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
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