Intraday Calls for 2nd November

Market is likely to open very weak (Gap down opening expected) as all weak global markets and Indian market is also want to take some rest.

It is better to stay away from the market today because of high volatility. Market can see some recovery after deep correction but overall market remains weak.

Buy for Intraday (Risky so keep tight SL & Buy at lower levels)

Power Grid

Neyveli Lignite

Cairn India

Ashapura Minechem

UNITECH

HCL Tech

RCOM

Prime Securities

DCB

Selan Exploration

National Fertilizers

Good Luck

IPO Talk: Empee Distilleries

Empee Distilleries is entering the capital market on 1st November, 2007 with a public issue of 48 lakh equity shares of Rs.10 each, in the band of Rs.350 to Rs.400 per share.

The company is presently engaged into manufacturing of various IMFL products with its distillery located at Kanchipuram, Tamil Nadu with an installed capacity of 30.24 lakh cases per annum and another distillery at Kerala with an installed capacity of 30 lakh cases per annum.

For 9 months ending 30-06-07, the total income of the company was at Rs.546 crores with EBITDA of Rs.32.73 crores, PBT of Rs.21.78 crores and PAT of Rs.16.42 crores, on equity of Rs.14.20 crores, which results in an annualized EPS of Rs.15.40. Presently, purchase and marketing of IMFL in the state of Tamil Nadu and Kerala are with the state government and hence no distilleries operating in those states can sell its products to any other buyers, except the state governments and also can’t produce beyond its rated capacity, which is based on monthly rated capacity. If any distillery reaches its levels, say on 25th of any month, it can’t operate for remaining 5 days of the month. Hence, capacity utilization is already capped and only improvement in the working can be made by change in product mix. Since, marketing is state subject, even distilleries can’t advertise and to push its brands of IMFL, they need to motivate to state distribution shops by offering them incentives in other forms, to enable them to push the company products, by which higher allocation of better brand is received by the distilleries, for better margin.

Realising this, company is expanding its Tamil Nadu distillery capacity as also setting up grain based distillery in Andhra Pradesh and relocating a distillery in Karnataka. Due to surplus land, held by the company, the same is also developed by the company at Shriperumber an I.T. hub, of about 2 lakh sq. ft. The total fund requirement is estimated at Rs.182 crores, which is financed by term loan of Rs.22 crores, internal accruals of Rs.9.50 crores and proposed IPO of Rs.192 crores, considering at the upper band of Rs.400 per share.

Considering an estimated EPS of Rs.16, for FY 07 and considering upper band of Rs.400, the share is being issued at a PE multiple of 25, which is in line with the valuation of existing IMFL manufacturers like Radico Khaitan, Jagatjit Industries etc. United Spirits and United Breweries are discounted dearly due to leadership and national presence.

Hence, considering present level of activity, share may seem fully priced at Rs.400 per share. However, capacity expansion in Tamil Nadu would add quickly to the financials while Andhra Pradesh and Karnataka would add to the financials from next year. The realty stock would also add good cash flow, in the next three years, to the financials. All this leaves scope for further appreciation in the share price. Due to 25% dilution to the public, low floating stock would also keep share price at respectable levels.

If you have no reservations for a wine stock, this could definitely give you decent returns, even if subscribed at the upper band of Rs.400.

Source:sptulsian.com

***** Latest Grey Market Premium: Rs. 130-140

Markets Today

The markets were seen consolidating at the higher levels and ended the day in red amid an extremely volatile session. The markets opened strong slipped in red, bounced back again but ended in red.

It opened today on strong note today and the Nifty breached the psychological level of 6,000 reacting to 25 bps cut by US Fed. But have failed to sustain at the higher levels. Sensex was 500 points down from the day's high and Nifty was down 150 points.

GSM operators in the telecom were the worst hit in todayĺs red on news of spectrum allocation to be made more stringent. Auto, FMCG and pharma stocks also dragged the markets.
Broader markets underperformed the benchmark indices and and ended in red. This gave markets weak breadth.
Top losers on the indices were Relaince, HUL, ITC, Bharti Airtel, MTNL, VSNL Nalco, HCL Tech .
L&T, HDFC Bank, ONGC, Sterlite Ind, Reliance Petroleum, Infosys were among the top gainers on the indices.
Sensex was down 113.64 points or 0.57% at 19724.35, and the Nifty down 34.20 points or 0.58% at 5866.45.
About 1089 shares have advanced, 1900 shares declined, and 71 shares are unchanged.
The BSE Midcap Index ended at 7,966.54 down 2%.
The BSE Smallcap Index ended at 9,646.61 down 1.5%.
The BSE Bankex was up 2% at 10,851.69. Bank of India, Oriental Bank, BOB, SBI, IOB, ICICI Bank, Bank of India moved upwards.
The BSE Capital Goods Index was up 2% at 20,141.19. L&T, Jyoti Structures, ABB, BHEL closed higher.
The BSE Auto Index closed at 5,391.37 down 2%. Bharat Forge, Maruti, Escorts, MRF, Cummins, Tata Motors, Bajaj Auto closed lower.
The BSE Metal Index closed at 17,582.54 down 2%. Hindalco, Shree Precoated, NALCO, Hind Zinc, Mah Seamless closed lower.
The BSE FMCG Index closed at 2,038.20 down 4%. HUL, ITC, United Spirits, Tata Tea, United Brewerie, Colgate, HUL closed lower
BSE Oil and Gas Index closed at 11,539.84 down 1%. Essar Oil, Reliance, HPCL, GAIL ended in red.
The BSE IT Index was flat at 4,615.44. Mphasis, Patni Computer, Tech Mahindra, I-Flex Solution, TCS closed lower.
The NSE cash turnover was at Rs 28448.79 crore and the NSE F&O turnover was at Rs 99734.01 crore. The BSE cash turnover was Rs 11436.95 crore. Total market wide turnover was at Rs 139619.75 crore.

Source:moneycontrol.com

Intraday Calls for 01st November

Market is likely to open with gap up but remain volatile and I think that market will remain rangebound this month and can consolidate near 20000 for some time.

Buy for intraday:

Keep an eye on Oil Exploration Stocks as crude oil is trading higher around $96 and heading for $ 100. Shiv-vani oil, ONGC, Selan Exploration, Hind Oil, Dolphin Offshore, Aban Offshore etc.

My favt. stock is Selan Exploration (157) Short term target 250+

RCOM (772) Target 800 SL 766

Reliance Industries (2782) Target 2875 SL 2770

Mercator Line (120) Target 125-128 SL 118

Videocon Industries (370) Target 395 SL 365

GMR Infra (177) Target 185 SL 175

Prithvi Information (299) Target 315-325 SL 295

Sterlite Optical (314) Target 325 SL 310

NTPC Ltd. (240) Target 250 SL 235

Others: Petronet LNG, Nagarjuna Fet, Ispat Industries, IDEA, IDBI, CIPLA, Engineers India, Philips Carban Black.

Good Luck

IPO Talk: Religare Enterprises

Religare Enterprises is entering the capital market on 29th October 07 with a public issue of 75.76 lakh equity shares of Rs.10 each, in the band of Rs.160 to Rs.185 per share. The proposed issue is 10% of the expanded equity of Rs.75.76 crores.

The company is 100% holding company for various subsidiaries engaged in stock broking, personal finance, commodities broking, insurance broking, wealth management services, venture capital, investment banking and art initiatives. Reliance Insurance Holding Co. Ltd., an insurance holding company, is 75% subsidiary of the company. The companies are all in place with strong organization network and capable to achieve scalability, over a period of time. Senior level executives and personnel have been recruited by various subsidiaries and business of all these subsidiaries would witness a sharp increase in time to come.

For FY07, on consolidated basis, total income of the company was placed at Rs.320.12 crores with PBT of Rs.47.60 crores and PAT of Rs.25.02 crores resulting in an EPS of Rs.3.67, on pre-issue equity of Rs.68.19 crroes. For 6 months ending 30-09-07, the total income was placed at Rs.307.96 crores with PBT of Rs.57.64 crores and PAT of Rs.36.73 crores, resulting in an annualized EPS of Rs.10.80. This means, present issue is being made at a PE multiple of 17, based on FY 08 earnings, and at the upper band of Rs.185 per share.

Presently, the company with its subsidiaries have 1,217 business locations managed by the company and its subsidiaries as also Business Associates in 392 cities and towns in India. The company proposes to establish 100 more branches for which Rs.26.50 crores has been allocated. Rs.50 crores has been allocated for funding retail finance business. Rs.60.60 crores has been earmarked for lending business and this amount has been sourced from pre-IPO placement, having made at Rs.160 per share.

The post issue equity of the company will be at Rs.75.76 crores and at Rs.185 per share, it has a market capitalization of close to Rs.1,400 crores which is very low, thus having huge scope of expansion. Also, in view of low-base and recent creation of organization for various subsidiaries, CAGR of atleast 40% for the next three years in bottomline is visible. This kind of performance would be well received by the market, post listing.

The issue is very attractively priced and investment is advised at the upper band of Rs.185 per share. This is probably the most economical broking stock which can give handsome returns to the short term and medium term investors as also good listing gains.

Source:sptulsian.com

*****Latest Grey Market Premium: Rs. 250-270/-

IPO Talk: Mundra Port & SEZ

Mundra Port and Special Economic Zone is entering the capital market on 1st November, 07 with a public issue of 402.50 lakh equity shares of Rs.10 each, in the band of Rs.400 to Rs.440 per share.

The company is the developer and operator of Mundra Port, which has a deep water draft ranging from approx. 15 meters to 32 meters in depth, at a distance of about 15 km. from shore, where it is used to unload crude, a big business potential. The port is principally engaged in providing port services for bulk cargo, container cargo, crude oil cargo, and value added port services including railway services. The commercial operations of the port has commenced from October 2001. Total cargo volume at Mundra Port increased from 11.7 million MT in FY 06 to 19.8 million MT in FY 07.

The concession agreement for the port is 30 years, which would expire on 17-02-2031, and 3,404 acres of land has been permitted to get used for the port alongwith a right to use the foreshore land and waterfront, and on 17-02-2031 the port shall be transferred to Gujarat Maritime Board.

The company presently has 15,665 acres of land available and 16,688 acres of additional land are at various stage of being transferred to the company, thus aggregating 32,353 acres for Port and SEZ.

The present equity of the company is Rs.360.04 crores which will increase to Rs.400.68 crores post IPO, of which, promoters stake would be 81.30% while 10% is being issued to the public, while about 8.7% is held by private equity investors like ICICI Bank, IDFC, Govt. of Singapore, Indivest PTE and 3i Venicle (Mauritius) Ltd.

For FY 07, the income of the company was placed at Rs.596 crores with PBT of Rs.175 crores and PAT of Rs.187 crores, due to deferred tax credit of Rs.13.32 crores. The total debt of the company as at Rs.30-06-07 was at Rs.1,399 crores while net worth was at Rs.764 crores.

If we calculate the enterprise value, post IPO, at the upper band of Rs.440 per share, the same works out at Rs.17,600 crores and adding debt of Rs.1,400 crores it works out to Rs.19,000 crores, which is very low compared to the size and operations of the Port and SEZ.

The company now has estimated a requirement of Rs.3,160 crores, which is mainly being Rs.700 crores for SEZ, Rs.2,000 crores for coal terminal project, Rs.255 crores in Adani Petronet (Dahej) Port, Rs.49 crores for Adani Logistic and Rs.156 crores for Inland Conware P. Ltd. This is being financed by debt of Rs.1,200 crores, internal accruals of Rs.525 crores and Rs.1,435 crores from proposed IPO. At the upper band, issue would mobilize Rs.1,770 crores which would take care of this requirement.

The noteworthy feature of the project is that such a big port is already operational, with virtually, entire land for port and SEZ having acquired. The potential of revenue generation is huge in view of all weather nature as also huge cargo inflow of coal mainly for Tata Power (4,000 MW) Ultra Mega Power Project and Adani Power, 2,640 MW, project. The crude cargo would also give huge revenue to the port. SEZ income would be added to the revenue and profitability of the company, in the coming years. However, concession period of 30 years, expiring in 2031 is considered to be of shorter duration.

As the infrastructure projects have huge potential and this being an operational Port, it represents an excellent investment bet and is recommended for investment even at the upper band of Rs.440 per share.

Source:sptulsian.com

*****Latest Grey Market Premium : 300-320

Markets Today

The markets ended marginally in green off day's high ahead of the Fed meet announcement. Selective buying was seen in power, bank, real estate stocks. Action was seen in the midcap space as the index is up nearly 1% and the smallcap index is giving it good company up 1.5%.
Market is eyeing Fed's crucial decision on rate cut, anayst are expecting a 25 bps rate cut.
On the results front, Bharti's results beat street expectations as non mobile business has helped in the outperformance. However HUL came out with weak set of numbers.
Realty majors Unitech and DLF are trading in green on the back of good set of numbers
Reliance Energy, Ranbaxy, NTPC, Sterlite Ind, Bharti, Reliance Communication, Reliance, Tata Steel, SBI were among the top gainers on the indices.
Top losers on the Sensex are HUL, Grasim, BHEL, Tata Motors, TCS , HDFC Bank and Wipro.
Sensex was up 54.48 points or 0.28% at 19837.99, and the Nifty up 31.90 points or 0.54% at 5900.65.
About 1537 shares have advanced, 1435 shares declined, and 87 shares are unchanged.
The BSE Midcap Index ended at 8,135.21 up 1.1%.
The BSE Smallcap Index ended at 9,796.86 up 1.6%.
The BSE Bankex was up 1% at 10,655.33. Bank of Baroda, PNB, HDFC Bank, Canara Bank, ICICI Bank moved upwards.
The BSE Capital Goods Index was down 1% at 19,795.32. Reliance Infra, Kalpataru Power, Carborundum, Alfa Laval, Greaves Cotton closed lower.
The BSE Auto Index closed at 5,507.17 up 0.5%. Exide Industrie, MRF, Bharat Forge, Mah and Mah, Cummins closed higher.
The BSE Metal Index closed at 17,884.93 up 3.4%. Jindal Steel, Jindal Saw, Hind Zinc, JindalStainless, Sesa Goa closed higher.
The BSE FMCG Index closed down 1% at 2,126.59. HUL, United Spirits, United Brewerie, Godrej Consumer closed lower.
BSE Oil and Gas Index closed at 11,658.48 up 1.2%. Reliance Petro, Petronet LNG, Reliance Natura, IOC, ONGC, BPCL ended higher.
The BSE IT Index was at 4,618.72 down 0.6%. Patni Computer, Tech Mahindra, TCS, Wipro closed lower.
The NSE cash turnover was at Rs 22652.01 crore and the NSE F&O turnover was at Rs 71090.73 crore. The BSE cash turnover was Rs 10018.18 crore. Total market wide turnover was at Rs 103760.92 crore.
Source:moneycontrol.com