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Saturday, February 06, 2010
[Technical-Investor] Re:commodity charts for MCX
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Re: [Technical-Investor] TA question
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[sharetrading] Value Guide: Share Khan [1 Attachment]
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Attachment(s) from ekam ber
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Happy Trading,
United we grow!!!
[sharetrading] ARSS Infra
A sizeable order book, strong sales and profit growth, and a secure client base in government contracts bode well for the offer.
Major exposure to the Railways segment provides high margins.
Bhavana Acharya
A relatively low asking price and a focus on government projects make the offer from ARSS Infrastructure Projects a reasonable bet, but only for investors with a high-risk appetite.
A construction contractor in the Railways and roadways segment, the company plans to raise Rs 103 crore from this issue to fund working-capital and joint ventures.
In its price band of Rs 410-450, the offer is at a valuation of 8.6 to 9.5 times the estimated FY-11 per share earnings on a post-offer equity. Reasonable valuations notwithstanding, given the risks to the business, investors are advised to exit the stock if it touches about a 21 per cent return.
ARSS has a high exposure to Railways (which offer higher margins) and roadways, a sizeable order book, strong sales and profit growth, and a secure client base in government contracts. The company also uses joint-ventures to bid for and execute bigger projects and build on execution capabilities. Strong margins and post-issue lower debt-equity are other positives for the company.
However, the order book has several contracts with a relatively short execution period. ARSS will have to keep up the pace of securing fresh orders to maintain current rate of growth.
A promoter facing criminal investigations, past instances of default in payment of power bills, default in servicing debt and decline in working capital turnover pose significant risk.
Background
ARSS executes construction contracts in Railways (laying and linking of tracks, earthwork and construction of bridges) and roadways (widening and strengthening of roads), with a recent move into irrigation. Geographically concentrated in Orissa, the company has moved into regions such as Tamil Nadu, Rajasthan, Jharkhand and so on. Almost 90 per cent of the contracts come from government-based institutions such as Ministry of Railways, Orissa Public Works Departments, and so on, providing a secure repeat client base. The company also has in-house design capacities.
Current order-book stands at Rs 2,877.5 crore (4.6 times 2008-09 revenues), and is well-diversified with 41 per cent in the Railways segment, 40 per cent in roads, 3 per cent in irrigation and the balance in other smaller works.
The order book is represented by over a hundred contracts, a smaller average contract value (about Rs 21 crore), and bulk of the order book is executable by FY-11 providing near-term earnings visibility. However, maintaining current growth rate depends on the company's ability to continually secure fresh contracts which provide similar margins.
Issue objects
ARSS has used joint ventures with players such as Kalindee Rail and Patel Engineering to execute projects where it lacks capability. Such ventures could help it build on its own expertise and allow a bidding capacity for bigger and more varied projects.
Besides, gradual build up of expertise could help it eventually qualify for projects on its own strength. About Rs 5 crore from the issue proceeds will go to funding such joint ventures and Rs 86 crore towards working capital.
Turnover of working capital, however, has gradually declined from 3.36 in FY07 to 1.67 times (as of December 09). Huge increases in inventory could partly explain this slide.
The order book just about doubled in FY-08 over the year before, but work-in-progress (WIP), a part of inventory, jumped about nine times. This has continued in FY-09 as well where WIP more than doubled against an order-book growth of 64 per cent.
Financials
Sales recorded a strong 118 per cent three-year CAGR while net profits put up a 149 per cent growth. Given a higher component of railway projects, and price escalation clauses built into a majority of the contracts, operating margins have been maintained above 10 per cent FY-07 onwards, standing at 12.5 per cent for the nine months ended December 09.
Net profit margins as well have stayed at about 8 per cent. Funding position appears comfortable with debt-equity on a post-issue basis on the lower side at 1.23 times, and interest cover at 2.7 times (December 09). The company has, however, defaulted on interest and repayment of loans in FY-06, FY-04 and FY-03.
Offer details
The issue is open from February 8-11. IDBI Capital Market Services and SBI Capital Markets are the lead managers.
Happy Trading,
United we grow!!!
Bonus Issues, Stock Splits, Rights Issues, IPO Updates: Technical Analysis - ONGC
Bonus Issues, Stock Splits, Rights Issues, IPO Updates: Technical Analysis - ONGC |
- Technical Analysis - ONGC
- Technical Analysis - Infosys Technologies
- Technical Analysis - Tata Steel
- Technical Analysis - State Bank of India (SBI)
- Technical Analysis - Reliance Industries
- Record Date - Jayshree Chemicals Rights Issue of 9:2
- Record Date - Pitambar Coated Papers Consolidation of Shares
- Record Date - Mounteverest Trading & Investment Bonus Issue
- Who is a IPO promoter?
Posted: 06 Feb 2010 06:08 PM PST ONGC experienced an erratic movement during the week, trading between Rs 1,066 and Rs 1,155 intra-week low and high respectively. Though the stock rallied above the 200-day moving average at Rs 1,120, it failed to hold above the average. The stock lost Rs 5 for the week. The near-term trend is... Read More... |
Technical Analysis - Infosys Technologies Posted: 06 Feb 2010 06:07 PM PST The stock commenced the week with a volatile session and later sessions it witnessed selling pressure. On Friday, it conclusively penetrated our last week’s first support level of Rs 2,400 and also dipped below the second support of Rs 2,350, however, it managed to close above this level. The... Read More... |
Technical Analysis - Tata Steel Posted: 06 Feb 2010 06:05 PM PST Tata Steel remained resilient in the early part of the week only to decline 5 per cent on Friday. Next target for the down-move from January 21 peak is Rs 498. The 200-day moving average at Rs 470 and the Fibonacci retracement support around the same level will lend strong medium term support to... Read More... |
Technical Analysis - State Bank of India (SBI) Posted: 06 Feb 2010 06:04 PM PST SBI reversed lower from the intra-week peak of Rs 2,148 to end over Rs 130 lower. The stock declined below the 200-day moving average on Friday and has closed just below this line in Saturday’s special session. The stock has already declined to the medium term support at Rs 1,880 that occurs... Read More... |
Technical Analysis - Reliance Industries Posted: 06 Feb 2010 06:03 PM PST Reliance Industries could not move above Rs 1,056 in the early part of last week and crumpled to the low of Rs 975 by Friday. The stock faces strong resistance at Rs 1,030 where the 200-day moving average is positioned. Fresh shorts can be initiated if the stock fails to move beyond this... Read More... |
Record Date - Jayshree Chemicals Rights Issue of 9:2 Posted: 06 Feb 2010 02:53 PM PST Jayshree Chemicals Ltd has announced that February 18, 2010 has been fixed as the Record Date for issue of 2,39,94,374 Equity Shares of Rs. 10/- each for cash at a premium of Rs. 5/- per Share, payable in full on Application, to the existing Equity Shareholders of the Company on Rights Basis with... Read More... |
Record Date - Pitambar Coated Papers Consolidation of Shares Posted: 06 Feb 2010 02:48 PM PST Pitambar Coated Papers Ltd has announced that February 12, 2010 has been fixed as the Record Date, pursuant to the order of BIFR dated August 13, 2009 for rehabilitation of Company, the existing equity share capital of the Company stands reduced by 90% (from Rs. 802.67 Lacs to Rs. 80.27 Lacs) and... Read More... |
Record Date - Mounteverest Trading & Investment Bonus Issue Posted: 06 Feb 2010 01:38 PM PST Mounteverest Trading & Investment has fixed 12 February 2010 as the record date for the purpose of determining the eligibility of the shareholders for the proposed bonus issue in the ratio of three equity shares for every one existing equity shares (3:1) of the company. On 4th February, the... Read More... |
Posted: 06 Feb 2010 12:55 AM PST Who is a IPO promoter? The promoter is defined as a person (or persons, as the case may be) who is in over-all control of the company, is instrumental in the formulation of a plan or programme pursuant to which the securities are offered to the public and who is named in the prospectus as promoter.... Read More... |
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