Investment Idea: BHEL

Bharat Heavy Electricals Ltd or BHEL as it is recognised, is the largest engineering and manufacturing enterprise in India in the energy-related/infrastructure sector, today. BHEL was established more than 40 years ago, manufactures over 180 products under 30 major product groups and caters to core sectors of the Indian economy. It has 14 manufacturing divisions, four Power Sector regional centres, over 100 project sites, eight service centres and 18 regional offices, and its employee strength is 42,600.
The company has posted a good performance for the year ended 31st March 2008. Its net sales rose by 12.34% at Rs.19,365.46 crore. Its mainstay continues to be the power sector, 80% of its turnover comes from this sector alone, the rest from the other industries. What is interesting to note is that in FY08, 14% of the total turnover came through commercialization of products and systems developed by way of in-house R&D efforts.
Significantly, during the year, BHEL spent over Rs.464 crore on R&D, which is 83% more than the previous year’s 68%. Infact, the R&D spend at 2.14% of the turnover, is among the highest in India in its kind of industry. Another notable achievement of FY08 has been the significant growth in Intellectual Capital with around one Patent/Copyright filed every alternate working day. It filed 175 patents and copyrights during the year, enhancing the company’s intellectual capital to 664 patents and copyrights filed.
The company’s PBT rose 18.58% at Rs.4,430.39 crore and PAT was up 18.41% at Rs.2,859.34 crore. Its equity capital doubled up from Rs.244.76 crore to Rs.489.52 crore in FY08 on account of the 1:1 bonus. EPS for the year was at Rs.58.41.
Power is its mainstay and with the current emphasis, which the Govt has laid in power sector growth, naturally, BHEL would be one of the biggest beneficiaries, what with the number of mega-power projects being created. If one looks at the turnover, it becomes apparent that the company is working at full capacity and for it to now reach a higher level, it will have to expand. Otherwise, its growth will be restricted.
All said and done, BHEL is a good buy at the current rate, if you have a 2-3 years horizon in mind.

Source: sptulsian.com

Markets Today

Market Snapshot
Markets remain volatile as Left withdraws support; recover from the day's lows
Political fallout on expected lines; markets react with a positive bias to developments
Sensex down 176 pts at 13350; recovers 300 pts from the day's low
Nifty down 42 pts at 3989; recovers 90 pts from the day's lows
CNX Midcap ends flat; BSE Small Cap Index down 0.5%
Reliance Industries down 2.5%; closes below 2000 for the first time since Aug 2007
BSE Cap Goods Index recovers nearly 5% from days low on hope of nuclear deal going through
BEL up 4.6%; BHEL up 2.1%; ABB up 1.8%; L&T up 1.5%
Nuclear deal benificiaries: Alstom Projects up 7.5%, Rolta up 5.8%, Areva T&D up 5.5%
SBI recovers nearly 10% from days low as the co seeks RBI nod to mark-to-mkt only 25% of Rs 9996 cr of govt bonds: Sources
BSE IT Index down 3.1%; Wipro down 5%; Infosys down 3.5%; Satyam down 2.9%; TCS down 2.6%
BSE Oil and Gas index down 1.6%; Relaince down 2.4% ONGC down 1.7%
OMC's gain; HPCL up 5.8%; BPCL up 5.6%; IOC up 1%
NSE Advance Decline at 1 : 1.5
Total F&O turnover at Rs 41112 cr Vs Rs 44635 cr
Total market turnover at Rs 56817 cr Vs Rs 61829 cr yesterday
F&O Snapshot
Nifty fut sees additional short build up; adds 27.9 lakh shares
Discount remains at nearly 50 points in today's trade
IT stocks like Infy & Satyam sees fresh short build up
Sugar Stocks like Renuka Sug, Bajaj Hind & Balrampur Chini sees continuation of short build up
NSE f&o volumes on lower side; turnover at Rs 41117.91cr vs 44634.29 on yesterday
Options Activity: Nifty 3700 put adds 3.3 lakh shares Nifty 4300 call sheds 3.8 lakh shares Nifty 4100 put sheds 2.6 lakh shares
Star Trade: Rolta up 6%; adds 1.1 lakh shares
Fresh Short: Renuka dn 6.1%; adds 10.1 lakh shares Wipro dn 5.7 %; adds 4.2 lakh shares Infosys dn 3.4%; adds 4 lakh shares ITC dn 3%; adds 13.8 lakh shares
Fresh Longs: JP hydro up 3.9%; adds 12.1 lakh shares Chambal fert up 4.4%; adds 7.6 lakh shares RNRL up 3.4%; adds 20.4 lakh shares SBI up 3.4%; adds 5.3 lakh shares

Source: moneycontrol.com

Intraday trading Calls for 8th July

Market may open weak but recovery expected in mid session and remains flat to nagetive. A nagetive closing expected today.

Today's Intraday Stock Tips/ Trading Calls:

ESSAR OIL
CAIRN INDIA
SASKEN COMMUNICAION
INIDABULLS REALEST
ADLABS FILMS
RPL

For Levels and Targets CLICK HERE.

Watch List: SmallCap & Midcap IT Sector: Core Projects, Vakarangee Softwares, Prithvi Info, 3i Infotech, Mphasis BFL etc.

Good Luck

STOCK IDEAS: KLG Systel, Ansal Housing, NCL Industries, India Glycols

Within a matter of six months, the share price of KLG Systel Ltd. (Code: 531269) (Rs.359.55) has fallen one third from its high in January 2008 despite posting a robust performance. For Q4FY08, its topline doubled to Rs.76.50 cr. and net profit shot up 75% to Rs.14 cr. For full FY08, the figures are far more impressive as it registered 120% and 140% increase in 14 revenue and profit to Rs.269 cr. and Rs.52 cr. respectively. Thus it posted an EPS of Rs.45 on its current equity of Rs.11.70 cr. but declared only 27.50% dividend for FY08 against 25% last year. The company specialises in offering technological solutions for the entire business lifecycle i.e. right from concept and creation, through plant design, project execution and management operations & optimisation to expansion/ revamp. It also provides on-line IT solutions to distribution utilities, using its self-developed software Vidushi, SG61 Technology and solution for determining the transmission & distribution losses, fixing the areas of power theft, on-the spot billing & cheque collection, enhancing revenue collection efficiency of the utilities and addressing consumer grievances. On the other hand, to capitalise on its Engineering Services Outsourcing (ESO) potential, the company has gained engineering design domain-expertise in various industry verticals and has ventured into planning, design and erection of large scale infrastructure projects. For FY09, it is expected to clock a turnover of Rs.325 cr. and profit of Rs.60 cr. i.e. an EPS of Rs.45 on estimated diluted equity of around Rs.13.25 cr.
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As per the experts, the real estate cycle has peaked out and the property prices are poised to correct substantially in the near future. Coupled with rising input costs, some of the companies are even excepted to slip into red. However, Ansal Housing & Construction Ltd. (Code: 507828) (Rs.96) being into construction of integrated township in smaller cities may continue to perform well. For Q4FY08, on a standalone basis, its revenue grew by 20% to Rs.65 cr. but its EBIDTA jumped up 50% to Rs.24 cr. But due to higher interest and tax, its net profit remained flat at Rs.13.25 cr. For FY08, its total revenue was up 25% to Rs.250 cr. and PAT increased by 30% to Rs.55 cr. posting an EPS of Rs.31 on its current equity of Rs.17.70 cr. This is among the few companies making full tax provisioning, which ensures that its profits are for real. For future growth, it has lined up gigantic 56.10 million sq. ft of development (80% in the residential segment) spread over 22 cities in the next five years. It has a rich land bank of 2500 acres with about 50% in its own name while the rest is under firm collaborators’ agreement. Earlier the company had made a preferential allotment of 17 lakh warrants to the promoters at Rs.208 and 29.50 lakh warrants at Rs.225 to others, which may not get converted into shares considering the low CMP. For FY09, it can report a topline of Rs.300 cr. with PAT of Rs.60 cr., which translates into an EPS of Rs.34 on its current equity whereas the diluted EPS of Rs.28 on its fully diluted equity of around Rs.21.50 cr. A good contrarian bet.
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The rising crude oil price is hurting most manufacturers but is indiretly benefiting India Glycols Ltd. (Code: 500201) (Rs.233.50) since it is engaged in production of ethylene oxide (EO)/mono ethyl glycol (MEG) from molasses against the conventional route of making it through distillation of crude. Thus while the price of the final product is shooting up its raw material cost remains the same thereby boosting its profit margin. It reported stellar performance for Q4FY08 as sales jumped up 60% to Rs.339 cr. and net profit stood at Rs.27 cr. against the net loss of Rs.1.90 last year. For FY08, its sales was up 50% to Rs.1304 cr. whereas PAT has more than quadrupled to Rs.178.50 cr. thereby registering an EPS of Rs.64 on its equity of Rs.27.90 cr. As a measure of backward integration, the company has set up a new distillery with an annual production capacity of 66,000 KBL at Gorakhpur in Eastern U.P and has also taken over a sugar company called M/s. Shakumbari Sugar. Moreover, it is adding an Extra Natural Alcohol (ENA) facility at Gorakhpur to meet the requirement of domestic and international markets. On a conservative basis, it is expected to clock a turnover of Rs.1500 cr. with net profit of Rs.165 cr. i.e. an EPS of Rs.59 on its current equity. It’s a good opportunity to accumulate this scrip at every decline.
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NCL Industries Ltd. (Code: 502168) (Rs.37), the flagship company of the NCL group is engaged in four business segments namely cement, cement bonded particle boards, prefab and hydel power. Presently, cement contributes 75% of its revenue, board and prefabs contribute 20% and the balance comes from hydel power. On the back of aggressive expansion, the company has doubled its cement manufacturing capacity to 630,000 TPA and is further looking to triple it to 20 million TPA within a couple of years. It has also set up a new particle board manufacturing facility in Himachal thereby taking its total capacity to 80,000 TPA. On the other hand, its prefabricated structures division is witnessing good demand and has bagged a huge order worth Rs.50 cr. a few months back. Fundamentally, it recorded 30% growth in sales to Rs.193 cr. whereas PBT grew by 45% to Rs.43 cr. Due to high tax provisioning, its net profit improved marginally by 7% to Rs.29.50 cr. posting an EPS of Rs.9 on its current equity of Rs.32.50 cr. With rising input costs and the government interference on cement prices, the company is estimated to report a topline of Rs.275 cr. and maintain its profit of around Rs.30 cr. i.e. EPS of Rs.9 on its fully diluted equity of Rs.34.90 cr.

Source: Internet (moneytimes)

Stock Idea: Jamna Auto

Jamna Auto manufactures automobile springs, spring leaves and automobile coil springs. Two of its group companies - Jai Parabolic Springs and MAP Springs were merged into Jamna Auto and the current results, reflects this merged performance, which could also explain the spurt in the top and bottomlines.
For the year ended 31st March 2008, the company recorded a very healthy 69% jump in net sales at Rs.471.22 crore. Despite the 62% jump in total expenses, EBIDTA rose by a fantastic 135%. Interest outgo shot up by 118.5% and depreciation rose 108%. Despite this, the company’s PBT rose by an unbelievable 187% at Rs.20.42 crore. And the jump in PAT was phenomenal, it jumped by 219% at Rs.20.14 crore. Apart from the merger adding to the performance, the fact that the company has shifted from conventional leaf springs to high margin parabolic springs
In November 2007, the company acquired Leaf manufacturing facilities of Tata Motors' at Jamshedpur, and has entered into strategic supply arrangement with them. The group would invest Rs 120 crore in expansion. Of this, Rs 75 crore would be invested in expanding the Jamshedpur plant, which would house the plant and machinery bought from Tata Motors.
It is investing another Rs.10 crore in a greenfield plant at Uttaranchal and another Rs.15 crore in an R&D centre in Chennai.
Clearwater Capital Partners — a private equity player — has invested Rs.40 crore of equity in the company in June 2007 at Rs.72 per share. It holds a 24.15% in the company.
Currently quoted at Rs.44, hold on to this stock.

Source: sptulsian.com

Markets Today

Markets Snapshot
Markets lose most of the days gains in last hour of trade
Sensex ends up 72 pts at 13526; off nearly 270 pts from the day's high
Nifty ends up 14 pts at 4030; off 85 pts from the day's high
BSE Small-Cap Index up 2.2%; CNX Midcap Index up 0.8%
Reliance Ind led to downfall from day's high; stock slips nearly 5% from day's high
Oil & Gas stocks slip on news of imposition of windfall gains tax on private oil cos; Cairn India down 5.4%; Reliance down 3.3%;
Aviations stocks active on M&A buzz in the sector: Deccan Aviation up 24%, SpiceJet up 22%
BSE FMCG Index up 2.75%; HUL, ITC up nearly 4%
BSE IT Sector Index up 2.64% ahead of Infosys earnigs this Friday; Satyam up 4.4%; Financial
Technologies up 4.2%; Wipro up 3.5%
Bankex surged 1.24% at 5,892.79 on the back of buying in SBI, Kotak Mahindra, Bank of India, IDBI Bank, Oriental Bank, Bank of Baroda and Karnataka Bank.
BSE Auto Index up 2.2%; Maruti up 4.4%; M&M up 4%
BSE Metals Index up 1.8%; Jindal Steel up 4.5%; Hindalco up 2.8%; Tata Steel up 1.8%; SAIL up 1.7%
Index Gainers: Siemens up 6.4%; GAIL up 4.6%; SBI up 4.2%; ACC up 4.2%
Index Losers: Reliance Comm down 3.9%; RPL down 2.9%; Zee Ent down 2.22%
Other Gainers: HMT Ltd 14.4%, DCW up 12%, SREI Infra 11.5%
NSE Advance Decline at 3:1
Total F&O turnover at Rs 44,635 cr Vs Rs 44,222cr
Total market turnover at 61,829 cr Vs Rs 62,387 cr yesterday
F&O Snapshot
Nifty futures sees fresh short buildup; discount widens to 54 points
Oil & Gas stocks like Reliance, Cairn & RPL sees short build up
Sugar stocks like Bajaj Hind, Balrampur chini, Shree renuka sees short build up
IT Stocks sees fresh long build up
NSE F&O turnover at Rs 44635 cr
Optons ActivityHugh build up in Nifty 4000 put (Nearly 49%)Out of the money call option sees unwindingNifty 4000 put adds 13.2 lakh sharesNifty 4400 call sheds 7.7 lakh sharesNifty 4300 call sheds 4.2 lakh shares
Star Trade: Deccan Air up 20.3%; adds 1.6 lakh shares
Fresh Shorts: RPL dn 3.3%; adds 19.7 lakh dn 6.5%; adds 9.4 lakh shares Reliance dn 4.1%; adds 4.1 lakh shares Bajaj Hind dn 7.5%; adds 4.4 lakh shares
Short Covering: IFCI up 4.9%; sheds 10.7 lakh shares Nagarjuna Const up 7.4%; sheds 3.3 lakh shares JP Asso up 4.4%; sheds 3.2 lakh shares
Fresh Long: Siemens up 6.5%; adds 1.2 lakh shares Satyam up 3.6%; adds 6 lakh shares SBI up 3.9%; adds 3.2 lakh shares
Source: moneycontrol.com

Intraday Trading Calls for 7th July

Indian Stock Market may open positively and remains positive for the day today. A good rally and a positive closing expected.

Today's Intraday Trading Calls/Stock Tips:

GSS AMERICA INFO
MERCATOR LINES
YES BANK
CANARA BANK
UNITECH LTD.
GAIL INDIA.

For Levels and Targets CLICK HERE.

Watch List: All banking stocks: SBI, Bank of Baroda, Bank of India, Union Bank, Andhra Bank.
Short-Med Term Delivery Pick: Buy Lok Housing 500256 (47) For Target Rs. 100+.

Good Luck