Stock Ideas

Rohit Ferro Tech Ltd. (Code: 532731) (Rs.65) is a leading producer of high carbon ferro chrome apart from manufacturing ferro manganese and silico manganese through submerged arc furnace route. It has set up a greenfield plant in Jajpur-Orissa thereby taking its total capacity to 1,65,000 MTA from 55,000 MTA earlier. Further, it has set up a fifth furnace with 15000 MTA capacity in Bishnupur, which is expected to go operational soon. To become an integrated player, the company has applied for a mining lease to the Government of Orissa for chrome ore as well as manganese ore. Presently, it is sourcing manganese ore from Australia besides local sourcing. On the other hand, due to higher production, better margins and better availability of raw-materials, the company is stressing more on production of ferro manganese in place of high Carbon Ferro Chrome. For future it has chalked out a plan to setup a 110 MW captive power plant to bring down its power cost. In order to fund this, it recently made a preferential allotment of 80 lakh convertible warrants at Rs.43 per share to promoters as well as strategic investors like Kampani Finance, Foster Capital etc. On the back of stunning Q3 results, it may end FY08 with sales of more than Rs.500 cr. with PAT of Rs.50 cr. i.e. an EPS of Rs.14 on its current equity of Rs.34.50 cr. The company has the potential to post an EPS of Rs.20 on its fully diluted equity of Rs.42.50 cr. for FY09. Keep accumulating at declines.

A few days back, GM Breweries Ltd. (Code: 507488) (Rs.79) came out with disappointing results for the March 2008 quarter. Sales improved marginally to Rs.49 cr. but net profit declined by 25% to Rs.2.65 cr. due to lower operating margin. Accordingly, the company declared 25% dividend (including 5% special dividend being the Silver Jubilee year), which gives a yield of nearly 3% at CMP. Although the March 2008 quarter results were below expectation, the entire FY08 figures are pretty decent as sales grew by 10% to Rs.186 cr. and PAT increased by 25% to Rs.14.70 cr. thereby registering a healthy EPS of Rs.16 on its equity of Rs.9.40 cr. At the current market cap of Rs.80 cr., the scrip is trading at a low P/E multiple of 5. With a whopping gross block of Rs.68 cr., low debt : equity ratio, strong cash flows, decent margins etc., the company deserves much better discounting. With 68% holding, the promoters are investor friendly and have an uninterrupted record of dividend payment from the day of listing. At a modest discounting by 12 times, the scrip has the potential to cross Rs.200 mark in the medium-to-long-term.

Source: Internet (money times)

Inflation Impact

Friday, the last day of the week, though the first of the new fiscal FY09 may not end on a very positive note. Inflation, which has remained a major concern for the past few days, has now raised up its ugly head. Inflation is at a 3 year high. Wholesale prices rose 7.0 percent in the week ended March 22 from a year earlier, faster than the previous week's 6.68 percent. Vegetable prices are up 4.9%. The current hike in inflation is being caused primarily by higher global commodity prices in agriculture, fuel and metals feeding to domestic inflation. It is not just an Indian situation; currently the whole world is facing the same problem of soaring prices.

The markets had expected the inflation rate to be around 6.52% and when the figure touched on the psychological 7% mark, all hell broke loose on Dalal Street. The markets immediately tanked by a whopping 300 points the moment the news was announced.

It was generally expected that if the inflation had not breached or touched the mark of 7%, the markets would have improved but now that reality has hit, the markets have not taken to this news too well.

There is no doubt now that the UPA Govt, which has been announcing a slew of measures over the past week, will have to take a more aggressive stand to get down the inflation figure. Inflation will be the biggest agenda for the Govt and this could not have been more ill-timed, what with the general elections scheduled for 2009.

There is also no doubt now that the Govt will have to put concerns over the slowing economic growth rate in the back burner and concentrate only on getting the prices down. A hike in the interest rates to curb inflation rate and a rise in the CRR are the most predicable and currently the only, immediate practical solution which the Govt will have to adopt to put a lid on this growing crisis. Rising interest rates would surely mean that slower economic growth but right now, there seems to be just no other alternative. The interest rates are currently at 7.75%, which was not tampered with when the Credit Policy was announced last on 29th January 2008. The next is scheduled for 29th April where a rate hike is a certainty.

Last week, the Govt suspended export subsidy under the duty entitlement pass book scheme (DEPB) on some steel products temporarily to control inflation and boost domestic supplies. The Govt has also withdrawn DEPB on cement, manganese, chrome and ferrous metals. It has also completely withdrawn the benefits on overseas sales of non-basmati rice. Govt raised the minimum price for non-basmati rice exports to $1,000 per tonne from $650 per tonne free-on-board, in a move to slow down overseas sales. Though the cement manufacturers have raised their prices, steel manufacturers have assured that they will not resort to a price hike right now and will keep the prices stable.

All these measures will start showing their effect from the next two weeks. The inflation figure of 7% which is yet to factor in the effects of these and hence it would be too premature at this stage to say that the inflation will now continue to soar even more high.

The pain in the market is expected to remain for a week or two more. By the time, the 18th April inflation rates are announced, the rates would surely have come down, in tandem with the measures taken. Till then, the markets would have discounted the inflation and once figures come in of even a slight drop from the 7% mark, the markets will rise.

For now, there is no alternative but to chin up and bear. Rising costs and falling markets are not exactly the most conducive atmosphere to live in but then, is there any other alternative?

Source: sptulsian.com

Intraday Calls for 4th April

Today Indian Stock markets may open flat to positive but remains volatile till the declaration of inflation numbers. If there is decrease in inflation then markets can see a strong rally.

Today's Intraday Calls:

BAJAJ HIND

GMR INFRA

CAIRN INDIA

JSW STEEL

SCI

For Levels and Targets download the file by CLICK HERE.

Others: Gammon Infra, IB Securities & Lok Housing.

Good Luck

Markets Today

The markets ended the day on a flat note amid volatility. Buying interest was seen in technology, oil, telecom, metal and FMCG stocks have given support to the markets though selling pressure has continued in power and capital goods.
On the global front, Asian markets ended strong barring Jakarta Composite and Taiwan. European markets are trading mixed.
Top gainers were Wipro, Satyam, TCS and Dr Reddy's Labs while losers - BHEL, Maruti, Reliance Energy, Suzlon and ABB.
Sensex closed up 82.15 points or 0.52% at 15832.55, and the Nifty up 17.40 points or 0.37% at 4771.60.
About 1393 shares have advanced, 1599 shares declined, and 77 shares are unchanged.
The BSE Midcap Index ended at 6,387.23 down 0.4%.
The BSE Smallcap Index ended at 7,840.29 down 0.9%.
The BSE Bankex closed ended flat at 7,820.62. IOB, ICICI Bank, Centurion bank, Axis closed in green.
The BSE Capital Goods Index closed at 13,214.73 down 2%. Suzlon, Reliance Infra, Siemens, Triveni Engineering closed lower.
The BSE Auto Index closed at 4,490.94 down 1%. Apollo Tyres, Escorts, Ashok Leyland, Hind Motors closed lower.
The BSE Metal Index closed at 13,588.76 up 0.5%. SAIL, JSW Steel, Jindal Steel, Jindal Stainless, Hind Zinc closed lower
The BSE FMCG Index closed up 1% at 2,344.68. Colgate, ITC, Nestle, Dabur ended higher.
BSE Oil and Gas Index closed at 10,531.88 up 2%. BPCL, HPCL, IOC, Reliance Natura, GAIL ended higher.
The BSE IT Index was at 3,764.91 up 3%. HCL, Infosys, Tech mahindra, TCS, Tech Mahindra closed higher.
The NSE cash turnover was at Rs 12401.12 crore and the NSE F&O turnover was at Rs 32513.16 crore. The BSE cash turnover was Rs 4972.01 crore. Total market wide turnover was at Rs 49886.29 crore.

Source: moneycontrol.com

Investment Idea: Panacea Biotech

Panacea Biotech is predominantly recognized as the company that manufactures the polio vaccines in India. And recently the stock price saw a major spurt when the Union Budget announced that there would be increased allocation for polio and this company is to be one of the major beneficiaries. The future might be good but the same cannot be said about its Q3 performance.

The financial performance for the third quarter ended 31st December 2007 has not been very good when compared on a QoQ basis but consistent when compared on YoY.

YoY, the company posted a net sales of Rs.226.35 crore, a rise of 15% YoY. Of this, Rs.177.42 crore was via vaccines, its mainline of business, Rs.49.84 crore came in via formulations and Rs.4 lakhs via its R&D. EBIDTA rose 22% at Rs.59.60 crore. Interest outgo jumped up more than three times to Rs.4.72 crore. PBT was up 13% at Rs.43.68 crore and PAT was up 6% at Rs.28.93 crore. QoQ, PAT was actually down 10%.

Hopefully, the coming quarters will now be good for the company with many positives happening. It has entered into an MOU with Punjab University, Chandigarh for research collaboration to identify a lead molecule with an aim to bring a drug superior to existing marketed products in me therapeutic area of Psychiatric Disorders.

It has been pre-qualified by WHO for supplying their innovative combination vaccines for pediatric immunization- EasyFour (DTP + Hib) and Ecovac (DTP + Hep B). The company is already a pre-qualified supplier of OPV and Hepatitis-B vaccines to UN agencies. With this pre-qualification by WHO, Panacea Biotec would now be able to participate in a large global market of combination vaccines for paediatric immunization.
The company is setting up a new vaccine production plant at Baddi, H.P.at a capex of over Rs.100 crore. It will have a capacity of more than 1 billion doses per annum, to cater to domestic and global markets. Once this goes on stream in FY09, the total capacity at Panacea would be two billion doses per annum.

The company is also into R&D in a big way. It recently opened its fifth R&D centre in Navi Mumbai. The company invests around 6% of its annual turnover into R&D though it is yet to start giving good returns.
Currently quoted at Rs.344, a good stock to invest and if invested, hold on.

Source: sptulsian.com

Intraday Calls for 3rd April

Market may open with positive bias and small rally expected today. A positive closing with some gain expected.

Today's Intraday Picks:

SAIL
RPOWER
SATYAM Computer
DLF
YES BANK

For Levels and Targets download the file by CLICK HERE.

Short Term Delivery Buy IOC (461) Target Rs. 525+
Good Luck

Markets Today

An early surge on the bourses proved short-lived as index heavyweights Reliance Industries, ICICI Bank and L&T, gave up initial gains. The Sensex, which had surged past 16,000 mark in early trade, fell below that level later. Nevertheless, the market breadth remained strong. 16 shares advanced from the 30-member Sensex pack.
Sensex settled 123.78 points or 0.79% higher at 15,750.40. Sensex gained 92.85 points at days low of 15,719.47 hit in late trade. Sensex opened with an upward gap of 396.68 points at 16,023.30 and advanced further to hit a high of 16,236.70 in early trade. At the days high, the Sensex rose 610.08 points. It oscillated in a band of 517.30 points in volatile trade
The broader based S&P CNX Nifty was up 14.65 points or 0.31% at 4,754.20. Nifty April 2008 futures were at 4741.15, a discount of 13.05 points as compared to spot closing.
Strong cues from global markets had boosted domestic bourses earlier in the day. US stocks rallied on Tuesday, 1 April 2008, after Lehman Brothers said it raised $4 billion in an offering of convertible preferred shares, which soothed fears it was heading for a fate similar to that of Bear Stearns. European markets, which opened after Indian market, were in green. Asian markets, which opened before Indian market Indian market, surged.
The market breadth was strong on BSE: 1734 shares advanced as compared to 938 that declined. 50 shares remained unchanged.
The BSE Mid-Cap index rose 0.08% to 6,400.37 and the BSE Small-Cap index advanced 0.51% to 7,901.91, as per provisional closing. Both these indices underperformed the Sensex.
The total turnover amounted to Rs 4769 crore on BSE as compared to Rs 4,718 crore yesterday, 1 April 2008
Total turnover in NSEs futures options segment amounted to Rs 34170.35 crore as compared to Rs 35886.84 crore yesterday, 1 April 2008
The BSE Consumer Durables index (up 0.80% to 3,917.70), the BSE IT index (up 2.93% to 3,644.35), the BSE Auto (up 1.56% at 4,539.52), the BSE Bankex (up 2.34% at 7,822.56), the BSE Health Care index (up 0.82% at 3,862.83), the BSE TecK index (up 2.04% to 3,078.22), outperformed the Sensex
The BSE Metal index (down 2.15% to 13,516.89), the BSE FMCG index (down 0.79% at 2,318.80), the BSE Oil & Gas index (down 0.25% to 10,328.08), the BSE Realty index (up 0.46% at 7,501.17), the BSE Power (down 0.49% to 3,137.12), the BSE Capital Goods index (down 0.46% at 13,498.15), and the BSE PSU index (down 0.11% to 7,387.62), underperformed the Sensex
IT pivotals advanced on fresh buying. Indias second largest software services exporter Infosys Technologies surged 4.34% to Rs 1483 on 1.66 lakh shares. It was the top gainer from Sensex pack.
Other IT pivotals, Wipro (up 1.10% to Rs 413.50), Satyam Computer Services (up 1.91% to Rs 405), and TCS (up 2.06% to Rs 852), advanced.
Indias largest private sector company in terms of market capitalisation and oil refiner Reliance Industries eased sharply from days high of Rs 2455. It settled 0.22% lower at Rs 2340 on 13.27 lakh shares. The company said on Tuesday, 1 April 2008, it had discovered more gas in an exploration block off the east coast. The potential commercial interest of the discovery is being ascertained through more data gathering and analysis, the company said in a statement.
Jaiprakash Associates (up 2.51% to Rs 231, off days high of Rs 240.95), HDFC (up 3.82% to Rs 2450, off days high of Rs 2524.70) and Bharti Airtel (up 1.32% to Rs 815.25, off days high of Rs 839), though up pared early gains.
Banking shares gained on fresh buying. Indias largest private sector bank in terms of net profit ICICI Bank advanced 3.93% to Rs 786.25. The stock came off session's high of Rs 815. The banks American Depository Receipt (ADR) jumped 8% yesterday, 1 April 2008, on the New York Stock Exchange (NYSE).
Other banking shares, State Bank of India (up 1.51% to Rs 1649), and HDFC Bank (up 0.45% to Rs 1314), also logged gains
Indias top tractor marker in terms of sales, Mahindra & Mahindra (M&M) rose 2.61% to Rs 667.25 after it said on Tuesday, 1 April 2008, its vehicle sales rose 20% to 24,682 units in March 2008 over March 2007. M&Ms sales rose 30% to 2,31,355 vehicles, in the financial year to March 2008 over the financial year to March 2007.
Indias top truck marker in terms of sales, Tata Motors rose 1.51% to Rs 636.90 after it said on Tuesday, its vehicle sales 6% to 66,495 units in March 2008 over March 2007. Sales of commercial vehicles rose 17% to 35,993 units and sales of cars and utility vehicles fell 4% to 24,737. Exports fell 9% to 5,765 vehicles
Indias largest private sector power utility company in terms of sales, Reliance Energy slumped 5.15% to Rs 1222 on 9.22 lakh shares. It was the top loser from Sensex pack.
Steel stocks declined on reports that the government has asked steel makers to cut prices by 10% to 20%, failing which it may take a host of fiscal measures to lower prices. Tata Steel, the countrys largest private sector in terms of sales, declined 3.50% to Rs 644
Other steel manufacturers JSW Steel (down 4.93% to Rs 785), Steel Authority of India (down 4.13% to Rs 167.30), and Jindal Steel & Power (down 2.36% to Rs 1965), declined. As per reports, the government has asked steel makers to cut prices by 10% to 20%, failing which it may take a host of fiscal measures to lower prices.
Bharat Heavy Electricals (down 2% to Rs 1854), and ITC (down 2.18% to Rs 206.55), edged lower from Sensex pack.
India's biggest engineering & construction firm by revenue L&T lost 1.1% to Rs 2861.25. The stock came off session's high of Rs 3069.90
GSS America Systems was the top traded counter on BSE with turnover of Rs 344.18 crore followed by Reliance Industries (Rs 318.62 crore), Reliance Capital (Rs 277.80 crore), Essar Oil (Rs 209.51 crore), and Reliance Petroleum (Rs 207.35 crore), in that order
Indiabulls Securities topped volumes chart clocking volumes of 1.50 crore shares followed by Reliance Petroleum (1.22 crore shares), Kashyap Technologies (1.10 crore shares), Reliance Natural Resources (1.02 crore shares) and Essar Oil (95.50 lakh shares), in that order.
Indiabulls Securities, which was spun off from Indiabulls Financial Services in January, settled at Rs 99.05 on BSE, as against base price of Rs 380, on its debut today. The stock hit a high and low of Rs 300 and Rs 96.20 respectively during the day. Indiabulls Financial Services, had allotted one share of Indiabulls Securities for every share held.
Among the side counters, Global Vectra Helicorp (up 19.97% to Rs 78.10), Classic Diamonds (up 20% to Rs 75.75), and Haldyn Glass Gujarat (up 20% to Rs 78.05), surged.
GSS America Systems (down 20% to Rs 623.10), Bosch Chasiss Systems (down 10% to Rs 559.75), ETC Networks (down 11.95% to Rs 261.95), and (down 9.94% to Rs 41.70), slipped
Cement shares gained on reports that they have raised prices in the range of 3% to 4% across the country. Ultratech Cement (up 5.53% to Rs 804), India Cements (up 2.05% to Rs 189.25), Birla Corporation (up 0.13% to Rs 198.50), ACC (up 0.89% to Rs 833.10) and Deccan Cement (up 1.61% to Rs 259) edged higher.
Prices were increased because of the rise in production cost. The cement price is now Rs 258 per 50 kilogram bag in Mumbai.
Steel Strips Wheels gained 3.62% to Rs 174.70 after the company said it has bagged an export order worth Rs 110 crore from Renault, France for supply of one million steel wheel rims over five years.
Gujarat Gas Company dipped 2.97% to Rs 227.30. The company said it has signed a contract for supply of 2.13 million cubic metres of gas per day with GAIL (India). The company made this announcement after trading hours on Tuesday, 1 April 2008.
BEML gained 1.45% to Rs 989 on achieving a provisional turnover of Rs 3005 crore with 15.5% growth and profit before tax of Rs 350 crore with 11% growth in the financial year 2007-08 over 2006-07. The company made this announcement.

Source: CapitalMarket