Investment Picks: IDEA, Llyod Electric, IGL

Idea cellular (Rs. 105.00) (Code 532822) :-Financial performance of the one of the leading wireless telecom company was excellent in the quarter ended on 31st March 2008. The company has its operations in 11 out of the 22 circles in the country. The company will start its operations in other 11 circles in around one year. The company is expected to increase its subscriber base by on crore customers and with inclusion of new subscribers base total subscribers of the company will reach to the level of 2.5 crores. Company is likely to add around 17 lac customers, a month after six months and growth rate of the company is expected to touch the level of 50 per cent by the end of calendar year 2008. The company has turn over of Rs. 6719 crores and net profit of Rs. 1044 crores during the FY ended on 31 March 2008. Company has EPS of Rs. 3.96 and PE of 27. EPS of the company is likely to reach to the level of Rs. 5.66 and Rs. 8 in FY 2008-09 and 2009-10 respectively, where as PE of the company is expected to
touch the level of 19.26 and 13 respectively during the two FY. Private equity company Aditya Birla has invested Rs. 64 crores in the company to purchase 20 per cent equity stake of the company. Aditya Birla has total 57.69 per cent stake in the company. Even international investors have started taking interest in the company.

Lloyd Electric & Engineering (Rs. 94.00) (Code 517518) :- The Company is largest producer of Evaporate and conditioner coils in the country. The company has captured 60 per cent market share. The company manufactures window split Air conditioners for MNC’s. The company also provides AC coach on turn key basis to railways. The company is also in the field of designing, manufacturing, supply and installation plus maintenance services. Gross turnover of the company was Rs. 650 crores and profit of Rs. 31 crores after payments of tax of around Rs. 58 crores (PAT) and has EPS of Rs. 19. Investors may invest in the scrip as the price is damn cheap.

Indraprasth Gas (Rs. 118.00) (Code 532514) :- Company was promoted by BPCL and GAIL to work in the area of distribution. Both promoters has 22.5 stakes in the company, where as mutual funds has total holding of around 40 per cents. Public has 15 per cent shares in their kitty. Total equity capital of the company is Rs.120 crores. Gross income of the company during FY 2007-08 was Rs. 706 crores, which is in comparison to the income of company during FY 2006-07 of Rs. 614 crores. PAT of the company stood at Rs. 174.50 crores and EPS at Rs. 12.46. Company has increased its dividend payments. Stock has seen 52 weeks high of Rs. 182 and low of Rs. 102. Investment the scrip may provide good return in 8 to 12 months period.

Source: internet (Smart Investment)

Stock Idea: Pondy Oxides & Chemicals Ltd.

Pondy Oxides & Chemicals Ltd. (Code: 532626) Rs.20
Incorporated in 1995, Pondy Oxides & Chemicals Ltd. (POCL) is one of India’s leading integrated metallic oxides and plastic additives producers. It manufactures zinc oxide, litharge (Lead monoxide), grey oxide (lead sub oxide) red lead and solid/liquid stabilizers of PVC. Metallic Oxides are largely used in batteries and the automobile sector whereas plastic additives are primarily used for the manufacture of PVC stabilizers. POCL has even promoted a subsidiary company, M/s. Baschem Pharma Ltd. to manufacture liquid stabilisers, epoxy oil and paint dryers. Besides, it also has a facility to manufacture lead acid batteries, which manufactures stationary batteries used for uninterrupted power supply (UPS), inverters, emergency lamps, photovoltaic batteries and automobile batteries. But recently, the company decided to dispose-off the same so that it can concentrate on its core business. Importantly, POCL boasts of being an integrated producer with in-house production facility of lead metal for captive consumption.
POCL’s has four manufacturing plants spread across Pondichery & Tamil Nadu with an installed capacity of 4680 MTA for lead sub oxide, 2880 MTA for zinc oxide, 1800 MTA for litharge and 360 MTA for red lead. To sum up, it has the capability to produce 9720 MTA of metallic oxides and 4200 MTA of PVC stabilizers. In addition it has a name plate capacity to manufacture 96,000 units of lead acid batteries at its Madurantagam plant, which the company is looking to sell off. Incidentally, lead is the major raw material for production of metallic oxides followed by zinc. Hence in order to reduce its dependence on suppliers and ensure regular and economical supply, POCL undertook backward integrated in late 2006 to manufacture lead and lead compounds. It has established a state-of-the-art manufacturing plant with a rated capacity of 14,4000 MTA for lead and lead alloys and another 3600 MT for lead compounds. The company is also engaged in the smelting, refining and alloying of lead metal and specialises in manufacturing lead alloys like lead tin calcium, lead tin, lead selenium alloy, lead antimony selenium alloy and others, which find use in the battery industry for grid casting for lead-acid batteries. Meanwhile, POCL is also looking to venture into the manufacture of refined Zinc and the project is under consideration. Another significant step recently finalized by the company is to acquire 51% stake in M/s. Lohia Metals Pvt. Ltd. at an investment of around Rs.2.25 cr. and make it a subsidiary. Lohia Metals is an associate company with a turnover of roughly around Rs.25-30 cr. and is engaged in the process of refining and alloying of lead metal with an installed capacity of 12,000 MTA. To fund its backward integration project, POCL had raised Rs.7.35 cr. in August 2006 through a 2:3 rights issue Rs.4 per share on the face value was Rs.2 per share. Subsequently, the company also issued 1:10 bonus and later consolidated all the equity shares on 20th January 2007 from the face value of Rs.2 to Rs.10 per share. On better capacity utilisation of the lead smelter and higher price realisation for metallic oxides, POCL’s sales shot up 60% to Rs.170 cr. and net profit jumped up 55% to Rs.4.50 cr. for FY08. It is expected to announce 15% dividend, which will give a yield of mind-boggling 7.5% at CMP. With robust metallic oxide prices and being an integrated producer as far as lead is concerned, POCL is expected to clock a turnover of Rs.200 cr. with PAT of Rs.5 cr. for FY09 i.e. EPS of Rs.5 on its equity of Rs.10 cr. So despite its low profit margin and low promoter holding, investors can buy this scrip at current levels as it can give 50% return in 12-15 months.

Source: Internet (MT)

Stock Idea: Prime Property Development Corp.

Prime Property Development Corpn. (Code: 530695) Rs.65.75
Incorporated in 1992, Prime Property Development Corporation Ltd. (PPDCL) is small real estate developer based in Mumbai. It made a late entry and started its real estate activity only in 2002. PPDCL is led by Shri Padamshil L Soni who has a rich experience of nearly two decades in construction. Apart from his two sons, the company has eminent personalities on its board including Shri Y. C. Pawar, Shri K. Nalinakshan, Dr. B. Samal to name a few. Under their leadership, the company has now positioned itself as a unique company catering to the niche segment of the property market. Within a short span of time, the company boasts of constructing landmark residential and commercial buildings for high end customers in Mumbai. ‘Prime Beach’ and ‘Prime Centre’ constructed in Santracruz by the company are among the most luxurious apartments and also well known for its modern and elegant architecture. On the other hand, its ‘Prime Plaza’ is a 100% commercial project with ultra modern facilities in Santacruz was a huge success. ‘Prime Avenue’ – a 100,000 sq. ft. residential cum commercial project in Vile Parle was the flagship project of the company comprising residential flats and large commercial units like showrooms, shops and offices.
Currently, PPDCL is developing two projects that are nearing completion. Of these, ‘Prime Down Town Mall’ project is much bigger being a 270,000 sq ft luxurious composite Mall with multiplexes. The mall is at the prime location of Hughes Road, Mumbai and is being constructed in partnership with others. Once operational it will be among the largest malls in Mumbai with hi-tech elevation and an international feel. ‘Prime Tech Park’, the other project is a 90,000 sq ft commercial building in Vile Parle mainly for IT /ITES companies. It is just next to the Western Express highway and barely a few kms away from the domestic and international airports. Apart from these two projects, the company has undertaken two more projects, of which both are shopping malls – one in Mumbai and the other in Pune. The Mumbai mall name ‘Prime Square’ is a four storey, 70,000 sq ft mall located on, S.V. Road, in Goregaon – a flourishing suburb of Mumbai. The Pune mall called ‘Prime Pune Mall’ will be a gigantic 430,000 sq. ft. state-of-the-art mall with anchor shops, multiplexes, food courts, entertainment area and a hotel. In short, the company is estimated to generate more than Rs.500 cr. of revenue over the next 2-3 years.
PPDCL has also finalised a location in Vile Parle (W) to construct a 60,000 sq ft shopping mall and has even created a blue print for the same. It is also planning to develop a residential project in Pimpri, Pune. The plan is still on paper and yet to be finalized. Financially, due to sale of units in ‘Prime down Town Mall’ and ‘Prime Tech Park’, PPDCL has ended FY08 on quite a buoyant note. It recorded a topline of Rs.105 cr. and bottomline of Rs.32.70 cr. Importantly, it has made the highest tax provisioning of Rs.17.50 cr., which ensures the integrity of its real profit. This translates into an EPS of Rs.16 on its equity of Rs.10 cr. with face value of Rs.5 per share. It is expected to declare Rs.2.50 as dividend which gives a yield of nearly 4%. Considering the company’s current projects on hand and that too at prime locations, it may report total revenue of Rs.150 cr. with net profit of Rs.40 cr. for FY09 i.e. an EPS of Rs.20 on its current equity. Hence, the scrip is available fairly cheap at a current P/E ratio of merely 4 times. At the same time, adverse profiling of the sector coupled with higher input prices, imposition of service tax on rentals of commercial property & hardening interest rates are bound to dampen the sentiment and affect the demand for certain categories of properties. Yet, the company is largely insulated from the downturn and investors can buy the scrip at current levels with a price target of Rs.100 in 9-12 months.

Source: Internet (MT)

Stock Ideas: Mercator Lines, Rohit Ferro Tech, UTV Software

Religare Research has recommended a buy rating on Mercator Lines with a target price of Rs 160 in its June 16, 2008 research report. "On an expansion spree – fleet size doubled over last two years to 29 vessels with firm plans to ramp up to 33 vessels by December 2010. Also, an oil drilling jack up rig, scheduled for delivery in Q1FY09, has already been contracted for 3 years.Augmented fleet amid favourable day rate conditions to drive revenue and margins. Revenues expected to log 22.3% CAGR over FY08-FY10, with earnings CAGR of 28.6% and ROE of 30%."
"Attractively priced at P/E of 4.9x and P/BV of 1.1x on FY10E. Our valuation of Rs 160 is based on 1.2x current NAV. At our target price, the stock would trade at a P/E of 6.9x and P/BV of 1.6x, which is reasonable given the expanded fleet and strong earnings growth," says Religare's research report.

Religare Research has recommended a buy rating on Rohit Ferro Tech with a target price of Rs 216 in its June 16, 2008 research report. "Riding high on the ferro alloy super cycle, as a severe ferro chrome supply crunch in the world market has escalated prices of this metal to unprecedented levels. Rohit Ferro is thus witnessing a sharp increase in profit per tonne.Timely expansion coupled with increasing feedstock linkages would further bolster growth."
"Acquisition of an operational coal mine in Indonesia (60% economic interest in thermal coal reserve of 20mn tonnes and coking coal reserve of 5 mn tonnes) and arrangements with a chrome ore mine in Iran would provide substantial raw material links. Coal mine would meet input requirements of a 110MW captive power plant coming up by FY10, besides generating revenues from sale of coal in the open market. Business valued at Rs 216 using an average of 5.5x P/E and 5x EV/EBITDA on FY10E, based on industry average multiples," says Religare's research report.

Religare Research has recommended a buy rating on UTV Software Communications with a target price of Rs 1068 in its June 16, 2008 research report."Media industry valued at Rs 513 billion and expected to log an 18% CAGR over the next five years, with films growing at 13%, television at 22% and animation & gaming at 25% (CAGR). UTV is a vast media conglomerate with strong business verticals and ample funding to ride on the opportunities in the sector. Fund infusion of Rs 13bn through recently concluded deals with Disney and the increased promoter group stake would anchor the company’s growth. UTV set to register a CAGR of 86% in revenue and 80% in PAT over FY08-FY10. Film business projected to grow at 47%, television at 40% and gaming at 140% CAGR."
"We have an SOTP-based target price of Rs 1068. At its peak, the stock traded at 23.7x FY10E earnings, while valuations are now at 16.2x – a significant discount to its previous high," says Religare's research report

Stock Idea: Hotel Leela

Hotel Leela Venture has announced a consistent performance for the year ended 31/03/08. The company reported a 24% rise in net sales for FY08 and this was matched with a 49% rise in total operating expenses. What is noteworthy is that its employee cost surged up from Rs.59 crore in FY07 to Rs.80.73 crore in FY08. Consequently, EBIDTA rose by 16%. It maintained its interest outgo at almost the same levels and depreciation was up marginally. This led to PBT improving by 18%.
For FY08, its total tax outgo was also maintained at Rs.73.18 crore as against Rs.74.06 crore in FY07. But what is significant here is that it made its entire tax provisioning in Q4 FY08 which saw a huge outgo at Rs.49.85 crore and this led to the PAT in Q4 being at the lowest levels when compared to the remaining three quarters of the year. Its PAT for Q4 was at Rs.29.41 crore and it ended the year FY08 with a PAT of Rs.148.55 crore. On an equity of Rs.75.56 crore, it ended the year with an EPS of Rs.4.01 on a face value of Rs.2 per share.
Continued buoyancy, especially in the Bangalore and Mumbai markets, led to the company performing better and as per current trends, is poised to continue with the growth in the current year inspite of the slowdown in the US and European economies from where most of the corporate an leisure travelers originate.
The various projects under implementation are progressing well with Gurgaon opening in October 2008, Udaipur in January 2009, Chennai in October 2009 and Chanakyapuri Delhi in 2010.
The stock has remained more or less lackluster at Rs.38-39 levels for the past whole week, which is more or less at its low of Rs.37. No major spurts are expected in the short term. Stay invested with a long term perspective.

Source: sptulsian.com

Markets Today

Inflation in double digit has bruised the markets very badly; the Sensex lost over 500 points. Blood-thirsty bears marched harshly on bulls and remained active through the day. The Sensex and Nifty hit new 2008 lows; it was lowest closing for both indices since August 2007. Indices of rate sensitive sectors like Bankex, Realty and Auto also touched new 2008 low. Advance:Decline ratio was pathetic. All BSE indices battered severely. Experts say that RBI will have to use monetary tools to contain inflation.
Inflation Internals
Fuel, power, lubricants 7.80%
ATF prices 14%
Diesel 21%
LPG 20%
Naptha 17%
Furnace Oil 15%
Food articles -1.10%
Non-food articles 1.40%
Manufactured pdts 0.30%
Edible Oil Major Gainer
Sunflower oil 6%
Groundnut 3%
Soybean/vanaspati 2%
Mustard seed 4%
Wholesale Price Index for the week ended June 7 stood at 11.05% as against 8.75% in earlier week. This is way above markets' estimation, which was expected around 9.93%. It is at 13-year high; last time inflation touched a high of 11-11% in May 1995. Inflation for April revised to 7.95% versus 7.33% earlier.
Oil price hike, which declared on June 4, 2008, was the main reason behind this higher inflation. Commerce Secretary says that they see high inflation for next 2 months and will consider food grain, vegetable price control to contain inflation.

Finance Minister says, "Rise in inflation was expected and we will have to look at stronger steps on fiscal, monetary side. Hike in petrol price is unavoidable."
Analysts feel that fuel price hike has not fully reflected in inflation numbers. It will see more impact in the next few weeks. They expect that the RBI will hike CRR or Repo rate before Monetary Policy. It will affect growth in infrastructure sectors as capital availability become scare, squeeze banks margin and impact on auto sales.
Moody's says, "RBI looks set to further tighten Monetary Policy and not to wait until next formal review. Inflation and tightening monetary policy will weigh on investor sentiment."
Broader indices have shattered completely and hit new 2008 lows again in just 10 days after June 10. The Sensex and Nifty hit new 2008 lows of 14,519.27 and 4333.60, which broken earlier lows of 14645.3 and 4369.8. Volumes were very high today; total turnover traded by the markets stood at Rs 85088.58 crore. This includes Rs 21056.2 crore from NSE Cash segment, Rs 58533.66 crore from NSE F&O and the balance Rs 5498.72 crore from BSE Cash segment.
The Sensex crashed nearly 569 points and the Nifty 171 points while touching day's low. The Sensex closed at 14,571.29, down 516.70 points or 3.42% and the Nifty at 4347.55, down 156.7 points or 3.48%. All BSE and NSE indices closed in red. ONGC is the only stock, remained strong through the day.
Amongst frontliners, Zee Entertainment was down -8.45%, Reliance Communication -6.68%, Reliance Ind -6.63%, Hindalco -6.39% and Jaiprakash Associates -6.03% while ONGC was up 1.56%.
Market breadth was weak; about 514 shares have advanced while 2328 shares declined. Nearly 284 shares remained unchanged.
Realty Index was the worst hit and hit new 2008 low. Index fell by 250.79 points or 4.45% at 5,383.81 due to huge selling in HDIL, Akruti City, Sobha Developers, Parsvnath, Indiabulls Real, DLF, Omaxe and Unitech.
Metal stocks like NALCO, Hindalco, Tata Steel, Sesa Goa, Jindal Steel, SAIL and Sterlite Ind lost shine. Index was down 603.80 points or 3.99% at 14,528.06.
Bankex lost 208.40 or 2.97% to settle at 6,804.78. Major losers were Bank of India, Bank of Baroda, IOB, SBI, Union Bank, Kotak Mahindra, ICICI Bank and HDFC Bank. Deutsche Bank says, "We see another 1/2 quarter of double-digit inflation and more RBI tightening."
Oil & Gas stocks took huge beating; Index fell 5.03% or 498.96 points at 9,419.89 as selling pressure seen in RNRL, Essar Oil, Reliance Ind, Cairn, GAIL and BPCL. Reliance Industries has hit new 2008 low and closed down by 6.63% at 2,099.20.
FMCG Index went down 2.51% at 2,234.23 on the back of weakness in GSK Consumer, United Breweries, Colgate, HUL, ITC, Marico and Dabur India.
Power stocks like Torrent Power, Reliance Infra, Reliance Power, Power Grid Corp, Tata Power, NTPC, CESC and Suzlon Energy have lost ground. Index plunged 2.5% at 2,539.84.
Auto stocks like TVS Motor, Bharat Forge, Hero Honda, Ashok Leyland, Tata Motors, Maruti Suzuki and Punj Tractors lost the road. Index was down 101.27 points or 2.44% at 4,042.86. Ashok Leyland says that such high inflation may result in incresae in interst rates; CRR hike will affect the CV industry and overall industry.
IT Index also caught into bears' grip, lost 101.28 points or 2.35% at 4,204.62. Major losers were Satyam, Patni Computer, Tech Mahindra, Wipro, TCS, HCL Tech and Infosys. S Gopalakrishnan of Infosys says that higher inflation will increase the cost of doing business.
Capital Goods stocks also hammered a lot. This includes Gammon India, Praj Industries, Siemens, Rel Ind Infra, Crompton Greaves, Punj Lloyd, BEML, Bharat Elec, ABB, L&T and BHEL. Index fell 267.90 points or 2.3% at 11,399.79. Lanco Infratech says that Inflation concerns are in the direction of interest rates and rising rates will be a concern for the infrastructure sector as a whole. They see hardening of interest rates by 50 bps from now.
Pharma stocks like Piramal Healthcare, Sun Pharma Adv, Aurobindo Pharma, Matrix Labs, Biocon, Dr Reddy's Labs, Wockhardt, Cipla and Ranbaxy Labs lost ground. Index fell 101.52 points or 2.29% at 4,325.40.
Midcap Index slipped 3.17% or 197.74 points at 6,032.43. Amongst midcap stocks, UB Holdings, Gammon India, Rajesh Exports, Corporation Bank, National Fert, BGR Energy, IFCI, Akruti City, Piramal Healthcare, Walchandnagar, Torrent Pharma, Deccan Aviation and Usha Martin were down over 7%.
In the small cap segment, Sical Logistics, OCL India, ETC Networks, Rain Commodities, Suprajit Eng, Hind Nat Glass, English Ind Cla, Arrow Webtex, Tata Metaliks, Automotive Axle, Zenotech Labs, Gayatri Project and Panchmahal Stee crashed over 9%. Small Cap index fell 262.76 points or 3.43% at 7,397.66.
Most active counters on the bourses were Reliance Industries, L&T, Reliance Comm, Ranbaxy Labs, ICICI Bank and HDFC.
On weekly basis, the markets smashed out cruelly. Sensex plunged 4% and the Nifty 3.7%; respective indices slipped nearly 1200 points and 325 points from weekly highs. BSE Capital Goods, Oil & Gas, Realty and Metal Indices were down 5%. Reliance Industries lost -7.5%, Bharti Airtel -6%, Reliance Communication -9.5%, TCS -5% and DLF -4.5%.
On the global front, Asian markets ended mixed; Nikkei was down -1.33%, Taiwan Weighted -1.8%, Hang Seng -0.23% and Kospi -0.56% while Shanghai was up 3.01% and Straits Times 0.31%. European markets were trading flat, at the time of writing market report.

Source: moneycontrol.com

Intraday Trading Calls For 20th June

A Good Bounce Back expected in Stock Market India. Closing should be positive with good gains today.

Today's Intraday Stock Tips/Trading Calls:

VOLTAS

RPL

JP ASSOCIATES

YES BANK

PRAJ INDUSTRIES

LIC HOUSING FINANCE

For Levels and Targets CLICK HERE.

Buy Spanco Tele 508976 (120) for Very Short Term Target of Rs. 145-160.

Good Luck