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T
I
M
E
S
A TIME COMMUNICATIONS PUBLICATION
VOL. XVII No. 26 Monday, May 12 – 18, 2008
Pages 18
Markets lack conviction
as confidence goes missing at higher levels
By Sanjay R. Bhatia
As indicated, the markets have displayed weakness and triggered a short-term correction on the back of negative global
cues. Rise in crude oil prices, which touched a record high and surpassed the $124 level has affected the market sentiment
negatively and triggered profit-booking and selling pressure. Traders and speculators were seen booking profits and also
going short on these concerns. FIIs remained marginal buyers in the cash segment but were big sellers in the derivatives
segment. Mutual Funds, too, were marginal buyers. The breadth of the market has remained negative on the back of
higher volumes, which is a negative sign for the markets.
The global cues have remained negative. Crude price
continued its uptrend on the supply concerns. Global
markets, too, turned negative on the back of crude
concerns, which have inflationary consequences. On the
domestic front, the inflation rate continued to move up to
touch 7.61% for the week ended 26
th
April 2008, which is a
42-month high. The Indian basket of crudes has touched
$117.83 per barrel. It is unlikely that we may see any major
softening in the inflation rate in the immediate future even
after the measures taken by the government.
The markets lack conviction and confidence at higher
levels. The negative sentiment is likely to continue, as
domestically except for the monsoon we do not have any triggers, which can help in unfolding a rally. In the meanwhile,
the markets would continue to take cues from the global markets and crude prices, which can rise even further. The
inflation rate would continue to impact the sentiment domestically. Stock specific activity will continue amidst occasional
bouts of volatility and choppiness
Technically, the BSE Sensex and Nifty have slipped below their respective 200-day SMA. On the upside, the Sensex faces
resistance at the 17,300, 17,600 and 17,824 levels and has support at the 16,608 and 16,372 level. On the upside, the Nifty
faces resistance at the 5025 and 5156 levels while 4899 and 4838 are its important support levels.
Investors are advised to stay away from taking long positions.
1
Start thinking…seriously!
By Fakhri H. Sabuwala
The economy given its growth rate, price rise, high inflation, sub prime woes, rising interest rates has turned out to be a
pain in the head, neck and the stomach! So much for the worrisome days ahead…seriously.
Are you worried? You better be! Those in their fifties are certainly stressed out big time according to a recent retirement
survey. In fact, knowing what you are fretting about - the state of your finances, may be the most productive thing you
can do to weather today's uncertain economic times.
Embrace your financial angst…
This threat-onomics approach may sound bully-ish but there is some sound science behind the benefits of embracing
one's concerns.
A Yale University professor discovered that financial angst - specifically the threat of losing money – was the most
effective motivator for him and other dieters to lose weight. In other words, the prospects of losing capital get people to
do things.
Negative incentives? Check. That'd be tanking portfolios, diminished savings and an endangered quality of life. As if you
need a reminder! A goal to strive for? Check. Avert financial disaster at all costs.
Now that I've gotten you all worked up about the state of your financial affairs, let's do something constructive with all
that built-up angst.
Face your 'Frightmare at Dalal Street' instead of rocking back and forth on the floor in the foetal position, try this
Behavioural Psyche 101 style exercise.
Think all the way through the likely outcome of your worst economic fears. Ask yourself: "What would happen
if…(insert a dreaded event)…were to actually take place?". Cover all the scenarios that keep you awake at night – house
values flooring in your neighbourhood; you or your spouse losing the job; your hard earned savings of 700K remaining
stagnant for five years. Push through all these pains and keep tissues on stanby.
As you perform this fire drill, you're pinpointing specific vulnerabilities in your financial plan.
Congratulations, you've just laid the ground work for your scary – scenario survival 'to do' list (write it all down!): the
stuff you need to do to improve the outcome of whatever frightens you.
Relax….by now you know what you need to do to dampen the effect of those economic jitters. You may have even
discovered those macro economic messes disrupting your sleep are not as big a threat to your way of life as you feared. If
so, there is plenty to worry about, like T/20 cricket series, your son's CAT ranks, the suspense that the 'saas' unfolds on
'bahus' in soap operas.
And finally, buy some bonds and mutual fund units cash for good measure. Above all retain cash. Come on start
thinking…..seriously.
Twenty20
Money spinning ideas:
World Steel Dynamics (WSD) Steel Benchmarker reports a continued upward movement in steel prices globally with the
US leading the trend again. Over the last twenty days, Hot Rolled Coil (HRC) prices have increased by US $94 per tonne
in USA and by US $59 per tonne in Europe and US $14 per tonne in China. During the same period Cold Rolled Coil
(CRC) prices have increased by US $76 per tonne in USA, by US $63 per tonne in Europe and US $6 per tonne in China.
This is the twelfth straight increase in HRC prices reported by WSD in US since October 2007. HRC prices in USA
increased from US $577 per tonne in October 2007 to US $1097 per tonne in April 2008 - an increase of US $520 per tonne
or 90% in the last 6 months.
Such an increase in the US market is primarily driven by increasing raw material costs and shortage of physical metal.
The key beneficiaries of this Twenty20 match are Tata Steel (a company with 75% of its consolidated capacity in Europe
i.e. Corus) followed by JSW Steel due to its plant and pipe mill operation in the US.
A leading broking house thus maintains a strong buy on both these stocks and targets Rs.1083 for Tata Steel at 10 times its
FY09 earning of Rs.108.3 and Rs.1583 for JSW at 10 times its FY09 EPS of Rs.158.3.
Pull-back rise terminated
TRADING ON TECHNICALS
By Hitendra Vasudeo
The Sensex last week opened at 17687 attained a high at 17735.70
during the week and fell to a low of 16678.94. The Sensex finally
closed the week at 16737.07 and thereby showed a net fall of 862
points on week to week basis. As a result of the weekly
movement, the Sensex has also formed an Engulfing Bear
candlestick pattern on the weekly charts which suggest that if
the high of 17735 is not crossed at the earliest we can see a
sustained fall in the market.
The entire expected weakness can be eliminated only if the high
of the Engulfing Bear weekly candle is crossed and preferably a
close above it will confirm further strength in the market. The
high of the Engulfing Bear is 17735.
2
Last week, we had
indicated that fall and
close below 16978 can
terminate the pull back
rise. Since its low of
14677, the Sensex had not
fallen below the previous
week's low. Last week,
we saw that happen,
which is an indication of
the termination of the
rising upmove from 14677
to 17735.
WEEKLY UP TREND STOCKS
Further, any fall from
hereon can either create a
higher bottom to rebound
back to test the high of
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
REI AGRO
1600.00 1375.0
1525.0
1600.0
1675.0
1825.0
78.8
1560.5
28/03/08
GLENMARK PHAR
649.00 554.3
621.3
660.7
688.3
755.3
78.3
618.1
28/03/08
NESTLE INDIA
1812.00 1591.3
1726.3
1775.7
1861.3
1996.3
74.7
1670.5
28/03/08
CAIRN INDIA
273.95 219.6
254.4
269.7
289.2
324.0
70.9
259.6
09/05/08
STERLING BIOTEC 194.95 168.3
187.3
198.7
206.3
225.3
70.6
193.6
14/03/08
WEEKLY DOWN TREND STOCKS
17735 or to cross it or to
make a lower top. In both
these
situations,
the
subsequent result is a
slide. It is a situation of
now or later and it ought
to happen.
Weekly resistance will be
17050-17422-17735.
Weekly support will be at
16365-15308-14677.
If the Sensex creates a
higher bottom of the rise
from 14677 to 17735 and
moves to cross 17735 then
expect the rise to get
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
SOBHA DEVELOP
570.60
466.2
543.1
592.6
620.0
696.9
29.05
596.20
09/05/08
THERMAX
478.20
426.1
464.7
489.7
503.3
541.9
29.20
500.28
07/03/08
BGR ENERGY SYS 445.65
399.8
432.3
451.4
464.8
497.3
29.23
449.64
09/05/08
INDIA CEMENTS
161.05
136.7
154.7
166.4
172.8
190.8
29.39
171.89
17/04/08
KALPATARU POW 1035.00 909.7
999.7
1054.3
1089.7
1179.7
30.38
1082.00 09/05/08
extended towards 18193-
18426.
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
GULSHAN SUGARS
524184
49.80
49.40
49.90
43.25
54.0
60.7
0.64
Sensex Wave Analysis
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- 8799 to 21206
Wave A-21206 to 14677
Wave B-14677 to 17735
Wave C- 17735 to 16678
(Current ongoing move)
Alternative Count of
Wave B
EXIT LIST
Scrip
Last Close Sell Price Sell Price Sell Price Stop loss Target 1 Target 2
Monthly
RS
RELIANCE INDUSTRIES
2528.00 2585.25 2608.50
2631.75
2707.00 2388.3
2191.3
36.58
WELSPUN-GUJARAT STAH
388.20
396.61
400.50
404.39
417.00
363.6
330.6
41.81
ASIAN PAINTS
1219.00 1250.96 1263.00
1275.04
1314.00 1149.0
1047.0
44.80
SESA GOA
4020.00 4071.73 4132.50
4193.27
4390.00 3556.7
3041.7
47.36
TRANSWORLD INFOTECH
216.45
235.61
242.75
249.89
273.00
175.1
114.6
50.20
NATIONAL ALUMINIUM C
438.85
443.46
447.00
450.54
462.00
413.5
383.5
52.79
EVEREST KANTO CYLIND
334.00
337.49
341.02
344.56
356.00
307.5
277.6
54.91
Wave a-14677 to 17735
Wave b-17735 to 16678
Once this Wave b is complete then expect Wave c to move higher beyond 17735.
Conclusion
3
Till the high of 17735 is not crossed, every rise will be a rise to create a lower top to surrender the gains. A slide to a lower
range will possibly test the low of 14677.
Strategy for the week
Exit long positions and sell on rally to 17050-17422 with a stop loss of 17736. Expect the lower range of 16365-15308 to be
tested. Since the fall on Friday was sharp and long, we could see a some retracement to 17050-17422 before it slides down
further.
* While Goldman Sachs forecasts crude oil at $200 per barrel, many experts opine that the world economy may collapse at
$135 and do not rule out a world war if crude oil crosses $150 per barrel.
TOWER TALK
* JB Chemicals is lying low on indifferent performance over the last two quarters but is expected to do well in FY09,
which is why the management is buying back shares at Rs.70.
* With crude oil price shooting up the best bets are exploration and service companies. Mid cap stocks to watch are Selan
Exploration and Asian Oilfield Services.
* A noted brokerage has given a buy call on Bihar Tubes. The company is adding capacities by acquisitions in
Maharashtra.
* Ansal Housing has come down to very attractive levels and is a fundamentally strong stock.
* There is some buzz about Autoline Industries' offer of preferential warrants to a leading investor. The company has a
grand target of Rs.500 cr. revenue in the near future.
* Bodal Chemicals has risen dramatically after the rights issue having caught the imagination of discerning investors.
* Sintex Industries' robust performance in FY08 and acquisition of Wausaukee Composites (USA), Automotives Business
Division of Bright Brothers and NIEF Plastion (France) paves the way for this scrip to scale to a 4-digit peak in coming
months. Only a matter of a smart investor marrying this damsel!
* The government's decision to disinvest 10% in profitable PSUs when listed PSUs are nursing their wounds inflicted by
government's interference will not go well with primary market investors.
* Arena T&D India is attracting the interest of local funds at the behest of a smart angler. A price target of Rs.2500 in a
year does not look out of place.
* Logix Microsystems's 80% rise in net profit for FY08 and a supportive dollar conversion rate makes it a scrip to watch in
the IT sector.
* Kouton's, a retailer in the attire business, is on an expansion spree and is winning candidate in readymades.
* Shipping companies stand to gain tremendously by the crude oil price rise as they earn freight on ad valorem rate.
* Flat Products has declared very poor performance for the March 2008 quarter. Exit immediately.
* JK Lakshmi Cement share may shoot up once its Q4FY08 results are out on 14
th
May. Its one of the safe bets with
negligible risk of any downfall.
* Stone India is looking for merger and acquisition options for future growth. Buy for short-term trading gains.
* High rubber prices will indirectly benefit Indag Rubber as its re-treading business will flourish in such a scenario. Keep
a watch on this counter.
* Southern Online Biotechnologies is on a firm footing with 50% of its biodiesel capacity sold to AP Roadways and
another 25% marked from next month.
* Grey market premium for IPOs softened sharply in keeping with the secondary market with Gokul Refoils quoting
Ra.15/16 and Anu's Labs around Rs.18/20 per share.
* Proxy IPO application forms for Rs.1 lakh retail application are quoting at Rs.1500/1600 for Gokul Refoils and
Rs.1400/1500 for Anu's Labs.
By Saarthi
BEST BETS
Ansal Housing & Construction Ltd. (Code: 507827 )
Rs.143.10
Incorporated in 1983, Ansal Housing & Construction Ltd. (AHCL) – part of the high profile Ansal Group is one of the
reputed real estate developers with a predominant presence in North India. AHCL is the pioneer of large integrated
residential townships in the country. Moreover, it was the first to enter Tier - II & III cities like Ghaziabad, Noida,
Allahabad, Lucknow, Ludhiana, Agra, Bhopal, Haridwar etc. Till now, the company has constructed a massive 67.6
million sq. ft. of commercial and residential project across India. Despite residential segment being the biggest
contributor, AHCL is now seeing increased activity in commercial space since it has aggressively forayed into shopping
malls and retail space. In collaboration with Radisson worldwide, it is setting up a chain of restaurants across India with
'The Great Kebabs Factory' and 'Superstars' already operational in Noida. It also owns and manages club houses under
the 'Chancellor' brand name in these Ansal townships. As a part of diversification, the company has also forayed in
4
automobile business through a joint venture with Itochu Corporation of Japan. And on the back of excellent prospects, it
is now setting up state-of-the-art sales cum service centre facility for Honda Cars at Ghaziabad.
Out of the total development till date, more than 95% has been carried out in the Tier II or Tier III cities, which stands out
as the USP of the company. Some of the popular townships developed by the company are Aashiana – Lucknow (477
acres), Golf Link I & II - Greater Noida (140 acres), Tronica city – Ghaziabad (87 acres), Bachittar Enclave – Ludhiana (34
acres) etc. In the commercial space, Imperial Tower, Majestic Tower, Classique Tower, Vikas Deep etc. in Delhi and Ansal
Plaza – Ghaziabad (5,45,000 sq. ft.), Fortune Arcade – NCR (91,35,000 sq. ft.), Mega Arcade – Noida (750,00 sq. ft.) are
some of its landmark creations.
On the back of the boom in the housing sector and the strong demand for commercial property, AHCL is aggressively
expanding and has launched residential townships branded as 'Ansal Town' across seven cities namely Agra, Indore,
Jammu, Rewari, Karnal, Meerut and Ghaziabad at an investment of Rs.2000 cr. and spread over 1400 acres. In all, the
company has lined up a gigantic 56.10 million sq. ft of development (80% in the residential segment) spread over 22 cities
in the next five years. Interestingly, it has construction plans in much smaller towns like Kurukshetra, Narnaul, Yamuna
Nagar, Rewri & Panchkula in Haryana, Ajmer & Alwar in Rajasthan, Muzzaffarnagar & Jhansi in UP, Parwanoo & Poanta
Sahib in HP. At the same time, it has ongoing projects in Mumbai metro whereby it is building two towers under the
name 'Whispering Meadows' and 'Ansal Heights' at Mulund and Worli respectively. It is also constructing three high
premium towers with super luxurious facilities under the 'Ansals Tanushree' project at Ghaziabad (UP). The company
also intends to develop Holiday Homes in Shahpur - Thane spread over 150 acres.
Currently, AHCL has a rich land bank of 2500 acres with about 50% under its own name while the rest are under firm
collaborator's agreement. Importantly, the acquisition cost of these lands is reasonably low because of which the company
has been able to register a better profit margin compared to its peers. Financially, its topline increased by 60% to Rs.199 cr.
and the PAT has more than doubled to Rs.42.75 cr. for FY07, posting an EPS of Rs.25 on its equity of Rs.16.80 cr.
Incidentally, AHCL follows the percentage of completion method of accounting and hence the revenue is recognized in
proportion to the actual cost incurred. It reported encouraging result for the first three quarters and is expected to end
FY08 with revenue of Rs.260 cr. and net profit of Rs.55 cr. i.e. EPS of Rs.31 on its current equity of Rs.17.50 cr. To fund its
various projects, AHCL has recently allotted 17 lakh warrants to the promoter group at Rs.208 per warrant and Rs.29.50
lakh warrants to others at Rs.225 per warrant. After all conversions, its diluted equity is estimated to be around Rs.21.50
cr. Considering its massive land bank, huge order book position and 52-week high/low at Rs.405/190, AHCL is trading
fairly cheap at an current enterprise value of merely Rs.500 cr. Investors are strongly recommended to buy the scrip at
current levels as it can easily appreciate 50% in a year's time.
Tamil Nadu Newsprint & Papers Ltd. (Code: 531426 )
Rs.101.30
Incorporated in 1979, Tamil Nadu Newsprint & Papers Ltd. (TNPL) was promoted by the Government of Tamil Nadu,
which still holds around 35% stake in the company. In spite of being a public sector company, TNPL pioneered the
concept of producing paper from bagasse, namely sugarcane waste thereby using as little wood as possible. Today apart
from being one of the lowest cost manufacturer, the company boasts of having the world's largest bagasse based paper
mill with a capacity of 2,45,000 TPA. It is also the largest exporter of wood free paper from India. TNPL basically
manufactures printing and writing paper
comprising cream wove, copier and mapiltho
paper for business stationery, classical
writing, computer stationery and other
commercial and quality printing. It offers a
range of high-quality surface sized maplitho
paper to suit any kind of printing - sheet-fed
or web-offset. It is the undisputed market
leader for computer stationery in domestic
market. It also derives nearly 2% revenue
from newsprint. Presently, the company's
product is exported to over 20 countries across
Asia-Pacific, Australia, Middle East, the
Mediterranean and the African continent.
TNPL is acknowledged as the world leader in
technology for the manufacture of paper from
bagasse and has the most modern paper mill
in the country with an unique bagasse
procurement, storing, preserving, handling,
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5
processing and pulping system. It continues to enjoy its relatively low reliance on wood because of its vision to make
paper primarily from bagasse - a sugarcane waste product, which is abundant and cheap as compared to wood, which is
scarce and expensive. Due to this technology, it actually avoids the chopping down of trees in about 30,000 acres of forest
land every year. However, it maintains a relationship of 65:35 for bagasse and wood pulp in its production to ensure high
quality of paper. To cater to the increasing paper demand and become a global player, TNPL has implemented Phase-I of
Mill Development Plan, which is almost completed. The evaporator, recovery boiler, lime kiln and few other plants were
commissioned during September 2007 and the 20 MW turbo generator during October 2007. Accordingly, the company
has increased its captive pulp production capacity from 170,000 TPA to 260,000 TPA with element chlorine free (ECF)
bleaching and a rise in the paper production capacity by 15,000 tonnes to 245,000 TPA. In order to further de-risk its
exposure to volatile wood pulp prices, TNPL intends to increase the pulpwood plantation by another 12,000 acres from
19,349 acres presently through farm forestry and captive plantation schemes. Importantly, TNPL is self-sufficient in
power with in-house captive power generation capacity of 86.12 MW and another 35.50 MW through wind farms. In fact,
it has been supplying surplus power to the Tamil Nadu State grid.
Considering the robust outlook for paper industry and to maintain its future growth, TNPL is now contemplating to
further hike its paper production capacities from 245,000 to 400,000 TPA by March 2010. Besides, the company has
entered into carbon trading by having got its Bio-methanation plant registered as a CDM project with UNFCCC and is
expected to get 37000 CER as carbon credit till 2013. Moreover, it is setting up a mini cement plant with a capacity of 400
TPD for producing high grade cement using the lime sludge and fly ash – the waste material generated in the process of
manufacture of paper. It is also contemplating to construct an IT Park measuring an office area of 4 lakh sq. ft. on its
surplus land in a suburb of Chennai.
Financially as well as fundamentally the company is on a strong footing. However, it has a huge debt of more than Rs.550
cr. For FY08, the company is expected to clock a turnover of Rs.930 cr. with net profit of Rs.115 cr., which translates into
an EPS of Rs.17 on its equity of Rs.69.40 cr. On the back of the increased pulp capacity, rise in paper manufacturing
capacity and increase in power generation coupled with robust paper prices, TNPL has the potential post an EPS of Rs.20
for FY09. Considering the company's eco-friendly technology, cash EPS of Rs.30, dividend yield of 4% and massive
reserves of more than Rs.500 cr., the scrip is available relatively cheap at an enterprise value of Rs.1300 cr. Hence investors
can buy with a price target of Rs.175 in 15 months.
Rain Commodities Ltd.: Sure to be re-rated
ANALYSIS
By Devdas Mogili
Rain Commodities Ltd. (RCL), formerly known as Priyadarshini Cement, is a 34-year old Hyderabad based company
incorporated in 1974. Following various schemes of amalgamations and mergers, RCL has emerged as the holding
company. The Cement Division of the group was transferred to Rain Industries Ltd. (RIL), a wholly-owned subsidiary.
RIL is primarily engaged in the manufacture and sale of cement including Ordinary Portland Cement (OPC) and
Pozzolona Portland Cement (PPC). In the domestic market, RIL operates through a network of dealers for the sale of its
products. Its major markets include Andhra Pradesh, Karnataka and Tamil Nadu. Considering the robust growth in
cement consumption, the company has undertaken a capacity expansion of 1.5 million tonnes, which is likely to
commence commercial production shortly. Post expansion, its total capacity will increase to 3 million tonnes.
Its Cement Division produces OPC 33 grade, 43 grade and 53 grade, PPC and Sulphate-Resistant Portland Cement (SRPC)
is sold under the brand name 'Priya'. RIL commissioned its first ready-mix concrete plant located at Uppal, Hyderabad in
December 1999. The second ready-mix concrete plant has been set up at Miyapur, also in Hyderabad. It had set up two
manufacturing plants with a rated capacity of 7200 cubic metres per month. N. Radhakrishna Reddy is the chairman
while N. Jagan Mohan Reddy is the managing director of the company.
RCL's wholly-owned subsidiaries are Rain Calciner Ltd, which is engaged in the business of manufacture and sale of
Calcined Petroleum Coke (CPC) and Cogeneration and supply of Power (Rain Calcining Ltd. was amalgamated with the
RCL w.e.f. 1
st
April 2007 and was renamed Rain Calciner Ltd.); and Rain Global Services LLC, USA, is engaged in the
business of trading and sale of Green Petroleum Coke (GPC) and CPC. Its other subsidiaries include Rain CII Carbon
(India) Ltd., Moonglow Company Business Inc. in The British Virgin Islands, Rain Commodities (USA) Inc. in USA and
Rain CII Carbon L.L.C. USA and its associate – Petroleum Coke Industries Company, Kuwait.
Performance: RCL's performance in the past has been lacKlustre. The company came out of the purview of BIFR and a
package was worked out to bail out of the company. Strategic moves of amalgamations and mergers saw the company
through difficult times and it made a smart turnaround in 2006.
The company came out with highly encouraging results for the year ended 31
st
December 2007. It posted a consolidated
net sales figure of Rs.1592.80 cr. with net profit of Rs.45.40 cr. netting an EPS of Rs.23.99.
6
Financial Highlights:
(Rs. in cr.)
Latest
Results:
The
company has announced
fabulous results for the QE
31/03/08. It registered a net
sales of Rs.810.02 cr. with
net profit of Rs.111.13 cr.
recording a basic and
diluted EPS of Rs.12.36
before extraordinary items.
The basic and diluted EPS
after extraordinary income is
Rs.16.40. The EPS works out
to
Rs.49.44
before
extraordinary items and
Rs.65.60 after extraordinary
items.
Particulars
QE 31/03/08
QE 31/03/07
YE 31/12/07
Net Sales/Income
810.02
142.33
1592.80
Other Income
0.15
10.06
41.15
Total Income
810.17
152.39
1633.95
Total Expenditure
639.47
102.92
1390.62
Interest
66.80
15.86
157.76
PBT, extraordinary item
103.90
33.61
85.57
Tax Expense
20.12
14.02
8.01
PAT, extraordinary item
83.78
19.59
77.56
Extraordinary item
(27.36)
33.61
31.64
Net Profit
111.13
53.20
45.92
Share of loss from Associate companies
-
-
(0.52)
Net Profit
111.13
53.20
45.40
Paid up equity FV: Rs.10
70.47
32.11
32.11
Res Exc Rev Reserves
339.65
83.57
202.63
Basic EPS (Rs) B Ex Item
12.36
6.10
23.99
Basic EPS (Rs) A Ex item
16.40
16.57
14.14
Diluted Before Ext Item
12.36
5.98
10.44
Diluted After Ext Item
16.40
16.26
6.15
Financials: The company's equity expanded from Rs.31.11 cr. to Rs.70.47 cr. following the amalgamation of Rain
Calcining Industries with the company and a book value of Rs.58.20 and a low debt : equity ratio of 0.15.
Share Profile: The company's shares with a face value of Rs.10 are listed and traded on the BSE and NSE under the B1
group. Its share price touched a 52-week high/low of Rs.309/Rs.109. At its CMP of Rs.216.25, it has a market
capitalization of Rs.1635 cr. The share has a beta value of 0.7, which indicates low volatility.
Dividends: The company paid a dividend of 35% for YE 31/12/07 and declared a dividend of 28% on its expanded
capital for the YE 31/12/07.
Shareholding Pattern: As on 31
st
March 2008, the promoter holding in the company was 40.90% while the balance 59.10%
was held by non-corporate promoters, institutions, mutual funds and the investing public. Among mutual funds, UTI,
Tata Mutual Fund, HDFC Mutual Fund have been adding the company's share to their various scheme for the last one
year.
Prospects: The outlook for the Cement industry continues to be good in 2007-08. India is the second largest producer of
cement in the world after China with an installed capacity of 165.7 million tonnes. South India is the largest cement
producing region with an installed capacity of 50 million tones and it is witnessing an upsurge in cement consumption.
Last year, as compared to an overall growth of 10% in cement consumption on an all India basis, cement consumption
grew by 19% in Karnataka, 16% in Tamil Nadu and 10% in Andhra Pradesh.
The demand for cement has grown by around 10% supported by the Government's sustained focus on infrastructure
development, irrigation projects worth Rs.46,000 cr., expansions undertaken by in both manufacturing and services
companies and the real estate boom empowered by the rising income levels of individuals in the region.
The government's impetus on infrastructure development, the strong demand from housing segment and the thrust on
capacity expansion by companies across industries is driving the growth in cement consumption. Southern states are
witnessing huge investments in real estate, primarily in residential complexes and various technology parks. The
growth is happening in both Tier I cities like Hyderabad, Bangalore, Chennai and also in Tier II cities like Mysore, Vizag,
Coimbatore etc.
Conclusion: RCL is operating in cement and CPC markets. Since there are no capacity additions in CPC, the company's
realizations are expected to increase and the margins are likely to shoot up which should add up to the bottomline of the
company significantly.
At its CMP of Rs.216.25, its share price is discounted less than 4 times against the industry average P/E ratio of 9, which is
the P/E ratio for the South based cement units. Since the company is a major player in CPC, a fair comparison with the
company could be Gujarat NRE Coke, which has a P/E multiple of over 25. Going forward and assuming a conservative
P/E multiple of just 10 against a P/E multiple of more than 25 for Gujarat NRE Coke, the RCL share has the potential to
race towards the Rs.650 mark. The scrip is likely to be re-rated sooner than later.
The market plunges and loses 863 points
MARKET REVIEW
By Ashok D. Singh
The market declined in all the five trading sessions and reversed the course for the week ended 9 May 2008 after clocking
gains for four straight weeks earlier as rising crude oil prices and inflation marred the sentiment. Indian bourses more or
less tracked the global markets. The BSE Sensex plunged 863.05 points or 4.9% to 16,737.07 for the week and NSE Nifty
7
8
fell 245.6 points or 4.69% to 4,982.60 for the week. The corporate results announced so far have been more or less in line
with market expectations.
The BSE Mid-Cap index declined 244.81 points or 3.38% to 6,992.66 in the week. The BSE Small-Cap index slumped 316.07
points or 3.58% to 8,472.67.
Crude oil for June 2008 delivery hit a record high $125.12 a barrel in electronic trading on the New York Mercantile
Exchange (NYMEX) on Friday, 9 May 2008 as strong diesel demand outweighed signs of rising OPEC supplies. It is set for
the biggest weekly gain since March last year as concerns about violence in Nigeria may cut-off supplies spurred
speculative buying.
Meanwhile in a meeting held on 8 May 2008, the Bank of England and the European Central Bank both kept interest rates
unchanged at 5% and 4% respectively as expected. Most experts now predict that both central banks are likely to cut rates
by the end of the year to shore up stumbling economies.
The wholesale price index rose 7.61% in the 12 months to 26 April 2008, marginally higher than the previous week's
annual rise of 7.57% government data showed on Friday, 9 May 2008. The rate was the highest since an annual reading of
7.68% on 13 November 2004. Finance Minister (FM), P Chidambaram, on 9 May 2008, said the government has asked
cement companies to reduce prices to curb inflation.
The Reserve Bank of India (RBI) on Thursday, 8 May 2008, eased lending norms for infrastructure projects. In a
notification, RBI said bank loans to infrastructure projects would be treated as sub-standard only if commercial
production is delayed by more than two years over the date originally envisaged instead of the present norm of one year.
The market regulator, SEBI, on 5 May 2008 relaxed margining in the cash market segment, which it called as an initial step
towards cross margining in the cash market and futures segment. Cross margin facility will be available in case where a
market participant has a position in the cash market with an off-setting stock futures position in the derivatives segment.
Cross margining benefit will initially be available to institutional investors only.
Indian steel makers on Wednesday, 7 May 2008, agreed to cut prices to support government's efforts to rein in inflation.
The public and private steel makers said they would cut the price of long products used in construction by Rs.2,000 a
tonne, or 5.5%, and that of flat products by Rs.4,000 a tonne, or about 10%. Steel makers have also decided to hold the
price line for the next three months. Steel makers, however, urged the government to discourage iron ore exports and
withdraw the tax on steel exports.
FIIs sold shares worth Rs.75.10 cr. in the first few days in the month of May 2008. They sold shares worth Rs.10433.20 cr.
in calendar year 2008 (CY08) till 7 May 2008. Domestic funds bought shares worth Rs.15.90 cr. in first few days of May
2008.
The BSE Sensex fell 109.22 points or 0.62% at 17,490.90 on Monday 5 May 2008. After trading within a narrow range
earlier in the day, the market declined in late trading as US stock futures indicated a lower opening on Wall Street. Realty
and healthcare stocks outperformed the market. Consumer durables and IT stocks dropped. Small-cap and mid-cap
counters were active throughout the session with their barometer indices outperforming the Sensex.
The BSE Sensex fell 117.89 points or 0.67% at 17,373.01 on Tuesday, 6 May 2008. The key benchmark indices ended lower
as investors resorted to profit booking due to lack of positive triggers in the market. Selling pressure was seen in mid-cap
and small-cap counters with their barometers underperforming the Sensex. Realty and power stocks rose whereas FMCG
and metal stocks gained. IT pivotals recovered at the fag end of the session after the rupee slipped to an 8-month low
against the dollar.
The BSE Sensex fell 33.70 points or 0.19% at 17,339.31 on Wednesday, 7 May 2008. Weakness in Asian markets and a surge
in crude oil prices spoiled the sentiment. IT and Oil & Gas stocks rose whereas capital goods stocks and the shares of PSU
firms suffered the most.
The BSE Sensex fell 258.66 points or 1.49% at 17,080.65 on Thursday, 8 May 2008. The market succumbed to selling
pressure as weak global equities and soaring crude oil prices worried investors. All sectoral indices on BSE, barring the
BSE Metal index, were in the red. Software and banking shares were the worst hit.
The BSE Sensex lost 343.58 points or 2.01% at 16,737.07 on Friday, 9 May 2008. The market tumbled as it was hit by a
series of bad news on the domestic and global front. India's inflation surged to more than 3-year high, global markets
declined and crude oil hit yet another record high near $125 a barrel. All the sectoral indices on BSE, barring FMCG index,
were in the red. Oil & Gas, realty and banking stocks declined sharply.
The Sensex lost 863.05 points to close at 16,737.07 last week. The recent rally in crude oil may weigh on the market
sentiments in coming weeks. The key data that the market will be eyeing at the start of the week is industrial production
data for March 2008 due on Monday 12 May 2008. Industrial production had risen 8.6% in February 2008 bouncing from
January's upwardly revised figure of 5.8%. The market will also track global equities in the absence of major domestic
trigger. The corporate results announced so far have been more or less in line with market expectations. Inflation data will
also be eyed as it remains as a major worry and hindrance for domestic growth. High inflation may compel the
government to take more fiscal measures to rein in prices in addition to a slew of measures taken recently.
Parliamentary elections are due next year and the government has taken a number of measures in response to soaring
food prices. The government has eliminated import tariffs on several commodities, including wheat, wheat flour and
palm oil. It has also tried to crack down on hoarding food. The Union government suspended futures trading in soybean
oil, potatoes, rubber and chickpeas for four months from 8 May 2008. These four commodities account for a trading
volume valued at nearly Rs.15,000 cr. every month (Rs.600 cr. daily) out of the total volume estimated at Rs.1,64,080 cr.
(about Rs.6,500 cr. daily). Last year, the government banned trading in rice and wheat futures.
Importance of behavioural science and perceptions
MARKET
By Suryadevara
The recent death of K. Ravindra Babu of Zen Securities Ltd. and the tributes he received in the print and electronic media
made me realise my mistake. If you are wondering why this should be told through the column of an investment weekly,
just read on, it will be worth your reading time.
In my formative years as, an investor (1987-1991), I relied on 'Prudential Investments Pvt. Ltd., Tenali, the start-up firm of
K. Ravindra Babu for market transactions and 'Money Opportunities' weekly especially the column of G. S. Roongta for
market guidance. I have to admit now that those four years were the most beneficial for me as an investor-I was almost
insulated from committing mistakes during that period and was guided to be a walking investor rather than to be a
running trader. The care, concern and individual attention to a client, however small, at Ravindra Babu's firm is really
unique and incomparable. Later, when I was transferred to Hyderabad, factors like nearness to my office and residence
(which were important for delivery/pick-up of physical share certificates in those days) weighed on me and to opt for
different brokerage for my market operations. For market guidance, I continued to follow G. S. Roongta, whom I consider
my guru, in 'Money Opportunities'. My subsequent transfer to Mumbai gave me a rare opportunity to share space in the
leading investment weekly - 'Money Times' with my guru G. S. Roongta. Even after getting such an opportunity, my
mistake of not reviving my links with K. Ravindra Babu troubles me within. 'May his soul rest in peace and let his legacy
carry on for the benefit of a large number of investors.'
This also brings to mind the importance of behavioural science in investment decisions. All our investment decisions are
not logical. This explains why the Indian market witnessed a steeper fall during January - March 2008 period than the fall
in the US market, even though the US economy was passing through a severe crisis. Before going further, let me list the
valuable advice I got from K. Ravindra Babu, in the late Eighties, for the benefit of readers:
(1) Do not be carried away by the past of a company. Look ahead objectively for its potential performance ahead.
(2) Do not look for speculative gains. Aim for investment gains.
(3) Respect the market. Never try to swim against the market tide.
(4) Quality of management is equally important as the fundamentals of the company. Do not commit your investments to
the companies whose management quality is poor.
(5) When you commit a mistake, accept it and cut-down your loss at the earliest and catch a winner in its place.
(6) Closely monitor your investments on continual basis the way farmers monitor their crops with passion.
(7) Do not develop attachment to scrips. Just take care to book profits at higher levels to buy at lower levels.
All these appear very simple but it is really difficult to follow them, and the disciplined few who can follow these can
really be successful in investments.
Now, to look at the present market conditions merely relying on fundamentals and investment logic cannot bring us good
results. Concepts of behavioural sciences are so important that they cannot be ignored. Look at the past events, when a
house is on fire, logic demands protection of valuables by shifting them out of the burning house to a safer place. Taking
that logic for granted, I had given the article 'Prime Advantage India' in the third week of September 2007 when our
markets were falling in August - September 2007 on the fear of the sub prime crisis in USA. Although the market
recovered subsequently to record a new high in January 2008, the fall in our market during January - March 2008 was
steeper than the fall in the US market, which was passing through severe crisis. This was because US funds had pressed
for massive sales in January 2008 ignoring the investment logic of moving securities to safer zones from the troubled
home. This resulted in FIIs dumping shares madly ignoring the strong fundamentals of Indian companies. When share
prices deteriorate steeply without any negative developments in their fundamentals, investment logic demands
immediate 'Buy' calls. Still, majority of investors simply dumped the falling shares establishing the role of behavioural
sciences in investment decisions. That was why 48 months low prices were recorded by scrips like Orchid Chemicals and
Ind-Swift Ltd. in March 2008, ignoring the impressive progress made by these companies in the last 48 months. However,
after the panic subsided in USA thanks to the prompt action taken by the US Federal Reserve, FIIs started returning to our
markets. That is why we saw a remarkable recovery in our markets even though the crude oil prices are virtually on the
boil. Now, can we conclude that the worst is behind us and that better things are in store for us?
9
10
Although things are looking up in USA after the frequent interest rate cuts to the present 2% from 5.25%, a Swift recovery
in the US economy cannot be visualised. The US economy may have to witness a longer period of a low growth similar to
Japan. Adding to the existing crisis, the boiling prices of crude oil is causing concern to the US authorities - they have
started to blame India and China for this rise, conveniently forgetting that the real reason for this is the US prolonged
war thrust on Iraq. I feel that but for the Iraq war, oil prices would not have crossed $75 per barrel level. In view of the
uncertainty of supplies from Iran and Nigeria, some analysts project a price of around $200 per barrel for crude, which
induces speculative buying and further aggravates the position. However, the present high levels of crude oil prices and
the low growth/recession in the US economy cannot exist in parallel. Crude oil prices should fall steeply in coming
months, if not weeks, in view of the highly speculative element in its prices in the commodities futures market .When that
happens, the Indian markets will witness really exciting times. Until then, investors need to be on guard. However,
investors can pursue profitable opportunities in the most happening sector - the Pharma sector, which will not be affected
by the financial crisis of USA or our governments actions to fight inflation for the time being. Even the quarterly results
from the Pharma sector justify our confidence in this sector.
Moreover, mergers and acquisitions in the global pharma space are becoming the order of the day. Dr. Reddy's
Laboratories and Jubilant Organosys have gone for real big-ticket global acquisitions in the recent past. Dr. Reddy's Labs
has acquired Dow Pharma's UK, units for $30 million (expected revenues of around $25 million a year) and an Italian
generic company, Jet Genericisri. It is also acquiring US based BASF'S manufacturing unit for $40 million with expected
revenue of $43 million in CY 2008.
Jubilant Organosys had acquired Hollister Stier of USA last year for US $125 million. Recently, it is acquiring Canada's
NASDAQ-listed Draxis Health for $255 million. Please note that this Canadian company recorded sales of $70 million in
2007 and is expected to record around $94 million in 2008. US bio-pharma company, Millennium Pharmaceuticals Inc.
was bought for $8.60 billion by Japan's largest drug maker 'Takeda Pharmaceuticals' by cash payment of $25 per share
which was 53% above the closing market price of Millennium. Indian pharma major Ranbaxy Labs is pursuing a different
strategy of picking up stakes in upcoming R&D focussed Indian pharma companies and entering business contracts with
them.
Looking at these developments, the observations of readers like Subhadra Challa and Usha Rani on the probability of
pharma majors developing a takeover interest in Ind-Swift Ltd. sounds really interesting. Just imagine the price any
acquiring company would like to bid for this Rs.500 cr. company, if at all such a takeover happens. If such a thing
unfolds, it can be a multi-bagger from the current levels of around Rs.28. Even in the absence of such a development, its
present fundamentals point to its gross under discounting, which cannot last longer. As per the available unaudited
results (given in the table), Ind-Swift Ltd. recorded revenues of Rs.506.35 cr. with net profit of Rs.27.99 cr. for FY08 with
an EPS of Rs.7.53 on its Rs.2 paid-up share. Even a P/E ratio of 10 against the industry average P/E multiple of above 21
should give its share a market price of above Rs.75 for this pharma company.
Amount (Rs. in cr.)
2007-08
2006-07
2005-06
2004-05
REVENUE
506.35
386.1
286.29
258.22
NET PROFIT
27.99
22.29
17.64
28.12
EQUITY
7.44
7.44
7.44
7.28
Even the earlier low-profile biopharma company, Jupiter Biosciences Ltd. from Hyderabad is going in for global
acquisitions. It had recorded satisfactory results for the year ended 31-3-2008 on a stand alone basis.
Amount (Rs. in cr.)
2007-08
2006-07
2005-06
2004-05
REVENUE
129.95
103.99
78.59
70.75
NET PROFIT
30.72
25.33
20.57
18.40
EQUITY
18.13
9.86
8.86
8.86
Although, the results appear satisfactory, the market expected better results from this company as it had bought one
manufacturing unit from Aurobindo Pharma last year. The expected improvement by takeover of Aurobindo units is not
visible from these results. Moreover, its inordinate delay in its NSE Listing is depriving it the deserved market rating. Is
its management aware of the poor perception of the market about its company? Price movements of Orchid Chemicals
during March - April 2008 are a testimony to the importance of market perceptions. Believe it or not, its share price
recorded a 48-month low by end March 2008 but touched a 52-week high in the third week of April 2008!
Improved perception resulted in such unbelievable trebling of price within a few weeks without any change in its
fundamentals. Will the management turn pro-active to improve the perceptions about the company or will it continue to
be indifferent to market perceptions? Having said this, I'd like to keep my fingers crossed.
MARKET
Market in correction
By G. S. Roongta
The stock market drifted lower last week having failed to sustain the Sensex level of 17,500 as it could not move above
17,600. Its attempt to do so met with heavy selling pressure, which ultimately pushed it back near to the breakout levels of
16,980 on the Sensex and 5050 on the CNX Nifty as identified in this column 3/4 weeks back. Thus the stock markets
struggled hard throughout the week but the bear operators did not allow it to reach the 17,900 level on the BSE Sensex
and the CNX Nifty, too, was no exception.
11
Although several analysts had issued a positive guidance for last week, I had clearly stated well in
advance four weeks back that the markets must face selling pressure after it attains the Sensex level of
17,500. Regular readers of this column may remember this forecast and must have observed that the
market turned cautious beyond 17,500 before reacting to the current level of 16,737 on the Sensex or 4983
on the Nifty.
The market was on a losing spree the whole of last week after the handsome profit of 313 points it posted
on Friday, 2
nd
May 2008 after the reduction by 25 bps in the US Federal rate, which had a salutary effect
on global markets. This was, however, temporary as evident by last week's movements and the market has once again
turned weak on lack of any positive triggers after the season of corporate results that seems to have come to an end and
weak global cues.
G.S. Roongta
Examining the market movements over the last fortnight, we find that the Sensex, which had closed at a high of 17,600
with a net rise of 522 points for the week ended Friday, 2
nd
May 2008, closed last week on Friday, 9
th
May 2008 with a loss
863 points at 16,737 in sharp contrast. Thus it has shed all gains of the earlier weeks and signalled some more reaction as
higher levels attracted profit-booking.
According to me, this so called reaction is most essential as the market is currently in a consolidation phase, which after
consolidating around 16,000, it could bounce back to the 17,000 level. Thereafter, if it crosses the 17,600 level, its next
target can be around 18,700.
The next big trigger for the market is the monsoon, which according to all reports till date is expected to be normal
leading to good rainfall throughout the country. Since our economy is based on agricultural output with nearly 80% of the
population dependent on a good crop, this is very reassuring news and the markets are bound to respond positively as
the monsoon nears. Last year, the country had a record harvest of 230 million tonnes of food grains on a 98% monsoon. If
the monsoon is equally good this year, the BSE Sensex may once again touch 18,700, which does not appear to be difficult
in the present market scenario wherein the Sensex fluctuates between 400 to 600 points a week.
Last week, stocks like Infosys, TCS, Satyam, BHEL, L&T together with the stocks from the Steel and Cement sectors were
under pressure. Banks stocks, too, faced a similar trend whereas Automobile and Auto Ancillaries stocks met with profit-
booking. Telecom stocks also faced some weakness. Metal stocks like Hindustan Zinc, Hindalco, Nalco, SAIL and Sterlite
Industries also lost grounds on lack of support.
This week may bring about support to the market with greater liquidity thanks to the receipt of dividend payouts and
interest on debentures, which will help consolidate the market at its peak of about 17,600.
Sectoral stocks like ACC, Grasim, India Cement, UltraTech and Shree Cement are good and do not have much downward
risk at the current market price despite repeated interferences from the government.
Metal stocks like Hindalco, Hindustan Zinc, Nalco, Sterlite Industries and Madras Aluminium look quite attractive.
The Tea sector is good. Think of Tata Tea first followed by Jayshree Tea, Harrisons Malyalam, McLeod Russell and Sarda
Plywood.
The Textile sector is being rejuvenated after a long lull as garment exports have started picking up to the Far East, UK and
USA as Indian textiles get preference over China. It should not surprise one if the Textile sector starts booming within the
next 6 months. The stocks to watch are Arvind Mills, Alok Textiles and Garden Silk Mills, which are prices much below
their worth.
Power Generation & Distribution stocks together with Power Equipment stocks look good.
Investors should start buying these stocks as they have great potential in 2008-09.
Scheme Analysis
MUTUAL FUNDS
Reliance Natural Resources Fund: Worth a look
By Devangi Bhuta
Our Recommendation – 21
st
January 2008
(NFO Closing Date – 30
th
January 2008)
Caveat Emptor: Investors seeking to invest in NFOs may note that the level of the market at which these schemes will be
deploying their funds is more relevant compared to the smaller per unit cost. These schemes may commence deploying
funds around the presentation Budget 2008-09 and investors may be better off entering the schemes after listing in view of
the volatile market conditions till the budget.
The Price Movement:
As forecast, the scheme dropped below its issue
NAV of Rs.10 and provided a decent buying
opportunity to investors in March/April 2008.
This open ended scheme with an asset size of
Rs.5,589.25 cr. as on 30
th
April 2008 has now
disclosed its portfolio. The scheme invested only
37% of its funds in equities and holds 63% in
derivatives, cash and other receivables.
The primary investment objective of the scheme is
to generate capital appreciation and provide long-
term growth opportunities by investing in
companies principally engaged in the discovery,
development, production, or distribution of
natural resources and the secondary objective is to generate consistent returns by investing in debt and money market
securities. The stocks include:-
This far, the company appears to have picked
fundamentally good stocks with focus on large cap stocks
like the Tata companies, Reliance and ONGC. These
companies may provide stable growth over the long-term.
Cairn India, too, is an attractive pick for the long term. Punj
Lloyd with its strong presence in the infrastructure space
has a well-diversified business model in terms of business
verticals as well as geographies.
Its overseas investments add to the risk of the scheme and
retail investors will have to depend entirely on the fund
manager's expertise.
Again, the markets are at a juncture where the direction will
be set by the monsoon in the near term but how good it
remains is anyone's guess. Further, the portfolio must be
monitored on a regular basis as approximately 63% remains
to be invested and the fund's strategy will only clear up
over a period of time.
The risk is certainly high but returns over a long-term
horizon could be good. Hence purchasing units in a
staggered manner will be a good strategy.
Stocks
Weightage %
Tata Steel Ltd
4.7
Reliance Industries Ltd
4.1
Oil & Natural Gas Corp Ltd
2.6
Hindalco Industries Ltd
2.6
Reliance Energy Ltd
2.2
Cairn India Ltd
2.1
Associated Cement Companies Ltd
2.0
Jaiprakash Associates Ltd
1.7
Tata Power Co Ltd
1.6
Gujarat Narmada Valley Fertilisers Co Ltd
1.5
Punj Lloyd Ltd
1.1
Overseas Equity Investments
1.1
Equity Less Than 1% of Corpus
10.0
Derivatives, Cash And Other Receivables
62.8
Grand Total
100.0
12
By Saarthi
STOCK WATCH
Although Accurate Transformers Ltd. (Code: 530513) (Rs.130) is unable to fully capitalise on the boom in the power
sector and registered a normal growth it's still a value buy at the current level. For Q4FY08, it posted 10% rise in sales as
well as net profit to Rs.95 cr. and Rs.3.40 cr. respectively. Accordingly for FY08, sales improved by 15% to Rs.197 cr. and
PAT grew by 25% to Rs.7.90 cr. This translates into a healthy EPS of Rs.27 on its very tiny equity of Rs.2.97 cr. Due to
shortage of working capital funds, the company is running at a very low capacity utilisation. Earlier, it tried to raise
capital by a preferential allotment of around 31 lakh warrants at Rs.56 to promoters but it did not get SEBI approval due
to some technical reason. The company has huge manufacturing facilities spread across Ghaziabad, Sikandrabad, Greater
Noida, Dehradun and Haridwar with an installed capacity to manufacture nearly 8000 MVA of transformers. At a very
modest discounting by 6-7 times, the share price can move up to Rs.175 in 6-9 months.
******
On an year-on-year (YoY) basis, Q4FY08 results of Tera Software Ltd. (Code: 590020) (Rs.50.50) look very disappointing
as revenue declined by nearly 50% to Rs.16 cr. and PAT fell by 40% to Rs.3 cr. But if we examine quarter-on-quarter (QoQ)
basis, it posted the highest sale among all the four quarters of FY08. This implies that the company may have completed
some big e-governance project in Q4FY07. Still for FY08, it posted marginal growth in revenue to Rs.59 cr. and 15%
increase in PAT to Rs.12.25 cr. after making the highest tax provision of 38%. It reported an EPS of Rs.11 on its equity of
Rs.12.50 cr. and may declare 25% dividend for FY08. Of late, the company has been empanelled as a vendor for the rollout
of IT services in the government sector through National Informatics Centre Services Inc. for a period of one year, which
can be extended by another year. Looking at its strong order book position, it may end FY09 with sales of Rs.75 cr. and
profit of Rs.16 cr. i.e. an EPS of Rs.13. Also as per reliable sources, the company is planning to dispose off its 20 acres
surplus land in Hyderabad, which is worth Rs.40 cr. Once the deal is finalised, its share price will shoot up.
******
Amar Remedies Ltd. (Code: 532664) (Rs.29.40) is a well-known manufacturer of ayurvedic, herbal and cosmetic dental
care, personal care, skin care, beauty care & healthcare products like tooth pastes, toothpowders, shampoos, creams,
lotions, shaving gels, balm & pain relieving ointments. Besides, it has successfully developed 24 different ayurvedic and
herbal medicines and has also obtained the FDA approval for the manufacture and sale of these medicines, which include
medicines for hypertension, diabetes, and heart ailments. Recently, it came out with excellent results for the December
2007 quarter as sales jumped by 70% to Rs.73 cr. and PAT increased by 40% to Rs.5.60 cr. However, the company is yet to
start commercial production at its newly set up Dehradun facility as it is awaiting the clearance certificate the from
pollution control authorities. On the back of aggressive capex, it has tripled its gross block from Rs.35 cr. to almost Rs.100
cr. For FY08 ending 30
th
June 2008, it can register sales of Rs.300 cr. with PAT of Rs.20 cr. i.e. an EPS of Rs.8 on its equity of
Rs.26.20 cr. A safe bet in the current market sentiments.
******
Mazda Ltd. (Code: 523792) (Rs.73.35) is among the few engineering companies in the world manufacturing very
specialized, high technology and critical equipments for various industries like power, refineries, fertilisers, chemicals,
nuclear, sugar, paper, food, pharma etc. Broadly, its product profile is segmented into Vacuum systems, Valves, Air
pollution control equipment, Crystallisers and Evaporators. It came out with satisfactory results for Q4FY08 and ended
FY08 on quite a buoyant note. For FY08, its sales improved by 15% to Rs.60.50 cr. whereas profit increased by 30% to
Rs.6.60 cr. Hence it registered a very healthy EPS of Rs.15.50 on its small equity of Rs.4.26 cr. Importantly, the company
has technical collaboration with world renowned Croll-Reynolds Inc., USA, which holds 12% stake in the company. To
cater to the increasing demand, it is setting up a third unit at an investment of approx.
Rs.5.6 cr. Despite the promising future, this hi-tech engineering company is available very cheap at an enterprise value of
around Rs.40 cr. and is a screaming buy.
By Kukku
FIFTY FIFTY
Investment Call
* Saregama India Ltd. (SIL) (Rs.128.05), earlier known as The Gramophone Company of India, was incorporated in 1946
and was taken over by the RPG Group in 1985 from EMI, UK. The company is currently managed by R. P. Goenka,
chairman. SIL is into retail selling of audio cassettes and CDs.
During FY07, the publishing and new media business registered a phenomenal growth of over 130% earning revenues of
over Rs.39 cr. The major contributors were revenues from ring-tones and FM Radio. With the mobile business continuing
its stupendous growth, especially due to its vast and rich catalogue, SIL is better placed to take advantage of management
of music on the mobile. It continues to have the largest market share of about 40% by revenue received from mobile, radio
and other streams of revenues.
SIL is the single largest owner of music tracks in India. Its catalogue offerings were revamped with implementation of
new brands like Music Cafe. The existing brands like 'Golden Collection', 'Anmol Ratan', 'Bombay Talkies' and 'Box
Office' have been given a fresh new look keeping in view the requirements of young consumers. It has 3 lakh tracks in its
music library and is the leader in the industry.
Radio opportunity: The biggest boost to the Indian music industry comes in the form of opening up of the FM Radio
space. With 400 FM stations to be operational by end of CY08, the music industry will potentially garner Rs.120 cr. in the
form of royalties. Saregama with a market share of 35% in the historical Hindi movie song library and 15% of the new
marketable library will be the key gainer.
The company is also into the film business, home video, T V software.
With the changing face of the music industry as it goes into the digital era, the company is well placed to leverage its
systems, network and catalogue strength.
With satellite and cable television as well as the ever increasing number of regional channels, the outlook for the T V
software industry seems to be promising.
SIL has investments in CESC and some other group companies. While its investment cost is around Rs.40 cr., the market
value of only the listed companies is above Rs.75 cr.
For FY08, SIL's estimated sales is likely to be around Rs.144 cr. with estimated net profit of around Rs.14 cr. The projected
sales for FY09 is likely to be around Rs.160 cr. with net profit of around Rs.20 cr. on its equity base of Rs.14.68 cr.
Sonata Investments belonging to the Reliance group holds 11.48% in the company.
13
The book value of the SIL share is Rs.59 and the stock has reacted from a high of Rs.388 to the current level where it looks
very attractive. Long-term investors can accumulate this stock at the current level as it is likely to cross the Rs.200 mark
over the next 6-8 months.
* Assam Company (Rs.27.10), which is the oldest tea company in the world, has also entered into the Oil & Gas
exploration business a few years back.
Oil, Tea, Power and SEZs are the focus areas for the company at present.
In the tea business, sales realization at Rs.86.50 per kg in 2006 was better than the previous year's Rs.76.28 per kg. And
this happened after a period of almost 4 years, when the tea market trends were very unfavourable. Current tea prices are
still better by 10% compared to the previous year.
To increase exports further, the company will improve its price realization and target higher production of Orthodox teas.
The company management is looking at inorganic growth in the Oil & Gas sector including acquiring assets overseas. But
it will need to raise capital to finance these projects.
As part of its plans to expand the tea business, the company is planning to set up more tea bars - joints retailing ready-to-
drink tea.
It plans to have 100 tea bars in 3 years from now. Of the 8 tea bars that the company currently operates, seven are in
Kolkata and one in Mumbai. The tea bars, operating under the name Camellia, will be set up under both company and
franchisee-owned models.
The company also recently started producing oil condensate and natural gas from the Amguri field in Assam.
For the year ended 31
st
December 2007 (CY07), the company reported total sales of Rs.151 cr. against Rs.149.5 cr. in CY06
while net profit went up to Rs.10.45 cr. from Rs.7.45 cr. on its equity of Rs.30.46 cr.
Its outlook is encouraging as current tea prices are firm and the outlook for the Oil & Gas exploration industry is good.
The stock having reacted from the high of Rs.57 to the current price looks very attractive at current price.
Market Guidance
* Ruby Mills (Rs.1376.85) - There is talk of placement at higher levels. Investors who bought the scrip at lower levels can
book part profits at higher levels and stay invested with the remaining quantity. There is fear in the market that there
may be oversupply of lease rental space over the next 18 months.
* Hinduja Foundry (Rs.200.65) stock has shot up. Investors can book profit as margins are under pressure. Investors can
think of switching to Saregama or Cords Cable.
* Religare Enterprises (Rs.389.80) stock is under accumulation by knowledgeable smart investors.
* Tata Metaliks (Rs.175.30) has been actively pursuing tie-ups with various State Governments for raw material linkages.
It is also keen to acquire an iron ore mining lease in Karnataka and to set up an end use plant. Investors are advised to
stay invested. The stock is cum 70% cum dividend at present.
* Shree Bhawani Paper (Rs.10.15) - There is regular buying by management circles in the last few weeks. In spite of raw
material prices shooting up, paper industry margins seem to be better in view of firm paper prices. The company
expanded its capacity last year but the benefit of the same will come in from current year onwards. It has received
approximately Rs.200 lakh from sale of 22,515 Certified Emission Reductions (CERs) issued for its CDM Project of rice
husk based cogeneration Power Plant I at Rae Bareli, Uttar Pradesh. Stay invested or add on dips.
* Arrow Webtex (Rs.54.55) was recommended a few months back. Investors are advised to stay invested for better times
ahead.
* Tribhuvan Housing (Rs.59.75) was recommended at Rs.24 a few weeks back. Now it is at Rs.59 level. Investors are
advised to book 50% of profit and switching
the same to First Leasing Company as a safe
investment.
* Rohit Ferro Alloys (Rs.127.70) is firm in the
falling market and has given a good breakout.
The company is likely to report sales of above
Rs.600 cr. with an EPS of Rs.20 for FY08. If the
current prices of chrome ore and ferro chrome
is any indication, then current year EPS is
likely to be around Rs.35-40 on sales of
around Rs.1000 cr. The stock has shot up by
more than 100% from lower levels. Investors
can book part profits.
* Revathi Equipment (Rs.1147.20) has
acquired 70% in the equity capital of Semac
Pvt. Ltd., Bangalore, a company providing
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14
engineering design solutions for industrial/commercial and infrastructure constructions at a consideration of Rs.45.50 cr.
Semac serves its customers from its offices in Bangalore, Delhi, Hyderabad and the Middle East. Semac is a leading Indian
multi-disciplinary consulting firm providing integrated architectural and engineering services with sales of above Rs.100
cr. enjoying attractive margins.
The Semac acquisition is likely to create good wealth for the company and its shareholders in the long run.
* Shiv Vani Oil (Rs.630.50), which reported encouraging results for FY08, is likely to achieve sales of around Rs.975 cr.
and net profit of Rs.170 cr. in the current year. Stay invested for target of Rs.800 plus over next one year's time. The stock
was advised in October 2007 at Rs.380 level onwards and has outperformed the market.
* Cairn India (Rs.273.95) may see further upside. Stay invested those holding from lower levels.
* Kirloskar Pneumatic (Rs.4.40) has received an order for supply of an air conditioning plant for a prestigious ship from
Cochin Shipyard Ltd. This order is worth Rs.80 cr. taking the total order for ACR & Process Gas Division to the tune of
Rs.273 cr. in hand. Besides this division, the company has orders worth of Rs.500 cr. in the Transmission & Compression
Systems Division. Long-term investors are likely to benefit in the long run. Stay invested or add on dips.
Note: Rising crude oil prices resulting in runaway inflation is a serious cause of concern. Investors need to be very
selective in buying. Retail participation in the market is very poor and higher levels may not be sustained.
Industry is not able to absorb higher input cost. Hence margins are likely to be under pressure in the current quarter.
Avoid all speculative/fundamentally weak stocks.
Investors are advised to book part profits in stocks that have shot up by 50-125% in the last few weeks and lock it out of
the market in fixed maturity plans (FMP) giving better returns than bank fixed deposits.
15
By V. H. Dave
EXPERT EYE
The shares of SAAG RR Infrastructure Ltd. (SAAG) (Rs.59.55) (Code: 531374) are being acquired by the knowledgeable
persons in anticipation of its great potential in the Oil & Gas industry. The share trades near to its 52-week high and
provides good opportunity for decent gains in the medium-to-long-term as it is likely to cross the three digit mark in the
near future.
Originally formed as a property development company in 1995, SAAG has evolved into a highly competent infrastructure
company controlled by SAAG Consolidated (M) BHD, Malaysia. The parent is a key player in the Oil & Gas sector in
Malaysia and the Southern East Asian region for over 20 years since its inception in 1982. As a company, principally
providing investment holding and management services, SAAG through its group of companies and strategic
partnerships, is involved in upstream and downstream activities in the Oil & Gas industry.
With a well-earned reputation as an innovative player in the manufacture, supply and service of equipment and
machinery in the Oil & Gas industry in Malaysia, SAAG has been growing rapidly and currently represents more than 20
established manufacturers of Oil & Gas equipment and machinery, including Flowserve, Burgess Manning, Leistritz,
Lubrizol and FMC Smithmeter. Together with Flowserve, SAAG Oil and Gas Sdn Bhd in Malaysia is involved in the
manufacture and assembly of mechanical seals since 1992.
SAAG's areas of business include customized solutions for large scale infrastructure projects, which include Oil & Gas
projects, pipeline projects, workover rig services, water treatment plants, sewage treatment plants, pipeline works and
residential, industrial and commercial projects.
SAAG's clients include NTPC, Railways, District Rural Development Agency (DRDA) of the Government of Tamil Nadu,
Airport Authority of India, Chennai Petroleum, Almech Engineers, ONGC, Hindustan Petroleum, Sara Lee, Bhel,
Government of India, Department of Space, Bangalore (ISRO), Purvankara, Mantri Housing and Hiranandani
Construction among others.
SAAG in technical collaboration with SAAG Drilling & Well Services (SDWS) provides and operates offshore modular
conventional electric workover rigs in India, which improve the efficiency and productivity of oil wells.
During FY07, SAAG earned 18% higher net profit of Rs.3.2 cr. on 42% increased income of Rs.46 cr. During Q3FY08,
although income advanced by 91% to Rs.22 cr. net profit shot up by 156% to Rs.1.7 cr. During the first nine months of
FY08, its net profit went up by 53% to Rs.3.4
cr. on 54% increased income of Rs.46.7 cr.
The company's equity capital is just Rs.10.6 cr.
and with reserves of Rs.8.5 cr., the book value
of the share works out to Rs.18. The
promoters hold 50% in the equity capita,
PCBs hold 7% leaving 43% with the investing
public.
SAAG has won projects from prestigious
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public sector and MNC clients including ISRO, NTPC, ICMR, BEML, HPCL, CMWSSB, B Braun Medical India and
Degremont. It is currently executing projects for Puravankara, Hiranandani and Mantri Developers, which are multi-
million dollar development projects in real estate.
SAAG made its entry in the Oil & Gas sector by securing firm orders from ONGC for charter hire of two offshore modular
workover rigs for about Rs.288 cr. for 3 years.
Over the next three to five years, the Government of India plans to lay more than 15,000 km of Oil & Gas pipelines.
Recently, some major companies in this industry, both private and public, have struck Oil & Gas reserves and the Gas
Authority of India (GAIL) is planning to form a network of pipelines across the country.
The government has announced various ambitious projects in the Oil & Gas sector. New blocks have been given to
private players and the government has recently announced its New Licensing Policy inviting private participation in
exploration of new blocks.
Some of the projects require substantial prequel conditions for eligibility to bid. For the purpose of bidding for large
projects, SAAG will form joint ventures with large Oil & Gas companies in the world to enable it to use their pre-qualified
status to bid for such projects. This will provide the company with a platform for to gain experience in executing large
sized projects and thereby enable it to bid for them directly in its own name.
Apart from these new opportunities, the existing infrastructure requires support services in terms of consulting, revamp,
reconstruction and maintenance. The Oil & Gas companies have invited suggestions and consulting for upgrading their
existing technology and equipments.
The company has formed a new division to focus on Oil & Gas projects. SAAG, being a services company catering to the
needs of Oil & Gas sector in Malaysia and the region, will pass on its expertise and contacts to SAAG RR to capitalize on
the growing oil & gas sector in India.
SAAG has positioned itself to take advantage of the growing needs of the Infrastructure and Oil & Gas sector through
proper financial and human resource management.
During FY08, SAAG is likely to notch revenues of Rs.72 cr. and earn a net profit of Rs.5.8 cr., which would give an EPS of
Rs.5.4. During FY09, its income is likely to go up to Rs.90 cr. with net profit increasing to Rs.12 cr. when the EPS would go
up to Rs.11.2. This EPS can further go up to Rs.16 in FY10.
The SAAG share is traded at a P/E of 12.5 on FY08 estimated EPS of Rs.5.4 and 6 times its FY09 projected EPS of Rs.11.2.
The industry average P/E currently rules firm at a staggering 27, which leaves good scope for the scrip to rise in the
future. Investment in this share is likely to fetch a decent gains of over 50% in 6-9 months. The 52-week high/low of the
share has been Rs.69/27.
16
By Nayan Patel
TECHNO FUNDA
Tanfac Industries
BSE Code: 506854
Last Close: Rs.62.75
Tanfac, incorporated in 1972, is one of India's largest
suppliers of Fluorine chemicals. It is a joint sector
company promoted by the Aditya Birla Group of
Companies i.e. Grasim Industries, Hindalco Industries,
Pilani Industries & Investment Corporation and Tamil
Nadu Industrial Development Corporation. Its plant
and facilities are spread over 60 acres in the chemical complex of SIPCOT at Cuddalore near Pondicherry, about 200 kms
from Chennai, India. Tanfac is engaged in the manufacture of inorganic Fluorine based chemicals such as Aluminium
Fluoride, Anhydrous Hydrofluoric acid, Sodium Silico Fluoride, Ammonium Bifluoride, Potassium Fluoride, Cryolite and
various other Organic Fluorine based chemicals.
Review
- Last week we recommended Novopan Industries at
Rs.51.40. During the week, the stock kissed Rs.56.35.
- Gandhi Special Tubes recommended at Rs.100.95 level
touched Rs.113.50 level.
- Lanco Global recommended at Rs.95.50 level reached
Rs.103.85 level during the week.
- Few days ago we recommended Lloyd Electric at Rs.109.50
level. It kissed Rs.131 last week.
The company has equity of just Rs.9.98 cr. and declared a mind blowing Q4FY08 results. Net sales jumped 58.15% to
Rs.54.07 cr. while net profit jumped 145.24% to Rs.5.15 cr. For FY08, its net sales jumped 33.59% to Rs.164.49 cr. while net
profit jumped 82.41% to Rs.12.24 cr. from Rs.6.71 cr. The company recorded an EPS of Rs.12.27 for FY08 v/s Rs.6.72 for
FY07. As its yearly EPS, this Aditya Birla stock is available at a P/E ratio of just 4.8. It declared 17.50% dividend against
15% last year.
The stock is highly undervalued at its current level. Investors can grab this jackpot with stop loss of Rs.55. On the upper
side, above Rs.65, its share price will go up to Rs.77 and Rs.86 in coming days.
Jayshree Chemicals
BSE Code: 506520
Last Close: Rs.27.20
Jayshree Chemicals is an Orissa based chlor-alkali and soda ash manufacturer with equity of just Rs.5.33 cr. The
promoters hold 52.56% stake in the company, LIC holds 1,44,810 shares, IFCI holds 70,388 shares, IDCO holds 2,03,036
shares in the company.
The company announced very good Q4FY08 results. Net profit jumped 59.84% to Rs.2.03 cr. and the company posted an
EPS of Rs.6.74 on yearly basis. It declared a maiden dividend of 10% for FY08. At the current level, the stock is available at
P/E ratio of just 4.
Buy with stop loss of Rs.22. On the upper side, the stock will go up to Rs.31 and cross over will take it to Rs.35/40 level in
the medium-to-long-term.
Anu's Labs. IPO rated 'below average fundamentals'
MONEY FOLIO
Anu's Laboratories Ltd. (ALL), engaged in the manufacture of basic, advanced intermediates and fine chemicals and
supplying them to various drug manufacturers, will enter the capital markets with a public issue of 38,20,000 equity
shares of Rs.10 each through 100% book building process in the price band Rs.200 to Rs.210 per equity. The issue opens on
Monday, 12
th
May and closes on Thursday, 15
th
May 2008. The IPO has been graded by ICRA as 'ICRA IPO Grade 2'
signifying below average fundamentals.
ALL was incorporated in 1996 to manufacture Bulk Active Pharma Ingredients (APIs) and Intermediates for drug
molecules and was promoted by Mr. K. Hari Babu. It has manufacturing facilities for key intermediates like 2,4-Dichloro-
5-Fluoro Acetophenone (DCFA) (an intermediate for synthesizing quinolone antibiotics like ciprofloxacin);
Chlorohexanone (key intermediate in the manufacture of cardio vascular medicine) and Methyl-4 (4-Chloro 1 oxo
butane), a Di-Methyl Acetate (an intermediate in the manufacture of Fexofenadine an anti allergic drug). The company
started exports to Israel in 2002 followed by exports to Italy, Japan, France, USA and Singapore. Currently, its exports
comprise of 19.97% of its total turnover.
In order to diversify and expand its business by means of forward integration, the company has decided to set up a new
plant for manufacturing drug intermediates including APIs at Vishakhapatnam at an estimated cost of Rs.55.09 cr. and
setting up a pilot plant for carrying out Contract Research and Manufacturing (CRAM) at Vishakhapatnam at an
estimated cost of Rs.8.34 cr. The long term working capital requirements would be Rs.16.67 cr.
The company's total income in FY07 was Rs.121.3 cr. as against Rs.95.34 cr. in FY07. The net profit during FY06 was
Rs.13.59.cr. against Rs.55.7 cr. The total income and the net profit for the nine months period ended 31
st
December 2007
were Rs.113.82.cr. and Rs.13.12.cr. respectively.
MAAC in joint venture with Toon Club
In a movie aimed to revolutionise the animation education segment and bring animation to young pupils countrywide,
leading animation–training institute Maya Academy of Advanced Cinematics (MAAC) has tied up with pioneering
children's animation education Toon Club. The new joint venture will be co-branded as MAAC Junior - Toon Club.
MAAC, the education division of Maya Entertainment Ltd. (MEL) is the pioneer of 3D animation and visual effects
education in India and operates about 60 centres and has serviced more than 30,000 students in Nepal and Middle East. It
has an association with Cambridge International Examination (CIE), London to validate its diploma courses. The institute
has pioneered animation training in the country and has also taken initiatives for the growth and development of the
industry by promoting young talents trough events like 24 FPS Animation Awards – an annual event conceptualised by
MAAC that helps in seeking the finest talents in animation in the country. MEL is owned by a group of investors
including Enam Securities, Intel Capital, Concept Advertising and Bhukhanvala Holding.
Union Bank excels
Union Bank of India has reported record growth in net profit of 64.14% YoY to Rs.1387 cr. in FY08. Operating profit grew
by 28.94% YoY to Rs.2580 cr. in FY08.
On a quarterly basis, the bank's net profit for Q4FY08 grew by 128.51% to Rs.512 cr. from Rs.228 cr. in Q4FY07. The
growth in Q4FY08 net profits is one of the highest in the industry.
Focus on asset quality, stringent credit review and monitoring mechanism together with robust recoveries has brought
about a significant reduction in both Gross and Net NPAs of the bank to 2.18% and 0.17% for FY08 from 2.94% and 0.96%
in FY07.
The Net NPA% for March 2008 is among the best in the industry.
The cost to income ratio, which reflects the operating efficiency of the bank, further reduced to 38.17% as of March 2008
from 42.45% in the previous year and is one of the lowest among peer banks.
17
18
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.
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