Stock Idea: NIIT Technologies Ltd.

This IT service company had managed to show a better performance in Q2 itself. By adopting various cost cutting measures then, it managed to tide over the bad times. And now that things are improving and costs remain low, Q3 ended 31st Dec 2009 has been good for NIIT Technologies.
Consolidated revenue YoY wad down 7% but up 2% on a QoQ but keeping a tight leash on the costs, the company showed a smart rise in operating profit, up 14% on YoY and 11% on a QoQ. OPM was up 22% YoY and QoQ. Net profit was up by a whopping 111% YoY and 10% on a QoQ.
The main contributor was the BFSI segment, which like in Q2FY10, maintained its share at 44% of overall revenues. Business from Travel and Transport segment contributed 34% to revenues. Share of revenues from Retail and Distribution was 9%. In Q3, it secured new orders to the tune of US$ 57 million. 4 new clients were added. Revenue from APAC region has gone up significantly and it now stands currently at 15% of the revenue mix. Share of revenue from EMEA during Q3 was 42%; North America contributed 34%, while India contributed 9% of the revenues.
The company has hedge exposure but thankfully, they have been done at non-average rate of 42.50 to a dollar. This is good in the current scenario of rupee appreciation as every time, the rupee becomes stronger, the hedge losses reduce. With the perception that rupee will remain strong, at least till the end of FY10, also with relatively lower exposure to North America, the outlook for the company remains good.
Source: Internet (premiuminvestments.in by S P Tulsian)

Stock Idea: JK Papers Ltd

JK Papers Ltd— STRONG BUY—50—INR
Sector — Paper
Regd.Off.— Central Pulp Mills, Fort Songadh, Surat, Gujarat-394660
Listed — NSE, BSE.
Company Overview—
JK Paper Ltd. is a part of well known group JK organization a leading multi-product, multi-business group of India. J K Paper Ltd was formerly known as Central Pulp Mills, a member of HS Singhania group is originally promoted by Parkhe Group to manufacture Paper and Paper products. Company purchased a Pulp Drying Plant from Finland in 2001 to increase the output and realization of market pulp. Company enjoys the location advantage in respect of sourcing raw material. It sources all its bamboo requirements with in the 200 kms radius of the plant. Further for long term continuous source of raw material the company is running social forestry and farm forestry programs in 11 districts of Orissa and 3 districts of Andhra Pradesh, covering a total area of over 20,000 Hectare. The name of the company was changed to JK Paper Ltd from The Central Pulp Mills Ltd. JK Paper has a deep commitment to protecting the environment. Company is the first paper mill in India to have been accredited with ISO-14001 certification for the Environment Management System Standard. Company Paper has a research and development wing involved in developing high quality seedlings and helping farmers achieve better yields from their plantations.
Products & Services—
Company is an established name in the manufacture and marketing of paper. It has the distinction of being the largest manufacturer of branded copier paper in India. Company is also been consistently exporting its products to markets such as Sri Lanka, Bangladesh and several West Asian Countries. Company was first to introduce surface sized maplitho in India, first to introduce high quality bond paper 'Finesse' in A4 size consumer friendly retail packs of 100 sheets. Company was first to introduce laser paper in India. The company has introduced two new value added products i.e. MICR Cheque Paper and Cup-stock Board and both of them have well established in the market. Company is well known for its success in creating brand in paper industry with having top two paper brand i.e JK Copier & JK Easy Copier in its basket the company has initiated outsourcing of paper products in india. Company outsources JK Cote from an international producer, who produces as per the specification of JK Paper. JK Paper today has an combined installed capacity of 2,40,000 tpa with two integrated Paper Mills at JK Paper Mills, Raygarh, Orissa and Central Pulp Mills, Gujarat.
Company has quality benchmarks from its commencement, and continues to do so. Its major brands include JK Copier, JK Easy Copier, JK Evervite, JK Excel Bond, JK Bond, JK SHB Maplitho, CPM Parchment and JK MICR. Company has one of the largest distribution networks in the paper industry. With more than 100 wholesalers, over 1700 dealers, 10 warehouses and 4 regional offices spread across country, it has achieved matchless service levels. Nearly 50% of the exports are of branded products.
Recent development—
JK Paper plans to infuse Rs 14 billion to expand its manufacturing capacity by 1.5 lakh tons annually in the next three years. The proposed investment and expansions will take place over a period of two to three years. The company is producing 2.6 lakh tons of paper every year, more than the current capacity of 2.4 lakh tons. Going forward, it plans to increase the capacity by 1.5 lakh tons.
Valuation—
At current market price, stock is trading at attractive valuation of 4.9 P/E multiple of its FY2010 estimated EPS. We recommend investors "Strong Buy" on "JK Papers limited" with medium to long-term investment prospective.

Source: Internet (Valuenotes by Abhishek Jain)

Intraday Trading Calls for 20th January

Indian Stock Market may positive but remains very volatile 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
GNFC	Buy Above	123.50	127.60	132.00
	Sell Below	121.40	118.35	115.00
DEEPAK FERT.	Buy Above	122.60	127.20	132.00
	Sell Below	120.70	116.50	112.00
GMDC	Buy Above	178.65	184.25	190.00
	Sell Below	175.50	171.35	166.00
WALCHAND NAGAR IND.	Buy Above	255.10	264.15	272.00
	Sell Below	250.00	243.40	235.00
GIC HOUSING FIN.	Buy Above	95.75	99.20	104.00
	Sell Below	94.35	91.40	88.00
IDBI	Buy Above	132.55	136.10	140.00
	Sell Below	131.05	128.20	125.00
ATLANTA	Buy Above	192.25	198.40	205.00
	Sell Below	190.05	185.55	180.00

Short to Medium Term Delivery Pick:

Deepak Fertilisers & Petrochemicals Corporation Ltd. (500645) CMP Rs. 122/- Short Term Target Rs. 155/-.

GOOD LUCK

Stock Idea: Repro India

Repro India Ltd (Rs 113)
(BSE Code- 532687 NSE Code- REPRO)
(P/E- 7, Promoters’ stake-68.78%, Market Cap - Rs117 cr)
Repro India Limited is one of the few integrated print solution provider and a manufacturer and exporter of books in the highly fragmented printing industry. Its solutions include content management, configuration to content delivery and the entire supply chain for publishers. The Indian Printing industry has managed to grow at a CAGR of 14% over the last 25 years. to touch Rs 1100 cr.. That is almost twice the GDP growth rate. Repro has successfully evolved from a printing press to an end-to-end print solutions provider. The company provides value-added printing and prints related solutions to major publishing houses, corporates and software companies. The clients of the company include publishing houses such as Alligator Books, Macmillan, Orient Longman, Oxford University Press ; software companies Microsoft , Oracle, IBM; and Indian corporates including Tata Steel, Infosys, Wipro etc. RIL had come with an IPO in November 2005 at Rs 165 per share and raised Rs 43.2 cr.. RIL’s equity stands at 10.47 cr. out of which promoters hold 68.78% while the public holding is 15.19%.
Through content process outsourcing, Repro offers content, creativity and designing. It provides desktop publishing, ideation, content creation, designing, illustration and copywriting. Content Process outsourcing is another large opportunity for India and holds great potential as we have a low cost talent pool, design and creative capabilities and knowledge of English language. Countries like USA and the UK, which are considered among the largest markets for printing industry, are increasingly looking at outsourcing to low cost countries such as India. Repro offers print solutions for educational and children’s books for the publishing industry and annual reports and other corporate print solutions for corporates. Digital printing is utilised for IT industry and print on demand (POD). It also services the insurance industry through POD. Repro is also into contractual publishing—magazine printing and others like replication of CDs and stock management activities
For the half year ended Sept. 2009, Repro posted Adjusted net profit of Rs 8.8 cr.(down 23%) on net sales of Rs 103.5 cr. (down 4%). EBIDTA fell 12% to Rs 16.8 cr. and net profit fell 45% to Rs 5.13 cr.. The major reason for fall in sales was that the impact of the global meltdown which led to delay in execution of large no. of export orders on account of Repro waiting for the client to tie up for the money or open the LC’s.. The situation has changed now and the growth prospects look optimistic in the coming quarters. Repro has an order book position of about Rs 130 cr.(of which Rs 35 cr. is domestic and rest is exports) to be executed in the next six months.
Repro had posted a healthy 57% growth in topline to Rs. 241 cr, for FY09 while net profit grew just 6.5% at Rs 16.55 cr..(up 6.5%) due to forex losses of 16.5 cr.. On a equity of 10.47 cr., the EPS stood at Rs 15.75 and the dividend declared was 25%. Almost 35% of the company’s turnover comes from exports. Its exports business holds significant revenue upsides as it shifts focus from straight printing to content process outsourcing(CPO). As the company would be focusing on CPO for its foreign clients it expects margins to grow in future. The expansion at Surat SEZ and Vashi units will also bring benefits this year. As the company scales up its business and sets up infrastructure to support its expansion in the exports market, it expects higher realizations in the years to come. The Repro stock appears attractive as it is valued at about 7.5 times expected FY10E(Rs 15) and at 5.6 times FY11E earnings(Rs 20). On account of increasing contribution from higher margin businesses and attractive valuations, the stock holds good potential for appreciation in the medium-long term. Investors can start accumulating the stock at current levels and add more on declines for decent returns of 40%-45% over the next 6-8 months.
Source: Internet (Valuenotes by Sanjay Chhabria)