Investment Idea: Orchid Chemicals

The share price of Orchid Chemicals has taken a beating for the past few days. And that is precisely what makes it a good buy. The fall in the stock was directly attributed to Bear Stearns selling off a major chunk of its holding in the company. Selling was further triggered by promoters of the company selling a 7% stake to meet the margin calls. The promoters had earlier ramped up their holding from 17% to 24% and had borrowed the money to increase the stake. But when the margin pressure increased and the promoters did not have enough money to pay these off, they took to the recluse of selling their 7% stake and raising the money.

There is also news about the company having incurred some forex losses and it is also feared that FCCB of US$193 million due in 2012 would not get exercised and hence could remain as a debt in the books of the company.

On the financial front, despite all these turmoil’s, the company has been doing very well. For the third quarter ended 31st December 2007, YoY, the net sales rose by 39% at Rs.332.69 crore. EBIDTA was up 34% at Rs.104.87 crore. PBT almost doubled from Rs.31.28 crore to Rs.61.78 crore. PAT rose by a whopping 91% at Rs.54.12 crore. The company has posted an exceptional item of Rs.6.42 crore, representing exchange gain on outstanding FCCB. On this, the company paid a tax of Rs.2.19 crore which does not make the gain look very big now. On an equity of Rs.65.84 crore, the EPS is at Rs.8.20, which on the current price of Rs.118 gives a of PE of just 4.

The company has lined up 12 new products for launch over the next two years. The company has a very strong R&D, which has seven pre-clinical entities (total 15 molecules) targeting diabetes, infection, inflammation and oncology areas. Currently Orchid spends about 6-7% per cent of its sales on R&D. ORLL has filed 162 patent applications for new drugs and other innovative products. Well, with most of the drug majors spinning off their R&Ds into separate profit making entities, it will not be a surprise to see Orchid also do the same in the near future. At the current market price of Rs.118, Orchid is a good investment.

Source: Sptulsian.com

Markets Today

Blue chips edged higher in volatile trading session today. After an initial surge, the market had pared gains in afternoon trade. The S&P CNX Nifty, had in fact, slipped into the red. A strong rebound was witnessed in late trade.
As per provisional closing, the 30-share BSE Sensex rose 351.89 points or 2.35% at 15,346.72. The index gained 356.48 points at the sessions high of 15,351.31, hit at the fag end of the trading session.
The broader CNX S&P Nifty rose 49.4 points or 1.08% at 4623.35.
Mid-cap and small-cap stocks slumped, which was clearly reflected in the poor market breadth. Banking and IT stocks were in demand. Metal and power stocks declined. 22 out of 30 stocks from the Sensex pack ended in green.
The market sentiment remained edgy on reports Monsoon Capital LLC, a $1.20 billion hedge fund firm run by Gautam Prakash, has been hit hard by a slump in Indian stocks this year. The news may trigger more redemptions from hedge funds with higher exposure to India, reports suggest.
Among the Asian markets, Japans Nikkei slipped traded in red and Chinas Shanghai Composite declined further. Earlier in the day, Asian indices were mostly in the green. European markets were closed on account of Easter holiday.
As per data released on Thursday, 20 March 2008, inflation surged to over 11-month high of 5.92% for the week ended 8 March 2008 as essential items like fruits and vegetables and pulses as well as some manufactured items turned expensive.
The BSE Mid-cap index fell 2.41% at 5,820.13. The BSE small-cap index was down 3.47% at 6,971.42.
The market breadth, which was negative in early trade, turned poor as the session progressed. On BSE, 559 stocks advanced, 2130 declined and 34 stocks were unchanged.
The BSE clocked a turnover of Rs 4663 crore as against Rs 5,796.91 crore on Wednesday, 19 March 2008.
Indias largest private sector firm by market capitalization and oil refiner Reliance Industries (RIL) rose 1.93% to Rs 2200.80.
Indias largest private sector bank by assets ICICI Bank rose 4.98% to Rs 804.55.
Indias largest engineering and construction firm by revenue gained 3.46% to Rs 2937.20.
Among the other Sensex gainers were, Housing Development Finance Corporation (up 7.96% at Rs 2389), Wipro (up 7% at Rs 402.95), HDFC Bank (up 6.14% at Rs 1349), Hindustan Unilever (up 4.84% at Rs 236.20), and State Bank of India (up 2.91% at Rs 1649.50).
Among the Sensex losers were, Tata Steel (down 6.95% at Rs 593), Reliance Energy (down 3.46% at Rs 1164.80), DLF (down 3.53% at Rs 601), Maruti Suzuki (down 1.91% at Rs 807), Jaiprakash Associates (down 1.08% at Rs 201.80) and Ranbaxy Laboratories (down 0.93% at Rs 446).
India's second biggest real estate developer by market capitalisation Unitech declined 4.90% to Rs 254.20, off sessions high of Rs 279.70. Lehman Brothers and Deutsche Bank are reportedly set to make a combined investment of $500 million in Unitech's special purpose vehicle formed to execute two commercial projects in Mumbai.
Refrigerant gases maker Gujarat Fluorochemicals jumped 3.35% to Rs 185 after its board approved the proposal to buyback equity at a ceiling price of Rs 300 per share.
Drug maker Sun Pharmaceutical Industries gained 1.31% to Rs 1277 after it received an approval from US Food and Drug Administration for the abbreviated new drug application to market a generic of Parke Davis's Cerebyx, fosphenytoin sodium injection.
Textiles firm S.Kumars Nationwide slumped 28.45% to 81.75 after 7.10 lakh shares changed hands on BSE at Rs 110 and 5.02 lakh shares changed hands on NSE at Rs 88.50 each.
Sujana Towers, manufacturer of galvanized steel towers, slumped 10.38% at Rs 85.05 after the firm said Morgan Stanley & Co International Mauritius acquired a further 3.85% stake in the company to raise its total holding to 7.04%.
FMCG products maker Dabur Pharma rose 3.38% to Rs 50.50 after 3.75 million shares or 2.4% of the company's equity capital changed hands on the NSE in a block deal at Rs 50.75 each.
Drug maker Aurobindo Pharma rose 0.60% to Rs 2505, off session's high of Rs 259.90. The comapny said it has concluded a deal to acquire Italy's Intellectual Property & Marketing Authorizations.
Edible oils maker KS Oils fell 1.73% to Rs 62.60 even as some reports suggested that the firm sees revenue rising to Rs 3200 crore and expects net profit of Rs 200 crore in full year (FY) 2009 due to a rise in demand, following import duty cuts in mustard oil. Indian government on Thursday, 20 March 2008 announced a cut in import duty on some edible oils to improve supplies and rein in inflation that touched a 10-month high.
Most Asian markets were trading higher today, 24 March 2008. Key indices in Taiwan, Singapore, and South Korea were up 0.58% to 3.99%. However, Chinas Shanghai Composite index was down 4.49% and Japans Nikkei was down 0.02%. Stock market in Hong Kong was closed for public holiday.
Wall Street shares soared on Thursday, 20 March 2008 as declining commodity prices helped offset worries about the economic slowdown. Financial stocks rallied on analyst expectations that more mortgage purchases by Fannie Mae and Freddie Mac may help stabilize the home loan market.
The Dow Jones industrial average jumped 261.66 points, or 2.16%, to 12,361.32. The Standard & Poor's 500 index added 31.09 points, or 2.39%, to 1,329.51, and the Nasdaq Composite index advanced 48.15 points, or 2.18%, to 2,258.11.
Back home, the Sensex rose 161.37 points or 1.09% at 14,994.83 on Wednesday, 19 March 2008. The broader based S&P CNX Nifty was up 40.95 points or 0.9% at 4,573.95 on that day.
The market remained closed on Thursday (20 March 2008) on account of Id-E-Milad and on Friday (21 March 2008) on account of Good Friday.
As per provisional data, foreign institutional investors (FIIs) purchased shares worth Rs 30.54 crore on Wednesday, 19 March 2008. Domestic institutional investors (DIIs) were net buyers of shares worth Rs 142.19 crore on that day.
FIIs were net buyers of Rs 1,901.33 crore in the futures & options segment on Wednesday, 19 March 2008. They were net buyers of index futures to the tune of Rs 1,838.77 crore and sold index options worth Rs 175.11 crore. They were net buyers of stock futures to the tune of Rs 239.51 crore and sold stock options worth Rs 1.85 crore.
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Intraday Calls for 24th March

Markets may open flat to positive and remains rangebound about +/- 1%. A flat to positive closing expected.

Today's Intraday Picks:

GMR Infra
SAIL
UNITECH
Federal Bank
Gujarat NRE Coke

For levels and Targets download the file by Click Here

Others: Lok Housing, Bank of Rajasthan, HCC, Noida Toll.

Good Luck

HAPPY HOLI

Sebi Allows Short Selling from April 21

The long wait is over for stock market participants. Regulator Sebi has finally announced that short-selling and stock lending and borrowing will be operational from April 21.

Short-selling will only be allowed in futures and option stocks, for a period of 7 days, after which its positions will have to be squared off.

Sectoral FDI caps will be available for short-selling. Many of the sectors, which have a low FDI cap and where FII limits have been crossed, will not be eligible despite being in the F&O segment.

Institutions and investors borrowing stocks will have to pay a margin fee to the lender.

Investment Idea: Bartronics India

Bartronics India, a zero debt company based in Hyderabad is engaged in providing solutions using automatic identification, data capture (AIDC) technologies and radio frequency identification (RFID) solutions. On November 16, 2007, the Company announced the incorporation of a wholly owned subsidiary, Bartronics America Inc.

For the third quarter ended 31st December 2007, YoY, the company has posted very good results. Its net sales was up almost 4 times at Rs.70.17 crore. Its total expenses also surged equally at Rs.57 crore as against Rs.13.32 crore in Q3 FY07. Of this, the cost on raw materials took away Rs.87.51 crore, which was at Rs.11.16 crore in Q3 FY07. Thanks to the stock-in-trade, the company was able to recoup some of this outgo, yet it continued to remain high. PBT rose over 3 times at Rs.12.34 crore and PAT surged from Rs.3.44 crore to Rs.10.95 crore.

The growth in net profit and total income was primarily driven by the increased utilisation of production capacity at its smart card manufacturing facility, along with a jump in its regular solutions business. The company commissioned its 80-million smart cards per annum facility at Medchal on the outskirts of Hyderabad in July 2007. The company is targeting 40 million cards during the current financial year. It is a major beneficiary of the Railway Budget, which announced that smart card-based ticketing system was on the anvil.

The company is now looking closely at the European markets, to acquire a European company, similar to the one that it had done in the US, for over $50 million (around Rs 200 crore). It is scouting for a company that is engaged in the RFID technology and smartcard solutions.

The company, in January 2008, acquired the assets of Proximities Inc and SRG America Inc for a total consideration of $50 million (around Rs.200 crore), which it raised through issuance of zero coupon unsecured FCCBs.

It plans to utilise the 80-million production capacity at its plant during the next financial year. This, coupled with its overseas plans, is expected to fuel the company’s topline to touch Rs.500 crore next year.
The stock is a good buy at the current rate of Rs.165.

source: sptulsian.com

Intraday Calls for 19th March

Fed cuts rates by 75 bps and US Markets rallies Dow +420 Nasdaq +91. So In Indian Stock Market A Strong Rally Expected today of about 3-4% gain and may be more as yesterday's due.

Today's Intraday Picks:

HDIL
INDIABULLS Financials
STERLITE Industries
JP ASSOCIATES
REL

For Levels and Targets Download the file by Click Here.

Also Watch GMR Infra, Prithvi Info, Noida Toll & Dish TV.

Good Luck