HAPPY DIWALI TO ALL OF YOU.
DIWALI TO DIWALI DELIVERY BUY:
Buy Cairn India (532792) CMP Rs. 293/- Buy at decline around Rs. 260-270 for Med to Long term for 100% gain (Rs. 1000/- level can also be possible).
Buy Purvankara Projects (532891) CMP Rs. 118/- For Med to Long Term Target Rs. 250/-.
Buy Cranes Software (512093) CMP Rs. 38/- For Med to Long Term Target Rs. 100/-.
Buy L G BALAKRISHNAN (500250) CMP Rs. 18.80/- For Med to Long Term Target Rs. 45/-.
Good Luck
Sunday, October 18, 2009
Stock Idea; Sundaram Finance Ltd
Sundaram Finance Ltd (Rs 302)
(BSE Code- 590071, NSE Code- SUNDARMFIN)
(P/E- 10, Equity - Rs55.55 cr, Market Cap - Rs1,665 cr)
Sundaram Finance Ltd (SFL) was established in 1954 by Mr TS Santhanam. SFL, based at Chennai, has 10 subsidiaries including SBNP Home Finance and SBNP Paribas AMC. SFL is involved in the following operations: Investments - Deposits, Mutual funds, Retail Finance - Car finance, Retail finance, Business finance - Commercial vehicle, Equipment finance, Tyre finance, Fleet card and Services - Infotech solutions, BPO, Logistics services, Insurance. Following the opening up of the insurance sector, SFL formed a joint venture company with Royal & Sun Alliance Insurance Plc (now a subsidiary) named Royal Sundaram Alliance Insurance Company (RSAIC) for non-life insurance business. It commenced operation in March 2001 and offers a full range of insurance products including fire, motor, personal accident, home, health, travel and rural insurance. In FY06, SFL sold 49.90% of its stake in Sundaram AMC to BNP Paribas. SFL's 2 JVs - Royal Sundaram Alliance Insurance Company Ltd and BNP Paribas Sundaram Global Securities Operations Pvt Ltd - are doing extremely well as reflected in SFL's FY09 annual report
From FY06 to FY09, Total Income has increased by a CAGR of 23.22%, but PAT has decreased at a marginal rate of 4.04% respectively. This decrease in PAT as well as the issue of bonus shares makes the ROE appear unimpressive. For FY09, SFL posted net profit of Rs 167.88 cr. on total income of Rs 1,742 cr. on consolidated basis. On a equity of 55.55 cr.(after 1:1 bonus issue in Aug'08) (Promoters' stake- 41.15%), the EPS stood at Rs 30.24 and the dividend declared was 65%. SFL posted net profit of Rs 150.73 cr. on total income of Rs 1,082 cr on standalone basis. SBNP Paribas Home Finance has a lion's share in consolidated sales as well as consolidated PAT. Going forward, SFL has ventured into the financing of cars and multi-utility vehicles, which is a growing market. An increase in freight movement would revive both new and used commercial vehicles sales, triggering the need of their financing. Foreseeing the slump in commercial vehicles sales in FY09, SFL reduced its exposure on commercial vehicles which highlights the foresight of the management. For the Q1 ended June 2009, SFL has posted net profit of Rs 61.23 cr. on total income of Rs 271.1 cr. on standalone basis. The net profit for Q1 is higher due to exceptional item which represents sale of 10,17,998 Equity shares of face value Rs 5/- each in WABCO - TVS India Ltd.
SFL has got one of cleanest and high quality asset books as Gross and net NPAs are only 1.64% and 0.75% of the total assets. Its philosophy of building sustainable, long-term relationships ensures that growth is not achieved at the cost of quality. As high as 89% of the total assets are net current assets, indicating a strong balance sheet. Only 6.89% of the total assets are held up as investments. Further, only 50.62% of these investments are into equities indicating neglibible exposure to market risk. At the current price of Rs 302, the stock trades at about 10 times FY09 earnings and about 1.4 times Book Value (Rs 207.5). Accumulate on declines for good gains over the medium-long term.
Source: Internet (By Sanjay Chabria)
(BSE Code- 590071, NSE Code- SUNDARMFIN)
(P/E- 10, Equity - Rs55.55 cr, Market Cap - Rs1,665 cr)
Sundaram Finance Ltd (SFL) was established in 1954 by Mr TS Santhanam. SFL, based at Chennai, has 10 subsidiaries including SBNP Home Finance and SBNP Paribas AMC. SFL is involved in the following operations: Investments - Deposits, Mutual funds, Retail Finance - Car finance, Retail finance, Business finance - Commercial vehicle, Equipment finance, Tyre finance, Fleet card and Services - Infotech solutions, BPO, Logistics services, Insurance. Following the opening up of the insurance sector, SFL formed a joint venture company with Royal & Sun Alliance Insurance Plc (now a subsidiary) named Royal Sundaram Alliance Insurance Company (RSAIC) for non-life insurance business. It commenced operation in March 2001 and offers a full range of insurance products including fire, motor, personal accident, home, health, travel and rural insurance. In FY06, SFL sold 49.90% of its stake in Sundaram AMC to BNP Paribas. SFL's 2 JVs - Royal Sundaram Alliance Insurance Company Ltd and BNP Paribas Sundaram Global Securities Operations Pvt Ltd - are doing extremely well as reflected in SFL's FY09 annual report
From FY06 to FY09, Total Income has increased by a CAGR of 23.22%, but PAT has decreased at a marginal rate of 4.04% respectively. This decrease in PAT as well as the issue of bonus shares makes the ROE appear unimpressive. For FY09, SFL posted net profit of Rs 167.88 cr. on total income of Rs 1,742 cr. on consolidated basis. On a equity of 55.55 cr.(after 1:1 bonus issue in Aug'08) (Promoters' stake- 41.15%), the EPS stood at Rs 30.24 and the dividend declared was 65%. SFL posted net profit of Rs 150.73 cr. on total income of Rs 1,082 cr on standalone basis. SBNP Paribas Home Finance has a lion's share in consolidated sales as well as consolidated PAT. Going forward, SFL has ventured into the financing of cars and multi-utility vehicles, which is a growing market. An increase in freight movement would revive both new and used commercial vehicles sales, triggering the need of their financing. Foreseeing the slump in commercial vehicles sales in FY09, SFL reduced its exposure on commercial vehicles which highlights the foresight of the management. For the Q1 ended June 2009, SFL has posted net profit of Rs 61.23 cr. on total income of Rs 271.1 cr. on standalone basis. The net profit for Q1 is higher due to exceptional item which represents sale of 10,17,998 Equity shares of face value Rs 5/- each in WABCO - TVS India Ltd.
SFL has got one of cleanest and high quality asset books as Gross and net NPAs are only 1.64% and 0.75% of the total assets. Its philosophy of building sustainable, long-term relationships ensures that growth is not achieved at the cost of quality. As high as 89% of the total assets are net current assets, indicating a strong balance sheet. Only 6.89% of the total assets are held up as investments. Further, only 50.62% of these investments are into equities indicating neglibible exposure to market risk. At the current price of Rs 302, the stock trades at about 10 times FY09 earnings and about 1.4 times Book Value (Rs 207.5). Accumulate on declines for good gains over the medium-long term.
Source: Internet (By Sanjay Chabria)
Stock Idea: Heidelberg Cement India Ltd
Heidelberg Cement India Ltd (Rs 42)
(BSE Code- 500292 NSE Code- HEIDELBERG)
(P/E- 5.2, Market Cap - Rs950 cr, Promoters' stake - 68.55%)
A MNC cement stock available at the P/E of 5.2
Heidelberg Cement India Ltd(HCL)(earlier know as Mysore Cement) is now owned 68.55% by Heidelberg Cement AG, Germany. The parent Euro MNC Heidelberg Cement is one of the three biggest cement producers in the world along with Holcim (which owns ACC, Ambuja) and La Farge, which has an unlisted presence in the country. HCL has two units - one at Ammmsandara in Mysore and another at Damoh in Madhya Pradesh. With up gradation and balancing at Damoh, the total capacity of MCL increased to 23 lac tpa in 2004-05
In 2006, Heidelberg took over the co. from Birlas, infused a sum of Rs 360 crore by making a preferential allotment of 6.5 crore shares to itself at a price of Rs 54 per share and cleared the debts, making the co. debt free. Thus not only has HCL become debt free, it has come out of the purview of the BIFR as well., with long term institutional and bank debts paid off. The stake was taken at Rs 54 per share. In December 2006, Heidelberg made an offer to the shareholders of Mysore cement to acquire 22.15% stake at Rs 58 per share. Within a short period of 3 months the Heidelberg led team accomplished a clean turn around at Heidelberg Cement India Ltd.
From Rs 10 cr, loss in calendar year 2006, the company posted a 29% YoY rise in net profit to Rs 125.55 cr, in the year ended Dec. 2008. Sales rose 35.36% to Rs 804.49 cr. The company posted a EPS of about Rs 7.94 on a equity of 158 cr. for CY2008. For the half year ended June 2009, the company posted a net profit of Rs 93.47 cr. (up 53%) on net sales of Rs 531.52 cr.(up 53%). The half yearly EPS on a expanded equity of 226.62 cr. stands at Rs 4.13. The 2 mn tpa cement producer Heidelberg cements sells for Rs 950 cr. in market cap(Equity Rs 226 cr, CMP Rs 42), and cash in deposit accounts of Rs 170 cr.-Heidelberg Cements sells for a net value of Rs 780 cr - one of the cheapest cement stocks in India.
The stock looks a good investment pick at current levels considering its fundamentals, CY09E earnings (Rs 8) and future prospects. With Heidelberg at the helm of operations, the performance is bound to improve in coming years. Going forward, more measures for efficiency increase and cost reduction will be implemented, and focus will be on further, gradual expansion in capacities. All in all it's a cement MNC stock available at the P/E of 5.25. The financials, debt free status of the company, its parentage and plans to raise capacity to over 6 mn tpa makes it the most interesting cement stock around. Investors can start accumulating the stock at current levels and add more on declines for decent returns of 40%-50% over the next 6-8 months.
Source: Internet (By Sanjay Chaabria)
(BSE Code- 500292 NSE Code- HEIDELBERG)
(P/E- 5.2, Market Cap - Rs950 cr, Promoters' stake - 68.55%)
A MNC cement stock available at the P/E of 5.2
Heidelberg Cement India Ltd(HCL)(earlier know as Mysore Cement) is now owned 68.55% by Heidelberg Cement AG, Germany. The parent Euro MNC Heidelberg Cement is one of the three biggest cement producers in the world along with Holcim (which owns ACC, Ambuja) and La Farge, which has an unlisted presence in the country. HCL has two units - one at Ammmsandara in Mysore and another at Damoh in Madhya Pradesh. With up gradation and balancing at Damoh, the total capacity of MCL increased to 23 lac tpa in 2004-05
In 2006, Heidelberg took over the co. from Birlas, infused a sum of Rs 360 crore by making a preferential allotment of 6.5 crore shares to itself at a price of Rs 54 per share and cleared the debts, making the co. debt free. Thus not only has HCL become debt free, it has come out of the purview of the BIFR as well., with long term institutional and bank debts paid off. The stake was taken at Rs 54 per share. In December 2006, Heidelberg made an offer to the shareholders of Mysore cement to acquire 22.15% stake at Rs 58 per share. Within a short period of 3 months the Heidelberg led team accomplished a clean turn around at Heidelberg Cement India Ltd.
From Rs 10 cr, loss in calendar year 2006, the company posted a 29% YoY rise in net profit to Rs 125.55 cr, in the year ended Dec. 2008. Sales rose 35.36% to Rs 804.49 cr. The company posted a EPS of about Rs 7.94 on a equity of 158 cr. for CY2008. For the half year ended June 2009, the company posted a net profit of Rs 93.47 cr. (up 53%) on net sales of Rs 531.52 cr.(up 53%). The half yearly EPS on a expanded equity of 226.62 cr. stands at Rs 4.13. The 2 mn tpa cement producer Heidelberg cements sells for Rs 950 cr. in market cap(Equity Rs 226 cr, CMP Rs 42), and cash in deposit accounts of Rs 170 cr.-Heidelberg Cements sells for a net value of Rs 780 cr - one of the cheapest cement stocks in India.
The stock looks a good investment pick at current levels considering its fundamentals, CY09E earnings (Rs 8) and future prospects. With Heidelberg at the helm of operations, the performance is bound to improve in coming years. Going forward, more measures for efficiency increase and cost reduction will be implemented, and focus will be on further, gradual expansion in capacities. All in all it's a cement MNC stock available at the P/E of 5.25. The financials, debt free status of the company, its parentage and plans to raise capacity to over 6 mn tpa makes it the most interesting cement stock around. Investors can start accumulating the stock at current levels and add more on declines for decent returns of 40%-50% over the next 6-8 months.
Source: Internet (By Sanjay Chaabria)
Friday, October 16, 2009
HAPPY DIWALI : BEST SECTORS
Diwali has come calling and Samvat 2066 promises to be more optimistic and festive with a mood of celebration in the air. This is a sea change from Samvat 2065 which was more sombre and we were all staring long and hard at a year of tough times. Tides have changed and recession is receding and hope once again springs.
This Diwali, instead of doing the usual ‘buys’, a list of stocks to buy for Diwali, we at Premium Investments have worked out a bag of sectors which you should bank on. And yes, we have also mentioned the frontliners in those sectors which you should make a part of your long term portfolio. Have a look.
1: INFRASTRUCTURE:
India is growing and every city you now go to, is in a state of flux, with major development of roads, metros and bridges being built. And this pace of rebuilding India will only gather more momentum. The news on the street is that most companies have an order book which runs into three years and their production capacities are booked to the brim. Projects which are expected to speed up work are power, NHAI projects and irrigation. The economy was slow last fiscal but the indications from the current Q1 and Q2 results have been positive, indicating that recovery is underway and as the year progresses, activity will only pick up further. So as industrial activity grows, infra companies are expected to get some more orders from the private sector too. The sector is expected to grow at an average of 20-22% in FY10. Most of the infra companies are expected to post a good performance for Q2FY10 as all work which was put on hold due to the elections have once again picked up and they are sure to report higher billing and consequentially, higher bottomlines.
India’s biggest drawback, apart from the red tapism and corruption which have no cure, is inadequate roads, power, ports and railways which have held India back from realizing its full growth potential. Now that funds are available for the construction of these infra facilities, growth in India is expected to be robust in coming years.
Stocks to bank on:
Ø GMR INFRA
Ø MUNDRA PORT
Ø GVK POWER
Ø JP ASSOCIATES
Ø PUNJ LLOYD
2: NON-FERROUS METALS:
Apart from China being the main driver, other factors like past production curtailments; tighter scrap supply; and improving demand are all indicative of major improvement in prices of non ferrous metals over the next few months. Hindustan Zinc hiked prices of zinc by Rs.2800/tonne and lead by Rs.1500/tonne following the surge on the LME. Zinc, primarily used in producing galvanised steel, is now priced at Rs 1,12,800 per tonne, while rates of lead, used mainly by battery, rubber and paint industries, stands at Rs 1,21,000 per tonne. Zinc prices on LME have risen to $1,987 a tonne from $1,900 a tonne last week. Lead prices moved up to $2,168 per tonne from $2,150 per tonne last week.
The outlook for aluminium is also good. In Asia excluding China, demand had slumped 12% in 2008, but in the second half of 2009, Asia excluding China is expected to grow by 22% over the same period last year. This is due to demand picking up and higher prices for aluminium and alumina. The auto sector picking up is one major factor which is contributing to the surge in prices. And this is expected to only continue.
The sector is in for a good time with the triggers being the recent uptrend in the international market (mainly on LME) and a sustainable increase in the demand on a long-term basis.
Stocks to bank on:
Ø HINDUSTAN ZINC
Ø STERLITE INDUSTRIES
Ø HINDALCO
3: BANKING:
the first set of Q2FY10 results from some of the banking stocks indicates that good times are set to role out for the sector. After a year of being literally tied down, the banks now flush with funds are eager to lend. Factory output is picking up, so disbursals to corporate would go up. Retail sector which was under a tight leash will once again see activity as demand is picking up, especially for housing sector and also for automobiles. Stock markets are up which will mean better asset management income. The momentum is on as the fund flow is continuing. Indian companies had postponed capital investments following the economic downturn, but stimulus spending, festivals and signs of strengthening demand are expected to boost loan demand in the December quarter. With industrial output picking up, credit growth is expected to only increase in the near future. PSU banks have completed a large part of their loan restructuring in current fiscal, no negative surprises are in store for the sector, as of now. PSU banks will benefit from treasury gains amid volatility in prices of government securities during the quarter.
Q2 might continue to be sedate but real credit off take and lending to core sector could be seen taking off from Q3 onwards.
Stocks to bank on:
Ø SBI
Ø PNB
Ø SOUTH INDIAN BANK
Ø DHANALAKSHMI BANK
Ø ICICI BANK
Ø AXIS BANK
Ø HDFC BANK
4: AUTOMOBILE:
This is one sector which has been showing good growth numbers on a MoM. Almost every auto company has reported higher sales in September and based on results for Q2 which have been out till now, the year ahead promises to be one of strong rebound. For the first half of FY10, passenger vehicle sales have jumped 13.5%, while two- wheelers grew at more than 15.5%. Commerical vehicles sales have been down when looked at the half year but since August 2009 have been showing a growth into positive.
The going looks good for the sector on the back of strong volume growth, further backed by lower costs, lower interest rates. The pay hike given to Govt employees has surely boosted sales to a large extent and news on the street is that they have started getting the balance 60% of the wage arrears as per the VIth Pay Commission and that would probably mean some more car sales. Auto companies tying up with various PSU banks for easy auto loans has also helped. Numerical growth in November-December and by the end of the financial year is expected to see some positive growth. Return of financing, especially to CV makers is expected to help vastly. Demand is expected to pick up this festive season and we are essentially looking at a double digit growth for the sector in FY10.
Stocks to bank on:
Ø MAHINDRA & MAHINDRA
Ø MARUTI SUZUKI
Ø TATA MOTORS
Ø HERO HONDA
5: CAPITAL GOODS:
If we talk of growth in the superlative for the infra sector, can the capital goods sector be far behind? These are the companies which will make the equipments to power the infra needs of India. And naturally, the capital goods companies would do extremely well.
The sector, which saw some sluggish growth due to holding back of orders is all set to get a bounty of orders. Infact order books have already started getting plump as has been seen in the performance of some of the companies which have announced their results. Q1 had been better, Q2 will be good but real growth will be seen from second half of FY10. Be it big or small, any reputed company which makes capital goods, from electrical equipments to exploration rigs, from machinery to motors, and from construction equipment to cement plants, capital goods companies may see dazzling growth of around 20-30% by end of FY10.
Stocks to bank on:
Ø THERMAX
Ø BHEL
Ø CROMPTON GREAVES
Ø SIEMENS
Ø ALSTOM
6: PHARMA:
If IT was the ‘big’ thing which has happened to India in the mid-90’s, pharma, rather R&D in pharma is an equally big thing right now. The sector is expected to show very good results in Q2FY10 due to lower raw material costs and the slow recovery in the US economy. Domestic formulation companies are expected to do well due to the advent of the swine flu, monsoon and then the October heat. US market is slowly improving and companies which have sizeable exports will now see a strong recovery.
Companies able to meet USFDA norms and those with the ability to derisk business would stand to do much better.
Stocks to bank on:
Ø RANBAXY LABS
Ø WOCKHARDT
Ø LUPIN
Ø CIPLA
Ø DR.REDDY’S
This Diwali, instead of doing the usual ‘buys’, a list of stocks to buy for Diwali, we at Premium Investments have worked out a bag of sectors which you should bank on. And yes, we have also mentioned the frontliners in those sectors which you should make a part of your long term portfolio. Have a look.
1: INFRASTRUCTURE:
India is growing and every city you now go to, is in a state of flux, with major development of roads, metros and bridges being built. And this pace of rebuilding India will only gather more momentum. The news on the street is that most companies have an order book which runs into three years and their production capacities are booked to the brim. Projects which are expected to speed up work are power, NHAI projects and irrigation. The economy was slow last fiscal but the indications from the current Q1 and Q2 results have been positive, indicating that recovery is underway and as the year progresses, activity will only pick up further. So as industrial activity grows, infra companies are expected to get some more orders from the private sector too. The sector is expected to grow at an average of 20-22% in FY10. Most of the infra companies are expected to post a good performance for Q2FY10 as all work which was put on hold due to the elections have once again picked up and they are sure to report higher billing and consequentially, higher bottomlines.
India’s biggest drawback, apart from the red tapism and corruption which have no cure, is inadequate roads, power, ports and railways which have held India back from realizing its full growth potential. Now that funds are available for the construction of these infra facilities, growth in India is expected to be robust in coming years.
Stocks to bank on:
Ø GMR INFRA
Ø MUNDRA PORT
Ø GVK POWER
Ø JP ASSOCIATES
Ø PUNJ LLOYD
2: NON-FERROUS METALS:
Apart from China being the main driver, other factors like past production curtailments; tighter scrap supply; and improving demand are all indicative of major improvement in prices of non ferrous metals over the next few months. Hindustan Zinc hiked prices of zinc by Rs.2800/tonne and lead by Rs.1500/tonne following the surge on the LME. Zinc, primarily used in producing galvanised steel, is now priced at Rs 1,12,800 per tonne, while rates of lead, used mainly by battery, rubber and paint industries, stands at Rs 1,21,000 per tonne. Zinc prices on LME have risen to $1,987 a tonne from $1,900 a tonne last week. Lead prices moved up to $2,168 per tonne from $2,150 per tonne last week.
The outlook for aluminium is also good. In Asia excluding China, demand had slumped 12% in 2008, but in the second half of 2009, Asia excluding China is expected to grow by 22% over the same period last year. This is due to demand picking up and higher prices for aluminium and alumina. The auto sector picking up is one major factor which is contributing to the surge in prices. And this is expected to only continue.
The sector is in for a good time with the triggers being the recent uptrend in the international market (mainly on LME) and a sustainable increase in the demand on a long-term basis.
Stocks to bank on:
Ø HINDUSTAN ZINC
Ø STERLITE INDUSTRIES
Ø HINDALCO
3: BANKING:
the first set of Q2FY10 results from some of the banking stocks indicates that good times are set to role out for the sector. After a year of being literally tied down, the banks now flush with funds are eager to lend. Factory output is picking up, so disbursals to corporate would go up. Retail sector which was under a tight leash will once again see activity as demand is picking up, especially for housing sector and also for automobiles. Stock markets are up which will mean better asset management income. The momentum is on as the fund flow is continuing. Indian companies had postponed capital investments following the economic downturn, but stimulus spending, festivals and signs of strengthening demand are expected to boost loan demand in the December quarter. With industrial output picking up, credit growth is expected to only increase in the near future. PSU banks have completed a large part of their loan restructuring in current fiscal, no negative surprises are in store for the sector, as of now. PSU banks will benefit from treasury gains amid volatility in prices of government securities during the quarter.
Q2 might continue to be sedate but real credit off take and lending to core sector could be seen taking off from Q3 onwards.
Stocks to bank on:
Ø SBI
Ø PNB
Ø SOUTH INDIAN BANK
Ø DHANALAKSHMI BANK
Ø ICICI BANK
Ø AXIS BANK
Ø HDFC BANK
4: AUTOMOBILE:
This is one sector which has been showing good growth numbers on a MoM. Almost every auto company has reported higher sales in September and based on results for Q2 which have been out till now, the year ahead promises to be one of strong rebound. For the first half of FY10, passenger vehicle sales have jumped 13.5%, while two- wheelers grew at more than 15.5%. Commerical vehicles sales have been down when looked at the half year but since August 2009 have been showing a growth into positive.
The going looks good for the sector on the back of strong volume growth, further backed by lower costs, lower interest rates. The pay hike given to Govt employees has surely boosted sales to a large extent and news on the street is that they have started getting the balance 60% of the wage arrears as per the VIth Pay Commission and that would probably mean some more car sales. Auto companies tying up with various PSU banks for easy auto loans has also helped. Numerical growth in November-December and by the end of the financial year is expected to see some positive growth. Return of financing, especially to CV makers is expected to help vastly. Demand is expected to pick up this festive season and we are essentially looking at a double digit growth for the sector in FY10.
Stocks to bank on:
Ø MAHINDRA & MAHINDRA
Ø MARUTI SUZUKI
Ø TATA MOTORS
Ø HERO HONDA
5: CAPITAL GOODS:
If we talk of growth in the superlative for the infra sector, can the capital goods sector be far behind? These are the companies which will make the equipments to power the infra needs of India. And naturally, the capital goods companies would do extremely well.
The sector, which saw some sluggish growth due to holding back of orders is all set to get a bounty of orders. Infact order books have already started getting plump as has been seen in the performance of some of the companies which have announced their results. Q1 had been better, Q2 will be good but real growth will be seen from second half of FY10. Be it big or small, any reputed company which makes capital goods, from electrical equipments to exploration rigs, from machinery to motors, and from construction equipment to cement plants, capital goods companies may see dazzling growth of around 20-30% by end of FY10.
Stocks to bank on:
Ø THERMAX
Ø BHEL
Ø CROMPTON GREAVES
Ø SIEMENS
Ø ALSTOM
6: PHARMA:
If IT was the ‘big’ thing which has happened to India in the mid-90’s, pharma, rather R&D in pharma is an equally big thing right now. The sector is expected to show very good results in Q2FY10 due to lower raw material costs and the slow recovery in the US economy. Domestic formulation companies are expected to do well due to the advent of the swine flu, monsoon and then the October heat. US market is slowly improving and companies which have sizeable exports will now see a strong recovery.
Companies able to meet USFDA norms and those with the ability to derisk business would stand to do much better.
Stocks to bank on:
Ø RANBAXY LABS
Ø WOCKHARDT
Ø LUPIN
Ø CIPLA
Ø DR.REDDY’S
SOURCE: WWW.PREMIUMINVESTMENTS.IN (BY S P TULSIAN)
Intraday Trading Calls for 16th October
Indian Stock Market may open positive and remains flat to positive 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 |
BRFL | Buy Above | 220.15 | 225.45 | 232.00 |
Sell Below | 216.35 | 211.70 | 206.00 | |
GMR INFRA | Buy Above | 75.25 | 77.55 | 80.00 |
Sell Below | 73.70 | 71.35 | 69.00 | |
BATA INDIA | Buy Above | 181.65 | 185.75 | 191.00 |
Sell Below | 179.15 | 175.25 | 170.00 | |
3I INFOTECH | Buy Above | 95.75 | 98.20 | 102.00 |
Sell Below | 94.35 | 91.45 | 88.00 | |
CAIRN INDIA | Buy Above | 281.25 | 285.45 | 290.00 |
Sell Below | 278.15 | 272.60 | 268.00 | |
SELAN EXPLO | Buy Above | 335.75 | 342.55 | 350.00 |
Sell Below | 331.45 | 326.15 | 320.00 | |
REL POWER | Buy Above | 164.25 | 167.45 | 170.00 |
Sell Below | 162.35 | 159.20 | 156.00 |
GOOD LUCK
Thursday, October 15, 2009
Intraday Trading Calls for 15th October
Indian Stock Market may open positive and remains flat to positive 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 |
ADSL | Buy Above | 496.25 | 507.35 | 516.00 |
Sell Below | 491.45 | 483.15 | 472.00 | |
GMR INFRA | Buy Above | 73.10 | 75.65 | 78.00 |
Sell Below | 71.45 | 69.35 | 67.00 | |
ALEMBIC | Buy Above | 51.70 | 54.10 | 57.00 |
Sell Below | 50.35 | 48.40 | 46.00 | |
POWER GRID | Buy Above | 112.25 | 115.70 | 120.00 |
Sell Below | 110.20 | 106.70 | 102.00 | |
CAIRN INDIA | Buy Above | 280.65 | 285.45 | 290.00 |
Sell Below | 277.35 | 272.60 | 268.00 | |
SELAN EXPLO | Buy Above | 341.20 | 347.45 | 354.00 |
Sell Below | 337.45 | 332.70 | 326.00 | |
PURVANKARA | Buy Above | 121.05 | 125.35 | 130.00 |
Sell Below | 119.40 | 115.55 | 111.00 |
Short to Medium Term Delivery Buy:
Buy L G Balakrishnan (500250) CMP Rs. 18.25/- Short Term Target Rs. 25/- and Med to Long Term Target Rs. 40/-.
GOOD LUCK
Wednesday, October 14, 2009
Stock Idea: Essel Propack Limited
Essel Propack Limited—Buy—38—INR
Sector — Packaging
Regd.Off. — Vasind P.O., Sahapur Taluka, Thane - 421604
Company overview—
Essel Propack Limited was incorporated in year 1982 is one of the largest manufacturers of laminated tubes in the world. Company is a part of the Essel Group, whose other interests include satellite communication, amusement parks. The company was started in technical collaboration with American National Can Company of US, Karl Magerle Kusnacht of Switzerland, and Kaito Chemicals of Japan. The company supplies tubes for toothpastes, cosmetics, pharmaceutical products, grease, adhesives and almost all segments of the packaging industry. Essel supplies the basic laminate or the web to its operations in Nepal, Egypt and China. Apart from this export revenue company also get royalty income of the sales and dividend from its overseas ventures. The laminated tubes manufacturing major is also looking at capacity expansion in its existing units in China, Egypt and Latin America, with an estimated investment of about $10 million. In the overseas operations the focus is going to be on the cosmetics and the oral care segment, so as to achieve critical mass. Company sees huge potential for laminated tube packaging in the pharmaceutical sector.
Products & services—
Essel Propack has state-of-the-art manufacturing facilities in 15 countries through 25 plants. Packaging products in a laminated tube gives it that competitive edge in the marketplace. Any product that requires attractive, safe and hygienic packaging can be packed in a laminated tube. Laminated tubes find applications in Toothpastes, Cosmetics & Toiletries, Pharmaceuticals, Food & Diary Products, Industrial Products and other products. In terms of growth engine, Company has got several successes in new segments such as cosmetics and pharmaceuticals. Company generates around 90% of its turnover from FMCG sector and 10% from pharmaceutical products.
Coextruded Seamless Tubes: Co-extruded seamless tubes make product stand out on a shelf and enhance its personality as a premium product.
Speciality Laminates and Webs for Laminated Tubes: Essel offers a wide range of laminates for several applications. Continuous innovation has enabled Essel to develop laminates that enable efficient running of tube making lines. The quality and performance of these laminates are top-notch.
Company plants are highly automated with the best technological machinery and systems available anywhere in the world. Company has put in place, two teams at its Technological Innovation Center. While one team focus on new products, the second works on process management. Primarily involved in developing new and improved products for customers, the first team works in close co-ordination with customers to enhance the product by experimenting with the various specifications associated with it. The second team works more with the existing product range. This team monitors machine efficiencies in all the manufacturing units and provides suitable recommendations. Together, the teams combine efforts with the marketing arm of the organization. Company also upgrades its testing facilities constantly to maintain its position at the frontier of technology.
China will be the major contributor in terms of volumes growth in future. Company has considerably enhanced its capacity in China. Except China, Western Europe and eastern European will be future growth drivers. Company has a manufacturing plant in US, East Germany, well positioned to serve western and Eastern Europe.
Recent Developments—
Essel Propack in april announced an acquisition of US based company Catheter & Disposables Technology (CDT), a supplier of specialized disposables medical devices. EPL has acquired 100% equity of CDT in an all cash deal through its US subsidiary, Tacpro. The buyout of CDT is in line with EPL’s strategic expansion plan, and will enable its medical business to establish and expand operations in Minnesota, the second largest medical device manufacturing region in USA.
Essel Propack and Ess Dee Aluminium, have joined a global race to acquire the packaging unit of Rio Tinto Alcan in april. The mining-to-metals major said it would sell the USD 5 billion packaging business as part of a move to focus on core areas. The joint bid is also being planned so that the two companies may split Rio Tinto’s unit subsequently, to merge with their own areas of operations. Morgan Stanley, the financial advisor to Rio Tinto, had suggested dividing the packaging unit to make it easier for interested companies and private equity firms to bid. Buyers could more likely be keen if the packaging division is broken up and offered for sale as smaller entities, the advisor is reported to have indicated. While sales of USD 5 billion or Rs 200 billion, is too big for any single company to acquire on its own. The packaging unit is the only section that has been immediately identified to be sold, while its bauxite, alumina, primary metal and engineered products divisions will all be absorbed into Rio Tinto.
Essel Propack (EPL) september, announced an acquisition of Minneapolis (US), based company Medical Engineering & Design (MED), a supplier of specialized disposable Medical Devices. EPL has acquired 74% equity of MED in an all cash deal through its US subsidiary - Tacpro. The rest will continued to be held by the existing promoter employees. MED has a diversified customer base with the provision of high quality medical device manufacturing services and reliable, on-time delivery of manufactured products. MED is supplier of custom products to the global medical device industry and delivers proven and effective solutions to catheter, extrusion and braid reinforced tubing needs of customers. The company is vertically integrated with its own in site extrusion, wire braiding, reflowing and assembly resulting in significant cost competitiveness and lead time savings to its customer.
Valuation—
Company is on expansion drive, it is looking for more acquisitions in international markets. At current market price, stock is trading at attractive valuation of 14.87 P/E multiple of its FY2010 estimated earnings par share. We recommend investors to “BUY” “Essel Propack Ltd” with medium to long-term investment prospective.
Source: Internet (Valuenotes by Abhishek Jain)
Sector — Packaging
Regd.Off. — Vasind P.O., Sahapur Taluka, Thane - 421604
Company overview—
Essel Propack Limited was incorporated in year 1982 is one of the largest manufacturers of laminated tubes in the world. Company is a part of the Essel Group, whose other interests include satellite communication, amusement parks. The company was started in technical collaboration with American National Can Company of US, Karl Magerle Kusnacht of Switzerland, and Kaito Chemicals of Japan. The company supplies tubes for toothpastes, cosmetics, pharmaceutical products, grease, adhesives and almost all segments of the packaging industry. Essel supplies the basic laminate or the web to its operations in Nepal, Egypt and China. Apart from this export revenue company also get royalty income of the sales and dividend from its overseas ventures. The laminated tubes manufacturing major is also looking at capacity expansion in its existing units in China, Egypt and Latin America, with an estimated investment of about $10 million. In the overseas operations the focus is going to be on the cosmetics and the oral care segment, so as to achieve critical mass. Company sees huge potential for laminated tube packaging in the pharmaceutical sector.
Products & services—
Essel Propack has state-of-the-art manufacturing facilities in 15 countries through 25 plants. Packaging products in a laminated tube gives it that competitive edge in the marketplace. Any product that requires attractive, safe and hygienic packaging can be packed in a laminated tube. Laminated tubes find applications in Toothpastes, Cosmetics & Toiletries, Pharmaceuticals, Food & Diary Products, Industrial Products and other products. In terms of growth engine, Company has got several successes in new segments such as cosmetics and pharmaceuticals. Company generates around 90% of its turnover from FMCG sector and 10% from pharmaceutical products.
Coextruded Seamless Tubes: Co-extruded seamless tubes make product stand out on a shelf and enhance its personality as a premium product.
Speciality Laminates and Webs for Laminated Tubes: Essel offers a wide range of laminates for several applications. Continuous innovation has enabled Essel to develop laminates that enable efficient running of tube making lines. The quality and performance of these laminates are top-notch.
Company plants are highly automated with the best technological machinery and systems available anywhere in the world. Company has put in place, two teams at its Technological Innovation Center. While one team focus on new products, the second works on process management. Primarily involved in developing new and improved products for customers, the first team works in close co-ordination with customers to enhance the product by experimenting with the various specifications associated with it. The second team works more with the existing product range. This team monitors machine efficiencies in all the manufacturing units and provides suitable recommendations. Together, the teams combine efforts with the marketing arm of the organization. Company also upgrades its testing facilities constantly to maintain its position at the frontier of technology.
China will be the major contributor in terms of volumes growth in future. Company has considerably enhanced its capacity in China. Except China, Western Europe and eastern European will be future growth drivers. Company has a manufacturing plant in US, East Germany, well positioned to serve western and Eastern Europe.
Recent Developments—
Essel Propack in april announced an acquisition of US based company Catheter & Disposables Technology (CDT), a supplier of specialized disposables medical devices. EPL has acquired 100% equity of CDT in an all cash deal through its US subsidiary, Tacpro. The buyout of CDT is in line with EPL’s strategic expansion plan, and will enable its medical business to establish and expand operations in Minnesota, the second largest medical device manufacturing region in USA.
Essel Propack and Ess Dee Aluminium, have joined a global race to acquire the packaging unit of Rio Tinto Alcan in april. The mining-to-metals major said it would sell the USD 5 billion packaging business as part of a move to focus on core areas. The joint bid is also being planned so that the two companies may split Rio Tinto’s unit subsequently, to merge with their own areas of operations. Morgan Stanley, the financial advisor to Rio Tinto, had suggested dividing the packaging unit to make it easier for interested companies and private equity firms to bid. Buyers could more likely be keen if the packaging division is broken up and offered for sale as smaller entities, the advisor is reported to have indicated. While sales of USD 5 billion or Rs 200 billion, is too big for any single company to acquire on its own. The packaging unit is the only section that has been immediately identified to be sold, while its bauxite, alumina, primary metal and engineered products divisions will all be absorbed into Rio Tinto.
Essel Propack (EPL) september, announced an acquisition of Minneapolis (US), based company Medical Engineering & Design (MED), a supplier of specialized disposable Medical Devices. EPL has acquired 74% equity of MED in an all cash deal through its US subsidiary - Tacpro. The rest will continued to be held by the existing promoter employees. MED has a diversified customer base with the provision of high quality medical device manufacturing services and reliable, on-time delivery of manufactured products. MED is supplier of custom products to the global medical device industry and delivers proven and effective solutions to catheter, extrusion and braid reinforced tubing needs of customers. The company is vertically integrated with its own in site extrusion, wire braiding, reflowing and assembly resulting in significant cost competitiveness and lead time savings to its customer.
Valuation—
Company is on expansion drive, it is looking for more acquisitions in international markets. At current market price, stock is trading at attractive valuation of 14.87 P/E multiple of its FY2010 estimated earnings par share. We recommend investors to “BUY” “Essel Propack Ltd” with medium to long-term investment prospective.
Source: Internet (Valuenotes by Abhishek Jain)
Subscribe to:
Posts (Atom)