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T
I
M
E
S
A TIME COMMUNICATIONS PUBLICATION
VOL. XVII No. 9
Monday, January 14 – 20, 2008
Pages 24
Markets must consolidate
for a sustainable rally to unfold
By Sanjay R. Bhatia
The markets displayed extreme bouts of volatility even though they continued to touch new historic highs last week.
However, profit booking and selling pressure at higher levels did not allow the markets to stay near their tops for a long.
Traders and speculators were seen switching positions from mid-cap and small-cap stocks to frontline and index
heavyweight stocks. The volumes recorded have been lower along with the advance-decline ratio, which has also
displayed weakness during the week. Incidentally, FIIs remained net buyers in the cash segment but were sellers in the
derivatives segment. Domestic institutional investors, too, were net sellers.
Global cues remained mixed with crude oil prices softening and
displaying a range bound trend. Global markets, too, remained
mixed on the back of negative economic data emanating from
the US. FII fund flows have started improving which augurs
well for the markets. The earnings season has started on a good
note. Now, it is important that the markets stabilise and
consolidate at the present levels for a sustainable rally to unfold.
Stock specific action will continue amidst intermediate bouts of
volatility and choppiness due to the earnings season. Liquidity
would continue to remain thin due to the impending IPOs. In
the meanwhile, the markets would continue to take cues from
global markets and crude prices along with the rupee-dollar
equation. Any negative cues could act as a trigger for a collapse
in the markets. Caution is advised at higher levels as the indices
are touching historic tops on low volumes and the breadth of the market remains negative.
Technically, on the upside, if the Sensex manages to sustain above the 20,800 level it is likely to test the 21,200 level. The
Sensex has support at the 20,500 level followed by the 20,375 level. On the upside, if the Nifty can move and sustain above
the 6250 level, it is likely to test 6300 followed by the 6450 level. 6159 followed by 5742 are important support levels for
the Nifty.
Traders and speculators could buy Britannia with a stop loss of 1557 and a target price of 1660.
Celebration continues in the New Year
By Fakhri H. Sabuwala
The new year began on an optimistic note. It was only a matter of few sessions for the market to cross 21K and scale a
new, higher peak. Volatile, of course, but the party continues. The paradox may be that the day the Sensex and the Nifty
remain steady and strong, the breadth of the market deteriorates. Possibly, it becomes easy for FIIs to sell at a time when
the market looks steady. So let Reliance, R Com, SBI and HDFC keep hold on the benchmarks but simultaneously sell off
1
the B1, B2 and the rest. After a long time, the market witnessed an 'only buyer' situation in penny stocks and had this
euphoric situation not been corrected or checked, the situation may have been out of hand.
Whether the Dow and Nasdaq cool off, whether the sub prime issue warrants hesitation, whether the US reels under a
recession, these issues hardly matter to the Indian economy. Its resilience is strong enough to overcome all fears. Had it
not been so, the FMs expectation of 9% growth in the next fiscal despite apprehensions about the global economy would
not have been possible.
As far as investment in stocks is concerned, the themes of 2008 may vary from the stories of 2007. Engineering, power and
metal remain the central growth areas. Though valuations may look stretched, one cannot still lose out on them. Media is
another area that is going to make it to the winning post this year. Just the way realty stocks made it in 2006 & 2007, 2008
shall belong to media & entertainment. Another area that shows signs of a comeback is FMCG and now that organized
retailing is taking shape the likes of ITC, HUL, Dabur, Marico, Godrej Consumer and P&G may outsmart the Sensex and
Nifty. Some classic performers from the pharma segment like Ranbaxy, Shashun, Wockhardt, Orchid, Glenmark, Dabur
Pharma, Neuland Labs, Dr. Reddy's may create wealth for their investors. Last but not the least, a sector that can dodge
storms and guided by strong management focus will be the outsmarters and PSU banks and IT companies. The likes of
SBI, BOI, BOB, Corporation Bank, Federal Bank, Dena Bank, Infosys, Satyam, Wipro and TCS offer a minimal risk at their
current prices.
This may appear a generalized approach to the events that may unfold, yet more money is to be made in tracking
individual stories of growth. It is here that we can discover multi-baggers and create wealth in coming months. Now that
the research boys at almost all the broking concerns are burning the midnight oil to identify such opportunities and are
publishing the same in the media, such stocks catching fancy has become easier. Some such investment proposals and
ideas are discussed hereunder and we pray that it creates 'Wealth' for every reader of Money Times.
* Kashyap Technologies: Inorganic growth is the order of the day at this company. After its initial acquisition of a US
based logistics company, it is on to its second acquisition in Philippines. The company has also closed a state government
project in southern India under the public/private partnership model. This Re.1 face value share may be locked up in
upper circuits now but is a good buy at declines and when the mad rush eases off.
* Gateway Distriparks: A conflict between the Singapore-based promoter and the Indian promoter resulted in the latter
hiking his stake and taking management control of this company. The company is in the container management business
in the logistics segment and is eyed as a takeover target by either the Tatas or Reliance. Either way, a lot of value will then
be unlocked. The business is booming, the sector is modern and with a change in management, it may get wings.
In coming days we may see the demerger of one of its subsidiary exclusively for rail containers called Gateway Rail
Freight Ltd.
* XL Telecom: Belonging to the sunrise industry, this Hyderabad based telecom and energy company is entering into the
power generation segment in Spain with an investment of over Rs.1000 cr. and a target capacity of 28 MW in the first
year.
The company is establishing a series of solar farms for power generation in Spain though its wholly owned subsidiary,
Saptashra Solar, a company with diversified business interests in telecom as well as energy. Spain is not the only country
XL is resting its laurels on. It is also looking to establish such farms in other countries and avail of the benefits offered in
setting up solar energy projects and go up the solar value chain.
* Aekta Ltd.: A change in the name to Ludlow Jute & Specialities Ltd. speaks of the changed focus this company shall
undergo. The company shall market all the jute value added products under the brand name 'Ludlow'.
In the last two consecutive years, it has turned the corner and is back in the black. A scrip that is a long shot for seasoned
investors.
Broad market strength needed
TRADING ON TECHNICALS
By Hitendra Vasudeo
Two weeks back the Sensex gave a breakout. Since the breakout was
not convincing enough, we needed a follow-up rise to the breakout.
The rise on a week-to-week basis has been witnessed but the follow-up
rise, spurt and impulse is not visible. The rise has been sluggish and
choppy.
Last week, the Sensex opened at 20637.21 attained a low at 20438.19
and moved up to 21206.77 to finally close the week at 20827.45 and
thereby showed a net rise of 104 points on a week-to-week basis. The
Sensex registered the 3rd consecutive week to week rise. The weekly
trend is up and can turn down on fall and close below 20000.
2
The Sensex is facing a resistance from a long term trend-line taken from the high of 6249 (Jan'04) and 12671 (May'06). In
the last couple of months, the Sensex is witnessing resistance of the same trend-line and is trying to hold on to that trend-
line and moved up further. But the Sensex cannot just afford to move along it. But the Sensex has to breakout above the
trend-line if it has to move into a new orbit. Otherwise, a sharp fall cannot be ruled out. A breakout and close above
21210 on weekly basis can take the Sensex into a new orbit and subsequently it may start moving above it. We are,
therefore, currently we are witnessing pressure at higher levels. Significant amount of profit booking has led to change of
hands and it now it depends how strong these hands are to withhold profit booking pressures. Two important medium
term support points are 18800 and 18100. A fall and close below both these points could take the Sensex to a collapse with
a pull-back rally just offering an opportunity to exit. Therefore, the Sensex must cross and close the week higher above
20210 in order to keep going. At this point, some exhaustion is witnessed on the Sensex when other indices have started
correcting sharply. Pressure is continuously mounting on the Sensex. It now depends whether Sensex cracks or holds,
itself for sideways move or a breakout to carry the burden of the market. A breakout can also bring back some life in
broad market stocks, which have currently lost momentum.
Weekly support will be at 20824-20441-20000. Weekly resistance will be at 21210 and 21978.
Broad Market Review
BSE Small Cap index was the biggest loser last week nullifying its previous week's similar gains. Similar is the situation in
CNX Nifty Junior, CNX Mid Cap 200. BSE Consumer Durables looks to have gone for a toss as a result of the evening doji
star candlestick pattern on weekly charts which
indicates a deeper correction unless its top of 7120 is crossed. As a result, expect quite a few small cap and mid cap stocks
from BSE Consumer Durables to do badly.
BSE Healthcare has formed an engulfing bear candlestick pattern which again has a bearish implication. BSE Healthcare
can survive a short bear
phase only if it crosses its
top of 4485. Heavy back to
back weekly fall has been
witnessed in BSE IT and
CNX IT index indicating
the weakest sector at this
point.
WEEKLY UP TREND STOCKS
BSE Metal, a leading
sector index has come
under pressure with the
formation of evening doji
star candlestick pattern,
which
has
bearish
implication.
Correction
across metals stocks is
likely unless its top of
20494 is crossed.
Let the price move below Center Point or Level 2 and when it move back above Center Point or Level 2 then buy
with what ever low registered below Center Point or Level 2 as the stop loss. After buying if the price moves to
Level 3 or above then look to book profits as the opportunity arises. If the close is below Weekly Reversal Value
then the trend will change from Up Trend to Down Trend. Check on Friday after 3.pm to confirm weekly reversal
of the up Trend.
Last
Center
Relative
Weekly
Up
Close
Point
Strength Reversal Trend
Scrips
Level 1 Level 2
Level 3 Level 4
Value
Date
Stop
Loss
Buy
Price
Buy
Price
Book
Profit
Book
Profit
AXIS BANK
1167.00 934.7
1075.7
1125.3
1216.7
1357.7
72.7
1033.0
28/12/07
JAIPRAKASH ASS. 446.40
343.9
413.9
451.5
483.9
553.9
72.4
438.7
26/10/07
GUJARAT NRE CO. 141.40
107.9
129.1
137.9
150.2
171.4
72.1
131.6
28/12/07
UNITECH
519.55
463.5
502.0
523.0
540.5
579.0
71.9
495.5
30/11/07
ADITYA BIRLA NUV 2379.00 1620.0
2100.0
2301.0
2580.0
3060.0
71.2
2090.5
16/11/07
WEEKLY DOWN TREND STOCKS
Let the price move above Center Point or Level 3 and when it move back below Center Point or Level 3 then sell
with what ever high registered above Center Point or Level 3 as the stop loss. After selling if the prices moves to
Level 2 or below then look to cover short positions as the opportunity arises. If the close is above Weekly Reversal
Value then the trend will change from Down Trend to Up Trend. Check on Friday after 3.pm to confirm weekly
reversal of the Down Trend.
Last
Center
Relative
Weekly Down
Close
Point
Strength Reversal Trend
Scrips
Level 1 Level 2
Level 3 Level 4
Value
Date
Cover
Short
Cover
Short
Sell
Price
Sell
Price
Stop
Loss
AUROBINDO PHAR 484.15
404.6
462.1
497.6
519.6
577.1
20.96
522.19
04/01/08
PATNI COMPUTER 307.85
273.6
298.6
314.3
323.6
348.6
23.80
317.89
20/12/07
I-FLEX SOLUTIONS 1485.00 1163.0
1392.0
1528.0
1621.0
1850.0
24.34
1489.50 20/12/07
INFOSYS TECHNO 1580.00 1371.3
1523.3
1618.7
1675.3
1827.3
24.90
1692.25 11/01/08
MARUTI SUZUKI
899.00
773.3
865.3
923.7
957.3
1049.3
25.27
960.00
20/12/07
BSE
Realty
is
comparatively
steadier
posting week to week
gains. BSE Bankex was a
sector index that was
outperformer last week
with strong week to week
gains. It will continue to
outperform with some
minor dips in line with
the overall market.
The broad market health
has gone down last week.
Generally, we find that
broad market indices at
times have fallen by 4%-
3
10% on a week to week basis but have bounced back equally sharp as well. If the deeper week to week fall of 4%-10%
range for different broad market indices persists at the end of this week, then we are heading for a deeper correction.
One week, grace period for broad market indices can be given to enable them to come back on the rising path. This week
can be important as we will get an idea of the sustained downward move.
Wave Analysis
PUNTER'S PICKS
Note: Positional trade and exit at stop loss or target which ever is earlier. Not an intra-day trade. A delivery
based trade for a possible time frame of 1-7 trading days. Exit at first target or above.
Scrips
BSE
CODE
Last
Close
Buy Price
Buy On
Rise
Stop Loss Target 1 Target 2
Risk
Reward
BALKRISHNA INDUSTRIE 502355 837.00
800.00
840.00
755.00
892.5
977.5
0.68
FORTUNE FINANCIAL SE 530023 295.90
290.35
304.85
266.10
328.8
367.6
1.10
Wave I-2594 to 3758
Wave II-3758 to 2904
Wave III- Internals as
follows:
Wave 1- 2904 to 6249
Wave 2-6249 to 4227
Wave 3-4227 to 12671
Wave IV- 12671 to 8799
Wave V- Internals as
follows:
Wave 1-8799 to 14724
Wave 2- Internals as
follows:
Wave A- 14724 to 12316
Wave B-12316 to 15868
Wave C-15868 to 13779
Wave
3-
13799
to
21206.77
(current
ongoing move)
Internals of Wave 3 as
follows:
Wave i-13799 to 20238
Wave ii-20238 to 18886
Internals of wave ii
Wave a-20238 to 18182
Wave b-18182 to 20498
Wave c-20498 to 18886
Wave iii – 18886 to
21206.77
(current
ongoing move)
EXIT LIST
Scrip
Last Close Sell Price Sell Price Sell Price Stop loss Target
Monthly Relative
Strength (RS)
BHARAT ELECTRONICS
1864.00
1966.1
2005.0
2043.9
2170.00 1636.1
42.82
CASTROL INDIA
293.30
320.4
329.9
339.3
369.80
240.5
49.33
CHENNAI PETROL.CORP.
387.95
402.0
410.0
418.0
444.00
334.0
55.20
CUMMINS INDIA
381.50
392.0
397.5
403.1
421.00
345.0
41.83
GILLETE INDIA
1093.00
1203.8
1242.0
1280.2
1404.00
879.8
50.25
GRASIM INDUSTRIES
3378.00
3521.0
3580.0
3639.0
3830.00 3021.0
46.49
GSFC (GUJ.STATE FERT
294.75
314.4
325.0
335.6
370.00
224.4
50.71
INDIA CEMENTS
269.80
284.8
290.6
296.3
314.90
236.2
45.69
INDRAPRASTHA GAS
149.45
161.2
165.3
169.3
182.50
126.7
57.50
JINDAL STAINLESS
202.40
214.5
219.6
224.6
241.00
171.7
53.40
JUBILANT ORAGANOSYS
335.05
347.4
351.7
356.0
369.90
311.1
48.87
KALPATARU POWER TRAN
1623.00
1679.6
1710.0
1740.4
1839.00 1421.6
36.37
MADRAS CEMENTS
4098.00
4233.0
4305.0
4377.0
4610.00 3623.0
44.89
MOTHERSON SUMI SYSTE
106.35
109.2
112.0
114.8
123.90
85.5
47.18
MRF
6332.00
6675.8
6795.0
6914.2
7300.00 5665.8
49.52
SKF INDIA
422.20
439.8
447.5
455.2
480.00
374.8
43.97
TATA CHEMICALS
365.00
389.0
397.0
405.0
431.00
321.0
51.83
TATA STEEL
853.00
877.8
892.0
906.2
952.00
757.8
51.73
UNITED BREW.(HOLDING
1123.00
1164.0
1190.0
1216.0
1300.00
944.0
49.85
The above internals of wave iii will hold true till the prices are above Sensex 20000. If it falls below 20000, the internal
moves and wave count will change.
Strategy for the week
Across the board, 2 weeks high for all indices need to get crossed if the near term trend is to remain firm. For frontline
stocks, Sensex must remain above 20000 mark. Book profit and exit long on spurts and try to get into stocks that make
new high or 52 week high from the short-term trader's perspective. Use the rise to exit till 2 weeks high is not crossed on
close for stocks that have reacted down. Stocks that posted week to week gains can be held and further position in the
same can be added on further rise above 2 weeks high. The 2 weeks low will be the trigger for the downward move.
* HFCL may win a spectrum covering a portion of North India. This news can take the scrip to over Rs.300.
TOWER TALK
* Tata Motor's 'Nano' may hit Maruti sales more than the two-wheelers.
* K Sera Sera, a scrip from Bollywood is coming out of the woods and may post an EPS of Rs.10 for FY08 and Rs.15 for
FY09. The scrip is heading for the century mark.
* Renewed buying interest in Ispat may take the scrip to new highs. This is what the operators are aiming for!
* BHEL staying in the dormant zone for the last two weeks has consolidated very well for a smooth take off to Rs.3250.
* GSPL is a star performer in the gas pipeline segment and this scrip will be a multi-bagger in coming years. It has over 18
cities gas distribution network in its fold.
* After a hitting a high of Rs.40 recently, Liberty Phosphate has corrected sharply to Rs.25 levels. It is one of the cheapest
fertilizer scrips and has the potential to test Rs.50 level in the medium-term.
* Kamanwala Housing is coming out with its results on 15
th
Jan and the scrip has corrected sharply as the company may
not match its December 2006 topline. But it has decent projects in hand and is a buy at every fall.
4
* Some operator has entered Panoramic Universal and the scrip has caught market fancy. Company is planning a right
issue at Rs.85 per share, which will be the icing on the cake.
* Power ancillary scrips like electrical equipment, transmission towers, power cables, transformers, switchgears etc. may
see a good rally post the Reliance Power IPO.
* Something is cooking in the Rama Papers counter as the scrip is purposely being kept low despite a general rally in
paper scrips. It's a risk free bet at current levels.
* Nirlon is the gem in real estate stocks as the fundamentals of its real estate story have not been fully absorbed. Long-
term investors can add the scrip on dips with a target of Rs.170 in 8-10 months.
* Some stocks did not move up in the euphoria or collapse in the carnage. Bodal Chemicals is such a stock with a
proposed rights issue and a good long term story.
* Infosys has not disappointed the market or set it on fire and indicates the trend in the IT sector, which may remain
neutral.
* Ferro Alloys is attracting discerning buyers. Real trigger in the stock is its platinum mines and its subsidiary, Facor
Power, which would generate substantial cash flows as they achieve optimal scale in the next 2-3 years.
* Sakuma Exports recommended here at Rs.13 in September has crossed Rs.50 and could touch Rs.70.
* The grey market premium on IPOs weakened last week with Reliance Power at Rs.370/375, Future Capital at
Rs.515/525.
* Proxy IPO application forms for Rs.1 lakh retail application are quoting Rs.7500/7700 for Reliance Power and
Rs.2200/2400 for Future Capital.
5
By Saarthi
BEST BETS
J K Lakshmi Cement Ltd. (Code: 500380)
Rs.180.35
JK Lakshmi Cement Ltd. (JKLC) was established in 1982 by hiving off the cement division from JK Corporation and is a
part of well known HS Singhania group which has diversified interest in tyres, paper, sugar, clinical research, textile, auto
ancillary etc. Since then over 25 years, JKLC has emerged as a leading and reputed cement manufacturer in the northern
and western markets. It basically markets three variants of cement under 'JK Lakshmi' brand, which is a very popular
brand and is renowned for its strength, quality and performance. Besides, the company has also forayed into the lucrative
ready mix concrete (RMC) and plaster of paris (POP) business through its brand 'JK Lakshmi Power Mix' and ' JK
Lakshmiplast' respectively. Apart from having its own marketing offices, the company has a wide network of about 1,500
dealers spread across Rajasthan, Gujarat, Delhi, Haryana, UP, Uttaranchal, Punjab, J&K, HP and Mumbai. Presently,
almost 65% of the total sales of the company comes from the northern region and the balance 35% from the western
region.
JKLC's state-of-the-art plant located at Jaykaypuram, distt. Sirohi, Rajasthan uses the latest technology from M/s. Blue
Circle Industries and modern equipments from M/s Fuller International of USA. To cash in on the buoyancy in the
cement industry, it has rapidly expanded its capacity to 3.40 MMTPA from 2.40 MMTPA during the last fiscal. With
cement demand expected to remain robust in coming years, it is further enhancing its capacity to 5 MMTPA by October
2008. On the back of serious & sustained efforts by the company, blended cement now contributes nearly 70% of total
sales against 46% earlier. Blended cement has a better margin as the cost of production is low due to mixing of 20% fly
ash. But more importantly, the company has installed and commissioned two pet coke based captive power plants of 18
MW each in March 2007 and July 2007 respectively. With this, it has become self sufficient in its power requirements and
will also be able to bring down its power cost considerably to around Rs.15 cr. per annum. On the other hand, it is betting
high on RMC business as it has great potential along with high margins. Currently, it is operating 5 RMC plants but is
aggressively expanding to add at least 5 to 6 plants more in the near future. In all, it has capex of around Rs.400 cr. of
which nearly 25% will be funded through debt and balance through internal accruals. It will also be getting Rs.35 cr.
through conversion of 41 lakh warrants allotted to a group company at Rs.97 per share in June 2006.
To maintain its growth momentum in future, JKLC intends to set up a greenfield cement plant near Bhilai, Chhattisgarh,
with a capacity to produce 2.5 MMTPA. For this, the company has identified couple of limestone mines and is looking to
apply for a mining lease. Meanwhile, it has
replaced its high cost debts by cheaper funds
to the extant of Rs.325 cr., which will reduce
its interest cost going forward. Hence the
company has come out of the Corporate Debt
Restructuring (CDR) purview. On the back of
terrific results for September'07 quarter, it
recorded 50% growth in sales to Rs.534 cr. and
Corrigendum
In the Best Bets recommendation on Bihar Tubes last week, it was erroneously
mentioned that its diluted equity was Rs.9.60 cr. instead of Rs.12.75 cr. as
Rs.31.75 lakh warrants are also eligible for 1:1 bonus issue. Hence, its diluted EPS
works out to Rs.12.50. For FY09, however, it has the potential to post an EPS of
Rs.17-18. Accordingly, the target price is downgraded to Rs.250 (25% appreciation)
over the next 12 months. Investors must buy only at sharp declines.
Net profit increased by 130% to Rs.142 cr. for H1FY08. Hence even on a conservative basis, it may clock a turnover of
Rs.1100 cr. with PAT of Rs.210 cr. for FY08, which translates into an EPS of Rs.34 on its fully diluted equity of Rs.61.20 cr.
However, the recent undue concession offered by the government for import of cement, including 0% import duty,
removal of countervailing duty and SAD, has put the Indian cement industry to a competitive disadvantage, which was
already subjected to high cost of manufacturing vis-à-vis its counterparts in China, Thailand, Indonesia. Despite this,
investors are recommended to buy at current levels for a target of Rs.280 (55% return) in a year's time.
Bihar Caustic (Code: 500057)
Rs.85.85
Bihar Caustic & Chemicals Ltd. (BCCL) was incorporated in 1976 as a joint venture between the Aditya Birla Group and
the Bihar State Industrial Development Corporation, primarily with the objective of catering to the caustic soda
requirements of Hindalco and to contribute towards the economic development of the backward region of Palamau
district in Jharkhand. Today, it is among the leading caustic soda producer in the northern and eastern regions of the
country. Apart from caustic soda it also produces liquid chlorine, hydrochloric acid, sodium hypochlorite, compressed
hydrogen and has recently ventured into aluminum chloride. In India, about 45% of the chemical industry depends the
caustic soda as an essential input for a host of industries like soap and detergent, aluminum, paper & newsprint, fibre,
glass, tyre, chemicals & petrochemicals, pharmaceuticals, water treatment, dyes, textiles, oils, etc. However, being a
subsidiary of Hindalco Industries, BCCL has an added advantage of assured off-take of caustic soda by the parent
company. It also has a hydrogen bottling facility that provides an additional revenue stream.
In early 2006, BCCL shifted the manufacturing process from mercury technology to the latest energy efficient and
environment friendly state-of-art membrane cell technology. Simultaneously, it also enhanced the caustic soda capacity
by 50% from 150 TPD to 225 TPD at an investment of Rs.112 cr. Thus, it presently its plant boast of having an installed
capacity of 225 TPD of caustic soda, 200 TPD of liquid chlorine, 130 TPD of hydrochloric acid, 150,000 Nm3/day of
compressed hydrogen and 3 TPD of sodium hypo chlorite. Further, the company is in the process of expanding capacity
of its caustic soda plant by 20% to 265 TPD by addition of electrolysers as well by debottlenecking. In order to gainfully
utilise the additional chlorine produced after expansion BCCL had commissioned an aluminum chloride plant in January
2007. This plant has a capacity of 12000 TPA and will boost the topline considerably once fully operational. Aluminum
chloride is basically used as an input for manufacturing of aluminum. Secondly, it has also taken a decision for setting up
a stable bleaching powder (SBP) plant at an estimated cost of Rs.7.50 cr., which will consume another 20 MT of captive
chlorine per day. Importantly, as caustic soda production is power intensive, BCCL has put up its own 30 MW coal based
captive power plant due to which its energy costs are lower than its peers. Although the company is vulnerable to caustic
soda price movements, the aluminum sector is expected to remain buoyant and with Hindalco as its biggest customer, it
is relatively safe.
To conclude, BCCL is poised for a good performance in coming years due to progressive improvement in capacity
utilisation of its plant, projected expansion and because of value added products like aluminum chloride and stable
bleaching powder. BCCL also enjoys the highest operating margins among it peers - even better than Gujarat Alkalies and
Chemfab Alkali. For H1FY08, its sales improved by 20% to Rs.79 cr. and profit increased by 45% to Rs.21 cr. Accordingly,
it is estimated to clock a turnover of Rs.185 cr. with PAT of Rs.45 cr., which leads to an EPS of Rs.19 on its current equity
of Rs.23.40 cr. Ironically, the BCCL share price was trading around Rs.80 in September 2005 when the Sensex was around
8500 and is available around same level even though the Sensex has shot up to 21000. Hence it has been a huge
underperformer despite sharp improvement in its fundamentals. Of late, the company has been on an uptrend and hit a
new high of Rs.105 few days back. There are also rumours that it may get merged with Hindalco Industries. But if this
happens, the true value of BCCL won't be unlocked, as the merger ratio will more favourable to the parent rather than
subsidiary. Still investors are recommended to buy at current levels as the scrip has the potential to touch Rs.150 in the
medium-term.
Apar Industries Ltd.: Powered for growth
By Devdas Mogili
Apar Industries Ltd. (AIL), formerly known as Gujarat Apar Polymers is a 18-year old Vadodara (Gujarat) based
company established in 1989. It is the flagship company of the Apar Group and was promoted along with the Gujarat
Industrial Infrastructure Corporation. N.D. Desai is the chairman of the company.
The company has three business divisions (a.) Transformer Oil & Speciality Oils division, (b.) Conductor division and (c.)
Polymers division. The Transformer and other Speciality Oils division contributed 45% of the company's revenue.
ANALYSIS
AIL is a diversified company offering value added products and services in Power Transmission Conductors, Petroleum
Specialities and Synthetic Rubbers. Its Special Oils Refinery Division was established in technical collaboration with Sun
6
Oil Company, USA, and is the pioneer and largest producer of 'Poweroil' transformer oils in the whole of Asia and Far
East.
It also offers a wide range of other Speciality Oils for the Rubber, Tyres, Ink, Cosmetics, Foods, Pharmaceuticals,
Healthcare, Steel, Aluminium, Petrochemicals, Power, Plastic, Paper, Sugar, Cement, Automotive and other industries.
AIL's Conductor Division is the largest producer of 'Powerline' Aluminium and Alloy Conductors in Asia in strategic
partnership with ABB and other global majors for Power Transmission Projects.
AIL's Polymer Division manufactures international quality 'Aparene' & 'Powerene' Synthetic Rubber (Nitrile & High
Styrene) also known as NBR and Rubber Latex in technology agreement with Good Year Tire & Rubber Co., U.S.A.
The footwear industry uses NBR for industrial and army boots. NBR latex is used in making paper, non-woven fabrics,
artificial leather and in finishing/water proofing of real leather.
This Gujarat-based producer of rubber products for industrial purposes signed a technology and licence agreement with
an Italy-based company, Eni, to produce automotive lubricants. Both the entities will have an equal stake in the joint
venture and produce AGIP-branded engine and transmission oils for blending at AIL's plant at Rabale in Navi Mumbai.
Clientele: The company's clientele includes companies like ABB, Alstom, Mitsui, Powergrid Corporation, NTPC, KEC
International, RPG Transmissions, Siemens, Kalpataru, L&T, Jyoti Structures, APTRansco, Crompton Greaves, Jaiprakash
Industries and all State Electricity Boards in India.
Shifting: AIL has shifted its manufacturing activities situated at village Mahul, in Mumbai to other locations some time
back. The company has granted full and free development rights along with the irrevocable power of attorney in favour
of a developer in respect of the said property for a total consideration of Rs.30.50 cr.
Financial Highlights:
(Rs. in cr.)
Latest Results: Sales rose
15.73% to Rs.418.41 cr. in
Q2FY08 as against Rs.361.53 cr.
during Q2FY07. Net profit of
AIL shot up by 246.99% to
Rs.42.09 cr. in Q2FY08 as
against Rs.12.13 cr. during
Q2FY07.
The
company
registered an operating profit
margin of 13.95% as against
8.26%
in
the
previous
corresponding
quarter.
It
recorded a healthy net profit
margin of 10.06% for the latest
quarter as against 3.35% in the
previous
corresponding
quarter. The EPS on an
annualized basis works out to
Rs.52.08.
Particulars
QE 30/09/07
QE 30/09/06
YE 31/03/07
Net Sales
418.41
361.52
1468.76
Other Income
1.64
08.47
4.33
Total Income
420.05
362.37
1473.09
Expenditure
-361.67
-332.50
-1365.48
Operating Profit
58.38
29.87
107.61
Interest
-9.46
-8.36
-31.53
Profit Before Depreciation and Tax
48.92
21.50
76.07
Depreciation
-3.26
-2.32
-10.01
Profit before Tax
45.65
19.18
66.06
Tax
-3.56
-4.29
-16.24
Profit after Tax
42.09
14.89
49.81
Extraordinary Items
-
-2.76
-3.84
Net Profit
42.09
12.12
45.97
Equity Capital
32.33
20.80
32.33
Basic And Diluted EPS
after Extraordinary item
-
05.36
1.46
Basic EPS after Extraordinary items
13.02
-
-
Diluted EPS after Extraordinary items
13.02
-
-
Operating Profit Margin
13.95
8.26
7.33
Net Profit Margin
10.06
3.35
3.13
Cash EPS
14.03
-
-
Financials: The company has an equity base of Rs.32.33 cr. with reserves of Rs.178.94 cr. and the book value works out to
Rs.65.35. It has a debt equity ratio of 0.61 while ROCE is at 36.84% and RONW 26.91%.
Share Profile: The company's shares with a face value of Rs.10 are traded on the BSE under the B1 segment. Its share
price touched a 52-week high of Rs.450 and a low of Rs.121. At its current market price of Rs.344 it has a market
capitalization of Rs.1323 cr.
Dividends: The company has been paying liberal dividends as shown below:
March 2007 - 35%; March 2006 - 35%; March 2005 - 30%; March 2004 - 22.50%; March 2003 - 15%; March 2002 - 10%.
Shareholding Pattern: As on 30
th
September 2007, the promoter holding in the company was 59.97% while the balance
was held by the non corporate promoters and the Indian public. A host of mutual funds like Magnum, Birla Sunlife, UTI,
Sahara, Taurus, Reliance, Sundaram, JM Basic Fund etc. have been adding the company's shares to their various schemes.
Prospects: According to the Central Electricity Authority (CEA) the total plan outlay for the transmission and distribution
sector under the 11
th
Five Year Plan is expected to be Rs.1,73,000 cr. In view of this level of spending, the conductor
requirement will be about 2.1 MMT against the current requirement of 2,50,000 MT per annum. Similarly, in the case of
transformer oils, the requirement of first fill (oil initially filled when the transformer is first commissioned) is estimated
at 900 million litres against a current requirement of 110 million litres per annum, which indicates that there will be
strong demand for the company's products.
7
In addition, the NBR demand growth in India and worldwide has been good and is the highest among all emulsion
polymers driven mainly by the automotive industry's robust growth. The company expanded its NBR capacity and
consolidated its manufacturing at Valia in Gujarat.
Conclusion: In view of the bright prospects for power and transmission units, the outlook for AIL is extremely good.
Moreover, it has reported significantly improved margins during the latest quarter, which indicates the shape of things to
come in future.
At its current market price of Rs.344, its share price is discounted less than 8 times its expected earnings against the
industry average P/E multiple of around 21. The share price has a long way to go. Further, considering its excellent
results, robust prospects and good clientele, the share offers value for money to the discerning investors. Buy for
significant gains in the medium-to-long-term.
The market has turned volatile
MARKET REVIEW
By Ashok D. Singh
The BSE Sensex gained a marginal 140.56 points or 0.67% to close at 20,827.45 for the week ended Friday, 11 January 2008.
However NSE Nifty declined 74.20 points or 1.18% to 6,200.10 for the week. The two key indices, BSE Sensex and NSE
Nifty witnessed a divergent trend last week. While the Sensex rose the Nifty declined. Both the niche indices struck all-
time highs during the week. The Sensex hit an all-time high above 21,000. Small-cap and mid-cap indices underwent a
major correction ever since they hit all-time highs on 8 January 2008. Volatility was high throughout the week.
The BSE Mid-Cap index lost a huge 674.58 points or 6.67% to 9,438.48 in the week. The BSE Small-Cap index declined
1190.09 points or 8.57% to 12,694.02 in the week. Both these indices underperformed the Sensex.
Trading for the week started on an upbeat note with the BSE Sensex rising 125.76 points to 20,812.65, on 7 January 2008 on
selective buying in index pivotals. Buying support continued on 8 January 2008, with the Sensex gaining 60.68 points to
20,873.33, a record closing high. The BSE Mid-Cap index struck an all time high of 10,245.81 while the BSE Small-Cap
index hit an all time high of 14,239.24 on that day.
The 30-share BSE Sensex declined 3.55 points or 0.02% to 20,869.78 on 9 January 2008. The broader CNX S&P Nifty lost
15.85 points or 0.25% to 6,272. The 30-share BSE Sensex slumped 287.70 points to 20,582.08 on 10 January 2008 on profit
booking in index pivotals. It hit a record high of 21,206.77 in mid-morning trade. The market showed volatile swings on
Friday, 11 January 2008. The BSE Sensex surged 245.37 points to 20,827.45, led by Reliance Industries and ICICI Bank.
FIIs pumped in Rs.71,486.50 cr. or $17.23 billion in Indian equities in calendar year 2007. FII inflow in calendar year 2008
amounted to Rs.3176.70 cr. (till 10 January 2008). Mutual funds bought shares worth a net Rs.1473 cr. in the first few days
of the New Year till 10 January 2008.
Based on data from fund groups reporting activity daily and weekly, flows into global emerging markets funds surged
380% in 2007 and flows into Latin America equity funds were up 308% from 2006. India will continue to witness dynamic
growth in 2008, on account of investment in the manufacturing and service sectors and will be largely insulated from
weakness in the global economy, as per a report dated 10 January 2008 by the United Nations
Union oil minister Murli Deora scheduled first meeting of a ministerial panel on fuel pricing on 17 January 2008 to discuss
a response to scorching global crude oil prices.
Car sales climbed up 8.9% to 88,220 units in December 2007 over December 2006. Sales of commercial vehicles, trucks and
buses, edged up 1.4% to 42,508 in December 2007 on an annual basis.
In a conference in New Delhi held on 9
January 2008, Commerce & Industry Minister,
Kamal Nath, said domestic cement prices
were high due to a demand-supply mismatch
and higher imports were necessary to bridge
the gap. The minister also informed that the
government was monitoring cement prices.
Reliance Industries advanced 4.77% to
Rs.3128.15. ICICI Bank surged 12.02% to
Rs.1439.90 on reports that the bank will list at
least 4 arms starting with ICICI Securities in
the next 6 months although its board is yet to
decide on listing its securities arm.
Infosys Technologies declined 6.77% to
Rs.1580.10 in the week. Infosys' consolidated
net profit as per Indian GAAP rose 11.9% to
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Rs.1231 cr. on 4% rise in net sales to Rs.4271 cr. in Q3FY08 over Q2FY07.
Tata Motors was down 2.80% to Rs.762.45 in the week. The company unveiled people's car (Rs.1 lakh) christened Nano on
10 January 2008. Tata Motors will commercially launch Nano in the second half of 2008.
L&T declined 1.63% to Rs.4175.10 in the week. It secured two major contracts from Cairn India for its project located near
Barmer in Rajasthan.
BHEL declined 4.34% to Rs.2435.15 in the week. The company signed a joint venture agreement with NTPC for
establishing and operating a joint venture company for taking up engineering, procurement and construction (EPC)
business.
Mahindra & Mahindra, slipped 5.87% to Rs.774.75 in the week. It acquired the business of G R Grafica Ricerca Design S.r.l
(GRD), an Italian auto designing, body engineering and feasibility and styling company based in Turin, Italy.
On 11 January 2008, Precision Pipes and Profiles Company settled at Rs.138.65 on BSE, a discount of 7.57% over the IPO
price of Rs.150. Precision Pipes and Profiles Company (PPAP) is engaged in the business of manufacturing automobile
sealing systems and exterior products. On the same day, Aries Agro settled at Rs.251.60 on BSE, a premium of 93.54%
over the IPO price of Rs.130. Aries Agro is engaged in the manufacture of agricultural products.
The 30-share BSE Sensex gained 140.56 points to close at 20,827.45 last week. Q3FY08 earnings will guide the market in
the coming week. Some of the top brokerages expect a slowdown in the aggregate earnings growth of 30-Sensex compass
in Q3FY08. Earnings surprise holds the key.
With the beginning of the calendar year 2008, FIIs are expected to make fresh fund allocations. But there might be some
liquidity drain from the secondary market as action might shift to primary market as the mega initial public offer of
Reliance Power opens for subscription on 15 January 2008. The IPO ends on 18 January 2008. There are few other large
public offers in the pipeline in the coming months.
Among the frontline companies, State Bank of India, Ranbaxy Laboratories, Housing Development Finance Corporation,
ITC and Wipro will announce their Q3FY08 in the coming week. Infrastructure Development Finance Company, EMCO,
KLG Systel, Monnet Ispat, Omnitech Infosolutions, Amtek India, Jubilant Organosys, Allahabad Bank, Petronet LNG,
Chambal Fertilizers & Chemicals and Idea Cellular among others will also declare their Q3FY08 results next week.
Keep booking profits at higher levels
MARKET
By G. S. Roongta
Last week was the best opportunity for investors to indulge in partial profit booking on their equity investments as stocks
from almost all sectors were ruling at their all time highs. Whether it was the BSE Sensex, CNX Nifty, the Mid-Cap Index
or the Small-Cap Index, they had indeed hit an all time high on all trading days. But it was again a question of greed and
fear which might have prevented many to sell at the high levels and repent when the Sensex suddenly took a u-turn on
Thursday, 10th January 2008 closed with a loss of 300 points inspite of a mid-market gain of 300 points on that day.
This sudden swerve trapped thousands of traders and investors who were basking in the glory of the all time highs that
the Sensex and the Nifty had recorded. The Sensex had just cleared the 21,000 mark and hit a high of
21,077.53 while the CNX Nifty touched 6,357.10, the CNX Mid-Cap hit a historical high of 9,781.7, the
CNX Nifty Junior also hit a lifetime high at 12,466.20. The BSE 100 also hit a high of 11,655.91 on Monday,
7th January 2008.
Punters celebrated the new Sensex 21 K level amid all round cheers and, as usual, the intra-day high, too,
crossed sensational levels. But the Sensex could not maintain the high level at the fag end of the closing
section. An attempt was made to achieve new highs on successive days i.e. 8th, 9th and 10th January 2008
with the BSE Sensex scaling new highs at 21,113 on 9th January 2008 and 21,206.77 on 10th January 2008.
But on all these occasions the Sensex failed to close on 21 K and the CNX Nifty above 6,300, which has made marketmen
nervous as they wonder the direction in which the market is headed.
G.S. Roongta
The story for the mid-cap and small-cap have been worse as they not only pruned sizeable gains but also made a
complete turnaround in sharp contrast to the speed at which they had been galloping in the weeks earlier. Thousands of
small and mid-cap stocks closed at their lower circuit filters from Tuesday, 8th January 2008 onwards. Thus those who
made a fresh entry in the earlier week could not sell. The mid-cap and small-cap history of the market has always been
one of luring small investors who invariably find themselves trapped and are the usual victims of stock market operators.
This was abundantly in evidence on Thursday, 10th January 2008 as the Sensex swung by 300 points on either side and
left them high and dry. The market proved to be very elusive that day and not only wiped out the impressive gains of the
first half and turned negative with equal force, which rarely occurs.
It was not an particular sector or stocks that took a u-turn but all fancied shares from Real Estate, Infrastructure, Power,
Cement, Steel, Engineering, Shipping, Automobiles and Sugar were liquidated extensively without exception leading to a
panic as day traders and small investors desperately tried to square up their positions at any available price.
9
Cement and Sugar stocks were beaten heavily and these sectors closed 5% - 10% lower in most of the stocks from these
sectors. ACC fell below Rs.935 as against its 52-week high of Rs.1315, Grasim hit a low of Rs.3325 from its 52-week high of
Rs.4074. Similar was the case with India Cements, JP Associates, UltraTech and other mid-cap and small-cap cement
stocks. The panic in them was on account of the government interference in pricing of cement bags and threats to import
cement in large quantities. The government is once again after the Cement industry as it feels that cement prices are too
high and cement manufacturers are enjoying excessive profit margins.
Shree Cement : As if on cue, Shree Cement, a major cement manufacturer, was the first among them to announce its Q3
results, which are so exciting that its stock would have flared up to a new high beyond Rs.1600 was it not for the
government interference. Thus even after the announcement of such good results, it lost Rs.75 at Rs.1330 on Thursday,
10
th
January 2008.
A glance at its Q3FY08 results shows that its turnover hit a new high at Rs.524 cr. from Rs.365 cr. in Q3FY07. Consolidated
sales for the 9 months crossed sales for the last full year at Rs.1415.8 cr. against last year's three quarters sales of Rs.990 cr.
The PBIDT for Q3FY08 was Rs.242.25 cr. compared to Rs.164.83 cr. and the figure of gross profit for the three quarters was
a mind boggling Rs.575 cr. And all this on its small equity capital of Rs.34.84 cr.!
The provision for depreciation provided on a written down value (WDV) basis was as high as Rs.292 cr. for the current
three quarters as against Rs.79 cr. over previous corresponding three quarters. This has pruned the net profit of the three
quarters at Rs.258.18 cr. as against Rs.280 cr. in the previous corresponding three quarters.
Despite this high provisioning for depreciation, its FY08 profit might turn out 100% higher around Rs.325 cr. as against
Rs.177 cr. for FY07.
When such eye catching profits of the other big players like ACC, Grasim, Gujarat Ambuja, UltraTech, JP Associates and
India Cements hit the market, the share prices of cement stocks would normally hit new highs. But now there are doubts
as the government action on the pricing front may compel cement companies to understate their profits by making all
possible provisions that are permissible under the tax laws and report a low net profit to escape the government's
jaundiced view.
As an analyst, I have been recommending cement stocks such as ACC, Grasim and Shree Cement throughout the year
purely based on their strong fundamentals and high growth prospects but the indifferent attitude of the government has
affected the outlook of the sector as a whole despite its strong performance. All these companies are slated to post an EPS
of Rs.100 to Rs.125, which will be one of the highest even when compared with some of the more fast moving and fancied
companies
Another sector that was highly volatile on Thursday, 10
th
January 2008 was Automobiles. Despite the 9
th
Auto Expo
inaugural in the capital on that day when Tata Motors launched its Sumo Grande and the much talked about Tata Nano
with a dealer price of Rs.1 lakh for the standard model.
At the opening Tata Motors gained Rs.75 to touch Rs.796 when the small car was unveiled and other auto stocks recorded
small to modest gains. But when the market went for a free fall, these stocks, too, joined the race losing sizeable grounds
like the others. Tata Motors lost Rs.50 from its high on 10
th
January 2008 while M&M, Maruti and Hero Honda also
suffered heavily.
The only exceptions for the day were ICICI Bank and Aditya Birla Nuvo (Indian Rayon), which were the star performers
at the beginning but even they lost some ground at the fag end.
As usual, the Reliance group of shares dominated the market sentiment as a prelude to the Reliance Power IPO scheduled
to open this week. The other big IPO by Future Capital Holdings has led to liquidation of stocks in the secondary market
as investors will need the money for applying to these two high priced shares.
But considering the fundamentals of the economy and the working of the corporate sector, India's growth story will
continue to boost the market but volatility will be a recurring feature given the short-term trading sentiment dominant at
intervals. In view of this, profit booking by selling at high levels and buying in panic is the best strategy to make money in
the market.
Beware of overpriced shares!
MARKET
By Sanjeev K.
During the last two months rampant speculation is going on in the stock market, particularly in Mid-cap and small cap
shares, which are rising rapidly. Hundreds of shares have doubled or trebled within a period of one month. Even in some
of the fundamentally weak shares appreciation is more than 5 to 10 times within two months. This sudden jump in mid-
cap and small cap must have made all investors happy. At the same time they are confused whether to book profit or
hold on for further appreciation. As we know Indian stock market is operator driven and shrewd operators have always
taken disadvantage of genuine investors' confusion in booking profit.
10
During the last one year, we have seen many investors who had purchased shares at lower level could not book profit at
higher level and are still holding these shares after steep fall from top level. Here are some examples (In to bracket top
level) Modipon Rs.96.50 (Rs.300), Neemtek Org. Rs.229.50 (Rs.507), Nira Vommercial Rs.1640 (Rs.3791), Roman Tarmat
Rs.204 (Rs.376), Oscar Investment Rs.285 (Rs.590), Al Champdany Rs.125 (Rs.457), CGL Products Rs.267 (Rs.548), Mah.
Electrosmelt Rs.920 (Rs.1971), Fed. Mogul Goetze Rs.170 (Rs.437) etc.
This column is dedicated only to genuine investors who are satisfied with more than sufficient profit within a short
period. Our aim is to point out highly overpriced stocks which are fundamentally weak and because of considerable
appreciation in share price within short period investors are confused while booking profit. We advise our readers either
book profit in small lots at every rise or book entire profit after 15% to 20% corrections from highest closing price. There is
no perfect formula for profit booking in a bull market but our suggestion will reward investors tremendously. Here are
some highly overpriced shares and the action to be taken to protect profit.
Amani Trading & Exports: Share price of this unknown company, which was lying low at around Rs.20 on 24/10/2007
moved up sharply to around Rs.235 on 10/01/2008 without the backing of any fundamentals. Its P/E ratio is 357.
Investors who are already holding this share or who have purchased it in the rising market should keep a watch on its
movement. One must not rush to book profit immediately, but partial profit booking is advisable at every rise. Those who
are holding it long may book profit 15% to 20% correction from the top closing level to take advantage of further
appreciation.
The performance of the company is not satisfactory. For FY07, its turnover declined sharply to Rs.2.04 cr. from Rs.8.24 cr.
in FY06 – a decline of over 75%. Gross profit, too, moved down sharply from Rs.0.49 cr. to Rs.0.06 cr. – a decline of 88%.
PAT, too, decline proportionately from Rs.0.44 cr. to Rs.0.04 cr. – a fall of 91%. Its equity capital is quite low at Rs.0.70 cr.
promoter holding is 75% and only 25% holding is in the hands of general public. Please do not hold this share for medium
to long term investment.
Master Trust: Rampant speculation has taken the share price of this fundamentally weak share to dizzy heights of Rs.288
on 10/01/2008. Just one month ago, it was languishing low at around Rs.60. Investors are advised not to get carried away
by the sharp jump in its share price, as its fundamentals are not sound. To take full advantage of speculation, investors
should remain alert to book profit in the near
future. Either book profits in small lots at
every rise or on 15% to 20% reaction from the
top level closing price.
Its fundamentals are very weak. For Q2FY08,
its turnover declined marginally by 15% to
Rs.0.82 cr. only. Net profit, too, declined
proportionately to Rs.0.29 cr. for the trailing
12 months on an equity base of Rs.5.70 cr., its
turnover is Rs.3.89 cr., which declined by
over 90%. However, net profit moved up by
over 168% to Rs.1.42 cr. book value is
Rs.34.50. EPS comes to mere 2.5. P/E ratio is
very high at 97. Promoters' holding is 50%.
Other company holding is 25% and
remaining 25% lies in the hands of the general
public.
Anil Products Ltd.: Share price of this Lalbhai
Group company jumped up sharply from
Rs.72
on 31/12/2007
to Rs.570
on
09/01/2008. Performance of the company
does not justify such a high price. However,
investors are advised to be alert and watch
out for further action on the counter. Keep on
booking profit at every rise or book entire
profit on 15% to 20% correction from the top
level. Shrewd operators may or may not take
the share price to dizzy heights but most of
the time our formula of profit booking will
give handsome returns in most cases.
Fundamentals of the company are sound, but
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the price does not justify such a huge jump within a short period. For FY07, its turnover increased from Rs.171.55 cr. in
the corresponding period of the previous year to Rs.202 cr. operating profit moved up from Rs.12.51 cr. to Rs.17.82 cr.
interest amount was higher at Rs.6.90 cr. against Rs.5.50 cr. in the previous year. After maintaining depreciation at Rs.2.66
cr. and providing higher taxation at R.3.33 cr. as against Rs.2.38 cr. Net profit moved up sharply from Rs.2.32 cr. to Rs.4.92
cr. EPS on a reasonable equity base of Rs.7.40 cr. comes to Rs.6.65. P/E ratio is at an unrealistic level of 82.
Pudumjee Agro Industries Ltd.: Ten times jump in share price within a period of two months is a real jackpot for
shareholders. Its share price which was only Rs.39 on 13/11/2007 shot up sharply to Rs.420 on 09/01/2008. Those who
are not greedy may book profit without any hesitation. Otherwise, book profit in small lots or book entire profit on 15% to
20% correction from the closing price. This is a rare opportunity for investors who are holding this share for long.
Fundamentals are not sound enough to grab the share at lower levels also. Keep close watch on the share price for profit
booking.
For FY07, its turnover at Rs.78.84 cr. declined from Rs.100.88 cr. in FY06 – a decrease of 22%. Operating profit declined
from Rs.5.54 cr. to Rs.4.15 cr. – a fall of 25%. After providing lower amount for interest at Rs.1.33 cr. as against Rs.2.36 cr.
and lower depreciation at Rs.1.08 cr. as against Rs.1.48 cr. and higher taxation at Rs.0.73 cr. compared to Rs.0.58 cr., net
profit was maintained at Rs.1.01 cr. as against Rs.1.11 cr. in FY06. On an equity base of Rs.3.60 cr., EPS comes to mere
Rs.2.81. P/E ratio is very high at Rs.83, which does not justify such a high price.
FUND ANALYSIS
MUTUAL FUNDS
Templeton India Growth Fund: Stable returns
By Devangi Bhuta
Fund Manager - Dr. J. Mark Mobius
Fund Size – Rs.408.19 cr.
Performance Snapshot
Absolute Returns as on 31/12/2007
6 Months
44.00 %
1 Year
63.07 %
3 Years
42.15 %
5 Years
52.73 %
(Returns are compounded and annualized; Source: Franklin Templeton December 2007 – Factsheet)
Benchmark Return
BSE Sensex – One year return of 47.15% as on 31/12/2007
Objective- Templeton India Growth Fund is an open-end equity fund that invests primarily in the equity market with the
objective of providing long-term capital appreciation towards meeting long-term financial needs like a comfortable
retired life or children's education.
Risk Ratio (for the 3-yr period ended 31/12/2007)
Parameters
Standard Deviation
Beta
Sharpe Ratio*
Templeton India Growth Fund
6.13%
0.90
1.66
Fundamental Analysis
Finance and petroleum products constitute around 33% of the total fund allocation followed by Software, Banks and
Telecom. The fund has added over 1,00,000 shares of Mindtree Consulting during November 2007, which appears to be a
good pick as the stock was available at an attractive valuation. It also added ICICI Bank while the shares of Grasim, Sesa
Goa and Hindalco were increased substantially in December 2007.
By and large, the fund manager's strategy appears to be holding on to fundamentally good stocks. The fund also seems to
be taking advantage of short term price movements and gain from the short term opportunities available in the market or
sectors from time to time. It has dabbled in power stocks for short term gains with respect to Power Grid and Reliance
Energy, which was a good move in a market driven by momentum stocks. These two stocks are fundamentally sound too.
Besides, it has recently entered into software stocks, which had taken a beating earlier.
Interestingly, Tata Investment Corporation (TIC) comprises 15% of the total corpus. Promoted by Tata Sons, it was set-up
to assist in the promotion of new companies and projects and partly to act as an investment company. Its activities
comprise primarily of investing in long-term investments in equity shares and other securities of companies in diverse
sectors. The major source of income for the company is dividend income and profit on sale of investments.
As on 1
st
January 2008, the total value of investments under the company amounted Rs.3100 cr. of which the investment
in Tata Group companies was close to 50%. The company's current market capitalization is close to Rs.2500 cr. thus
providing some cushion on the downside. As mentioned earlier, the majority holding of its investments is in Tata group
12
of companies, which again augurs well for the quality of its investments. Considering the overall quality of investments,
diversified portfolio and the prospects of the invested companies, TIC is a good long term investment candidate. The
major concern, however, is its exposure to capital markets with investments in over 175 companies.
Other top stocks of the Fund include ONGC, Hindalco, Bharti Airtel, Reliance Industries and Sesa Goa which are
fundamentally sound. The diversification across sectors as well as stocks passes muster. Also, the scheme appears to be
well diversified between large and mid caps.
Investment Call
This scheme appears to be suitable for investors who do not want to miss the short term trading opportunities and with
stable returns over a long period. Patient investors looking for stable long term returns may consider it for investment at
declines keeping in mind their cash market exposures in stocks/ sectors of this scheme.
13
By Saarthi
STOCK WATCH
More than copper and telecom, Bhagyanagar India Ltd. (Code: 512296) (Rs.60.35) is now known as a real estate and
infrastructure company as it owns around 175 acres of land bank valued at more than Rs.600 cr. that was acquired at one
third its present value, which means that the company is sitting on a huge unrealized gains. To derive the maximum
benefit of the ongoing real estate boom, it has aggressively forayed into real estate development through its various
subsidiaries and is focusing mainly on housing and construction of IT Parks. Recently, it formed a special purpose vehicle
(SPV) IL&FS for undertaking various infrastructure and entertainment projects such as theme parks, SEZ, industrial parks
etc on a large scale basis. It has already commissioned a wind power project with an installed capacity of 9 MW in
Karnataka in FY07. To concentrate on its real estate business, the company is planning to soon demerge its other divisions
like copper, telecom, metals, auto components into a separate company. In October 2006, the company had raised approx
Rs.70 cr. through FCCB route at Rs.44 per share to fund its various projects. Recently in October 2007, it made a
preferential allotment of 1.15 cr. warrants at Rs.44 per share and now in Jan'08 it is making another placement of 55 lakh
warrants at Rs.90 per share. Thus it has made a funding arrangement of Rs.100 cr., which will take its total diluted equity
to Rs.21.40 cr. The scrip has the potential to shoot up by 50% in 6-9 months.
*****
Although the share price of Andhra Petrochemicals Ltd. (Code: 500012) (Rs.34.35) has doubled in the recent rally,
investors can still accumulate this scrip at declines for further gains. It is the only producer of Oxo-Alcohols in India with
a production capacity of 42,000 MTPA. The demand for Oxo-Alcohols is currently estimated at 143,000 MTPA, of which it
caters to 30% and the balance 70% is met through imports. To secure a greater share of the market and meet the growing
demand, the company is undergoing an expansion cum modernisation programme to enhance its production capacity to
73,000 MTPA, which is expected to be operational by September 2009. Importantly, the company has been able to save a
massive Rs.12 cr. per annum on power costs as it has installed and commissioned 2400 KVA uninterrupted power supply
system and discontinued the operation of D.G. Sets from the last fiscal. In FY07, the company made a strong turnaround
as sales increased by 35% to Rs.266 cr. but net profit skyrocketed to Rs.36 cr. compared to Rs.2 cr. in FY06. It even declared
10% maiden dividend. On the back of higher realizations and better efficiency, it has reported encouraging numbers for
the first two quarters as well and is expected to end FY08 with sales of Rs.300 cr. with PAT of Rs.48 cr. i.e. an EPS of Rs.6
on its equity of Rs.85 cr. As per the grapevine, India's leading corporate entity is eyeing this company. At the same time,
its promoters i.e. Andhra Sugars has increased its stake by 4% in the last one year through the creeping acquisition route.
*****
EL Forge Ltd. (Code: 531144) (Rs.80.80)
manufactures carbon, alloy and stainless steel
forged components that are mainly used to
manufacture engine parts, transmission parts,
steering and suspension parts, break assembly
parts, chassis parts, drive line and electrical
parts. To move up the value chain, it is
gradually changing its product mix to
machined
components
that
enjoy
comparatively higher margins than forged
products. Hence, it has recently put up a
machine shop facility at
Chromepet,
especially for MICO. It also set up a world
class manufacturing facility at Sriperambadur
near Chennai that has started commercial
production recently and enhanced its installed
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capacity to 23200 MTPA from 18200 MTPA. To fund this expansion, the company had raised around Rs.15 cr. last year
through preferential allotment of 12.15 lakh shares at Rs.120 per share. Yet, it is available at a good 30% discount to this
allotment price. For future growth, however, the company is betting on exports since India has emerged as a major source
of supply of forgings to the global auto industry. Financially, the company has reported decent results for H1FY08 and is
expected to end FY08 with consolidated sales of Rs.185 cr. and profit of Rs.10.50 cr., which works out to an EPS of Rs.12
on its equity of Rs.8.50 cr. Currently, FIIs including Goldman Sach, BSMA etc are holding 18% stake. Keep accumulating
at declines.
*****
Jupiter Biosciences Ltd. (Code: 524826) (Rs.176.90) is poised to become a global peptide solutions group with a broad
canvas of peptide products, peptide reagents, coupling reagents, protective agents and a supplier of key ingredients used
in peptide based pharmaceuticals. It's operating in a very niche segment and is among the few companies in the world
that ate competent in the synthesis of peptides. The company is on a very strong growth trajectory as it has recently raised
Rs.100 cr. through QIP route at Rs.153 per share. It is setting up a 5500 sq ft manufacturing facility in Maryland, USA, to
cater the US, Canadian and European markets. It is also looking to acquire a few companies globally. Importantly, it has
entered into a 10-year product purchase agreement with Ranbaxy on peptide pharmaceuticals for global markets and as
per contract allotted 31.77 lakh warrants at Rs.147. Recently, it cancelled the 27.50 lakh equity shares allotted to the
promoters and instead issued 40 lakh warrants at Rs.182 to strategic investors. So another Rs.100 cr. will come in to the
company on the conversion of warrants. Moreover, it has already invested whopping Rs.85 cr. in a subsidiary company –
Sven Genetech, which was till now busy in setting up infrastructure. For FY08, on a standalone basis, Jupiter Bioscience is
expected to post total revenue of Rs.125 cr. with PAT of Rs.30 cr. i.e. EPS of nearly Rs.20 on its current equity of Rs.15.40
cr. After all with the conversion of warrants, its equity will get diluted to Rs.22.50 cr. But at the same time, its topline as
well as bottomline will shoot up accordingly. With 33% FII holding, it is trading fairly cheap at a current market cap of
less than Rs.300 cr.
By Kukku
FIFTY FIFTY
Investment Calls
* Supreme Industries (Rs.324.30) made an investment plan of Rs.240 cr. for FY07 and FY08 of which Rs.132 cr. has been
spent on:
1) A mega plastics product complex at Gadegaon near Jalgaon to manufacture varieties of plastics pipe products,
Pallets, Crates, Furniture and Fabricated products from Cross laminated film.
2) A new facility at Urse- near Pune - to produce high technical protective packaging products.
3) To enhance the Injection Moulding capacity at its plants in Durgapur, Lalru, Talegaon, Pondicherry, Noida and
Khushkheda.
4) Acquiring moulds for new products in Furniture and Crates.
5) To boost the capacity of Cross laminated films and products at Halol and Silvassa.
It is building a ten storey commercial complex with an office space of around 2,10,000 sq. ft. with a two level of
basements for parking 350 cars at Veera Desai Road, Andheri West. Two level basement areas are nearing completion.
The whole complex should be ready for occupation by the last quarter of 2008.
The company has sold the development rights of Salt Lake area and received Rs.12.03 cr. received for the same.
It has also decided to quit from segments where its product range is not differentiated, viz. Rigid PVC film at Malanpur
and FSW division at Daman. This restructuring should improve its working in FY08.
The company is also exploring the possibility of disposing off some units, which do not give adequate returns and may
realize a good amount if it decides to divest these assets. These divestments will also release the working capital blocked
in these product segments.
The company expects to accelerate its presence in the segments where the 'Supreme' brand commands high respect.
Company's Strength & Growth Drivers:
1) Manufacturing sites: The company has 16 manufacturing sites widely spread in the country. Supplies from Urse and
Gadegaon will further strengthen its ability to provide cost effective solutions for its customers.
2) Distribution Network: The company has built up an excellent distribution team and trains them to ensure proper
service to its ultimate customers.
3) Growth Drivers: The company is continuously innovating to increase the share of its speciality products in each
segment to meet the demanding specifications of its end users. The proportion of such business is growing in each
product segment.
Plastics Piping Systems:
The company categorizes piping products into two broad categories:
14
a) Building and Installation: It has products used above the ground level including SWR System, Aqua gold system, PPR
system, ASTM Threaded Pipe, Plumbing Pipes used for hot and cold water connections. It is adding two new systems,
one for rainwater harvesting and one for Hot and Cold water plumbing in the current year.
b) Civil & Infrastructure: It comprises mainly products used below ground level and includes pipes for drinking water,
irrigation, casing and submersible pipes, underground drainage, storm water system and sewage system. It will add two
new systems, one for Gas distribution and the other for Industrial usage.
The company has already reported improved working for H1FY08 ended on 31
st
December 2007. Sales were up by 10% at
Rs.542 cr. while net profit was up by 15% at Rs.22.81 cr. This is despite the shut down for a few weeks in
November/December 2007 and loss of sales for discontinuing of some of the businesses.
The company had jointly promoted Supreme Petro, where it holds investment at cost value of Rs.33 cr. whose market
value is Rs.125 cr. With expanded capacity in operation, H2FY08 results should be very encouraging, which is normally
better than H1.
At present, stocks related with water sectors are much sought after by informed investors. Since products of the company
are water related and also pertain to the infrastructural sector, the stock is likely to attract the attraction of fund managers
and market players.
Investors with long-term
view can add this stock on
reactions for good long-term
growth.
* Ion Exchange (Rs.277.95) -
The Government plans to
privatise drinking water and
sanitation projects will also
open up drinking water
purification and operation
& maintenance business for
water treatment companies.
The expansion of company's
solutions portfolio for entire
environment
management-
water, waste water, solid
waste, air and renewable
energy and diverse sectors in
infrastructure,
industrial,
municipal and household are
expected to result in its
significant growth.
Significant increase in its
company's presence overseas
and the global acceptance of
its products and services are
expected to drive its export
business. The company views
the future with optimism.
It has
already
reported
encouraging H1FY08 results
with sales going up by 30% to
Rs.220 cr. and net profit
higher by 129% at Rs.2.79 cr.
ICICI Prudential Mutual
Fund hold 5 lakh shares from
lower levels and recently
Rakesh Jhunjhunwala is said
to have taken a good
investment position in the
company.
Winners of 2008!
All the 'Winners of 2007' released on 2nd January 2007 have gained from their recommended
levels to their respective highs.
Their performance till 31
st
December 2007 is also given.
The 3rd edition of 'Winners of 2008' has been released.
Get 'WINNERS of 2008' with yearly levels and quarterly updates for Rs.2000 by email or as a
print publication. Add Rs.100 extra if needed by courier. Book your copy now and remit your
subscription to 'Time Communications (India) Ltd.' C/A No.623505381145. ICICI Bank, Fort,
Mumbai – 400 001 or C/A No. 10043795661, State Bank of India, Fort Market Branch,
Mumbai – 400 001, under email advice us at moneytimes@vsnl.com.'
Scrip
Close
29/12/06
High After
Recco
% Gain
to High
Close
31/12/07
% Gain/Loss
on closing
Reliance Capital
606.40
2649.00
336.84
2589.00
326.95
Bhushan Steel
374.25
1655.00
342.22
1557.00
316.03
SAIL
89.20
292.50
227.91
284.35
218.78
Sesa Goa
1411.00
3941.00
179.31
3799.00
169.24
Mphasis
303.45
339.80
11.98
755.00
148.81
Subash Projects
251.85
499.00
98.13
477.35
89.54
Jain Irrigation System
382.80
766.00
100.10
645.00
68.50
J.B.F.Industries
122.75
208.45
69.82
204.00
66.19
Century Text.& Ind.
740.00
1200.00
62.16
1170.00
58.11
Suashish Diamonds
209.35
320.00
52.85
297.20
41.96
Champagne Indage
551.10
981.00
78.01
764.00
38.63
N.C.L.Industries
59.95
83.65
39.53
82.90
38.28
India Cements
235.10
333.00
41.64
310.30
31.99
Finolex Cables
100.42
122.00
21.49
121.30
20.79
Elder Pharma
366.50
470.00
28.24
420.85
14.83
Ashok Leyland
45.45
55.10
21.23
52.00
14.41
Ipca Laboratories
593.75
794.00
33.73
678.00
14.19
Kesoram Ins
546.95
675.00
23.41
588.00
7.51
Mahindra & Mahindra
906.00
1002.00
10.60
861.00
-4.97
Classic Diamonds
538.00
560.00
4.09
507.35
-5.70
Hinduja TMT
737.00
782.00
6.11
691.00
-6.24
Lupin
612.05
755.00
23.36
567.95
-7.21
Bombay Dyeing
766.00
803.00
4.83
633.70
-17.27
Infosys Technologies
2241.00
2439.00
8.84
1768.00
-21.11
K.S.B. Pumps
676.00
679.00
0.44
465.30
-31.17
Sundaram Clayton
1394.00
1400.00
0.43
861.00
-38.24
Hexaware Tech.
199.65
204.00
2.18
85.85
-57.00
15
16
With a strong order position, the company is expected to report sharp improvement in coming years. We have been
strongly recommending this stock from Rs.110/120 level. Stay invested or add on dips only for good long-term growth.
* Ansal Housing & Construction Ltd. (Rs.310) - The Ansal group is a reputed real estate developer predominantly in
North India. The company's future strategy is to focus on development of integrated townships in the suburbs. This will
help the company acquire land at relatively low cost and get better realizations and higher returns over time as prices in
the townships appreciate faster than inflation.
Despite the residential segment being the biggest contributor, AHCL is now seeing increased activity in commercial
division since it has aggressively forayed into shopping malls and retail space. In collaboration with Radisson Worldwide,
it is setting up chain of restaurants across India with "The Great Kebabs Factory" and "Superstars" already operational in
Noida.
The company has land bank in 22 cities across India and has plans for hotels wherever they have townships. The total
value of the projects is close to Rs.6,500 cr. Currently, AHCL has access to an extensive land bank of about 2,600 acres
(67.6 mn. sq. ft. of saleable area with AHCL share being 54.6 mn sq. ft.) either directly or through subsidiaries or through
joint developments, majority of which is located in Tier II and III cities primarily in North India. Importantly, the
acquisition cost of these lands is reasonably low, for which company has been able to register better profit margin
compared to its peers.
For H1FY08, it has clocked a growth of about 30% in sales revenues and 57% growth in profit after tax. For full year FY08,
it may achieve a profit after tax of about Rs.65 cr. which would translate into an EPS of Rs.40. The total value of projects is
about Rs.6,500 cr., but its market cap is just Rs.520 cr., and stock is trading at a price to earning ratio of about 8 on its
current FY08 earnings. Development work has started on about 2,000 acres of land bank and work on the remaining land
bank will start within a year. Considering the company's strong project pipeline, we estimate revenues and PAT to grow
at a CAGR of 40% to 50% over the next 4-5 years.
In this current market, it's difficult to find such undervalued real estate stocks. Add on reactions around Rs.300 level.
Market Guidance
* Grauer Weil (Rs.167.80) had given 1st phase at Rs.36/37 per sq. ft. about three years back or so. Current rates are
around Rs.150 per sq. ft. Moreover, Big Bazar and Cinemax pay a comparatively lower rate but attract huge crowds which
will help the second phase of the project of approx. 3,00,000 sq. ft. at much higher rates .
The 2nd phase will be ready by 31st March 2008 and lease rental income will come from Q2FY09 onwards.
Existing rates, too, come for renewal at much higher levels, which will bring about a sharp improvement in sales &
margins over the next few years. IT park approval is expected any time for its Pune unit.
A group company has real estate of around 3.5 acres at Mumbai and there is possibility of a merger once it comes out of
BIFR.
Its core business is also said to be doing well.
There is selling in the counter above Rs.180 level. Sustained closing above Rs.190 level can give good breakout. It's a good
stock to add around Rs.160/165.
* Paper stocks are expected to do very well in future in view of firming paper prices. Sirpur Paper (Rs.123.10)
recommended as a safe investment around Rs.60/63 level is catching fancy and has reached the levels of Rs.150 before
reacting to Rs.122. The company will get good benefit of expansion, which it has completed timely. This benefit will come
next year only. Investors are advised to stay invested.
* Ballarpur Industries ((BILT) Rs.169.35), which was recommended at Rs.120 level is also good to hold for good long-
term growth.
* Finolex Cables (Rs.118.85) - There is unconfirmed news that the company is likely to list one of its subsidiaries in which
it holds a good stake indirectly. The stock is good portfolio choice. Stay invested.
* Jetking (Rs.331.75) investors can continue to hold this stock.
* Nile Ltd. (Rs.272.85) is another good stock which investors can think of adding on reactions.
* Cairns India (Rs.240), MTNL (Rs.188.70) and GTL (Rs.275.05) are good for investors looking for speculative cum
investment buying for good targets over next few months.
* Tata Metaliks (Rs.187.80) reported a net profit of Rs.15.86 cr. in Q3FY08 as a against net loss of Rs.1.12 cr. during
Q3FY07. Sales rose 83.74% to Rs.271.92 cr. in Q3FY08 as against Rs.147.99 cr. during Q3FY07. For the first 9 months of the
current year, its EPS is Rs.17.46 while full year estimated EPS is likely to be in the region of Rs.25/26. The stock is
available at a P/E ratio of less than 8. The company has formed Tata Metalik Pipes as a subsidiary to make pipes, which
are in good demand. Invest in this stock for good long-term growth.
* Hindusthan National Glass & Industries (Rs.1330.50) manufactures glass containers with a capacity at an
average of 6.5 million pieces per day. The growth in Beer, Pharma, Food, Liquor and other high-end sectors will drive
the growth in revenue and profitability of the company.
Its H1FY08 EPS was Rs.31.6 up by 320% compared to the previous corresponding period. Promoter holding is 91%. Stay
invested or add on reactions.
* English Indian Clay (Rs.2807.25) - Though the stock has shot up recently from Rs.1700 to Rs.2800 while other mid-caps
were falling. Investors can continue to hold this stock for further gains with long-term view in mind.
* Ashiana Housing (Rs.698.65) though the stock has given superb returns over the last 24 months but long-term investor
likely to see further good appreciations. Stay invested.
* Shree Ram Urban (Rs.389.80), Tyche Peripherals (Rs.102.55) and Advanced Micro (Rs.101.55) are likely to see higher
levels as per informed sources. Stay invested.
By V.H. Dave
EXPERT EYE
The share of Empee Distilleries Ltd. (EDL) (Code: 532920) (Rs.317.70) is recommended by an analyst with a reputed
brokerage house with a target price of Rs.500 in the medium-term. Based on its strong fundamentals and ongoing
expansion, investment in this share for long term capital appreciation.
EDL, a part of the Empee Group promoted by M. P. Purushothaman and family members, manufactures Indian-made
foreign liquor (IMFL) since 1984 and sells it under its own brands or through tie-ups with other companies. Its distillery
located at Kanchipuram in Tamil Nadu has an installed capacity of 38.33 lakh cases per annum. Another distillery at
Palakkad in Kerala has an installed capacity of 21.60 lakh cases per annum.
EDL came out with a public issue in November 2007 at Rs.400 per share and mobilised Rs.192 cr. for expansion. It is a
major supplier of IMFL products to the Tamil Nadu State Marketing Corporation (TASMAC) and one of the top ten
selling brands in the IMFL 180-ml pack segment. It has strong brands like Club Royal, John Peter in the medium whisky
segment. In the popular whisky segment, its brands are Marcopolo and Power. Its rum brands are Elcanso in the medium
segment and Old Secret, Power, Mclene & Marcopolo.
The proceeds will be utilised to set up a 60-kilo litres per day (KLPD) grain-based distillery in Andhra Pradesh to cater to
the medium and premium categories, a 0.70-lakh cases per month bottling plant in Andhra Pradesh, and a 7.5-MW
biomass-based power plant in Tamil Nadu.
It is also expanding its Tamil Nadu unit's existing extra-neutral alcohol capacity from 20 KLPD to 70 KLPD and bottling
capacity from 3,20,000 cases per month to 5,00,000 cases per month, and relocating and expanding the existing capacity of
its distillery in Karnataka from 50,000 cases per month to 1,00,000 cases per month. These expansions will help it to enter
new markets in Andhra Pradesh and Karnataka and strengthen its position in Tamil Nadu.
For FY07 ending 30
th
September 2007, EDL's sales increased by 107% to Rs.626 cr. and net profit by 141% to Rs.20.1 cr.
yielding an EPS of Rs.10.6 on its enhanced equity of Rs.19 cr. resulting from this IPO. With reserves of Rs.230 cr., the book
value of its share works out to Rs.131.
The promoters hold 75% in its equity capital and the balance is widely held by FIIs, mutual funds, corporates and the
general public.
EDL is setting up a 100 KLPD molasses based alcohol plant in the proposed Integrated Sugar Complex in Tirunelveli by
2009. It is also setting up a brewery in Andhra Pradesh with a capacity of 5,00,000 HL per annum.
It is setting up of two other 7.5 - 10 MW capacity biomass based power plants in Tamil Nadu and is pursuing setting up
wind power projects in Kerala and Karnataka. EDL is also exploring emerging technologies of Thin Voltaic Panels and
Hybrid technology in the renewable solar energy sector.
The company is developing part of its 20.88 acre freehold property located at Sriperumbudur, Kanchipuram District, into
12.23 lakh sq. ft. of residential space and 3 lakh sq. ft. of basement. This project was approved by DTCP in March 2007 and
is eligible for deduction under Section 80-IB of the Income Tax Act making it eligible for 100% tax exemption on the
profits to be earned from the development of this property. The remaining 2.38 acres of land would be used for setting up
godown for storage of bottle and 3.27 acres for commercial use.
EDL also owns 13 acres 10 cents land at Poonamalle Taluk in Tiruvallur Dist., 13 acres 3 cents in Gummidipundi Taluk
in Tiruvallur District and 10,260 sq. ft. land in Kancheepuram Dist. as also 15 acres at Kuthumbakkam near Chennai.
These properties would be developed after about 12 months over the next 4 -5 years, which would result in a total area of
above 25 lakh sq. ft.
EDL also has 4 grounds totalling 10,260 sq. ft. at Singaravelar Main Road, Neelangarai Village, Tambaram Taluk and
Kancheepuram District, Chennai.
In the past, the Tamil Nadu government had not permitted any new entrants other than the existing six licensees to
manufacture and market IMFL products. Even national operators have to route their bottling operations through existing
operators. Due to the entry barriers in the State, competition will not be severe and also provide an opportunity to bag
manufacturing contracts from national players.
The alcoholic beverages industry in India comprises 5 key segments, viz. Beer, Wine, Indian Made Liquor (IMFL), Bottled
Orgin (NIO) Alcoholic Products and Country Liquor. In 2006-07, the IMFL industry grew over 16% to register sales of
17
over 157 million cases of 9 Bulk Litres (BL) each. The industry was particularly buoyant with the opening up of key
northern markets of Punjab, Haryana and Chandigarh. Changes in the alcohol policy in these states opened up the
industry from one controlled by a few large syndicates to wide-spread ownership thereby paving the way for reasonable
prices and free play of market forces.
The availability of a wide range of alcoholic products, the large untapped segment for low priced brands in unorganized
markets, opening of new distribution channels, keen competition in production and distribution attributed to the growth
in consumption habits and entry of international brands/manufacturers leading to further expansion of markets are the
main demand drivers.
During FY08, EDL expects to register sales of Rs.1100 cr. with a net profit of Rs.64 cr., which would give an EPS of Rs.34.
Going forward, sales would increase to Rs.1600 cr. in FY09 and Rs.2100 cr. in FY10 with corresponding net profit of Rs.148
cr. and Rs.178 cr. and the EPS would increase to Rs.78 and Rs.94 respectively.
At the CMP of Rs.317, the EDL share is trading at a P/E of 9.9 on FY08 estimated EPS of Rs.34 and 4.3 on FY09 projected
EPS of Rs.78. At a reasonable P/E of 15, as against the industry average P/E of 48, the share has the potential to touch
Rs.500 in the medium-term and Rs.1170 in the long-term. The 52-week high/low of the share has been Rs.489/290.
*****
The counter of FIEM Industries Ltd. (FIEM) (Code: 532768) (Rs.102.85) has been attracting value buying with
knowledgeable persons acquiring a good chunk of shares. The buzz is that after expansion FIEM is all set to garner an
EPS of above Rs.16 in FY09. The share trades at a forward P/E of just 6.9 against the industry average P/E of 21. The
grapevine has it that the share is all set to cross the Rs.160 mark at a reasonable P/E of 10.
FIEM manufacturers of automotive lighting & signalling equipment and rear view mirrors, was originally incorporated in
India as Rahul Auto Pvt. Ltd. in 1989 in New Delhi. It was converted into a public company in 1993. FIEM was promoted
by Mr J. K. Jain, who is a Chairman and Managing Director and is first generation promoter. He has a rich experience of
about 35 years in the automotive components industry and is one of its pioneers. It makes Automobile Parts, Components
& Spares, Automotive Lighting, Head
Lamps, Tail Lamps, Warning Triangles,
Reflectors, Auxillary Lights, Fog Lights,
Automotive Lamps, Blinker Lamps, Reflex
Reflectors, Work Lamps.
18
FIEM has subsisting technical support from
Ichikoh Industries, Japan (IOL)). IOL is a
well-known
name
worldwide
in
automotive lighting, rear view mirrors &
wiper blades and is a Tier 1 supplier to the
major Japanese vehicle manufacturers such
as
Nissan
Motor,
Toyota
Motor
Corporation,
Fuji
Heavy Industries,
Daihatsu
Motor Co,
Mazda
Motor
Corporation etc.
January – March 2007
EBG Quarterly Performance:
100% once again
During January – March 2007, which is the second quarter of the fourth
year of 'Early Bird Gains' (EBG) – the investment newsletter that spots
multi-baggers, it has scored 100% success with all 16 recommendations
recording an appreciation.
EBG has, therefore, consistently, maintained quality while the bonus
issues in excess of 30% highlight the confidence of its recommendations.
Issue
Dated
Scrip
Highest
price since
recom.
Buy
Price
Growth
%
01-01-07
FIEM's four manufacturing units are
strategically located in Haryana, Tamil
Nadu and Karnataka. The fifth unit (EOU)
at Kelamangalam in Hosur in Tamil Nadu
has recently started commercial production.
The expansion at Unit VI at Nalagarh,
Himachal Pradesh is under way. FIEM
offered 41 lakh equity shares with a face
value of Rs.10 each through book building
route for expansion, which fetched Rs.56.2
cr.
The new manufacturing facility at
Nalagarh, Himachal Pradesh (Unit
VI) for automotive lighting and signalling
and rear view mirrors has commenced
production with the first consignment to
Punjab Tractors. FIEM has made progress
by clinching a new order from Yamaha
Mount Shivalik Inds. Ltd
61.30
147.4
140
01-01-07
Uni Abex Alloys Product
112.00
135
21
10-01-07
Sanghi Polyesters
8.35
16
92
10-01-07
Godawari Power & Ispat
100.40
376.50
275
17-01-07
Uniply Industries Ltd.
55.00
61
11
24-01-07
Lakshmi Electrical Cont
298.00
589
98
31-01-07
Veejay Lakshmi Engg.
130.65
152
17
07-02-07
Jindal Stainless Ltd.
124.00
243.80
96
07-02-07
Era Constructions (I)
488.00
957
96
14-02-07
Syncom Formulations
46.35
79
70
21-02-07
FIEM Industries
111.50
137
23
28-02-07
Roto Pumps Ltd.
55.90
99.25
78
07-03-07
Numeric Power Systems
312.20
1199
284
14-03-07
DMC International Ltd.
49.20
89
82
21-03-07
Indo Tech Transformers
253.95
807.75
218
28-03-07
City Union Bank
165.85
515.45
210
EBG for sure profits
19
Motor India, paving the way for enhancing business with Japanese companies.
FIEM adheres to TQM through stringent quality control systems and state of the art manufacturing facilities. The
products conform to international standards viz, JIS, ADR, DOT, ECE, SAE and Indian standards. FIEM has to its credit
ISO 9000, ISO 9002, QS 9000, ISO 14001 and ISO/TS 16949 certification.
Some of the prestigious OEMs in the domestic and global automotive industry are: TVS Motor Co, Honda Motorcycle &
Scooter India, Hyundai, Tata Motors, Punjab Tractors, International Tractors, Swaraj Mazda, Kinetic, Yamaha, Royal
Enfield, Reva, HM, Sonalika, Fiat, Skoda Auto India, Suzuki Motor Cycles India, General Motors India., Aspock Systems
(Austria) and Piaggio (Italy).
During FY07, FIEM posted 36% increased sales of Rs.168 cr. and earned 47% higher net profit of Rs.10.6 cr. During
H1FY08, net profit amounted to Rs.5 cr. 16% lower compared to H1FY07 on 13% higher sales of Rs.88 cr. Its equity capital
is Rs.11.9 cr. and with reserves of Rs.78.6 cr., the book value of the share works out to Rs.76. Its gross block in FY07 was
Rs.129 cr. against Rs.77 cr. in FY06. The promoters hold 64% in the equity capital, while the public holding is 22% leaving
8% with PCBs and 4% with mutual funds.
FIEM's EOU (Export Oriented Unit) has recently started commercial production with the first consignment to Europe,
Aspock Holding GmbH, Austria and Ichikon Industries, Japan. The products are also being supplied to Piaggio and
C.s.p.a., Italy. FIEM will also export automotive lighting & signalling equipment and rear view mirrors to TVS Motors for
its Indonesian project.
Coming to future prospects, India is among the few nations which has its 'own' automobile industry and makes the entire
range of automobiles. India is reckoned to be amongst the most exciting growth markets globally. Stronger economic
growth, rapid rise in road infrastructure and increasing affordability will ensure a high sales growth momentum for the
auto sector. India is already the 2nd largest two-wheeler market in the world; 4th largest tractor manufacturer in the
world; 5th largest commercial vehicle market in the world and 3rd largest car market in Asia excluding Japan.
With the domestic automobile industry growing at 13% and outsourcing of components on a high, the Indian Auto
Components industry cruised along at top speed in the last fiscal. According to estimates by the Automotive Component
Manufacturers Association (ACMA), domestic production increased by 17% in 2005-06 to $10 billion (approximately
Rs.43,000 cr.), while exports jumped by 30% to $1.8 billion (approximately Rs.7,750 cr.).
The new manufacturing facilities of FIEM at Nalagarh, Himachal Pradesh (Unit VI) for automotive lighting and signalling
and rear view mirrors has advantage of excise duty exemption for the final product along with income tax holiday for 10
years. Based on the current going, FIEM is likely to garner sales of Rs.190 cr. and post a net profit of Rs.14 cr., which
would give an EPS of Rs.11.7.
On the back of expansion, sales are expected move up to Rs.300 cr. in FY09 with net profit increasing to Rs.19 cr. The EPS
would work out to Rs.16. The FIEM share is currently quoted at Rs.102, which discounts the FY08E by 9.5 times and
FY09E by 6.9 times. The share of its immediate peer, Lumax Industries is traded at Rs.438 discounting its estimated FY09E
of Rs.26 by a whopping 16.8 times. Against this, the FIEM share is available at an attractive forward P/E. The industry
average P/E of the auto ancillaries industry currently rules firm at 21. A conservative P/E of even 10 will take the share
price to Rs.160 in about 6-9 months. The 52-week high/low of the share has been Rs.135/82.
*****
The share of Surana Telecom and Power Solutions Ltd. (STPSL) (Code: 517530) (Rs.39.75) is being recommended for
decent appreciation in the medium-to-long term as its new projects are likely to take off.
Originally incorporated as Surana Petroproducts Pvt Ltd in 1989 by the Bhagyanagar Group, STPSL is engaged in the
manufacture of heat-shrinkable jointing kits, cable splicing/filling compounds, jelly filled telecommunication cables,
optical fibre cables, wire connectors, which cater to the telecommunications sector. STPSL supplies cables to BSNL,
MTNL, electricity boards and the Railways mostly. For the past several years, it has maintained its market share of 12% to
15%.
Its core telecom business has been strengthened with the establishment of units for 11 KV and 33 KV power low tension
and high tension power cables and a manufacturing unit for rods. The company thus covers the entire bandwidth of
power cables from house wiring to underground cables.
The company has purchased a 1.25 MW wind turbine from Suzlon Energy at Rs.6 cr. in Karnataka and entered in to a
power purchase agreement with Gulbarga Electricity Supply Company at Gulbarga, Karnataka, for supply of power
generated for a period of 20 years.
STPSL has also entered into assembling and marketing of CDMA/GSM mobile phones and entered a MoU with LG
Electronics of Korea to supply these phones and is exploring potential with private players like Tata and Reliance.
During FY07, STPSL achieved 15% increased sales of Rs.85 cr. and posted 29% lower net profit of Rs.8.2 cr. yielding an
EPS of Rs.3.5. Although sales declined by 44% to Rs.27 cr. during H1FY08, net profit shot up by 92% to Rs.5.6 cr.
Its equity capital is Rs.11.3 cr. and with reserves of Rs.55 cr., the book value of the share works out to Rs.29. With
borrowings of Rs.14 cr., its debt-equity ratio works out to 0.21:1. The value of its gross block is Rs.78 cr. The promoters
hold 53.4% in the equity capital, foreign holding is 1.4%, institutional holding is 2.3%, PCBs holding is 6.2% leaving 36.7%
with the investing public.
The company is in the process of issuing 33,95,600 warrants of face value Rs.5 each at a price of Rs.31 on preferential basis
to strategic investors and the promoters group.
With a view to become an active player in the infrastructure business, the company has initialed several projects to build
up IT/ITES and hardware infrastructure at different places.
The company has created 'IT Space' of 96,000 sq. ft with a plug and play facility in Hyderabad, which has been let out to
Oracle, Hyundai, DE Shaw.
It has been allotted 5 acres land in the Rajiv Gandhi Infotech Park, Pune, wherein it has planned a 3 lakh sq. ft. facility at a
cost of Rs.60 cr.
The company has also been allotted 1 acre land in IT Park, Goa, 50 acres in approved SEZ at Tada, Andhra Pradesh, 2.5
acres in Hardware Park at Hyderabad near the new international airport. It has also been allotted 2.5 acres land for setting
up assembly facilities for CDMA/GSM phones.
As a step towards diversification, the company has planned to set up a facility for the manufacture of LED display boards
of 3.2/2.5 metres. The project would be completed by mid FY09. It is also exploring possibilities of entering into the solar
power related business.
The demand for power cables has gone up significantly and STPSL expects its power cable division to contribute about
Rs.50 cr. revenue in a full year of operation, once it manufactures entire range of products. It has the approval to produce
upto 11 kb and plans to scale up to 53 kb. STPSL has begun producing cables of certain specifications and will expand to
other cables as well. The power cable project will manufacture cables up to 33 KV.
India has been one of the fastest growing telecommunication systems in the world with an average annual growth of
about 25% for basic telephone services and over 100% for cellular and internet services. As there is tremendous growth in
the telecommunications industry, especially on the cellular front (CDMA), it will be a good opportunity for STPSL to be a
part of the growing demand for the wireless products.
India is witnessing an unprecedented growth in telecommunications and estimated to lead to an expenditure of over US $
50 billion by 2010. New technologies and services like 3G rollouts, national internet backbone, e-governance, IPTV, FTTx,
continued upgrades and replacements of existing infrastructure set-ups are anticipated to keep the growth rate for
telecom equipments and telecom cables higher than those prevalent globally. The demand for optic fibre cables is
expected to grow at 10% CAGR.
During FY08, STPSL is likely to post a net profit of Rs.14 cr. on sales of Rs.75 cr. and the EPS would work out to Rs.6.1.
During FY09, sales are expected to surge by 20% to Rs.95 cr. with the net profit increasing to Rs.17 cr.
In view of the better product mix for higher operational efficiency, backward integration, diversification into power
cables, future growth plans including foray into real estate, the shares of STPSL offer potential for further appreciation.
The share of STPSL is traded at Rs.39 at P/E of 5.9 on FY08 estimated EPS of Rs.6.1 and 5.6 on FY09 projected EPS of
Rs.7.5. The shares are recommended with a target price of Rs.60 in the medium-to-long-term. The 52-week high/low of
the share has been Rs.53/22.
20
By Nayan Patel
TECHNO FUNDA
WS Industries - A planet will turn into a star
BSE Code: 504220
Traded on NSE also
Last Close: Rs.123
Chennai based WS Industries is about to
become the number one insulator manufacturer
in May 2008 when its Vishakapatanam plant
goes on stream. Today, it is number two in India
(No.1 is Aditya Birla Novo) and is the fifth
largest manufacture of insulators in the world.
The company will have a capacity of 16,000 TPA
of ceramics after the start of its Vizag plant
(where it is investing Rs.108 cr.) as this capacity
will add 10,000 TPA. It makes porcelain
insulators in 72 KV to 171 KV range with 95%
for exports to 45 countries all over the globe. It
was also enlarged in sub stations as it made coupling devices and other equipments in Bangalore. But in 2000, it diverted
Review
- Krypton Industries recommended last week at Rs.77.95 zoomed and
kissed Rs.96 in spite of the highly bearish sentiment in the cash segment.
- Sangam India was recommended for the short term at Rs.70.10 with a
target of Rs.76, which was achieved on Monday itself.
This is what we cautioned last time:
Some mid-cap and small-cap stocks are highly overvalued and 'kabadi'
operators are ready to take advantage of this sentiment. Please be
careful and stay away from over valued or fundamentally unsound stocks.
Once again we proved 100% correct. For the whole week, everyone was
selling overvalued small cap and mid-cap shares, BSE Small cap index is
down by almost 1750 points from its high while the BSE mid cap index has
lost 965 points.
it to Alsthom and stuck to insulators, which is its core business. Two years ago, the company also focused in network
integration, engineering and planning from the experience of its Bangalore ventures. This business now accounts for 12%
of the company's total sales, which can go up to 20% next year and to 33% in future.
WS Industries has tied up with PPC Insulator of USA, a global company with a footprint in reality. In partnership with
the Chaterjee group of Kolkata, it plans to develop 5-6 hectares IT park. The company will retain nearly 25,000 sq m,
which is worth more then Rs.120 cr. at today's rates. Company will also earn Rs.12 cr. p.a. in rentals.
As India is growing very fast and power supply will be in increased demand, the domestic insulator industry is all set to
take off from its current size of about Rs.666 cr. and the company is all set to cross Rs.1000 cr. in the insulator business
only by 2010.
Its equity is Rs.21.14 cr. and the promoters hold around 41% stake in the company. LIC holds 5.48%, United India
Insurance Company holds 1.40%, Oriental Insurance holds 1.79%, Schroder Credit Renaissance Fund holds 11.92%,
Schroder Credit Renaissance Fund LP holds 2.98%, Principal Trustee Company Pvt. Ltd. holds 1.19%, GMO Emerging
Fund holds 5.59% stake while the Indian pubic holds only 20.91% stake in company.
The company has posted marvellous numbers for the first six months of this year. Net sales jumped 29.82% to Rs.104.49
cr. and net profit jumped 103.72% to Rs.7.11 cr. against whole last year's profit of Rs.6.56 cr.) This means that the company
has crossed last year's profit in first six months of this year alone.
On 24
th
December 2007, the board of WS Industries India has considered and approved the issue of 6 lakh warrants
proposed to the promoters of the company on preferential basis at Rs.107 per warrant entitling the holder of each warrant
to apply for and obtain allotment of one equity share against such warrant.
The board has considered and approved the issue of 3,50,000 non-convertible cumulative redeemable preference shares of
Rs.100 each aggregating to Rs.35, 000,000 to the promoters.
At the current level, the stock is traded at Rs.123. Buy with stop loss of Rs.110 with an upper target of Rs.140 in a short
span of time. Stock will go up to Rs.200 level in the next one year. WS Industries is safe and solid investment bet in the
present uncertain market.
Future Capital Holdings IPO opens on 11
th
January
MONEY FOLIO
Future Capital Holdings Ltd. (FCHL), the financial services arm of the Future Group, is entering the capital market with
an IPO of 6,422,800 equity shares of Rs.10 each for cash through a 100% book-building process in the price band of Rs.700
and Rs.765 per equity share. The Bid/Issue opened for subscription on Friday, 11
th
January and will close on Wednesday,
16
th
January 2008 and will be listed on the BSE and NSE.
FCHL was incorporated in 2005 and promoted by Pantaloon Retail (India) Ltd. (PRIL), the flagship company of the
Future group, its Managing Director, Mr. Kishore Biyani, and Mr. Sameer Sain, a former Managing Director at Goldman
Sachs International. One of the investors in the company is Och-Ziff, a prominent international fund. Its three primary
lines of business are investment advisory services, retail financial services and research.
The company provides private equity and real estate investment advisory services to onshore and offshore clients, which
include investment analysis, research and recommendations. It acts as the investment advisor to the Rs.350 cr. Kshitij
Venture Capital Fund, an onshore SEBIregistered venture capital fund, whose main focus is developing retail malls in
India. It also acts as the investment advisor to three offshore investment managers namely: Indivision Capital
Management.
In June 2007, FCHL launched its retail financial services offering 'Future Money' with the objective of becoming a leading
retailer of financial products and services in India. Pursuant to an agreement with PRIL, it has the exclusive right to
provide financial products & services at present and future malls, stores and retail outlets in India that are owned,
controlled or managed by PRIL and its subsidiaries.
FCHL will also embark on the distribution of financial products including credit cards and has entered into an agreement
with ICICI Bank for marketing and distribution of the 'Future Card', which will be a credit card offering loyalty points to
customers. It is also in the process of finalising detailed terms for acting as a corporate agent, for Future Generali India
Insurance Company limited for general insurance products and, for Future Generali India life Insurance Company
limited for life insurance products. Future Capital Research, its research business, conducts and publishes economic
research on India with the objective of enhancing value creation across the other businesses.
Public issue mobilization may touch Rs.75,000 cr. 2008: Prime
Backed by a buoyant secondary market and handsome post-listing gains on almost all IPOs in the past two years, 2008
may turn out to be a record year for public issues- IPOs and FPOs according to Prithvi Haldea of PRIME, India's premier
database on the primary capital market. Prime estimates that the year may witness 150-175 public issues- - raising about
Rs.75,000 cr. This will be the highest-ever amount in a year-the previous highest being Rs.45,176 cr. in 2007. Calendar 2006
21
had ended with a mobilization of Rs.24,679 cr. Of this Rs.75,000 cr., about Rs.60,000 cr. would be through IPOs and the
balance Rs.15,000 cr. is estimated to be through FPOs.
Even if the 70 documents filed presently with SEBI were to materialize, these alone would result in a mobilization of over
Rs.35,000 cr., with the full year still ahead. The pipeline is presently Rs.1,90,000 cr. strong and while the issuer pipeline is
strong, the investors' appetite, too, is huge. The myth about the Indian market being shallow has been totally dispelled;
almost all issues over the past three years have received very high oversubscriptions.
Unlike ever in the past, almost all prospective issuers are well-established companies or promoters that are planning to
raise fresh capital for expansion or there are divestments by venture capitalists and in some cases follow-on offerings, all
of which augur well for the investors, the capital market and the economy. There appears no market for greenfield
projects from new promoters,courtesy the new market structure, SEBI entry norms and compulsory participation and
hence validation by QIBs.
2008, is likely to witness several super mega issues, starting off with Rs.10125 cr. Reliance Power. Other mega issues are
expected from Emaar MFG, UTI AMC, Sterlite Energy, JSW Energy and Oil India.
Leading the pack would be the power sector companies. Besides Reliance Power, IPOs are lined up from Rural
Electrification Corporation, NHPC, North Eastern Electric Power Corporation, Essar Power, Jaiprakash Power Ventures,
JSW Energy and Sterlite Energy.
Another major sector, as per Prime, would be the real estate/construction. Already, issues are lined up from IRB
infrastructure, J.Kumar Infraprojects, KNR Constructions and SVEC Constructions (having already received SEBI
approval) with Emaar MGF, Gammon Infrastructure, Infinity Infotech Parks, M.S.Khurana Engineering, Man
Infraconstruction, NKG Infrastructure, Prince Foundations, Ramky Infrastructure, Rithwik Projects, RNS Infrastructure,
Vascon Engineers and Vijai Infrastructure having already filed their offer documents with SEBI. In addition, the pipeline
includes scores of companies including Ambience Infrastructure, BPTP, Godrej Properties, Lodha Builders, Sahara
Infrastructure, Shriram Properties and Vatika.
Tata AIG Life launches its first single-premium annuity plan
Tata AIG Life Insurance Company Limited (Tata AIG Life) today announced the launch of its first single-premium
annuity plan. The plan provides Return of Purchase Price and offer annuity payments which are paid throughout the
lifetime of an annuitant. The plan comes in two versions - Easy Retire Immediate Annuity Plan and Group Immediate
Annuity Plan catering to the retail and corporate segments of the insurance market.
Easy Retire Immediate Annuity is an individual immediate-annuity plan which is the ideal solution to convert a
policyholder's corpus to a guaranteed regular income. Group Immediate Annuity is a group annuity plan that helps in
managing employees' corpus which in turn would endow them with a secure, guaranteed, regular income flow.
Easy Retire Immediate Annuity and Group Immediate Annuity also provide the policyholder maximum flexibility by
allowing the option to choose his/her annuity payment modes i.e. monthly, quarterly, half yearly or annually – the
frequency at which the policyholder wants his/her income. The regular income helps the policyholder maintain his
standard of living and cope with the day-to-day expenses that are incurred post retirement which increase with age due
to mounting health bills and ever increasing prices.
AIG Infrastructure & Economic
Reform Fund
AIG Investments has
launched
AIG
Infrastructure and Economic Reform Fund, an
open-ended equity scheme. The fund will
invest in companies that may benefit from
potential investments in infrastructure and
unfolding economic reforms without having
any bias towards any sector or market
capitalization range.
The New Fund Offer priced at Rs.10 per unit
(plus applicable entry load) is open for
purchase from 10
th
January to 31
st
January
2008
and
will re-open for ongoing
purchases/redemptions no later than 29
th
February 2008. The fund will be managed by
Mr. Tushar Pradhan, Chief Investment Officer
- Equities.
FOR WEEKLY GAINS
Fast...Focused…First
Power of RS Weekly
Adding to its range of trading products, PROFITRAK is pleased to
announce its new offering 'Power of RS Weekly' – a product designed
for short-term trading.
Singling out one stock to focus upon. Power of RS Weekly will identify
the stop loss, buy price range and profit booking levels along with its
relative strength, weekly reversal value and the start date of the
trend or the turndown exit signals.
This recommendation will be followed up in the subsequent week with
the revised levels for each trading parameter.
Available only by email before the beginning of the week.
Subscription: Rs.1500 per month or Rs.12000 per annum.
For a sample copy visit www.moneytimes.in or call Money Times on
022-22654805 or email at moneytimes@vsnl.com
22
Lotus India AMC launches Lotus India Mid N Small Cap Fund
Lotus India AMC, a joint venture between Fullerton Fund Management Group and Sabre Capital Worldwide, has
launched a 3-year Close-Ended Equity Scheme: Lotus India Mid N Small Cap Fund: The investment objective of the
scheme is to provide long term capital appreciation by investing in a portfolio that is predominantly constituted of equity
and equity related instruments of mid and small cap companies.
The scheme offers Growth and Dividend Options. The Dividend option offers Dividend Payout and Dividend Re-
investment facilities.
The New Fund Offer priced at Rs.10 per unit opened for initial purchase from January 7, 2008 and closes on February 19,
2008. The fund will invest in mid cap stocks in the range of 65-100% and in small-cap stocks in the range of 5% - 40%. A
portion could also be invested in debt and money-market instruments. An investor can start investing with as little as
Rs.5000 and in multiples of Re. 1 thereafter in this Fund.
Speaking about the launch of the scheme, Mr. Ajay Bagga, Chief Executive Officer, Lotus India AMC said, "Generally
mid and small-cap stocks are under owned & under-researched by the markets but have huge growth and re-rating
potential over the medium to long term. The profitability of companies across sectors is increasing due to strong
industrial growth and economic expansion but several companies in the small and mid cap segments have yet to benefit
from this structural change. The fund will seek to identify and capitalise on such opportunities by identifying performers
from the large universe of small and mid-cap stocks that display growth potential and can reward long term investors.
Aviva India introduces three new fund options
Aviva Life Insurance has introduced 3 new fund options – Index fund, Enhancer fund and Bond fund in its products -
PensionPlus, LifeLong, Life Bond 5, SaveGuard, LifeSaver Super and FreedomLife Plan. This is in addition to the existing fund
options – Secure, Balanced, Growth and Protector funds available currently for most of Aviva's products.
The Index fund aims to create long term wealth by investing in Nifty 50 companies and has a lower fund management
charge as compared to other equity linked funds. The fund can invest in equities in the range of 80-100% and debt and
money market securities in the range of 0-20%
The Bond fund, aims to generate a steady income through investment in high quality fixed income securities. This fund is
ideal for customers with a low risk appetite and comprises 100% debt and money market instrument with no exposure to
equities. The Enhancer fund aims to provide long-term capital growth with high equity exposure. The fund will invest in
equities in the range of 60-100% and debt and money market in the range of 0-40%.
Disclaimer: Investment recommendations made in Money Times are for information purposes only and derived from sources
that are deemed to be reliable but their accuracy and completeness are not guaranteed. Money Times or the analyst/writer does
not accept any liability for the use of this column for the buying or selling of securities. Readers of this column who buy or sell
securities based on the information in this column are solely responsible for their actions. The author, his company or his
acquaintances may/may not have positions in the above mentioned scrip.
23
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Communications (India) Ltd.' for _____ months _____ years as per the subscription rates given below.
DD No. ________ dated ________ on _________________ Branch __________ Rs._____
b) Have transferred the amount electronically to 'Time Communications (India) Ltd.' C/A No.
10043795661 at State Bank of India, Fort Market Branch, Fort, Mumbai – 400001 or deposit cash only in the
nearest ICICI Bank favouring 'Time Communications (India) Ltd.', C/A No.: 623505381145 at ICICI Bank,
Fort Branch, Mumbai – 400001 and have advised you by email about the same.
c) I/We are aware that investment in equities is risky and stock performance is unpredictable and can
result in losses in spite of all analysis and projections.
Subscription Rates:
MT:- 1 year: Rs.500, 2 years: Rs.950, 3 years: Rs.1350, 4 years: Rs.1700, 5 years: Rs.2000.
By email
By post
Courier (Add Rs.25 per issue as courier charges)
PD & PF&O:- Rs.2500 p.m., Rs.7000 quarterly, Rs.13000 half-yearly, Rs.20000 annually. (By email only)
PW:- Rs.1500 p.m., Rs.12,000 annually.
By email
By post
Courier (Add Rs.25 per issue as
courier charges)
PF:- Rs.8000 p.a.
By email
By post
Courier (Add Rs.25 per issue as courier charges)
LMC:- Rs.3000 p.m. (By SMS on mobile/internet)
NF:- Rs.1000 p.m., Rs.8000 p.a. (By SMS only)
PSG:- Rs.8000 p.a.. (By email only)
PP:- Rs.2500 p.m, Rs.6000 quarterly, Rs.12000 half yearly, Rs.20000 annually (By email only)
RS Weekly:- Rs.1500 p.m., Rs.12000 p.a.
By email
Courier (Add Rs.25 per issue as courier charge)
DFB:- Rs.2000 p.m. (By email only)
ISM:- Rs.8000 p.a.
By email
Courier (Add Rs.25 per issue if required by courier)
TT:- Rs.1000 p.m., Rs.10, 000 p.a.
By email
By post
Courier (Add Rs.25 per issue as courier
charges)
DBC:- Rs.2000 p.m., Rs.18000 annually (By SMS only)
ET:- Rs.2000 p.m. (By email only)
EBG:- 1 year: Rs.5000, 2 years: Rs.8500, 3 years: 11,000.
By email
By post
Courier (Add Rs.25
per issue as courier charges)
Winners:- Rs.2000 yearly.
By email
By post
Courier (Add Rs.25 per issue as courier charges)
Name (in capital):______________________________________________________________
Address: ______________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Tel. No.: (O) ___________________ (R) ___________________ (M)___________________
Email ID: ______________________________________________________________________
Are you an Investor
Trader
Broker/Sub Broker
Investment Adviser
Banker
Date & Place _____________
Signature ________________
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