Stock Idea: Federal Mogul Goetze (India)

Federal Mogul Goetze (India) (Rs 112)

(Bse Code- 505744 Nse Code- Fmgoetze)

(P/E- 10, Promoter’s Stake-74.98%, Equity- 55.63 Cr., Market Cap- 623 Cr.)

Goetze (India) Limited was established in 1954 as a joint venture with Goetze-Werke of Germany. Goetze-Werke of Germany is now owned by Federal-Mogul Corporation, a $6.3 billion global company and one of the leading manufacturers of automotive components in the world. In 2006, US-based Federal-Mogul acquired the Indian promoters’ stake, raising its holding to 50.11%, to take control of the company after which the name of the company changed to "Federal-Mogul Goetze (India) Limited"(FMG). Federal Mogul, one of the promoters of Goetze (India) and a US auto-parts major acquired 62,30,000 equity shares of the company at Rs 222.50 per share, constituting 24.64% of the equity share capital. There was rights issue in 2008 at Rs.56 per share, which did not get adequate response from the investors and promoters subscribed to the Shares and increased their holding to 74.98%. FMG has a paid-up equity capital Rs 55.63 cr. of which promoters hold 74.98%., FII/MF’s hold 12.07%, Bodies corporate hold 3.24% and Public holds 9.71%

FMG is the largest manufacturer of pistons and piston rings in India. The parent Federal-Mogul is a leading auto-ancillary company with a very strong presence in the diesel vehicles segment. FMG is involved in the manufacture of auto components like pistons, piston rings, sintered parts and cylinder liners covering a wide range of applications including two/three-wheelers, cars, SUVs, tractors, light commercial vehicles, heavy commercial vehicles, stationary engines and high output locomotive diesel engines. FMG has 4 manufacturing facilities at Bengaluru (Karnataka), Parwanoo (Himachal), Bhiwadi (Haryana) and Patiala (Punjab) and 22 pan India marketing offices. It makes the widest range of piston rings and pistons varying from 30mm to 300mm diameter. It also manufacturers sintered parts light metal castings and cylinder liners covering a wide range of applications including two/three-wheelers, cars, SUVs, tractors, light commercial vehicles, heavy commercial vehicles, stationary engines and high output locomotive diesel engines. It is market leaders both in OEM and aftermarket. Besides, about 10% of its business is from exports. Within the original equipment manufacturing (OEM) segment, FMG’s revenues are spread across all auto players including Tata Motors, M&M, Bajaj Auto and TVS. There are also expectations that the US based auto parts major parent may use FMG as an outsourcing hub.

For the Q1 ended March 2010, FMG has posted 31% rise in net sales to Rs 209.1 cr. whereas net profit increased 29% to Rs 11.35 cr. on standalone basis. For the year ended December 2009, FMG had posted net sales of Rs 785.32 cr. and net profit of Rs 54.52 cr. on consolidated basis. On a equity of 55.63 cr. the EPS stood at Rs 9.8. For the year ended December 2008, FMG had posted net sales of Rs 706.6 cr. and net loss of Rs 6.89 cr. The Indian automobile industry is on fast revival after tough period. 2-Wheelers and passenger cars sales are already in “Topgear”. With confidence returning in economy, CV and Capital goods sales are likely to see upward trend after almost 2 years of slow down. Increased focus on rural economy can boost tractors sales in a big way. Going forward, FMG is expanding its capacity, by installing a new plant at Chennai, which is likely to begin operations next year. At CMP of Rs 112, the FMG stock trades at 11.4 times CY09 earnings (Rs 9.8) and at 9.3 times expected CY10 earnings(Rs 12), which is attractive for a company that is the biggest player in its line of business. From Rs 449 on 5 January 2007, the scrip tumbled to Rs 28 by 9 March 2009. In view of the improved results, strong parent and good medium term prospects, Investors can start accumulating the stock at current levels and add more on declines for decent returns of 45%-50% over the next 8-12 months.

Source: Internet (Valuenotes by Sanjay Chhabria)

Stock Ideas: Fortis, GMDC, Aban, Mphasis

Fortis Healthcare (Rs. 147.00) (Code : 532181) : Fortis Healthcare jumped more than 6% on Friday after Malaysia's sovereign wealth fund Khazanah offered to raise its stake in Singapore healthcare firm Parkway Holdings to 51.5% for $835 million. Khazanah's Integrated Healthcare unit has offered Singapore dollar 3.78 a share for Parkway, a premium of 25% over Parkway's last traded price. This will allow it to raise its stake in the Singapore firm to 51.5%. Currently, it has a stake of nearly 24%. Khazanah's offer price represents a 6.17% premium to the price at which Fortis had acquired stake in Parkway in March 2010. Fortis had acquired 23.9%  stake in Parkway Holding at Singapore dollar 3.56 per share from US buyout firm TPG, aggregating in a deal worth $685 million. The stock has corrected quite a bit after it touched record high of Rs. 188 on 12th March. Buy the stock immediately.

GMDC (Rs. 121.00) (Code : 532181) : Gujarat Mineral Development Corporation reported jump of 28.2% in its net profit. The profit rose to Rs 90.49 crore on 9.3% increase in net sales to Rs 345.82 crore in Q4 March 2010 over Q4 March 2009. Gujarat Mineral Development Corporation (GMDC)'s net profit rose 18.4% to Rs 279.87 crore on 9% increase in net sales to Rs 1065.22 crore in the year ended March 2010 over the year ended March 2009. The board of directors of the company recommended a dividend of Rs 2.50 per share (125%) for the year ended March 2010. The stock hit a high of Rs 124.45 and a low of Rs 122.05 so far during the day. The stock had hit a 52-week high of Rs 187.70 on 19 January 2010 and a 52-week low of Rs 68.30 on 13 July 2009. It is very safe at current level. Buy.

 

Aban Offshore (Rs. 716.00) (Code : 523204) : Drilling services firm, Aban Offshore, on Tuesday reported a consolidated net profit of Rs 39.26 crore for the March quarter against a consolidated net loss of Rs 93  rore in the same period previous fiscal. Total income rose to Rs 1,020.98 crore in the fourth quarter of the past fiscal, from Rs 774 crore in the same period last year. The company board has proposed a dividend of Rs 3.60 per share, or 180 per cent, on the face value of Rs 2 each to the shareholders. The company has approved fund raising of USD 400 million through issue of FCCBs, GDRs, ADRs etc and QIP of upto Rs 2500 crore. Earlier, Aban Offshore had secured an order for deploying a jack-up rig in the Middle East. The estimated revenue from the contract with an estimated duration of approximately four years is around $187 million. The rig will be deployed in the second quarter of calendar year 2010. The stock has corrected from

Rs. 1200 plus to Rs. 650 within one month. It has now become attractive. There is very less to lose and huge to gain.

Mphasis (Rs. 580.00) (Code : 526299) : Angel Securities has maintained a buy on this stock with a target price of Rs 872, in its report dated May 27, 2010. The report says, "Mphasis reported strong performance for 2QFY2010 with revenue growing by 2.4% qoq to Rs 1,221 crore, in line with our estimate of Rs 1,223 crore. Revenue in dollar terms grew by 5.3% to US $270mn. Growth was largely contributed by robust volume growth in the ITO (up 10.5% sequentially) and application services (up 3.8% qoq) segments. The company continued to witness strong deal wins, with an addition of 22 clients, including 14 through the HP channel." The company will maintain its revenue outperformance in the industry because of its robust business flow from the HP channel. Buy.

Source (Internet Smartinvestments)

Stock Idea: Garware Polyester

Garware Polyester (Rs. 89) (Code : 500655)

Mumbai based Garware Polyester Ltd is the largest manufacturer of Polyester films in India. In fact, GPL is the first Indian company to start production of polyester films. Its brand ‘Sun Control” film has become a household name in India and it is patented in 16 countries and is exported to over 40 countries. Main application of polyester films are: · Solar control · Packaging · Reprographic Surplus Land: GPL has its office in Mumbai, very close to domestic and international airport. GPL is likely to shift its office elsewhere and sell this land in near future. Sale of Mumbai land alone should fetch more than Rs 400 cr.
Stock is available at 3.85xFY10E Eps which is extremely low considering  pioneering status of GPL in polyester film industry. Recently, share price had  gone upto Rs 110/. Investors may buy big quantity of GPL as scrip can appreciate at least 60- 80% in stable market conditions in less than 1 year. If land sale materialises, then scrip can give more than 200% appreciation.

Source: Internet (SmartInvestmetns)

Intraday Trading Calls for 04th June

Indian Stock Market 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
SASKEN COMM.	Buy Above	197.25	203.45	208.00
	Sell Below	195.00	190.15	185.00
MPHASIS BFL	Buy Above	580.60	590.10	600.00
	Sell Below	574.50	565.15	556.00
ADHUNIK METAL	Buy Above	110.25	114.75	120.00
	Sell Below	108.30	104.40	100.00
ATLANTA	Buy Above	278.25	284.70	292.00
	Sell Below	274.40	268.35	262.00
IDFC	Buy Above	162.65	165.50	168.00
	Sell Below	161.05	158.30	155.00
ESCORTS	Buy Above	182.75	186.55	191.00
	Sell Below	180.50	176.30	172.00
ROLTA INDIA	Buy Above	166.65	171.15	175.00
	Sell Below	164.45	160.35	156.00

GOOD LUCK

Intraday Trading Calls for 03rd June

Indian Stock Market 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
SASKEN COMM.	Buy Above	196.75	203.45	208.00
	Sell Below	194.30	190.15	185.00
MPHASIS BFL	Buy Above	564.25	574.70	585.00
	Sell Below	558.40	550.15	540.00
APTECH  LTD.	Buy Above	135.25	140.05	145.00
	Sell Below	133.10	129.30	125.00
BHARTI AIRTEL	Buy Above	272.80	280.10	286.00
	Sell Below	267.40	261.45	255.00
IDFC	Buy Above	156.25	160.10	164.00
	Sell Below	154.05	151.10	148.00
ESCORTS	Buy Above	180.00	184.65	190.00
	Sell Below	176.50	172.20	168.00
ROLTA INDIA	Buy Above	164.60	169.75	174.00
	Sell Below	162.25	158.15	154.00

GOOD LUCK

Intraday Trading Calls for 02nd June

Indian Stock Market 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
WOCKHARDT	Buy Above	130.25	134.75	140.00
	Sell Below	127.70	123.15	120.00
CIPLA	Buy Above	326.50	332.70	338.00
	Sell Below	321.40	316.45	310.00
APTECH  LTD.	Buy Above	133.60	138.25	144.00
	Sell Below	131.40	127.30	124.00
SELAN EXPLO (530075)	Buy Above	352.65	360.10	368.00
	Sell Below	347.30	340.45	332.00
CAIRN INDIA	Buy Above	292.65	299.20	305.00
	Sell Below	289.45	285.10	280.00
ESCORTS	Buy Above	178.20	183.65	188.00
	Sell Below	176.50	172.20	168.00
DCB	Buy Above	50.00	52.75	55.00
	Sell Below	49.05	47.25	45.00

GOOD LUCK

Stock Idea: Yuken India

Yuken India manufactures hydraulic devices, used in the heavy engineering industry for automation. With automation the buzz all around, Yuken’s products have a good demand and this has been seen in its spectacular numbers for FY10 and especially Q4FY10 where, YoY, net profit has shown a surge of over 17 times. And for FY10, net profit rose over 8 times.

The company is very small, given the fact that its equity base as tiny as Rs.3 crore but its reserves as at 31st March 2010 stood at Rs.35.66 crore. Yuken has been around for the last 32 years, with most manufacturers of Original Equipment using Yuken as their preferred partners for hydraulics. The stock touched a new high yesterday at Rs.210.50. On the current EPS of Rs.27.4, this discounts the price by less than 8 times, making it a good buy with potential in the coming months.

Source: Internet (premiuminvestments.in by SP Tulsian)