Monday, March 16, 2009

Investment Call: JVL Agro Industries Ltd.

The share of JVL Agro Industries Ltd. (JVL) (Code: 519248) (Rs.53), formerly Jhunjhunwala Vanaspati Ltd., is recommended for decent appreciation in the medium-to-long-term. Incorporated in 1990, JVL promoted by Mr. S.N. Jhunjhunwala with its factory in Varanasi. It produces vanaspati ghee and refined oils and its brand 'Jhoola' is a household name, particularly in Bihar and U.P. JVL commands nearly 30% share of the U.P. and Bihar markets, which are the biggest consuming centres of vanaspati in India. Its products are sold in packing of 200 ml, 500 ml, 1 litre in pouches and 2, 5, 10 and 15 litres tins and jars. It has a network of 17 depots in U.P.
and a strong marketing alliance over the country. Its 3 MW power plant commenced production in March 2007. For FY08, JVL posted 67% higher sales of Rs.1156 cr. and earned 66% increased net profit of Rs.23.7 cr. over FY07 with an EPS of Rs.37.2 and paid dividend of 20%.
For Q3FY09, sales were up by 14% at Rs.327 cr. and net profit by 7% to Rs.7.4 cr. For the first three quarters of FY09, sales surged by 38% to Rs.1092 cr. and net profit by 57% to Rs.27.8 cr. giving an EPS of Rs.37 for the 9 month period.
JVL has a small equity of Rs.7.5 cr. and with reserves of Rs.75.4 cr., the book value of its share works out to Rs.110. The promoters hold 51.5% in its equity capital, foreign holding is 1%, PCBs hold 19.8% leaving 27.7% with the investing public.
The company's expansion plan of 400 MTPD costing Rs.27 cr. of Red palmolein, RBD palmolein & Inter Sterified products including its preparatory section by Alfa Laval (India) has started the commercial production of refined oil in Q3FY09. JVL’s foray into refined mustard oil began with a purchase of an edible oil complex in Rajasthan at a cost of just Rs.12 cr. The company spent another Rs.10 cr. on modernisation and capacity expansion and the unit started earning revenue from FY08. It is also putting up a tin manufacturing plant and a large section for packaging.
JVL has already received SEZ approval for its 300 acre land in U.P. and has reportedly initiated talks with developers to build the SEZ. It has also set up a Rs.105 cr. new factory in Bihar, which will involve a refinery of 500 TPD, Vanaspati Ghee of 250 TPD, captive power plant and Neutraliser for Soya of 250 TPD. JVL is also looking for a suitable location to set up a factory in Jharkhand for setting facilities for 500 TPD refinery, 300 TPD Fractionation, 200 TPD Vanaspati, Neutraliser for 250 of TPD Soya refining and a captive power plant at a capex of approx Rs.110 cr. The project is targeted to be completed by December 2009. JVL is also planning to go in for palm oil cultivation. It is actively scouting for a partner in Indonesia to set up a joint venture. Once the partner for the plantation is finalised, it will also set up a milling unit in Indonesia. This project is likely to envisage an investment of about Rs.75 cr. In order to save costs, the company continues to directly import palm oil from Indonesia and Malaysia.
The vegetable oil & ghee sector plays a crucial and significant role in the Indian industry. While the economic growth has created significant business opportunities, the production of vanaspati ghee is much less compare d to the demand in the country. The middle income and upper income groups largely use vanaspati ghee and refined oil as a cooking medium. Hence the growth of the industry is inevitable. Earlier, the company issued 60 lakh warrants of Rs.80 each to be converted into equity shares of Rs.10 each on September 2009. Hence its equity may go up to Rs.13.5 cr. if the warrants are converted into equity, which is only likely if its share price shoots up beyond Rs.80. For FY09, JVL is likely to achieve sales of Rs.1600 cr. and earn a net profit of Rs.32 cr. leading to an EPS of Rs.42. For FY10, sales are expected to zoom to Rs.2500 cr. after expansion when net profit could go up to Rs.65 cr. giving an EPS of Rs.48 on its expanded equity of Rs.13.5 cr. At the current market price of Rs.53, the JVL share is trading at a P/E of 1.1 on FY09 expected EPS of Rs.42 and a P/E of 1 on its projected EPS of Rs.48 for FY10. The average P/E of the solvent extraction industry in which JVL operates, currently works out to 6, leaving good scope for its share to rise in future. Investment in this share is likely to fetch a decent appreciation of over 30% in the medium-to-long-term. The 52 week high/low of the share has been Rs.185/44.
Source: Internet (Moneytimes)

Stock Idea: Tera Software Ltd.

Tera Software Ltd. (Code: 590020) (Rs.19.45) is one of the leading e-governance solution providers that undertakes data entry/scanning works for digitization of information maintained under Right to Information (RTI) Act. It also undertakes short-term projects like issue of photo ID cards, ration cards and election commission cards. Last year, the company successfully executed Maharashtra Vikri Kar Seva Project (VAT implementation of the Maharashtra Sales Tax Department) on BOOR (build, own, operate and refresh) model as the scope of work was computerisation of the Sales Tax Department in the entire state of Maharashtra. Of late, the company has procured six new projects in the State Governments of Andhra Pradesh, Karnataka, Rajasthan, West Bengal and Himachal Pradesh. It has also ventured into imparting computer education in more than 225 schools in Goa and AP by establishing computer labs with computers and providing the teaching staff and maintenance of systems. On the back of satisfactory Q3FY09 numbers, it recorded 10% fall in net profit to Rs.8 cr. on 20% increased sales of Rs.53 cr. for the first nine months ending 31 December 2008. Accordingly it is expected to end FY09 with topline of Rs.70 cr. with PAT of Rs.9.50 cr. i.e. an EPS of Rs.8 on its equity of Rs.12.50 cr. It may declare 15% dividend for FY09, which gives a yield of 7% at CMP. Moreover, the company has few acres of surplus land in Hyderabad, which it can either sell or enter into JV with infrastructure company. The scrip can easily double in 12-15 months.
Source: Internet (Moneytimes)

Stock Idea: 3i Infotech Ltd.

For Q3FY09, 3i Infotech Ltd. (Code: 532628) (Rs.26.75) reported encouraging results as its total revenue grew by 90% to Rs.616 cr. and PAT increased by 40% to Rs.70 cr. on a consolidated basis. Accordingly for the first nine months ending 31 December 2008, it has posted a topline of Rs.1694 cr. with a bottomline of Rs.200 cr., which means it has already clocked an EPS of Rs.14 for the first three quarters. As on date, the company has an order book position of over Rs.1400 cr. to be executed in the next one year. Despite this, the scrip is hitting an all time low. To maintain its organic growth, it is in the midst of opening 255 new service centres in tier-II and tier-III cities to help banks and financial institutions reduce the processing time for their various back office operations. It has also bagged a huge contract from the Central Government for setting up over 12,000 kiosks spread across various states for providing citizen services centres to be used for dispensing G2C and B2C services. It has recently made a strategic tie up with ICICI Lombard, Airtel and Max New York Life to open 12,500 retail stores in rural areas to offer a bouquet of retail services in general insurance, telecom and life insurance products respectively. Earlier, it had formed a 51% joint venture with a Chinese company, which will localise the 3i Infotech’s financial technology software to cater to the requirements of China's diversified financial services sector. With an expected an EPS of Rs.16 for FY09, this scrip is trading grossly cheap at current market cap of Rs.400 cr. Keep accumulating at declines.
Source: Internet (Moneytimes)

Intraday Trading Calls for 16th March

Stock Market India may open Positive but flat trading expected today with high volatility.

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

SCRIP NAME

TRIGGER

PRICE

TARGET 1

TARGET 2

EVERONN SYSTEM

Buy Above

86.25

89.50

94.00

Sell Below

84.40

81.35

78.00

SUN TV

Buy Above

151.20

155.70

160.00

Sell Below

148.70

145.25

141.00

PUNJ LLOYD

Buy Above

74.50

77.25

80.00

Sell Below

72.45

70.15

68.00

NTPC

Buy Above

171.60

175.45

180.00

Sell Below

169.35

166.25

162.00

HDIL

Buy Above

68.75

71.55

74.00

Sell Below

67.25

65.35

63.00

REL CAPITAL

Buy Above

313.70

321.15

330.00

Sell Below

307.20

300.10

292.00

RIIL

Buy Above

250.80

256.75

262.00

Sell Below

247.50

243.10

238.00

Keep an eye on KS OILS & RUCHI SOYA.

GOOD LUCK

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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