Monday, October 26, 2009

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)

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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