JK Cement trades at 3.9 times. It's CMP is close to book value making it a value stock.
Mutual Fund, SBI Magnum Emerging Businesses Fund (Growth), holds stocks of Mangalam cement in it's portfolio.
Considering all valuations and growth opportunities due to reviving demand from infrastructure sector, Investors may buy stocks of Mangalam Cement as long-term investment.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
MANGALAM Cement part of the BK Birla Group has grown aggressively over the past three years, thanks to robust demand conditions. Kumarmangalam Birla, who will inherit BK Birla controlled Kesoram Industries and Century Textiles, will own a 17.7% stake in Mangalam Cement via these entities and account for a significant portion of the promoter holding.
CAPACITY & EXPANSION PLANS
Mangalams capacity was 2 million tonne at the end of FY 09, double the level from two years ago. The company invested Rs 198.6 crore as capex during this period and its cash flow was Rs 277 crore. Despite the capex, Mangalam Cements leverage ratio was just 0.17 at the end of March 09, compared to 0.48 two years earlier.
Its key markets are Rajasthan, UP and Delhi, where demand conditions have remained strong thanks to governmentfunded projects and rural housing projects, and price realisations have also remained higher on a y-o-y basis. The board of Mangalam Cement had earlier given its in-principle approval for setting up a new cement plant with a capacity of 1.5 million tonne at its existing plant site in Rajasthans Kota district. In addition, the company plans to set up a captive power plant with a capacity of 17.5 MW, for which it has placed orders.
The cost of this expansion project is estimated at Rs 750 crore, which would be financed via internal accruals to the tune of Rs 300 crore and the remainder by debt. Given the strong cash flows of Mangalam Cement, financing this project over the next two years should not be a problem.
FINANCIALS
The companys operating profit margin rose by 1,460 basis points y-o-y to 36.2% in the September 09 quarter, helped by its realisation that improved an estimated 23.2% y-o-y to Rs 3919 per tonne. However , the companys total despatches declined 2.1% y-o-y to 423,000 tonne in the second quarter of FY 10.
Compared to its peers, Mangalam Cement has handled its operational costs quite efficiently. For instance, in the year ended March 09, the company spent nearly Rs 831 per tonne on power & fuel costs. The corresponding figure for Shree Cement and JK Cement was Rs 781.6 per tonne and Rs 1,000 per tonne, respectively, for FY 09. Also, while Mangalam Cement has reported a decline in its power cost over last three years, its other two peers have reported a rise.
Market Cap: 336.61
EPS (TTM): 46.76
**P/E: 2.70
P/C: 2.26
* Book Value: 107.79
* Price/Book: 1.17
Div(%): 55.00
Div Yield(%): 4.36
Market Lot: 1.00
Face Value: 10.00
Industry P/E: 9.20
VALUATIONS
At Rs 127, Mangalam Cement trades with a P /E of just 2.6 times its trailing earnings. Binani Cement, on the other hand, trades at 5.4 times while JK Cement trades at 3.9 times. It's CMP is close to book value making it a value stock.
Mutual Fund, SBI Magnum Emerging Businesses Fund (Growth), holds stocks of Mangalam cement in it's portfolio.
Considering all valuations and growth opportunities due to reviving demand from infrastructure sector, Investors may buy stocks of Mangalam Cement as long-term investment.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Tuesday, December 01, 2009
Buy Accentia Technologies Ltd (BSE Code: 531897) at the CMP .
I had yesterday, given a buy call on the scrip for good targets in the next 30-45 days. The MACD(Moving Average Convergence Divergence) of the scrip is about to show positive divergence on the hourly charts (of the scrip). The Stochastic is in buy mode and Bollinger bands have also confirmed the same. Moreover, the fact that the Accentia Technologies Ltd is above the Rs.112 makes it ideal for investment in the short term. The company has opened new units as part of Government of Kerala's new Technology initiative.
Accentia Technologies Ltd is a leading global Healthcare Receivables Cycle Management (HRCM) organisation, involved in the areas of Medical Documentation, Medical Coding, Billing Receivables Management & Integration and restructuring solutions to the healthcare service organisations. It has recently secured an extension of its SEZ implementation at Cochin from the Development Commissioner. The Company intends to set up its Legal Process Outsourcing and Mega Monitering and Research Activities from Cochin.
THE MUMBAI (BOMBAY) BASED ACCENTIAL TECHNOLOGIES LTD HAS UNITS IN PORTLAND, OREGON, USA, FT. LAUDERDALE, FL, USA, NEW JERSY, USA, RAK, UAE, BANGALORE, HYDERBAD, KOLKATA (CALCUTTA), CHANDIGARH, TRIVANDRUM. COCHIN, BHUBENESHWAR, ETC.
With Total Revenues of Rs.238 Cr in FY09, Accentia Technologies Ltd enables its clients to maximise returns by reducing its costs and revenue cycle by implementing customized processes, onsite and offsite operations, coupled with state of the art solutions; ensuring high level of customer satisfaction. The company ensures this through its domain and process management expertise, domain specific IT skills, time tested innovative delivery models and focus on off-shoring.
The September, 2009 quarter results of the company (Accentia Tech) are fantastic. The net profit of the company for Q2FY10 is Rs.32.94 Cr on a small equity of only Rs.13.44 Cr. This gave a diluted EPS (Earning Per Share) of Rs.24.33 in September, 2009 quarter alone---can you imagine??!!!!
It has one of the lowest P/E (Price/Earnings) multiples in the whole of Information Technology Sector. Just close your eyes and buy the scrip at the CMP . for superb gains in the short term.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Accentia Technologies Ltd is a leading global Healthcare Receivables Cycle Management (HRCM) organisation, involved in the areas of Medical Documentation, Medical Coding, Billing Receivables Management & Integration and restructuring solutions to the healthcare service organisations. It has recently secured an extension of its SEZ implementation at Cochin from the Development Commissioner. The Company intends to set up its Legal Process Outsourcing and Mega Monitering and Research Activities from Cochin.
THE MUMBAI (BOMBAY) BASED ACCENTIAL TECHNOLOGIES LTD HAS UNITS IN PORTLAND, OREGON, USA, FT. LAUDERDALE, FL, USA, NEW JERSY, USA, RAK, UAE, BANGALORE, HYDERBAD, KOLKATA (CALCUTTA), CHANDIGARH, TRIVANDRUM. COCHIN, BHUBENESHWAR, ETC.
With Total Revenues of Rs.238 Cr in FY09, Accentia Technologies Ltd enables its clients to maximise returns by reducing its costs and revenue cycle by implementing customized processes, onsite and offsite operations, coupled with state of the art solutions; ensuring high level of customer satisfaction. The company ensures this through its domain and process management expertise, domain specific IT skills, time tested innovative delivery models and focus on off-shoring.
The September, 2009 quarter results of the company (Accentia Tech) are fantastic. The net profit of the company for Q2FY10 is Rs.32.94 Cr on a small equity of only Rs.13.44 Cr. This gave a diluted EPS (Earning Per Share) of Rs.24.33 in September, 2009 quarter alone---can you imagine??!!!!
It has one of the lowest P/E (Price/Earnings) multiples in the whole of Information Technology Sector. Just close your eyes and buy the scrip at the CMP . for superb gains in the short term.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Sunday, November 29, 2009
Golden Rules
• Divide your capital into 4 equal risk parts.
• Never over trade.
• Never place order for BUY/SELL without stop loss conditions.
• Never let profit turn into loss.
• Trade with the trend.
• Never take lead you may loose heavily.
• Never try to be over smart.
• Don’t trade if trend not clear
• Don’t follow tips only.
• Use the right orders only.
• Withdraw portion of profits.
• Don’t be whimsical about closing your trades.
• Never buy a stock to get dividend.
• Never average your losses.
• Take big profits and small losses.
• Sell short as often as you go long.
• Never buy any stock just it is low priced.
• Pyramid your trades correctly.
• Decrease your trading after a series of successful trades.
• Don’t change your opinions during market hours.
• Don’t follow the crowd – they are usually wrong.
• Buy on rumor and sell on news.
• Take windfall gains when you get.
• Keep your charts up to date.
• Preserve your capital.
• Nothing ever new occurs in market.
• Markets are never wrong opinion may be.
• Never permit speculative ventures to turn into investments.
• Never try to predetermine your profits.
• Never buy a stock just because it is low priced or don’t sell just because it is high priced.
• Look for reasonable profits.
• Buy as soon as a stock makes new highs after a normal reaction.
• Ban wishful thinking in the market.
• Leaders of today may not be leaders of tomorrow.
• Don’t be too cautious about reasons behind the moves.
• Trade only the active stocks.
• Bear markets have no support and bull markets have no resistance.
• The smarter you are the longer it takes.
• It is very hard to get out of a trade than to get in.
• Don’t talk about what you are doing in the market.
• When time is up, markets must reverse.
• Control what you can; manage what you can not.
• Big movements take time to develop.
• A good trade is profitable right from the start.
• If you can not make money trading the leading issues you can not make it trading the overall market.
• Avoid partnership in trading accounts.
• The human side of every person is the greatest enemy of successful trading.
• Money can not be made every day in the market.
• As long as market is acting right don’t rush to take profits.
• Never buy a stock just because it has fallen from a great high, nor sell a stock because it is high priced.
When u are Getting Free calls with accuracy of more then 80% +.....Sometime our stock fails...but then we give stop & resistance levels too.
Always remember...no force or single person can move stock.Its a game of mass
psychology.We look at chart ,collect information and just spread it .......free of cost
Always Remember :Never pay money to anybody ..who is asking for it.Just ask any Analyst (TV ,Media ,Print or Website wale Analyst ko pucho............What is their success ratio in Day trading???A Million $ Question ...Doing Bla-Bla on TV ,writing on web is very easy......but while u trade .....u are playing with live wire
wish u happy trading to all of u.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
• Never over trade.
• Never place order for BUY/SELL without stop loss conditions.
• Never let profit turn into loss.
• Trade with the trend.
• Never take lead you may loose heavily.
• Never try to be over smart.
• Don’t trade if trend not clear
• Don’t follow tips only.
• Use the right orders only.
• Withdraw portion of profits.
• Don’t be whimsical about closing your trades.
• Never buy a stock to get dividend.
• Never average your losses.
• Take big profits and small losses.
• Sell short as often as you go long.
• Never buy any stock just it is low priced.
• Pyramid your trades correctly.
• Decrease your trading after a series of successful trades.
• Don’t change your opinions during market hours.
• Don’t follow the crowd – they are usually wrong.
• Buy on rumor and sell on news.
• Take windfall gains when you get.
• Keep your charts up to date.
• Preserve your capital.
• Nothing ever new occurs in market.
• Markets are never wrong opinion may be.
• Never permit speculative ventures to turn into investments.
• Never try to predetermine your profits.
• Never buy a stock just because it is low priced or don’t sell just because it is high priced.
• Look for reasonable profits.
• Buy as soon as a stock makes new highs after a normal reaction.
• Ban wishful thinking in the market.
• Leaders of today may not be leaders of tomorrow.
• Don’t be too cautious about reasons behind the moves.
• Trade only the active stocks.
• Bear markets have no support and bull markets have no resistance.
• The smarter you are the longer it takes.
• It is very hard to get out of a trade than to get in.
• Don’t talk about what you are doing in the market.
• When time is up, markets must reverse.
• Control what you can; manage what you can not.
• Big movements take time to develop.
• A good trade is profitable right from the start.
• If you can not make money trading the leading issues you can not make it trading the overall market.
• Avoid partnership in trading accounts.
• The human side of every person is the greatest enemy of successful trading.
• Money can not be made every day in the market.
• As long as market is acting right don’t rush to take profits.
• Never buy a stock just because it has fallen from a great high, nor sell a stock because it is high priced.
When u are Getting Free calls with accuracy of more then 80% +.....Sometime our stock fails...but then we give stop & resistance levels too.
Always remember...no force or single person can move stock.Its a game of mass
psychology.We look at chart ,collect information and just spread it .......free of cost
Always Remember :Never pay money to anybody ..who is asking for it.Just ask any Analyst (TV ,Media ,Print or Website wale Analyst ko pucho............What is their success ratio in Day trading???A Million $ Question ...Doing Bla-Bla on TV ,writing on web is very easy......but while u trade .....u are playing with live wire
wish u happy trading to all of u.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Dubai World is Dubai's standard bearer for global investments.
The government-owned holding company is at the center of Dubai's thrust to diversify its economy into property, leisure and investment -- both locally and globally.Dubai is the most populous of the seven Emirates -- a territory ruled by a Muslim monarch -- that make up the United Arab Emirates.Dubai World was established in March 2006 under a decree ratified by the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum. Sheikh Mohammed also holds a majority stake in the company.
Dubai World has four main arms of investment: Transport and Logistics, Drydocks and Maritime, Urban Development and Investment and Financial Services.The company's assets include DP World, one of the largest marine terminal operators in the world. In February 2006, DP World sparked a national security debate in the U.S. when it acquired ports operator P&O.
Several months later it sold P&O's U.S. assets following objections from U.S. legislators that U.S. ports would fall under control of a Middle Eastern operator.Focusing on Dubai, Drydocks World & Dubai Maritime City, is an organization tasked with turning the Emirate into a major shipbuilding and martime hub.Istithmar World is the group's investment arm. It is a world-class investment company with extensive investments outside Dubai, notably in Europe, the U.S.and South Africa.Dubai World made headlines in March 2008 after Chairman Sultan Ahmed bin Sulayem threatened to take the fund's investment out of Europe, in response to a proposed EU code of conduct for sovereign wealth funds -- state-owned investment companies.
Perhaps the best known arm of Dubai World's holdings is Nakheel the property developer behind world famous projects like the artificial Palm Islands and The World, built on reclaimed land.
There are also plans for The Universe, a series of man-made islands in the shape of the sun, the moon and the planets that would wrap around Nakheel's The World project.If completed, Nakheel's ambitious waterfront development of Dubai would add over 600 miles of beachfront to the Emirate.In January 2009, Nakheel announced that work would be halted for 12 months in the ambitious project to build Nakheel Tower, a 200-story skyscraper that would soar to 1km high -- and would become the world's tallest building.
Dubai sent investors reeling Thursday after asking creditors to freeze the debt repayments of one of its biggest holding companies, Dubai World.The announcement came after the market close on the eve of the Eid holiday and Thanksgiving in the U.S., leaving traders' hands tied over their exposure to investments in the Emirate.Shares dropped in London and Europe as bankers struggled to gauge the implications of the debt freeze without additional guidance from Wall Street.With very little information being distributed from Dubai, the market has been left to question the motives of ruler Sheikh Mohammed Bin Rashid Al Maktoum and the financial future of Dubai World and its huge portfolio.
So what happened?
Late Wednesday, the government of Dubai issued a statement saying it had authorised the Dubai Financial Support Fund to "spearhead the restructure of Dubai World with immediate effect."
The first step, it said, was to ask all providers of financing to Dubai World and Nakheel to "standstill" its debt repayments until at least May 30, 2010. It added, to the market's surprise, that the proceeds of a $5 billion bond issue raised hours earlier wouldn't be used to bail the company out.
Odd timing wasn't it?
Dubai's decision to release its statement just before the Eid holiday in the Middle East, and on the eve of Thanksgiving in the U.S., provoked consternation.
"Dubai have certainly picked their moment to finally own up to a need to restructure their debt. I would imagine the news has ruined a few Thanksgiving dinners today," David Morrsion, a strategist at GFT told the Financial Times.
How did the markets react?
Banking stocks led equity markets lower in London and Europe as traders moved to distance themselves from a potential debt hole in the Middle East. Technical problems in London halted trade for some time, providing further frustration for traders with exposure to Dubai World's lenders.
How severe is the debt?
Dubai World is said to account for some $59 billion of Dubai's $80 billion debt burden. Nakheel had been due to pay a $3.5 billion convertible loan which expires on December 14. More debts were due to be repaid next year.
"This is not just a couple of billion story," Turker Hamzaoglu, EMEA economist at the Bank of America Merrill Lynch Global Research told CNN.
"For instance, Dubai has to service $10 billion including the Nakheel debt in December and $15 billion U.S. dollars by the end of 2010," he added.
How much damage has the announcement done?
That's incalculable at this stage. Markets in the Middle East and the U.S. don't open until next week so the full impact won't be known until then. It also depends on Dubai's next move. The surprise announcement has shaken confidence in the Emirate as a place to do business.
"The key here is the communication of this strategy. I guess everybody is on the same page regarding the need for consolidation in Dubai and for the region. But the only market-positive implication would be if this comes with a clearly open and a predictable way," Hamzaoglu said.
"The problem is, here we have a lack of transparency and all these policy reactions are either coming at the last minute, or for example, the recent one just before the long holiday."
"I think this is going to shake some investor confidence which may not be reversed as quickly as people expect. So they have to be careful," he added.
Who will bail them out?
Abu Dhabi has been a lucrative source of funding for its neighbor. The $5 billion bond issue was take up by UAE banks.
The question now is whether it will continue to give its backing to its debt-laden neighbour. It may have the money to do so, but does it have the will?
What comes next?
Ideally, the market wants guidance as to Dubai's debt strategy. It has said that the Dubai World debt freeze is the first stage of a restructuring plan. Investors want to know what comes next.
Right now, the region is seen as a risky bet for nervous investors. Hamzaoglu says there are other options for those who want to back similar markets.
"From an investor perspective, if you want to still play for the global backdrop of oil prices, etc. there are some other markets, say Brazil or Russia, that investors can be interested in, rather than taking this high risk for the region," he said.
Market experts say the debt revelations from Dubai this week will not lead the global economy back into recession, but have seriously damaged the Emirate's standing as a leading financial hub.
The Dubai government caught investors off-guard late Wednesday by announcing it was asking creditors for a six-month moratorium on the debt repayments of Dubai World and Nakheel, one of its biggest holding companies and its real estate arm. The U.S. stock market opened lower on Friday as traders seized their first chance to respond to the news after the Thanksgiving holiday.
The Dow closed 153 points down while Nasdaq and the S&P lost 1.7 percent, although although light trading -- markets were only open half-a-day due to the holidays -- exaggerated any volatility in markets. European markets closed higher after recouping earlier losses. Earlier, Asian markets fell amid worries about the impact of Dubai's debt problems elsewhere.
"It's so easy to jump onto the gloom and doom bandwagon over this," Stephen Pope, Chief Global Equity Strategist at Cantor Fitzgerald told CNN.
For more than a decade, Dubai has set a new standard for pace of development. Cranes have dominated the skyline in a rapid flurry of building to establish the Emirate as not only a financial center, but a leading tourism hub.Long ago, the Emirate's ruler recognized that it would have to find another source of income as its oil reserves were depleted.
The call for a debt freeze came after a series of high-profile glamorous events. Just last week, Dubai hosted the Dubai World Championships, the climax of the inaugural Race to Dubai, one of the world's richest golf competitions.
Dubai is one of seven emirates which make up the United Arab Emirates.
Located on the southern coast of the Persian Gulf it is 3885 square kilometers in size and has a population of 1,758,244. It is ruled by Mohammed bin Rashid Al Maktoum. The Al Maktoum family has ruled Dubai since 1833. It is the fastest growing city in the world.After the Dubai government announcement, ratings agencies Standard & Poors' and Moody's downgraded their ratings on a number of Dubai's largest companies, including DP World and the Jebel Ali Free Zone. They both said their response reflected Dubai's announcement on the restructuring of Dubai World.
Farouk Soussa, Head of Middle East Government ratings at Standard & Poor's, told CNN the agency had been flagging issues about the debt burden of Dubai World and Nakheel since April.
"The fact that they are having difficulty repaying this debt is not news, it is not a surprise. What is more of a surprise is that the government of Dubai has not stepped in to help them out," Soussa said.
He said Standard & Poor's downgraded the likelihood of government support for Dubai's struggling companies back in June, and again on Wednesday, but analysts were working in an "information vacuum."
"The question of support is really the million dollar question. Very little has been said by the government specifically on this question throughout the last year," he said.
"In an opaque policy environment, what people have had to do is make assumptions regarding government support -- and clearly those assumptions were too high."
Few analysts expect Dubai to allow Dubai World to fail. It would come at too great a cost to the region.
But for Dubai, he says the damage has been done.
This drives a big hole into Dubai's ambitions of being the regional financial center because there's no shortage of other contenders for that.
Bahrain would like to have that mantle back again, Qatar is building up very aggressively there and is of course is seen as being one of the main players.
And Saudi Arabia has been touting Jeddah as regional hub, so there's no shortage of competitors who could take that role away from Dubai.
Dubai World has four main arms of investment: Transport and Logistics, Drydocks and Maritime, Urban Development and Investment and Financial Services.The company's assets include DP World, one of the largest marine terminal operators in the world. In February 2006, DP World sparked a national security debate in the U.S. when it acquired ports operator P&O.
Several months later it sold P&O's U.S. assets following objections from U.S. legislators that U.S. ports would fall under control of a Middle Eastern operator.Focusing on Dubai, Drydocks World & Dubai Maritime City, is an organization tasked with turning the Emirate into a major shipbuilding and martime hub.Istithmar World is the group's investment arm. It is a world-class investment company with extensive investments outside Dubai, notably in Europe, the U.S.and South Africa.Dubai World made headlines in March 2008 after Chairman Sultan Ahmed bin Sulayem threatened to take the fund's investment out of Europe, in response to a proposed EU code of conduct for sovereign wealth funds -- state-owned investment companies.
Perhaps the best known arm of Dubai World's holdings is Nakheel the property developer behind world famous projects like the artificial Palm Islands and The World, built on reclaimed land.
There are also plans for The Universe, a series of man-made islands in the shape of the sun, the moon and the planets that would wrap around Nakheel's The World project.If completed, Nakheel's ambitious waterfront development of Dubai would add over 600 miles of beachfront to the Emirate.In January 2009, Nakheel announced that work would be halted for 12 months in the ambitious project to build Nakheel Tower, a 200-story skyscraper that would soar to 1km high -- and would become the world's tallest building.
Dubai sent investors reeling Thursday after asking creditors to freeze the debt repayments of one of its biggest holding companies, Dubai World.The announcement came after the market close on the eve of the Eid holiday and Thanksgiving in the U.S., leaving traders' hands tied over their exposure to investments in the Emirate.Shares dropped in London and Europe as bankers struggled to gauge the implications of the debt freeze without additional guidance from Wall Street.With very little information being distributed from Dubai, the market has been left to question the motives of ruler Sheikh Mohammed Bin Rashid Al Maktoum and the financial future of Dubai World and its huge portfolio.
So what happened?
Late Wednesday, the government of Dubai issued a statement saying it had authorised the Dubai Financial Support Fund to "spearhead the restructure of Dubai World with immediate effect."
The first step, it said, was to ask all providers of financing to Dubai World and Nakheel to "standstill" its debt repayments until at least May 30, 2010. It added, to the market's surprise, that the proceeds of a $5 billion bond issue raised hours earlier wouldn't be used to bail the company out.
Odd timing wasn't it?
Dubai's decision to release its statement just before the Eid holiday in the Middle East, and on the eve of Thanksgiving in the U.S., provoked consternation.
"Dubai have certainly picked their moment to finally own up to a need to restructure their debt. I would imagine the news has ruined a few Thanksgiving dinners today," David Morrsion, a strategist at GFT told the Financial Times.
How did the markets react?
Banking stocks led equity markets lower in London and Europe as traders moved to distance themselves from a potential debt hole in the Middle East. Technical problems in London halted trade for some time, providing further frustration for traders with exposure to Dubai World's lenders.
How severe is the debt?
Dubai World is said to account for some $59 billion of Dubai's $80 billion debt burden. Nakheel had been due to pay a $3.5 billion convertible loan which expires on December 14. More debts were due to be repaid next year.
"This is not just a couple of billion story," Turker Hamzaoglu, EMEA economist at the Bank of America Merrill Lynch Global Research told CNN.
"For instance, Dubai has to service $10 billion including the Nakheel debt in December and $15 billion U.S. dollars by the end of 2010," he added.
How much damage has the announcement done?
That's incalculable at this stage. Markets in the Middle East and the U.S. don't open until next week so the full impact won't be known until then. It also depends on Dubai's next move. The surprise announcement has shaken confidence in the Emirate as a place to do business.
"The key here is the communication of this strategy. I guess everybody is on the same page regarding the need for consolidation in Dubai and for the region. But the only market-positive implication would be if this comes with a clearly open and a predictable way," Hamzaoglu said.
"The problem is, here we have a lack of transparency and all these policy reactions are either coming at the last minute, or for example, the recent one just before the long holiday."
"I think this is going to shake some investor confidence which may not be reversed as quickly as people expect. So they have to be careful," he added.
Who will bail them out?
Abu Dhabi has been a lucrative source of funding for its neighbor. The $5 billion bond issue was take up by UAE banks.
The question now is whether it will continue to give its backing to its debt-laden neighbour. It may have the money to do so, but does it have the will?
What comes next?
Ideally, the market wants guidance as to Dubai's debt strategy. It has said that the Dubai World debt freeze is the first stage of a restructuring plan. Investors want to know what comes next.
Right now, the region is seen as a risky bet for nervous investors. Hamzaoglu says there are other options for those who want to back similar markets.
"From an investor perspective, if you want to still play for the global backdrop of oil prices, etc. there are some other markets, say Brazil or Russia, that investors can be interested in, rather than taking this high risk for the region," he said.
Market experts say the debt revelations from Dubai this week will not lead the global economy back into recession, but have seriously damaged the Emirate's standing as a leading financial hub.
The Dubai government caught investors off-guard late Wednesday by announcing it was asking creditors for a six-month moratorium on the debt repayments of Dubai World and Nakheel, one of its biggest holding companies and its real estate arm. The U.S. stock market opened lower on Friday as traders seized their first chance to respond to the news after the Thanksgiving holiday.
The Dow closed 153 points down while Nasdaq and the S&P lost 1.7 percent, although although light trading -- markets were only open half-a-day due to the holidays -- exaggerated any volatility in markets. European markets closed higher after recouping earlier losses. Earlier, Asian markets fell amid worries about the impact of Dubai's debt problems elsewhere.
"It's so easy to jump onto the gloom and doom bandwagon over this," Stephen Pope, Chief Global Equity Strategist at Cantor Fitzgerald told CNN.
For more than a decade, Dubai has set a new standard for pace of development. Cranes have dominated the skyline in a rapid flurry of building to establish the Emirate as not only a financial center, but a leading tourism hub.Long ago, the Emirate's ruler recognized that it would have to find another source of income as its oil reserves were depleted.
The call for a debt freeze came after a series of high-profile glamorous events. Just last week, Dubai hosted the Dubai World Championships, the climax of the inaugural Race to Dubai, one of the world's richest golf competitions.
Dubai is one of seven emirates which make up the United Arab Emirates.
Located on the southern coast of the Persian Gulf it is 3885 square kilometers in size and has a population of 1,758,244. It is ruled by Mohammed bin Rashid Al Maktoum. The Al Maktoum family has ruled Dubai since 1833. It is the fastest growing city in the world.After the Dubai government announcement, ratings agencies Standard & Poors' and Moody's downgraded their ratings on a number of Dubai's largest companies, including DP World and the Jebel Ali Free Zone. They both said their response reflected Dubai's announcement on the restructuring of Dubai World.
Farouk Soussa, Head of Middle East Government ratings at Standard & Poor's, told CNN the agency had been flagging issues about the debt burden of Dubai World and Nakheel since April.
"The fact that they are having difficulty repaying this debt is not news, it is not a surprise. What is more of a surprise is that the government of Dubai has not stepped in to help them out," Soussa said.
He said Standard & Poor's downgraded the likelihood of government support for Dubai's struggling companies back in June, and again on Wednesday, but analysts were working in an "information vacuum."
"The question of support is really the million dollar question. Very little has been said by the government specifically on this question throughout the last year," he said.
"In an opaque policy environment, what people have had to do is make assumptions regarding government support -- and clearly those assumptions were too high."
Few analysts expect Dubai to allow Dubai World to fail. It would come at too great a cost to the region.
But for Dubai, he says the damage has been done.
This drives a big hole into Dubai's ambitions of being the regional financial center because there's no shortage of other contenders for that.
Bahrain would like to have that mantle back again, Qatar is building up very aggressively there and is of course is seen as being one of the main players.
And Saudi Arabia has been touting Jeddah as regional hub, so there's no shortage of competitors who could take that role away from Dubai.
Thursday, November 26, 2009
PICK OF THE WEEK:
Alchemist Realty Ltd
BSE Code: 532114
Face Value: Rs.2
CMP: Rs.14.54
Market Cap: Rs.107.74 Cr
EPS: Re.0.11
Introduction: Formerly known as Pan Packaging Industries Ltd, the Company’s principal activity at present is to develop real estate property. Pan Packaging Industries Private Ltd. was originally incorporated as Private Limited company on 03 March 1983 to manufacture and supply Corrugated Boxes. The name and style of the company was changed as Pan Packaging Industries Limited on 25th April 1995. The company started its commercial production in 13-03-1984 which was its first phase of operations with an installed capacity of 900 TPA. Alchemist Realty is now widely recognized as one of the growing innovative real estate companies in India.
The Company now engages in the acquisition and development of real estate and infrastructure facilities in India. It real estate development projects include housing projects, cottages, recreation clubs, and other infrastructure projects. The company which was formerly known as Pan Packaging Industries Limited changed its name to Alchemist Realty Limited in 2006. Alchemist Realty Limited is based in Mumbai, India.
Shareholding Pattern: The promoters hold 42.3 % while the general public holds 57.70% according to the latest data available.
Shareholding belonging to the category
"Public" and holding more than 1% of the Total No. of Shares
Sl. No. Name of the Shareholder No. of Shares Shares as % of Total No. of Shares
1 Endogram Leasing & Trading C 8,605,580 11.61
2 Basic Soft Solutions Pvt Ltd 4,878,500 6.58
3 Manbhavan Buildwell Pvt 2,442,285 3.30
4 Basics Soft Solutions Pvt Ltd 1,917,750 2.59
5 Amandeep 2,635,200 3.56
6 Archna Singh 1,560,000 2.11
7 Sunil Talwar 1,052,695 1.42
8 Varinder Pal Singh 912,730 1.23
9 HS FII Investments Ltd 7,115,000 9.60
10 CLSA Mauritius Ltd 7,112,000 9.60
11 Somerset Emerging Opport 1,143,944 1.54
Total 39,375,684 53.14
Financials: In FY09, though the net sales of the company increased but the net profit declined due to higher investments in Land Plots & Constructed Properties. The net income of the company for FY09 came out to be Rs.101.55 Cr as against Rs.82.87 Cr in the same period previous year. The net profit of the company came out to be Rs.1.03 Cr in FY09 as against Rs.4.54 Cr in the same period previous year. In Q2FY10, the total income of the company came out to be Rs.28.071 Cr as against Rs.5.7 Cr in the same period previous year. The net profit of the company for Q2FY10 came out to be Rs.24.62 lakhs as against Rs.12.43 lakhs in the same period previous year. During the quarter ended September, 2009, the company declared a divided of 5%, i.e.Re.0.10 per equity share of Rs.2 each for the year FY09.
Triggers:
• During the year, the Company acquired lands at various locations all over the country and is in the process of launching many projects in Real Estate Development which includes housing projects, cottages, recreation clubs and other infrastructure projects. The Company has also finalized Joint Venture agreements with various Companies for launch of prestigious projects.
• In the last fiscal the Company issued 7040100 equity shares of the face value of Rs.10 each as bonus shares to the shareholders in the ratio of 1:1 i.e. One bonus share for every one scare held by the shareholders as on record date i.e. 7th February, 2008. This somewhat proves that it is in investor friendly.
• Alchemist Realty Limited is a real estate company, for which land is a key asset. The Company believes in acquiring lower cost land in suburban area and transforming them into modem and utilizes land. With this philosophy intact, the Company has continued to develop its land bank. This is quite evident in FY09 results, when the company invested more in assets as compared to the same value in previous year. Needless to say in FY08 and FY09, the Company acquired newer land parcels in various parts of North India.
• Alchemist Realty Limited is focused on developing itself as a premium brand that enjoys a strong sense of trust amongst its stakeholders. There has been a constant endeavor to focus on creating a brand that embodies all the Company’s strategic goals and corporate values. In the real estate space, the Alchemist Realty Limited stands for: (a) Ability to identify and procure land in strategic locations, (b) Experience in executing large projects, c) Superior design, construction and development.
• The company is exploring various opportunities in the real estate business and has also finalized Joint Venture agreements with various other players in the Real Estate for launch of prestigious projects. With the continuous trend of shifting population from rural areas to urban areas, increase in the size of population, the demand of both residential and commercial properties is showing an upward trend. Moreover, it is now widely believed that the US Fed will happily risk inflation in order to avoid deflation, Because the US Fed is far more worried about the possibility of deflation (systematically falling prices) caused by a double-dip recession. Japan in the 1990s suffered economic stagnation for a decade because of deflation, and the US is determined to avoid that path. So, it will keep interest rates at virtually zero for the foreseeable future. So this is expected to increases money supply by over a trillion dollars in the world and that too at virtually zero interest. The dollar is an international currency whose impact is felt across the world. Investors and speculators everywhere know that growth prospects are much better in emerging markets than in the West. So they are borrowing hundreds of billions of dollars at dirt-cheap rates to buy stocks, real estate and commodities in emerging markets. Hence, asset values are getting inflated not just in India but in all emerging markets. This is expected to push the investors to real estate stocks and pure real estates in future. The company stands to gain from this move as it has a sizable land bank.
• The last year there was news in a section of the media that Alchemist Realty Ltd will invest over Rs.5, 000 Cr in the next 7-10 years for developing a land bank of 10,600 acres. The company’s land bank in CY08, stood at 10,600 acres across the country, mainly in the northern states.
• Alchemist Realty proposes to open a chain of specialty restaurants in northern India under ‘Red Cap’ brand. At first, the company would open only 20 (twenty) restaurants by the end of FY11 in northern states. The size of the outlets would vary from 3,200 sq ft to 6,500 sq ft. The company would also develop over 1,000 high-end housing units by 2011. The company would construct luxury villas on nine acres of land in Shimla and an IT park at Chandigarh.
Conclusion: Considering all the factors mentioned above it will be prudent to invest in the shares of Alchemist Realty Ltd for medium to long term perspective, though some short term gains till Rs.21 cannot be ruled out.
From the weekly charts it is found that the stock has a strong support at Rs.13.5; the higher bottom being made at Rs.14.20. The fast Stochastic and Bollinger bands are in buy mode. One can buy the scrip at the CMP of Rs.14.54 for a target of Rs.21 in the short term. In the medium to long term, the scrip can rise to Rs.55-Rs.60. Hence buy this scrip in all declines.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
BSE Code: 532114
Face Value: Rs.2
CMP: Rs.14.54
Market Cap: Rs.107.74 Cr
EPS: Re.0.11
Introduction: Formerly known as Pan Packaging Industries Ltd, the Company’s principal activity at present is to develop real estate property. Pan Packaging Industries Private Ltd. was originally incorporated as Private Limited company on 03 March 1983 to manufacture and supply Corrugated Boxes. The name and style of the company was changed as Pan Packaging Industries Limited on 25th April 1995. The company started its commercial production in 13-03-1984 which was its first phase of operations with an installed capacity of 900 TPA. Alchemist Realty is now widely recognized as one of the growing innovative real estate companies in India.
The Company now engages in the acquisition and development of real estate and infrastructure facilities in India. It real estate development projects include housing projects, cottages, recreation clubs, and other infrastructure projects. The company which was formerly known as Pan Packaging Industries Limited changed its name to Alchemist Realty Limited in 2006. Alchemist Realty Limited is based in Mumbai, India.
Shareholding Pattern: The promoters hold 42.3 % while the general public holds 57.70% according to the latest data available.
Shareholding belonging to the category
"Public" and holding more than 1% of the Total No. of Shares
Sl. No. Name of the Shareholder No. of Shares Shares as % of Total No. of Shares
1 Endogram Leasing & Trading C 8,605,580 11.61
2 Basic Soft Solutions Pvt Ltd 4,878,500 6.58
3 Manbhavan Buildwell Pvt 2,442,285 3.30
4 Basics Soft Solutions Pvt Ltd 1,917,750 2.59
5 Amandeep 2,635,200 3.56
6 Archna Singh 1,560,000 2.11
7 Sunil Talwar 1,052,695 1.42
8 Varinder Pal Singh 912,730 1.23
9 HS FII Investments Ltd 7,115,000 9.60
10 CLSA Mauritius Ltd 7,112,000 9.60
11 Somerset Emerging Opport 1,143,944 1.54
Total 39,375,684 53.14
Financials: In FY09, though the net sales of the company increased but the net profit declined due to higher investments in Land Plots & Constructed Properties. The net income of the company for FY09 came out to be Rs.101.55 Cr as against Rs.82.87 Cr in the same period previous year. The net profit of the company came out to be Rs.1.03 Cr in FY09 as against Rs.4.54 Cr in the same period previous year. In Q2FY10, the total income of the company came out to be Rs.28.071 Cr as against Rs.5.7 Cr in the same period previous year. The net profit of the company for Q2FY10 came out to be Rs.24.62 lakhs as against Rs.12.43 lakhs in the same period previous year. During the quarter ended September, 2009, the company declared a divided of 5%, i.e.Re.0.10 per equity share of Rs.2 each for the year FY09.
Triggers:
• During the year, the Company acquired lands at various locations all over the country and is in the process of launching many projects in Real Estate Development which includes housing projects, cottages, recreation clubs and other infrastructure projects. The Company has also finalized Joint Venture agreements with various Companies for launch of prestigious projects.
• In the last fiscal the Company issued 7040100 equity shares of the face value of Rs.10 each as bonus shares to the shareholders in the ratio of 1:1 i.e. One bonus share for every one scare held by the shareholders as on record date i.e. 7th February, 2008. This somewhat proves that it is in investor friendly.
• Alchemist Realty Limited is a real estate company, for which land is a key asset. The Company believes in acquiring lower cost land in suburban area and transforming them into modem and utilizes land. With this philosophy intact, the Company has continued to develop its land bank. This is quite evident in FY09 results, when the company invested more in assets as compared to the same value in previous year. Needless to say in FY08 and FY09, the Company acquired newer land parcels in various parts of North India.
• Alchemist Realty Limited is focused on developing itself as a premium brand that enjoys a strong sense of trust amongst its stakeholders. There has been a constant endeavor to focus on creating a brand that embodies all the Company’s strategic goals and corporate values. In the real estate space, the Alchemist Realty Limited stands for: (a) Ability to identify and procure land in strategic locations, (b) Experience in executing large projects, c) Superior design, construction and development.
• The company is exploring various opportunities in the real estate business and has also finalized Joint Venture agreements with various other players in the Real Estate for launch of prestigious projects. With the continuous trend of shifting population from rural areas to urban areas, increase in the size of population, the demand of both residential and commercial properties is showing an upward trend. Moreover, it is now widely believed that the US Fed will happily risk inflation in order to avoid deflation, Because the US Fed is far more worried about the possibility of deflation (systematically falling prices) caused by a double-dip recession. Japan in the 1990s suffered economic stagnation for a decade because of deflation, and the US is determined to avoid that path. So, it will keep interest rates at virtually zero for the foreseeable future. So this is expected to increases money supply by over a trillion dollars in the world and that too at virtually zero interest. The dollar is an international currency whose impact is felt across the world. Investors and speculators everywhere know that growth prospects are much better in emerging markets than in the West. So they are borrowing hundreds of billions of dollars at dirt-cheap rates to buy stocks, real estate and commodities in emerging markets. Hence, asset values are getting inflated not just in India but in all emerging markets. This is expected to push the investors to real estate stocks and pure real estates in future. The company stands to gain from this move as it has a sizable land bank.
• The last year there was news in a section of the media that Alchemist Realty Ltd will invest over Rs.5, 000 Cr in the next 7-10 years for developing a land bank of 10,600 acres. The company’s land bank in CY08, stood at 10,600 acres across the country, mainly in the northern states.
• Alchemist Realty proposes to open a chain of specialty restaurants in northern India under ‘Red Cap’ brand. At first, the company would open only 20 (twenty) restaurants by the end of FY11 in northern states. The size of the outlets would vary from 3,200 sq ft to 6,500 sq ft. The company would also develop over 1,000 high-end housing units by 2011. The company would construct luxury villas on nine acres of land in Shimla and an IT park at Chandigarh.
Conclusion: Considering all the factors mentioned above it will be prudent to invest in the shares of Alchemist Realty Ltd for medium to long term perspective, though some short term gains till Rs.21 cannot be ruled out.
From the weekly charts it is found that the stock has a strong support at Rs.13.5; the higher bottom being made at Rs.14.20. The fast Stochastic and Bollinger bands are in buy mode. One can buy the scrip at the CMP of Rs.14.54 for a target of Rs.21 in the short term. In the medium to long term, the scrip can rise to Rs.55-Rs.60. Hence buy this scrip in all declines.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Wednesday, November 25, 2009
Kamanwala Housing Construction - Small Cap Real Estate Stock To Buy
Kamanwala Housing Construction Limited (KHCL) is a company with a 20-year track record. They are based at Mumbai, the commercial capital of India. Kamanwala have 12 ongoing projects spread across the prime location of Mumbai like central and western Mumbai – Bandra Kurla Complex, Andheri, Santa Cruz, Malad and Versova.
Mumbai’s Filmistan studio is owned in partnership by Kamanwala and they are coming up with development of this 7 lakh sq ft of land to a shopping mall. Kamanwala has entered into joint venture with M/s. Prajay Engineers & others to construct at Patancheru, Hyderabad. The work has already began.
Kamanwala stock is a dividend paying company. They also gave bonus shares last year.
Big investors who are buying stocks of Kamalwala constructions:
=> Mavi investment’s Nirmal Kotecha of Pyramid Samira fame is buying this stock
=> Nisha Suman Jain is holding a major quantity of more than 10 % and in bulk deal it shows that she is increasing her stake at every stage. She is HNI who is director of Jainson Group of Industries, Build2 Last Infrastructure and a film producer of Maalik Ek.
=> Ashok Parmar, a HNI from Pune has invested in Kamanwala. He is known for acquiring a big stake in the company he invests in and according to news, he is also increasing his stake in Kamanwala. He has been in news for acquiring a high stake in Videocon and shooting its price up.
=> Religare holds a good amount of quantity and they are in the process of increasing it further.
Real estate sector and housing has started recovering from recession but it will take time. Mumbai real estate price has been shooting up for some time now and 2010 would observe the recovery in prices.
The company would achieve a turnover of Rs.1800 cr in 18 months( March 2011) due to completion of its projects which totals up to 20 lakh sq ft. Following this, the expected EPS for 2011 is Rs.150 - Rs.200. It is a small cap stock to buy and one can buy especially if it corrects from current CMP 66.50/-
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Mumbai’s Filmistan studio is owned in partnership by Kamanwala and they are coming up with development of this 7 lakh sq ft of land to a shopping mall. Kamanwala has entered into joint venture with M/s. Prajay Engineers & others to construct at Patancheru, Hyderabad. The work has already began.
Kamanwala stock is a dividend paying company. They also gave bonus shares last year.
Big investors who are buying stocks of Kamalwala constructions:
=> Mavi investment’s Nirmal Kotecha of Pyramid Samira fame is buying this stock
=> Nisha Suman Jain is holding a major quantity of more than 10 % and in bulk deal it shows that she is increasing her stake at every stage. She is HNI who is director of Jainson Group of Industries, Build2 Last Infrastructure and a film producer of Maalik Ek.
=> Ashok Parmar, a HNI from Pune has invested in Kamanwala. He is known for acquiring a big stake in the company he invests in and according to news, he is also increasing his stake in Kamanwala. He has been in news for acquiring a high stake in Videocon and shooting its price up.
=> Religare holds a good amount of quantity and they are in the process of increasing it further.
Real estate sector and housing has started recovering from recession but it will take time. Mumbai real estate price has been shooting up for some time now and 2010 would observe the recovery in prices.
The company would achieve a turnover of Rs.1800 cr in 18 months( March 2011) due to completion of its projects which totals up to 20 lakh sq ft. Following this, the expected EPS for 2011 is Rs.150 - Rs.200. It is a small cap stock to buy and one can buy especially if it corrects from current CMP 66.50/-
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Saturday, November 21, 2009
Latest update after Swiss Bank has agreed to disclose the funds&.
Our Indians' Money - 70, 00,000 Crores Rupees In Swiss Bank
1) Yes, 70 lakhs crores rupees of India are lying in Switzerland banks. This is the highest amount lying outside any country, from amongst 180 countries of the world, as if India is the champion of Black Money.
2) Swiss Government has officially written to Indian Government that they are willing to inform the details of holders of 70 lakh crore rupees in their Banks, if Indian Government officially asks them.
3) On 22-5-08, this news has already been published in The Times of India and other Newspapers based on Swiss Government's official letter to Indian Government.
4) But the Indian Government has not sent any official enquiry to Switzerland for details of money which has been sent outside India between 1947 to 2008.. The opposition party is also equally not interested in doing so because most of the amount is owned by politicians and it is every Indian's money.
5) This money belongs to our country. From these funds we can repay 13 times of our country's foreign debt. The interest alone can take care of the Centers yearly budget. People need not pay any taxes and we can pay Rs. 1 lakh to each of 45 crore poor families.
6) Let us imagine, if Swiss Bank is holding Rs. 70 lakh Crores, then how much money is lying in other 69 Banks? How much they have deprived the Indian people? Just think, if the Account holder dies, the bank becomes the owner of the funds in his account.
7) Are these people totally ignorant about the philosophy of Karma? What will this ill-gotten wealth do to them and their families when they own/use such money, generated out of corruption and exploitation?
8) Indian people have read and have known about these facts. But the helpless people have neither time nor inclination to do anything in the matter. This is like "a new freedom struggle" and we will have to fight this.
9) This money is the result of our sweat and blood.. The wealth generated and earned after putting in lots of mental and physical efforts by Indian people must be brought back to our country.
1) Yes, 70 lakhs crores rupees of India are lying in Switzerland banks. This is the highest amount lying outside any country, from amongst 180 countries of the world, as if India is the champion of Black Money.
2) Swiss Government has officially written to Indian Government that they are willing to inform the details of holders of 70 lakh crore rupees in their Banks, if Indian Government officially asks them.
3) On 22-5-08, this news has already been published in The Times of India and other Newspapers based on Swiss Government's official letter to Indian Government.
4) But the Indian Government has not sent any official enquiry to Switzerland for details of money which has been sent outside India between 1947 to 2008.. The opposition party is also equally not interested in doing so because most of the amount is owned by politicians and it is every Indian's money.
5) This money belongs to our country. From these funds we can repay 13 times of our country's foreign debt. The interest alone can take care of the Centers yearly budget. People need not pay any taxes and we can pay Rs. 1 lakh to each of 45 crore poor families.
6) Let us imagine, if Swiss Bank is holding Rs. 70 lakh Crores, then how much money is lying in other 69 Banks? How much they have deprived the Indian people? Just think, if the Account holder dies, the bank becomes the owner of the funds in his account.
7) Are these people totally ignorant about the philosophy of Karma? What will this ill-gotten wealth do to them and their families when they own/use such money, generated out of corruption and exploitation?
8) Indian people have read and have known about these facts. But the helpless people have neither time nor inclination to do anything in the matter. This is like "a new freedom struggle" and we will have to fight this.
9) This money is the result of our sweat and blood.. The wealth generated and earned after putting in lots of mental and physical efforts by Indian people must be brought back to our country.
Mid-day Multimedia - Stock Analysis & Recommendation
Multimedia Limited operates as a media company in India. It owns and operates various community newspapers, including Mid Day and Sunday Mid Day for English readers, Gujarati Mid Day, and Urdu daily Inquilab. The company also operates Radio One 94.3 FM with stations at Ahmedabad, Bangalore, Chennai, Delhi, and Pune.
In addition, it engages in outdoor advertising business. Mid-Day Multimedia Limited is based in Mumbai, India. Rakesh Jhunjhunwala, an iconic investor in Indian stock markets pocketed around 5% stake in the counter at 40 odd rs. Sensex moved five times since then, many scrips became huge wealth creators, people made fortune but mid-day never moved.
Market Cap 127.07
* EPS (TTM) 0.63
* P/E 38.17
* P/C 29.69
* Book Value 30.60
* Price/Book 0.79
Div(%) 0.00
Div Yield(%) -
Market Lot 1.00
Face Value 10.00
Industry P/E 32.30
The stock is trading at higher P/E levels but it is available below it's book value which is indication of a value stock.
Rakesh Jhunjhunwala is holding the stock even now which shows his confidence and conviction in the company. Media sector is a sun rising sector with immense potential and opportunities. With RJ still backing it I feel mid day is a stock to buy which has little downside from around 20/- levels but can be a multi bagger in long run.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
In addition, it engages in outdoor advertising business. Mid-Day Multimedia Limited is based in Mumbai, India. Rakesh Jhunjhunwala, an iconic investor in Indian stock markets pocketed around 5% stake in the counter at 40 odd rs. Sensex moved five times since then, many scrips became huge wealth creators, people made fortune but mid-day never moved.
Market Cap 127.07
* EPS (TTM) 0.63
* P/E 38.17
* P/C 29.69
* Book Value 30.60
* Price/Book 0.79
Div(%) 0.00
Div Yield(%) -
Market Lot 1.00
Face Value 10.00
Industry P/E 32.30
The stock is trading at higher P/E levels but it is available below it's book value which is indication of a value stock.
Rakesh Jhunjhunwala is holding the stock even now which shows his confidence and conviction in the company. Media sector is a sun rising sector with immense potential and opportunities. With RJ still backing it I feel mid day is a stock to buy which has little downside from around 20/- levels but can be a multi bagger in long run.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Thursday, November 19, 2009
MY FINANCIAL GURU ;Rakesh Jhunjhunwala On How To Buy Stocks
Excerpts of interview of Rakesh Jhunjhunwala which every investor must read, were published on moneycontrol.com. I am reproducing it here for benefit of fellow investors.
If you’re a proponent of value investing, which involves buying stocks that offer value when they’re cheap and holding on to them till they achieve their potential — Warren Buffet style — here are tips from India’s own Buffet, Rakesh Jhunjhunwala, that you may use.
Rakesh Jhunjhunwala’s advice to investors is not to look for companies that would give profits but understand factors that help in creating profits. “Don’t emphasise too much on analysis of profits,” he says. “Profits are created due to various stages of circumstances. I always look at how large is the opportunity for that business in the sector.”
He recalls how he bought Praj Industries, a bio-ethanol company that gave him large returns. “When I bought Praj, we thought there would be a humongous demand for ethanol. The opportunity was huge but it was not recognized.”
IT bellwether Infosys, he said, benefited because of the internet revolution. “Nobody knew about Infosys in 1993 but Infosys could become Infosys because the opportunity for the internet went through the roof.”
“When opportunities come, they can come through technology, marketing, brands, value protections, capital, etc. You need to be able to spot those.”
— “Then I look at scalability of a particular company that I choose in a sector,” Jhunjhunwala says. “A friend of mine asked me: should I invest in a small cap or largecap? I said we must invest in the smallcaps, which will be the largecaps. The biggest challenge of investing is that you should recognise whether organization has the ability to scale.”
Jhunjhunwala says he makes an investing decision by understanding how a company’s profits may grow in the next four-five years, and by that account, its price-to-earnings and valuation. “If I succeed in making the right call, then after four-five years, I do a proper re-examination of the business model and accordingly reallocate capital because the business model can undergo change. Intense competition could emerge in that sector,” he says. “This is when I examine the earlier opinion I had made when I first bought, whether those assumptions still were valid.”
— How should you spot a good company? “You can have an idea by looking at companies’ capital raising. Are they distributing profits, are they using the surpluses in the right manner,” he says. “For me, quarters don’t matter. There can be always be an aberration in one quarter when the company has less profits. You should examine the reason for it and whether it can revert back on its growth.”
— Choices of asset classes is important too, says Jhunjhunwala. “If you bought gold in 1970 and sold it in 1980. you bought the Nikkei Index in 1980 and sold it in 1989 and then bought the Nasdaq [till before the dotcom bust], you would have made 33% compounded returns in three decades,” he says. “Warren Buffet rode the entire wave of those different asset classes.”
— “Value investing is relevant in all circumstances. But thought processes and principles are dynamic and not static. Be open to change,” he says.
— Don’t get carried away short term market trends, he says. “In 1999, people used to buy Himachal Futuristic, Global Tele, Pentasoft, I used to buy Shipping Corporation and Bharat Electronics because I saw long-term value,” he adds. “Never get carried away by aberrations, recognize and respect them but do remember that the market corrects its aberration though it takes time.”
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
If you’re a proponent of value investing, which involves buying stocks that offer value when they’re cheap and holding on to them till they achieve their potential — Warren Buffet style — here are tips from India’s own Buffet, Rakesh Jhunjhunwala, that you may use.
Rakesh Jhunjhunwala’s advice to investors is not to look for companies that would give profits but understand factors that help in creating profits. “Don’t emphasise too much on analysis of profits,” he says. “Profits are created due to various stages of circumstances. I always look at how large is the opportunity for that business in the sector.”
He recalls how he bought Praj Industries, a bio-ethanol company that gave him large returns. “When I bought Praj, we thought there would be a humongous demand for ethanol. The opportunity was huge but it was not recognized.”
IT bellwether Infosys, he said, benefited because of the internet revolution. “Nobody knew about Infosys in 1993 but Infosys could become Infosys because the opportunity for the internet went through the roof.”
“When opportunities come, they can come through technology, marketing, brands, value protections, capital, etc. You need to be able to spot those.”
— “Then I look at scalability of a particular company that I choose in a sector,” Jhunjhunwala says. “A friend of mine asked me: should I invest in a small cap or largecap? I said we must invest in the smallcaps, which will be the largecaps. The biggest challenge of investing is that you should recognise whether organization has the ability to scale.”
Jhunjhunwala says he makes an investing decision by understanding how a company’s profits may grow in the next four-five years, and by that account, its price-to-earnings and valuation. “If I succeed in making the right call, then after four-five years, I do a proper re-examination of the business model and accordingly reallocate capital because the business model can undergo change. Intense competition could emerge in that sector,” he says. “This is when I examine the earlier opinion I had made when I first bought, whether those assumptions still were valid.”
— How should you spot a good company? “You can have an idea by looking at companies’ capital raising. Are they distributing profits, are they using the surpluses in the right manner,” he says. “For me, quarters don’t matter. There can be always be an aberration in one quarter when the company has less profits. You should examine the reason for it and whether it can revert back on its growth.”
— Choices of asset classes is important too, says Jhunjhunwala. “If you bought gold in 1970 and sold it in 1980. you bought the Nikkei Index in 1980 and sold it in 1989 and then bought the Nasdaq [till before the dotcom bust], you would have made 33% compounded returns in three decades,” he says. “Warren Buffet rode the entire wave of those different asset classes.”
— “Value investing is relevant in all circumstances. But thought processes and principles are dynamic and not static. Be open to change,” he says.
— Don’t get carried away short term market trends, he says. “In 1999, people used to buy Himachal Futuristic, Global Tele, Pentasoft, I used to buy Shipping Corporation and Bharat Electronics because I saw long-term value,” he adds. “Never get carried away by aberrations, recognize and respect them but do remember that the market corrects its aberration though it takes time.”
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Tuesday, November 17, 2009
Scripscan:Rama Pulp & Papers Ltd-----currently quoting at compelling valuations
Scripscan:Rama Pulp & Papers Ltd@21
Code:502587
Story:Rama Pulp & Papers Limited (RPPL) is a certified ISO 9001-2000 Company, engaged in manufacturing various types of papers mainly cultural and speciality grades. RPPL has firmly positioned itself among prominent paper manufacturing groups based in India.Rama Pulp and paper is a mid sized player in the Indian paper industry. The company currently operates with a capacity of 21,000 tpa with the capability to manufacture various paper varieties like writing-printing and carbon base paper, poster and wrapping paper,napken grade tissue paper etc. RPPL is expanding its capacity to 30,000 MTs. p.a. The company has a strong distribution network that enables it to market its products in various regions.Today RPPL has grown from strength to strength with its diversified product mix andstrategic marketing plan. With further expansion programs on hand, RPPL is now looking ahead to meet the emerging challenges both in domestic as well as overseas market.Keeping in view to take the company to the next level, company is planning to acquire an existing Industrial Chemical Unit to produce various industrial grades of chemicals, especially Sulfonated products like Sulfur Dioxide, Sulfur Trioxide etc.This new venture will give the company a new lease of life.As the paper industry requires lot of steam and power, the high pressure steam being vented out of the manufacturing process of these chemicals can be used for running the steam based power plant and then the extracted steam will be used for manufacturing of paper. Hence, the paper mill will self sufficient for its requirement of energy like steam and power. The will make the company very high on its bottom line.RPPL has a strong product mix that would enable it to cater to the demands of various customer segments. The new value added products introduced by the company are well accepted by the dealers as well as the end users, which ultimately gave a forward thrust to the company to emerge as a key player in this segment. The Carbon base paper being manufactured by the company has a market share of more than 50%, which places the company among the top players in this segment.The company is exporting its products to a very reputed chain of departmental stores like WALLMART and its specialty grade paper is very well accepted globally.The demand of paper as a whole is in a growing spree. The demand of paper is directly linked to the literacy of a particular country and in India, with implementation of educational policy, the literacy rate is growing and paper consumption is also in upward. Therefore, a steady growth in the demand of paper, especially writing printing,newsprint etc., is expected.RPPL is expected to register robust growth in revenues and earnings going forward. It is currently quoting at compelling valuations of 1.8x and 1.6x FY11E and FY12E earnings. Capacity expansion and growing demand for paper from various segments like education, industrial and specialty, in addition to its inorganic growth in Sulfonated chemicals will drive revenue and earnings growth for RPPL. The stock has potential to deliver handsome returns to the investors over a period of next one year. Investors can enter into the stock at current level considering the huge growth potential, which would enable investors to earn a healthy return on their investment.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Code:502587
Story:Rama Pulp & Papers Limited (RPPL) is a certified ISO 9001-2000 Company, engaged in manufacturing various types of papers mainly cultural and speciality grades. RPPL has firmly positioned itself among prominent paper manufacturing groups based in India.Rama Pulp and paper is a mid sized player in the Indian paper industry. The company currently operates with a capacity of 21,000 tpa with the capability to manufacture various paper varieties like writing-printing and carbon base paper, poster and wrapping paper,napken grade tissue paper etc. RPPL is expanding its capacity to 30,000 MTs. p.a. The company has a strong distribution network that enables it to market its products in various regions.Today RPPL has grown from strength to strength with its diversified product mix andstrategic marketing plan. With further expansion programs on hand, RPPL is now looking ahead to meet the emerging challenges both in domestic as well as overseas market.Keeping in view to take the company to the next level, company is planning to acquire an existing Industrial Chemical Unit to produce various industrial grades of chemicals, especially Sulfonated products like Sulfur Dioxide, Sulfur Trioxide etc.This new venture will give the company a new lease of life.As the paper industry requires lot of steam and power, the high pressure steam being vented out of the manufacturing process of these chemicals can be used for running the steam based power plant and then the extracted steam will be used for manufacturing of paper. Hence, the paper mill will self sufficient for its requirement of energy like steam and power. The will make the company very high on its bottom line.RPPL has a strong product mix that would enable it to cater to the demands of various customer segments. The new value added products introduced by the company are well accepted by the dealers as well as the end users, which ultimately gave a forward thrust to the company to emerge as a key player in this segment. The Carbon base paper being manufactured by the company has a market share of more than 50%, which places the company among the top players in this segment.The company is exporting its products to a very reputed chain of departmental stores like WALLMART and its specialty grade paper is very well accepted globally.The demand of paper as a whole is in a growing spree. The demand of paper is directly linked to the literacy of a particular country and in India, with implementation of educational policy, the literacy rate is growing and paper consumption is also in upward. Therefore, a steady growth in the demand of paper, especially writing printing,newsprint etc., is expected.RPPL is expected to register robust growth in revenues and earnings going forward. It is currently quoting at compelling valuations of 1.8x and 1.6x FY11E and FY12E earnings. Capacity expansion and growing demand for paper from various segments like education, industrial and specialty, in addition to its inorganic growth in Sulfonated chemicals will drive revenue and earnings growth for RPPL. The stock has potential to deliver handsome returns to the investors over a period of next one year. Investors can enter into the stock at current level considering the huge growth potential, which would enable investors to earn a healthy return on their investment.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Monday, November 16, 2009
Cox and Kings (India) — IPO: Invest
Investments with a long-term perspective can be considered in the initial public offering of the global tour operator Cox and Kings (C&K). The company’s strong brand image, wide geographical reach — both within the country and across major global markets — synergies of operations between its various subsidiaries and the economies of scale it thus enjoys are positives to the offer.
Despite last year’s declining trends in the global travel and tourism space, C&K managed to not just grow it revenues but also improve its operating margin and profits. C&K’s strong domestic market position helped by improving discretionary spends by Indian consumers and its newly acquired presence in high potential markets of the US and Australia offers it bright growth prospects.
The highly fragmented domestic travel market, with few organised tour operators, also leaves sufficient scope for market share gains. The valuation, though a tad stiff given the current market conditions, is at a discount to that of Mahindra Holidays and Resorts (29 times its likely FY10 per share earnings).
The offer price of Rs 316-330 discounts the C&K’s likely FY-10 per share earnings by 22-23 times on post-offer equity base. The company’s superior growth rates, high operating margin in this business and the likely scarcity premium for the business do offer room for premium valuations.
Business prospects
The company’s domestic business straddles leisure travel, corporate travel, forex and visa processing. While it designs packages for both individuals and groups for their domestic and international travel-tagged outbound travel, it also offers destination management and ground handling services for foreign tourists visiting India.
C&K has also built a web of subsidiaries that complement each other’s business offerings. For instance, while on the one hand, its overseas presence through its subsidiaries help attract business for the domestic inbound business, on the other, it also helps keep a check on service levels and costs.
Similarly, its UK subsidiary, ETN, that does destination management for European sites stands to gain from its acquisitions in Australia and the US, both of which enjoy a high outbound travel volume to Europe. The high synergies and travel volumes afford the company better bargaining power with airlines and hotels, in turn, helping it competitively price its products and services.
Other ventures such as Maharaja Express, a luxury train to be launched in January 2010 in collaboration with IRCTC and visa-processing business for which it has received approvals from six countries, also offer long-term growth potential.
Marketing presence
On the whole, C&K has presence in 19 countries. In India, which made up more than half its overall revenues last year, the company has 255 points of presence covering 164 locations through a mix of owned and franchised sales shops, general sales agents and preferred sales agents.
The company, may need toimprove its reach in order to keep competition at bay. Its franchise distribution model holds potential in this regard. Not only does it offer a cheaper expansion mode, it may also help convert potential competitors into partners; the established client relationships of converts offering an added advantage.
C&K may also have to fight with vacation ownership companies for consumers’ wallet share. In that, however, tour operators appear relatively better placed as besides being asset light, they offer a wider basket of travel destinations.
Results and IPO proceeds
Over the last three years, C&K has grown its revenues and profits at a compounded annual growth rate of about 66 per cent and 80 per cent, respectively. In the same period, it managed to expand its operating profit margin by 10 percentage points to 42 per cent. Attributable mainly to increasing interest burden, the company’s NPM fell to 22 per cent from 28 per cent. With C&K seeking to use a portion of the IPO proceeds (Rs 129.6 crore) to repay loans, its interest outgo can be expected to come down significantly. C&K also plans to earmark IPO proceeds for acquisitions (Rs 150 crore), invest in overseas subsidiaries and upgrade corporate office.
Offer Details
The company seeks to raise Rs 584-610 crore from the issue, which also comprises an offer for sale of 3,046,640 equity shares by Lehman Brothers Opportunity Ltd, Deutsche Securities Mauritius Ltd and Merrill Lynch Capital Markets Espana.
The offer is open from November 18-20.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Despite last year’s declining trends in the global travel and tourism space, C&K managed to not just grow it revenues but also improve its operating margin and profits. C&K’s strong domestic market position helped by improving discretionary spends by Indian consumers and its newly acquired presence in high potential markets of the US and Australia offers it bright growth prospects.
The highly fragmented domestic travel market, with few organised tour operators, also leaves sufficient scope for market share gains. The valuation, though a tad stiff given the current market conditions, is at a discount to that of Mahindra Holidays and Resorts (29 times its likely FY10 per share earnings).
The offer price of Rs 316-330 discounts the C&K’s likely FY-10 per share earnings by 22-23 times on post-offer equity base. The company’s superior growth rates, high operating margin in this business and the likely scarcity premium for the business do offer room for premium valuations.
Business prospects
The company’s domestic business straddles leisure travel, corporate travel, forex and visa processing. While it designs packages for both individuals and groups for their domestic and international travel-tagged outbound travel, it also offers destination management and ground handling services for foreign tourists visiting India.
C&K has also built a web of subsidiaries that complement each other’s business offerings. For instance, while on the one hand, its overseas presence through its subsidiaries help attract business for the domestic inbound business, on the other, it also helps keep a check on service levels and costs.
Similarly, its UK subsidiary, ETN, that does destination management for European sites stands to gain from its acquisitions in Australia and the US, both of which enjoy a high outbound travel volume to Europe. The high synergies and travel volumes afford the company better bargaining power with airlines and hotels, in turn, helping it competitively price its products and services.
Other ventures such as Maharaja Express, a luxury train to be launched in January 2010 in collaboration with IRCTC and visa-processing business for which it has received approvals from six countries, also offer long-term growth potential.
Marketing presence
On the whole, C&K has presence in 19 countries. In India, which made up more than half its overall revenues last year, the company has 255 points of presence covering 164 locations through a mix of owned and franchised sales shops, general sales agents and preferred sales agents.
The company, may need toimprove its reach in order to keep competition at bay. Its franchise distribution model holds potential in this regard. Not only does it offer a cheaper expansion mode, it may also help convert potential competitors into partners; the established client relationships of converts offering an added advantage.
C&K may also have to fight with vacation ownership companies for consumers’ wallet share. In that, however, tour operators appear relatively better placed as besides being asset light, they offer a wider basket of travel destinations.
Results and IPO proceeds
Over the last three years, C&K has grown its revenues and profits at a compounded annual growth rate of about 66 per cent and 80 per cent, respectively. In the same period, it managed to expand its operating profit margin by 10 percentage points to 42 per cent. Attributable mainly to increasing interest burden, the company’s NPM fell to 22 per cent from 28 per cent. With C&K seeking to use a portion of the IPO proceeds (Rs 129.6 crore) to repay loans, its interest outgo can be expected to come down significantly. C&K also plans to earmark IPO proceeds for acquisitions (Rs 150 crore), invest in overseas subsidiaries and upgrade corporate office.
Offer Details
The company seeks to raise Rs 584-610 crore from the issue, which also comprises an offer for sale of 3,046,640 equity shares by Lehman Brothers Opportunity Ltd, Deutsche Securities Mauritius Ltd and Merrill Lynch Capital Markets Espana.
The offer is open from November 18-20.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Saturday, November 14, 2009
LEARNING SECTION-----The cognitive process of acquiring skill
In his wonderful book, Pit Bull , Marty Schwartz tells several stories of the times he lost money because his ego got in the way. In the end he has this to say about ego: "I've said it before, and I'm going to say it again, because it cannot be overemphasized: the most important change in my trading career occurred when I learned to DIVORCE MY EGO FROM THE TRADE. Trading is a psychological game. Most people think that they're playing against the market, but the market doesn't care. You're really playing against yourself. You have to stop trying to will things to happen in order to prove that you're right. Listen only to what the market is telling you now. Forget what you thought it was telling you five minutes ago. The sole objective of trading is not to prove you're right, but to hear the cash register ring
When u are Getting Free calls with accuracy of more then 80% +.....Sometime our stock fails...but then we give stop & resistance levels too.
Always remember...no force or single person can move stock.Its a game of mass psychology.We look at chart ,collect information and just spread
it .......free of cost.
Always Remember :Never pay money to anybody ..who is asking for it.Just ask any Analyst (TV ,Media ,Print or Website wale Analyst ko pucho............What is their success ratio in Day trading???A Million $ Question ...Doing Bla-Bla on TV ,writing on web is very easy......but while u trade .....u are playing with live wire
wish u happy trading to all of u.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
When u are Getting Free calls with accuracy of more then 80% +.....Sometime our stock fails...but then we give stop & resistance levels too.
Always remember...no force or single person can move stock.Its a game of mass psychology.We look at chart ,collect information and just spread
it .......free of cost.
Always Remember :Never pay money to anybody ..who is asking for it.Just ask any Analyst (TV ,Media ,Print or Website wale Analyst ko pucho............What is their success ratio in Day trading???A Million $ Question ...Doing Bla-Bla on TV ,writing on web is very easy......but while u trade .....u are playing with live wire
wish u happy trading to all of u.
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
Pick of the Week
Geodesic Ltd
BSE Code: 503699
CMP: Rs.99.55
Face Value: Rs.2
52-Week High/Low: Rs.158.65/ Rs.38.50
Price/Book: 1.50
P/E: 4.99
EPS: Rs.19.94
Dividend Yield: 1.61%
Introduction: Geodesic Ltd established inthe year 1999, operates in a niche area of developing various innovative products in the information, communication and entertainment space. Geodesic's product t-list is versatile and all-encompassing when it comes to offering choice of communication and collaboration solutions to its users, whether it is the inherently simple hand-held Simputer to web-based mobile & wireless applications to the intricately complex Spyder applications.
Geodesic's mix of innovative products and high performance solutions has driven the company to profit right from its first year. Focusing its inventive capabilities across all aspects of communication and collaboration the company is widely recognized for its pioneering universal instant messaging system.
Geodesic is all set to contribute significantly to the wave of Convergence by launching innovative world class products such as the Geodesic IP phone that operates across different platforms of landlines, mobile phones & desktops/laptops that will work on all prevailing internet connections and will help users save 75-80 % on long distance calls.
Geodesic's talented staff of more than 400 employees ensures innovation, utility and ease of use. The combination of a highly competent team and state-of-the-art tools enhance the development of future-proof, useful business solutions.
Geodesic has offices in UK, Sweden, Mauritius, Germany and Hong Kong. It provides solutions and services to the following segments:
• Enterprise---SMB, BFSI, Large Business, System Integrators, Govt. etc.
• Portals and Publishers
• Handset manufacturers and Telecom Operators
• Retail Business.
Its products include a communication stack (Email/IM/ VOIP/ SMS), Customer Alignment and Relationship management and the entertainment stack including Internet Radio. Geodesic Ltd also builds E-governance solutions based on its GeoAmida (Geodesic’s Hand held Computer).
Shareholding Pattern: The promoters hold 22.74 % while the general public holds 77.26% of the shares of the company.
Shareholding belonging to the category
"Public" and holding more than 1% of the Total No.of Shares
Sl. No. Name of the Shareholder No. of Shares Shares as % of Total No. of Shares
1 Sloane Robinson Llp A/C Sr Global (Mauritius Class C -International) 6,941,726 7.53
2 Genesis Indian Investment Company Ltd General Sub Fund 5,636,742 6.11
3 Tree Line Asia Master Fund (Singapore) Pte Ltd 5,576,957 6.05
4 Deutsche Secuririies Mauritius Ltd 3,838,171 4.16
5 Morgan Stanley Investment Management Inc A/C Morgan Stanley India Investment Fund Inc 955,459 1.04
6 Indea Capital PTE Ltd A/C Indea Absolute Return Fund 1,000,000 1.08
7 Carlson Fund Equity - Asian Small Cap 3,050,000 3.31
8 Genesis Asset Managers Llp A/C Smaller Companies Portfolio Of The Genesis Emerging Markets Opportunities Fund Ltd. 2,431,603 2.64
9 Sloane Robinson Llp A/C Sr Global (Mauritius) Ltd (Class B Asia) 2,493,168 2.70
10 College Retirement Equities Fund - Global Equity Account 1,971,502 2.14
11 Banque Degroof Laxembourg Sa A/C Asia Pacific Performance Sicav 1,436,595 1.56
12 Shinsei Uti India Fund (Mauritius) Ltd 1,746,892 1.89
13 Ward Ferry Management Limited A/C Wf Asian Smaller Companies Fund Ltd. 2,457,000 2.66
14 College Retirement Equities Fund - Stock Account 1,312,500 1.42
15 Ward Ferry Management Limited A/C Wf India Reconnaissance Fund Ltd 1,183,000 1.28
16 Fidelity Funds - Pacific Fund 924,441 1.00
17 Payash Securities Pvt Ltd 1,194,727 1.30
Total 44,150,483 47.88
Financials: Geodesic Ltd reported revenue of Rs.154.4 Cr in Q2FY10, which is flat as compared to the same quarter previous year. It has managed to report a marginal rise in revenues despite revising its licensing prices downwards for the enterprise segment. Geodesic issued fewer licenses of Mundu IM and Radio to the OEM/ODM segment owing to the drop in smart phone shipments.
Its net profit for the 2nd quarter, FY10 declined by 24% at Rs.57.03 Cr as compared to the quarter ended Sept 30, 2008. The EPS for Q2FY10 came out to be Rs.6.18 as against Rs.8.12 in the same period previous year. Dividend at 40% (Re.0.80 per share) on the face value of equity share is declared by the shareholders in the AGM held on 29-09-09 and paid on 20-10-09.
Triggers:
• Geodesic's mix of innovative products and high performance solutions has driven the company to profit right from its first year. Company was awarded the Inaugural Red Herring Small Cap 100 award and is one of the only Indian companies to be included in the Red Herring Small Cap 100 list. Geodesic is a traded on India's major Stock Exchanges, the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
• The Company is focusing its inventive capabilities across all aspects of communication and collaboration. Their areas of specialty include RDBMS, networking applications, web technologies (including interface designing and Interactivity) and security protocols. Company is widely recognized for its pioneering universal instant messaging system (www.mundu.com). The Mundu products successfully combine AIM, Google Talk, ICQ, MSN, Mundu and Yahoo with deep content collaboration across the Internet, wireless devices and platforms.
• All Geodesic products are complimentary to each other. Each product can be used independently but also seamlessly integrates with all other products. Geodesic customers can begin with a single product that fulfills their requirements and as their requirements change or increase; additional products from the Geodesic suite can easily be incorporated. Geodesic was the first in the world to introduce an 'Information Slider' that changed the way people shared and collaborated information.
• The Mundu SMS launched its International SMS Service in India, Australia, Singapore, Philippines, South Africa, UAE, and UK. Mundu SMS will reach out to more than 100 countries during the financial year.
• It announced plans to launch Filmorbit—a portal dedicated to the India Entertainment and Media industry in India. The portal would use Mundu Entertainment stake as a means to deliver deep interlinked content. Moreover, Mundu Radio has been rated as one of the top 10 popular applications on the Nokia OVI store.
• Forbes Magazine listed Geodesic in the top 200 under a billion companies. The company signed a deal with Entel PCS, Chile’s largest mobile operator to provide windows live instant messaging service to its mobile subscribers.
• A UK based Financial Service Company acting as an exchange for C2C, C2B and B2B multi-currency transaction signed a trial order for the company’s GeoAmida hand held device.
• The company signed deals with Orissa Capital Bank B S C, Bahrain, Business India Group and a major Korean Investment Bank to provide financial service solutions including CRM and integrated communications over web.
• During the last quarter the Chandamama launched interactive children friendly portals in Kannada, Marathi, Telegu, Tamil and Hindi, with a host of features, making browsing exciting and enjoyable for readers.
Valuation and Chart Check:
The Geodesic Ltd’s business model is based on a recurring revenue stream. The nature of the products and the business promotes returning customers and all Geodesic products are created with this model in mind.
The charts however are not giving an immediate buy signal, but the same cannot be denied in the middle of the week. Both the slow and fast oscillators are highly oversold and a bounce can be expected at any time. A bounce from the temporary bottom formed should be used to accumulate. A short term target of Rs.141 cannot be ruled out in the next 3 to 4 months time frame. The medium to long term investors should buy the scrip with a SL of Rs.94.50
Note: The stock was recommended to the Paid Groups ( on the last Sunday (8th November, 2009).
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
BSE Code: 503699
CMP: Rs.99.55
Face Value: Rs.2
52-Week High/Low: Rs.158.65/ Rs.38.50
Price/Book: 1.50
P/E: 4.99
EPS: Rs.19.94
Dividend Yield: 1.61%
Introduction: Geodesic Ltd established inthe year 1999, operates in a niche area of developing various innovative products in the information, communication and entertainment space. Geodesic's product t-list is versatile and all-encompassing when it comes to offering choice of communication and collaboration solutions to its users, whether it is the inherently simple hand-held Simputer to web-based mobile & wireless applications to the intricately complex Spyder applications.
Geodesic's mix of innovative products and high performance solutions has driven the company to profit right from its first year. Focusing its inventive capabilities across all aspects of communication and collaboration the company is widely recognized for its pioneering universal instant messaging system.
Geodesic is all set to contribute significantly to the wave of Convergence by launching innovative world class products such as the Geodesic IP phone that operates across different platforms of landlines, mobile phones & desktops/laptops that will work on all prevailing internet connections and will help users save 75-80 % on long distance calls.
Geodesic's talented staff of more than 400 employees ensures innovation, utility and ease of use. The combination of a highly competent team and state-of-the-art tools enhance the development of future-proof, useful business solutions.
Geodesic has offices in UK, Sweden, Mauritius, Germany and Hong Kong. It provides solutions and services to the following segments:
• Enterprise---SMB, BFSI, Large Business, System Integrators, Govt. etc.
• Portals and Publishers
• Handset manufacturers and Telecom Operators
• Retail Business.
Its products include a communication stack (Email/IM/ VOIP/ SMS), Customer Alignment and Relationship management and the entertainment stack including Internet Radio. Geodesic Ltd also builds E-governance solutions based on its GeoAmida (Geodesic’s Hand held Computer).
Shareholding Pattern: The promoters hold 22.74 % while the general public holds 77.26% of the shares of the company.
Shareholding belonging to the category
"Public" and holding more than 1% of the Total No.of Shares
Sl. No. Name of the Shareholder No. of Shares Shares as % of Total No. of Shares
1 Sloane Robinson Llp A/C Sr Global (Mauritius Class C -International) 6,941,726 7.53
2 Genesis Indian Investment Company Ltd General Sub Fund 5,636,742 6.11
3 Tree Line Asia Master Fund (Singapore) Pte Ltd 5,576,957 6.05
4 Deutsche Secuririies Mauritius Ltd 3,838,171 4.16
5 Morgan Stanley Investment Management Inc A/C Morgan Stanley India Investment Fund Inc 955,459 1.04
6 Indea Capital PTE Ltd A/C Indea Absolute Return Fund 1,000,000 1.08
7 Carlson Fund Equity - Asian Small Cap 3,050,000 3.31
8 Genesis Asset Managers Llp A/C Smaller Companies Portfolio Of The Genesis Emerging Markets Opportunities Fund Ltd. 2,431,603 2.64
9 Sloane Robinson Llp A/C Sr Global (Mauritius) Ltd (Class B Asia) 2,493,168 2.70
10 College Retirement Equities Fund - Global Equity Account 1,971,502 2.14
11 Banque Degroof Laxembourg Sa A/C Asia Pacific Performance Sicav 1,436,595 1.56
12 Shinsei Uti India Fund (Mauritius) Ltd 1,746,892 1.89
13 Ward Ferry Management Limited A/C Wf Asian Smaller Companies Fund Ltd. 2,457,000 2.66
14 College Retirement Equities Fund - Stock Account 1,312,500 1.42
15 Ward Ferry Management Limited A/C Wf India Reconnaissance Fund Ltd 1,183,000 1.28
16 Fidelity Funds - Pacific Fund 924,441 1.00
17 Payash Securities Pvt Ltd 1,194,727 1.30
Total 44,150,483 47.88
Financials: Geodesic Ltd reported revenue of Rs.154.4 Cr in Q2FY10, which is flat as compared to the same quarter previous year. It has managed to report a marginal rise in revenues despite revising its licensing prices downwards for the enterprise segment. Geodesic issued fewer licenses of Mundu IM and Radio to the OEM/ODM segment owing to the drop in smart phone shipments.
Its net profit for the 2nd quarter, FY10 declined by 24% at Rs.57.03 Cr as compared to the quarter ended Sept 30, 2008. The EPS for Q2FY10 came out to be Rs.6.18 as against Rs.8.12 in the same period previous year. Dividend at 40% (Re.0.80 per share) on the face value of equity share is declared by the shareholders in the AGM held on 29-09-09 and paid on 20-10-09.
Triggers:
• Geodesic's mix of innovative products and high performance solutions has driven the company to profit right from its first year. Company was awarded the Inaugural Red Herring Small Cap 100 award and is one of the only Indian companies to be included in the Red Herring Small Cap 100 list. Geodesic is a traded on India's major Stock Exchanges, the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
• The Company is focusing its inventive capabilities across all aspects of communication and collaboration. Their areas of specialty include RDBMS, networking applications, web technologies (including interface designing and Interactivity) and security protocols. Company is widely recognized for its pioneering universal instant messaging system (www.mundu.com). The Mundu products successfully combine AIM, Google Talk, ICQ, MSN, Mundu and Yahoo with deep content collaboration across the Internet, wireless devices and platforms.
• All Geodesic products are complimentary to each other. Each product can be used independently but also seamlessly integrates with all other products. Geodesic customers can begin with a single product that fulfills their requirements and as their requirements change or increase; additional products from the Geodesic suite can easily be incorporated. Geodesic was the first in the world to introduce an 'Information Slider' that changed the way people shared and collaborated information.
• The Mundu SMS launched its International SMS Service in India, Australia, Singapore, Philippines, South Africa, UAE, and UK. Mundu SMS will reach out to more than 100 countries during the financial year.
• It announced plans to launch Filmorbit—a portal dedicated to the India Entertainment and Media industry in India. The portal would use Mundu Entertainment stake as a means to deliver deep interlinked content. Moreover, Mundu Radio has been rated as one of the top 10 popular applications on the Nokia OVI store.
• Forbes Magazine listed Geodesic in the top 200 under a billion companies. The company signed a deal with Entel PCS, Chile’s largest mobile operator to provide windows live instant messaging service to its mobile subscribers.
• A UK based Financial Service Company acting as an exchange for C2C, C2B and B2B multi-currency transaction signed a trial order for the company’s GeoAmida hand held device.
• The company signed deals with Orissa Capital Bank B S C, Bahrain, Business India Group and a major Korean Investment Bank to provide financial service solutions including CRM and integrated communications over web.
• During the last quarter the Chandamama launched interactive children friendly portals in Kannada, Marathi, Telegu, Tamil and Hindi, with a host of features, making browsing exciting and enjoyable for readers.
Valuation and Chart Check:
The Geodesic Ltd’s business model is based on a recurring revenue stream. The nature of the products and the business promotes returning customers and all Geodesic products are created with this model in mind.
The charts however are not giving an immediate buy signal, but the same cannot be denied in the middle of the week. Both the slow and fast oscillators are highly oversold and a bounce can be expected at any time. A bounce from the temporary bottom formed should be used to accumulate. A short term target of Rs.141 cannot be ruled out in the next 3 to 4 months time frame. The medium to long term investors should buy the scrip with a SL of Rs.94.50
Note: The stock was recommended to the Paid Groups ( on the last Sunday (8th November, 2009).
Disclaimer : Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken
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