Stock Idea: CEAT Ltd., Titan Industries

Sharekhan has maintained its buy rating on Ceat with a revised price target of Rs 196 in its May 20, 2008 research report. "Ceat's Q4FY2008 results are ahead of our expectations, mainly on the sales front. The net sales of the company grew by 14.8% to Rs 646.2 crore in the quarter. The original equipment (OE) sales continued to decline whereas the replacement sales grew strongly by 28.2% in Q4FY2008. The operating profit margin (OPM) declined by 180 basis points to 6.0% as a result of a higher raw material cost. Consequently, the operating profit declined by 12.3% to Rs 38.5 crore."
"We maintain our positive view on Ceat, as the stock is trading at very cheap valuations. The volume growth could be higher than our expectations in view of the improvement in the OE volumes, the company's ability to pass on any further rise in input prices to its customers and the cooling off of the key raw material prices. At the current market price of Rs119 the stock is trading at 5.2x its FY2010 earnings of Rs24.5 and enterprise value (EV/earnings before interest, tax, depreciation and amortisation (EBITDA) of 2.8x. We maintain our Buy recommendation on Ceat with a revised price target of Rs 196," says Sharekhan's research report.

Hem Securities has recommended a buy rating on Titan Industries with a target price of Rs 1630 in its May 20, 2008 research report. "The company has posted excellent results in the year 2008. Net sales have surged to Rs 3046 million showing a growth of 42.57%. The revenues from the jewellery and watches segment have been on a continuous uptrend. Net profit margins have been under pressure but the ongoing expansion plans of the company will enhance the profitability too. EPS for the year ended March 2008 comes out to Rs 33.24 against Rs 22.50 in 2007." "The company has posted a CAGR of 39.02% in the topline and 91.74% in the bottomline over a period of 3 years. The diversified range of products and strong brand presence in the market are expected to leverage its growth. New ventures like Titan eye+ and Gold plus are targeted to tap opportunities in the unexplored segments. The company’s foray into Precision engineering is also expected to become a significant contributor to the revenues in the coming years. Presently, the stock is trading at Rs 1212 which is at 36.46 times to its earnings and 12.07 times to its book value. Keeping in mind the prospects offered by the company, we initiate a ‘BUY’ signal on the stock with a target price of Rs 1630 in the medium to long term investment horizon, expecting an appreciation of 34%," says Hem's research report.

Markets Today

Markets Snapshot
Markets recover from days low in line with Asian markets
Sensex ends up 13 pts at 17243; recovers nearly 200 pts from days low
Nifty ends up 12.7 pts at 5118; recovers nearly 70 pts from days low
Midcap and small cap continue to outperform major indices
CNX Midcap Index up 0.78%; BSE Small-cap Index up 1.5%
BSE Oil & Gas Index up 2.36%; Nymex July crude hits new high of $ 130.28/bbl
Oil & Gas stocks; RIL up 2.5%, RPL up 3.8%, BPCL up 2.25%
BSE Metal Index up 1.24%; Metal stocks; Nalco up 5.2%, Tata Steel up 3%
BSE Bank Index down 1.4%; HDFC Bank down 3.5%, ICICI Bank down 1.7%, PNB down 1.5%
Tea and petro stocks buzz in midcap and small cap space
Tea stocks; Harrison Malayam, Duncans up 20%, Jay Shree Tea up 17%
Petro stocks; Manali Petro up 20%, Andhra Petro up 17%, Supreme Petro up 16%
Other buzzers; Videocon Appliances up 20% for 2nd day runinng
Relisting: KGN Ind shares suspended during the day; ends at Rs 15000 Vs relisting price of Rs 72, volumes traded at 827 shares
NSE Advance Decline at 2:1
Total market turnover at Rs 61843 cr Vs Rs 52860 cr on Tuesday
Total NSE F&O turnover at Rs 39481 cr Vs Rs 33290 cr on Tuesday
F&O Snapshot
Nifty futures prem at 7 pts Vs 8 pts discount yesterday; add 19.3 lakh shares in OI
Some p[rofit booking seen in the last half an hour of trade; Nifty OI addition came down to 19.3 from 29 lakh shares
5000 put add 1.85 lakh shares in OI; 4800 put shed 1.5 lakh shares in OI
5000 call add 1 lakh shares in OI
Momentums stosk witness long additions like Chambal Fert, RPL, Nag fett, Ispat, Praj, RNRL, HOEC, Essar Oil
Short covering seen in Rel Power, IDBI, lanco, India cement, BHEL, DRL
Fresh shorts seen in NTPC, HUL, ICICI Bank
Buzzers in F&O
Praj up 11%; add 10.3 lakh shares in OI
Aptech up 9.3%; add 71 thousand shares in OI
IFCI up 7.8%; add 64 lakh shares in OI
HOEC up 7%; add 14 lakh shares in OI
Chambal fert up 6%; add 29 lakh shares in OI
source: moneycontrol.com

Intraday Trading Calls for 21st May

Indian Stock Market may open with gap down. A smart recovery expected from lower levels. Flat to nagetive closing expected.

Today's Intraday Trading Tips:

CAIRN INDIA
VOLTAS
STERLITE INDUSTRIES
VIDEOCON INDUSTRIES
PFC
RENUKA SUGAR

For Levels and Targets download the file by CLICK HERE.

Others: GMR Infra, TTML, Adlabs & NTPC all these stocks may recover very fast from day's low.
Good Luck

Markets Today

Markets Snapshot
Markets recover from day's low, however profit booking seen at higher levels
Sensex ends down 205 pts at 17230.2; recovers nearly 100 pts from day's low
Nifty ends down 53 pts at 5105; recovers nearly 30 pts from day's low
CNX Midcap Index down 0.7%, BSE Small-cap Index outperforms all indices, ends up 0.44%
Interest rate sensitive sectors like Bank & Realty witness selling pressure
BSE Bank Index down 2.4%; SBI down 3.14%, HDFC Bank down 2.6%
BSE Realty Index down 1.9%, Unitech down 2.9%, DLF down 2%
Index losers; Rel Infra down 4.8%, BHEL down 3.5%, ABB down 3.1%, Bharti down 2.7%
Index gainers; Cairn India up 8.5% ((UBS upgrades to Buy from Sell and price target to Rs374 (from Rs246))
Sterlite Ind up 4.7%, Suzlon up 3.4%, May Sell Some Stake In REpower
Buzzers; Mundra Port up 14%, Videocon Ind up 16.5%, Adlabs up 6.6%, S Kumars up 5.4%, Sasken up 8%, Graphite India up 15.2%
Buzzers; Videocon Appliance, Tamilandu Petro, Hilton Metal up 20% each
NSE Advance Decline at 5:6
Total market turnover at Rs 52860 cr Vs Rs 57402 cr on Friday
Total NSE F&O turnover at Rs 33290 cr Vs Rs 37877 cr on Friday
F&O Snapshot
F&O action muted; very stock specific
Nifty seen short buildup; trades at a 10-15 point discount; Adds 34 lakh shares in Mar series
Turnover lower than last weeks average
Nifty 5100, 5200 Call adds over 1 lakh shares each
Nifty 5000, 4800 put sees unwinding of open interest
Long positions seen in Cairn, Suzlon, R Power, JSW Steel, SRF
Fresh shorts seen in NTPC, SAIL, Unitech, JP Associates, PFC, DLF
Unwiding of long positions seen in momentum stcoks like Chambal Fert, Nag Fert, IFCI, GMR Infra, Alok, RNRL, Arvind MIlls
Long Positions
Cairn India up 7.7%; add 24 lakh shares in OI
Suzlon up 3.7%; add 17.5 lakh shares in OI
R Power up 4.3%; add 8.7 lakh shares in OI
HDIL up 4.2%; add 8.6 lakh shares in OI
Unwinding of long positions
Chambal Fert down 2.6%; shed 13.8 lakh shares in OI
GMR Infra down 1.3%; shed 9.15 lakh shares in OI
Nag fert down 2%; shed 8.7 lakh shares in OI
RNRL down 2%; shed 4.6 lakh shares in OI

Source: moneycontrol.com

Investment Pick: Voltas

A Tata group company, the market did not take too kindly to the results of Voltas. The financial performance for year ended 31-03-08 can be labeled as consistent, not trailblazing, which is probably what the market expected.
The net sales of the company rose 26.8% at Rs.3,044.50 crore. Its operating expenses rose 22%. Yet, it managed to post a 76% higher EBIDTA at Rs.293.90 crore. PBT was up 38% at Rs.307.50 crores and PAT rose 12% at Rs.208.30 crore. On an equity of Rs.33.07 crore, its EPS stands at Rs.6.30.
Higher volumes managed to offset the rising prices and this helped its translation into better profits. Its engineering and machine tools division faced some slowdown.
The company is now looking at acquisitions, mainly in organic business and is scouting around in South Africa, North Africa, Vietnam, Singapore and Middle East.
Its order book was at Rs.800 crore in domestic market and Rs.3,800 crore in international market. The company is expecting manpower shortages in current fiscal in overseas market and to retain employees, it is considering pay hikes. Rising manpower costs is something that most companies will have to now learn to grapple with.
Voltas continues to be a good investment buy at the current price.

Source: sptulsian.com

Intraday Trading Calls for 20th May

Stock Market India may open flat and see some profit booking. It may remains rangebound of +/- 1%. A Nagetive closing expected.

Today's Intraday Trading Calls:

ORCHID CHEMICAL
GMR INFRA
BANK OF BARODA
KOLTE PATIL
S KUMAR NATIONWIDE
CAIRN INDIA

For Levels and Targets Download the file by CLICK HERE.

Others: Hind Oil Exploration, Selan, RPL as crude oil trading at all time high around $127.

Good Luck

Multibagger: Control Print (India) Ltd.

Control Print (India) Ltd.: Good growth potential
BSE Code: 522295
Book Value: Rs.47.53
EPS: Rs.9.15
P/E: 5.40
Dividend: 20%
Market Cap: Rs.37.18
Performance: Market out-performer
Target: Rs.130-160 in 18 months
Introduction: Control Print (India) Ltd. (CPL) began in 1991 with a dream of bringing Indian packaging at par with the international benchmarks in terms of coding & marking and is the undisputed market leader in the coding and marking machinery with a market share of around 40%. It has a product range of contact coders, superior touch coders, specialized metal marking systems, sophisticated ink jet coders and advanced laser coders that can be used to print on any type of surface like plastic, glass bottle, paper, wood, steel etc. The company operates in a single segment, viz. Coding & Marking machines and consumables thereof.
The company has entered into a technical collaboration with KBA-Metronic AG, Germany for manufacture of Industrial Ink-Jet Printers at Nalagarh, Himachal Pradesh. The company has also entered into technical collaboration for Thermal Transfer Overprinters, Large Character Printers and ink-jet consumables. KBA-Metronic AG, Germany, is the undisputed worldwide technology leader in Coding, Marking and Printing. The venture will lead to Industrial Ink-jet Printers manufactured in India based on the know-how transferred from KBAMetronic. It is worth noting that KBA-Metronic AG is a wholly owned subsidiary of Koenig & Bauer AG (KBA), the world's third largest printing equipment manufacturer.
The company will also be manufacturing KBA-Metronic's wide range of specialized ink formulations for various applications. With this tie-up, the company will be the first Indian manufacturer of industrial inkjet printers. The company has already set up a manufacturing and assembly facility for marking and coding devices at its facility in Nalagarh, Himachal Pradesh and which has already started commercial production from FY08. It shall he expanded for production of the Industrial Ink-jet Printers.
The company plans to export printers to other emerging markets in conjunction with KBAMetronic. The company has launched its ‘Conprint’ range of consumables for ink-jet printers and has also started marketing the full range of products.

Shareholding Pattern: The promoters hold 38.2% while the investing public holds 57.25% of which United India Insurance holds 4.52%, promoters have increased their holding from 36.57% to 38.2% in FY08.
Financials: For Q3FY08, its total income was flat at Rs.9.26 cr. as against Rs.10.45 cr. in Q3FY07 while the net profit was lower at Rs.1.04 cr. as against Rs.1.81 cr. in Q3FY07. This reduction in sales and profit was due to changeover of products.
Investment Rationale:
(1) Earlier, CPL made preferential allotments of 1,25,000 equity shares of Rs.10 each at a premium of Rs.53 per share i.e. Rs.63 per share as per SEBI guidelines to the promoters.
(2) The company declared a dividend of 20% for FY07 and may reward shareholders again in FY08.

(3) CPL plans to develop its land in a prime area of Mumbai, for commercial purpose in FY09. It will first develop its property at Chandivali, Andheri East, Mumbai. In fact, the value of its land is more than its market cap of Rs.37.18 cr. This is an important trigger for re-rating the scrip.
(4) CPL has commenced the commercial production of Conprint Hot Ink Coders and its consumables Ink Rolls at Nalagarh in Himachal Pradesh. The products are at par with similar imported products and it has received repeat orders from the users.

(5) The cumulative margins of printer and consumable sales are expected to expand further in FY09 and FY10.

(6) The company’s topline and bottomline is expected to see good growth from marketing of high end digital printers. The digital printers are used to print variable information on the Aluminum foil packaging of pharmaceutical tablet strips or on the packaging labels.
(7) One of the promoters has recently increased his holding in the company.
(8) The company’s clients include Coca Cola, Pepsi, P&G, Shaw Wallace, Cipla, Dr. Reddy’s Laboratories, Novartis, Rane Brakes, Tata Steel, SAIL, Hindalco, Jindal Iron, Aksh Optifibre and the like.
(9) With organized retailing coming off age in India, packaging has assumed importance. As a result, this technology has readymade domestic and overseas markets.
Concerns:
(1) Entry of new players could increase the already strong cut throat competition existing in the industry. With the market set to expand rapidly, many new players can be expected.
(2) Any delay in employing the latest technology could reduce growth targets. While CPL is lready in talks with many large companies for digital printers, the low cost machine sales would depend on its ability to market the product efficiently.
Conclusion: CPL is in a relatively new industry with mammoth growth potential. It is also the only listed company in this segment. This makes comparing valuations difficult and complex. It is worth understanding that CPL derives majority of its revenue from FMCG, Pharmaceutical and the Auto sectors. Since CPL is dependent on these sectors, it ought to get valuations closer to sectors dependent on these sectors. But the fact that it derives revenue from multiple sectors reduces its dependence on one particular sector. As a result stability in earnings is high. Profit visibility is also expected to improve as its printer base continues to grow over the next few years resulting in high consumable sales.
Considering these factors, the CPL share may get a valuation lower than the core sectors but closer to the dependent sectors. At a P/E of only 5.4, Book Value of Rs.47.53, Dividend of 20% and EPS of Rs.9.15, the scrip is available at an attractive CMP of Rs.49.45 and could get re-rated soon. The scrip is near its 52-week low of Rs.41 and thus has a minimum downside. In the short-term if the scrip is able to cross Rs.57 with good volume then the next target could be Rs.70-75. The stock is in the oversold territory and a bounce back could be expected very soon. Please keep a strict Stop Loss of Rs.45.5 in case it starts to slide or if the market dynamics change suddenly. I place a target of Rs.130-160 in 18 months time frame.

By Suman Mukherjee (Source: Moneytimes Internet)