Stock Idea: Navin Fluorine Ltd.

Navin Fluorine Ltd.
BSE Code: 532504/NSE
Last Close: Rs.133
Navin Fluorine is the largest integrated fluorochemicals complex in India since 1967. The company has an equity of just Rs.10.10 cr. but has huge reserves of over Rs.215 cr. The promoters hold 37.16%, corporate bodies hold 15.53%, government financial institutions hold 7.05% and the public holds 38.69% stake in the company. The company has posted excellent Q2FY09 results. Net sales jumped 73.57% while net profit was Rs.17.87 cr. against a loss of Rs.1.81 cr. in Q2FY08. In H1FY09, the company’s sales zoomed 75.45% to Rs.222.82 cr. while net profit was Rs.36.83 cr. against a loss of Rs.1.89 cr. in H1FY08. The company has recorded an EPS of Rs.17.69 in Q2FY09 while the H1FY09 EPS was Rs.36.47. After posting marvellous numbers, the company has declared 50% interim dividend as against FY08 full yaer dividend of 40% and the record date for dividend is 7th November 2008. Its 52-week high/low rate is Rs.455/Rs.130. At the current level, the stock is available at P/E ratio of just 2.9. Investors can buy this stock every decline. On the upper side, it can go up to Rs.175-201 levels in coming days.

Source: Moneytimes (internet)

Intraday Trading Calls for 24th October

Indian Stock Market may open Nagetive with gap down but sharp recovery expected at mid session.

Today's Intraday Trading Calls / Stock Tips (Keep Appropriate Stop Loss for each trade):

BANK OF BARODA (275)

Buy Above 276.80 Target 283.45, 290.00

Sell Below 273.20 Target 268.70, 262.00

WIPRO (272)

Buy Above 274.60 Target 280.15, 288.00

Sell Below 270.05 Target 265.30, 260.00

SATYAM COMPUTER (300)

Buy Above 302.40 Target 309.60, 320.00

Sell Below 297.10 Target 292.10, 285.00
TECH MAHINDRA (376)

Buy Above 378.50 Target 385.35, 395.00

Sell Below 373.40 Target 368.25, 360.00

HDIL (150)

Buy Above 151.25 Target 155.35, 160.00

Sell Below 148.60 Target 145.15, 140.00

RCOM (230)

Buy Above 232.65 Target 240.30, 250.00

Sell Below 227.20 Target 223.10, 218.00

GOOD LUCK

Low Inflation – Liberal ECB

Inflation fell to 11.07% for week ended 11th October 08 against 11.44% of the previous week. The inflation was 3.07% for the corresponding week of the previous year. However, inflation for week ended 16-08-08 was revised upwards to 12.82% from 12.40%.
Looking to the steep fall in global commodity prices like crude, steel, non-ferrous metals as also due to food prices coming under control on the domestic front, due to ensuing kharif crop and liquidation of foodgrain stocks by the traders, we are expected to see inflation softening in single digit by end of November 08 itself. This was earlier expected or likely to happen by end of December or in the first week of January. With Indian crude basket now ruling at close to $ 61 per barrel, we may see reduction in oil prices by the government, which may also help us in seeing lower inflation. Also oil marketing companies, announce the price of non-administered oil products every 1st and 15th of the month, the data of next week’s inflation may be quite low, as effect of falling crude price is not reflected in these datas as they pertain for week ending 10th October 08.
Due to lower inflation figures, which are market friendly, the government has again started releasing them during market hours at 12 noon. When they were on rise, government have been releasing them in the evening, as rising figures were spoiling the market sentiments.
Inspite of a drop in inflation, stock market has not responded too well to these. Maybe, the present problem for the market is not of inflation but of liquidity. And as stated by us in our previous stories, RBI has been pro-active and have gone for CRR cut of 250 bps and Repo rate cut of 100 bps, to inject the liquidity in the system and to make borrowings bit cheaper.
One more step in this direction was taken by the government and RBI by easing the ECB norms, which will help Indian companies to borrow from overseas market to fund its projects.
The revised rules permit ECBs upto $ 500 million per borrower per financial year, for rupee or foreign currency expenditure for permissible end uses under the automatic route. The norm of a minimum average maturity period of seven years for ECB of more than $ 100 million for rupee capital expenditure by borrowers in the infrastructure sector has been dispensed with. Definition of infrastructure sector has also been widened to include mining and refining, henceforth.
Revised rules provide for companies to pay a higher interest of upto 500 bps over the six month LIBOR on ECBs. Borrowers can bring in the proceeds immediately and can also use dollar borrowings for rupee expenditure. Presently, ECB proceeds are required to be parked overseas until actual expenditure takes place. Telecom companies would also be allowed to use ECB for payment of licence/permit for 3G Spectrum. However, this will not be allowed for realty and inter-corporate loans.
This is with a view to ease liquidity in the domestic system as also to stop rupee weakening further, which is ruling close to 50 levels.
India would see short term debt redemption of $ 89 billion between July 08 to July 09 and this could put further pressure on the rupee. This redemption is equal to about 40% of country’s total external debt of $ 220 billion as on date.
So unless, we have huge forex inflow in the next 6 – 12 months, we may see huge imbalance and could see rupee falling to 53 – 54 levels..
The relaxation in ECB norms may not result in an immediate inflow of funds due to widening, spreads over LIBOR and huge credit crunch faced by global markets with huge financial turmoil in US and Europe. But, for the established Indian companies with good track record and good projects, would be able to source funding, as some lenders would also be forthcoming to lend, to keep its business running.
Though market is not responding to both these positive news, as they are driven by global sentiments, which are quite negative but would help in the medium to long term for the Indian economy.

By SP Tulsian

source: sptulsian.com

Intraday Trading Calls for 23rd October

Indian Stock Market may open Nagetive with gap down but recovery expected at mid session.

Today's Intraday Trading Calls / Stock Tips (Keep Appropriate Stop Loss for each trade):

HPCL (209)
Buy Above 210.65 Target 215.35, 222.00
Sell Below 207.40 Target 202.55, 196.00
BPCL (323)
Buy Above 324.60 Target 331.45, 340.00
Sell Below 320.10 Target 314.30, 308.00
TATA SPONGE (157)
Buy Above 158.80 Target 164.25, 170.00
Sell Below 155.10 Target 152.15, 148.00

CIPLA (183)
Buy Above 184.50 Target 187.15, 190.00
Sell Below 181.40 Target 178.25, 175.00
RANBAXY (256)
Buy Above 258.75 Target 263.45, 270.00
Sell Below 254.60 Target 248.20, 240.00
RCOM (235)
Buy Above 236.85 Target 242.60, 250.00
Sell Below 233.20 Target 228.40, 222.00

IDEA CELL (47.55) Buy at Decline around 44-45 for short term target of Rs. 65+.
GOOD LUCK

Ranbaxy – Indian to overseas MNC

Ranbaxy Laboratories Ltd., an Indian MNC has become a subsidiary of Japanese drug major Daiichi Sankyo Co. Ltd., a R&D major. Daiichi had first acquired 9.25 crore shares of Ranbaxy (representing 20% of the emerging voting capital of Ranbaxy) at Rs.737 per share from Indian public. The company made a preferential allotment of 4.63 crore shares at Rs.737 per share, for Rs.3,410 crores to Daiichi. 8.19 crore shares were acquired by Daiichi from the promoters of Ranbaxy in the first tranche. Remaining 4.80 crore share would be acquired by Daiichi from promoters in the second tranche.
The present stake of Daiichi in Ranbaxy is now placed at 52.50%, which would rise to 64%, post acquisition of shares in second tranche from the promoters.
Now the question in the minds of investors in Ranbaxy is whether to treat the company as an overseas MNC and if yes, none of pharma companies with overseas promoters are well received by the market and are poorly discounted on the bourses. Some of them are Abbott India, Glaxo, Novartis, Pfizer and Wyeth.
However, one can’t go by the same yardstick while investing in Ranbaxy or taking a valuation call on the stock.
Ranbaxy on a consolidated basis, as at 31-12-07 had a total debt of Rs.3, 700 crores, net off cash. Now with infusion of Rs.3, 585 crores by Daiichi, by subscribing 4.63 crore shares and 2.38 crore warrants, the company has become totally debt free.
Now let’s have an analysis from Daiichi investment angle, who have invested R.3, 585 crore by preferential allotment paid Rs.6, 817 crores to public shareholders as also shall be paying Rs.9, 575 crores to the Indian promoters. An additional Rs.1, 580 crores shall be paid by Daiichi to the company, on conversion of 2.78 crores warrants, into equal number of shares at Rs.737 per share, within the next 6 – 18 months. So aggregate investment by Daiichi in Ranbaxy is to the extent of Rs.21, 557 crores, which is about U S $ 4.50 billion.
When Daiichi has made this kind of investment, definitely they have growth plans for the company, which will yield its results over a longer term. Ranbaxy stock is now ruling at Rs.260 per share, which translates into a market capitalization of about Rs.12, 000 crores, post warrant conversion. This kind of valuation definitely is very low when compared with its annual consolidated topline of Rs.7, 500 crores and debt free status. Ranbaxy had a profit after tax of Rs.787 crores for year ending 31-12-07. The company is aiming to a have a global sales of US $ 5 billion, by 2012 and to be among the top 5 global generic companies. This dream would not have been achieved by the Indian promoters due to various global litigations but now would be possible with Daiichi at the helm of affairs of the company.
Daiichi is an established R&D player and now with Ranbaxy coming in its fold, it becomes an end to end complete pharma company. With many patents going off-patent in the next 3 – 5 years, Ranbaxy, with the backing of Daiichi would be able exploit the potential of global markets.
We have been getting lot of queries from our viewers whether it would be prudent to remain invested in Ranbaxy stock or to buy it at Rs.260 levels. Going by the investments having made by Daiichi in the company and looking to scale and size of Ranbaxy, share at Rs.260 hold lot of long term potential with virtually minimal risk.

Source: sptulsian.com

Intraday Trading Calls for 22nd October

Indian Stock Market may open Nagetive but recovery expected at mid session and a flat to positive closing can be seen today.

Today's Intraday Trading Calls / Stock Tips (Keep Appropriate Stop Loss for each trade):

SATYAM COMPUTER (317)

Buy Above 319.65 Target 325.25, 332.00

Sell Below 314.70 Target 308.35, 300.00

WIPRO (296)

Buy Above 298.80 Target 305.40, 312.00

Sell Below 294.10 Target 288.45, 282.00

CORE PROJECTS (46)

Buy Above 46.80 Target 49.25, 52.00

Sell Below 45.10 Target 43.05, 40.00

MOSER BAER (100)

Buy Above 101.50 Target 105.55, 110.00

Sell Below 98.40 Target 95.15, 91.00

POLARIS LAB (50.80)

Buy Above 51.75 Target 54.25, 58.00

Sell Below 49.70 Target 47.10, 44.00

NAV BHARAT VENTURE (133)

Buy Above 134.85 Target 139.60, 145.00

Sell Below 131.20 Target 126.40, 120.00

IT & Tech sector looks good and may perform well in coming months so Buy IT & TECH Stock for Short to Med Term at every decline.

GOOD LUCK

Intraday Trading Calls for 21st October

Indian Stock Market may open Positive. A strong rally expected today with good positive closing.
Today's Intraday Trading Calls / Stock Tips (Keep Appropriate Stop Loss for each trade):

BANK OF BARODA (312)
Buy Above 314.75 Target 320.25, 328.00
Sell Below 309.20 Target 303.35, 295.00
SAIL (108)
Buy Above 109.20Target 113.40, 118.00
Sell Below 107.10 Target 104.15, 100.00
TATA STEEL (252)

Buy Above 254.80 Target 262.40, 270.00
Sell Below 249.40 Target 243.05, 235.00
CAIRN INDIA (162)
Buy Above 163.50 Target 167.40, 172.00
Sell Below 160.10 Target 156.15, 152.00
VIDEOCON INDUSTRIES (132)
Buy Above 133.60 Target 138.25, 145.00
Sell Below 130.00 Target 126.10, 122.00
NTPC (152)
Buy Above 153.45 Target 157.55, 162.00
Sell Below 150.50 Target 146.40, 142.00

GOOD LUCK