HAPPY DIWALI TO ALL OF YOU.
DIWALI TO DIWALI DELIVERY BUY:
Buy Cairn India (532792) CMP Rs. 293/- Buy at decline around Rs. 260-270 for Med to Long term for 100% gain (Rs. 1000/- level can also be possible).
Buy Purvankara Projects (532891) CMP Rs. 118/- For Med to Long Term Target Rs. 250/-.
Buy Cranes Software (512093) CMP Rs. 38/- For Med to Long Term Target Rs. 100/-.
Buy L G BALAKRISHNAN (500250) CMP Rs. 18.80/- For Med to Long Term Target Rs. 45/-.
Good Luck
Sunday, October 18, 2009
Stock Idea; Sundaram Finance Ltd
Sundaram Finance Ltd (Rs 302)
(BSE Code- 590071, NSE Code- SUNDARMFIN)
(P/E- 10, Equity - Rs55.55 cr, Market Cap - Rs1,665 cr)
Sundaram Finance Ltd (SFL) was established in 1954 by Mr TS Santhanam. SFL, based at Chennai, has 10 subsidiaries including SBNP Home Finance and SBNP Paribas AMC. SFL is involved in the following operations: Investments - Deposits, Mutual funds, Retail Finance - Car finance, Retail finance, Business finance - Commercial vehicle, Equipment finance, Tyre finance, Fleet card and Services - Infotech solutions, BPO, Logistics services, Insurance. Following the opening up of the insurance sector, SFL formed a joint venture company with Royal & Sun Alliance Insurance Plc (now a subsidiary) named Royal Sundaram Alliance Insurance Company (RSAIC) for non-life insurance business. It commenced operation in March 2001 and offers a full range of insurance products including fire, motor, personal accident, home, health, travel and rural insurance. In FY06, SFL sold 49.90% of its stake in Sundaram AMC to BNP Paribas. SFL's 2 JVs - Royal Sundaram Alliance Insurance Company Ltd and BNP Paribas Sundaram Global Securities Operations Pvt Ltd - are doing extremely well as reflected in SFL's FY09 annual report
From FY06 to FY09, Total Income has increased by a CAGR of 23.22%, but PAT has decreased at a marginal rate of 4.04% respectively. This decrease in PAT as well as the issue of bonus shares makes the ROE appear unimpressive. For FY09, SFL posted net profit of Rs 167.88 cr. on total income of Rs 1,742 cr. on consolidated basis. On a equity of 55.55 cr.(after 1:1 bonus issue in Aug'08) (Promoters' stake- 41.15%), the EPS stood at Rs 30.24 and the dividend declared was 65%. SFL posted net profit of Rs 150.73 cr. on total income of Rs 1,082 cr on standalone basis. SBNP Paribas Home Finance has a lion's share in consolidated sales as well as consolidated PAT. Going forward, SFL has ventured into the financing of cars and multi-utility vehicles, which is a growing market. An increase in freight movement would revive both new and used commercial vehicles sales, triggering the need of their financing. Foreseeing the slump in commercial vehicles sales in FY09, SFL reduced its exposure on commercial vehicles which highlights the foresight of the management. For the Q1 ended June 2009, SFL has posted net profit of Rs 61.23 cr. on total income of Rs 271.1 cr. on standalone basis. The net profit for Q1 is higher due to exceptional item which represents sale of 10,17,998 Equity shares of face value Rs 5/- each in WABCO - TVS India Ltd.
SFL has got one of cleanest and high quality asset books as Gross and net NPAs are only 1.64% and 0.75% of the total assets. Its philosophy of building sustainable, long-term relationships ensures that growth is not achieved at the cost of quality. As high as 89% of the total assets are net current assets, indicating a strong balance sheet. Only 6.89% of the total assets are held up as investments. Further, only 50.62% of these investments are into equities indicating neglibible exposure to market risk. At the current price of Rs 302, the stock trades at about 10 times FY09 earnings and about 1.4 times Book Value (Rs 207.5). Accumulate on declines for good gains over the medium-long term.
Source: Internet (By Sanjay Chabria)
(BSE Code- 590071, NSE Code- SUNDARMFIN)
(P/E- 10, Equity - Rs55.55 cr, Market Cap - Rs1,665 cr)
Sundaram Finance Ltd (SFL) was established in 1954 by Mr TS Santhanam. SFL, based at Chennai, has 10 subsidiaries including SBNP Home Finance and SBNP Paribas AMC. SFL is involved in the following operations: Investments - Deposits, Mutual funds, Retail Finance - Car finance, Retail finance, Business finance - Commercial vehicle, Equipment finance, Tyre finance, Fleet card and Services - Infotech solutions, BPO, Logistics services, Insurance. Following the opening up of the insurance sector, SFL formed a joint venture company with Royal & Sun Alliance Insurance Plc (now a subsidiary) named Royal Sundaram Alliance Insurance Company (RSAIC) for non-life insurance business. It commenced operation in March 2001 and offers a full range of insurance products including fire, motor, personal accident, home, health, travel and rural insurance. In FY06, SFL sold 49.90% of its stake in Sundaram AMC to BNP Paribas. SFL's 2 JVs - Royal Sundaram Alliance Insurance Company Ltd and BNP Paribas Sundaram Global Securities Operations Pvt Ltd - are doing extremely well as reflected in SFL's FY09 annual report
From FY06 to FY09, Total Income has increased by a CAGR of 23.22%, but PAT has decreased at a marginal rate of 4.04% respectively. This decrease in PAT as well as the issue of bonus shares makes the ROE appear unimpressive. For FY09, SFL posted net profit of Rs 167.88 cr. on total income of Rs 1,742 cr. on consolidated basis. On a equity of 55.55 cr.(after 1:1 bonus issue in Aug'08) (Promoters' stake- 41.15%), the EPS stood at Rs 30.24 and the dividend declared was 65%. SFL posted net profit of Rs 150.73 cr. on total income of Rs 1,082 cr on standalone basis. SBNP Paribas Home Finance has a lion's share in consolidated sales as well as consolidated PAT. Going forward, SFL has ventured into the financing of cars and multi-utility vehicles, which is a growing market. An increase in freight movement would revive both new and used commercial vehicles sales, triggering the need of their financing. Foreseeing the slump in commercial vehicles sales in FY09, SFL reduced its exposure on commercial vehicles which highlights the foresight of the management. For the Q1 ended June 2009, SFL has posted net profit of Rs 61.23 cr. on total income of Rs 271.1 cr. on standalone basis. The net profit for Q1 is higher due to exceptional item which represents sale of 10,17,998 Equity shares of face value Rs 5/- each in WABCO - TVS India Ltd.
SFL has got one of cleanest and high quality asset books as Gross and net NPAs are only 1.64% and 0.75% of the total assets. Its philosophy of building sustainable, long-term relationships ensures that growth is not achieved at the cost of quality. As high as 89% of the total assets are net current assets, indicating a strong balance sheet. Only 6.89% of the total assets are held up as investments. Further, only 50.62% of these investments are into equities indicating neglibible exposure to market risk. At the current price of Rs 302, the stock trades at about 10 times FY09 earnings and about 1.4 times Book Value (Rs 207.5). Accumulate on declines for good gains over the medium-long term.
Source: Internet (By Sanjay Chabria)
Stock Idea: Heidelberg Cement India Ltd
Heidelberg Cement India Ltd (Rs 42)
(BSE Code- 500292 NSE Code- HEIDELBERG)
(P/E- 5.2, Market Cap - Rs950 cr, Promoters' stake - 68.55%)
A MNC cement stock available at the P/E of 5.2
Heidelberg Cement India Ltd(HCL)(earlier know as Mysore Cement) is now owned 68.55% by Heidelberg Cement AG, Germany. The parent Euro MNC Heidelberg Cement is one of the three biggest cement producers in the world along with Holcim (which owns ACC, Ambuja) and La Farge, which has an unlisted presence in the country. HCL has two units - one at Ammmsandara in Mysore and another at Damoh in Madhya Pradesh. With up gradation and balancing at Damoh, the total capacity of MCL increased to 23 lac tpa in 2004-05
In 2006, Heidelberg took over the co. from Birlas, infused a sum of Rs 360 crore by making a preferential allotment of 6.5 crore shares to itself at a price of Rs 54 per share and cleared the debts, making the co. debt free. Thus not only has HCL become debt free, it has come out of the purview of the BIFR as well., with long term institutional and bank debts paid off. The stake was taken at Rs 54 per share. In December 2006, Heidelberg made an offer to the shareholders of Mysore cement to acquire 22.15% stake at Rs 58 per share. Within a short period of 3 months the Heidelberg led team accomplished a clean turn around at Heidelberg Cement India Ltd.
From Rs 10 cr, loss in calendar year 2006, the company posted a 29% YoY rise in net profit to Rs 125.55 cr, in the year ended Dec. 2008. Sales rose 35.36% to Rs 804.49 cr. The company posted a EPS of about Rs 7.94 on a equity of 158 cr. for CY2008. For the half year ended June 2009, the company posted a net profit of Rs 93.47 cr. (up 53%) on net sales of Rs 531.52 cr.(up 53%). The half yearly EPS on a expanded equity of 226.62 cr. stands at Rs 4.13. The 2 mn tpa cement producer Heidelberg cements sells for Rs 950 cr. in market cap(Equity Rs 226 cr, CMP Rs 42), and cash in deposit accounts of Rs 170 cr.-Heidelberg Cements sells for a net value of Rs 780 cr - one of the cheapest cement stocks in India.
The stock looks a good investment pick at current levels considering its fundamentals, CY09E earnings (Rs 8) and future prospects. With Heidelberg at the helm of operations, the performance is bound to improve in coming years. Going forward, more measures for efficiency increase and cost reduction will be implemented, and focus will be on further, gradual expansion in capacities. All in all it's a cement MNC stock available at the P/E of 5.25. The financials, debt free status of the company, its parentage and plans to raise capacity to over 6 mn tpa makes it the most interesting cement stock around. 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 (By Sanjay Chaabria)
(BSE Code- 500292 NSE Code- HEIDELBERG)
(P/E- 5.2, Market Cap - Rs950 cr, Promoters' stake - 68.55%)
A MNC cement stock available at the P/E of 5.2
Heidelberg Cement India Ltd(HCL)(earlier know as Mysore Cement) is now owned 68.55% by Heidelberg Cement AG, Germany. The parent Euro MNC Heidelberg Cement is one of the three biggest cement producers in the world along with Holcim (which owns ACC, Ambuja) and La Farge, which has an unlisted presence in the country. HCL has two units - one at Ammmsandara in Mysore and another at Damoh in Madhya Pradesh. With up gradation and balancing at Damoh, the total capacity of MCL increased to 23 lac tpa in 2004-05
In 2006, Heidelberg took over the co. from Birlas, infused a sum of Rs 360 crore by making a preferential allotment of 6.5 crore shares to itself at a price of Rs 54 per share and cleared the debts, making the co. debt free. Thus not only has HCL become debt free, it has come out of the purview of the BIFR as well., with long term institutional and bank debts paid off. The stake was taken at Rs 54 per share. In December 2006, Heidelberg made an offer to the shareholders of Mysore cement to acquire 22.15% stake at Rs 58 per share. Within a short period of 3 months the Heidelberg led team accomplished a clean turn around at Heidelberg Cement India Ltd.
From Rs 10 cr, loss in calendar year 2006, the company posted a 29% YoY rise in net profit to Rs 125.55 cr, in the year ended Dec. 2008. Sales rose 35.36% to Rs 804.49 cr. The company posted a EPS of about Rs 7.94 on a equity of 158 cr. for CY2008. For the half year ended June 2009, the company posted a net profit of Rs 93.47 cr. (up 53%) on net sales of Rs 531.52 cr.(up 53%). The half yearly EPS on a expanded equity of 226.62 cr. stands at Rs 4.13. The 2 mn tpa cement producer Heidelberg cements sells for Rs 950 cr. in market cap(Equity Rs 226 cr, CMP Rs 42), and cash in deposit accounts of Rs 170 cr.-Heidelberg Cements sells for a net value of Rs 780 cr - one of the cheapest cement stocks in India.
The stock looks a good investment pick at current levels considering its fundamentals, CY09E earnings (Rs 8) and future prospects. With Heidelberg at the helm of operations, the performance is bound to improve in coming years. Going forward, more measures for efficiency increase and cost reduction will be implemented, and focus will be on further, gradual expansion in capacities. All in all it's a cement MNC stock available at the P/E of 5.25. The financials, debt free status of the company, its parentage and plans to raise capacity to over 6 mn tpa makes it the most interesting cement stock around. 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 (By Sanjay Chaabria)
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