Stock Idea: Prakash Industries

Prakash Industries has posted a set of flat results for the year ended 31st March 2009. On a 22% rise in net sales, its expenses soared 28%. It managed to maintain its EBIDTA at the same levels as FY08. Interest outgo rose 46% and though it managed to reduce depreciation, PAT before exceptional item was down 6% at Rs.198.03 crore. After adding up an exceptional gain of Rs.6.13 crore, its net profit for the year was flat at Rs.204.16 crore, up by just over 1% over FY08.

Though sales volume rose over 20% and the company reported its highest ever production, it has not got translated into better realisations, which is reflected in the profit margins. OPM for FY09 was down at 19.77% compared to 24.05% in FY08 and NPM was down at 13.38% as against 16.10% in FY08.

The performance of the wire rod manufacturing unit at Raipur, Chhattisgarh has been good as the unit operated more than its rated capacity contributing significantly to the bottom line. The company has commissioned its 25 MW power plant during the year which has taken the total power generation capacity of the company to over 100 MW. This will help bring down the costs in the current fiscal.

The company is already in the process of doubling its steel making capacities in the entire chain of integrated steel operations. Encouraged by the performance of the existing wire rod mill the company has taken steps to further augment its capacity wire rod production capacity. In addition, one of the existing mills is being modernized to expand its product mix to enable it to manufacture TMT bars as well, which is expected to be completed by August this year. All these expansion plans are expected to increase the present volumes by more than 50% in the ensuing year. and the company is expected to maintain this growth momentum in the future years also. The company is taking steps to get the iron ore mines in Chattisgarh as well as in Orissa operational in second half of FY10. In addition, Madanpur coal block allotted to the company in JV with other companies is expected to be operational by end of the current financial year. This shall cater to the increased coal requirement of the steel and power operations of the company.

Source: www.premiuminvestments.in (S P Tulsian)

Corporate News

M&M and Tata Motors figure amongst the global list of firms being considered by General Motors for a possible sale of small car brand Saturn. (ET)

Suzlon is planning to raise Rs6bn from private equity investors to fund the acquisition of RE Power. (ET)

Tech Mahindra is looking to pre-pay Rs3bn loan taken by Satyam in February 2009. (ET)

Tata Motors has bagged an order to supply 4,689 buses for the JNNRUM project. (BL)

DLF has put its Andheri (Mumbai) project on the block. (ET)

GVK Power is planning to raise Rs25bn via the QIP route. (ET)

Reliance Industries has stopped exporting petroleum products to Iran. (ET)

Reliance Industries' German textile arm Trevira has filed for bankruptcy. (ET)

BHEL bags Rs3.75bn order for installing two gas turbines generating unit in Oman. (ET)

NHPC likely to float Rs16.7bn IPO in August 2009. (BS)

Union Bank eyes business of Rs3trillion in FY10. (BS)

Cadila aims US$1bn sales in FY11. (FE)

Anand Mahindra ceased to be a promoter of Kotak Mahindra Bank after reducing his stake to 3.68% from a peak of nearly 15%. (ET)

Tata Power to generate 5MW from geothermal, solar plants in Gujarat. (BL)

HPCL plans to invest Rs6.1bn in two sugar mills it has bought in Bihar to manufacture Ethanol. (BS)

LIC Housing Finance plans to raise capital by issuing 10mn shares through QIP route. (BS)

Government has kicked off disinvestment process by putting up Indian Telephone Industries on the block. (ET)

Religare rights issue price may be raised to Rs400. (ET)

Pantaloon Retail has delayed its restructuring plan as it awaits a favorable FDI policy. (ET)

Aptech sells stake in China joint venture company. (BL)

Kinetic Engineering bags an order from European auto major. (BL)

Network 18 to raise Rs1.2bn through preferential allotment of shares to Asian private equity firm SAIF Partners. (BS)

SEBI has cleared Rs160mn open offer for Spice Mobiles. (FE)

TVS Motors arm to venture into car accessories business. (FE)

Source: indiainfoline.com

Intraday Trading Calls for 04th June

Stock Market India may open flat to Negative but may some recovery from lower levels and close flat to positive.

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

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
GMR INFRA	Buy Above	174.25	178.55	184.00
	Sell Below	172.10	168.35	162.00
SESA GOA	Buy Above	167.80	173.25	178.00
	Sell Below	165.10	161.35	156.00
IGL (532514)	Buy Above	139.60	144.55	150.00
	Sell Below	137.40	133.15	130.00
NILKAMAL (523385)	Buy Above	96.20	101.75	108.00
	Sell Below	94.35	90.55	86.00
GOKUL REFOIL (532980)	Buy Above	272.25	280.45	290.00
	Sell Below	267.45	260.10	252.00
PSL LTD. (526801)	Buy Above	160.55	165.70	172.00
	Sell Below	158.20	154.35	150.00
FDC (531599)	Buy Above	47.25	50.10	54.00
	Sell Below	46.10	44.15	41.00

Keep an Eye on K S Oils and Ruchi Soya also.

GOOD LUCK

Intraday Trading Calls for 03rd June

Stock Market India may open flat to positive and 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
GMR INFRA	Buy Above	174.25	178.55	184.00
	Sell Below	172.10	168.35	162.00
MOSER BAER	Buy Above	109.60	115.55	122.00
	Sell Below	106.70	101.65	96.00
IGL (532514)	Buy Above	135.80	141.75	148.00
	Sell Below	133.40	129.45	125.00
ROYALORCHID HOTELS	Buy Above	72.10	76.05	80.00
	Sell Below	70.05	67.45	64.00
VENUS REME (526953)	Buy Above	246.55	253.75	262.00
	Sell Below	243.15	238.45	230.00
KALE CONSULTANT	Buy Above	51.80	55.75	60.00
	Sell Below	49.50	47.10	44.00
SESA GOA	Buy Above	170.60	175.10	180.00
	Sell Below	168.20	164.35	160.00

Short to Medium Term Delivery Buy:

Buy Indraprasth Gas Ltd. (IGL) (532514) CMP Rs. 135/- Short Term Target Rs. 170-185/-.

GOOD LUCK

Intraday Trading Calls for 02nd June

Stock Market India may open positive but some profit booking expected at mid-session. A positive closing expected.

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

SCRIP NAME	TRIGGER	PRICE	TARGET 1	TARGET 2
GMR INFRA	Buy Above	176.20	181.35	186.00
	Sell Below	174.35	170.15	165.00
MOSER BAER	Buy Above	101.70	108.20	115.00
	Sell Below	99.40	95.35	90.00
IRB INFRA	Buy Above	151.20	156.45	162.00
	Sell Below	148.60	144.35	139.00
PSL LTD. (526801)	Buy Above	143.25	148.10	154.00
	Sell Below	141.35	137.45	132.00
VENUS REME (526953)	Buy Above	230.10	237.45	245.00
	Sell Below	226.40	220.10	214.00
REL POWER	Buy Above	183.75	188.10	192.00
	Sell Below	181.40	176.65	172.00
SESA GOA	Buy Above	170.60	175.10	180.00
	Sell Below	168.20	164.35	160.00

Keep an eye on Indowind Energy (532894) it can touch UC today again.

And Dish TV (532839) CMP Rs. 51/- It can make new highs.

GOOD LUCK

Multibagger: Temptation Foods Ltd

Temptation Foods Ltd.: For delicious gains
By Devdas Mogili
Temptation Foods Ltd. (TFL) is an 18-year old Mumbai based company established in 1991. It processes a variety of vegetables and fruits for the Indian markets and also exports them to some of the biggest brands in USA, UK, Europe and the Middle East. The company has one of the largest product ranges covering over 50 different types of Individually Quick Freeze (IQF) vegetables and fruits. It has 6 plants located at Sonepat, Karnal, Rudrapur, Kashipur (2 plants) in North India and Jejuri in Maharashtra. Mr. Vinit Kumar is the chairman of the company. TFL has the capacity to process, pack and IQF over 60,000 TPA of vegetables and fruits. It has an installed capacity of above 30,000 tonnes (including IQF, Blast and Plate capacities), which makes TFL the largest company with such facilities in India. Further, its own in-plant cold stores have a combined capacity of over 5,400 MT, which again make it one of the largest cold stores in India. The company procures fresh fruits and vegetables primarily from the Terai region in North India and the Agriculture Produce Market Committee (APMC) of Mumbai and Pune. All its plants are strategically located in the heart of the agricultural heartlands. TFL processes the vegetables and fruits and freezes them through the highly effective IQF technology at the plants.
The company’s revenue is principally derived from the international demand for frozen fruits and vegetables. The company also forayed into the marine food business with the acquisition of the ‘Everfresh’ and ‘Karen Anand’ brands. has now entered the domestic processed food industry with the aim of becoming a dominant player in this sector. Brands: It acquired the ‘Everfresh’ brand of frozen fruits and vegetables from the K. K. Birla Group in November 2007.
also acquired the ‘Karen Anand’ range of gourmet products and produces them at its plant in Jejuri near Pune in Maharashtra. TFL also services some of its institutional clients under the brand name of ‘Delika’. Clientele: TIL’s clientele includes Taj SATS, Ambassador, Oberoi and Dinshaws, and retail chains like Metro, Shoprite, Big Apple, Spencers, Reliance Fresh, Spinach and Food Bazar. Performance: For FY09, its sales rose by 165.22% to Rs.870.07 cr. against Rs.328.05 cr. in FY08 and net profit rose 121.34% to Rs.52.70 cr. in FY09 as against Rs.23.81 cr. in FY08. It posted an impressive EPS of Rs.20.96 for FY09.

Latest Quarterly Results: Sales declined 11.46% to Rs.225.23 cr. in Q4FY09 as against Rs.254.37 cr. in Q4FY08. However, net profit s rose 17% to Rs.15.34 cr. in Q4FY09 as against Rs.13.11 cr. in Q4FY08 and it notched up an EPS of Rs.6.10 for the quarter. Financials: The company has an equity base of Rs.25.14 cr. with a book value of Rs.93.02. It is a zero debt company with RoCE of 27.06% and RoNW of 23.32%.
Share Profile: TFL’s share with a face value of Rs.10 is listed and traded on the BSE under the B group. Its share price touched a 52-week high/low of Rs.350/18.85. At its current market price of Rs.40, it has a market capitalisation of Rs.92 cr.
Dividends: In view of its aggressive growth plans and with a view to conserve resources, the company has not declared any dividend.
Shareholding Pattern: The promoter holding in the company is 18.19% while the balance 81.81% is held by non corporate promoters, institutions, foreign holdings and the Indian public.
Prospects: With a population of 1.08 billion, India is growing at approximately 1.6% per annum. The domestic market is a large and growing market for food products as it is still the single largest component of private consumption expenditure accounting for as much as 53% of the total expenditure of Indian households. The Indian retail revolution is witnessing high growth with the growing number of modern retail stores and the larger freezer space in them. Consumer lifestyles are also changing with the increasing need for convenience and hygiene. All this will grow the latent demand for frozen and convenience foods. Further, processing enhances the shelf life of agricultural produce and thus reduces wastage. The role of food processing, therefore, becomes critical since agricultural production is targeted to double in the next 10 years.
Conclusion: TFL is an existing and profit-making company with good brands and clientele. It is one of the largest organized, listed player in its domain. At its current market price of Rs.40, the share is discounted less than 3 times its FY09 earnings of around Rs.21. Considering its aggressive growth plans, impressive performance, zero debt status, hefty book value of Rs.93, makes TFL a tempting investment opportunity for delicious gains in the medium-to-long-term. The share is quoting 50% below its book value of Rs.93, which indicates a good margin of safety for investors.

Source: moneytimes

Corporate News

Maruti Suzuki's car sales in the domestic market increased 8-10% in May 2009. (ET)

Multiplexes resolution is expected before June 12. (BS)

M&M to undertake major revamps of its tractor business. (ET)

Bharti Wal-Mart, the JV between two companies to invest over US$100mn in setting up 15 more such outlets in the next three-four years. (BS)

Coal India to sign an agreement with NTPC for setting up a 4,000-MW pithead power plant at Brahmani block near Rajmahal in Jharkhand. (ET)

IOC, BPCL and HPCL raised the ATF price by an average of Rs108/kl. (BS)

Tata
Steel UK lenders agreed to reset the terms and conditions for a £3.7bn loan that was taken at the time of the acquisition of Corus. (ET)

Wockhardt in talks with a number of multinational Pharma companies including Eli Lilly, Roche, Sandoz, Pfizer and Sanofi-Aventis to find a strategic partner for its biosimilar business. (ET)

Jet
Airways freezes fleet expansion for now and put off aircraft deliveries for two years. (ET)

Real estate developers may spring up more than a hundred malls spread over 30mn sq ft in the country by end-2010. (DNA)

PNB plans to expand its branch network by 10% in 2009-10. (DNA)

Unitech plans to repay about Rs20bn of its debt and bring it below Rs60bn level by the end of this fiscal. (DNA)

Axiata Group may increase its stake in Idea
Cellular through a hostile open offer. (DNA)

Tata
Motors plans to lower capital expenditure committed earlier and reduce exposure to vehicle financing. (DNA)

NTPC is looking at acquiring coal assets in Mozambique and Indonesia.

GMR International, wholly-owned subsidiary of GMR Infrastructure, signed an agreement with InterGen NV to acquire 100% ownership stake in Island Power Singapore. (BS)

The board of Bharati Shipyard decides to make an open offer for Great Offshore. (ET)

The government at the Centre plans to raise Rs100bn through stake sales in state-owned units over the next one year. (ET)

Indiabulls Real Estate decides to write off the entire investment in its retail arm. (ET)

SCI enters into an agreement with Geneva-based Mediterranean Shipping Company to run its European service. (BS)

Oman Oil Company to buy a 26% stake in the upcoming refinery at Bina for Rs12bn. (BS)

Aditya
Birla Retail, Bharti Enterprises, Reliance Retail, Trent, Mahindra Retail and others to open new stores spread over 5mn square feet. (BS)

Transformers
and
Rectifiers sets up a facility for manufacturing transformers at Moraiya in Ahmedabad with an investment of Rs1bn. (BS)

Orissa government recommends the prospecting license for Horomoto iron ore mines in favour of Jindal
Stainless, which is setting up a 1.6mn tonne per annum integrated stainless steel project at Kalinganagar in Jaipur. (BS)

Hindustan
Dorr
Oliver is likely to go in for a rights issue. (DNA)

IVRCL
Infrastructure to exit non-core operations and remain focused on water-related projects. (DNA)

Anant
Raj may raise Rs20bn via QIP route. (DNA)

Tata
Power Company plans to add 200 megawatts of capacity in the current fiscal year. (FE)

BOC
India not increasing its equity now and is also not considering delisting of its stock. (BL)

RBI to allow SBI to guarantee the recently-concluded Rs42bn non-convertible debenture issue by Tata Motors. (ET)

Mindtree plans to address the healthcare market for technology solutions. (ET)

MNC arms' delist plans may hit price wall. (ET)

Shopper Stop to invest Rs400mn to roll-out 3-4 stores in the current fiscal. (BS)

Tata Motors aims to sell 4,000 World Trucks in the current financial year. (BL)

Shriram Transport Finance Company is looking to invest Rs40bn for an acquisition. (BS)

SBI plans to add atleast 40mn new deposit customers from the rural area by FY11. (BL)

Source: indiainfoline.com