Stock Idea: Seamec

Investment Argument
SEAMEC - is a MNC outfit of Technip Group of France. Its leader in operating MSVs/DSV in India, with 4 out of 6 vessels belonging to it and balance 2 are with ONGC. There are just about 30-35 MSV’s operating in the world. They are specialized vessels used for undertaking any kind of underwater engg, maintenance and developmental works. The company has strategy of deploying vessels on long term charters as against in the spot market, therefore the cash flow for the future is better predictable.
All the ships are fully deployed right now and charter rates are also strong, due to strong demand for such vessels. In past due to focus on spot market and also due to some kind of accidents etc, the performance of company was quite erratic and thus valuations of stock suffered too much. Company’s balance sheet is quite robust with Zero debt, huge cash balances and it is also likely to generate almost Rs. 265 cr for year ending Dec.’09. With market Cap of just Rs 680 Crs, this stock with likely [for Dec’09] NAV of Rs 350 per share and EPS of Rs 70 appears dam cheap at Rs 200/-. We think by the time annual results for Dec’09 are announced, stock can easily reach 260-280. BUY.
Background
South East Asia Marine Engineering & Construction (SEAMEC), was promoted by Peerless General Finance & Investment Company, but latter on acquired by MNC giant Technip Group of France. The company operates in Multi support vessels (MSV) for diving and provides under water/sub sea engineering and construction, maintenance, inspection of under water structures construction, rescue operations and fire fighting and other support services for offshore oil/gas installations located in India or abroad.
The company started operating on a single DSV in Indian Offshore market, grown subsequently to own and operate 4 Vessels. Seamec-I with 1700DWT, Seamec-II with 2100DWT, Seamec-III with 2100DWT and SEAMEC Princess. All vessels are deployed on various contracts. As demand for such vessels is strong, during intermediate period of contract also, they can undertake short term charters. The oil and gas sector in India as well as abroad, is witnessing significant investment activity and potential still appears to be huge. With oil prices recovering from lows of $30 to current $80, the E&P activities in oil & Gas sector will remain robust. Plus most of the E&P activities are in deep sea, so need of such support vessels is growing much faster.

Risks and concerns
Fluctuating crude oil prices causing downturn in oil exploration and production activities can affect the revenue stream of the company. Dry docking of vessels at regular interval will have loss of working days and may put pressure on OPM in later years. Company usually adopts the policy of conserving cash for asset creation and don’t give dividends.
Recommendation
Looking to the attractive earnings of Rs. 70/- and cash generation of around Rs 265 Crs in this year and with a debt free status; the stock looks quite attractive. Mostly company uses cash generation to buy fresh vessels, with huge cash it can buy more vessels, which can shore up earnings in future. With promoters holding of 75%, chances of delisting can’t be ruled out, but in that case also, buy back price could be quite attractive [over 350/-].

Source: Internet (Valuenotes by Anand Rathi)

Stock Idea: Voltas Ltd.

This Tata company has posted a set of encouraging results for the second quarter ended 30th September 2009. Net sales was up 11% on a YoY at Rs.1098 crore. Operating profit grew 52% at Rs.133 crore. Net profit was up 50% at Rs.92 crore. Cost cutting in manufacturing helped boost the margins.
Its Electro-mechanical projects and services unit showed a 22% rise in revenue at Rs.769 crore. On the other hand, engineering unit continued to feel the brunt of the recession and poor off take of capital goods led to this unit show a 28% lower growth in revenue. This is also the unit which supplies textile machineries and given the state of the textile sector, naturally this unit has taken a hit. The Unitary cooling system unit showed a 27% rise in revenue.
The company procured raw materials till Q2 at prices which were negotiated at the beginning of the year and now, from Q3 onwards, the higher costs would have some impact on the costs.
45-50% is the contribution of international business to overall revenue and profit. The Abu Dhabi Formula One project executed by Voltas is to be inaugurated in November and Burj Dubai, the largest building in the world, would be inaugurated in December.
The company electro-mechanical unit has an order book of Rs.4359 crore of which 25% is from the Middle East. The company plans to increase its presence in the Middle East, especially in UAE and Qatar.
The company has on August 25, 2009 increased its stake in Rohini Industrial Electricals, a subsidiary of the company, for a consideration Rs.23.56 crore from 51% to 67.33%.
Demand continues to remain low and the company has stated that inquiry is yet to pick up. Q4 is expected to be much better. Usually for the company, Q1 and Q4 are the best seasons so even on a cyclical basis, its best to wait out Q3. The aim of the company is to more or less maintain growth at the present levels in Q3.

Source: Internet (By S P Tulsian)

Intraday Trading Calls for 30th October

Indian Stock Market may open positive and remain good positve but very volatile today.

Today's Intraday Stock Tips / Trading Calls (Keep strict Stop Loss for Each Trade):

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
VOLTAS	Buy Above	154.25	157.60	162.00
	Sell Below	152.45	149.05	146.00
TRIVENI ENGI	Buy Above	106.20	110.35	115.00
	Sell Below	103.40	99.25	95.00
TANLA SOLUTION	Buy Above	61.50	64.10	67.00
	Sell Below	59.70	57.20	54.00
IDFC	Buy Above	147.60	151.35	155.00
	Sell Below	145.05	142.05	139.00
JAIPRAKASH ASSOCIATE	Buy Above	213.20	218.55	224.00
	Sell Below	209.40	204.35	198.00
BAJAJ HIND	Buy Above	210.10	216.45	224.00
	Sell Below	207.55	202.60	196.00
NAGARJUN CONSTRUCT	Buy Above	148.60	153.75	158.00
	Sell Below	146.35	142.70	138.00

Buy GTL INFRA (532775) at CMP Rs. 30/- Very Short Term Target Rs. 38/-.

GOOD LUCK

Stock Idea: Century Enka Ltd.

This BK Birla group company has continued with its stellar performance which it had shown in Q1FY10. Infact, it has bettered the performance.
Just like in Q1, in Q2 also the topline on a YoY has declined but profitability has gone up. On a YoY, net sales was down 4% at Rs.311.47 crore. The company continues to bring down its costs. Raw material costs were down by 22% and employee cost was down 20% and this helped boost the overall margins.
Net profit was up by an unbelievable 6 times on YoY at Rs.32.76 crore. QoQ, net profit was up 15%. Q2 also saw the company post one of its highest profit margins in recent times. OPM was at a very healthy 21.84% as against 12.55% in Q1FY09. NPM was up at 10.52% compared to 1.55% in previous first quarter.
Net profit for the first half of FY10 stands at Rs.61.11 crore and this is already 3.6 times the net profit of Rs.16.62 crore it posted in 12MFY09.
The company's equity capital is Rs 20.05 crore and the annualized EPS on the face value of Rs.10/share stands at Rs.65.36.
This is a company which will be managed by Kumaramangalam Birla as that is his grandfather’s (BK Birla) wish. BK Birla group holds 25.23% stake in the company. In the AGM of the company, the patriarch BK Birla stated that promoters stake in the company would be increased to 40% within the next three years. LIC has a 8.24% stake in the company.
We had recommended this stock on 21st Aug 2009 at Rs.140 and today it is at Rs.195. Even at the current rate, the stock is a good buy at it discounts the annualized EPS by a PE of merely 3.35 times.
Source: Internet (By S P Tulsian)

Intraday Trading Calls for 29th October

Indian Stock Market may open negative but some recovery expected from lower levels.

Today's Intraday Stock Tips / Trading Calls (Keep strict Stop Loss for Each Trade):

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
VOLTAS	Buy Above	150.05	154.20	158.00
	Sell Below	148.05	143.55	140.00
TRIVENI ENGI	Buy Above	111.20	115.35	120.00
	Sell Below	109.05	105.25	100.00
CRANES SOFTWARE	Buy Above	41.25	43.70	46.00
	Sell Below	40.20	38.45	36.00
IDFC	Buy Above	149.60	153.75	157.00
	Sell Below	148.05	144.55	141.00
APTECH LTD.	Buy Above	199.25	205.45	212.00
	Sell Below	195.35	190.05	184.00
BAJAJ HIND	Buy Above	218.25	224.15	230.00
	Sell Below	214.70	210.35	205.00
NAGARJUN CONSTRUCT	Buy Above	156.70	161.10	165.00
	Sell Below	154.05	150.65	146.00

Short to Medium Term Delivery Buy:

Buy Compact Disc (526141) at CMP Rs. 60/- & at decline Short to Med Term Target Rs. 95+ Long Term Target Rs. 135-150/-.

GOOD LUCK

Stock Idea: GMR Infra

The stock lost 3.83% yesterday to close at Rs.66.50. Post announcement of the results, punters battered down this stock. YoY, for current Q2, GMR Infra reported a 40% drop in net profit and that is all the market looked at and just remained sellers.
We, on our website have been recommending this stock right since the time we launched this site and continue to have conviction in the stock. Take a closer look at the performance we have analysed for GMR Infra and you will realise that the company remains very strong.
For second quarter ended 30th September 2009, net revenue rose 41% (YoY) and by 1% at Rs.1194.29 crore. Sector wise, on a YoY, the highest growth in net revenue was seen in the EPC division at 347%, followed by roads (151%), energy (25%) and airports grew 5%. And in terms of growth in EDIBTA, it was the airports sector which showed the highest growth on a YoY at 170%, followed by roads at 128%, EPC 70% while energy sector showed a de-growth of 1%.
EBIDTA was up by a healthy 54% (YoY) and 18% (QoQ) at Rs.380.06 crore. Given the kind of projects it has undertaken, it comes as no surprise to see higher depreciation outgo and interest costs have increased due to large borrowings for the various huge projects. Interest cost was up 70.86% (YoY) and 11% (QoQ) at Rs.177.14 crore. Depreciation rose 65% (YoY) and 3% (QoQ) at Rs.140.82 crore. Cash profit of the company was up 6% (YoY) and 23% (QoQ) at Rs.190.30 crore.
PAT on a YoY was down 40% but QoQ was up by a whopping 138% at Rs.53.61 crore. The growth in the topline and the EBIDTA levels indicate that the company continues to remain on solid ground. Just as the management of the company has indicated, when companies like GMR Infra take on large infra building projects, they usually build projects with capacities which are larger than the requirement. The Hyderabad airport project has been built by the company to handle a traffic of 12 million capacity but as against this, the current utilisation is around 6.5 million. And at this stage, costs overtake the earnings and it is this under utilisation of the infra capacity which drives down the PAT. And this is a phenomenon typical of all large infra companies and they start showing returns only after the initial 2-3 years.
During Q2, the company acquired 100% ownership interest in EMCO Energy Ltd (EMCO),which is developing a 600 MW coal based power plant, in two phases (of 300 MW capacity each) in the state of Maharashtra. This project has a 15-year debt component of Rs 2,610 crore. Axis Bank has arranged and syndicated the debt, for which the finances were tied up on October 21. Land acquisition, evacuation plans and water allocation for the two-phase project had been completed. Barge relocation work from Mangalore to Kakinada is on and the plant would be operational by end of current fiscal.
What indeed qualifies as ‘breaking news’ is that it will be inaugurating the airport at Istanbul, Turkey on 31st October 2009 and will be ready for commercial operations by second week of November, which is 12 months ahead of schedule.
GMR Infra is a long term stock. Such dips in PAT will be temporary and once it’s infra projects achieve better capacity, the returns would be equally baffling. Stay invested.

Source: Internet (by S P Tulsian www.premiuminvestments.in)

Intraday Trading Calls for 28th October

Indian Stock Market may open negative but some recovery expected from lower levels.

Today's Intraday Stock Tips / Trading Calls (Keep strict Stop Loss for Each Trade):

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
VOLTAS	Buy Above	148.55	154.20	158.00
	Sell Below	146.20	143.05	140.00
INDIA GLYCOLS	Buy Above	138.75	144.20	150.00
	Sell Below	136.05	131.55	126.00
CRANES SOFTWARE	Buy Above	41.35	43.20	45.00
	Sell Below	40.20	38.45	36.00
IDFC	Buy Above	151.25	155.05	158.00
	Sell Below	149.50	146.50	143.00
APTECH LTD.	Buy Above	214.20	220.35	226.00
	Sell Below	210.35	205.25	200.00
GMR INFRA	Buy Above	67.25	69.55	72.00
	Sell Below	65.70	64.20	62.00
IRB INFRA	Buy Above	244.30	250.45	257.00
	Sell Below	241.05	236.45	230.00

GOOD LUCK

Intraday Trading Calls for 27th October

Indian Stock Market may open negative and remains negative with very high volatility.

Today's Intraday Stock Tips / Trading Calls (Keep strict Stop Loss for Each Trade):

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
NATCO PHARMA	Buy Above	125.65	130.20	135.00
	Sell Below	123.50	120.10	116.00
INDIA GLYCOLS	Buy Above	154.20	158.75	164.00
	Sell Below	152.10	148.15	142.00
CRANES SOFTWARE	Buy Above	43.55	45.25	47.00
	Sell Below	42.50	41.10	39.00
IDFC	Buy Above	158.60	163.10	167.00
	Sell Below	156.35	153.20	150.00
TRIVENI ENGI	Buy Above	119.20	123.65	128.00
	Sell Below	117.05	113.10	109.00
GMR INFRA	Buy Above	70.05	73.25	76.00
	Sell Below	68.45	66.35	64.00
IRB INFRA	Buy Above	252.25	257.60	263.00
	Sell Below	248.55	243.45	238.00

GOOD LUCK

Intraday Trading Calls for 26th October

Indian Stock Market may open good positive and remains positive for the day.

Today's Intraday Stock Tips / Trading Calls (Keep strict Stop Loss for Each Trade):

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
GODREJ INDUSTRIES	Buy Above	210.65	215.40	222.00
	Sell Below	207.40	202.35	197.00
INDIA GLYCOLS	Buy Above	145.75	151.20	157.00
	Sell Below	143.60	140.35	136.00
CRANES SOFTWARE	Buy Above	42.10	44.20	46.00
	Sell Below	40.70	38.50	36.00
IDFC	Buy Above	161.45	164.75	168.00
	Sell Below	159.35	156.45	152.00
BRFL	Buy Above	214.20	219.65	225.00
	Sell Below	210.40	205.10	198.00
GMR INFRA	Buy Above	70.55	73.25	76.00
	Sell Below	68.75	66.35	64.00
IRB INFRA	Buy Above	248.60	254.20	260.00
	Sell Below	245.35	240.15	235.00

GOOD LUCK

Stock Idea: Blue Bird India Ltd

Blue Bird India Ltd (Rs 33)
(BSE Code- 532781 NSE Code- BLUEBIRD)
(P/E- 5.5, Market Cap- 116 cr., FY09 Sales- 502 cr., BV-Rs 57)
Blue Bird (India)(BBIL) is a leading manufacturer of paper based notebooks and stationery under its Blue Bird brand. The company's products i.e notebooks and stationery, are designed for educational use, office use and for home and personal use. The Company derives more than 80% of the revenue from the notebook category. Besides this, the company undertakes commercial printing services in a wide variety of areas like product brochures, catalogues & instruction materials, diaries & calendars, magazines & other publications, business forms, and annual reports. The "Blue Bird" brand has a strong presence in western and southern India. BBIL's products principally cater to Western India, including the State of Maharashtra. BBIL is also present in Southern India and is expanding its presence there. AC Nielsen ORG-MARG has estimated that Blue Bird enjoys the highest market share of 48% in the organized notebook market. In November 2006, BBIL came with an IPO of 87.8 lakh shares at Rs 105 per share to finance its two major expansions: one in south and the other in west India

The fortune of the notebook industry is closely tied with the evolving and growing national economy and population. This holds true for BBIL products, since most of the end-users are students, as the Company derives more than 80% of the revenue from the notebook category. With literacy level on the rise, the 7-24 age group (the education pursuing population), which currently has a literate population of 257 million, is estimated to grow to 342 million by 2011, as per the AC Nielsen report. As a result, the notebook market is set to grow from the current Rs 5,100 cr. to Rs 8,208 cr. by 2011.

In an industry dominated by the unorganized sector, the company has been able to post consistent growth in the past. Net profit of BBIL rose 42.40% to Rs 7.12 cr. in the Q1 ended June 2009 whereas Sales rose 77.03% to Rs 210.47 cr. in the quarter. For the year ended March 2009, the company had posted net sales of Rs 502.47 cr. and net profit of Rs 15.16 cr.. On a equity of 35 cr.(Promoters' stake- 52.6%) the EPS stood at Rs 4.33. At Rs 33, the stock is available at a P/E of about 5.5 times expected FY10 earnings (Rs 6). The mkt. cap of the company stands at just 116 cr. against expected sales of Rs 600 cr. for FY10


Going forward, the key to company's success is the growth in student population. With literacy level on the rise, the notebook market is set to grow from the current Rs 5,100 cr. to Rs 8,208 cr. by 2011. This bodes well for companies like blue bird. The blue bird stock at current levels looks undervalued, given its leadership status and also as an education play. Blue Bird India appears a pure value pick, trading at close to one fifth its FY09 sales with a market capitalization (m-cap) of Rs 116 cr. and sales of Rs 500 cr. The company is among the largest manufacturers of notebook and printing stationery. It is currently available at a P/E of 5.5x. Further growth could come from the fresh capacities being put up, which is expected to see bottom line contribution starting H2FY10 onwards. Investors can start accumulating the stock at current levels and add more on declines for decent returns of 40%-50% over the next 6-8 months.
Source: Internet (Valuenotes by Sanjay Chhabria)

Stock Idea: ICRA Ltd.

ICRA Ltd (Rs 790)
(BSE Code- 532835 NSE Code- ICRA)
(P/E- 15, Market Cap- 790 cr., Moody's Group stake-28.5%)
ICRA, incorporated as Investment Information and Credit Rating Agency of India Ltd in 1991, is one of the recognized credit rating agencies in India with a wide portfolio of products and services. In close association with the Moody's group of the US, the company is engaged in the business of providing rating and grading services, research-based information services and also outsourcing services. ICRA has three wholly owned subsidiaries: ICRA Management Consultancy Services (IMaCS), ICRA Techno Analytics Ltd (ICTEAS), and ICRA Online Ltd (ICRA Online). IMaCS provides management consulting services to clients based in India and abroad. ICTEAS provides business solutions and computer-aided engineering services. ICRA, the No. 2 credit rating agency in the country enjoys a strong market position, brand recognition and creditability. Moody's Group, one of the global credit rating majors, holds a 28.5% equity stake. This will help ICRA to leverage the US company's expertise in newer products. Also, ICRA provides certain outsourcing services to Moody's Investors Service. The credit rating business in India is in a sweet spot as it is on the cusp of robust growth potential driven by three triggers a) strong CapEx cycle in Indian economy b) lower penetration of corporate bond market and c) regulatory push due to implementation of Basel II norms. ICRA, one of the four leading rating agencies in India, is likely to benefit from this favorable scenario with its strong parentage (Moody) and its domain expertise.

The near-term revenue driver for Indian rating agencies is the mandatory requirement of ratings for bank loan exposures. Industry estimates suggest that about 30 per cent of the current loan exposures of banks by value and about 55% in number remain unrated as of now. The RBI requires all commercial bank loans of above Rs 10 cr. to be rated by end of 2008-09. Alternatively they will have to set aside more capital for such un-rated loans (through higher risk weights). That may prompt banks to obtain ratings on the residual loans to free up capital for lending. ICRA has already signed MoUs with more than 23 banks, including SBI, Canara Bank, Central Bank of India and Andhra Bank for providing rating services and can be expected to reap revenues from their mandates. With India's corporate debt market in a nascent stage, corporate credit ratings will be the key medium to long-term revenue driver for rating agencies such as ICRA.

On consolidated basis for the Q1 ended June 09, ICRA has reported topline growth of 30.5% to Rs 33.2 cr.. Net Profit surged 72% to Rs 12.36 cr.. Margins at the EBITDA and PAT levels have increased considerably to 60% and 37% in Q1 FY10 as compared to 44% and 28% for Q1FY09 respectively. On the segmental front, ICRA's rating business for Q1FY10 stood at Rs. 20.9 cr., showing a growth of 28%. IT Services and Outsourced Services business have also seen high Y-Y growths, increasing by 43% and 69% respectively as against the corresponding quarter of last year. During the period under review, Current Investments have been marked to market as on June 30, 2009 and a reversal of 6.63 cr. has been made to reflect the diminution in the carrying value of the investments. This has been credited to the P&L account and is not on a recurring basis. In the consolidated performance for the year ended March 09, top line grew 36.6% to Rs 135.8 cr.. Net profit was up 36.6% to Rs 38.89 cr.. On a equity of 10 cr. the EPS stood at Rs 38.9 and the dividend declared was 120%(Rs 12 per share).

ICRA has over past three years used its strong cash flows and domain expertise to expand its services offering beyond main bread and butter rating business. The IT and outsourcing services have given further boost to revenues. The boost to profitability will be more meaningful as once it achieves commendable scale in these new businesses. Being an established player in rating industry, ICRA is raising its presence in other business segments like consultancy, information technology service and outsourcing activities. Having consistently delivered a high rate of earnings growth, ICRA is expected to manage growth at a fair clip over the next two-three years, given the sizeable opportunities in the credit rating business. The sector's oligopolistic nature, strong brand equity and higher demand for rating services likely from India Inc's increased domestic capital raising plans, offer a sizeable opportunity for the company. The strong cash flows and low debt requirements of the business, impressive operating profit margins for the ratings business (51 per cent), also make the stock a stable addition to one's portfolio, despite a small cap status.

At CMP of Rs. 790, the stock is trading at 15.8x FY10E earnings of Rs. 50 and at 12.7x FY11E earnings of Rs 62, at a discount to the lone listed competitor CRISIL. The discount may be justified by CRISIL's more diversified business profile, even as ICRA is highly reliant on rating services. Considering the growth potential in the ratings business and ICRA's presence in high growth consulting and outsourcing services, the company is well placed for future growth. With Moody's Investor Services as the sole promoter of ICRA, with a 28.5% stake, the possibility of new business opportunities from an expanding relationship with Moody's, and a possible stake hike by the promoter at a later date, also remain possibilities. Investors can accumulate the ICRA stock at this level and add more on declines.
Source: Internet (Valuenotes by Sanjay Chhabria)

Intraday Trading Calls for 23rd October

Indian Stock Market may open good positive and remains positive for the day.

Today's Intraday Stock Tips / Trading Calls (Keep strict Stop Loss for Each Trade):

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
CAIRN INDIA	Buy Above	284.25	290.15	296.00
	Sell Below	281.40	276.55	271.00
SELAN EXPLO	Buy Above	356.75	364.25	370.00
	Sell Below	352.35	348.35	342.00
CRANES SOFTWARE	Buy Above	39.50	42.10	45.00
	Sell Below	38.40	37.25	35.00
GMDC	Buy Above	115.10	119.40	124.00
	Sell Below	112.50	109.25	105.00
BRFL	Buy Above	212.70	218.45	224.00
	Sell Below	209.40	204.35	198.00
COMPACT DISC	Buy Above	65.60	68.20	71.00
	Sell Below	64.15	61.55	58.00
JAIPRAKSH ASSOCIATE	Buy Above	240.15	245.65	252.00
	Sell Below	237.15	232.55	227.00

GOOD LUCK