Stock Idea: Voltas

Voltas has announced its first quarter results. The company's standalone net profit was up at Rs 85.1 crore versus Rs 52.2 crore (YoY).
Key takeaways from Voltas concall:
Income from Operations rose by 22% to Rs 1017 crores, as against Rs 834 crores in the same period last year.
Operating Profit (Profit before Tax and Exceptional Income /(Expenses)) increased by 32% to Rs 103 crores as against Rs 78 crores in the same period last year.
Profit after Tax increased by 63% to Rs 85 crores, as compared to Rs 52 crores in the same period last year.
EPS at Rs 2.57 on face value of Re 1 (not annualised).
Total order-book at Rs 5923 crores up by 165%.
International order book at Rs 4600 crore.
The Company’s Electro-mechanical Projects and Services segment’s revenues grew by 24%. The Order Book of this segment stands at Rs 5675 crores, registering a growth of 183%.
The Engineering Products and Services segment’s revenues grew by 23%, in the face of the continuing decline in demand for capital equipment.
Mining & Construction Equipment business achieved 39% growth in sales.
The Unitary Cooling Products for Comfort and Commercial Use segment’s revenues grew by 20% including 29% value growth in air conditioners.
The cash balance as on June 30, 2008 is Rs 370 crore.
Source: moneycontrol.com

Markets Today

Markets closed at day’s high after D day verdict as UPA government has won vote of confidence by 19 votes wherein 275 seats were in favour of them and 256 in against of them. It was biggest single intraday points gain for Sensex since March 25, 2008. In last five trading session the Sensex has recovered around 20% from its recent lows of 12576 (July 16, 2008).
All BSE sectoral indices were closed in green. Strong buying interest was seen in bank, realty, capital goods, power, metal and oil and gas sectors, which were up anywhere between 5% and 10%. The BSE midcap and small cap indices were also closed with good gains; they were up 5% and 4% respectively.
For quite some time markets were trading under pressure as political concern, rising crude price, inflation, rupee depreciation. Out of these, now political concern is out of the way after UPA government wins. There are sign of crude cooling off and which will auger well for rupee appreciation. So one can expect further rally in the coming days.
The Sensex was up 838.08 points or 5.94% at 14942.28, and the Nifty was up 236.70 points or 5.58% at 4476.80.
Market breadth was positve, about 2371 shares have advanced, 574 shares declined, and 205 shares are unchanged.
Top gainers on the bourses were Reliance Communications up 12.20%, ICICI Bank up 11.64%, HDFC up 10.92, SBI up 10.45% and Reliance Infra up 10.36%
However, top losers on the bourses were Cairn India at Rs 220.45 down 2.46% Cipla at Rs 232.50 down 2.21% and HUL at Rs 231.05 down 0.65%.
The BSE Bankex was up 9.99% or 662.52 points at 7291.Yes Bank, Karnataka Bank, Kotak Mahindra, Federal Bank, IDBI Bank and ICICI Bank spurted up.
The BSE capital goods index was up 8.18% or 933.47 points at 12,339.77. Punj Lloyd, Siemens, BHEL, Suzlon Energy, Crompton Greave, L&T and AIA Engineering gained.
The BSE realty index was up 8.08% or 388.78 points at 5,199.27. RNRL, Essar Oil, BPCL, IOC and Petronet LNG.
The BSE power index was 7.74% or 194.43 points at 2,707.11.
The BSE metal index was up 6.85% or 838.07 points at 13,070.52. Sesa Goa, Jindal Steel, Ispat Industries, SAIL and Jindal Saw ended green.
The BSE oil & gas index was up 5.14% or 482.28 points 9,864.59. RNRL, Essar Oil, BPCL, IOC and Petronet LNG ended up.
The BSE auto index closed up with 3.86% or 140.12 points at 3,768.18. Cummins, Escorts, MRF, Hind Motors, Exide Industries and Tata Motors moved up.
The BSE IT index was up 2.35% or 85.59 points 3,733.51. Financial Tech, Aptech, HCL Tech and Wipro closed positive.
The BSE health care index was up 1.26% or 52.11 points at 4,192.94. Wockhardt, Dishman Pharma, Piramal Health, Divis Labs and Matrix Lab surged.
The BSE FMCG index was up 1.13% or 23.90 points at 2,141.84. Marico, United Spirits, Bata India and Godrej Consumer. moved up.
Turnover traded by markets has improved, which stood at Rs 95860.28 crore . This includes Rs 20400.14 crore from NSE Cash segment, Rs 68010.68 crore from NSE F&O and the balance Rs 7449.46 crore from BSE Cash segment.

Source: moneycontrol.com

Intraday Trading Calls for 23rd July

Indian Stock Market will see a strong rally today as UPA wins Trust Votes and Crude oil goes down to $127 and also all global markets trading higher. So a good positive closing expected.

Todays' Intraday Trading Calls / Stock Tips:

ROLTA INDIA

SATYAM COMPUTER

VOLTAS

KSK ENERGY

IOC

RPL

For Levels and Targets CLICK HERE.

Today Keep an Eye on NTPC, GVK POWER, JP HYDRO, TATA POWER, Reliance Infra (REL), RPOWER.

Short-Med Term Delivery Buy VOLTAS (121) Target 150+.

Good Luck

What is Nuclear Deal

At the crux of this entire political conundrum, the core issue, which lays quite forlorn and forgotten is the nuclear issue. Today the politicians might have turned it into an opportunity to topple the UPA Govt but few remember that it all started with the nuclear deal.

Surely few of these politicians would have actually taken the effort to read the 82-page nuclear deal and tried to understand what it is all about. Somehow that does not come as a surprise at all! So without getting into the “political” angle of it, let us take a look at what exactly is this nuclear issue. What would India gain if UPA wins the vote and what we stand to lose if the deal gets cancelled?

What exactly is nuclear power?
Nuclear power is generated using Uranium, which is a metal mined in various parts of the world. It produces around 11% of the world's energy needs, and produces huge amounts of energy from small amounts of fuel, without the pollution that you'd get from burning fossil fuels.

Where does India currently stand on nuclear power?
In India, nuclear power is being produced under the Nuclear Power Corporation of India. Seventeen reactors are under operation and five reactors are under construction. These power projects are highly capital intensive and currently, takes care of 2.8% of the power needs of the country. Amongst the 30 countries in the world that use nuclear power, India’s rank at 27 is one of the lowest.

Why nuclear power?
To take India’s economic growth rate to greater heights, there is no doubt that power would be required as the main fuel for this growth. Though coal, thermal and hydro fuel would remain India’s dominant energy mix, it cannot continue to depend on coal alone. Global warming considerations and the immediate availability of clean coal technologies may constrain the coal route at least in the short term. Hydropower may also face constraints that arise from changes in the hydrological cycle triggered by long term climatic change. Hence having nuclear power in India’s energy portfolio is crucial for preserving India’s energy security

What does 123 agreement mean?
The 123 Agreement is the terms of engagement which operationalizes the treaty agreement between India and USA for transfer of civil nuclear technology. India’s right to test nuclear weapons, guarantees of lifetime fuel supply and India’s right to reprocess the spent fuel have all been covered in this agreement.

What is the Hyde Act?
The Henry J. Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006, it is known as the Hyde Act. It is the legal framework for this deal and provides the legal basis for the 123 Agreement with India.

What would the deal with USA mean for India?
The Govt has chalked out a roadmap wherein over the next 25 years, through the deal, it has set a target of generating 20,000 MWe (unit of nuclear power) as against the current 3,900 MWe.

The biggest advantage, which the UPA Govt is actually seeking is projecting to the world that it an ally of USA, which is a superpower in the world of today. The deal would provide India with access to American civilian nuclear technology. It would finally open up the door to US military technology, especially the fascinating US missile defense system.

Once the new reactors are set up, and they go critical without any time overrun, the nuclear power generation would take care of 8% of India’s total power requirement. More than 80% of the power generated in India comes from coal and thermal. And that will continue but just as oil has become critical today, coal will also one day reach such a stage. And unless we have backups ready, our entire country could get unplugged. Having nuclear power could help India, over the long run, offset the rising cost of coal.

Yes, price of uranium is also mounting. Between 2005 (when the India-US nuclear deal was first proposed) and 2007 (when the 123 Agreement was finalised), since then, the spot price of uranium has quadrupled. According to a June 2008 market assessment, a further 58 per cent increase is expected. But remember unlike oil, we are dealing with more mature economies here who will supply uranium and hopefully, they will prevent the present cartelization which we see in oil.

What is the cost of nuclear power?
At present, power from existing nuclear reactors costs, after huge subsidies, between Rs 2.70 and Rs 2.80 per kWh. The coal-fired Sasan mega power project in Madhya Pradesh will be supplying power at Rs 1.196 per unit. The real cost of power from existing nuclear reactors is around Rs 4 per unit; the cost of power produced by new reactors will be around Rs 5.50 per unit. But the economies of scale would soon start giving the advantages. Plus, these costs are today at the present levels of coal price, so when price of coal escalates further, cost would only go up.

What would the deal mean to Indian companies?
India has plans to set up 15 plants over the next 20 years. Business worth $100 billion is expected to be generated from this nuclear deal over the next 20 years. Apart from USA and France, which would benefit immensely, Indian companies too will get a part of this juicy pie. Over 400 Indian companies are expected to benefit, mainly for those involved in making equipment for nuclear power plants.

Why did the Left withdraw support?
The Left alleged that the deal would undermine the sovereignty of India's foreign policy. It has also stated that the Indian government was hiding certain clauses of the deal, which would harm India's indigenous nuclear program.

Source: sptulsian.com

Intraday Trading Calls for 22nd July

Indian Stock Market may open flat to nagetive and remains very volatile throughout the day.

Today's Intraday Trading Calls / Stock Tips:

LANCO INFRA
ESSAR OIL
VOLTAS
LIC HOUSING
JAIPRAKASH ASSOCIATES
CAIRN INDIA

For Levels and Targets CLICK HERE.

Short-Med Term Delivery Buy VOLTAS (124) Target 150+.

Good Luck

Stock Ideas: Pitti Laminations Ltd. Cosmo Films Ltd. 3i Infotech Ltd.

Pitti Laminations Ltd. (Code: 513519) (Rs.35.75) is primarily engaged in the manufacture of electrical steel laminations and stampings, which form a critical part in all industrial motors, alternators, pump sets, aeronautics, windmill generators and DG sets. It even produces small laminations on its High Speed Press for compressors. With an installed capacity of 25,000 MTPA, it is operating at 70% capacity utilisation leaving ample scope for future growth. Besides in January 2008, it has completed its forward integration plan and has put up a project for fabrication of steel stator bodies, machining of stator bodies and dropping of assembled stator core into the stator body. This will result in value addition and considerable improvement in the margin. However due to the rupee appreciation during FY08, it reported lower OPM of 12% against 14% in FY07. Accordingly, its sales improved by 15% to Rs.170 cr. but PAT declined by 35% to Rs.6.50 cr. after huge tax provisioning of Rs.4 cr. equivalent to 40% of PBT. It declared 20% dividend, which gives a yield of nearly 6% at CMP. With the rupee stable above Rs.42 it has the potential to clock a turnover of Rs.200 cr. with PAT of Rs.9 cr. i.e. an EPS of Rs.10 on its equity of Rs.9.50 cr. for FY09. A strong buy.

Cosmo Films Ltd. (Code: 508814) (Rs.83.60) is the pioneer and one of the largest manufacturers of Bi-axially Oriented Polypropylene Films (BOPP) with an installed capacity of 77,000 MTPA. It also manufactures thermal lamination film, an export focused product with higher margins. For future growth, the company is expanding its capacity by adding two BOPP lines of 40,000 MTA each. The first line is expected to be commissioned before March 2009 for which orders have 10 been placed for all major equipments. In addition, it is also adding two new lines in thermal lamination and increasing its capacity from 13,500 to 19,500 MTA. To fund all this, it recently placed 31 lakh warrants to be converted at Rs.107 per share. It has also taken the approval for issue of 10 lakh equity shares under ESOP. For FY08, it sales improved by 10% to Rs.585 cr. but the net profit zoomed by 80% due to better operating margin, lower interest and lower depreciation. It reported an EPS of Rs.23 and declared 50% dividend, which gives a yield of more than 6% at CMP. However this year, it may face margin pressure due to rise in crude oil prices with polypropylene being its main raw material. Hence it may clock a turnover of Rs.625 cr. with profit of Rs.35 cr. i.e. an EPS of Rs.16 on its diluted equity of Rs.22.50 cr.

3i Infotech Ltd. (Code: 532628) (Rs.94.10) is the fourth largest Indian software products company offering a comprehensive range of software products & solutions primarily for banking, insurance, capital markets, mutual funds, telecom, manufacturing, retail & distribution industries. For Q4FY08, its revenue increased by 70% to Rs.352 cr. and net profit jumped up 60% to Rs.50 cr. With significant growth anticipated in the transaction services business in India, the company has set up a hub and spoke model spanning across the country with cost efficient delivery capabilities and it is into processing of credit cards, insurance applications, contact point verification, soft collections, cheque clearing services, reconciliations, etc. As on date, the company has a very healthy order book position of Rs.865 cr. For entire FY08, it recorded 80% and 75% growth in sales and net profit to Rs.1223 cr. and Rs.183 cr. respectively. This translates into an EPS of Rs.14 on its current equity of Rs.130.50 cr. However, the EPS works to Rs.11 on its fully diluted equity (conversion of all FCCB) of Rs.165 cr. Recently the company has acquired a strategic stake of 26% in the Hyderabadbased Locuz Enterprise Solutions Ltd. for an undisclosed amount, with a commitment to acquire the remaining stake over a period. A strong and a safe bet.

Source: Moneytimes (Internet)

Countdown Starts

The countdown has begun. The vote of confidence is in progress, yet it fails to instill any sense of confidence in the political machinery of India today. The blatant horse trading and the way deals have been negotiated has left one completely bewildered about the kind of politicians, supposedly the leaders, we have today. The actual trust vote is scheduled to happen tomorrow between 5-6 PM and till then, this pushing and shoving of MPs and volley of words is expected to continue.
Just as the majority of the Indians today do not know where the Govt is headed, the stock market is also a reflection of this same sentiment. Since morning, despite the falling crude prices and positive global cues, the Indian bourses are directionless. Trading is extremely choppy and more stock specific. The market has taken the news of Reliance Communication (Rcom) calling off the deal with MTN in its own stride. The stock risen and reposed its faith back into the stock.
Despite all the happenings in the corporate world, politics has taken over all. Till this cloud of uncertainty is not cleared, the mood will remain despondent, which is till tomorrow’s session. By late evening we will know the outcome and that will give the markets a sense of direction for trading on Wednesday.
At this point of time, getting the magic number of 271 seems daunting for the UPA. The way Mayawati has made herself the nucleus of this entire drama left everyone completely dazzled. Her rise to power, the fact that she is being looked upon as the next Prime Minister of India is amazing, albeit a tad difficult to digest.
There is one school of thought which says that looking at the immense compromises the UPA Govt is making to accommodate the nuclear issue, taking on proven criminals and allowing them to bargain their way, isn’t that a major comprise on national interest? The Patna High Court last week granted bail to Mohammed Shahabuddin to attend the special session of parliament. It also temporarily released Lok Jantantrik Party lawmaker Surajbhan Singh, while a lower court in Allahabad allowed Samajwadi member Atiq Ahmed to attend the vote. The Delhi High Court also gave permission to Rajesh Ranjan, alias Pappu Yadav, to attend parliament. One cannot help but raise the question of political morality here.
There is no doubt that India today needs the nuclear deal. We are sitting on a power crisis and we need to work on this nuclear to avoid blackouts. The Prime Minister has reiterated that the signing of this accord will allow India to import technology and fuel without joining the 1970 Nuclear Non-Proliferation Treaty. The deal will help India increase its nuclear generation almost 10-fold and will help end the power crisis.
The markets would naturally react positively if the UPA manages to get the required number of votes. But this positive would then once again get dependent on the inflation and crude oil numbers. So even if we see a rise, it could be shortlived. And if the UPA fails, the markets would fall and then wallow in self pity, letting itself drown in the inflation and crude oil figures.
But yes, what could indeed be a welcome scene would be the UPA winning the trust vote and the crude oil also slipping downwards. Now that will drive away the bears for sure! If crude continues to fall, inflation would automatically start showing signs of coming down. That’s a clear win-win situation, Let us wait and watch and see how the cookie crumbles!

Source: sptulsian.com