Stock Idea: Rallis India Limited

Rallis India Limited, a Tata company and a leading agrochemical player in India, kept up its track record and announced another set of good results for second quarter ended 30th Sept 2009. A company with a widespread basket of pesticides, given the current thrust of the Govt on agriculture and rural India, this is the perfect company to capitalize on.
Seasonally, the first quarter always shows lower earnings as sowing begins only after the first quarter and hence Q1FY10, keeping with the cycle had showed a subdued performance. And compared to that Q2 has been spectacular and this is despite the poor monsoons. New product launches, geographical market focus and cost control is what helped. Very efficient management of working capital helped the company scale down its interest costs too.
For Q2FY10, sequentially, net sales rose 93% and net profit was up 385% and YoY, it was up 13% and 10% respectively. For H1FY10, net sales was up at Rs.487.30 crore, up 6% and net profit was at Rs.55.13 crore, up 20%. Interest outgo for current first half was at less than one crore at Rs.78 lakhs, down from Rs.1.83 crore in H1FY09.
Tata Chemicals hiked its stake in the company from 9.4% in Q1FY10 to 45.97% in Q2FY10. It purchased 35.80% stake in Rallis being held by other Tata group firms like Tata Tea (24.52%), Tata Sons (7.52%), Tata Investment Corporation (2.42%) and Ewart Investments (1.35%). Post this, apart from Tata Chemicals, currently, Tata Investment Corp holds 0.08% and Ewart Investments has 0.04%.
Rallis plans to invest Rs.150 crore in the first phase of its ongoing project at Dahej in Gujarat, expected to be commissioned between April-June 2010. Phase I will enhance the company’s existing products and later in Phase II, it will cater to contract manufacturers. Once fully commissioned, this plant is expected to add Rs.500 crore to the topline by FY12.
Source: Internet (By S P Tulsian)

Intraday Trading Calls for 29th December

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
REL POWER	Buy Above	147.60	151.70	156.00
	Sell Below	145.10	141.50	138.00
INDIABULLS REALEST	Buy Above	220.10	226.35	234.00
	Sell Below	216.55	210.45	205.00
KPIT	Buy Above	128.25	132.10	136.00
	Sell Below	126.70	123.20	120.00
CAIRN INDIA	Buy Above	281.60	287.20	292.00
	Sell Below	279.30	274.35	270.00
SELAN EXPLO	Buy Above	335.10	343.75	352.00
	Sell Below	330.05	323.40	315.00
ESSAR OIL	Buy Above	142.10	146.35	151.00
	Sell Below	139.70	136.20	132.00
VIDEOCON INDUSTRIES	Buy Above	225.50	231.60	238.00
	Sell Below	223.40	218.45	212.00

Short to Medium Term Delivery Pick:

Buy Tinplate Company of India Ltd. (504966) CMP Rs. 65/- Short to Med. Term Target Rs. 100/-.

Buy Reliance Power Ltd. (532939) CMP Rs. 147/- Short to Med. Term Target Rs. 185/- & Long Term Target Rs. 250/-.

GOOD LUCK

Stock Idea: HEG Ltd.

Flagship of the LNJ Bhilwara group, HEG is a diversified company with interests in graphite electrodes and power.
For the Q2 ended 30th Sept 2009, though actual numbers on a QoQ have gone up, the margins have reduced sequentially. YoY the story is other way round - the numbers show pressure but margins have gone up. Net sales was at Rs.272.13 crore, up 18% on QoQ but down 7% on YoY. Net profit was at Rs.44.24 crore, up 6% QoQ but up 40% on a YoY. This was possible due to cost cutting measures taken. Expenses which were at 75% of the topline, reduced to 66% in Q2FY10 on a YoY.
OPM was at 34.69%, up from 26.21% (YoY) but down from 37.08% (QoQ). NPM was at 16.20% v/s 10.66% (YoY) and 18.03% (QoQ). This fall sequentially was on account of the costs, which have actually gone up from Q1FY10. Also due to its seasonal nature, the hydro electric plant at Tawanagar operated only for a part of the quarter under review, that too affected the performance to some extent.
HEG generates 60MW of power of which, after consuming 40MW, it sells the remaining in open market and average realisations on the sale of this surplus power was at around Rs 4.5-5/MW.
By Jan 2010, the additional capacity of 6000 tonnes, taking the total capacity to 66,000 tpa will go stream. Realisations, which were down have now seen a 8-10% rise and in the remaining quarters of FY10, it is expected to remain more or less at the same levels. Capacity utilization for FY10 is estimated at 85-90%.
The company completed its buyback programme successfully by buying 32,95,703 equity shares at an average price of Rs.147.15 per share from its Paid-up Equity Capital; out of which 6,07,250 Equity shares were bought back in the quarter under review. Post this, as at 30th Sept 09’, promoter’s holding is at 53.74%, up from 49.74% in Q2FY09.

Source: Internet (by S P Tulsian)