Stock Idea: Mahindra Satyam

The market was grossly disappointed with the numbers of Mahindra Satyam for Q4FY11. It posted a consolidated net loss of Rs.327 crore despite a 7.5% rise in revenue. But this loss was mainly on account of the one time exceptional expenditure spent on lawsuit settlement. Exceptional items was to the tune of Rs.571.5 crore in Q4FY11 related to restructuring, forensic investigation and litigation support, class action settlement consideration and provisioning for impairment losses in subsidiaries. And for FY11, exceptional expenditure was placed at Rs.641 crore. So till date the company has paid off US$ 125 million on class action cost, $10 million as US Securities and Exchange Commission (SEC) cost and $70 million for Upaid lawsuits.

The good part is that the company has completed cleaned up its books after the scam. It will now begin FY12 truly on a clean slate. Volumes have started picking up which rose 3.5% in FY11, mainly on the back of business from America and Asia-Pacific. And indicating the turnaround is the fact that it plans to hire around 17,000 people in current fiscal. Its current headcount is at 30,000. Its merger with parent company, Tech Mahindra is still quite far away as it is looking at a horizon somewhere by mid next fiscal. Baring this exceptional expenditure, overall, the company had done well and current fiscal could be its true turnaround year.

Source: Internet (Premiuminvestments.in)

Intraday Trading Calls for 01st June

Intraday Trading Ideas:

Buy PFC Above Rs. 203/- Target Rs. 207-212/- Stop Loss Rs. 201/-.

Buy IFCI Above Rs. 48.50/- Target Rs. 51-53/- Stop Loss Rs. 47.70/-

Buy UFLEX Above Rs. 190.20/- Target Rs. 196-202/- Stop Loss Rs. 197/-

Buy ROLTA Above Rs. 139.20/- Target Rs. 143-148/- Stop Loss Rs. 137/-

GOOD LUCK

Stock Idea: Arvind Ltd.

As expected, the company ended FY11 on a high note. Despite a 33% rise in raw material costs and 16% rise in interest outgo, the company, on a 25% rise in consolidated net sales, posted a whopping 211% rise in net profit. Call it is the base effect or better realisations, the company has done well. Even sequentially, for Q4FY11, though the growth is not as trailblazing as on the annual basis, topline grew 19% and bottomline by 31%. Interestingly, raw material cost for the quarter was down 7%. This shows that cotton prices are on the decline.

Arvind holds 54% stake in another listed group company, Arvind Products and this company is now to be merged with Arvind. The merger ratio is 1 share of Arvind for every 11 shares of Arvind Products. The company is banking big on its realty business in current fiscal. It has already formed a JV for a large township project with Tatas for its 134 acres into a SPV. 50% of the value of land, Rs.125 crore is expected to accrue to the company in current fiscal. For FY12, the company hopes to notch up a turnover of around Rs.4800 crore and if it is able to maintain the same margins, then a net profit of around Rs.195 crore. On an equity of Rs.257.81 crore (includes Rs.3.41 crore from merger with Arvind Products) the FY12 EPS of Rs.7.55 discounts the current price by around 10 times. A good bargain for the largest denim making company in the world.

Source: Internet (Premiuminvestments.in)

Intraday Trading Calls for 31st May

Intraday Trading Ideas:


Buy PFC Above Rs. 200.60 for Target Rs. 207-212. Stop Loss Rs. 197.00

Buy VALECHA ENG. Above Rs. 102.10 Target Rs. 106-110/- Stop Loss Rs. 100.00

Buy RPOWER Above Rs. 116.20 for Target Rs. 120-123. Stop Loss Rs. 114.00

Buy GITANJALI GEMS Above Rs. 282.00 Target Rs. 290-298. Stop Loss Rs. 277.00

GOOD LUCK

Intraday Trading Calls for 30th May

Intraday Trading Ideas:

Buy PFC Above Rs. 200.60 for Target Rs. 207-212. Stop Loss Rs. 197.00

Buy Camlin Above Rs. 80.25 for Target Rs. 84-88. Stop Loss Rs. 78.50

Buy RPOWER Above Rs. 116.20 for Target Rs. 120-123. Stop Loss Rs. 114.00

GOOD LUCK

Stock Idea: Lakshmi Vilas Bank

Lakshmi Vilas Bank can move to Rs 145 in the next four-six months time, says SP Tulsian of sptulsian.com.

Tulsian told CNBC-TV18, "Lakshmi Vilas Bank has shown a very good performance for Q4. If you take their overall FY11 performance, the bank had posted an EPS in double digits that is Rs 10 plus and their fall in the NPA was at 4% plus as of March 31, 2010 and has fallen to less than 1% to be precise at 0.91%. They have a total 273 branches with presence in 16 states. If you take the marketcap of the bank which is at Rs 440 crore that means each branch is valued at a valuation of Rs 1.5 crore."

He further added, "If you see the financials or the provisioning coverage ratio which is at 77% against the stipulation of 70% and apart from improvement in working in Q4, the bank will be aggressive in opening more branches going forward. The same kind of profitability is likely to continue and I won’t be surprised if I see an EPS of over Rs 12 plus for the bank in FY12. The stock looks quite good at Rs 112. I am expecting that probably it can move to about Rs 145 in the next four-six months time."

Stock Idea: Mayur Uniquoters

Mayur Uniquoters can test Rs 400 in the next six-eight months time, says SP Tulsian of sptulsian.com.

Tulsian told CNBC-TV18, "Mayur Uniquoters is a very established company which makes synthetic leather. If you see their financials, the company has posted an EPS of close to Rs 45 for FY11 with PAT margin of close to about 10%. Presently, the company is operating with a plant capacity of 1.4 running million meters per month. Now they are raising their production capacity from 1.4 million per month to 1.9 million per month with the increased capacity operational from July."

He further added, "Their topline has seen a growth of 50% in FY11. Their total income was about Rs 250 crore while the bottomline grew by about 56-57%. The best part is that they are debt free and have a cash balance of about Rs 24 crore in the books. The expansion will get implemented in this cash balance and since their EPS for FY11 is Rs 44-47, I am expecting the expansion to happen by July. That will also contribute for about eight-nine months working in FY12. One can safely assume that they should be able to post an EPS of at least Rs 60."

"The product has very good demand and is supplied largely to auto seats and in furnishing. Their customers are Maruti, Honda, Hero Honda which they supply synthetic leather too. The share is viable at a PE multiple on historic earning at about 5 PE multiple. If I take the forward earnings it is ruling at 3.5-4 PE multiple and debt free status with promoter stake of 75%, this is quite a safe and good growth oriented stock. I expect a price of Rs 400 in the next six-eight months time."