Wednesday, November 25, 2009

Stock Idea: Andhra Bank

Company snapshot
Andhra Bank, founded by the freedom fighter Dr. Bhogaraju Pattabhi Sitaramayya, commenced business on 28 November 1923. The bank is headquartered in Hyderabad and has a concentrated network in the state of Andhra Pradesh with major proportion of its advances being generated from the branches located in the state.
The Bank has posted whopping qtrly result during the qtr ending Sept’09. The return on Asset of bank stood at 1.54% as compare to 1.12 %( Q2FY09) & 1.44 %( Q1FY10).The bank has also shown rise in Return on Equity as it stood at 30.05% as compare to 19.89%(YoY) & 25.60%(QoQ).The Provision coverage ratio of bank stood at 81.12% as compare to 76.65 %( Q2FY09) &
72.26 %( Q1FY10) The cost ratios of the bank depicted the firm trend as cost of funds shown drop to 5.88% from 6.21% (YoY) & 6.13%(QoQ)The cost to income ratio of bank has also shown great improvement to 39.45% from 50.27%(YoY) and 48.78% (QoQ).The Net Interest Margin of bank increased to 2.90% form 2.50% in qtr ended June’2009.The growth was mainly attributed
to drop in cost of funds and higher credit to deposit ratio during the qtr ended Sept’09.
Business Details
Andhra Bank, founded by the freedom fighter Dr. Bhogaraju Pattabhi Sitaramayya, commenced business on 28 November 1923. The bank is headquartered in Hyderabad and has a concentrated network in the state of Andhra Pradesh with major proportion of its advances being generated from the branches located in the state. Andhra Bank is a fast growing public sector bank in the country with a total business size of Rs.110460 crore as on 30 Sept 2009. It renders services through 2421 delivery channels consisting of 1536 branches, 798 ATMs spread over 22 states and 2 Union Territories. The bank played an important role towards developing and expanding self help groups (SHGs). It continued to focus on agriculture and allied activities ensuring a steady flow of credit to this sector. Finance to Agricultural sector by bank stood at Rs 7482 Crores .All Branches of the Bank are under CBS. Bank has also launched Online Tax payment (eTax) along with Internet Banking (Retail as well as Corporate). Bank also provides facilities like SMS Alerts over Mobile Phones for certain type of transactions and account balances are made available to clientele registered for this facility.
As on 30th September 2009, 7.53 Lakh customers got registered for this facility. Bank is also providing its customers facility to request for account information through SMS-pull facility. Customer can seek balance enquiry, mini-statement, cheque status, etc through this facility. Bank also offers customers the facility to subscribe to Initial Public Offers of corporate using Applications Supported by Blocked Amount Scheme. Bank's Internet Banking Customers can participate in Online Trading via M/s Religare. Bank has also launched a web based fast forex remittance facility (AB Speedway) for the benefit of NRIs of U.S.A .
Industry Outlook
Indian banking industry faced many uncertainties during 2008-09 in the face of tight market liquidity in the global financial markets. The RBI's prompt and relevant measures ensured adequate domestic and foreign liquidity to Indian banking industry so that the flow of credit to productive sectors would not suffer much. Yet, on account of the severe global economic slowdown and its spillover effects on India, growth of bank credit to commercial sector decelerated in 2008-09. Moreover, expansion in net foreign exchange assets of the Indian banking industry moderated to a large extent. However, the Indian banks, in general, posted healthy financial results during 2008-09 compared to their global peers despite challenging economic conditions. The outlook for Indian banking industry remains positive in 2009-10 on the backdrop of its stricter prudential regulation by the RBI, sound financial indicators and stable political regime.
Investment Rationale
Bank has recently received R2 approval for the insurance Joint Venture with Legal & General and Bank of Baroda. Also, Bank has signed MOU for launching a banking subsidiary in Malaysia jointly with Bank of Baroda and Indian Overseas Bank. This will help the bank in expanding its presence in Malaysia. Bank has tied up with Piaggio Vehicles aimed at offering a highly competitive retail financing scheme that ensure low interest rates to the customers which will in turn provide boost to the credit offtake of bank. Also, the new corporate slogan ‘Andhra Bank….for all your needs’ is introduced during the first quarter reflecting good recall and visual value. Bank has opened 104 branches during the Half year taking the total number of branches to 1536. With 49 ECs, 38 Satellite Offices and 798 ATMs the total number of delivery channels of banks has increased to 2421. Also, number of ATMs of the Bank increased to 798 as on 30-09-2009. Besides Banks owned ATMs, the ATM/ Debit Cards issued by Bank are accepted on NFS Network, VISA Network and under bilateral arrangements numbering in all 45000 ATMs Number of ATM/Debit Cards issued by the bank increased from 35.4 Lakhs as on 31-03-2009 to 45.52 Lakhs as on 30-09-2009. For remote branch connectivity for CBS, Bank has deployed 251 VSATs. Retail credit registered robust growth of 34.73% over previous year and reached Rs. 7149 Crs as at the end of September-09 Also, lending to MSME sector has gone up by 52.19% and reached Rs. 6835 Crs. All other advances including Corporate credit moved up to Rs. 25645 Cr from Rs. 19800 Cr, year on year. Bank aims to attain a business mix of Rs.1,30,000 Crs by the end of March 2010 at a growth rate of 30% and Rs.1,50,000 Crs by September 2010. Bank is also targeting to reach CASA percentage of 33% of total deposits by March2010. Bank shall be rolling out the insurance products of its own Joint Venture for sale by July 2010. Banking subsidiary in Malaysia jointly with BoB and IOB expected to function next year.
Valuation
At the current price of Rs 117, the Bank is trading at 6.01times to its TTM eps of Rs 19.45. The bank has posted whopping results for qtr ended Sept’09. With the plans of strengthening its network and customer base while focusing on further enhancement in the customer service through innovative products and services, bank will continue to leverage technology for an all-round performance. Looking at the strong financial performance, the bank looks undervalued at the current price of Rs 117. Hence we recommend investors to “BUY” the stock with the price target of Rs 155 in medium term which is 32% above from the current price of Rs 117.
Source: Internet (Valuenotes by Hem Securities)

Intraday Trading Calls for 25th November

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

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

SCRIP NAME

TRIGGER

PRICE

TARGET 1

TARGET 2

ICSA

Buy Above

172.25

176.35

180.00

Sell Below

169.70

166.15

162.00

IDFC

Buy Above

168.75

172.05

176.00

Sell Below

167.35

164.10

160.00

IGL

Buy Above

171.25

175.20

179.00

Sell Below

169.40

165.35

161.00

GODREJ INDUSTRIES

Buy Above

208.25

213.55

220.00

Sell Below

205.35

200.10

195.00

ROLTA INDIA

Buy Above

177.10

181.35

185.00

Sell Below

175.10

171.45

167.00

GMDC

Buy Above

130.60

134.55

140.00

Sell Below

127.35

122.70

118.00

COMPACT DISC

Buy Above

65.25

67.55

70.00

Sell Below

64.35

62.10

60.00

GOOD LUCK

Stock Idea: Nagarjuna Construction Co. Ltd.

Nagarjuna Construction Co. Ltd— BUY—166—INR
Sector — Construction (Infrastructure)
Regd.Off.— 41, Nagarjuna Hills, Hyderabad, A.P.-500 082
Listed — NSE, BSE.
Company Overview—
Nagarjuna Construction Company was incorporated in 1978. The company has consolidated its presence in high growth infrastructure sector such as Roads, Water supply, and Electrical Transmission Systems. Company went public in 1992 and is engaged in industrial construction, housing development projects, plant and non-plant construction for nuclear projects, construction of hospitals, construction of roads and bridges including national highways, fabrication, erection of structural steel works etc. Apart from the conventional construction methods, the company adopts the NBS Cellular System, which was developed in collaboration with Byyging Uddheman AB of Sweden and NCC Pre Fab System, which was developed in house. Strategic tie-ups with leading multinational companies keep NCC abreast with latest developments in the field of construction and also put it on par with international companies in terms of standards of performance and quality of projects.
Products & Services—
Company is involved into construction of Industrial & Commercial buildings, Roads, Bridges & Flyovers, Water Supply & Environmental projects, Housing, Power transmission lines, Real Estate development, Irrigation and Hydropower Projects, Social amenities etc. Company has presence & capabilities in all area of construction activities. Company has ISO 9001:2000 certifications.
Industrial Structures & Buildings— Company provides long lasting buildings and industrial structures at optimum cost and in minimal time. Construction of large factory and workshop structures has been made speedier and more economical by the use of modern construction methods including folded plate and shell roofs, precast and prestressed roof elements etc. The largest Cardiac hospital in Asia; a record seven month turnaround time for a turnkey Airport project; the largest single concrete slab in Asia, Company has notched up many firsts to its credit.
Transportation— Indian Government is actively building world-class infrastructure facilities in the country, to place it on par with developed economies elsewhere in the world. High density corridors have been identified and the exercise of strengthening and four laning of highways has already been started. Company has been chosen to execute highways, bridges, flyovers and road projects all over the country. The carriageway of a ring road, Bangalore; the construction of an international quality six lane highway in Samalkha, Haryana; the Kalina-vakola junction flyover, Mumbai; the Grade separator at Bangalore; the Subway and Flyover at Latur, stand for company's expertise in infrastructure projects.
Water & Environment— Company executed major water supply projects, drainage schemes, construction of water and sewage treatment plants, turnkey solutions in water supply and UGD schemes, including survey and design. It has capabilities in the areas like - Turnkey implementation of rural, urban and industrial water supply projects from concept to commissioning, implementation of waste water collection systems for urban communities and industrial waste disposal, implementation of water treatment plants and sewage treatment plants from concept to commissioning.
Housing— Company has developed and deployed innovative operational methods including the highly effective: 1) NBS Cellular Construction System - It replaces all conventional methods of building construction by incorporating load bearing RCC shear walls. Roof slab is cast monolithic with RCC walls, eliminating construction joints and thus reducing the possibility of cracking and dampness, while enhancing the speed of construction manifold. 2) NCC Precast Construction System - It involves the manufacture of precast building components at site to achieve larger volumes of built-up area and greater quality levels in the least possible time.
Electricals— Company has expertise in the engineering and construction of EHV/HV sub-stations, transmissions and distribution lines, distribution system improvement projects, internal and external electrification of multi-storeyed utility buildings & commercial complexes and township electrification.
Property Development— Company has acquired properties for the construction and sale of independent houses, multi-storyed apartments and commercial complexes. The initial ventures have been undertaken in Bangalore/Mysore. Residential flats in JP Nagar, Bangalore; residential apartments at Mysore; Nagarjuna Elysses, deluxe apartments coming up in Richards Town, Bangalore; Nagarjuna Gardens, Sahakarnagar; Nagarjuna Spectrum, at Indiranagar, Bangalore; Nagarjuna Green Ridge at HSR layout, Nagarjuna Maple Heights at Marthahalli Bangalore, Nagarjuna Green Woods at Marathahalli Bangalore, Nagarjuna Pearl Bay at Kochi, Bangalore speak of NCC's determined efforts to excel in this area of construction.
Irrigation & Hydropower— with good presence in various sectors of the construction industry and looking to the emerging opportunities the company is working on various water supply and power plants projects around the country.
Recent developments—
In July 2009, Company has obtained three new orders aggregating Rs 7.76 billion. The first order valued at Rs 6 billion is secured from Employees State Insurance Corporation, New Delhi for construction of medical college and related works at Mandi, Himachal Pradesh to be completed over a period of 24 months. The second order is from general manager, Mezgon Dock, Mumbai for Mazdock Modernization Project works in Mumbai valued at Rs 1.36 billion to be completed over a period of 28 months and the third is from National Institute of Technology, Assam for construction of 500 capacity boy’s hostel valued at Rs 400 million to be completed over a period of 16 months.
In September 2009, Company has bagged two new orders aggregating Rs 4.81 billion. The first order valued at Rs 4.49 billion is obtained from Water Resource Department, Bihar for execution of restoration of Eastern Gandak Canal system to be completed over a period of 25 months. Meanwhile, the second order is from MRF, Chennai for construction of proposed radial tyre plant and easy tyre plant in Andhra Pradesh valued at Rs 320 million to be completed over a period of 6 months.
In Nov 2009, Company has secured five orders aggregating Rs 7.22 billion. The first order is valued at Rs 3.28 billion from Water Supply & Sewerage Board, Bangalore for water supply and sewerage project at West Bangalore to be completed over a period of 26 months. The second is order from Water Resources Department, Bihar for construction of Bituminous Road worth Rs 1.43 billion to be completed over a period of 24 months. The third, fourth and fifth orders are worth Rs 1 billion, Rs 910 million and Rs 600 million respectively.
Valuation—
At current market price, stock is trading at 19.57 P/E multiple of its FY2010 estimated earnings. We recommend investors to buy “Nagarjuna Construction Company Ltd” with medium to long-term investment horizon.
Source: Internet (Valuenotes by Abhishek Jain)

Stock Idea: Gammon India Ltd.

Gammon India Ltd— BUY—247—INR
Sector — Construction (Infrastructure)
Regd.Off.— Gammon House, Veer Savarkar Marg, Prabhadevi, Mumbai- 25
Listed — NSE, BSE.
Company Overview—
Gammon India was incorporated in 1922 and converted into a public Ltd. company on 31st April 1962. At the time of incorporation, the name of the Company was J.C. Gammon (Mumbai) Ltd. The first work carried out by Mr. J. C. Gammon was the construction of reinforced concrete pile foundations for Gateway of India. The name was changed to Gammon India Ltd. In 1975, Gammon Nirma Ltd. was incorporated as a subsidiary of the company. Another subsidiary Gammon Turnkeys Ltd. was formed. In 1977 company associated with Gammon Eastern Union Ltd., Hong Kong, which promoted Gammon Mideast Ltd. joint venture Company in Sharjah, United Arab Emirates. This joint venture company was incorporated to undertake construction and service contracts in the Middle East and elsewhere. A new joint venture company, Heitkamp Gammon Ltd., was being established with Gammon India Ltd., and Heitkamp Rohrbau GmbH, West Germany as the principal promoter shareholder. In 1989 R&D Division of the company undertook development of energy efficient GFRP bladed fans for ID Cooling towers and PP splash grid modular packing system for ND/ID covering towers, alternative packing systems etc. Company’s R & D division developed, fabricated and put into commission the headmast and tail-mast for 700 m span cable ropeway for Alamatti Dam as also 1500 mm dia. double-wall casing for executing the pile foundations for transmission towers at Tezpur for 60 m deep piles. It also designed and manufactured a special reverse circulation-pilling rig for 1500 mm diameter piles capable for depths upto 75 m. This division also developed special techniques for installation of 1500 mm diameter piles for a Bridge across Brahmaputra River at Jogighopa. Sikkim Hydro Power Ventures Ltd, a Special Purpose Vehicle Company was incorporated for the development of 60 MW Rangit - II Hydro Electric Power Project in Sikkim is a subsidiary of Gammon Infrastructure Projects Ltd.
Products & services—
Company has presence in all areas of civil construction. Company has executed many multifarious civil engineering works from Cotton Godowns, Bridges, flyovers, bitumen & concrete Roads, Marine Structures, Cooling Towers, Chimneys, Tunnels, Dams etc. Company has specialization in tunnel engineering, marine structures, bulk storage structures, energy projects & high-rise structures, ground engineering & environmental protection, hydraulic works & irrigation projects, industrial structures, public utility structures, transport engineering, bridge engineering. Gammon has established strong presence of pre-stressed concrete in India. Company can claim for the largest numbers of bridges and flyovers built in India.
Company provides start-to-end solutions like the Builders and contractors, reinforced concrete specialists, engineers, architects, surveyor’s estimators and designers. Gammon is the only Indian Construction Company to have been accredited with ISO 9001 certification for all fields of Civil Engineering Works including design, stands out as gateway for Technological and Engineering excellence in Civil Engineering fields. Company has dedicated and experienced team of planners, designers and construction engineers are ever ready to contribute their expertise together and turn vision into reality. Company made the longest river bridge in the world across the mighty Ganges at Patna. The tallest bridge in Asia, the longest span cantilever bridge in India across river Jadukata, the longest road bridge in India across the open sea and first cable stayed bridge in India. As builders to the nation, Gammon has made concrete contributions by designing and constructing bridges, ports, harbours, thermal and nuclear power stations, dams, high-rise structures, chemical and fertilizer complexes environmental structures, cross country water, oil and gas pipelines.
Valuation—
At current market price, stock is trading at 14.72 P/E multiple of its FY2011 estimated earnings par share. We recommend investors to buy “Gammon India” at every correction with medium to long-term investment prospective.
Source: Internet (Valuenotes by Abhishek Jain)

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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