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T
I
M
E
S
A TIME COMMUNICATIONS PUBLICATION
VOL. XVII No. 7
Monday, 31
st
Dec. 2007 – 6
th
Jan. 2008
Pages 24
Market should consolidate
ahead of Q3 results
By Sanjay R. Bhatia
The markets displayed a positive trend amidst intermediate bouts of volatility and choppiness last week on the back of
good global cues and news flow. The volumes recorded have been low on account of festive holidays but the advance-
decline ratio remained positive. FIIs remained net buyers in the cash as well as the derivatives segment albeit their net
purchases were only marginally positive. Domestic institutional investors, on the other hand, remained net buyers.
Global cues, however, have remained mixed with crude oil prices
once again spiking above the US $95 level on lower US inventory
data and the assassination of Benazir Butto. Otherwise, global
markets have remained positive while the rupee continued its
appreciation. The announcement by the government that trusts
will be allowed to invest in securities including shares and bonds
of listed companies has gone down well with the markets. They
witnessed follow-up buying at higher levels, which is a positive
sign.
Now, it is important that the markets consolidate at present levels
ahead of the Q3 results, which will start from the second week of
January 2008. The Q3 results are likely to work as a trigger for the
markets, which have so far lacked triggers. Meanwhile, the
markets would continue to take cues from global markets and
crude prices and stock specific action will be witnessed. FII inflows are also likely to improve after the first fortnight of the
New Year, which should take the markets to higher peaks. The only danger is that Q3 results should not disappoint the
Street.
Technically, on the upside, if the Sensex manages to sustain above the 20,000 level, it is likely to test the 20,250 followed
by 20,576 level. The Sensex has support at the 19,700 level followed by the 18,737 level. If the Nifty can sustain above the
6000 level, it is likely to test the 6100 followed by 6245 level. The 5937 level followed by the 5520 are important support
levels for the Nifty.
Investors could buy Aventis Pharma with a stop loss of Rs.1050 and target price of Rs.1200 followed by Rs.1275.
1
A leap forward!
By Fakhri H. Sabuwala
The leap year has arrived but the year that just ended was in no way less than a leap year. The extra day may have been
missing in 2007 but the leaps in the Sensex, Nifty, mid-caps and small caps indices were always there. From 13K to 20K
was nothing less than a zip, zap, zoom. Fundamentals are on an upbeat and so is the flow of liquidity. The confidence and
enthusiasm of investors is at its peak and the transition from 2007 to 2008 is an interesting one. Has the year end ever seen
such strength in the market?
Early December 2007 may have shown hesitancy but the latter days were positive and brought Xmas cheers a 1000 points
gain as a New Year gift. The strength in the market can be gauged from five top single day gains in the Sensex ever – all
coming up in the last three months. The highest ever single
day rise of 894 points on 24
th
November 2007, followed by 879
points on 23
rd
October 2007, 789 points on 9
th
October 2007,
735 points on 29
th
October 2007 and 692 points on 24
th
December 2007. It is not a mere coincidence for such rises to
occur so consistently. Call it a response to strong
fundamentals, greater interest by local and foreign investors
or the Narendra Modi effect, the message is loud and clear:
India is on the move and arriving.
Almost every segment of the economy is participating in the
rally although in turns. Even the coolest of them all,
information technology and pharmaceuticals were doing the
warm up last week. When the going is so great, how can
Indian investors with a prudent approach go wrong?
2008 will also witness continuation of the upbeat mood. With
the centre asking the PSU navratnas to issue bonus shares and
improve the networth of the Central government, which is the
major shareholder in such companies. The relaxation of rules in allowing private and public trust funds to invest in
equities could be the single largest reason for a bullish 2008. The outlay of foreign funds, which are looking at various
investment opportunities in listed and private equities, is enormous. About $10.4 billion (Rs.42,000 cr.) is the size of the
Gulf Cooperation Council's fund looking for opportunities in India and neighbouring countries. It has defined its interest
in areas like infrastructure, real estate, financial services and logistics. Other Gulf investments are also on the rise and a lot
of money (petro-dollars) waiting on the sidelines is about to take a plunge. The Qatar government has set up a huge fund,
on the lines of the Singapore government, to invest in India.
The success of qualified institutional placement (QIP) route for raising capital over the traditional options like ADRs,
GDRs or preferential allotment adds to the charm. Last three weeks has seen a raising of over $2 billion or Rs.8800 cr. by
nine companies, which is two-thirds of the total QIP worth Rs.14000 cr. or $3 billion spread over 31 issues during January
to November 2007 and 16 issues with Rs.4000 cr. during May to December 2006. GMR Infra (Rs.3966 cr.), Suzlon (Rs.2183
cr.), UB Holdings (Rs.600 cr.), India Cements (Rs.593 cr.) are some of the key companies from the recent nine.
QIP is a private placement of equity shares or securities convertible into equity by a listed company to a qualified
institutional buyer under the provisions of chapter 13A of SEBI (DIP) guidelines. The benefits of speedy process, cost
effectiveness and an easy exit option for investors make it a favourite option. Initially QIP was introduced to raise local
funds rather than global money but with the passage of time, it has become an avenue for raising huge funds.
2008 will be a year for such huge placements and mega IPOs from real estate, metals, power and retailing segments. A
year in which expensive rights issues shall create a perennial liquidity crunch.
Two schools of thought, both extremes opine differently. The bullish one says the Sensex mark of 25000 is a certainty
before December 2008 and the cautious one says it would settle around 16.5K before any major upmove. Which of the two
shall prevail? Only time will tell. But what is a certainty is the ever increasing interest in equities, the robust growth,
improved savings, higher spending, huge infrastructure expenditure etc. Can anyone go wrong with such trump cards
and 'paplus' in your hand?
So here is wishing you a Happy New Year and a very prosperous and wealth creator 2008.
Sensex breakout likely
TRADING ON TECHNICALS
By Hitendra Vasudeo
Last week, the Sensex opened at 19038.20 and maintained
the same as the low for the week. Further, it moved up to
register a weekly high at 20323.76 and closed the week at
20206.95 and thereby showed a net rise of 1044.38 points on
week to week basis. As a result of the strong weekly close,
the Sensex has registered the highest ever weekly in its
history. The last week of calendar year 2007 ended on a
positive note on weekly charts with strong positive candle
and highest ever weekly closing.
2
Resistance for the Sensex
during the week will be at
20500-20584. In case of a
sustained rise and close
above 20584, a weekly
breakout
could
be
confirmed.
If
that
happens, then expect the
rally to get extended to
24000. Weekly support
will be at 19946-19568-
18886. A fall and weekly
close below 18800 could
spell trouble for the
Sensex subsequently for
the short-term.
WEEKLY UP TREND STOCKS
3
Crossing the top and
sustaining a weekly close
above 20500 is very
important from hereon.
The earlier peak of 20238
was followed by bearish
candlestick pattern which
offered correction down
to 18182 ultimately. Once
again, after making new
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
NATIONAL ALUMIN
497.55 227.4
390.4
446.2
553.4
716.4
69.0
437.2
07/12/07
CHAMBAL FERT
86.65 75.8
82.9
86.3
90.0
97.1
69.0
85.0
02/11/07
MERCATOR LINES
153.15 86.2
127.6
143.5
169.0
210.4
68.9
131.8
28/12/07
UNITECH
483.80 437.7
465.6
475.3
493.5
521.4
68.6
462.3
30/11/07
GUJARAT STATE
97.40 84.8
92.8
96.3
100.9
108.9
68.5
90.5
02/11/07
WEEKLY DOWN TREND STOCKS
high at 20498, the Sensex
developed
a
bearish
candlestick
pattern,
which led to a minor fall
down to 18886, which did
not fall below its earlier
18182 level. The Sensex
has created a higher
bottom at 18886. At
higher range of 20300-
20500, a
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
I-FLEX SOLUTIONS 1518.00 1378.7
1473.7
1524.3
1568.7
1663.7
24.70
1539.75 20/12/07
PATNI COMPUTE
330.65
303.2
321.1
329.5
339.0
356.9
26.18
328.52
20/12/07
TATA MOTORS
731.00
665.7
710.7
735.3
755.7
800.7
28.31
739.25
20/12/07
WOCKHARDT
403.20
363.5
391.5
407.7
419.5
447.5
30.77
409.01
28/12/07
MARUTI SUZUKI
984.00
939.7
971.7
991.3
1003.7
1035.7
32.34
1015.00 20/12/07
PUNTER'S PICKS
cluster of resistances is
visible and the moment
this
cluster
is
comprehensively crossed,
a spring like rise can be
witnessed. All the above
will hold true till the
overall prices are above
18886.
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
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
ADOR WELDING
517041
268.40
261.00
273.00
251.55 286.3
307.7
1.06
APAR INDUSTRIES
532259
381.30
375.00
394.00
330.05 433.5
497.5
1.02
BASANT AGRO TECH (I)
524687
82.00
78.00
82.90
75.70
87.4
94.6
0.85
BELL CERAMICS
515035
18.95
18.25
18.95
17.05
20.1
22.0
0.62
BLUE DART EXPRESS
526612
715.00
655.00
724.00
550.00 831.5
1005.5
0.71
CELESTIAL LABS
532871
61.45
59.00
61.45
53.30
66.5
74.6
0.62
CINEVISTAAS
532324
83.55
81.00
84.00
77.65
87.9
94.3
0.74
DISHMAN PHARMA
532526
345.65
327.15
352.00
320.00 371.8
403.8
1.02
FOODS & INNS
507552
376.85
364.00
400.00
343.00 435.2
492.2
1.72
INDSIL ELECTROSMELTS
522165
92.30
90.15
95.80
87.00 101.2
110.0
1.69
JINDAL POLY FILMS
500227
287.70
280.00
287.70
267.05 300.5
321.1
0.62
PARENTERAL DRUGS (I)
524689
155.80
154.75
162.45
143.50 174.2
193.1
1.49
SILKTEX
526835
32.05
31.15
32.80
29.30
35.0
38.5
1.06
SUPER SALES INDIA
512527
208.70
206.10
211.00
193.00 222.1
240.1
0.86
TWENTYFIRST CENT.
523301
66.55
64.90
67.95
60.25
72.7
80.4
0.98
YASH MANAGEMENT &
511601
18.92
18.26
19.59
17.75
20.7
22.6
1.54
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 20498
(current ongoing move)
BUY LIST
Scrip
Last Close Buy Price Buy Price Buy Price Stop Loss Target 1 Target 2
Monthly
RS
FERTILISER CHEMICAL
44.75
42.38
41.55
40.72
38.05
49.4
56.4
72.24
HFCL INFOTEL
48.30
47.91
46.40
44.89
40.00
60.7
73.5
66.99
HMT
111.00
102.60
100.00
97.40
89.00 124.6
146.6
64.64
MOTHERSON SUMI SYSTE
116.95
110.09
107.05
104.01
94.15 135.9
161.7
54.63
IVRCL INFRASTRUCTURE
523.90
503.69
494.20
484.71
454.00 584.1
664.5
53.03
SUN PHARMACEUTICAL I
1207.00 1182.87 1157.50
1132.13
1050.00 1397.9
1612.9
51.93
FERTILISER CHEMICAL
44.75
42.38
41.55
40.72
38.05
49.4
56.4
72.24
Internals of Wave 3 as
follows:
Wave i-13799 to 20238
Wave ii-20238 to 18886
Internals of wave ii
EXIT LIST
Scrip
Last Close Sell Price Sell Price Sell Price Stop loss Target
Monthly Relative
Strength (RS)
I.C.I. INDIA
535.60
555.21
571.95
588.69
642.90 413.3
45.31
MAHARAS. ELEKTROSMEL
721.00
857.31
919.50
981.69
1183.00 330.3
52.28
Wave a-20238 to 18182
Wave b-18182 to 20498
Wave c-20498 to 18886
Wave iii – 18886 to 20323 (Wave iii- would have begun)
The above internals of wave iii will hold true till the prices are above 18886. If it falls below 18886, the internal moves and
wave count will change.
A breakout and close above 20500 will also confirm the actual formation and confirmation of this wave
count. Impulsive moves could begin on such a breakout.
If the above wave count holds true, then the first month of the new calendar year would prove to be beneficial to
investors.
Now let's move on the overall range for 2008 and what can be expected. Before that, we should take a look at what was
mentioned in December'2006 for Calendar Year 2007. For the year 2007, we had forecast 15600 and 20800 as the two upper
levels. Against this, the Sensex attained a high of 20498 and with one day to close the year 2007. Our forecast given in
December 2006 has thus been bang on target. On the lower side, the lower expected range was 12207 and 10378. The level
of 12207 was the centre point for 2007 and every year for the last 3 years and the Sensex has not violated the centre point.
It has always moved near it and bounced back to move towards the Yearly Level 3 and Yearly Level 4.
For the Year 2008, the Yearly Level 3 will be placed at 23031 and Yearly Level 4 will be placed at 31213. Similarly, the
Yearly Centre Point will be at 17673 and Yearly Level 2 will be at 14849. The high probable range for 2008 will be 23031-
17673 and may slip to 14849 in case of any abnormal correction. On the whole, the Sensex should be able to maintain its
head high and try to move to 23031 and ultimately move towards 31213 in its own time with volatile corrections on the
back of some unforeseen negative flows. For the last 5 years, our Yearly forecast of range has been absolutely stunning.
Whether it will be repeated this year only, time will tell.
In calendar year 2008, following indices can do well. BSE Cap Goods will continue to do well but could take a back seat
and reduce its outperformance. BSE Oil & Gas would do well can be in limelight. BSE Metals index will remain in
flavour. BSE BANKEX can follow behind them in terms of outperformance. CNX MID CAP 200 index has gathered fairly
good relative strength and stocks from this index could do well. Mid Cap indices, which grossly underperformed against
the frontline indices in the first 9 months, have made up in the last 3 months. We could find mid cap stocks turning into
large caps and small caps into mid cap this year.
Finally, let us come back to our strategy for the week
Strategy for the week
Breakout and weekly close above 20500 is essential for frontlines to come back into action. Fresh buying in index related
stocks is suggested on a breakout and close above 20500. If the low of 18886 is violated, then short term long positions can
be in trouble and that can damage the market breath as well. Till then index is above 18886 all will be good generally.
* Orient Beverages has seen quiet buying .This company with a low equity of under Rs.2.5 cr. good book value and
decent performance could see more upside.
TOWER TALK
* With Mines Bank becoming an investment attraction similar to land bank NR International is on the rise. The company
with logistics and a coal washery facility is a value buy.
* The South India Paper Mills is a stock with good potential for growth. With huge expansion lined up by this company
with a low P/E, valuation has a good upside in the near future.
4
* CNI Research, which is marketing products from the Sify platform, is reportedly in talks with a financial and marketing
arm of major construction firm for marketing its products over 10000 outlets.
* Stelco Strips is expected to announce expansion plans by organic or inorganic acquisitions. The stock is a value buy.
* Zenith Fibres which manufactures a crucial material PPSF for road ways and constructions is attracting the attention of
discerning investors. The company has a good dividend record too.
* Orient Abrasives is being eyed by HNIs after it completed its 8 MW power plant, which would boost its EPS sharply in
the current year and is an ideal bonus candidate.
* An analyst tracking Empee Distilleries to touch Rs.500 within six to nine and expects this recently listed company to
post an EPS of Rs.30 by year ending September 2008.
* Kaashyap Technologies is acquiring an US company and expanding its facilities in India. Stock is being cornered by
knowledgeable persons on hopes of crossing the Rs.10 mark.
* Facor Alloys is being closely watched by FIIs and HNIs who have taken huge delivery of shares. One FII projects a
share price of Rs.25 in the near future.
* Mahindra Holiday Resorts is planning an IPO in early'08. This will be first of its kind with land bank and leisure. A
blue chip subsidiary getting up.
* A life style retail chain of stores on the lines of ITC's Wills is being set up by M&M. one more offshoot of M&M and one
more subsidiary to list.
* GAIL, ONGC, BHEL, SAIL, BPCL, HPCL, IOC, Nalco, SCIL, BEL, BEML are sure shot for a split and/or bonus issues
next year.
* Foreign investors like Jebel Ali of Dubai are keen on setting up a free zone SEZ at JNPT. Does that mean a
developmental IPO on the lines of Mundhra Port?
* Off market transactions become difficult to go by as the scrutiny is severe. Reasons for such a transfer, consideration,
how and when are to be submitted. The government feels a special STT on its value should be levied.
* Supreme Petrochemcials with its re-designed products and additional capacity is a centurion in the making.
* Aekta Limited is on its way to become a leader in jute and jute based products. The scrip is likely to touch half century
mark to begin with.
* The grey market premium on IPOs were stable last week with Aries Agro at Rs.18/20, BGR Energy at Rs.360/370,
Brigade Enterprises at Rs.15/20, Burnpur Cement at Rs.6/7, e-Clerx at Rs.50/55, Manaksia at Rs.25, Porwal Auto at Rs.-
1 and Precision Pipes at Rs.18/20.
Sundaram Brake Lining Ltd. (Code: 590072)
Rs.350
BEST BETS
Established in 1976 as a joint venture with a world famous friction materials manufacturer, Sundaram Brake Lining Ltd
(SBLL) is now a fully Indian company belonging to the reputed TVS group of South India. It manufactures automotive,
non-automotive and industrial friction materials with specialisation in asbestos-free brake linings and pads. In fact, it
enjoys the status of being the first Indian friction material company to introduce asbestos-free brake blocks and its
products are extensively used in commercial vehicles, passenger cars, tractors and motor cycles. Besides, it also makes
asbestos-free woven clutch facings, disc pads, flexible rolls, and insitu bonded shoes. It has a strong presence in the Indian
original equipment market (OEM) as it provides logistic support for just-in-time deliveries to ensure zero production
stoppage at its customer's plants. It also services the Indian after sales market through more than 140 TVS owned
wholesaler outlets spread across major towns. On the other hand, it derives 30% of revenue from exports to around 70
countries worldwide. SBLL boasts of catering to the after market needs of international care manufacturers like Mercedes
Benz, Volvo, Scania, Renault etc. It is also the preferred supplier to some of the well-known axle manufacturers as original
equipment. Importantly, apart from being an ISO/TS 16949 and ISO-14001 certified, SBLL has the distinction of being the
first friction material manufacturer in the world to win the coveted Deming application prize for practising Total Quality
Management (TQM).
SBLL has four manufacturing plants with two plants dedicated exclusively to produce asbestos-free brake linings and
pads. To increase its export revenue, the company has established Plant 4 last year in Mahindra World City - a notified
Special Economic Zone (SEZ). The combined production capacity of all its four facilities is 1.2 million brake blocks per
month. Notably, the company's products have been tested to meet European ECE-R90, American FMVSS 121, Australian
ADR 35/38, South African SABS 1506 standards besides the Indian IS 11852. To service the US and Canadian markets
instantly and establish brand recognition, the company has a warehouse in North America along with business
representatives in USA who works closely with the US/Canadian brake re-builders and distributors. In view of the
changing trend from drum brake linings to disc brakes for commercial vehicles, it has given special focus to CV Pad
business and in the process has created a wide range of 39 references and is aggressively marketing them worldwide. It
regularly participates in international fairs in North America, Europe, Africa, Middle East and Far East. Interestingly, the
5
company is also negotiating with various overseas buyers for servicing branded product programmes to ensure further
export growth.
With more and more countries banning the use of asbestos based friction material products, the future prospects of SBLL,
being a pioneer look promising. The number of countries which uses only asbestos free friction products has now
increased from 34 to 37. Secondly, the uptrend in the domestic market is expected to continue on the back of strong
economic as well as industrial growth. However, rising input costs, constant downward pressure on prices by customers,
availability of cheaper products and adverse exchange rate fluctuations are few factors that put pressure on the margins
of the company. Hence, it is expected to clock a turnover of Rs.190 cr., same as FY07, with marginal decline in net profit to
Rs.12.50 cr. for FY08. This works out to an EPS of Rs.46 on its tiny equity of Rs.2.70 cr. Against its current market cap of
Rs.95 cr., SBLL has huge reserves of Rs.62 cr. (BV - Rs.240), Gross Block of Rs.117 cr. and low debt:equity ratio of 0.65.
Moreover, the company has an excellent track record of uninterrupted dividend payment for the last 15 years and at the
CMP, the dividend yield comes to nearly 4%. Considering its 52-week high/low as Rs.598/320, this is one of the safer bets
in the current all time high market. Investors are recommended to buy it at current levels as the scrip can appreciate 50%
in 12-15 months.
N R Agrawal Industries Ltd. (Code: 516082)
Rs.34.80
Belonging to the Mumbai based N R Agarwal Group, N R Agarwal Industries Ltd. (NRAIL) was incorporated in 1993 by
Shri N. R. Agarwal, a qualified chemical engineer with over 40 years of experience in the paper industry. The company
produces duplex board and newsprint. In fact, it is the second largest manufacturer in terms of duplex (packaging) board
in India. It makes grey back & white back, double coated duplex boards (heavy weight coated) from 200 to 550 GSM in
different sizes as per industry standards. These coated duplex boards are mainly used as packaging material by various
industries such as cigarettes, pharma, FMCG goods, cosmetics, liquor, food and beverages, industrial products etc.
Hindustan Unilever, Colgate, Glaxo, Ranbaxy, Nicholas Piramal, Gillette, Rasna, Reynolds, Amul etc are few of its end
users. Besides, duplex boards are also exported across the globe to many countries including Sri Lanka, Bangladesh,
Philippines, Egypt, East Africa and Gulf countries to name a few. Under the newsprint division, the company
manufactures five different qualities i.e. deluxe, deluxe prime, super deluxe, premium and super premium depending on
the specific needs of publishing houses. It has been regularly supplying to the Indian Express group, Lokmat, Sandesh,
Jagran, Sakal, Pudhari, Janmabhoomi, Mumbai Samachar etc.
After its recent amalgamation with two group companies viz. M/s N.R. Paper and Boards Ltd. and Suman Paper and
Boards Ltd., NRAIL can now boast of having four manufacturing units located at Vapi, Gujarat, with total installed
capacity of 130,000 MTPA for duplex boards and 40,000 MTPA for newsprint. Against this, the company sold 99,480
tonnes of duplex board and 30,812 tonnes of newsprint during FY07. Notably, as its feedstock the company uses imported
waste paper of various categories carefully selected after years of R&D. And it has already developed several sources of
such raw material across the world over a period of time. On the power front, the company has recently put up 5 MW
captive co-generation power plant in Sept 2006 at Unit I besides having 3 MW plant at Unit II. To diversify its product
range, NRAIL has started manufacturing cream wove i.e. writing & printing paper form this fiscal itself. It has also taken
up the 2nd phase
of
modernisation of the existing
plant at a cost of Rs.25 cr.
Moreover, as per unconfirmed
reports it has acquired 90 acres
of land near Vapi to set up a
1,25,000
MTPA, greenfield
plant for newsprint cum
writing and printing paper.
With the growing culture of
super
markets
and
departmental
stores,
the
consumption of packaging
duplex board is increasing
manifold. And with print
media becoming stronger day
by day, the demand for
newsprint is also robust.
Importantly, to improve its
operating efficiency, NRAIL
6
has recently implemented the SAP ERP system and has even won the SAP Award for customer excellence among 152
companies. Financially, the company recorded 30% growth in sales to Rs.267 cr. whereas net profit doubled to Rs.11 cr.
posting an EPS of more than Rs.6 for FY07 and gave 15% dividend. However, the first two quarterly results indicate that
the company is facing some margin pressure and may accordingly end FY08 with sales of Rs.325 cr. and PAT of Rs.9 cr.
This translates into an EPS of little more than Rs.5 on its current equity of Rs.17 cr. Considering its cash EPS of more than
Rs.10, 4% dividend yield at CMP, 73% promoter stake and gross block of Rs.150 cr., it is a decent buy at an enterprise
value of Rs.150 cr. Investors are advised to buy at declines with a price target of Rs.50 (i.e.40% return) in a year's time.
Nava Bharat Ventures Ltd.: A plum pick
ANALYSIS
By Devdas Mogili
Nav Bharat Ventures Ltd. (NBVL), formerly known as Nav Bharat Ferro Alloys Ltd., is a 35-year-old Hyderabad based
company established in 1972. The company commenced its journey as a single product company but subsequently
became a multi product company.
NBVL is a diversified company with business interests in power generation, ferro alloys, downstream products, sugar
and infrastructure projects. The company's ferro alloys units and power plants are located in Andhra Pradesh and Orissa
while its sugar unit is located at Samalkot near Kakinada, Andhra Pradesh.
The company has two subsidiaries i.e. Kinnera Power Company Ltd and Brahmani Infratech Pvt Ltd and Nav Bharat
(Singapore) Pte Ltd, Nav Bharat Realty Ltd and Nav Bharat Projects Ltd. Recently, it formed a consortium with Malaxmi
Group under the name and style Malaxmi NBFA Ventures Pvt. Ltd. for its foray into the booming infrastructure sector.
NBVL manufactures manganese, silicon and chromium alloys, which are essential inputs in the manufacture of steel.
Manganese and silicon alloys impart strength and hardness and act as powerful deoxidizing agents. Chromium alloys
make the steel corrosion resistant and more heat tolerant.
Clientele: The company's clientele includes Visakhapatnam Steel Plant, Tata Steel Ltd, Essar Steel Ltd, Mukand Ltd, Steel
Authority of India Ltd, Sunflag Iron & Steel Co. Ltd, Mahindra Ugine Steel Co. Ltd, Shah Alloys Ltd, Ispat Industries Ltd
and JSW Steel Ltd.
Exports: NBVL exports its products to competitive international markets like USA, Europe, Gulf, Japan, Korea, Indonesia,
Glencore International A.G., Switzerland, Ronly Holdings Ltd., U.K. Marubeni Tetsugen Co. Ltd., Japan, Considar
Europe, Luxembourg etc. Its thrust on exports has enabled NBVL to establish itself as a leading manufacturer and
exporter of ferro alloys from India. The company is a recognized Export House and has been receiving the Certificate of
Export Excellence from the Engineering Export Promotion Council (EEPC) every year since 2000-01.
Ferro Alloys Division: The company produced 77,568 MT of manganese alloys and 26,664 MT of chromium alloys and
sold 81,104 MT of manganese alloys and 22,279 MT of chromium alloys including conversion during the year.
NBVL commands a market share of about 14% in the Indian ferro alloy manufacturing industry and serves both the
carbon steel and stainless steel sectors. Both these sectors show signs of resurgence of late.
Power Division: The company generated 871.97 as against 644.26 in the previous year from its A.P and Orissa power
plants. The company consumed 424.17 MU for production of ferro alloys, 97.70 MU for auxiliary consumption and 350.10
MU for merchant sale.
The company would nearly double its perating capacity from 112 MW in FY07 to 208 MW during the current year in
phases. The power deficit scenario is unlikely to be bridged in the foreseeable future and NVBL does not envisage any
problem on sale of its surplus power.
Sugar Division: NBVL crushed 4,70,758 MT of sugarcane yielding an average recovery of 10.21% compared to 4,37,457
MT at an average recovery rate of 10.71% in the previous year. The Bio-fuel sector is receiving a lot of attention and is set
to emerge as one of the principal industries in the near future. NBVL is also looking at this sector.
Infrastructure Division: NBVL made a quiet entry into the emerging infrastructure sector and is securing the
Highway Concession, a SEZ developmental right and coal linkage for setting up a large power project apart from being
a short-listed party for the metropolitan railway project for Hyderabad. The company's infrastructure projects that are on
the anvil include the following:
Highway BOT Project - The project involves design, construction, development, finance, operation and maintenance of
Laknadon - MP/MH Border section from km 547.400 to km 596.750 on National Highway no. 7 (NH-7) in Madhya
Pradesh on BOT (Annuity) basis.
IT/ITES Park: A world class IT/ITES Park along with an integrated township in 250 acres is being developed by
Brahmani Infratech Pvt. Ltd. near the upcoming Shamshabad International Airport at Hyderabad.
600 MW Power Project: A 600 MW coal based power project is underway in Orissa being the Ist phase of the 1200 MW
Power Project. A MoU with the Orissa Government has been signed to set up the project. Coal linkage for about 600 MW
7
has been received as the fuel source and it has signed the power purchase agreement (PPA) with the Power Trading
Corporation (PTC).
Krishnapatnam Power: 2x125+/- 10% coastal thermal power plant is being set up at the Krishnapatnam Port, Nellore,
Andhra Pradesh. The MoU has been signed with PTC.
Future Projects: Further, its other future projects include Hyderabad MRTS: The Malaxmi Group's consortium has been
shortlisted for the Hyderabad MRTS project along with members IL&FS, Italian Thai & Maytas Infra. Its other projects
include the Food Processing Park in Coastal Andhra Pradesh over an area of 500-1000 acres and the power generation
project for various power projects in partnership with certain MNCs, PTC etc., in states such as Haryana, Gujarat, Punjab,
Maharashtra, Madhya Pradesh etc.
Performance: For FY07, the company reported a sales turnover of Rs.591 cr. with a net profit of Ra.140.46 cr. posting an
EPS of Rs.21.04.
Financial Highlights:
(Rs. in lakh)
Financials: As on 30
th
September 2007, it has
an equity base of Rs.14.53 cr. with reserves
excluding revaluation reserves of Rs.404 cr.
and the book value of 67.5. Recently, the
company allotted 2,845,238 equity shares of
Rs.2 each to Lehman Brothers International
(Europe), at the conversion price of Rs.132.96.
NBVL has an ROCE of 23.33% while RONW is
38.74% and debt equity ratio is 0.95.
Particulars
QE 30/09/07
QE 30/09/06
YE 31/03/07
Sales
19685.99
17660.91
71101.15
Less: Inter Seg sales
3729.89
3524.19
11959.83
Net Sales
15956.10
14136.72
59141.32
Other Income
204.67
68.68
1217.40
Total Income
16160.77
14205.40
60358.72
Total Expenditure
9776.15
11038.11
45241.31
Finance Charges
385.12
412.10
1519.86
Profit from ord activ
5999.50
2755.19
13597.55
Extrod items (incm)
-
-
(1016.61)
PBT
5999.50
2755.19
14614.16
Tax Expense
Current tax
675.00
Share Profile: The shares of NBVL with a face
value of Rs.2 and are traded on the BSE and
NSE under the B1 segment. Its share price
touched a 52-week high of Rs.304 and a low of
Rs.83. At its current market price of Rs.286 it
has a market capitalization of Rs.2077.23 cr.
310.00
1700.00
Deferred tax
13.75
125.00
(30.54)
MAT Cr entitlement
87.00
(300.00)
(1130.00)
FBT
7.00
7.00
29.00
Net Tax
782.75
142.00
568.46
Net Profit
5216.75
2613.19
Shareholding Pattern: As on 30
th
September
2007, the promoter holding in the company is
to the tune of 43.56% while the balance 56.44%
is held by non-corporate promoters and the Indian public. A large number of mutual funds like Birla Mutual Fund, Tata
Mutual Fund, Sundaram Fund, Sahara Mutual Fund, UTI, PRU ICICI etc have added the company's shares to their
various schemes.
14045.70
Paid up equity Rs.2
1452.61
1335.75
1353.99
Res Ex Rev Reserv
40442.34
Basic EPS (Rs)
7.63
3.91
21.04
Diluted EPS (Rs)
7.03
3.91
20.96
Dividends: The company has a liberal distribution policy as can be seen from its dividend payouts.
FY07 - 200%, FY06 - 100%, FY05 - 100%, FY04 - 60%, FY03 - 30%, FY02 - 18%.
Prospects: The global production of ferro alloys is concentrated in four key countries: China, Ukraine, South Africa and
India. Internationally, Silico Manganese is largely consumed by China, Japan, Ukraine and India. U.K has shown a drastic
drop in consumption and the U.S. is gradually switching to Silico Manganese. India's per capita consumption of steel is
perceptibly lower than that in China and other emerging markets giving rise to a good demand potential as its
Stainless Steel consumption. The ferro alloys industry can, therefore, look for higher demand going forward.
Power generation is critical to the infrastructure of a country. India has one of the lowest electricity consumption levels in
the world. Despite generation capacity growing almost 100 fold since 1947, supply has continuously trailed behind
demand with an average gap of 8%. The total power generation capacity of India was 146,908 MW at the end of October
2006. The estimated capacity addition during the 11th Five Year Plan is 67.68 GW.
The government has announced the National Electricity Policy which aims at accelerated development of the power
sector to provide electricity to all areas.
India is the largest sugar consuming nation and is the second largest producer. Recently, the government has fully lifted
the ban on sugar exports and has allowed mills to export sugar. Further, India has already stipulated mandatory mixing
of 5% Ethanol in 10 states with motor fuels so as to reduce import dependency. Bio-fuel sector is receiving a lot of
attention and is set to emerge as one of the principal industries in the near future.
Infrastructure encompasses highways, ports and urban transport which are considered the thrust areas of development
by the Government at the Centre as well as States. The primary objective of achieving double digit growth in GDP is
incumbent upon high degree of infrastructure growth in the country in all these spheres.
Sensing an opportunity in the emerging infrastructure sectors, NBVL was quick to respond to the situation and forayed
into infrastructure sector by forming a consortium with Malaxmi group which should augur well for the overall growth
of the company.
8
Conclusion: NBVL is a well diversified company with interests in Ferro Alloys, Power, Sugar, Bio Fuels and
infrastructure. The company is also recipient of several awards like Excellence in Energy Management 2007 from CII,
Pollution control excellent award 2007 for ferro alloy and Power Plants. Furthermore, in view of the booming economy
and envisaged higher GDP growth, the prospects for the company look extremely bright.
At its current market price of Rs.286, the share price is discounted less than 10 times against the industry average P/E
multiple of 16. The company is operating in key growth areas of power, bio- fuels, infrastructure and steel. Further, in
view of its captive power generation, the company should report better bottomlines in days to come. The share is a plum
pick for decent appreciation in the medium to long term.
Sensex gains over 1000 points
MARKET REVIEW
By Ashok D. Singh
The market surged ahead of the Q3FY08 earnings reporting season. Strong global cues also boosted the market sentiment.
Stronger-than-expected US consumer spending calmed fears about the world's top economy heading into a recession. The
market also cheered a comfortable victory for the BJP in the Gujarat state election. The market got a further boost from
reports that the government has allowed all trusts to invest in securities, including shares and bonds of listed companies.
The Sensex gained in 3 out of 4 trading sessions in the week. The Sensex surged 1,044.38 points or 5.45% to 20,206.95 for
the week. The NSE Nifty jumped 313.2 points or 5.43% to 6,079.70.
The BSE Mid-Cap index rose 549.03 points or 6.08% to 9,574.57. The BSE Small-Cap index surged 1,087.97 points or 9.2%
to 12,901.29. It hit an all time high of 12,909.82 on Friday, 28 December 2007.
The BJP won the Gujarat elections on 23 December 2007 bagging 117 of the 182 seats. The Congress party bagged only 59
seats, which means a setback to its plans to call an early national election.
The third, and probably the final, round of negotiations for India-specific safeguards with the International Atomic
Energy Agency is expected to take place in Vienna early January 2008.
India's wholesale price index rose 3.45% in the 12 months to 15 December 2007, lower than the previous week's rise of
3.65%, government data showed on Friday, 28 December 2007. The annual inflation rate was 5.73% during the
corresponding week of the previous year. The wholesale price index is more closely watched than the consumer price
index, which is published monthly, because it covers a higher number of products and is published weekly.
The infrastructure sector grew 4.5% in October 2007 over 9.9% in October 2006. The six key infrastructure industries
comprising cement, crude, refining, coal, electricity and steel rose grew by 6.2% in the April-October 2007 compared to
8.9% in April-October 2006. Infrastructure growth data for September 2007 was revised downwards to 5.5%.
On 26 December 2007, the government approved spectrum review committee's recommendation of allocating additional
frequency to existing GSM operators based on the Telecom Regulatory Authority of India's subscriber linked formula and
in multiples of 1 MHz. The GSM operators were getting additional spectrum in multiples of 2.4-2.8 MHz and lowering it
to 1 MHz would hit the operators as this would mean additional capital expenditure for them.
The market regulator, Securities & Exchange Board of India, on Thursday, 27 December 2007, proposed to clear mutual
funds products on a fast-track basis. To begin with, fixed maturity plans with closed ended income schemes can be
offered on a fast track basis. Under the
proposal for fast-track clearance, a fund house
can file a final offer document with the
regulator along with compliance certificates
and fees. After the filing, the regulator will
confirm the receipt of the documents and the
fund house can offer the scheme to investors.
The SEBI on Thursday, 27 December 2007,
gave nod to BSE and NSE for launch of mini
derivative (futures & options) contract on BSE
Sensex and NSE Nifty respectively. The mini
derivative contract on Sensex and Nifty will
have a minimum contract size of Rs.1 lakh at
the time of its introduction in the market.
According to a report by the Confederation of
Indian Industry (CII) and KPMG 'India
Energy Inc. – Emerging Opportunities &
Challenges', released on 26 December 2007,
India's power and upstream energy sectors
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need investments to the tune of $120–150 billion over the next five years.
FIIs were net buyers of Rs.3,494.20 cr. in equities till 26 December 2007. They had sold equities worth Rs.5,849.90 cr. in
November 2007 after heavy purchases in September 2007 and October 2007.
The Sensex rose 691.55 points or 3.61% to 19,854.12 on Monday, 24 December 2007. Bharti Airtel spurted. Reliance
Industries edged higher. Reliance Energy hit an all time high. The market breadth was strong.
The 30-share Sensex jumped 338.40 points or 1.70% to 20,192.52 on Wednesday, 26 December 2007. The market surged led
by a rally in index heavyweight Reliance Industries.
The 30-share Sensex ended up 24.20 points or 0.12% to 20,216.72 on Thursday, 27 December 2007. The market swayed
between gains and losses ahead of expiry of December 2007 derivative contracts. The market breadth was strong. Reliance
Industries declined. ICICI Bank moved up. Consumer durables, metal and PSU stocks were in demand. Auto and IT
stocks declined.
The 30-share Sensex declined 9.77 points or 0.05% to 20,206.95 on Friday 28 December 2007. The market ended flat on that
day largely shrugging off geopolitical concerns arising from Pakistan's opposition party leader Benazir Bhutto's
assassination in nuclear-armed Pakistan. Bhutto was killed on Thursday, 27 December 2007, at a rally in Rawalpindi,
raising fears of instability in Pakistan.
ONGC gained 3.01% to Rs.1,226.75, on reports it would raise $20 billion to buy stakes in major oil and gas properties
overseas. ONGC is expected to finalize agreements in Turkmenistan, Iran, Latin America and West Africa, reports
suggest.
State Bank of India (SBI) advanced 5.26% to Rs.2,384.45 on reports that its board of directors will meet on 25 January 2008
to consider the merger of its six associate banks with itself. As per reports, the respective boards of its associate banks are
expected to give an in-principle nod to the merger. These associates include the listed banks - State Bank of Travancore,
State Bank of Mysore, State Bank of Bikaner and Jaipur and unlisted banks State Bank of Hyderabad, State Bank of Indore,
and State Bank of Patiala.
The Sensex gained 1,044.38 points to close at 20,206.95 last week. Geopolitical situation in South Asia could weigh down
the sentiments on the market in the coming week after former Pakistani Prime Minister Benazir Bhutto's assassination on
Thursday, 27 December 2007. Stock markets around the world weakened and oil prices rose after the assassination in
nuclear-armed Pakistan increased geopolitical uncertainties with investors shifting money into safe-haven assets such as
gold and bonds. However, the Indian market ended flat on Friday, 28 December 2007, shrugging off the geopolitical
concerns.
Rising oil prices can also dampen the market sentiments as it is nearing $100 mark. Oil rose for the fifth day to $97 a barrel
on Friday after US crude stocks fell more sharply than expected and geopolitical tensions mounted in Pakistan and
northern Iraq. Also US government data showed US crude oil stockpiles fell to their lowest level since January 2005 last
week.
Stock specific activity may rule the roost based on expectations regarding Q3FY08 results of the companies. IT bellwether
Infosys Technologies will announce results on 11 January 2007.
10
2008 to be even better
MARKET
By G. S. Roongta
To get a proper perspective of the market last week, it is important to see it in relation to the movements in the earlier
week (previous week) ended Thursday, 20
th
December 2007. That was perhaps the most disappointing week as it took a
toll of 868.26 points on the BSE Sensex at 19,162.57 and a loss of 281.20 points on the CNX Nifty at 5,766.50. Having
experienced such a massive fall in the previous week, the indices bounced back sharply last week ending Friday, 28
th
December 2007 with the same strength and vigour. The other similarity between the last two weeks was the loss of one
trading day on account of Bakri Eid in the previous week and on account of Christmas last week.
The bullish trigger, however, emerged on SEBI's decision to allow to short-selling by institutional investors, which is
denied to them till now. Thus, institutional investors will be at par with individuals so far as short-selling
is concerned. This news was greeted by market participants on the opening day itself i.e. Monday, 24
th
December 2007, when the Sensex opened with a gap of nearly 250 points and kept on rising throughout
the day without bothering to look back even for a while and hit a high of 19,879 before closing at
19,854.12. The Sensex had thus gained 691 points that day whereas the CNX Nifty had added 218.60
points at 5,985.10. This bullish sentiment continued for the rest of the week despite the intervening
market holiday on Tuesday, 25
th
December 2007.
G.S. Roongta
The market gained nearly 1000 points on the Sensex till Thursday, 27
th
December 2007 and appeared
well-positioned to hit its recent high of 20,498.11 that it had made on 13
th
December 2007. Thursday was also the
settlement day for the F&O transactions for December 2007. Since over 90% outstanding positions were rolled over to
January 2008, it indicates that the sentiment is positive and that the market is likely to remain bullish.
Readers may recall that I had firmly stated about the bullish trend being 'yet alive' in my column last week despite the
sharp fall of 1300 points in the earlier week when other print media analysts were busy locating the next bottom or the
nearest support level after that fall. The indices had already drifted beyond the bull market trend and without any
negative news mainly on account of profit booking at higher levels. But any analyst who took a balanced view of the
market would have similarly concluded that there was no cause for worry and supported my summary: 'The long-term
bullish trend is yet alive and there is no cause for worry for long-term investors. Short-term traders, however, will suffer
on account of occasional liquidation' as printed last week.
It is, therefore, heartening to note that the market recovered more than what it lost and is poised for making a new high as
it is already gained 1044 points during the week ended 28
th
December 2007. From this week onwards and the next, the Q3
results will start pouring in, which could act as a trigger for the markets. The results are expected to be better if the tax
payment made by the top 10 corporates is any fair indication. They reflect the super performance of India Inc. and the
results may even be mind-boggling in some cases.
For the third quarterly installments of tax payments, ONGC paid Rs.6,213 cr. followed by SBI at Rs.2,645 cr., SAIL at
Rs.2,480 cr., RIL at Rs.1,989 cr., NTPC at Rs,1,322 cr., Tata Steel at Rs.1315 cr., BHEL at Rs.1240 cr. and ICICI Bank as the
10
th
highest tax payer at Rs.1200 cr. Such Advance Tax payments are just mind boggling. Just think bout their pre-tax
profits figures, which will be nothing short of stunning.
Besides, the Finance Minister has also hinted a couple of days back that the Direct Tax collection this time has exceeded
not only the target figure but also exceeded the Indirect Tax collection. As a result, there is a case for reduction of tax rates
in the forthcoming Union Budget. This is really very heartening and speaks well of our economy on enlarged volumes.
The stock market can only flare up further if the tax rates are lowered.
Another good news that will have an even more far reaching impact is about our indices. Till now, global indices were
influenced by the Dow Jones of NYSE or the Nikkei of Japan or the Hand Seng of Hong Kong or the Singapore Strait
Times Index. But now, they are reported to be following the Indian stock markets. If this is true, then one can discard any
pessimistic view about the Indian stock markets and instead watch them achieve dizzy heights by end 2008. In a bullish
market, if you buy any stock at any rate on any day you are likely to witness higher prices of the same stock even if it
declines for sometime after your purchase.
In this context, I am inclined to pen a few lines of one such stock viz. Shri Dinesh Mills Ltd. (SDML).
This scrip has been one of my favourites for over two decades and I have recommended it on several occasions and every
time investors find a new higher price or witness a new high post recommendation.
SDML is among the rarest of stocks whose face value of the share is still Rs.100 paid-up. Thus, if we sub-divide its market
price to Re.1 paid-up, as being proposed by SEBI, one will find that this cash rich stock is available at a mere Rs.20 or
Rs.21!
Let us review its fundamental strength based on its financial background:
A. Shareholders Funds
(1) Equity Capital – Rs.527.75 lakh (5,27,750 x Rs.100 paid-up)
(2) Reserves & Surplus – Rs.5098.47 lakh
(3) Investments – Rs.1337.63 lakh (the market price of which is much more)
B. On the other side, the company has loan funds not exceeding Rs.30 cr., which is so small looking to its net capital
assets of Rs.5990.82 lakh, which is just double of the loan taken. In addition, it has current assets of Rs.6061 lakh.
Taken together, the assets are more than four fold.
C. On the performance side, the company has performed exceedingly well to report Rs.13.40 cr. profit before
taxation despite being in the textile sector.
D. Its EPS is good at Rs.162.
E. Book value is also over Rs.1000.
The market price of SDML had hit a high of Rs.3250 a few days ago and is currently available at Rs.2337, which is Rs.900
cheaper against the bull market top, which is always achievable anytime.
According to me, the SDML stock price will zoom still higher when the share will be split into Rs.10 or Re.1as per SEBI
thinking of all listed stocks to be Re.1 paid up value.
The company is situated in Vadodara and is 75 years old. It must have enough land bank, whose value when it comes in
the limelight, will send the stock flaring beyond Rs.5000 for Rs.100 paid-up or Rs.500 for Rs.10 paid-up while Rs.50 for
Re.1 paid-up might prove to be a throw away price whenever it occurs.
Those who have this stock in their portfolio will rewarded handsomely.
REVIEW
11
Welcome New Year 2008
Look out for potential winners
By Suryadevara
As volatile and prosperous 2007 passes on the baton to the New Year 2008, it is time to crystal gaze and plan for our
investments in 2008 for better returns. The outgoing year 2007 is leaves behind many milestones in the Indian capital
markets and leaves behind five prosperous years in succession. Will the New Year 2008, too, bring about any further
wealth creation or any unpleasant wealth erosion for the investors?
Before looking ahead, let us peep through the rear-view mirror for a moment. Earlier, the year 2003 was a dream year
during which the BSE Sensex recorded a growth of around 72.90%. Later in the highly volatile 2004, the Sensex recorded a
net gain of just 13.10%. In 2005, the Sensex grew by 42.30% and maintained it in recording a growth of above 46.70%.
Again the outgoing 2007, the Sensex has recorded a gain of 46.62% (uptil 27.12.2007).
What
next
after
five
successive prosperous years?
If we look at the apparent and
unfolding
positive
and
negative factors, we find that
the probably the party is still
on and the investors can
welcome the New Year with
reassuring hope. Is it a mere
New Year wish or a reasoned
perception? Let us look in
detail.
Look at the concerns first-In
the Indian context, bull
markets are always shorter in
duration while bear markets
last longer. Some fears of a
global recession over the next
few years still abound. Even
the prevailing global crude oil
prices of above 90 per barrel
present a picture of concern.
Political bickerings also do
pose some concerns as does
India's fiscal deficit. Terror
threats to prosperity is very
much a concern today and
political expediencies by the
ruling parties in the election
year ahead does not augur
well for the markets and the
economy.
Now
look
at
the
positive factors. The excellent
monsoon all over the country
is expected to revive the farm
sector. Regarding pre-election
political concerns, the recent
results from Gujarat (where
no electoral freebee were
announced) should compel a
pragmatic
development
vision to prevail over the
short-sighted,
populistic
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 7th December 2007 is also given.
The 3rd edition of 'Winners of 2008' will be released on 1st January 2008. Prospective
subscribers may please book in advance.
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
07/12/07
% Gain/Loss
on closing
Reliance Capital
606.40
2525.00
316.39
2399.00
295.61
Bhushan Steel
374.25
1625.00
334.20
1365.00
264.73
SAIL
89.20
292.40
227.80
274.20
207.40
Sesa Goa
1411.00
3941.00
179.31
3549.00
151.52
Jain Irrigation Syst
382.80
766.00
100.10
693.00
81.03
Champagne Indage
551.10
981.00
78.01
866.00
57.14
J.B.F.Industries
122.75
207.80
69.29
190.25
54.99
Subash Projects & Ma
251.85
421.00
67.16
388.25
54.16
Century Text.& Ind.
740.00
1174.00
58.65
1106.00
49.46
India Cements
235.10
322.80
37.30
300.40
27.78
Suashish Diamonds
209.35
269.00
28.49
260.40
24.38
N.C.L.Industries
59.95
82.90
38.28
72.50
20.93
Ashok Leyland
45.45
53.75
18.26
50.15
10.34
Elder Pharmaceutical
366.50
470.00
28.24
400.70
9.33
Kesoram Industries
546.95
634.85
16.07
582.65
6.53
Ipca Laboratories
593.75
794.00
33.73
618.85
4.23
Finolex Cables
100.42
109.98
9.52
100.05
-0.37
Mphasis
303.45
339.80
11.98
295.20
-2.72
Bombay Dyeing & Mfg.
766.00
803.00
4.83
725.00
-5.35
Lupin
612.05
755.00
23.36
567.95
-7.21
Classic Diamonds (I)
538.00
559.90
4.07
483.95
-10.05
Mahindra & Mahindra
906.00
1002.00
10.60
780.00
-13.91
Hinduja TMT
737.00
782.00
6.11
621.00
-15.74
Infosys Technologies
2241.00
2439.00
8.84
1718.00
-23.34
K.S.B. Pumps
676.00
679.00
0.44
472.15
-30.16
Sundaram Clayton
1394.00
1400.00
0.43
778.00
-44.19
Hexaware
Technologies
199.65
204.00
2.18
82.80
-58.53
12
measures often resorted to by the rulers. Even the finance minister and the visionary prime minister have expressed their
intention of strengthening the economy. Impressive foreign exchange reserves as well as the government's commitment
to reforms and its eagerness to strengthen the infrastructure emulating China are big positive factors. Even the
strengthening Rupee bodes well for the better inflows into India. The Rupee has appreciated by 11.06% against US Dollar,
by 9.97% against GBP, by 2.16% against the Euro, 7.52% against JPY, by 5.49% against the Swiss Franc, by 5.60% against
the Singapore Dollar while it depreciated marginally against CAD (5.455%) in 2007. The Rupee is expected to strengthen
further in the New Year as the US Dollar is expected to weaken further in the long run in view of the sub-prime problems
of U.S.A. A Rupee level of around Rs.30 per US Dollar within the next 5 years against the present rate of around Rs39.50
per dollar is predicted by K. P. Kamath of ICICI Bank. Some global financial giants, too, subscribe to a stronger Rupee.
After 17 consecutive federal interest rate hikes from 1% to 5.25%, the rate cut button was pressed by the US Federal Chief
with 3 successive rate cuts to bring down the fed rate to 4.25%.Some more rate cuts are imminent in 2008 as the sub-prime
problem is yet to be fully overcome. The Chinese currency may be in for another re-valuation and Chinese authorities are
also talking about cooling down the heated Chinese economy. These two events coupled with softening crude prices will
result in the Rupee turning stronger against the US Dollar.
Last year also proved that the impact of higher crude oil prices is no longer alarming in the light of the globalisation. Even
crude oil prices are likely to soften further after a couple of months. Coming to the fiscal deficit front, India's position is
far superior to that of USA.
Investors who fear to think of a bull phase beyond 5 years may please recollect more than a decade long bull phase in the
Nineties in U.S.A or similar prolonged bull phase in China in the recent past. Now, is it India's turn to record such a
prolonged bull phase? The answer is a resounding YES. Looking at our impressive GDP growth rate and the consistent
and sustainable growth rate of India Inc. India is bound to be attractive to global funds for some more time. That is why
some global funds are thinking of raising India dedicated funds in their home country even at this stage. Some analysts,
however, are of the opinion that the US problem will influence even Asian economies and even India cannot escape such
a fall out. However, historical developments have proved that funds flow from combat zones to growth zones. Such flow
of funds only resulted in the Japanese boom in the Eighties, USA boom in the Nineties and the subsequent boom in
China. India can record such an impressive boom phase now if it continues to improve its infrastructure sector. The
present moves of the government suggest such a continued focus on infra growth. That is why Haruhiko Kuroda
(President, Asian Development Bank) had expressed: "Infrastructure development in India could increase the rate of GDP
growth from the current level of 8-9% to about 10-11% as seen in the case of China".
Thus, the positives far outweigh the concerns and India can continue to be an investment destination for global funds for
some more time, their occasional profit-bookings notwithstanding (like that of August 2007 during which month they
withdrew heavily).
This analyst believes that the Sensex level beyond 24,500 can be achieved during 2008 and investors can witness really
exciting times ahead in the New Year. This does not mean that one should throw away caution to the winds and simply
rush headlong into equity markets unprepared. The New Year can be more volatile in the wake of global integration but it
can be equally prosperous, for those investors who plan their moves right.
Just let us review the performance of the scrips recommended last year (in my article 'Welcome New Year 2007') -
The BSE Sensex has recorded a growth of 46.62% till now. Against this broad market movement, 3 of the 32 scrips
recorded marginal losses while the rest 29 recorded impressive gains - (with Sagar Cements a gain of 244%,UTV Software
230%, GMR Infra 241%, Lanco Infra 216% leading the list). Even a passive investment of Rs.10,000 each in all these scrips
gave an average growth of 70.90% till now.
Active investors who booked profits at higher
levels to buy back at lower levels should have
recorded far more impressive growth
depending up on their individual moves.
Looking ahead in 2008 - Realty Infrastructure,
Power, Pharma, Banking & Financial sectors
can attract greater market fancy. Although the
Sensex growth in the New Year may not be as
impressive, Mid-Cap and Small-Cap shares
may record greater gains as the participation
of retail investors is bound to increase as the
markets gather further strength.
Some potential winners of these sectors are
given below.
Infrastructure - GMR Infra, Madhucon
Daily Fresh Buy
(for the busy investor)
PROFITRAK is pleased to announce the launch of 'Daily Fresh Buy' for
investors/ traders who are keen to focus and gain from a single stock every
trading day.
With just one daily recommendation selected from stocks in an uptrend,
you can now book profit the same day or carry over the trade if the target
is not met.
Our review over the next four days will provide new exit levels while the
stock is still in an uptrend.
This low risk, high return product for the busy investor is available for
subscription at Rs.2000 per month. For details contact
moneytimes@vsnl.com or phone on 022-22616970/ 22654805.
13
Projects, Maytas Infra etc. Even infrastructure sector dedicated schemes from the mutual funds can give decent gains for
the investors.
Power Sector - N.T.P.C, REL Energy, JP Hydro, BHEL etc. can be watched. Forthcoming Reliance Power is bound to
attract massive investors fancy. These two sectors are the most talked about for the New Year.
However, going by the potential, Indian pharma sector seems to be grossly under-estimated by most analysts.
Pharma Sector - Ranbaxy Lab, Nicolas Piramal, Zenotech Ltd., Divi's Lab Ltd., Jupiter Biosciences Ltd., Ind-Swift Ltd. etc.
can be watched. R&D strengths of Jupiter Biosciences will be more visible from this year onwards and domestic mutual
funds who have negligible exposure in this company against FIIs holding of around 37% equity, cannot ignore it for long.
Ind-Swift Ltd is expected to record surprising growth rates in the next few years.
Banking & Financial Services - SBI, Canara Bank, Bank of Baroda, ICICI, Reliance Capital, Religare Enterprises etc. can be
watched.
Scrip specific investments {irrespective of the sectors) too can give good returns in the New Year. Scrips like Arvind Mills,
JCT Ltd, MTNL can record decent gains from the current levels. Penny stocks like Maars Software, G V Films, Hindustan
Biosciences Ltd etc can give windfall gains.
Primary Market
The primary market is likely to see increased activity in the New Year. Investors can look forward to good public issues
like mega issue from R-ADAG group Reliance Power, Shanta Biotech. However as the primary market improves, even
poor quality papers will be dumped at high premiums on unsuspecting investors. Care must be exercised that past
mistakes are not repeated by subscribing to poor quality paper at exorbitant prices.
Choosing the right investments alone is not sufficient for ensuring good returns. Profit-booking will be more relevant in
the New Year especially after five prosperous years. Booking profits at higher levels to increase liquidity and buying
again at lower levels will ensure superior returns. It may be better if investors think of locking/preserving the gains
recorded over the past few years in the New Year. Although the India Story is expected to be fancied over the next few
years, investors who had invested 100% of their savings in equities may better think of crystallizing their gains by
diversifying into other classes of assets.
In these fast-changing times, investors who update their knowledge with the help of good and unbiased experts can
benefit from the emerging conditions. Buying into potential winners, booking profits at higher levels during market peaks
to re-enter at lower levels should be the approach in the New Year.
May the New Year 2008 bring pleasing prosperity and happiness to all the readers of Money Times.
FUND ANALYSIS
JM Financial MF: Average performance
By Devangi Bhuta
This week we review the performance of JM Financial's Mutual Fund schemes. The performance thus far has been
average although a few schemes appear to have some steam.
JM Equity Fund: The fund's
objective is to generate long
term capital growth and
appreciation through equities
in India. With a one year time
horizon in perspective (ending
November 2007 as per latest data available), the fund was overweight on the auto sector initially. But as per the latest fact-
sheet construction and software stocks hold sway. Although it had been dabbling in banking stocks, it has exited the
ICICI Bank counter. The portfolio churning rate appears to have been brought down, which augurs well for investors.
MUTUAL FUNDS
Scheme
1 year Returns (%)
Benchmark Returns (%)
JM Equity Fund
37.01
41.38
JM Basic Fund
97.14
110.78
JM Emerging Leader's Fund
62.28
49.17
JM Small & Mid Cap Fund ( 7 months)
47.54
52.39
JM HI FI Fund
42.66
45.73
JM Basic Fund: The primary objective of the Scheme was to provide capital appreciation to unit holders through
judicious deployment of the corpus of the Scheme in the Energy and Petrochemicals sectors. This fund has the mandate to
invest in Oil & Gas, Petrochemicals, Power Generation & Distribution and Electrical Equipment suppliers.
The stock has reduced its exposure to Industrial Capital Goods segment and continues to hold around 19% in this space at
present. Construction space also forms a substantial part of its portfolio. The churn ratio has been low with the current
one at 0.2320 times. It appears that this scheme has been an outperformer in its category and may continue to do well in
the medium term.
JM Emerging Leaders Fund: The primary investment objective of the scheme is to seek long term capital appreciation
from investment in a portfolio of stocks across all market capitalization range. The portfolio may include those companies
operating in emerging sectors of the economy or companies which exhibit potential to become leaders of tomorrow.
14
The scheme's portfolio has high exposure to consumer non-durables, construction materials and ferrous metals space. The
latest portfolio indicates Crest Animation Studio as the latest pick and it appears to be a good bet. The churn ratio is
0.0115 this month as no significant changes have been made. The prospects here appear promising although at a higher
risk.
JM Small & Mid-Cap Fund
The scheme got recently listed (on 30.04.07) and its objective is to provide capital appreciation by primarily investing in
small and mid cap stocks. Although it is too early to comment on the performance of the stock, it has delivered returns of
47.54% since inception. It is similar to the emerging leaders' fund in many ways as it is picking up stocks which appear to
be winners going ahead.
JM HI FI Fund: JM Housing, Infrastructure & Financial Services Fund
The scheme's objective is to generate medium to long term capital growth from a portfolio that is substantially constituted
of equity and equity related securities of companies that could benefit by the structural changes brought about by the
continuing liberalization in economic policies and investments by the Government in housing, infrastructure and
financial services sectors.
It has an extremely low churn rate for this month of 0.0002 times, which augurs well for the investors. In line with its
objective, it has very high exposure to the Construction space and the industrial capital goods sector. These stocks have
been the flavour of the market and are expected to do well in the near future.
Nevertheless, investors must understand the high risk involved in this kind of exposure. The fund has invested in
telecom, retail and airlines, which it has exited and appear to be a good move.
This space has better schemes focusing on these sectors and this fund does not inspire too much.
The other sector specific schemes of the JM fund house include JM Auto Sector Fund, JM Telecom Sector Fund, JM
Healthcare Sector Fund and JM Financial Services Sector Fund. The last one is innovative with 67% of its exposure in
banks while the rest is in financial services companies. The risk in all these schemes is extremely high due to the sector
focus and investors may look at them as a tool to diversify their cash portfolios only.
"Investors should stay invested as fundamentals of India are still intact"
MUTUAL FUNDS
- Mr. Pankaj Tibrewal, Fund Manager, Principal PNB Mutual Fund
Principal PNB Asset Management Company Private Limited is the investment manager for
Principal PNB Mutual Fund. It was the first private sector company to tie-up with the
Department of Postal Services to sell mutual funds through the postal network. In June 2003, it
acquired the right to manage the schemes of SUN F&C Mutual Fund. In May 2004, Punjab
National Bank and Vijaya Bank bought 30% and 5% respectively in Principal Asset
Management.
Pankaj Tibrewal, Fund Manager, Principal PNB Asset Management Company Private Limited,
joined Principal PNB AMC in 2003 as Credit Analyst. He has over four years experience in the
debt market. Prior to joining Principal PNB AMC, he had a short stint with Global Trade
Finance. He is a graduate in Commerce from St. Xavier's College, Kolkata, and holds a Masters
degree in Finance from Manchester University, U.K.
What are the changing trends as far as investing in MF is concerned?
Awareness has started growing in India. International and domestic fund houses are equal contributors for creating
awareness. There is a shift seen in investor class from institutional to retail on the equity side. Another change in the
industry is that fund houses are penetrating the market through innovative ways like distribution through banks. Fund
managers have strengthened public confidence by giving phenomenal returns. But if anyone says growth in the industry
has stopped, I don't agree. We see much room ahead for the mutual fund industry to grow especially when we see the US
MF industry, which is bigger than the bank deposits. Money raised by NFOs and invested has boosted the markets. With
the market doing well, fund houses are able to collect huge funds through NFOs. Now fund houses are moving to Tier-II
Tier-III cities addressing the population which has a long term view. The fixed income group is also participating in
mutual funds that want to taste equity.
At current levels, what is your advice to investors in terms of allocation of assets?
It depends upon the risk appetite of the investors. Retired investors would like to have regular income with very little
risk. Younger generation can be exposed to equity whereas a middle age individual will go for balanced fund.
But one can't time the markets or mutual funds. Many people have not participated in the market when the Sensex was at
14,000 as they were waiting for the fall to make an entry. But the market zoomed and has cleared every hurdle to reach
new peaks. A crash in the market is unacceptable, as the India growth story is still intact with GDP growing at 8%. Indian
companies are now looking at acquiring global companies. It underlines the strong capability and managerial skills that is
building up corporate India. Yes, one can stay invested as the long-term outlook remains positive.
15
To what extent is crude oil price fluctuation a concern?
Yes. It is a concern because one third of our import bill is because of oil. But when oil started moving from USD$65 to
USD$90 per barrel, people have stopped worrying about the rise. One of the reasons is the rupee appreciation, which is
acting as a cushion against this rise. That has alleviated the concern. Secondly, the price hikes have not been passed on to
the consumer although oil marketing companies are seeking a policy change. But for a country like ours, where the
government plays a vital role in controlling oil prices, it is not a major concern unless the rise is passed on to the general
public. But it is matter of serious concern where free pricing policy prevails.
What are the other concerns that disturb you in the near term?
The theory of 'decoupling of the Indian Economy' seems to be very popular these days. But if Indian companies keep
hunting for foreign strategic partners and still believing in the decoupling theory, I wouldn't buy it. India would grow
with a domestic story no doubt. But yes, if anything happens at the global level, India would be affected too. Another
concern is the psychological factor. Most participants are complacent about the market moves. 'If the market falls by 1000
points on a particular day, it will recover the next day. The third factor in the short term would be political issues. Almost
17 to 18 State elections are scheduled for 2008 and many populist moves are likely to be announced by the government
and many pending issues or economic reforms may be delayed further. All these political uncertainties disturb foreign
institutional investors. And lastly, valuations seem expensive. Some engineering companies are trading at 30-40x P/E to
future earnings.
Which are the sectors you are bullish on and bearish about?
Investors are paying a premium for capital goods and engineering companies. As in a bull market, people pay for vision
and not for earnings. If we expect that interest rates have peaked or just behind the peak, one can see a decline in interest
rates. This would have a positive effect on public sector banks and the financial sector. Also the volume growth story has
kicked in. Although some stocks seem to be stretched at present, they would balance out with their capex plan boosting
volumes next year. At our fund house, we are stock pickers and adopt a bottom-up approach, wherein we look at stocks
rather than sectors, e.g. many of our funds have IT & pharma stocks, which are doing well even after the sectoral
obscurity. On a sectoral basis, we don't take too much of a call.
What is the story behind the success of your ELSS Principal PNB Personal Tax Saver'?
The same funda of bottom-up picking approach. Our AUM in the scheme has grow from Rs.42 cr. in April 2007 to Rs.287
cr. in November 2007. Being a closed ended scheme, it provides leverage to fund mangers like us to pick stocks that are
undervalued at present but have the potential to spurt in two to three years.
What is the amount of cash you are sitting on?
No, we don't take cash calls aggressively. Investors park their money to participate in the equity market. Instead of sitting
on cash, we normally invest in large caps to reap the benefit of equity and get returns above the call rates.
What is your advice to retail investors?
Stay invested with three to five year perspective. You can reap good returns.
(Courtesy: India Infoline)
Ennore Coke Ltd.: Catch it young
STOCK PICK
By Suman Mukherjee
BSE Code: 512369
Face Value: 10
Market Price: Rs.50.95
Performance: Market outperformer
Market Cap: Rs.74 cr.
Sector: Metallurgical Coke (Met Coke) & Power
Stop loss for very short-term trade: Rs.41.9 & Rs.36
Target: Rs.150 in 600 days.
Introduction: Ennore Coke Ltd. (ECL) was incorporated as a public limited company on 25
th
February 1985 to carry out
the business of yarn, cloth, fibre and the business of leasing of moveable and immoveable properties. These activities
were carried out till 30
th
September 2005. Effective, 5
th
December 2005 the controlling interest of the company was taken
over by Shriram EPC Ltd, and Mrs. Vatsala Ranganathan. The new management discontinued these businesses and
entered into manufacturing met coke by purchasing the proposed Coke Project of EPCPL situated at Haldia, West Bengal.
The company actually purchased the business and not just the plant & machinery. The company has a making a met coke
factory and a power plant.
16
Shareholding Pattern: The promoters hold 61.64% while the investing public holds 38.36%. It is worth noting that
Shriram EPC Ltd. is one of the promoters of the company. Mrs. Vatsala Ranganathan who is the co-promoter of the
company is also the Whole Time Director of Shriram EPC Ltd.
Financials: Since the company's projects are at an advanced stage of implementation, there are no major revenue streams
at present. It reported some revenues by way of consultancy in making of project reports in the latest balance sheet. But
its revenues are expected to take off with a big-bang after the implementation of the projects which are nearing
completion.
Triggers:
•
The first phase of the met coke plant will be completed by January 2008. It will thus start earning revenues from
next month onwards. The company already has a list of ready-buyers for its products. The company has decided
to increase its proposed capacity of 100,000 TPA to 130,000 TPA, which is in an advanced stage of
implementation. This will be further increased to 300,000 TPA in the next 18 months.
•
The company's power projects are expected to be completed by March 2008. After that, the company will increase
the power generation capacity from 6 MW to 18 MW at Haldia, West Bengal within the next 18 months. It is
already in talks with the West Bengal State Electricity Board and with some other companies for the sale of
power. This will generate additional revenues for it from FY09 and will use some of the power for captive use.
•
It has a strong promoter in the form of Shriram EPC Ltd., which is one of the leading service providers of
integrated design, engineering, procurement, construction and project management services for renewable
energy projects, process and metallurgical plants and for municipal services sector projects throughout India. It
also manufactures 250 KW wind turbine generators (WTG).
•
Shriram EPC Ltd. is an ISO 9001:2000 certified company and has filed its Draft Red Herring Prospectus (DRHP)
with SEB) to enter the capital market with its IPO of equity shares. This will have a rub-off effect on the shares of
ECL.
•
Its production capacity, which is expected to be completed by January 2008, will be almost 22% of the capacity of
Gujarat NRE Coke Ltd. But this company has a very low equity base of only Rs.15.5 cr. and reserves of Rs.15.03
cr. as compared to Gujarat NRE Coke's equity capital of Rs.288.11 cr. without any reserves as per its latest balance
sheet of 30
th
September 2007. This points to its high growth potential and is a real catch at the CMP of Rs.50.95.
•
The company will import coke to be transformed into met coke and sold to user industries. Due to rupee
appreciation, the company has already made a killing in some of its overseas contracts that were fixed sometime
back. If the rupee further appreciates then the company will make further windfall gains as its products will be
mostly sold in the domestic market.
•
Due to high anti-dumping duty imposed following a written complaint by the Indian Metallurgical Coke
Manufacturer's Association (IMCOMA), there is virtually very little threat of cheap imports from Japan and other
Asian Countries.
•
ECL with its proposed sizeable manufacturing capacities is expected to cash in on the robust demand for met
coke from its user industries — soda-ash plants, furnaces of steel plants, cast iron and brass foundries. India has
largely been an importer of met coke from China and Japan. However, the shortage of met coke in these countries
due to captive consumption needs, has led to substantial increase in met coke prices of late. Exports from China
and Japan have been rationed over the past couple of months and its domestic price is expected to rise following
the demand from user industries.
•
While there is been a sharp increase in met coke prices, the price of prime coking coal — the raw material for met
coke, has not risen in proportion. Hence going forward, the margins of ECL are expected to be healthy.
•
ECL's recent capacity of 1,30,000 MT per annum is nothing compared to the demand in the domestic market.
Increasing its capacity to 3,00,000 TPA will, therefore, place it in better footing among its peer group and will give
it the required critical size. As no major domestic met coke capacity expansion is likely, the prices of its products
should remain firm.
•
ECL's 6 MW of power plant will be run by utilizing the waste heat generated from the process of manufacturing
met coke and the company could apply for Carbon Credits, which could be an additional source of revenue.
Conclusion: Considering all the factors listed above, investors with a risk appetite can consider buying ECL at the CMP
of Rs.50.95. Strong demand from the steel sector and steel capacity expansions could lead to higher earnings. At the CMP
of Rs.50.95, the scrip looks cheap considering its huge earning potential in the next 18 months. The scrip could more than
triple from the CMP in the next 500-600 days.
By Saarthi
STOCK WATCH
Indo Asian Fusegear Ltd. (Code: 532658) (Rs.155.05) manufactures wide range of electrical circuit protection equipment
including distribution boards, switch boards, switch panels, fuse switches, MCCBs, HRC Fuses, MCBs, RCDs, etc.
Besides, it's one of the largest manufacturers of CFLs and MCB's in India. To capitalize on the ongoing boom, it is
diversifying into the power sector business and will undertake distribution projects on behalf of state electricity boards,
corporations and utilities on a franchise basis. Meanwhile, it has forayed into the cables & wires manufacturing business
17
with a planned investment of Rs.100 cr. in phases. For the higher end segment, it is setting up a plant in Haridwar under a
joint venture with Simon Holding (Spain) for manufacturing home and building automation products for the first time in
India. On the other hand, it is putting up a facility in Saudi Arabia through a tie up with Saudi National Glass for
production of Compact Fluorescent Lamps (CFLs) and High Intensity Discharge Lamps (HID Lamps). On the back of not
so encouraging results for FY07 and H1FY08, its share is still available at 50% discount against its high of Rs.320 in May
2006. For FY08, it is expected to clock a turnover of Rs.300 cr. with PAT of Rs.18.50 cr., which works out to an EPS of Rs.12
on its equity of Rs.15.05 cr. However, the company has the potential to post an EPS of around Rs.18 for FY09. At a modest
discounting by 12 times against FY09 expected earnings its share price can move up to Rs.220 in the medium-term.
*****
Belonging to the renowned BC Jindal Group, Jindal Poly Films Ltd. (Code: 500227) (Rs.287.70) is India's largest
manufacturer of flexible packaging films. It makes polyester films (BOPET), polypropylene films (BOPP), metallised films
and coated films with in house ability to produce polyester chips for captive consumption. With its new unit at Silvassa
turning operational recently, the current production capacity of the company stands enhanced to BOPET (111000 TPA),
BOPP (90000 TPA), metallised film (40000 TPA), coating (18000 TPA) and polyester chips (70000 TPA). Importantly, JPL's
export of high value BOPET film to the European Union doesn't attract anti dumping duty although it is imposed on
other manufacturers in India. Moreover, it also has a foreign subsidiary company viz. Rexor SAS, a leading metallised
and coated film producer in France. The company has posted an excellent set of results for H1FY08 as sales grew by 35%
to Rs.613 cr. but PAT jumped up 180% to Rs.68 cr., which is more than the profit of Rs.65 cr. for entire FY07. Accordingly,
it is estimated to end FY08 with topline of Rs.1350 cr. and bottomline of Rs.130 cr. i.e. an EPS of Rs.46 on its equity of
Rs.28.10 cr. Notably, the company has massive reserves of Rs.760 cr. leading to a book value of Rs.280. Although the scrip
has seen a smart run up in the recent past, it still has a lot of steam left. Accumulate at sharp declines.
*****
Belonging to the BK Birla Group, Mangalam Cement Ltd. (Code: 502157) (Rs.180) is one of the leading cement
manufacturers with an installed capacity of Rs.1.8 million tonnes. Its 'Birla Uttam' brand is quite popular in northern
India as the company derives 35% revenue from UP, 30% from Rajasthan, 25% form Delhi and the balance form Haryana.
Due to the buoyancy in the market, the company is implementing a Rs.75 cr. capex plan that will enhance its production
capacity by 0.5 million tonnes thereby taking its total installed capacity to 2.3 million tonnes. The project is near
completion and is expected to commence shortly. For future growth, the company intends to set up another 1.5 - 2 million
tonnes plant either at the same location or at Chittor where the company has applied for a mining lease. More
importantly, the company has installed 17.5 MW captive thermal power plant, which started generating power only from
August 2007. Earlier, company was buying power from the grid at Rs.4.06 per unit. Thus, apart from preventing
production loss, the power plant is likely to result into saving of Rs.120 per tonne i.e. round about Rs.15 cr. per year.
Hence for FY08, it may report a turnover of Rs.525 cr. with PAT of Rs.95 cr. i.e. EPS of Rs.34 on its equity of Rs.28.25 cr.
Investors can buy the scrip at current levels with a price target of Rs.240 in the medium-term. Meanwhile, BIFR has
discharged the company from the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 and hence it
ceases to be a sick unit.
*****
As the demand for housing and for housing loan continues to rise due to strong economic growth, Can Fin Homes Ltd.
(Code: 511196) (Rs.80.75) is still a decent bet considering its cheap valuation. Apart from housing loans, it offers other
personal loans like mortgage loan, loan against rent receivable etc. To provide free insurance to its client along with
housing finance, it has tied-up with Aviva Life Insurance. It has a pan India presence with four zonal office and 43 branch
offices across the country. However, because of stiff competition the net interest margin of the company is under
pressure. For H1FY08, its revenue increased by 20% to Rs.109 cr. but net profit declined by 20% to Rs.12 cr. Thus it may
report total revenue of Rs.225 cr. and net earning of Rs.28 cr. i.e. EPS of Rs.14 on its equity of Rs.20.50 cr. As the company
has huge reserves of Rs.177 cr. i.e. book value of Rs.97, the share price can shoot up Rs.120 in a year's time. Moreover, to
consolidate its position, Canara Bank - the parent company, has come out with open offer to acquire nearly 21% stake at
Rs.78 per share. That means that the downfall is limited to that extent only.
By Kukku
FIFTY FIFTY
Investment Calls
* Kolkata-based Balmer Lawrie & Co. (Rs.644.10) manufactures industrial packaging, barrels and drums, LPG cylinders,
greases and lubricants, leather chemicals, functional additives and marine freight containers. It also undertakes tea
exports and trading, travel, tours, cargo and engineering services such as turnkey projects, energy-audit, consultancy and
freight-container repairs. It is the largest manufacturer of steel barrels in India and has a tie-up with Fuchs Petrolub,
Switzerland, to market industrial and automotive lubricants.
18
19
For H1FY08, the company's topline was up by 13% at Rs.710.25 cr. largely driven by the grease & lubricants business. Sale
of greases & lubricants rose by 45% to Rs.109.24 cr. representing 15% of its total sales. Sale of industrial packaging
increased by 13% to Rs.140.84 cr. representing 20% its total sales. Sale of Logistics infrastructure & services rose by 9% to
Rs.156.14 cr. representing 22% of its total sales. Travel & tours segment grew by 13% to Rs.273.62 cr. representing 38% of
its total sales.
For H1FY08, it earned a net profit of Rs.46 cr. on its equity of Rs.16.29 cr. yielding an attractive EPS of Rs.28.
It is the largest manufacturer of mild steel (MS) barrels and drums in India with a market share of around 60%. MS barrels
are an eco-friendly packaging medium for storing and transporting a variety of items including petroleum products,
lubricating oils, chemicals, food and pharmaceutical products, hazardous and waste materials.
The company has century-old expertise in Logistics infrastructure & services industry with a modern infrastructure to
provide solutions that address each client's critical requirement. The infrastructure include: container freight stations in
Chennai (40,000 sq. mt), Kolkata (37,000 sq. mt) and Mumbai (80,000 sq. mt.) with covered warehouses and its own critical
equipment.
Long-term outlook of the company is said to be encouraging. If H1FY08 profit is any indication, it is likely to post full
year EPS of above Rs.55. Investors can accumulate this stock between Rs.570 to Rs.600 level for good long-term growth.
* Khoday India (Rs.330.35) (formerly known as Khoday Distilleries), is engaged in the manufacture and distribution of
high quality Alcoholic Beverages in the domestic and overseas markets. The company also manufactures high quality
Glass bottles and Printing & writing papers through separate divisions. The company's portfolio includes some premium
brands like Red Knight Malt Whisky, Peter Scot Malt Whisky, Hercules XXX Rum, Honeywell Brandy, etc.
The gross sales turnover of the company in FY07 at Rs.168.10 cr. registered an increase of about Rs.13.63 cr. over FY06. It
made a turnaround and registered a profit after tax of Rs.10.03 cr. on the back of improved business performance and
effective cost control measures.
In the domestic market, Peter Scot sells about 85,000 cases (12 bottles of 650 ml each) per year and Red Knight sells about
2 lakh cases per year. The management expects to sell three times the current sales in another two years. An amount of
Rs.200 cr. has been earmarked for expanding the capacities of its five distilleries, one brewery as well as 11 bottling plants.
A vodka brand in the premium segment and a beer brand from Germany will also be launched soon. The Rs.200-cr.
investment will be spread over a period of two-three years.
The capacity of its brewery in Bangalore will be expanded to 5 lakh cases per year from 2 lakh cases.
It is also planning to export two of its whiskies, Peter Scot and Red Knight, to Italy, marking its foray into international
markets. In the beginning, it plans to export around eight containers of Red Knight Whisky and two containers of Peter
Scot Whisky every month. The revenues generated on each container of Red Knight would be around Euro 30,000-35,000
while the same for Peter Scot would be in the range of Euro 60,000-70,000. Besides this, the company is also scouting for a
bottling unit in Scotland.
The management plans to hire more professionals and hopes to capture a major share of the market.
The company has reported 51% higher sales of Rs.82 cr. in H1FY08 and a loss of Rs.3.1 cr. After providing Rs.3.1 cr. of
depreciations, which was higher by 41% over the previous corresponding period.
Besides having plan to increase sales to Rs.200 cr. in the core business, the company is said to have huge land bank of
around 2000 acres, the valuations of which is said to be very high.
Investors should add this stock in small quantities for good long-term growth.
Market Guidance
* English Indian Clay (Rs.1770.20) - In last week's write-up, there was an error in mentioning the following points:
H1FY08 profit may be read as Rs.9.46 cr. and not Rs.0.46 as wrongly mentioned.
The company also holds 29,55,173 shares a of Greaves Cotton, the cost price of which was Rs.45 cr. while the market value
today is Rs.114 cr. (in this line word Greaves Cotton was missing).
* Patel's Airtemp India (Rs.110.95) - The company is engaged in the manufacture and sale of extensive range of Heat
Exchangers such as Shell & Tube type, Finned tube type and Air cooled Heat Exchangers, Pressure Vessels, Air-
conditioning and Refrigeration equipments and Turnkey HVAC Projects in India and marketing of equipments even
outside India. We had earlier advised this stock around Rs.55/58 level in this column a few weeks back.
There are indications that the company is likely to get some good orders in the near future. The stock is attracting support
from good knowledgeable investors. Stay invested for good long term targets of Rs.175.
* After a long consolidation Nirlon Ltd. (Rs.137.65) is likely to see higher levels in the near future. Long-term target can
be much higher as per informed sources.
* DIC India's (Rs.227.10) recent rights issue at Rs.225 per share is said to have been oversubscribed. The merger of its
subsidiary is also over and future outlook is said to be encouraging. This is a safe stock to accumulate around Rs.220
level.
* Investors can take a small exposure in Nelco (Rs.155.40). The company is expected to do well in coming years.
* Some fund managers & high networth investors are very bullish on KCP Ltd.. Stay invested. This stock is under regular
recommendation in this column from Rs.95 onwards.
* Zenith Fibres (Rs.34.10) Q3 results likely to be better compared to Q1 and Q2. Investors can take exit at higher levels.
* Indiabulls Finance (Rs.981.15) is likely to see a further upside before the demerger date. The stock has already given
superb return to investors in the last one year. The stock was advised last year at Rs.400 levels before demerger of
Indiabulls Realty with regular updates in this column.
* Bombay Dyeing (Rs.748.65) - Stronger reports are pouring on its real estate business. The stock is likely to see better
valuations. Stay invested.
* There is talk that Surana Telecom (Rs.45) is entering into solar energy. Stock is likely to see higher levels.
* Madhucon Projects (Rs.620) has gone up by 2.6 times from Rs.243 level when it was strongly recommended in this
column about a few weeks back. Book part profits and switch to Khoday India /ECE Industries for good long term gains.
* Jenson & Nicholson (Rs.18.5) was advised around Rs.7/8 levels a few weeks back. Book 50% profits.
* Stronger reports are pouring in about the valuation of Rajasthan Spg. & Wvg. Mills (Rs.227). Stay invested for target
above Rs.300.
* First two quarter results of Savera Industries (Rs.104) are very encouraging. Stock is likely to see higher levels. Capital
is Rs.5.96 cr. Book value is Rs.36. Stay invested.
* Artefact Projects (Rs.167) has consolidated itself as a sizeable Infrastructure & Consultancy Services Company. Keep a
watch on this stock for investment on reactions.
* Rohit Ferro (Rs.102)/ Ferro Alloys (Rs.42) have given good breakout for a further upside. Sector is doing well. Stay
invested.
* Hind Constructions (Rs.221)/Hind Dorr Oliver (Rs.169) are yet to participate fully in this mid-cap rally of
infrastructure stocks. Stay invested. These are few of the best stocks in the sector for investment.
* Nuchem Ltd. (Rs.25) was recommended earlier in this column long back around Rs.8 level. It is attracting attention on
its real estate story. Book part profit around Rs.32/35 level.
Note: Investors should avoid buying if a stock flares up sharply. Above updates are provided for investors holding from
lower levels.
By V.H. Dave
EXPERT EYE
Power Grid Corporation of India Ltd. (PGCIL) (Code: 532898) (Rs.140) owns and operates the bulk of India's inter-state
power transmission assets and transmits about 45% of the power generated in the country. It has also developed a 19,000-
km fibre-optic telecom network using its overhead transmission infrastructure and leases bandwidth to all major telecom
players. The company, which raised Rs.2,984 cr. through its IPO in September 2007 at a price of Rs.52 per share, plans to
expand its telecom and consultancy business apart from its proposed foray into entertainment to shore up returns. PGCIL
is betting on new businesses to contribute a fifth of its total revenues over the next three years from less than 10% at
present.
It marked a stellar debut on the exchanges when it was listed on 5
th
October 2007 and the share closed at Rs.100.65 - a
premium of 94% to its issue price of Rs.52 on listing day and it climbed to Rs.167.45 on 19
th
November 2007.
During FY07, PGCIL posted a net profit of Rs.1229 cr. (Rs.1008 cr.) on revenue of Rs.3600 cr. (Rs.3145 cr.). During Q2FY08,
it reported a net profit of Rs.371 cr. on sales of Rs.1034 cr. During H1FY08, net profit amounted to Rs.823 cr. (Rs.457 cr.) on
sales of Rs.2009 cr. (Rs.1631 cr.).
Its equity capital is Rs.4208 cr. and with reserves of Rs.8837 cr., the book value of the share works out to Rs.31. Its gross
block is Rs.38,500 cr. as on 31
st
March 2007 and investments stood at Rs.1900 cr. The government holds 86.5% in its equity
capital, foreign holding is 4.5%, mutual fund/institutions hold 2% leaving 7% with the investing public.
Post-listing, the state-owned power transmission major aims to leverage its extensive fibre optic telecom network to
stream entertainment content in order to secure higher returns on investments, more than the regulated returns of 14%
that it gets from its core business of power transmission.
The move by the company to rent out its fibre optic infrastructure is in line with its plans to diversify into areas with high
returns and low incremental costs. While the power transmission business generates stable 14% return on equity, the
entertainment business has the potential to rake in higher returns through minimal investments on infrastructure.
PGCIL has presence in Afghanistan and neighbouring countries such as Nepal and Bhutan. It is currently negotiating to
pick up a stake in an asset rich Philippines transmission company. The company is also looking at African markets but its
priority will be for meeting the huge demand on the home turf.
The company is already investing heavily in its telecom business and plans to infuse up to Rs.2,000 cr. in expanding its
fibre-optic network over the next two years to nearly double its current size, which covers almost 60 cities. Meanwhile, as
per recent reports, PGCIL bagged a Rs.4,200 cr. transmission project from the Indian Government.
20
PGCIL has granted investment approval to Eastern Region System Strengthening Scheme - II at an estimated cost of
Rs.227.52 cr., which is scheduled to be commissioned within 30 months from the date of investment approval. The
Western Region System Strengthening Scheme - V transmission, at an estimated cost of Rs.478 cr., is scheduled to be
commissioned within 33 months and Northern Region System Strengthening Scheme – X, at an estimated cost of Rs.408
cr., is scheduled to be commissioned within 36 months.
PGCIL's joint venture firm will evacuate electricity from NTPC's Koldam hydel project as well as from National
Hydroelectric Power Corp's Parbati plant in Himachal Pradesh. It will lay about 300 kms of transmission lines from
Parbati to Koldam and Koldam to Ludhiana in Punjab. PGCIL will have a 26% equity holding in the joint venture while
Reliance Energy will have 74% stake.
PGCIL has chalked out a further Rs.55,000 cr. investment plan and a couple of FIIs are likely to participate in the
expansion. With this investment, PGCIL plans to increase it's inter regional capacity from 14,600 MW to about 37,000 MW
in the 11
th
Five-Year Plan. This includes 45 projects that are currently being implemented by it, which would increase its
transmission lines by 30,536 circuit km (ckm) and transformer capacity by 29420 MVA.
It is expected to spend Rs.6,500 cr. in Solapur, Maharashtra, over the next 12 months and is setting up Rs.430 cr. 400 KVA
substation at Navi Mumbai SEZ to be completed by 2011. It plans include Rs.14,544 cr. for 12,580 ckm inter-state
transmission network by 2008.
Unlike the power generation utilities, PGCIL was able to achieve its 10
th
Five-Year Plan physical target with lower outlay.
The power transmission industry is capital and technology intensive, which acts as an entry barrier, providing near
monopoly to existing players. Roughly, it takes about Rs.1 cr. of investment to set up a 1 ckm transmission line.
India currently has a power generation of 1,35,000 MW. The 11
th
Five-Year Plan has set a target of adding 78,577 MW of
power generation requiring an investment of Rs.10.3 trillion. Over the last decade, energy shortage in India hovered
around 8% and peak shortage at around 11-12%. This peak shortage shot up to 14.6% in the six months April - September
2007.
Based on the current going, PGCIL is likely to generate revenue of Rs.4500 cr. and register a net profit of Rs.1950 cr.
resulting in an EPS of Rs.4.6. During FY09, revenues are likely to advance by 22% to Rs.5490 cr. and net profit to Rs.2600
cr. when its EPS would go up to Rs.6.2 and
increase further to over Rs.10 in FY10.
Its investment is already lined up and
further plans of massive investment and
improved working capital management
give complete visibility to its revenue &
profitability in the coming years.
About one third of the total generating
capacity in India is transmitted through its
power grid system. PGCIL takes pride in
maintaining high transmission system
availability and is ranked amongst top six
transmission utilities in the world. It is the
only company through which investors will
be able to get direct exposure to the power
transmission sector. The share is traded at
Rs.140 at a forward P/E of 22.5 on its FY09
estimated EPS of Rs.6.2 and 14 on FY10
estimated EPS of Rs.10. Investment in this
share is likely to fetch a decent appreciation
of 40% in six months. The 52-week
high/low of the share has been Rs.167/85.
21
*****
Bharat Gears Ltd. (BGL) (Code: 505688)
(Rs.74.40) is one of the cheapest shares
available in the auto component space.
Incorporated on 23rd December 1971 and
belonging to the Apollo Tyres group, BGL
is India's largest gear manufacturer. Since
commencing
business
in
1974,
it
manufactures a wide range of gears for
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automotive trucks, tractors, buses and utility vehicles. BGL has invested sizeable amounts from time to time in
modernizing its plants.
BGL was founded by Raunaq Singh, who was instrumental in strengthening BGL to the leadership position in the gear
section. His son, Surinder P. Kanwar is now the chairman & managing director. BGL's modern manufacturing facilities
are located at Shilphata near Mumbai and Faridabad near Delhi.
BGL's clientele includes almost all the players in the automobile industry. In the tractors, trucks, buses and utility vehicle
segments they include Ashok Leyland, L&T John Deere, Escorts, Carraro India, Mahindra & Mahindra, Volvo, VST
Tillers, TAFE, Spicer India and Toyota Kirloskar. In the export market, its clients include Carraro Spa Italy, Funk
Manufacturing Company, ZF Hungary and Tech Development Inc. USA.
During FY07, BGL posted 20% increased sales of Rs.196 cr. and earned 124% higher net profit of Rs.8.7 cr. yielding an EPS
of Rs.11.2. During H1FY08, although sales have advanced by 31% to Rs.108 cr., net profit has soared by 873% to Rs.2.5 cr.
Its equity capital is Rs.7.8 cr. and with reserves of Rs.22.6 cr., the book value of its share works out to Rs.39. The value of
its gross block is a whopping Rs.180 cr. and the debt-equity ratio is 1.7:1.
The promoters hold 52.6% in its equity capital, Reliance Capital Trustee Company A/c Reliance Tax Saver ELSS Fund has
acquired 8.8%, LIC holds 3.5%, Brics Securities has taken a call of 1.3%, PCBs hold 7.6% leaving 26.2% with the investing
public.
With the domestic automobile industry growing at 13% and outsourcing of components at a high, the India 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 2005-07 to $10 billion (approximately Rs.40,000 cr.), while exports jumped by 30% to $1.8 billion
(approximately Rs.7,200 cr.).
Meanwhile, the domestic industry is set to grow manifold over the next few years as estimates point out that the Indian
auto components industry will invest about Rs.4,000 cr. towards ramping up capacities and acquiring newer technologies
every year over the next 10 years.
Utility vehicle majors like Telco, Maruti, Mahindra & Mahindra, Toyota, Ford, Hyundai, Honda Siel and General Motors
etc. have plans to introduce new models and BGL being the leading gear manufacturer will get good business from this
growing sector of the industry.
The icing on the cake would be the launch of Rs.1-lakh car and passenger van version of ACE. Additional business from
these two models will more than compensate for a slowdown in the business from motorcycles and passenger cars.
With customer satisfaction at the foundation of its entire operations, BGL is committed to provide the highest quality
products, the best customer service, and the safest operating conditions in the industry.
Its strong management quality, excellent outlook, sustained margins and bright prospects of the industry give its earning
visibility in the future. Traditionally, BGL fares better in the second half. During FY08, BGL is all set to post a net profit of
Rs.10 cr. on sales of Rs.250 cr., which would give an EPS of Rs.12.8. Going forward, its EPS is likely to go up to Rs.18 in
FY09.
The stock is available at Rs.71 at a P/E multiple of 5.5 on FY08E and 3.9 on FY09E EPS of Rs.18 and is a good buy with a
target price of Rs.100 in the medium-term. The 52-week high/low of the share has been Rs.85/47.
22
By Nayan Patel
TECHNO FUNDA
Avon Organics: A dark horse
BSE Code: 531541
Last Close: Rs.43.85
This Hyderabad based company has two factories one with
its DIKETENE division in Medak and with its Biotech
division at Sholapur. Last year, it suffered heavy losses in
the DIKETENE division due to increase in platinum and
crude oil prices and reduced domestic selling prices. But the
company stood because of its Biotech division.
Now it has created the most modern factory for biotech
products, which is capable of producing Statins. Because of
this and USFDA approval, export orders will pick up
sharply. Moreover, Arch Pharmalabs has acquired
reasonable stake in the company. Marketmen expect to get Arch Pharmalab to be listed at around Rs.450-500. It is certain
that under the leadership of the new management, Avon Organics will make a sharp turnaround. Arch has entered a
Review
- Alembic recommended in the last issue at Rs.96.70
touched Rs.106.
- Indsil Electronics recommended at Rs.90.55 touched
Rs.95.
- ROHL recommended at Rs.147.45 touched Rs.168.
- Lokesh Machines recommended at Rs.115 touched Rs.120
during the week.
- BDH Inds recommended at Rs.38 touched Rs.42.15.
- KEW recommended at Rs.36.65 touched Rs.46.55.
- Kirloskar Ferrous recommended at Rs.70.65 zoomed to
Rs.84.40 during the week.
- Sathvahana Ispat recommended at Rs.68.95 touched a
high of Rs.82.75 during the week.
parternership with DSM which is a part of Euro 9 billion group. Arch group will now produce DSM products at its plant
and DSM will provide access to global markets.
With all these developments, Avon is poised for leap in performance. Biotech Companies enjoy very high valuations and
this company, too, can go very high. They say sky is the limit!
Buy considering Rs.41 as strong support. Keep stop loss of Rs.38. On the upper side, it will go up to Rs.47.50. Above that,
it will go up to Rs.57, Rs.65 levels in coming days.
Cera Sanitaryware
BSE Code: 532443
Last Close: Rs.176.10
This Kadi, Gujarat based company is engaged in sanitaryware/ceramics industry. Company has only Rs.3.09 cr. equity
and promoters holds more then 54% stake in the company. Foreign shareholder holds 9.10% stake in company. The
company has posted fantastic results for H1FY08. Net profit jumped 21.10% to Rs4.42 cr. in H1FY08 and is expected to
touch Rs.10-12 cr. profit for this year.
The board of Cera Sanitaryware has decided to offer and allot 10,00,000 warrants to promoter at Rs.162 per share.
Company paid 22% last year.
Buy with stop loss of Rs.170. On the upper side, it will zoom to Rs.195, cross over will take it to Rs.210 level in coming
days.
Union Bank launches SMS banking services
MONEY FOLIO
Patience pays…
Since the day this column started, it has performed and our recommendations once again prove that slow & steady wins the
race.
(1) Pioneer Distilleries recommended in the issue No-43 dated 10-9-2007 at Rs.47.65 touched a high of Rs.125.
(2) Parsoli Corporation recommended in the issue No-44 dated 17-9-2007 at Rs.68 touched a high of Rs.186.
(3) Control Print recommended in the issue No-45 dated 24-9-2007 at Rs.72 touched a high of Rs.112.20.
(4) Marg Constructions recommended in the issue No-46 dated 1-10-2007 at Rs.156.85 touched a high of Rs.569.95. VBC Ferro
recommended at Rs.205.85 touched a high of Rs.483. Futura Polyester recommended at Rs.32.90 touched a high of Rs.46.
(5) Anjani Portland recommended in the issue No-47 dated 8-10-2007 at Rs.38 touched a high of Rs.56.55. NCL Industries
recommended at Rs.57 touched a high of Rs.82.40.
(6) KEW recommended in the issue No-48 dated 15-10-2007 at Rs.30 touched a high of Rs.46.55.
(7) Tanfac Industries recommended in the issue No-49 dated 29-10-2007 at Rs.50 touched a high of Rs.86. Ador Fontech
recommended at Rs.105.70 touched a high of Rs.134. Shivalik Bimetal recommended at Rs.21 touched a high of Rs.32.
(8) Garware Offshore recommended in the issue No-50 dated 22-10-2007 at Rs.185 touched a high of Rs.310. Kalindee Rail
recommended at Rs.324 touched a high of Rs.569.50.
(9) Carnation Nutra recommended in the issue No-51 dated 5-11-2007 at Rs.96 touched a high of Rs.131. Suraj Stainless
recommended at Rs.130 touched a high of Rs.235.
(10) Hydro S&S recommended in the issue No-52 dated 12-11-2007 at Rs.54 touched a high of Rs.68.
(11) Kulkarni Power recommended in the issue No-1 dated 19-11-2007 at Rs.189 touched a high of Rs.255. Ferro Alloys
recommended at Rs.32.70 touched a high of Rs.42.30.
(12) IOL Chemicals recommended in the issue No-2 dated 26-11-2007 at Rs.110 touched a high of Rs.204. Surana Corporation
recommended at Rs.79 touched a high of Rs.118.55.
(13) Hitachi Home recommended in the issue No-3 dated 3-12-2007 at Rs.145 touched a high of Rs.168. Indsil Electrosmelt
recommended at Rs.84 touched a high of Rs.96.
(14) Futura Polyester recommended in the issue No-4 dated 10-12-2007 at Rs.34.65 touched a high of Rs.46. Kisan Moulding
recommended at Rs.44.35 touched a high of Rs.69.45.
(15) IG Petrochemicals recommended in the issue No-5 dated 17-12-2007 at Rs.89.70 touched a high of Rs.106. LCC Info
recommended at Rs.1.80 touched a high of Rs.2.85.
Readers are requested to book reasonable profit in all the above shares and enjoy the New Year with this profit with your family
& friends.
Union Bank of India has crossed another milestone having covered its 1501
st
branch under its CBS network offering
anytime anywhere banking and is the second Public Sector Bank to cover more than 1500 branches under CBS. With this,
90% of the Bank's business is now covered under CBS.
The bank has also launched SMS banking which comprises:
* SMS Request on Pull – balances, mini statements, cheque status.
* Automatic Alerts – all credit/debit transactions through Branch, ATMs or Internet Banking, Balances dipping below
minimum levels, Fixed Deposit maturity dates, Loan instalments.
* Updates on interest rate changes, new products of the Bank.
23
Bank of India to raise equity through QIP
Bank of India is infusing capital by issuing 3,77,72,600 new equity shares through Qualified Institutional Placement (QIP).
This move to raise equity capital is planned to meet the increased capital requirements under Basel-II norms, which
internationally active banks have to meet by 31st March 2008. Enhanced capital is also required to take care of growth of
the Bank's loan book in the current year and also business expansion in the coming years.
A proposal to raise the bank's equity capital by issuing 3,77,72,600 new equity shares through QIP has been approved by
the bank's board at its meeting held on 27th December 2007.
The proposal involves dilution of the Government's holding in the Bank's shares by 5% from 69.47% to 64.47%. The
placement of the Bank's shares as above will be offered to Public Sector Enterprises and Mutual Funds and will be subject
to SEBI (DIP) guidelines. The additional capital will give the bank enhanced eligibility for raising Tier-II capital.
Shalibhadra Finance expands its wheeler finance business to rural areas
Shalibhadra Finance Ltd., engaged in two wheeler finance business catering to rural areas in Maharashtra & Gujarat, has
planned to expand its business to many other states with new business lines of financing white goods along with existing
business in rural areas. The Company is performing very well and has 3 years continuous dividend paying track record.
Presently, it has a network of 10 branches with over 15000 customers with exposure to the tune of over Rs.180 cr. and
100% recovery ratio.
UTI MF launches UTI- Long Term Advantage Fund-Series II
UTI Mutual Fund has launched UTI-Long Term Advantage Fund-Series II, which closes on March 19, 2008. Units can be
purchased only during the NFO period i.e. December 19, 2007 to March 19, 2008. It is a ten year close-ended Equity
Linked Savings Scheme with a redemption facility after an initial lock-in-period of three years from the date of allotment
at relevant redemption price.
The investment objective of the scheme is to provide medium to long term capital appreciation along with income tax
benefit. Investment made in the scheme will qualify for deduction from Gross Total Income up to Rs.1,00,000/- (along
with other prescribed investments) under section 80C of the Income Tax Act, 1961.
Ms. Swati Kulkarni, Fund Manager of the scheme said, "The broad investment strategy of the fund will be to invest in
equities of well managed, high quality companies that have the potential to grow at a reasonable rate in the long term.
The scheme will also invest in those emerging growth companies that have potential to offer appreciation greater than the
growth in the relevant stock market indices in the long term. The scheme aims to build and maintain a diversified
portfolio."
ICICI Prudential Life leads as a private life insurer in rural India
Marking its eight year of operations, ICICI Prudential Life Insurance announced its successful foray into rural India.
Taking a cue from its achievements in the segment while meeting the IRDA guidelines, the company has identified rural
as the next big opportunity and has established a strong business model to strengthen its presence further in rural India.
ICICI Prudential Life launched the Rural Business Channel and Rural Operations in February 2007 and has garnered over
Rs.100 cr. business since then. Over the last few months, it has developed a robust multi-channel distribution network
and created a strong service infrastructure to ensure customers are provided service experience at par with that in urban
India.
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.
24
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25
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Website: www.moneytimes.in
Money Times/ Profitrak /EasyTrade/ Investrak/ Early Bird Gains/ Top Trades
I wish to subscribe to:
Money Times (MT)
Profitrak Daily (PD)
Profitrak Weekly (PW)
Profitrak Fortnightly
Profitrak Short-Term Gains (PSG)
Profitrak F&O (PF&O)
Profitrak Power (PP)
Power of RS
Weekly (RS Weekly)
Daily Fresh Buy (DFB)
Investrak Smart Moves (ISM)
Top Trades (TT)
EasyTrade (ET)
Early Bird Gains (EBG)
Nifty Futures (NF)
Live Market Calls (LMC)
Delivery
based calls (DBC)
Winners and
a) Enclose demand draft/ pay order payable at par in Mumbai (No cheques please) favouring 'Time
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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