Monday, March 31, 2008

IOC – BLENDING TO SAVE EARTH AND ITSELF

One of the drivers plying the congested roads of Mumbai said, “ aaj kal Govt is mixing daaru with petrol and diesel. Is that good?” Well, when put like that, in the barest form, it does sound crude. But yes, that is indeed the truth today. The blending of ethanol, at grassroot level, actually means blending of alcohol. And many big wig companies, driven by the rising crude oil prices are now looking at running a sugar unit or a distillery, mainly for laying its hands on supplies of ethanol, which in some years time will become a gold mine.

And the latest company, albeit very late, Indian Oil Corporation, is now making grandiose plans of getting into ethanol production.

So why is IOC getting into ethanol production?

Currently the Govt of India has made 5% blending mandatory and from October 2008, 10% blending is expected to come into effect. The procurement price of ethanol has been fixed at an ex-factory price of Rs.21.50 per litre, for three years from October 2007. Hence it makes a lot of sense to get into ethanol production.

What exactly is ethanol?

Ethanol is a by product of the sugar industry. Currently, ethanol is used for making alcoholic beverages and the same ethanol is as fuel, produced by fermentation. In technical terms, when certain species of yeast, metabolises sugar in the absence of oxygen, ethnol is produced. Simple, molasses, a by-product of sugar mills is the raw material.

Why ethanol for blending into fuel?
Ethanol can be used as an automotive fuel by itself and can be mixed with gasoline to form what has been called "gasohol". Because the ethanol molecule contains oxygen, it allows the engine to more completely combust the fuel, resulting in fewer emissions. Since ethanol is produced from plants, it is a renewable fuel.

So what does IOC mean when it says that it getting into ethanol production?

The company can become an ethanol producer either by setting up a sugar unit or by following the simplest route which most of the other companies are doing – taking over existing suagr mills. The company is yet to decide about how it will go about procuring ethanol, it is not ruling out the viability of setting up a new unit also.

What would be the cost of setting up a new unit?

As per Ethanol India, to set up a ethanol unit using rectified spirit as raw material, with a capacity of 30,000 litres per day, it would cost Rs.3.84 crore. Same capacity, using raw material as molasses would cost Rs.7.90 crore and using sugar cane juice would cost Rs.15.25 crore.

Economical to buy a sugar unit?

The sugar mills in India are currently going through a very rough patch and most of the state onwed units have turned sick. The various state Govts are now giving the sugar units on lease. Infact the Bihar govt had invited bids for 15 of its sugar mills for long term lease of 60 years, extendable by 30 years. Reliance Industries was the highest bidder for the Motipur unit of Bihar State Sugar Corporation at a price of Rs.57 crore, marginally higher than the floor price of Rs.55.36 crore. HPCL had made a bid of Rs.45 crore for the Lauriya unit in West Champaran against the floor price of Rs.29.64 crore. For these prices, the capacities, which these companies are able to lay their hands on, are much larger. The economies of scale of taking over an existing sugar mill, compared to setting up a mill at today’s rates, are much higher.

On one hand, there is a major demand for ethanol and big companies are vying to lay their hands on these capacities. Yet, at the same time, sugar companies are sitting on huge stocks of ethanol where companies, blending it into fuel, are just not picking them up. The three State-owned oil marketing companies, BPCL, HPCL and IOC had contracted to lift a total 1,176.13 million litres of ethanol from sugar mills over a three-year period from November 2006. But till September 2007, these companies had procured just 7.2% of the total contracted quantity.

Are the environmentalists happy?

Currently we have a major shortage of wheat, edible oil and supply is tight in case of rice. Now henceforth, all efforts will be made to increase the production of these foodgrains. Sugar is in oversupply, which is why we do not see a spiraling run-up on its price. But now, with companies taking over sugar mills with the aim of making ethanol, it could soon lead to a situation in sugar from oversupply to shortage.

As Mr.Chidambaram had pointed out, developed countries are making more and more use of foodgrains for using as fodder for fuel and that, to a large extent has been the culprit leading to a run-up in the commodity prices. If that is the case, then this blending of ethanol will lead to a situation of sugar prices soaring and fall in production in the coming years. So this will once again be a double edged sword.

We can never keep all the people happy at all times, we can only keep some people happy for some time. So all in all, this is a good initiative on the part of IOC to get into ethanol production but it might not make sense to set up a new unit, which will have a longer gestation period, best would be to go for a readymade sugar mill and set the ball rolling immediately. The first big step would be to start at least lifting the abundant ethanol from the sugar mills, especially from those located in Uttar Pradesh.
By Ruma Dubey
Source: sptulsian.com

Markets Today

Sustained selling pressure in blue chips ever since the opening bell spooked the bourses today. Negative cues from global markets dampened sentiment. The sentiment was also hit by reports that the Institute of Chartered Accountants of India (ICAI) has asked companies to disclose losses on a mark-to-market basis incurred due to derivatives trades from the current financial year onwards (year ending March 2008), as a precursor to making a new accounting standard -- the AS-30 -- mandatory from 1 April 2011. This may hit Q4 March 2008 and FY 2008 (year ending March 2008) bottom line of Indian firms.
European markets, which opened after Indian markets, were weak in early trade. Asian markets, which opened before Indian market, were in red. US stocks dropped on Friday, 28 March 2008, as a profit warning from US department store chain J.C. Penney raised concerns about slowing consumer spending while persistent worries about credit-related problems throttled financial stocks. A prominent analyst warned that earnings will not support current dividend payouts in 2008 at Citigroup, Wachovia Corp and other US banks.
The BSE Sensex dipped below 16,000 mark. 28 stocks from the 30-member Sensex pack declined. Despite the sharp fall, the market breadth was positive.
As per provisional closing, the 30-share BSE Sensex plunged 808.14 points or 4.94% at 15,563.15, which was also its lowest level of the day. Sensex had opened with a downward gap of 144.63 points at 16,226.66.
The broader based S&P CNX Nifty plunged 233.95 points or 4.73% at 4,708.05 as per provisional closing.
The ICAI norm requires companies to provide for all losses, including those that may occur due to trading in derivatives. Indian companies are sitting on huge losses on account of the forex derivative transactions they undertook during the year. A steep decline in the value of the US dollar against the Japanese Yen and the Swiss Franc has hit Indian corporates which have used these two currencies (Yen and Franc) extensively to swap their rupee denominated debt.
There are many companies, which are not disclosing these losses, as it is not mandatory to show these numbers in the balance sheets. But with the new accounting norms they now have some compulsions. Companies, which thought that they could escape declaring the losses, will now have to come forward and show their numbers, which could hit their balance sheet, which, in turn, may impact their market capitalisation.
Earlier, robust corporate advance tax payments in Q4 March 2008 indicated that corporate profit growth will be strong in the quarter. Advance tax figures showed banks, hospitality and software firms were doing better than sectors like automobiles and cement.
Despite the market crash, the market breadth was positive: On BSE 1,356 shares advanced as compared to 1,302 that declined. 45 shares remained unchanged.
The BSE Mid-Cap index was down 1.93% to 6,397.21 while the BSE Small-Cap index slipped 1.02% to 7,821.04, as per provisional closing. Both these indices outperformed the Sensex
The total turnover amounted to Rs 5912 crore on BSE as compared to Rs 4376 crore by 14:30 IST.
Indias largest dedicated housing finance provider in terms of net profit Housing Development Finance Corporation slumped 9.10% to Rs 2376.20 on 2.74 lakh shares. It was the top loser from Sensex pack.
Banking shares slumped. HDFC Bank (down 6.87% to Rs 1304.85), ICICI Bank (down 8.03% to Rs 768.10), and State Bank of India (down 4.26% to Rs 1608.15), also slipped.
Indias largest private sector company in terms of market capitalisation and oil refiner Reliance Industries lost 4.11% to Rs 2251 on 11.24 lakh shares. The stock moved in a range of Rs 2251 and Rs 2340 during the day.
IT pivotals were hit on worries a recession in US may impact their revenues. Infosys Technologies (down 6.31% to Rs 1429), Satyam Computers (down 3.42% to Rs 394.50), Wipro (down 8.59% to Rs 415), and TCS (down 7.94% to Rs 801), declined. IT firms derive majority of their revenue from exports to US markers.
Reliance Energy, the countrys largest private sector power utility company in terms of net profit slipped 6.12% to Rs 1252. The company has bought back 6.50 lakh equity shares since the start of the offer on Tuesday, 25 March 2008 aggregating Rs 83.15 crore
Hindalco Industries (down 6.13% to Rs 164.70), DLF (down 7.14% to Rs 646) and ONGC (down 6.61% to Rs 982), edged lower from the Sensex pack.
Cipla, the countrys third largest pharma company in terms of sales, gained 0.96% to Rs 219.60 on 4.83 lakh shares. It was the lone gainer from Sensex pack.
European markets opened lower today, 31 March 2008. Key benchmark indices in United Kingdom (down 0.95% to 5,639.10), France (down 0.90% to 4,653.60), and Germany (down 1.46% to 6,464.63), edged lower.
Asian markets were trading lower today, 31 March 2008. Hang Seng (down 1.88% at 22,849.20), Japan's Nikkei (down 1.88% at 12,525.54), Taiwan's Taiwan Weighted (down 0.59% at 8,572.59), Singapore's Straits Times (down 0.81% at 3,007.26), Shanghai Composite (down 3% to 3,472.13), edged lower. However South Korea's Seoul Composite rose 0.13% to 1,703.99
US markets closed lower on Friday, 28 March 2008 after a profit warning from J.C. Penney renewed fears about slower consumer spending. The Dow Jones industrial average slipped 86.06 points, or 0.70%, to 12,216.40. The S&P 500 index was down 10.54 points, or 0.80%, to 1,315.22, and the Nasdaq Composite index declined 19.65 points, or 0.86%, to 2,261.18.
Back home, the 30-share BSE Sensex advanced 355.73 points or 2.22% at 16,371.29 on Friday, 28 March 2008. The broader CNX S&P Nifty was up 111.75 points or 2.31% at 4942 on that day.
The Sensex surged 1,376.46 points or 9.18% to 16,371.29 in the week ended Friday, 28 March 2008 on buying by foreign institutional investors. The S&P CNX Nifty rose 368.05 points or 8.04% to 4,942 in the week.
As per provisional data, foreign institutional investors (FIIs) purchased sold worth Rs 401.95 crore on Friday, 28 March 2008. Domestic institutional investors (DIIs) were net buyers of shares worth Rs 729.50 crore on that day.
FIIs were net sellers of Rs 132.21 crore in the futures & options segment on Friday, 28 March 2008. They were net sellers of index futures to the tune of Rs 366.53 crore and bought index options worth Rs 406.38 crore. They were net sellers of stock futures to the tune of Rs 184.53 crore and bought stock options worth Rs 12.47 crore
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Stock Idea: Apollo Tyres

A well known company, in the Indian corporate world but not much fancied on the bourses, the company’s financial performance for the third quarter ended 31st December 2007 has been encouraging. The company’s sales were up 15.37% on a q-on-q basis. The component of other income was down almost 10 times at Rs.37 lakhs (Rs.3.49 crore). Total expenditure surged 14.53% and yet, EBIDTA was up 17.67%. PBT rose 23.37% and net profit was up 21.66%. OPM was slightly up at 13.48% (13.21%) and NPM was up at 6.38% (6.05%).

The company, in August 2007, sub-divided its Rs.10 face value shares into 10 equity shares of Re.1 per share.

Apollo Tyres is planning to step up its truck-bus radial tyre capacity in the next fiscal. The company had set up its radial tyre facility for heavy commercial vehicles on pilot basis at Vadodara, using indigenous technology, in this fiscal. The pilot plant has nearly exhausted its capacities and is currently producing 1,000 tyres a day. Apollo is the second Indian company to make foray in truck-bus radial tyres after JK Tyres.

The company is likely to be the after-sales partner for the Tata Nano and later graduate to an original equipment supplier. Apollo may also soon become the OE partner for Czech auto maker Skoda and Korean auto maker Hyundai.

On the forthcoming off-the-road (OTR) tyre facility at Vadodara to meet the demands of Bharat Earth Movers, production is expected to commence by end-2008. The company is also planning production of speciality and industrial tyres such as docking tyres and those used in forklifts.
Currently quoted at Rs.42 one can stay invested.

Intraday Calls for 31st March

Markets may remain very volatile throughout the day today.

Today's Intraday Picks:
SAIL
UNITECH
BAJAJ HIND
MOSER BAER
MAN Industries
For Levels and Targets download the file by CLICK HERE

Short Term Delivery Buy Hind Motors (32.90) Target 40+.

Good Luck

Friday, March 28, 2008

Stock Idea

ABG Shipyard, the largest private sector shipbuilding yard in India has posted good results for third quarter ended 31st December 2007.

On a sequential basis, on a Q-on-Q basis, the net sales increased 29.79% at Rs.274.96 crore, EBIDTA was up 29.49% at Rs.83.56 crore, PBT was up 37.96% at Rs.71.67 crore and PAT was up 38.14% at Rs.47.12 crore. On an equity of Rs.50.92 crore, the EPS stands at Rs.9.25.

The company currently has an order book of Rs 8,277 crore. The company has been constantly upgrading its facilities and that is precisely one of its biggest strengths. It has expanded its existing facility in Surat and also acquired a strategic stake in Vipul Shipyard located near the existing Surat unit. ABG is also setting up a new facility in Dahej, which is expected to commence operations from April 2008. Once this facility is fully operational, the company would be able to manufacture ships up to 1,20,000 DWT (dead weight tonnage).

The company is well entrenched in the shipping sector and poised well to take advantage of the currently booming industry. Given its reputation and expertise, the company gets repeat orders which in turn help giving it better economies of scale. Though the OPM of the company has slipped marginally to 30.39% from 30.46% in the previous quarter, it is expected that given the improvements in the fortunes and margins of the shipping industry, the coming quarter will reflect a better and improved OPM.
Currently quoted at Rs.686, investors could well stay invested.
Source: sptulsian.com

Intraday Calls for 28th March

Markets may open flat to positive and ramians volatile with positive bias. A positive closing expected today in Indian Stock Markets.
Today's Intraday Picks:
UNITECH
CAIRN INDIA
HDIL
Parsvnath Developoers
Aurobindo Pharma
For Levels and Targets download the file by CLICK HERE

Others: GTL Infra, Bag Films, Dish TV.

Good Luck

Thursday, March 27, 2008

Tata Motors - JLR Deal

Next time you go to USA or Europe and see someone driving a swanky Jaguar or a Land Rover (JLR), surely you can walk a little taller with the collar raised up, after all it is an Indian company, which now owns these luxury cars! Indeed, we have come a long, long way from the taboo that the “Made in India” tags had! Ex-Prime Minister of UK, Tony Blair owns a Jaguar and it is one of the few trademarks to hold Royal Warrants of Appointment from both Queen Elizabeth and Prince Charles. The Queen of England loves to ride in her Land Rover when in Scotland. India buying the most loved British brands, surely a moment of celebration!

Tata Motors clinching the deal for Jaguar and Land Rover for a whopping $2.3 billion would have surely made the world sit up and take notice. If the world had missed out looking at what India is all about when Tata Steel bought Corus, surely now, Tata Motors would have got the attention of one and all.

After the entire halo over the pride of being an Indian clears, comes the moot question – how will this affect the balance sheet of Tata Motors? The shareholders of Tata Motors are a worried lot today as they do not know whether they should cry in joy over the acquisition or shed tears of impending doom.

Tata Motors has acquired Jaguar and Land Rover (JLR) for $2.3 billion, which is actually a bargain considering that Ford had acquired these two brands for $5.23 billion in the early 2000s. Tata Motors Ltd, has signed a deal to receive a $3 billion (Rs12,180 crore) one-year bridge loan from Citigroup Inc. and JPMorgan Chase and Co. Of this $3 billion, the JLR acquisition will take away $2.3 billion and the rest is to be used to meet working capital needs and few other expenses, like maybe the cost of getting the Nano on the Indian roads.

A consortium of eight banks — State Bank of India, Bank of Tokyo-Mitsubishi UFJ, BNP Paribas, ING, Mizuho and Standard Chartered, is underwriting the bridge loan. The bridge loan has been structured in the form of step-up financing: for the first six months, the interest charge would be Libor (London Inter-Bank Offered Rate) plus 70 basis points and for the next six months, it would be 140 basis point over the benchmark rate. A special purpose vehicle is raising the bridge loan, which is 100% owned by Tata Motors.

A year later, the short-term borrowings are to be refinanced through a combination of long-term debt and equity. The company is looking at a debt equity ratio of 1:1. So this means that of the Rs.12,180 crore being raised, Rs.6090 crore is to come via debt and another Rs.6090 crore via liquidation of investments and issue of fresh shares.

First the debt part. On the Rs.6090 crore, assuming an interest rate of 6%, we are looking at an interest burden of Rs.365 crore per annum. So we now have to realize that about over Rs.400 crore of the bottomline will be additionally eaten away by the interest burden.

Now for the equity part. The company is also contemplating selling a slice of its holdings in its group companies to raise the amount. A look at the balance sheet of Tata Motors was a real eye opener. Instead of finding a string of investments, the company has only two major investments to talk about which on liquidation will give it money. One is the holding in Tata Steel. It holds 2.58 crore shares of Tata Steel. Currently quoted at Rs.655, if Tata Motors decides to sell off its entire holding in Tata Steel, it will be able to raise Rs.1690 crore, as of today. In unquoted, the company has 66.67 lakh shares of Tata Industries, which promotes the Group's entry into new and high-tech areas. If Tata Motors decides to sell its stake in this company which has face value of Rs.100 per share, at Rs.1000 per share, then it will be able to raise Rs.660 crore. So these two companies together, will be able to raise around Rs.2500 crore, which is over 40% of the total money to be raised via equity route. For the rest, the company will be able to raise another Rs.1500 crore via preferential allotment to Tata Sons and for the balance, it might come out with a rights issue. Now these are the plausible methods of raising the equity and might also prove to be the best.

It may be recalled that Tata Steel had sold 85 lakh shares in TCS at an average rate of Rs.1,082 per share, managing to raise Rs.920 crore to refinance a part of the Corus deal.

There is no doubt that Tata Motors has a huge responsibility now. It has taken over two of the biggest luxury brands of the world but both of them have had dwindling sales and a red balance sheet. It is now upto Tata Motors to turn it around. The balance sheet of Tata Motors of next fiscal will reflect the consolidated figures of JLR and their losses if they keep mounting, might be meager in the developed country parlance but would be enough to drown the company in a quagmire of losses.

Tata Motors also has the responsibility of ensuring that it is able to show profits on its Nano project and this too will require some more amount of investment.

Till now the shareholders of Tata Motors had to worry only about the Nano but now, they have to worry about the performance of Jaguar and Land Rover. It should not happen that this current moment of pride turns into a sore wound. The next two years will undoubtedly be painful, years of integration. Till then, the shareholders can take pride of being owners of the company, which owns JLR, so what if they don’t actually drive a Jaguar to home!

By Ruma Dubey
Source: sptulsian.com

Investment Idea: Welspun Gujarat

Promoted by the Welspun group, one of the largest SAW pipe manufacturers of India, the company has posted good Q3 results.

On a y-on-y basis, the financial performance of the company for the third quarter ended 31st December 2007 has been phenomenal. It clocked a 136% jump in net profit and its topline grew 39%. The biggest contributor to the sales was exports which accounted for over 68% of overall sales.

Compared on a q-on-q basis, the increase in the performance has been more or less as expected. Net sales was up 11.73% at Rs.1036.40 crore, EBIDTA was up 13.38% at Rs.176.30 crore, PBT was up 17.44% at Rs.147.50 crore and PAT was up 18.06% at Rs.97.40 crore. Its OPM improved from 16.76% to 17.01% and NPM improved from 8.89% to 9.40%.

The company provides complete solutions for all line pipe requirements. It manufactures pipes in varying sizes and diameters, ranging from as small as ½ inch to as large as 100 inches of higher grades, up to X 80. It also offers complete coating, as well as bending solution. Welspun has supplied pipes to the deep offshore gas pipeline project in the Gulf of Mexico, the United States. The company’s customers include TOTAL, Shell, Saudi Aramco, Chevron, Clough Engineering, PGN, MITCO, Exxon Mobil and Enterprise

The company recently bagged a prestigious pipeline order worth Rs.1075 crore for the supply of spiral pipes in Northern Africa. The new order has taken Welspun’s order book position to above Rs.5900 crore.

The stock is currently quoted at Rs.364. Stay invested.

Market Whispers

KLG Systel qualifies a good buy at Rs.535 for short to medium term as share price has potential to cross Rs.600 mark soon.

Kernex Micro seems to have settled at Rs.140 levels and one could buy it with 6 months view, where share has potential to cross Rs.200 mark.
SAIL is viewed a good short to medium term bet at Rs.204 in view of good Q4 results expected from the company.

Essar Shipping have corrected sharply and now ruling at Rs.140 is viewed a good buy in view of merger of closely held companies of the group. On NAV basis, share value works out to Rs.400 by analysts. Good for medium term.

Axis Bank is recommended a good short term buy at Rs.800 for a Rs.50 gain.
Adani Enterprises is likely to witness informed buying and share may show a rise of about Rs.40 from its present levels of Rs.530.

Profit booking is advised in Pantaloon Retail and one may exit from the stock at Rs.425 levels as Q4 working is likely to be below market expectations, which may pull down price below Rs.400.

HUL is a good buy at the current rate of Rs.239 for short to medium term. One can accumulate this stock at every decline.

A well known broking house is recommending NTPC to its client at the current rate of Rs.197.

With Morgan Stanley predicting that the Indian rupee could reach a decade high of Rs.38.61 per dollar by June 30th 08'; FIIs are expected to pump in more money to take advantage of the currency arbitrage.

Intraday Calls for 27th March

Market may open nagetive but it can recover from lower levels and remains in range of 1-2% +/-. Small cap and Midcap may continue moving up but at higher levels some profit booking expected.

Today's Intraday Picks:

Praj Industries
Jindal Stainless
Bajaj Hindustan
Renuka Sugar
KPIT
For levels and Targets download the file by CLICK HERE
Keep an eye on Tata Motors and Tata group companies.
Good Luck

Wednesday, March 26, 2008

Markets Today

The key benchmark indices ended the volatile session with a loss of nearly one percent. Mixed global cues and imminent expiry of March 2008 derivative contracts kept the market volatile throughout the day.
Investors turned cautious after the previous day's 6.1% jump. Majority of the sectoral indices on BSE slipped into red. ICICI Bank was the top loser from the Sensex pack. The market breadth was positive.
As per provisional closing, the 30-share BSE Sensex was down 156.96 points or 0.97% at 16,060.53. The index lost 207.62 points at sessions low of 16,009.87 hit in afternoon trade. The index gained 92.39 points at the sessions high of 16,309.88, hit at the onset of the trading session.
The broader CNX S&P Nifty was down 58.3 points or 1.20% at 4819.20.
The March 2008 derivative contracts will expire on Thursday, 27 March 2008. As per reports, the marketwide rollover of derivative positions from March 2008 series to April 2008 series stood at 38%, while that of Nifty was 41% by Tuesday, 25 March 2008.
The BSE Mid-cap index was up 1.42% at 6,262.04. The BSE small-cap index was up 2.15% at 7,441.01.
The market breadth was positive. On BSE, 1710 stocks advanced, 1003 declined and 47 stocks were unchanged.
The BSE clocked a turnover of Rs 6100 crore as against Rs 6,880.05 crore on Tuesday, 25 March 2008.
Indias largest private sector bank by assets ICICI Bank fell 4.54% at Rs 840.
Indias largest private sector firm by market capitalization and oil refiner Reliance Industries (RIL) fell 0.62% to Rs 2300.
Indias top commercial vehicle maker by sales Tata Motors lost 0.71% to Rs 675.10. As per reports, US automaker Ford has agreed to sell its luxury brands Jaguar and Land Rover to India's Tata Motors for more than $2 billion. Ford, which signed the deal on Tuesday, 25 March 2008, plans to publicly announce the transaction in New York today, reports suggest.
Top Sensex gainers were, Tata Steel (up 3.99% at Rs 659.10), Housing Development Finance Corporation (up 3.18% at Rs 2672), ITC (up 2.30% at Rs 195.50), and Grasim Industries (up 0.53% at Rs 2701).
Top Sensex losers were, Hindustan Unilever (down 4.37% at Rs 234.25), Bharti Airtel (down 4.24% at Rs 799), Bharat heavy Electricals (down 3.51% at Rs 1942), Jaiprakash Associates (down 3.47% at Rs 225) and DLF (down 3.32% at Rs 656.10).
Shipping firm Mercator Lines rose 6.80% to Rs 76.15 after the company said its subsidiary Mercator Lines, Singapore has entered into negotiation with Refined Success for the time charter-out of Geastiniono TBN, a gearless panamax vessel.
Avantel Softech surged 9.41% to Rs 59 after the company said it has bagged an order worth Rs 8.25 crore from the Government of India for supply of satellite communication receiver terminals for Indian Navy
Engineering firm GEI Industrial Systems soared 10.85% to Rs 71.50 after the company said it has bagged an order worth Rs 30 crore from Essar Construction for supply of air cooled heat exchangers for a project in Gujarat.
Private sector lender Axis Bank vaulted 4.34% to Rs 826.50 after a two block deals totaling 45.46 lakh shares were struck on the counter at average price of Rs 799.89 per share on BSE.
Garment manufacturer SEL Manufacturing Company rose 5% to Rs 276.05 after the company said its board has approved raising upto $250 million through issue of foreign currency convertible bonds and global depository receipts.
Diesel engines maker Kirloskar Oil Engines jumped 5.95% to Rs 106 after three block deals aggregating 30.99 lakh shares were executed on the counter at an average price of Rs 100.03 per share in opening trade on BSE.
Edible oils maker K S Oils gained 0.39% to Rs 64.60 after the company said it has acquired a single palm plantation over a vast area spread across 50,000 acres of green land in Indonesia.
US markets ended on mixed note yesterday, 25 March 2008 after the consumer confidence fell sharply in March 2008 with the Consumer Confidence Index (CCI) slumping to a five-year low of 64.5. The Dow Jones industrial average declined 16.04 points, or 0.13%, to 12,532.60. The S&P added 3.11 points, or 0.23%, to 1,352.99 and the Nasdaq gained 14.30 points, or 0.61%, to 2,341.05.
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Market Whispers

Profit booking is advised in Edelweiss Capital at Rs.725 levels, as share has chances to fall below Rs.680 in the short term.

Oswal Chemicals may show a rise upto Rs.40 levels from its present levels of Rs.34. Short term buying is advised.

Adlabs Films may show a sharp rise from its present levels of Rs.600 to Rs.720 in the short run mainly as a value buy by the informed circles.

IFCI is a safe bet at Rs.44 levels and would show a rise of about Rs.6 in the next one week.

Bank of Rajasthan can be considered for buying at Rs.100 levels for a rise of about Rs.20 in the short run. The sharp has virtually no downside risk.

Saregama is a good stock to buy at Rs.113, as it has potential to rise to Rs.150 levels very soon.

Navbharat Ventures is a good buy at Rs.205 from short term trading view for a gain of Rs.20.

Prime Securities is expected to see some more selling from its present low of Rs.97 as rumours are abound about the company having tough times ahead.

NRB Bearing is poised for a smart upward rally from the current price of Rs.58.

Phoenix Mills has acquired a 25 acre land from GKW for Rs.320 crores and is also eyeing GKW's land in Kolkatta, Pune and Mumbai. With such a substantial increase expected in the land bank, Phoenix Mills can be accumulated for short to medium term gains.

Intraday Calls for 26th March

Market may open flat to positive and may see some profit booking at higher levels. Remains rangebound of about 1-2%.

Today's Intraday Picks:

NTPC
GAIL
NIIT Tech
Videocon Industries
Essar Oil
For levels and targets download the file by CLICK HERE

Buy Delivery LOK HOUSING (127) For Short Term Target 160+.

Good Luck

Tuesday, March 25, 2008

Investment Idea: Rain Commodities

Rain Commodities has recently restructured its business by bringing in Cement and Calcined Petroleum Coke (CPC) business under its fold. The cement capacity of 1.50 Million TPA would rise to 3.16 million TPA by June 08 while CPC capacity is 2.44 Million TPA and is the world’s largest producer of CPC.

The company acquired CII of USA on 19-07-07 manufacturing 1.84 Million TPA of CPC with manufacturing facilities in Illinois, Louisiana, Missisipi and West Virginia for a cash purchase price of US $ 595 Million.

CPC is a raw-material used in the production of aluminium and titanium dioxide and its raw-material is Green Petroleum Coke.

The merger of all the business took place from 1st April 07 and the company changed its accounting year to end on 31st December, every year. Hence, accounts for 9 months ended 31st December 07 were approved by the Board recently with business of CII, USA incorporated w.e.f. 19-07-07, from the date of its acquisition by the company.

For 9 months ending 31-12-07 the total income of the company was at Rs.1,634 crores with PBT of Rs.85.57 crores and PAT of Rs.77.56 crores on equity of Rs.32.10 crores. Dividend of 28% was declared for the period ended 31-12-07. This amounts to annualized dividend of 37.33%.

The results for 9 months above, includes gain of Rs.102.55 crores, being profit on sale of investment in GLC Carbon and financial and legal cost of Rs.134.18 crores for acquisition of Rain CII Carbon LLC. Hence, net extraordinary expenses of Rs.31.64 crores, brought down net profit to Rs.45.92 crores for the period.

The present equity of the company is Rs.32.10 crores, of which, 40% is held by the promoters while 8% by Mutual Funds and FIIs and 52% by Public. Of this 52%, Citicorp is holding 14.95% stake.

On 11-03-08, 35 lakh warrants were converted into 35 lakh shares at Rs.200 per share, issued to the promoters, due to which paid-up equity rose to Rs.35.60 crores.

Due to restructuring and other one time costs and gain, the results of period ended 31-12-07 are not truly reflecting the working of the company. On an annualized basis, 2.4 million tonne CPC can give a topline of Rs.2,400 crores, while 3.14 million cement can give a topline in excess of Rs.1,000 crores. This could result into a PAT in excess of Rs.350 crores, thus resulting into an EPS of close to Rs.100 per share.

Though new cement capacity of 1.50 million tonne would be operational from May 08, this would get reflected into the working for part of CY 08.

For the year ended 31-12-08, the company is most likely to post an EPS of close to Rs.80 and dividend is likely to exceed 50% for the year.

Share is presently ruling at Rs.155 which discounts its expected CY 08 earning by less than 2 times. CPC has huge demand by aluminium manufacturers in India and China, thus putting the company into an advantageous position.

Share has potential to give a return of 100% in the next 18 – 21 months, with virtually no risk of fall from the present levels. A safe and excellent bet at Rs.155 in this market.

By S P Tulsian

Investment Idea: S Kumars Nationwide

A very known brand, S Kumars is a name associated with mainly school uniforms and suitings. Over the years, it has metamorphosed into a big company with many bigger brands. It continues to sell uniforms, work-wear fabrics and blended suitings under S. Kumars and Belmonte brands; worsted suitings, wool-polyester blended suitings sold under Reid & Taylor brand; home textiles sold under Carmichael house brand and ready-to-wear garments sold under the brands Reid & Taylor and Belmonte brands. Incidentally, Belmonte is the “official” suits sponsorer of IPL’s Kolkatta team, of which Shahrukh Khan was as such the brand ambassador. So over the next few days, this S Kumars brand is expected to get more visibility.

Financially also S Kumars Nationwide (SKN), the company seems to be doing pretty well. For the third quarter ended 31st December 2007, YoY, the company’s net sales rose 44% and despite a 40% rise in total expenditure, EBIDTA was up 61% at Rs.101.36 crore. OPM improved on the back of high sales at 22.37% from 19.99% in Q3 FY07. The company’s interest outgo rose by a whopping 75% at Rs.25.28 crore and despite this, the company has managed to post very healthy PBT up 72% at Rs.64.68 crore and PAT also rose 72% at Rs.57.20 crore. NPM was up from 10.57% to 12.62%. On an equity of Rs.202.16 crore, the EPS, on a face value of Rs.10 per share, stands at Rs.2.83.

The consumer textiles contributes about 60% to the sales, Reid & Taylor contributes 25%. Over the next three years, consumer textiles contribution is expected to be about 31 - 32% to sales, Reid & Taylor is expected to remain the same, home textiles is expected to become an area of focus and is expected to contribute 17-18%. Infact the company has stated that in the domestic market, its ready-to-wear segment is going to be the fastest growing segment, but on the international front, high value cotton fabrics and home textiles are going to be the focus. The company is also planning to launch brands in the home textile segment, called Carmichael House any time now.

The company is now busy restructuring some of its businesses. It has demerged its retail business - Brandhouse Retails Ltd (BRL) into a separate company and shareholders of SKN would be eligible to receive the one equity share of BRL against five equity shares held in SKN. Record date for this is yet to be fixed. What this also means is that the company, at a future date is surely looking at an IPO of this retail company.

SKN also hived off its Reid & Taylor division, including the factory at Mysore, with all assets and liabilities relating to the division on slump sale basis and on as is where basis as a going concern to its subsidiary company - Reid & Taylor (India) Ltd.

In textiles, it is all about the brand name. S Kumars has a very good brand presence and in the coming days, its brands are expected to get more visibility, thanks to IPL. Currently quoted at Rs.82, stay invested and on declines, one can even consider investment.

Source: sptulsian.com

Markets Today

Intense buying in frontline stocks saw the Sensex breach 16,000 mark today. A buoyancy was visible across the global markets. The rally was triggered by JP Morgan raising Bear Stearns acquisition price by 5 times and US economic data that showed US new home sales had risen 3% in February 2008.
In the domestic front, all the sectoral indices on BSE ended higher. Banking, IT and realty stocks posted impressive gains. Mid-cap and small-cap stocks surged. The market breadth was strong.
In Europe, key indices in UK, France and Germany were up by 2.80% to 3.25%. Most of the Asian indices rallied today. Chinas Shanghai Composite, which declined more than 1% earlier, recovered sharply as the session progressed. It ended up 0.09%. Key benchmark indices in Hong Kong, Singapore, South Korea and Japan were up by 1.19% to 5.88%.
As per provisional closing, the 30-share BSE Sensex rose 967.07 points or 6.33% at 16,256.47. The index gained 972.98 points at sessions high of 16,262.38, hit at the fag end of the trade.
The broader CNX S&P Nifty was up 284.45 points or 6.17% at 4894.30.
The BSE Mid-Cap index was up 6.77% at 6,198.65. The BSE Small-Cap index was up 5.28% at 7,317.34.
The market breadth was strong. On BSE, 2075 stocks advanced, 637 declined and 50 stocks were unchanged.
The BSE clocked a turnover of Rs 6836 crore as against Rs 4,682.75 on Monday, 24 March 2008.
Indias largest private sector firm by market capitalization and oil refiner Reliance Industries (RIL) rose 5.56% to Rs 2323.20. The firm is reportedly evaluating a plan to set up its third refinery at Jamnagar in an ambitious project to reach a total capacity of 100 million metric tonne per annum (mmtpa), the largest at a single location in the world.
India's largest private sector bank by assets ICICI Bank soared 9.38% to Rs 880. The bank has reportedly entered into a Rs 1,150-crore equity-cum-debt deal with Jaypee Infratech, a unit of Jaiprakash Associates. The bank has decided to pick up 1% stake in Jaypee Infratech for Rs 250 crore, reports added.
Indias largest engineering and construction firm by revenue Larsen & Toubro rose 3.94% to Rs 3053.
Top Sensex gainers were, Jaiprakash Associates (up 17.37% at Rs 235.10), DLF (up 14.86% at Rs 686.95), Reliance Energy (up 12.09% at Rs 1290), Housing Development Finance Corporation (up 9.90% at Rs 2620), Wipro (up 9.59% at Rs 437) and Infosys Technologies (up 9.45% at Rs 1490).
Chemicals maker GHCL surged 19.16% to Rs 88.95 after the company said it plans to spin off its home textiles and retail businesses into separate units as part of a restructuring plan.
Software firm Prithvi Information Solutions surged 10.40% to Rs 155.50 after the software services firm said its board will consider a share buyback proposal on 31 March 2008.
Steel pipes maker Welspun Gujarat Stahl Rohren jumped 13.49% to Rs 334 after the company said it has bagged pipeline orders worth Rs 1,075 crore for the supply of spiral pipes to Northern Africa.
Apparels maker Gokaldas Exports advanced 8.73% to Rs 185 on reports the company has secured an order to supply 2.50 lakh units of sportswear like jumpers, track-suits & vests for the thousands of athletes participating in Beijing Olympics.
Apparels firm Arvind Mills jumped 5.87% to Rs 37 after the company said Arvind Brands a division of the company has signed an agreement with Philips-Van Heusen Corporation for designing, distribution & retailing of IZOD brand in India.
Future Capital Holdings, the financial services arm of the Future Group, jumped 5.79% to Rs 578.50 after the company said its board has approved to invest upto Rs 47.75 crore in its subsidiary Future Finmart.
Cement maker Prism Cement soared 11.20% to Rs 42.70 after 14 lakh shares, or 0.47% of the company's equity, changed hands in a block deal on NSE at Rs 39.55 each.
Power equipment maker Jyoti Structures spurted 4.07% to Rs 162.30 after its secured an order worth Rs 160 crore for construction of transmission line and sub-stations in Uganda.
US markets rallied yesterday, 24 March 2008 on the back of a revised offer for Bear Strens. JP Morgan Chase revised its open offer for Bear Strearns to $10 per share from $2 per share. The Dow Jones industrial average surged 187.32 points, or 1.52%, to 12,548.64. The Standard & Poor's 500 index advanced 20.37 points, or 1.53%, to 1,349.88, and the Nasdaq Composite index added 68.64 points, or 3.04%, to 2,326.75.
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Intraday Calls for 25th March

Indian Stock Markets may open with GAP UP of about 2-3% and this time a strong rally expected. It may see some bounce in small and midcaps also.
Today's Intraday Picks:

SAIL
GMR INFRA
INDIABULLS
ICICIBANK
NEYVELI LIGNITE
HCC

For Levels and Targets download the file by CLICK HERE

Banking and Financial sector may see bounce in today's trade. (SBI, PNB, Kotak Bank, Indiainfoline)

Good Luck

Monday, March 24, 2008

Stock Ideas

Accurate Transformers Ltd. (Code: 530513) (Rs.86.50) is engaged in manufacturing of power and distribution transformers ranging from 1 MVA to 160 MVA - in up to 220 KV class. It also carries out rural electrification project, which involve electrification in remote areas including the laying of lines, poles and substations. Unfortunately, despite having installed capacity of more than 8000 MVA, the company is working at very low capacity utilization of less than 50% due to mounting debtors and shortage of funds. However, on the back of the ongoing boom in the power sector and the robust demand for transformers, the situation has improved considerably. Due to better operating efficiency and higher realization, the company is expected to improve its profit margin going forward. It may even grow at CAGR of 50% over the next three years as far as its bottomline is concerned. On a conservative basis, it can clock a turnover of more than Rs.200 cr. with PAT of Rs.8 cr. for FY08. This works out to an EPS of Rs.27 on its current equity of Rs.2.96 cr. As perunconfirmed reports, SEBI has stalled its preferential issue of 31 lakh warrants at Rs.56 and it may have to go in for fresh fund raising programme as per SEBI guidelines. The scrip has reduced to nearly one third from its high of Rs.240. A screaming buy.
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Spanco Telesystems & Solutions Ltd. (Code: 508976) (Rs.165) offers core competency telecom systems integration, which includes implementation of multi-location, multi-services converged networks for carrying diverse multimedia traffic (voice, data & video) based on latest technologies like ATM, MPLS, Frame Relay, TCP/IP etc. On the other hand, it has bagged a 10-year contract to set up, operate and maintain Interactive Voice Response System (IVRS) and Regional Call Centres (RCC) for the Indian Railways in a joint venture with the Spice Group. Moreover, it has ventured into the RFID space by acquiring 51% stake in Skandsoft Technologies - a pioneering software solutions company, which is dedicated to revolutionize the upcoming world of automated business processes through technologies like Radio Frequency Identification (RFID) & Automatic Identification and Data Capture systems (AIDC). It has even formed a joint venture ‘Spanco-GKS’ with Golden Key Solutions of Oman to replicate its Indian business in the Gulf region as well. For FY08, it may clock a turnover of Rs.625 cr. with profit of around Rs.48 cr. on a standalone basis i.e. an EPS of Rs.23 on its current equity of Rs.20.65 cr. A solid bet.
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ANG Auto Ltd. (Code: 530721) (Rs.94.45) is among the few companies in the world to be completely integrated – from the manufacture of components to sub-assemblies and assemblies and finally to vehicles. Today, it is the largest trailer manufacturing company in India with a capacity of 3600 trailers per year and will soon be No. 1 in Asia as it is augmenting the capacity to 6000 trailers. Notably, the company has entered into a 5-year contract with Ashok Leyland for trailers, which is valued at Rs.1500-1800 cr. Secondly, its patented automatic stack adjuster and the single piece dummy axle is witnessing strong demand from all over the world. Going ahead, it intends to manufacture suspension systems and is also setting up a forging unit at Bhiwadi, Rajasthan, at capex of Rs.37 cr. To consolidate its operations, the company has merged ANG Auto Tech, its 75% subsidiary with itself. On a standalone basis, it is expected to clock a turnover of Rs.120 cr. and profit of Rs.16 cr. for FY08 i.e. an EPS of Rs.13.50 on its current equity of Rs.11.90 cr. Since the conversion price is high at Rs.325, its FCCB of Rs.50 cr. may not get converted into equity. Moreover, finding its valuation very cheap, the management has obtained the approval to buy back equity shares up to 24.30% of the total paid-up equity capital at a maximum price of Rs.215 per share. A golden opportunity to buy at such low price levels.
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Part of the B. M. Thapar Group, Greaves Cotton Ltd. (Code: 501455) (Rs.192.50) is engaged in the production of diesel/petrol/LPG engines for power generation, agro equipment and automotives apart from manufacturing gensets, agro equipment and construction equipment Besides, it is also engaged in marketing high technology systems for marine, aviation and electronic applications. Last year, to enhance its presence in the global market, it acquired Bukh Farymann Diesel GmbH (renamed as Greaves Farymann Diesel GmbH), which is engaged in the manufacture and marketing of single cylinder diesel engines and parts for Rs.25 cr. For FY08, it may clock a turnover of Rs.1400 cr. with PAT of Rs.115 cr. i.e. an EPS of Rs.24 on its current equity of Rs.48.80 cr. More importantly, few weeks back Piaggio Group's Indian subsidiary signed an 8 year agreement with the company for purchase of mono-cylinder diesel engines for application on the three-wheeled vehicles manufactured by it. This implies that the company will continue to be a single source supplier of such mono-cylinder diesel engines to Piaggio. A solid bet for long-term.
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PAE Ltd. (Rs.19.25) is in the automotive and non-automotive (industrial) segments of batteries and components/systems The power segment presents its new growth opportunities as PAE has launched power back-up devices and systems and sees excellent growth potential for them. It is a profit making and dividend paying company. In the current year expected EPS is around Rs.5/6. Last dividend was around 10%, which is likely to rise to 12% in the current year. At present, market cap is just Rs.19 cr. The stock has reacted from a high of Rs.54 to the current level of Rs.19 where it looks very attractive for investment.
* Torrent Cables (Rs.180) - Those who booked profits at higher levels can add this stock at the current level of Rs.180 or on dips. Full year expected EPS is Rs.38/40.
Source: Internet

Investment Idea: Orchid Chemicals

The share price of Orchid Chemicals has taken a beating for the past few days. And that is precisely what makes it a good buy. The fall in the stock was directly attributed to Bear Stearns selling off a major chunk of its holding in the company. Selling was further triggered by promoters of the company selling a 7% stake to meet the margin calls. The promoters had earlier ramped up their holding from 17% to 24% and had borrowed the money to increase the stake. But when the margin pressure increased and the promoters did not have enough money to pay these off, they took to the recluse of selling their 7% stake and raising the money.

There is also news about the company having incurred some forex losses and it is also feared that FCCB of US$193 million due in 2012 would not get exercised and hence could remain as a debt in the books of the company.

On the financial front, despite all these turmoil’s, the company has been doing very well. For the third quarter ended 31st December 2007, YoY, the net sales rose by 39% at Rs.332.69 crore. EBIDTA was up 34% at Rs.104.87 crore. PBT almost doubled from Rs.31.28 crore to Rs.61.78 crore. PAT rose by a whopping 91% at Rs.54.12 crore. The company has posted an exceptional item of Rs.6.42 crore, representing exchange gain on outstanding FCCB. On this, the company paid a tax of Rs.2.19 crore which does not make the gain look very big now. On an equity of Rs.65.84 crore, the EPS is at Rs.8.20, which on the current price of Rs.118 gives a of PE of just 4.

The company has lined up 12 new products for launch over the next two years. The company has a very strong R&D, which has seven pre-clinical entities (total 15 molecules) targeting diabetes, infection, inflammation and oncology areas. Currently Orchid spends about 6-7% per cent of its sales on R&D. ORLL has filed 162 patent applications for new drugs and other innovative products. Well, with most of the drug majors spinning off their R&Ds into separate profit making entities, it will not be a surprise to see Orchid also do the same in the near future. At the current market price of Rs.118, Orchid is a good investment.
Source: Sptulsian.com

Markets Today

Blue chips edged higher in volatile trading session today. After an initial surge, the market had pared gains in afternoon trade. The S&P CNX Nifty, had in fact, slipped into the red. A strong rebound was witnessed in late trade.
As per provisional closing, the 30-share BSE Sensex rose 351.89 points or 2.35% at 15,346.72. The index gained 356.48 points at the sessions high of 15,351.31, hit at the fag end of the trading session.
The broader CNX S&P Nifty rose 49.4 points or 1.08% at 4623.35.
Mid-cap and small-cap stocks slumped, which was clearly reflected in the poor market breadth. Banking and IT stocks were in demand. Metal and power stocks declined. 22 out of 30 stocks from the Sensex pack ended in green.
The market sentiment remained edgy on reports Monsoon Capital LLC, a $1.20 billion hedge fund firm run by Gautam Prakash, has been hit hard by a slump in Indian stocks this year. The news may trigger more redemptions from hedge funds with higher exposure to India, reports suggest.
Among the Asian markets, Japans Nikkei slipped traded in red and Chinas Shanghai Composite declined further. Earlier in the day, Asian indices were mostly in the green. European markets were closed on account of Easter holiday.
As per data released on Thursday, 20 March 2008, inflation surged to over 11-month high of 5.92% for the week ended 8 March 2008 as essential items like fruits and vegetables and pulses as well as some manufactured items turned expensive.
The BSE Mid-cap index fell 2.41% at 5,820.13. The BSE small-cap index was down 3.47% at 6,971.42.
The market breadth, which was negative in early trade, turned poor as the session progressed. On BSE, 559 stocks advanced, 2130 declined and 34 stocks were unchanged.
The BSE clocked a turnover of Rs 4663 crore as against Rs 5,796.91 crore on Wednesday, 19 March 2008.
Indias largest private sector firm by market capitalization and oil refiner Reliance Industries (RIL) rose 1.93% to Rs 2200.80.
Indias largest private sector bank by assets ICICI Bank rose 4.98% to Rs 804.55.
Indias largest engineering and construction firm by revenue gained 3.46% to Rs 2937.20.
Among the other Sensex gainers were, Housing Development Finance Corporation (up 7.96% at Rs 2389), Wipro (up 7% at Rs 402.95), HDFC Bank (up 6.14% at Rs 1349), Hindustan Unilever (up 4.84% at Rs 236.20), and State Bank of India (up 2.91% at Rs 1649.50).
Among the Sensex losers were, Tata Steel (down 6.95% at Rs 593), Reliance Energy (down 3.46% at Rs 1164.80), DLF (down 3.53% at Rs 601), Maruti Suzuki (down 1.91% at Rs 807), Jaiprakash Associates (down 1.08% at Rs 201.80) and Ranbaxy Laboratories (down 0.93% at Rs 446).
India's second biggest real estate developer by market capitalisation Unitech declined 4.90% to Rs 254.20, off sessions high of Rs 279.70. Lehman Brothers and Deutsche Bank are reportedly set to make a combined investment of $500 million in Unitech's special purpose vehicle formed to execute two commercial projects in Mumbai.
Refrigerant gases maker Gujarat Fluorochemicals jumped 3.35% to Rs 185 after its board approved the proposal to buyback equity at a ceiling price of Rs 300 per share.
Drug maker Sun Pharmaceutical Industries gained 1.31% to Rs 1277 after it received an approval from US Food and Drug Administration for the abbreviated new drug application to market a generic of Parke Davis's Cerebyx, fosphenytoin sodium injection.
Textiles firm S.Kumars Nationwide slumped 28.45% to 81.75 after 7.10 lakh shares changed hands on BSE at Rs 110 and 5.02 lakh shares changed hands on NSE at Rs 88.50 each.
Sujana Towers, manufacturer of galvanized steel towers, slumped 10.38% at Rs 85.05 after the firm said Morgan Stanley & Co International Mauritius acquired a further 3.85% stake in the company to raise its total holding to 7.04%.
FMCG products maker Dabur Pharma rose 3.38% to Rs 50.50 after 3.75 million shares or 2.4% of the company's equity capital changed hands on the NSE in a block deal at Rs 50.75 each.
Drug maker Aurobindo Pharma rose 0.60% to Rs 2505, off session's high of Rs 259.90. The comapny said it has concluded a deal to acquire Italy's Intellectual Property & Marketing Authorizations.
Edible oils maker KS Oils fell 1.73% to Rs 62.60 even as some reports suggested that the firm sees revenue rising to Rs 3200 crore and expects net profit of Rs 200 crore in full year (FY) 2009 due to a rise in demand, following import duty cuts in mustard oil. Indian government on Thursday, 20 March 2008 announced a cut in import duty on some edible oils to improve supplies and rein in inflation that touched a 10-month high.
Most Asian markets were trading higher today, 24 March 2008. Key indices in Taiwan, Singapore, and South Korea were up 0.58% to 3.99%. However, Chinas Shanghai Composite index was down 4.49% and Japans Nikkei was down 0.02%. Stock market in Hong Kong was closed for public holiday.
Wall Street shares soared on Thursday, 20 March 2008 as declining commodity prices helped offset worries about the economic slowdown. Financial stocks rallied on analyst expectations that more mortgage purchases by Fannie Mae and Freddie Mac may help stabilize the home loan market.
The Dow Jones industrial average jumped 261.66 points, or 2.16%, to 12,361.32. The Standard & Poor's 500 index added 31.09 points, or 2.39%, to 1,329.51, and the Nasdaq Composite index advanced 48.15 points, or 2.18%, to 2,258.11.
Back home, the Sensex rose 161.37 points or 1.09% at 14,994.83 on Wednesday, 19 March 2008. The broader based S&P CNX Nifty was up 40.95 points or 0.9% at 4,573.95 on that day.
The market remained closed on Thursday (20 March 2008) on account of Id-E-Milad and on Friday (21 March 2008) on account of Good Friday.
As per provisional data, foreign institutional investors (FIIs) purchased shares worth Rs 30.54 crore on Wednesday, 19 March 2008. Domestic institutional investors (DIIs) were net buyers of shares worth Rs 142.19 crore on that day.
FIIs were net buyers of Rs 1,901.33 crore in the futures & options segment on Wednesday, 19 March 2008. They were net buyers of index futures to the tune of Rs 1,838.77 crore and sold index options worth Rs 175.11 crore. They were net buyers of stock futures to the tune of Rs 239.51 crore and sold stock options worth Rs 1.85 crore.
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Intraday Calls for 24th March

Markets may open flat to positive and remains rangebound about +/- 1%. A flat to positive closing expected.

Today's Intraday Picks:

GMR Infra
SAIL
UNITECH
Federal Bank
Gujarat NRE Coke

For levels and Targets download the file by Click Here

Others: Lok Housing, Bank of Rajasthan, HCC, Noida Toll.

Good Luck

Thursday, March 20, 2008

Sebi Allows Short Selling from April 21

The long wait is over for stock market participants. Regulator Sebi has finally announced that short-selling and stock lending and borrowing will be operational from April 21.

Short-selling will only be allowed in futures and option stocks, for a period of 7 days, after which its positions will have to be squared off.

Sectoral FDI caps will be available for short-selling. Many of the sectors, which have a low FDI cap and where FII limits have been crossed, will not be eligible despite being in the F&O segment.

Institutions and investors borrowing stocks will have to pay a margin fee to the lender.

Wednesday, March 19, 2008

Investment Idea: Bartronics India

Bartronics India, a zero debt company based in Hyderabad is engaged in providing solutions using automatic identification, data capture (AIDC) technologies and radio frequency identification (RFID) solutions. On November 16, 2007, the Company announced the incorporation of a wholly owned subsidiary, Bartronics America Inc.

For the third quarter ended 31st December 2007, YoY, the company has posted very good results. Its net sales was up almost 4 times at Rs.70.17 crore. Its total expenses also surged equally at Rs.57 crore as against Rs.13.32 crore in Q3 FY07. Of this, the cost on raw materials took away Rs.87.51 crore, which was at Rs.11.16 crore in Q3 FY07. Thanks to the stock-in-trade, the company was able to recoup some of this outgo, yet it continued to remain high. PBT rose over 3 times at Rs.12.34 crore and PAT surged from Rs.3.44 crore to Rs.10.95 crore.

The growth in net profit and total income was primarily driven by the increased utilisation of production capacity at its smart card manufacturing facility, along with a jump in its regular solutions business. The company commissioned its 80-million smart cards per annum facility at Medchal on the outskirts of Hyderabad in July 2007. The company is targeting 40 million cards during the current financial year. It is a major beneficiary of the Railway Budget, which announced that smart card-based ticketing system was on the anvil.

The company is now looking closely at the European markets, to acquire a European company, similar to the one that it had done in the US, for over $50 million (around Rs 200 crore). It is scouting for a company that is engaged in the RFID technology and smartcard solutions.

The company, in January 2008, acquired the assets of Proximities Inc and SRG America Inc for a total consideration of $50 million (around Rs.200 crore), which it raised through issuance of zero coupon unsecured FCCBs.

It plans to utilise the 80-million production capacity at its plant during the next financial year. This, coupled with its overseas plans, is expected to fuel the company’s topline to touch Rs.500 crore next year.
The stock is a good buy at the current rate of Rs.165.

source: sptulsian.com

Intraday Calls for 19th March

Fed cuts rates by 75 bps and US Markets rallies Dow +420 Nasdaq +91. So In Indian Stock Market A Strong Rally Expected today of about 3-4% gain and may be more as yesterday's due.

Today's Intraday Picks:

HDIL
INDIABULLS Financials
STERLITE Industries
JP ASSOCIATES
REL

For Levels and Targets Download the file by Click Here.

Also Watch GMR Infra, Prithvi Info, Noida Toll & Dish TV.

Good Luck

Tuesday, March 18, 2008

Electrotherm (India)

Electrotherm (India) has posted very encouraging results for the third quarter ended 31st December 2007. YoY, its net sales rose by a robust 82% at Rs.381.91crore. PBT was at Rs.30.04 crore, up by 85% and PAT zoomed up by 72% at Rs.19.73 crore. On an equity of Rs.9.13 crore, its basic EPS for Q3 was at Rs.21.60.The biggest contributor to the topline has been the engineering projects and special steel divisions.

The company has bagged orders worth US $ 14.06 Million (US Dollar Fourteen Million Six Thousand Only) from Istanbul, Turkey. The deadline for dispatch of first part of the order is before the end of March 2008 and the balance by the December 2008.

The company recently launched its corrosion-resistant steel (CRS) bars, expected to increase the life-span of buildings. It has invested nearly Rs.514 crore so far in its fully integrated steel plant at Samkhyali in Kutch that came up in 280 acres after the Centre and the Gujarat Government gave tax incentives in the district ravaged by the 2001 earthquake.

The company’s electric motorcycles sought to revolutionise the Indian automotive market, is currently having a bumpy ride. The company has seen a slide in sales of the Yo-bykes. In April-Dec 2007, the electric vehicle division could generate only Rs.36.86 crore compared to Rs.51.77 crore in the same period the previous year, posting a drop of nearly 29%.

The company is also planning to invest Rs.300 crore in expanding its engineering projects division, steel, power and electric vehicles divisions over the next one year. To fund its expansion, the company intends to offload nearly 12.5% stake worth Rs.82 crore to DEG of Germany. It is also planning to raise funds via QIPs to the tune of Rs.300 crore.
Currently quoted at Rs.364, stay invested.
Source: Sptulsian.com

Investment Idea: SAIL

Steel Authority of India Ltd. (SAIL) is a PSU, fully integrated iron & steel maker, producing both basic and special steels for construction, engineering, power, railway, automotive and defence industries.
SAIL has 5 integrated steel plants at Bhilai, Bokaro, Durgapur, Rourkela and IISCO while 3 special steel plants are located in Karnataka, Tamil Nadu and West Bengal with 653 dealers in 527 districts spread all over the country.
The company has joint venture power projects with NTPC as 50 : 50 JV for 314 MW captive power plants at Rourkela, Durapur and Bhilai while 50 : 50 JV with Damodar Valley for 302 MW power project and 1,880 tonne per hour steam generation at Bokaro.
To improve its self sufficiency, SAIL has entered into a 50 : 50 coal mining JV with Tata Steel to explore 4 coal blocks in India as also a JV with Manganese Ore India Ltd. for 31,000 TPA of Ferro Manganese and 70,000 TPA of Silico Manganese to be available by 2010 for producing 24 million MT of steel.
During FY 07, the company produced 12.26 million tonne of steel by operating at 114% capacity of which 3 million tonne was value added and special steels.
For FY 07 the total income of the company was at Rs.35,865 crores with EBITDA of Rs.10,966 crores, resulting into a margin of 30.58% with PBT of Rs.9,422 crores and PAT of Rs.6,202 crores, resulting in an EPS of Rs.15.
For 9 months ending 31-12-07 the total income was at Rs.27,662 crores with EBITDA of Rs.8,921 crores resulting into margin of 32.25% with PBT of Rs.7,804 crores and PAT of Rs.5.160 crores, giving an EPS of Rs.12.50 for the period.
For FY 08, EPS of the company is likely to be Rs.18 while for FY 09 the same would be close to Rs.24 in view of better realizations and strong growth expected in the steel consumption.
The company is planning to have production of 24 million tones of steel by 2010, for which capex of Rs.40,000 crores is planned.
The debt equity ratio of the company as at 30-06-07 was at 0.18 : 1. The net worth of the company as at 31-03-08 would be Rs.23,000 crores and hence the debt equity ratio of the company is not likely to exceed 0.60 : 1, which is considered very healthy for such a huge steel company.
SAIL presently has five iron ore mines which provides about 14 million tones of raw-materials to meet almost the total iron ore and about 30% of its flux (limestone and dolomite) requirement of the eastern sector steel plants. About 12 – 13 mt of coking coal is sourced from outside sources. Hence, rising cost of iron ore is not affecting its profitability, though rising cost of coal is a concern.
Of the present equity of Rs.4,130 crores, Government holds 85.82%; Banks, Mutual Funds, FIIs and Insurance Companies hold 11.75% while only 2.43% is being held by public. This is leaving very low floating stock.
The present market capitalization of the company is close to Rs.80,000 crores at current market price of Rs.190 per share. The present debt of the company at Rs.2,500 crores makes company virtually debt free, net off, net current asets.
The steel prices for flat and long products have been increased by about 8% in last fortnight and rose by about 22% since January 08. Still after this rise, the product is in short supply with good offtake. This is bound to improve the working of the company for March 08 quarter.
Share is presently ruling at Rs.190, which discounts its FY 09 EPS by about 8 times. The steel sector is likely to remain attractive at the current levels, as all the stocks have corrected by about 30% to 35% in the last couple of months.
Share at Rs.190 makes it an excellent buy with potential to rise by about 50% in the next 12 months.

by SP Tulsian

Prithvi Information Solution

The company, when it had gone public in October 2005, its entire focus had been on developing software for small and medium scale businesses in US. With the bigwigs in the industry itself gasping for life right, it is little wonder that small and middle rung companies like Prithvi are able to sustain and yet post some improvement in performances. And this is precisely the reason why the stock has fallen down from the levels of Rs.300 to now rule at Rs.150.

The financial performance for the third quarter ended 31st December 2007 has not been very good. On QoQ, its net sales rose by just 10% at Rs.291.73 crore. Its total expenditure rose 29% of which software development expenses, which till Q2 represented 98% of the total outgo, has come down to 79%. This resulted in the EBIDTA showing a fall of 44% at Rs.35.66 crore. PBT registered a rise of a meager 3% while PAT rose by a measly 5% at Rs.28.40 crore. On an equity of Rs.18.08 crore, it managed to post a good-looking EPS of Rs.15.71.

The main objective of the IPO was to build an offshore delivery centre with 1,500-seat capacity in Hyderabad at a cost of Rs.150 crore, of which, till 31st December 2007, it has spent Rs.62 crore. It’s been over two and half years and it is yet to fully implement the project? Does not speak too well about the management abilities of the company.

And maybe realising that it needs to move on beyond being a mere IT service provider, the company is now trying to gain some foothold in telecom. The company bagged an order of Rs.309 crore from BSNL, for supply of transmission equipment that helps increase network bandwidth. Prithvi has tied up with a Chinese telecom major, Huwei Technologies to source the equipment and is customizing it for BSNL.
Considering annualized EPS of Rs.60, remain invested.
Source: sptulsian.com

Intraday Calls for 18th March

Markets are highly oversold so it may see some recovery today.

Today's Intraday Picks
NTPC
GMR Infra
BOB
Future Capital
For levels and Targets download the file by Click Here

Good Luck

Monday, March 17, 2008

GMR Infra

Since a very long time, a new airport has not been started in India. We constantly crib about the lack of infrastructure facilities in the country and in these circumstances; it is indeed big news about the swanky new airport getting all set for commercial operations in India.

The launch date of Bangalore airport, as we all know, has been delayed and now we hear that, even while Mrs. Sonia Gandhi was unveiling the new world class airport at Hyderabad, news came in that the launch of its commercial operations might get delayed and it might not take off as per the “earlier than scheduled” target.

Now, we at premiuminvestments.in have been very gung-ho about GMR Infra and that very fact that it was the company responsible for developing the airports in Hyderabad and Delhi made it one of our top most recommendations. And now, with the markets falling everyday, coupled with the news of the delay in the launch of the commercial operations of Hyderabad airport, investors are asking whether it is time to re-rate our stand on GMR Infra.

Well, we would now like to go on record to say that we still very strongly believe that GMR infra continues to hold tremendous potential and this delay in the launch date of the airport is just a minor glitch. The issues over the delay is happening are not very major, they all are small blips, which will soon get erased out.

The delay in the Hyderabad airport is on account of “operational reasons”. Now this includes, poor connection between the new airport and the Hyderabad city, fleet of buses to shuttle employees between the airport and the city not yet at full strength, presence of a big drain at about 105 feet from the airport.

Another issue is that the airline operators have also asked for some more time to fully shift their operations from the old to the new airport. There is major worry over the increase in the ground handling charges and the imposition of the new central infrastructure fees, which is expected to hit the very purpose of the Budget airlines to offer tickets at low costs. Surely, it is going to increase the cost of traveling from Hyderabad and Bangalore airports but then, just as there is always this major resistance to any cost increase or imposition of new tolls or taxes, which eventually does get passed and people get used to paying, this too shall soon pass.

We feel all these glitches are not ones which will jeopardise the entire airport, simply because we cannot afford to do so. These issues are all workable and as GMR has said, these are “operational issues” which were not in control of GMR.

So we once again reiterate that we maintain our long term bullishness in GMR Infra and there is no way in which we think the stock requires any kind of re-rating or downgrading from the present levels. The prospects of the company continues to remain strong and with the company soon expected to bid for the development of an East European airport also, the company is no longer just an Indian company, it is soon morphing into a truly global “airport” company.

Investors who have purchased GMR Infra, are advised to stay invested. In today’s general market conditions, almost all the stocks are falling across the board. This is a good long term stock.
By SP Tulsian

Sunday, March 16, 2008

Intraday Calls for 17th March

Market may open with negative bias but some recovery expected in mid-session.


Today's Intraday Picks:

GMDC LTD.
PNB
MTNL
DLF
Ansal Infra
For Levels and Targets download the file by Click Here


Good Luck

STOCK IDEAS

Manugraph India Ltd. (Code: 505324) (Rs.84.95) is India's largest manufacturer of web offset and sheet fed offset printing presses. With a whopping 70% market share, its printing presses are present in almost all major publication houses. In India, it has worldwide presence from Latin America to Europe and from the Middle East to China. Last year, it acquired Dauphin Graphic Machines Inc, the No. 1 company in the USA in the four page segment for US $19.20 million. With this acquisition it has become the world’s largest single width printing press manufacturing company. Accordingly, the US subsidiary has started outsourcing the component parts from India and even marketing Manugraph machines in North America. But due to the economic slowdown in USA, the response was not as good as anticipated earlier. Still on the back
of robust domestic demand, it is expected to end FY08 with sales of Rs.400 cr. and PAT of Rs.50 cr. on a standalone basis.
This translates into EPS of Rs.16 on its current equity of Rs.6.08 cr. with a face value of Rs.2. The scrip has been beaten down mercilessly from its recent high of Rs.205 in November 2007 and offers an excellent opportunity to buy. Also, its agreement of business co-operation for marketing with MAN Roland of Germany is under negotiation.
******
Lokesh Machines Ltd. (Code: 532740) (Rs.64.10) is engaged in the design, development and manufacture of custom built special purpose machines and general purpose CNC (computerised numerical controls) machines along with their components. Presently, it derives 70% revenue from the machining division whereas the balance 30% comes from its auto components division. The company caters primarily to customers in the auto OEM, auto ancillaries and general engineering space. Hence it supplies mainly to Tata Motors, Bajaj Auto, Force Motors, Cummins, Bharat Forge, Kirloskar Oil Engines, Everest Kanto Cylinders etc. with separate dedicated facilities for M&M and Ashok Leyland. Of late, it has also forayed into overseas markets with good orders. On the back of an encouraging performance for the first three quarters of FY08, it is estimated to register sales of Rs.105 cr. with net profit of Rs.13 cr. for FY08. This works out to an EPS of Rs.11 on its equity of Rs.11.80 cr. Considering its IPO price of Rs.140 in Arpil 2006 and 52-week high/low as Rs.168/60, it’s a screaming buy.
******
Being the market leader in High Tension XLPE power cables, Torrent Cables Ltd. (Code: 504096) (Rs.217) manufactures XLPE insulated cables in the voltage range of 1.1KV to 132 KV, Low-Tension (LT) power cables up to 1.1KV and High- Tension (HT) power cables up to 11KV. It also produces EHV, TRS flexible cables, welding cables, lift cables, colliery cables and specialty cables in the form of fire resistant low smoke cables (FRLS), railway-signalling cables, mining and trailing cables. It has a very exhaustive customer base spread over State Electricity Boards (SEBs), Utilities, EPC Contractors, government/semi-government companies, private companies, dealer network, consultants and many more. Apart from the SEBs, its clientele includes biggies like Tata Power, L&T, BHEL, ABB, Siemens, Alstom, Jindal, Reliance, Essar, Suzlon, NTPC, Railways, Powergrid, SAIL, Torrent Power etc. The rural electrification plans, APDRP programmes and government’s aim to achieve power for all by 2012 has resulted in increased demand for power related products like cables. Hence, for FY08, the company is estimated to clock a turnover of Rs.225 cr. with net profit of Rs.30 cr. i.e. EPS of Rs.40 on its small equity of Rs.7.50 cr. With a 52-week high/low of Rs.440/143, it’s a screaming buy as it can
easily appreciate 50% within a year.
******
Patels Airtemp (India) Ltd. (Code: 517417) (Rs.57.50) is engaged in the manufacture and sale of an extensive range of heat exchangers such as shell & tube type, finned tube type and air cooled heat exchangers, pressure vessels, air-conditioning and refrigeration like power, refineries, fertilizers, cement, petrochemicals, pharmaceuticals, textiles and the chemical industries. For future growth, the company is concentrating more on high value added engineering products and has even got its product the coveted ASME `U' Stamp authorization. For the December 2007 quarter, the company’s net sales declined by 15% to Rs.10.50 cr. due to delay in dispatches but net profit shot up to Rs.1.40 cr. on lower depreciation cost. Hence it is expected to register a topline of Rs.50 cr. and profit of Rs.5 cr. for FY08. This will lead to an EPS of Rs.10 on its current equity of Rs.5 cr. Technically, the scrip seems to have bottomed out and can shoot up 50% in 6-9 months.

*******
Pratibha Industries (Rs.311.15) has received the Certificate of Registration for its quality management system – API Specification Q1 for 'Design and Manufacture of Line Pipe'. With this registration, the company's SAW Pipe Manufacturing Unit is now fully geared to manufacture pipes for supply to the oil & gas segment. This approval is in line with our expectations. Investors are advised to stay invested for good long-term targets.

English Indian Clay (Rs.1739.25) - Shareholders to get four shares for every 19 shares of Bharat Starch Product Ltd. held on 20th February 2008. The stock is trading after this demerger, it is yet to become ex-right. Book part profits at Rs.1900 level.

J P Associates (Rs.236.25) has value unlocking potential with regard to JP Power Ventures, awarding land to Jaypee Infratech and potential value from the Ganga-Balia Expressway, which would act as triggers. Stay invested or add on dips.

Punj Llyod’s (Rs.329.55) strong order position and Investments in PSL and Ramprastha JV could add significant value. Stock looks attractive at current rate.

MTNL’s (Rs.100.20) book value is Rs.185 and dividend is 40%. Stock looks attractive at Rs.100 level.

Balmer Lawrie (Rs.366.95) has a strong book value of Rs.165 with expected EPS is Rs.50/52 while last dividend was Rs.135%. It is a good stock to add in small quantities on dips.

Revathi Equipments (Rs.919.20) is looking for more acquisitions, if informed sources are to be believed. It is also developing small real estate in partnership in Mumbai. With coal prices shooting up, coal mining equipment manufacturers are likely to see better times ahead. Investors are advised to stay invested or add on dips around Rs.800 level. There are also indications, as per unconfirmed sources, that few MNC companies have shown interest in the company for taking a stake.

Mather & Platt Pumps (Rs.149.40) will benefit by the fast growing pump markets in Asia and Eastern Europe where a lot of activity is taking place in waste-water treatment, municipal water supply and construction. The company will have access to both through Wilo's strong presence in Europe and its Korean and Chinese operations. Long-term investors will benefit. Stay invested.

Ranbaxy (Rs.464.10) - Strong reports are pouring in. Stay invested.

Ashiana Hsg. (Rs.97) - Profit projections and long-term story is intact. Due to change in sentiment, stock price has come down in line with the trend. Stay invested.

Valuation of IFCI (Rs.49.85) is attractive at Rs.49 level. Investors can add with a long-term view.

Natural Capsules BSE Code: 524654 Last close: Rs.23.90
Natural Capsules Ltd. was established in the year 1993 at Bangalore. The company has a well-equipped modern manufacturing plant to manufacture hard gelatin capsules shells, hard cellulose capsule shells and pharmaceutical dosage in capsules. It has an equity of just Rs.4.28 cr., promoters hold 42.48% stake and the company paid 10% dividend last year. In January 2008, its share price had touched Rs.49.75 level but it is now available at Rs.24. The company posted an EPS of Rs.4.30 for the first nine months of FY08 which may touch Rs.6 for the full year. Against the estimated EPS, the stock is trading at a P/E ratio of just 4. The company will be allotting warrant and shares to promoters and promoter group at Rs.30. Buy with stop loss of Rs.19.50 for a medium-term target of Rs.28-30. Thereafter, stock will go up to Rs.35 and later to Rs.49 in the long run.
Source: Internet

Friday, March 14, 2008

Investment Idea: GMDC

Gujarat Mineral Development Corporation Ltd. (GMDC) is a Gujarat State government undertaking engaged in the business of lignite, bauxite and fluorspar mining as also power generation units based on Lignite.

The company has been posting improved financial performance quarter on quarter of FY 08. For FY 07, the total income was at Rs.610 crores with EBITDA of Rs.310 crores, PBT of Rs.157 crores and PAT of Rs.105 crores, resulting in an EPS of Rs.6.60 (face value Rs.2).

For 9 months ending 31-12-07, the total income of the company was Rs.700 crores with EBITDA of Rs.419 crores, PBT of Rs.270 crores and PAT of Rs.200 crores, giving an EPS of Rs.12.60 for 9 month. Hence, FY 08, is likely to have topline in excess of Rs.1,000 crores with PAT of close to Rs.300 crores, giving an EPS of close to Rs.19 on face value of Rs.2 per share.

The present equity of the company is Rs.31.80 crores with face value of Rs.2 per share. The board of the company proposed 1 : 1 bonus shares in last week of January 08 and share is presently ruling at Rs.308 cum bonus.

This translates into a market capitalization of close to Rs.5,000 crores for the company, which is quite low compared to rich reserves of lignite held at its various mines. Even total borrowing of less than Rs.800 crores is largely for net current assets which makes it virtually a debt free company.

The shareholding pattern of the company as at 31-12-07 is 74% with the promoters being the Govt. of Gujarat, 12% by Mutual Funds, Banks and Financial Institutions and 14% by Public with about 47,000 shareholders.

The company presently producing about 80 lakh MT of lignite at its three mines. New mines have been developed at the various locations at Surat to cater to South Gujarat where estimated annual production would be 10 lakh MT. 10 lakh MT of lignite production at Amod near Bharuch would fully contribute in FY 09. 30 lakh tonne of lignite production is estimated from Bhavnagar mines to cater to Saurashtra region and Central Gujarat. So, in FY 09, the production of lignite shall get increased by about 40%.

The company also has 250 MW power plant in operation based on lignite.

Lignite referred to as Brown Gold, is an alternative for coal which is in great demand, as natural resources are becoming scarce all over the world. FY 09 the company may see a topline of Rs.1,500 with PAT of Rs.600 crores which would result in an EPS of Rs.38, on pre-bonus equity. This results into a PE multiple of just 8 times for the stock, which is very cheap for any mining company.

The share which is now ruling at Rs.308, would go ex-bonus by the end of April at Rs.155. The stock at this rate is quite cheap, which can give a conservative return of close to 50% per annum over the next two years.A safe and excellent bet at Rs.308 levels on cum-bonus basis.
Source: sptulsian.com

Investment Idea: Alembic Pharma

More than 100 year’s old, it is an integrated pharmaceutical company, recognized more popularly as the “Glycodin” company. It has over 90 brands covering antibiotics, antibacterials, cardiovasculars, cough/cold and antihistamines.

For the third quarter ended 31st December 2007, YoY, the net sales was up 40% at Rs.260.62 crore. Of this domestic sales comprised of Rs.173.63 crore and exports were at Rs.91.63 crore. Total expenditure rose by almost 50%. What is noteworthy is that the company spends substantially on R&D. Its R&D bill rose from Rs.6.80 crore last Q3 to Rs.11.20 crore in the current Q3. Its interest bill burgeoned by a whopping 176% at Rs.8.38 crore. Due to this, its PBT actually took a beating; it fell 19% at Rs.19.87 crore.

But then came its knight in the shinning armour! It sold off its surplus land and earned a decent one-time gain of Rs.22.55 crore. And thanks to the land deal, the company managed to show a bumper net profit, which was up 1.67 times at Rs.42.02 crore, which otherwise would have been down by over 20%. There is no doubt that the company needs to work on getting its overall expenditure down or else, there wont be too much surplus land left every time, to bail it out.

The company is now utilizing Rs.29.17 crore from share premium account and Rs.102.58 crore from its general reserve account, against debit to Profit and Loss Account of the balances in the Intangible Assets Account of the company to the tune of Rs.176.83 crore after making due adjustment for Deferred Tax. The effect of the same will now appear in the annual accounts for the year ending on March 31, 2008. This intangible asset mainly represents amount paid for acquiring 24 brands pf non-oncology formulation business of Dabur Pharma.

The company has acquired the API manufacturing facility of Nirayu, located on the outskirts of Vadodara, for a consideration of Rs.17.50 crore and will be used by the company to increase its API business and regulatory filings. It is a USFDA approvable facility. USFDA also successfully inspected the company’s formulation facility at Panvel.

The company is very sound and hopefully, the reduction in the excise duty announced in the Budget 2008-09 would benefit the company to post better results in the coming months. Currently quoted at Rs.46, stay invested.
Source: sptulsian.com

Markets Today

Buying in battered pivotals triggered solid rally on the bourses in late trade, with market closing near highest point of the day. However, the market breadth, indicating the overall health of the market remained negative. 24 shares from the 30-member Sensex pack advanced.
Most Asian markets, which opened before Indian market, were trading lower. European markets, which opened after Indian market, were in green.
As per provisional closing, the 30-share BSE Sensex surged 441.07 points or 2.87% at 15,792.42. The Sensex settled at the highest level of the day. Sensex had slipped 26 points at days low of 15,331.35 in early trade.
The broader based S&P CNX Nifty advanced 133.10 points or 2.88% at 4,756.70 As per provisional closing.
The Sensex declined 4943.36 points or 24.35% in calendar 2008 (till yesterday, 13 March 2008).
Driven by the higher prices of food items and manufactured products, annual inflation rate based on the wholesale price index increased to 5.11% for the week ended 1 March 2008 as against 5.02% in the previous week. Inflation rate stood at 6.51% for the corresponding week in the previous year.
Finance minister (FM), P Chidambaram today said he expects the economy to maintain growth levels of above 8.5% in the coming years. FM also said in parliament that the present volatility in the local stock market reflected worldwide phenomena.
Despite the rally, the market breadth remained negative: On BSE 1,473 shares declined as compared to 1202 that advanced. 62 shares remained unchanged.
The BSE Mid-Cap index was up 1.02% to 6,596.23 and the BSE Small-Cap index rose 0.20% to 8,091.46, as per provisional closing,. Both these indices underperformed the Sensex.
The total turnover amounted to Rs 5880 crore as compared to Rs 4924 crore by 15:45 IST on BSE.
Indias leading private sector power utility company in terms of sales, Reliance Energy galloped 13.01% to Rs 1353 on 12.35 lakh shares. It was the top gainer from Sensex pack. The stock is the worst performing Sensex stock, declining 47.47% in calendar 2008 (till yesterday 13 March 2008).
Real estate shares staged a comeback after recent plunge. Indias largest real estate developer DLF jumped 8.15% to Rs 656.20 on huge volumes of 28.83 lakh shares. The stock replaced GlaxoSmithkline Pharma in the S&P CNX Nifty index from today. The BSE Realty index declined 44.33% in calendar 2008 (till yesterday, 13 March 2008).
Indias largest private sector company in terms of market capitalisation and oil refiner Reliance Industries rose 4.40% to Rs 2340.20 on 11.84 lakh shares. It moved in a range of Rs 2225 and Rs 2316.60 so far during the day. The stock is down 21.27% in the calendar year 2008 (till yesterday 13 March 2008).
IT pivotals advanced on fresh buying. Satyam Computer Services (up 4.61% to Rs 380.85), Infosys Technologies (up 2.74% to Rs 1370), TCS (up 3.76% to Rs 807.85), and Wipro (up 0.93% to Rs 368.40), logged gains.
Frontline banking shares gained despite the latest data showing a surge in inflation. ICICI Bank (up 4.30% to Rs 873.95), HDFC Bank (up 1.23% to Rs 1,312.25) and State Bank of India (up 0.78% to Rs 1,709) edged higher.
Hindalco (up 4.78% to Rs 182), NTPC (up 4.35% to Rs 194.80), and Larsen & Toubro (up 4.10% to Rs 2920), gained from Sensex pack.
Jaiprakash Associates soared 7.80% to Rs 236. The stock replaced Bajaj Auto in the BSE 30-share Sensex pack from today.
Bajaj Holdings & Investment settled at Rs 775 in highly volatile trade after its auto and the financial services businesses were spun off effective today, 14 March 2008. As per the restructuring, Bajaj Holdings, earlier known as Bajaj Auto, has 30% in Bajaj Auto and Bajaj Finserv, both to be listed separately in due course. The stock hit a high and low of Rs 1143.80 and Rs 720 respectively.
Bharti Airtel, the countrys top listed cellular services provider lost 3.26% to Rs 753 on 6.31 lakh shares. It was the top loser from Sensex pack.
Auto stocks were subdued. Mahindra & Mahindra (down 2.57% to Rs 644) and Maruti Suzuki India (down 0.32% to Rs 837.10) slipped on profit booking.
Reliance Natural Resouces was the top traded counter on BSE with turnover of Rs 305.11 crore followed by Reliance Petroleum (Rs 274.47 crore), Reliance Industries (Rs 271.37 crore), GSS America Infotech (Rs 223.33 crore), and Bajaj Holdings & Investment (Rs 197.02 crore), in that order.
The next trigger for the market would come from the figures of advance tax payment by corporates for the fourth installment, which falls due on 15 March 2008.
Another major trigger for the market is outcome of the US Federal Reserve meeting on 18 March 2008 to review interest rates. A cut in interest rate, as expected by the street may provide some support to the markets. Fed Chairman Ben Bernanke had signaled a readiness to cut interest rates again to prevent further damage to the weak US economy, even as he took note of rising inflation risks.
European markets were higher. Key benchmark indices from United Kingdom (up 0.45% to 5,718.20), France (up 0.43% to 4,650.25), and Germany (up 0.67% to 6,543.90), gained.
Most Asian markets were trading lower. Hong Kong's Hang Seng (down 0.29% at 22,237.11), Japan's Nikkei (down 1.54% at 12,244.48), Seoul Composite (down 0.95% at 1,600.26), Taiwan Weighted (down 0.60% at 8,161.39) and Shanghai Composite (down 0.22% at 3,962.67) edged lower after early rise.
However Singapores Straits Times index rose 1.19% at 2,839.01
US markets reversed early losses on Thursday, 13 March 2008, as S&P predicted an end to subprime mortgage writedowns. The early fall came after lower than expected retail sales and reports that another hedge fund may collapse. The Dow Jones industrail average gained 35 points to 12,145. The Nasdaq rose 19 points at 2.263; while the S&P 500 gained 6 points to 1,315.
Back home, a major setback was witnessed on the bourses as share prices fell almost across the board on Thursday 13 March 2008. The 30-share BSE Sensex slumped 770.63 points or 4.78% at 15,357.35, its lowest level since early September 2007. The broader based S&P CNX Nifty was down 242.40 points or 5.10% at 4,623.60 on that day
As per provisional data, foreign institutional investors (FIIs) sold shares worth Rs 108.50 crore on Thursday, 13 March 2008. Domestic institutional investors (DIIs) were net buyers of shares worth Rs 56.44 crore on that day.
FIIs were net buyers of Rs 242.82 crore in the futures & options segment on Thursday, 13 March 2008. They were net sellers of index futures to the tune of Rs 85.43 crore and bought index options worth Rs 85.82 crore. They were net buyers of stock futures to the tune of Rs 238.73 crore and bought stock options worth Rs 3.70 crore.
US crude for April delivery fell 58 cents to $109.75 today, 14 March 2008 a barrel after hitting a record of $111. London Brent crude for April dropped 54 cents to $107
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Market Whispers

A big broking house is known to be liquidating its position in Sterlite Industries. The stock could see some turbulent times and may soften from present levels of Rs.755.

JSW Steel is expected to see a sharp spurt from the current price of Rs.900, backed by positive news that it is to commission its Vijaynagar plant, ahead of schedule. Share could touch four digit mark soon.

Kirloskar Brothers is a good buy at the current rate of Rs.285, it has corrected substantially and is now perched at an attractive level.

A well-known mutual fund is accumulating Powergrid, especially in the wake of the current price fall at Rs.90.

Educomp may bounce back from the present level of Rs.3,250 by Rs.200.

DLF will see a sharp spurt from the current levels as punters are taking this opportunity of the dip in the price to shore up their holdings. Share may soon cross Rs.670 mark.

Ranbaxy is being tipped as one of the best bets in this volatile market, at Rs.460 levels.

Disclaimer

The information in this publication is provided by http://www.moneybazzar.blogspot.com/ is intended for use for Readers & Traders . Every effort is made to provide accurate information, but http://www.moneybazzar.blogspot.com/ cannot guarantee the accuracy of the information or of the market analysis. This is a newsletter and is for informational purposes only. It is not a solicitation or offer to buy or sell futures. There is a high risk of loss in trading futures. You should not trade with money that you cannot afford to lose. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this newsletter. The past performance of any trading system or methodology is not necessarily indicative of future results.



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