Feel the market!!

Global feeling has taken its hit on the stock market. Is this start of the downtrend? Is this the phase of consolidation ? No one knows.

But what one knows is "traders stay away from the market" and "investors don't touch the market when u don't what's next in the menu.."

BSE 30 was hit. 29 out of 30 in red. I fear what will be for tomorrow?

Guys if your stocks have got hit, there are two option short it or hold on becoz India's growth for future is positive.

TAs can not always be right. Everyone knows it. For few days we have been playing the time game.
I have heard a Suman, and many other TAs say that the market is in consolidation phase.
What we need is time. Don't look at the market for some time. Unless and until we don't see the conslidation we can not trade in bear.

I must accept that bloodbath, carnage, nose dives have taken a toll on my portfolio, but I have not lost hope and I will not. I don't care what some FII like Marc Faber says about sensex falling between 6000 and 9000. What we don't have and they have is a strong knowledge, strong liquidity and above all communication. Senior investors will be aware as how FII when they sell, they sell together and when they buy they together. This keeps them away from negative market.

For the new investors my only suggestion would be to see the market and not invest in it. Because unless and until we don't see the signal we don't see the positive breadth in the market.

Find me at stockpick_india@yahoogroups.com

$opportunity to the new investors!!

 The bloodbath & market carnage has given an opportunity to the new investors to make a fortune from the rock bottom.

On Monday I made a purchase of 2.84 lakhs and now the total is worth 3.1 lakhs.

There are stocks that have still not recovered and give an ample opportunity to negate your losses.

Here is a small list that I have made, that will add a spice into your stocks.

Company High  11-May-06    22-May-06     23-May-06
ESSAR OIL              80                  44                          52
MANALI PETRO    22                   13                         16
HIND.MOTORS      59                   37                         40
SATNAM OVER.    129                 87                          85
NAGAR.FERT           19                 13                          13
SURYA ROSHNI    114                 79                           83
ESCORTS                108                74                            80
STEEL AUTHOR      96                 67                           76
PRISM CEMENT      43               31                             33
BAJAJHIND.LT      552              410                         443

Bull run is on. Don't miss this opportunity to cash on it.

My Final list of Monday purchase

 
The stocks in the lists have performed very good in the market recovery. Other than Escort every script is looking good.

BHEL is a strond blue chip co. It is a buy at these levels.

There are other news on the way.

Cheers

Abdul Ahad

My Monday shopping list

  After burning the midnight oil for last two days, I have come up with this list. It was a tedious job but it will indeed fetch returns in the future. I have made the list in a sector wise distribution perspective.

I have made this list on a emerging business perspective, low P/E, PEG, and projected growth.
On Friday, my shopping list consisted of RIL & Infosys.



1. In the IT Sector
Infosys & Satyam. I have already taken a long position on infosys.


2. In auto sector,

Escort, Ashok Leyland & Hindustan Motor.


3. In Metals,

Hindalco


4. In Media,

Zee


5. In Cement

ACC & Grasim


6. In pharma,

Cipla

For the investors this may act like a guidance for making your own list.

Cheers

Abdul Ahad

For Traders

 
BUY IOC SUPPORT @ 493; RESISTANCE @ 544
BUY MUKAND LTD  SUPPORT @ 386; RESISTANCE @ 458
BUY WOCKHARDT LT SUPPORT @ 386; RESISTANCE @ 458

DERIVATIVES
BUY RELIANCE MAY FUT @ 1005; SL:978; TGT:1048

It is Buy zone

 Take this bear market oppertunity to enter cement and steel stocks. Buy into stooks that you were not able to enter becoz of excess valuation.
ACC -down by10%
Gujarat Ambuja Cement- down 8.6%
VSNL- down 12 %
Infosys -down by 5.44%

I have taken a long position in Infosys. There is a dividend coming up for infosys.

Cheers

Abdul Ahad

Metal Sector is looking attractive.

 Dear friends,

It is yet another bull run after the correction. Keep yourself on the toes. It is money making time.

I have taken positon in sterlite Ind. and Tisco. It is going to do well for the short term.
Nalco is yet another to hold on to.

P.S. Rose Zinc is on up up up. Its target is way far away. Invest in it.

Cheers

Abdul Ahad

And the Stock is Rose Zinc

 Rose Zinc is yet another story like the Hindustan Zinc.

It will touch 30 in a short term.
It is a small company, but they have the ablility to scale up 2-3 times.

Cheers

Abdul Ahad

Money tripled in 2 weeks

 There is a stock I am tracking for a month. It started at 4 and is now 15. It is running into upper freezefor last 1 week.

Later in the day I will reveal the stock name.

Cheers,

Abdul Ahad

Air Deccan issue was fixed at Rs 150-175 per share

 The price band for Air Deccan issue was fixed at Rs 150-175 per share. The face value is Rs 10 per share. The issue date is between May 18, 2006 and May 23, 2006.

SKP Research report on Air Deccan:

Company overview:

"Deccan Aviation Limited, a Bangalore based company operates Air Deccan, a low - cost commercial passenger airline and Deccan Aviation, a private helicopter and airplane chartering service in India. Air Deccan which began operations in Aug, 2003 was the first Indian airline to follow a no - frills, low - cost passenger airline business model. The business strategy focuses on offering low fares to attract cost conscious middle class and corporates, selecting new routes and reducing costs. Such a strategy seems to have worked well so far, as the airline has managed to corner a market share of 16% in three years of its operations. Deccan Aviation, India's largest private heli - charter company provides heli - services for company charters, tourism, medical evacuation, off-shore logistics etc."

Opportunities:

Strong economic growth:

"India is witnessing strong economic growth which will fuel the demand for air travel. The sector grew at 15.7 % CAGR from FY02 to FY05 on the back of robust growth in economy. Rising income levels and low air fares would attract people who travel by railways or other modes of road transport."

Emergence of low cost airlines:

"Low cost carriers like Air Deccan, Spice Jet, and Go Air has changed the Indian aviation landscape by offering low air fares and making air travel more affordable. More such service providers are expected to launch their operations in the future which would further increase air traffic in India."

Under-penetrated market:

"Despite the strong growth in air passenger traffic, the sector continues to be under - penetrated with an average Indian making 0.02 trips per annum against 2.02 trips in the US in FY05. Such a scenario leaves enough headroom for growth in air travel as it becomes more affordable for a larger population."

Growth in tourism:

"The tourism market has been growing at a significant pace for the last few years helped by government initiatives to promote the sector. Travel and tourism expenditure is expected to grow at a real rate of 8.8% from FY04 to FY14."

Concerns:

Competition:

"Airline companies are vying to capture a larger market share by offering rock bottom fares. This unhealthy competition would have a negative effect on the margins. Some low cost carriers have come to the market in the last few months and more are expected to launch their operations in the future which will further intensify the competition."

Loss Making:

"Deccan Aviation incurred a loss of Rs 35.2 crs and Rs 68 crs in FY05 and six months ended Sep 30, 2005 respectively. The management believes that the prospects of the company turning profitable would depend largely on successful implementation of the capex plans for Air Deccan and demand for low - cost flights."

Fluctuations in the prices of Aviation Turbine Fuel (ATF):

"Fuel costs accounted for 32% of the total costs in first half of FY06. ATF prices have fluctuated in the past due to the higher volatility in crude oil prices."

Reccomendation: Subscribe to the issue with a long term perspective.

"Deccan Aviation Ltd has been incurring losses since FY04 and has a negative EPS of 13.86 (annualised) based on H1 FY06 earnings. The prospects of the company turning profitable depends largely on successful implementation of the growth plans of Air Deccan and the demand for low - cost travel. Strong economic growth and under- penetrated market will drive the growth of the sector going forward. Air Deccan with its first mover advantage in the low - cost segment would be the major beneficiary of this growth."

Dr Reddy`s gained 1.29%

 Dr Reddy`s gained 1.29% to Rs 1,615 as the pharma major is introducing an European researched bronchodilator for the first time in India.


About 79,532 shares changed hands in the counter on BSE.

The stock has been rising steadily since January 2006. From Rs 1,033.25 on 16 January 2006, the stock touched Rs 1,431.85 on 29 April 2006, gaining 38% in four months. On 2 May 2006, the stock opened at Rs 1,450 to close at Rs 1,682, rising 17.4% in one day on the back of the Zocor ruling. The scrip later touched an intra-day high of Rs 1,754 on 8 May 2006. Later, the stock slipped and traded range bound.

Dr Reddy's Laboratories informed that the company has introduced for the first time in India, an European research product Doxofylline, a novel second-generation xanthine bronchodilator. The company has introduced this product under a license agreement from Kent Union, Hong Kong and marketing cooperation with Netherlands-based Pharma Company - Eurodrug Laboratories BV.

Doxofylline is introduced under the brand name 'Doxobid' and will be available in a special pack of 10's in 400 mg dosage. Doxobid is meant to treat patients suffering from asthma & COPD (Chronic Obstructive Pulmonary Disease).

In April, the US Food and Drug Administration granted final approval for the company's abbreviated new drug application (ANDA) for fexofenadine hydrochloride tablets 30 mg, 60 mg and 180 mg.

In early March 2006, Dr Reddy's Lab had completed the acquisition of 100 per cent of Betapharm Group, the fourth largest generic pharmaceuticals company based in Germany, for a total enterprise value of Euro 480 million in cash.

Earlier in February, the company and Argenta Discovery entered into an agreement for the joint development and commercialisation of a novel approach to the treatment of Chronic Obstructive Pulmonary Disease (COPD).

Recently, a federal court ruled that the US Food and Drug Administration (USFDA) had unfairly denied Israel-based Teva Pharmaceutical Industries' petition to exclusively market generic forms of Merck's $4 billion drug Zocor. In February, Dr Reddy's had struck a deal with US-based Merck to sell generic versions of Zocor, if some other company won a 180-day exclusivity deal after the patents expire. The patent on Zocor, or the generic simvastatin, expires on June 23. If the US FDA rules in favour of Teva, Dr Reddy's will be able to start selling a generic version along with the Israeli firm.

For Q3 December 2005, Dr Reddy`s reported 522.4% rise in net profit to Rs 27.01 crore (Rs 4.34 crore). Net sales grew 29.3% to Rs 473.96 crore (Rs 366.52 crore).

Buy Cement Stocks

 Today India cement, Guj Ambuja have done well. It is looking good gor the long term.

Sundaram Clayton

Cluster: Apple Green
Recommendation: Buy
Price target: Rs1,550
Current market price: Rs1,178

Br(e)aking new ground




Key points

Sundaram Clayton Ltd (SCL) would benefit from the buoyancy in the country's commercial vehicle (CV) industry. The shift from hydraulic brakes to air brakes expected in the CV industry augurs well for SCL.
WABCO, holding a 39.17% stake in SCL, is scouting for a low-cost producer of brakes in India and SCL would be the ideal choice. We expect SCL to become a major sourcing hub for WABCO and meet its global requirements of brakes and machined castings. Such an arrangement would increase SCL's business opportunities significantly.


We believe that the much-awaited demerger of SCL is about to take place. A demerger would enhance the business focus of both the divisions and lead to the unlocking of the value of the company's investments in group companies.
SCL has introduced anti-lock braking systems (ABSs) in India. It would get a boost from the government's move to make the use of ABS in CVs mandatory from January 2007. Also, the margins in ABSs are higher than that in the conventional braking systems which should further boost the company's margins.
The value of SCL's total investment in group companies works out to Rs1,930 per share. While computing SCL's value, we have assumed a 75% discount to the company's total investment. After adjusting for this, the SCL stock is currently trading at around 8.8x its stand-alone FY2008E earnings and around 7.1x its stand-alone FY2008E earnings before interest, depreciation, tax and amortisation (EBIDTA). We believe the valuations are attractive and hence recommend a Buy on SCL with a one-year price target of Rs1,550.

Long term Strategies

 Finolex Cables: Buy

Improved capacity utilisation, presence in high-margin business and strong financials add visibility to the earnings growth of Finolex Cables. At the current market price, the stock trades at 16 times its expected earnings for FY07. Investors can consider this exposure with a medium term perspective.


Finolex Cables is a maker of power cables that have applications across residential, industrial and commercial sectors. Electrical and communication cables are the major contributors to the company's revenue.

Although domestic demand for network solutions in the country continues to be robust, the requirements have undergone a change. In the light of tapering demand for jelly-filled telecom cables (JFTC), Finolex Cables has converted a part of the JFTC capacity into power cables, thus achieving better capacity utilisation. Any further conversion may help improve margins given the robust demand for power cables.

Finolex Cables enjoys a presence in high-end products such as automobile and battery cables, which command high margins.

Presence of fewer players gives an edge to the company to expand volumes in this premium segment. It has also initiated plans to launch other high-margin products such as switches, compact fluorescent lamps and circuit breakers. These products will complement the cable business and enable the company to be an integrated player in the electrical space.

Construction activity in the residential and commercial space is likely to ensure steady revenue flows for the company. A 60-per-cent increase in revenues and doubling of profits for the fourth-quarter ended March 2006 shows that the company has started capitalising on the realty boom.

Operating margins for Q4 increased by more than 200 basis points to 12.5 per cent. Surge in volumes coupled with ability to pass on price increases attributable to hike in raw material costs has enabled an expansion in margin. Copper, the key input, continues to demonstrate firm price trends; inability to pass further price hikes would dent OPMs and that remains a principal risk to our recommendation.


Bajaj Auto: Buy


Helped by the success of recent launches, Bajaj Auto continues to outperform the growth rate in the motorcycle segment. The cash chest and the controlling stake in the insurance business are major positives from an investment perspective. These factors make Bajaj Auto a top pick in the two-wheeler space.

The sustained growth in the demand for Pulsar and the success of the recently-launched Discover have helped Bajaj Auto record robust growth in motorcycle sales. After the launch of Discover (125CC engine), the company followed it up with another variant with a 110CC engine. This has resulted in an improvement in product mix in favour of higher value products, which would have a positive impact on profitability.


The entry-level Bajaj CT 100 and its variants continue to do well despite the competition from TVS StaR and Hero Honda CD-Deluxe.

The recovery in the three-wheeler segment is another positive owing to higher profitability associated with this product segment. Bajaj Auto continues to record robust growth in sales volume, registering a 36 per cent jump in motorcycles and a 21 per cent improvement in three-wheelers in April 2006.

The company has launched a new 100 CC model, Platina. The pricing and the features indicate that this model would deliver returns for Bajaj Auto. This could help the company garner market share in the 100-CC market where the CT 100 model is facing competition from TVS Motor's StaR City and Hero Honda's CD-Deluxe. Bajaj Auto is planning to launch a motorcycle sporting multi-point fuel injection (MPFI) technology. Though the concept may be in a nascent stage in India, this technology is widely accepted in the developed market.

The success of this proposed model would have an impact on the company's prospects. On balance, Bajaj Auto appears on track to a steady robust growth in motorcycle market. Long- term investors may include this stock in the portfolio.


Sintex Industries: Buy


Investors may consider taking fresh exposures in the Sintex Industries stock that trades at 23 times its FY-06 earnings. Though valuations appear stretched, growth opportunities in textiles, prefabricated buildings and fibre reinforced plastic tanks augur well for the medium term. The company plans to expand its prefabricated structures business in India and abroad. Sintex has earmarked about Rs 450 crore for an acquisition.

The textiles division, which contributes about 30 per cent of its revenues, is on a growth path. Sintex is among the larger manufacturers of structured fabrics and has a strong presence in the corduroys segment. Though the revenue growth appears to have slowed in the second half of FY-06 the division maintained a double-digit growth rate.

Its clientele include leading European brands. Its tie-up with Canclini Tessile of Italy, which has given it a foothold in the European market, is working in its favour. Sintex plans to tap opportunities in the domestic and international markets by increasing its loom capacity by 33 per cent to 24 million meters. It also plans to tap the women's apparel segment, which is a relatively un-exploited.

Finolex Cables: Buy

Improved capacity utilisation, presence in high-margin business and strong financials add visibility to the earnings growth of Finolex Cables. At the current market price, the stock trades at 16 times its expected earnings for FY07. Investors can consider this exposure with a medium term perspective.


Finolex Cables is a maker of power cables that have applications across residential, industrial and commercial sectors. Electrical and communication cables are the major contributors to the company's revenue.

Although domestic demand for network solutions in the country continues to be robust, the requirements have undergone a change. In the light of tapering demand for jelly-filled telecom cables (JFTC), Finolex Cables has converted a part of the JFTC capacity into power cables, thus achieving better capacity utilisation. Any further conversion may help improve margins given the robust demand for power cables.

Finolex Cables enjoys a presence in high-end products such as automobile and battery cables, which command high margins.

Presence of fewer players gives an edge to the company to expand volumes in this premium segment. It has also initiated plans to launch other high-margin products such as switches, compact fluorescent lamps and circuit breakers. These products will complement the cable business and enable the company to be an integrated player in the electrical space.

Construction activity in the residential and commercial space is likely to ensure steady revenue flows for the company. A 60-per-cent increase in revenues and doubling of profits for the fourth-quarter ended March 2006 shows that the company has started capitalising on the realty boom.

Operating margins for Q4 increased by more than 200 basis points to 12.5 per cent. Surge in volumes coupled with ability to pass on price increases attributable to hike in raw material costs has enabled an expansion in margin. Copper, the key input, continues to demonstrate firm price trends; inability to pass further price hikes would dent OPMs and that remains a principal risk to our recommendation.



Bajaj Auto: Buy



Helped by the success of recent launches, Bajaj Auto continues to outperform the growth rate in the motorcycle segment. The cash chest and the controlling stake in the insurance business are major positives from an investment perspective. These factors make Bajaj Auto a top pick in the two-wheeler space.

The sustained growth in the demand for Pulsar and the success of the recently-launched Discover have helped Bajaj Auto record robust growth in motorcycle sales. After the launch of Discover (125CC engine), the company followed it up with another variant with a 110CC engine. This has resulted in an improvement in product mix in favour of higher value products, which would have a positive impact on profitability.



The entry-level Bajaj CT 100 and its variants continue to do well despite the competition from TVS StaR and Hero Honda CD-Deluxe.

The recovery in the three-wheeler segment is another positive owing to higher profitability associated with this product segment. Bajaj Auto continues to record robust growth in sales volume, registering a 36 per cent jump in motorcycles and a 21 per cent improvement in three-wheelers in April 2006.

The company has launched a new 100 CC model, Platina. The pricing and the features indicate that this model would deliver returns for Bajaj Auto. This could help the company garner market share in the 100-CC market where the CT 100 model is facing competition from TVS Motor's StaR City and Hero Honda's CD-Deluxe. Bajaj Auto is planning to launch a motorcycle sporting multi-point fuel injection (MPFI) technology. Though the concept may be in a nascent stage in India, this technology is widely accepted in the developed market.

The success of this proposed model would have an impact on the company's prospects. On balance, Bajaj Auto appears on track to a steady robust growth in motorcycle market. Long- term investors may include this stock in the portfolio.



Sintex Industries: Buy



Investors may consider taking fresh exposures in the Sintex Industries stock that trades at 23 times its FY-06 earnings. Though valuations appear stretched, growth opportunities in textiles, prefabricated buildings and fibre reinforced plastic tanks augur well for the medium term. The company plans to expand its prefabricated structures business in India and abroad. Sintex has earmarked about Rs 450 crore for an acquisition.

The textiles division, which contributes about 30 per cent of its revenues, is on a growth path. Sintex is among the larger manufacturers of structured fabrics and has a strong presence in the corduroys segment. Though the revenue growth appears to have slowed in the second half of FY-06 the division maintained a double-digit growth rate.

Its clientele include leading European brands. Its tie-up with Canclini Tessile of Italy, which has given it a foothold in the European market, is working in its favour. Sintex plans to tap opportunities in the domestic and international markets by increasing its loom capacity by 33 per cent to 24 million meters. It also plans to tap the women's apparel segment, which is a relatively un-exploited.

15 May 2006 - Advice

Networth keeps a BUY on Dabur India

Kotak PCG keeps a BUY on Bharat Bijlee; Price target Rs.1800

Kotak PCG keeps a BUY on EID Parry


WATCH LIST

BOC INDIA, BATA INDIA, ERA CONSTRUCTION, ESAB INDIA, VALECHA ENG. RUCHI INFRASTRUCTURE, MC DOWELLS, WILLIAMSON MAGOR, SINTEX, RIIL, GM BREWARIES, SURYA ROSHNI, MC LEOD RUSSELS, DABUR, GAIL, FAG BEARING, SKF BEARING, S KUMARS, MALWA COTTON, GNFC, BOMBAY DYEING, CEAT, BONGAI GAON REG.........

Nahar Export Ltd

 Nahar Exports: Current Price Rs.100 - PE 9.3
Nahar Spinning : Current Price Rs.280- PE 31.1

Nahar Exports has decided to hive off Textile Business and merge it with Nahar Spinning. Both Companies are in for a Stock split. From Rs.10 to Rs.5.

After the hive off, All those who hold shares in Nahar Exports would receive Shares of Nahar Exports and Nahar Spinning as follows, AFTER STOCKSPLIT:

If you hold 100 Shares of Nahar Exports, you would receive 70 shares of Nahar Exports and 55 Shares of Nahar Spinning

Cost of 100 Shares of Nahar Exports- ~Rs.10,000
Assume that price of Nahar Exports remain at Rs.100 and Nahar Spinning at Rs.280. (Well both are rising and should go up further) After Stock Split, if price remains same as above, Nahar Export will be at Rs.50 and Nahar Spinning at Rs.140.

Assuming Prices remaining as above
You will get 70 shares of Rs. 5 Face Value Nahar Exports@~Rs.50 = 3500
You will get 55 shares of Rs.5 Face Value of Nahar Spinning @~140 =7700
Total= Rs.11200 at lowest

Reliance Communications with right moves

 Reliance Communications Ventures Ltd (RCoVL) is in the news for various reasons. The company will replace Tata Power in the Sensex, the 30 share benchmark index. RCoVL has also approved a proposal to sponsor a secondary market offering of Global/American Depository Receipts (GDR/ADRs) at a premium to the market price, for an amount upto $1 billion (approximately Rs 4,500 crore), in one or more tranches. As of now, the company has a market capitalisation of Rs 41,000 crore.

If one looks at the market capitalisation of Sensex companies, this figure is closer to the market capitalisation of Tata Motors and Larsen & Toubro which are in the range of Rs 35,000-37,000 crore. It would be the second telecom company that will be a part of the Sensex. Bharti Tele-Ventures, which has a market capitalisation of around Rs 79,000 crore ranks among the top 10 companies when seen in terms of market capitalisation. There are 18 companies in the Sensex that have a market capitalisation lower than RCoVL. Since its listing on March 6, 2006, the company has shown an appreciation of 17% and is traded at a current market price of Rs 340. The Sensex has appreciated by 15.30% during the same period. On the other hand, Tata Power which has a market capitalisation of Rs 11,100 crore has actually shown a fall by 2.44%. Says Ambareesh Baliga, of Karvy Stock Broking, "Specially when the market is bullish, the inclusion of RCoVL as a part of Sensex 30 scrips would have a positive impact on the company. There should be a further demand for the shares as those who are tracking the Sensex are bound to buy the scrip." RCoVL, the flagship company in the group, is the holding company of CDMA-based telecom company Reliance Infocomm Ltd, GSM-based telecom company Reliance Telecom Ltd, bandwidth company Flag Telecom Ltd and Reliance Communication Infrastructure Ltd. There are only three companies listed in the telecom sector on the Indian bourses. Out of the three Tata Teleservices focuses on just Maharashtra and Gujarat. So that leaves only Bharti Tele-Ventures and RCoVL with a Pan-India presence. Increase in FII investment limit from 26% to 74% will have a positive impact on the RCoVL stock. Investors will surely look at diversifying their holding in the telecom sector.
RCoVL has a market share of a little over 19%, compared to 22% of Bharti Tele-Ventures. Bharti had 17.4 million users at the end of January 2006, followed by RCoVL with 15.5 million. RCoVL is presently trading at a discount to Bharti Tele-Ventures. The reasons for which are lower ARPU and lower operating margins. The other reason being lack of information and disclosures in case of RCoVL as compared to Bharti Tele-Ventures due to its recent listing. But this is a short-term scenario and, eventually, more information will help the market to know more about the business of RCoVL. The company is in the business of volumes whereas Bharti operates at higher margins. For the quarter ended March 2006, the company has reported a 42% jump in net profit at Rs 440 crore, whereas the EBITDA stood at Rs 1,042 crore, a growth of 23%. The EBITDA margin of the wireless business expanded from 32% to 36%, led by record customer acquisitions, economies of scale, cost efficiencies and productivity gains. The broadband business achieved a revenue growth of 54%, and strong EBITDA margin expansion from 20% to 31% sequentially. The company has the total assets of nearly Rs 26,000 crore and net worth of Rs 11,742 crore. The company's wireless business has achieved the highest-ever acquisition of 3.2 million customers in a single quarter, with the total base crossing a record 20 million customers as of March 2006.The market is expecting the company to post an EPS of Rs 12 for the next year, which also indicates that the stock is available at around 28 times to its 2006-07 earnings.

UT Limited: In league with Caterpillar

BSE 526879, CMP Rs 133
Calcutta based small cap UT limited has been recently picked up as a preferred supplier by Caterpillar India. This supply arrangement with a US based transnational corporation is likely to propel UT’s fortunes in the coming years. Investors would recall that Caterpillar is one of the most profitable and largest US engineering corporation that builds heavy machinery used in mining, excavation, power generation and road building.
In recent years, Caterpillar India has shown aggressive growth plans buying out the CK Birla owned Hindustan Powerplus, and delisting the same. It has rapidly moved into capturing a large market share in the diesel power generation segment, front loaders, bull dozers, dumpers, fork lifts, cranes and site controlled elevators.
A complementary fit
UT Ltd (formerly Usha Telehoist) is one of the pioneers in the field of Hydraulics. It manufactures hydraulic equipments, hydraulic pumps, tipping cylinders, hydraulic and wire operated passenger lifts, and airport equipment. These find application in agriculture, mining, construction and heavy industrial segments. UT operates out of three manufacturing locations Kolkata, Sahibabad and Hosur-all cities in close proximity to the heavy engineering consumption areas.
Financials are getting better
In the nine months to December 2005, UT reported Revenues of Rs 63 crore, with after tax profits of Rs 1.8 crore. UT is likely to report FY06 Revenues of slightly over Rs 100 crore, with after tax profits of Rs 3 crore. Thus for the concluded financial the EPS would be Rs 5.
For FY07, with the orders already under its belt, UT is likely to report Revenues of nearly Rs 150 crore, with after tax profits of Rs 6 crore. Thus FY07 earnings per share could be in the region of Rs 10. The scrip could thus inch upto the Rs 200 mark in a year’s time from now giving a smart 50 per cent return on investments.
Concenterated Ownership
Out of the Rs 6 crore Equity, Promoter's own 47.52 per cent, New India Assurance and LIC own 19.90 per cent and PCB's own 9.90, leaving a small public float of 18 per cent.

Arvind Mills Limited

 Current Price: 100 ; Target Price: 143


In a strong turnaround from its BIFR days, Arvind
Mills has re-emerged in the reckoning of one of the
strongest denim players in the world today. Besides
ramping up capacity in its denim business, it has
also sought to get itself vertically integrated to
capitalise on the export opportunities in the post
quota regime. While volatility in the denim business
will undoubtedly continue, low cost production (lower
cost of power and cotton) and hedge from the
garment and branding businesses will stand the
company in good stead going forward.
Once the benefits of quota dismantling start filtering
in, we believe that integrated players like Arvind Mills
shall stand to yield the maximum benefit, as smaller
players will have very limited scope in the global
markets. We would therefore advise investors to

BUY the stock. The benefits of consolidated
operational synergies will yield the desirable returns
for investors in the longer term. At the current price
of Rs 101, the stock is trading at 7.4 times our
estimated FY08 consolidated earnings. We estimate
a 2-year target price of Rs 143 for the stock (CAGR
of 16.2%). However, the risk profile of the stock is
very high, which investors should bear in mind.

Dabur India

 


Dabur India, a leading food product company with huge products and has business and good exports too.
Dabur is in Business of Health Care, Baby Care, Hair Care, Oral Care & Digestives
We are very well aware of the Brands Of DABUR INDIA:
Amla Hair Oil
Binaca ToothPaste
Baby Olive Oil
Binaca
Chyawanprash
Dabur Balm
Glucose
Hajmola
Hingoli
Honey
Lal DantManjan
Lal Tel
Pudin Hara
Real Active
Red ToothPaste
Sat Isabgol
ShankhaPushpi
Vatika
Meswak
Babool
Many Others....

There is hardly any product which is not being used in your home. Dabur is doing an excellent business and has a great Brands in Market. So the future of the company is very safe.

The company has potential management, effective employees & creative top level employees. I have never met any salesman, franchisee who are unhappy with DABUR and nor any ANTI-Dabur customer and this is all enough for me to BUY Dabur

Arvind Mills

 It has crossed 100.

Above 100, we can expect 110, 115 in short term.

Capture real estate stocks!!!!!!

 It is time for the real estate stocks.

Guys it is time you do some research and find indirect real estate stocks.
For now

IndiaBULLs looks good. it is a HOLD.
I will give u a stock a potential stock in the evening. Watch out for this space

In other News

Houseview: BRICS PCG keeps BUY on Murudeshwar Ceramics; Target Rs.180

Houseview: BRICS PCG keeps HOLD on Triveni Engineering; target Rs.144

Houseview: BRICS PCG keeps BUY on Greenply Industries; target Rs.120

Houseview: Kotak PCG keeps Bank of India; price target Rs.162

Houseview: Kotak PCG keeps Mather & Platt Pumps; target price Rs.260

Houseview: BRICS PCG keeps SELL on Raymond; target price Rs.545

Houseview: First Global keeps OUTPERFORM on Gujarat Ambuja Cements

Houseview: BRICS PCG keeps BUY on Punj Lloyd; target price Rs.1,458

Enam Securities keeps NEUTRAL on Glenmark Pharma; target price Rs.380

Real estate companies to feed the bull for a new marathon

Once considered the bad boys of Dalal Street, the three Hs (Hotels, Home & Hospitals) are now calling the shots. Take real estate-it is estimated that in next four to six months, this sector alone will bring in over Rs 20,000 cr Initial Public Offer (IPO) into the market.

Says Prithvi Haldia, MD, Prime Data Base: "There is a big real estate boom happening all over the country. Land prices have appreciated in a big way in the last couple of years. Since there are few listed real estate companies in the stock market, this is a good opportunity for them to cash in on. In the stock market, the three Hs were once considered the bad boys because of the huge cash element involved. Now things have changed and they are one of the hottest sectors."

No other sector has raked in the kind of funds that's expected from this sector. Not even the IT sector during boom time.

Of the IPOs in the pipeline is one from the DLF Group, which is planning to raise almost Rs 13,000 cr from the Indian stock markets through an IPO. The Ansal API is looking at an IPO of Rs 2,000 cr, Parsvnath Developers Ltd is soon coming out with an issue of Rs 2,000 cr, Omaxe Group is looking at a Rs 3,000-cr issue, while Ahluwalia Contracts (India) Ltd is planning a Rs 300 to Rs 500 cr IPO. There are three more groups which are in the initial stages of their IPO planning.

Says Rothas Goel, CMD, Omaxe Group: "The growing Indian economy and the emphasis by the government on housing and infrastructure is giving the real estate sector a big boost. Various states are also liberalising policies to attract large developers to create new townships with the required infrastructure. To meet these needs, developers will need to raise a lot of capital."

Adds Pradeep Jain, chairman, Parsvnath Group : "This is a big step towards a new milestone. We are looking forward to complying with all the regulatory requirements to seek listing of our shares on the bourses and unlock the inherent value derived from booming real estate development."

Most realty groups are, at the moment, busy with their financial advisors figuring out when and how to bring out the public issue. Goldman Sachs is one of the investment bankers to the DLF issue, which is not evoking just domestic attention, but a lot of foreign interest too. If the DLF IPO manages to raise Rs 13,000 cr it will be the largest-ever fresh offering by any company.

Says Dr Davinder Gupta, MD, BNB Properties: "The frenzy in the real estate sector is high as returns currently exceed most other investment areas. Yields on commercial real estate across metros in India are higher than those of many global real estate markets and investors are now keen on sinking their teeth into a part of this pie."

Allaince Sec.

A good Stock to hold on to.

I have recommended to my friends at 28.
It currently 38.

Bsel Infra

recommended @ 52 currently 85

Cheers

Abdul Ahad

Rallis

 Hi,

Rallis is part of India`s Tata Group, the country`s
largest business conglomerate.

Rallis is the largest agro-business company and the
second largest seed producer in India.

This stock can prove to be a Stock Pick for Tomorrow
in Agrochemicals business. This is a good fundamental
agri stock. This can be a potential multibagger from
here on. This quater results are good and also
declared a divident of 40%.

In the month of Feb, they have done collaboration
with Nuziveedu Seeds for marketing its Bt cotton
hybrids. Rallis will market the hybrids in a special
packaging. The arrangement is likely to yield
additional revenue of Rs 20 crore.

Coming to the technicals :-

Its trading at CMP of 335. Its 52 week high - 450;
52 week low - 235. Recently this stock is under
consolidation, it may break out anytime. It has a
support at 300 levels. Its resistsance is at 340; once
it breaks that, then its going higher. In the long run
i expect it 500+. One can buy at 300 levels for
investment. Keep an eye on it. It may start moving
soon to my target ;) This is my 8th stock pick of
tomorrow, watch out for some action soon. All my
previous 7 stocks are doing pretty well.

Bonus/ Stock Split

 State Bank of Mysore plans stock split


by Stock Market India on 04/05/2006 4:53 AM


State Bank of Mysore proposes to increase its capital this year by at least Rs 500 crore and simultaneously carry out a stock split.


The equity raising was likely to be done either through a rights issue or through the initial public offering route, he added. The bank also proposed to have a stock split simultaneously.
[0] Comments Permalink Add Comment


DS Kulkarni - Right issue of equity shares


by Stock Market India on 03/05/2006 8:52 PM


DS Kulkarni Developers Ltd has informed BSE that the rights issue of 55,00,000 equity shares of Rs 10/- each (part of composite issue of 1,10,00,000 equity shares of Rs 10/- each) issued at a premium of Rs 100/- per share in the ratio of 1 new equity shares for every 2 existing shares held as on the record date i.e; March 21, 2006 of the Company was open from March 30, 2006 to April 29, 2006. This rights issue got subscribed and the management decided to close the subscription list at the end of the business hours / banking hours as on this date i.e. April 29, 2006.
 


Investment & Precision - Updates on Bonus issue


by Stock Market India on 03/05/2006 8:51 PM


With reference to the earlier announcement regarding recommendation of Bonus issue by the Board of Directors of the Company, Investment & Precision Castings Ltd has informed BSE that the ratio of Bonus issue should be read as 3:1 i.e., three equity shares of Rs 10/- each for every one equity share of Rs 10/- each held on the Company, and not 1:3 as intimated earlier.

[0] Comments Permalink Add Comment

Kalpataru Power - Allotment of Bonus shares


by Stock Market India on 03/05/2006 8:49 PM


Kalpataru Power Transmission Ltd has informed BSE that the Executive Committee of the Company has allotted 10861500 Equity Shares of Rs 10/- each as Bonus Shares in the ratio of 1:1 to the Equity Shareholders of the Company as on record date April 17, 2006.
 


KSL & Industries Board recommends Bonus issue


by Stock Market India on 02/05/2006 7:37 PM


KSL & Industries Ltd has informed BSE that the Board of Directors of the Company at its meeting held on May 02, 2006, inter alia, has recommended Bonus of 1 share for every 5 share held on the total paid-up equity share capital of Rs 318 million.
[0] Comments Permalink Add Comment


Gemini Communication Board to consider Stock Split


by Stock Market India on 02/05/2006 7:35 PM


Gemini Communication Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 09, 2006, inter alia, to consider the audited financial results for the full year ended March 31, 2006 and a stock split by sub dividing the equity shares of the Company. The stock split if approved, would be subject to the approval of the shareholders and completion of necessary formalities.
[0] Comments Permalink Add Comment


United Breweries Board approves stock split


by Stock Market India on 28/04/2006 1:10 PM


United Breweries Ltd has informed BSE that the Board of Directors of the Company at its meeting held on April 26, 2006, inter alia, has approved the sub division of 21,600,125 Equity shares of Rs 10/- each of the Company into Equity shares of Re 1/- each. The sub division is subject to the approval of the Members at the Extraordinary General Meeting (EGM) and will be effective from the date to be decided in due course. The EGM of the Members is proposed to be held on May 24, 2006 to consider the above business.
 


Atlas Copco Board recommends bonus issue


by Stock Market India on 28/04/2006 1:10 PM


Atlas Copco India Ltd has informed BSE that the Board of Directors of the Company at its meeting held on April 28, 2006, inter alia, has recommended, subject to the approval of the shareholders, a bonus issue in the ratio of 1:1.
[1] Comments Permalink Add Comment


Apollo Sindhoori Board to consider issue of bonus shares


by Stock Market India on 27/04/2006 11:47 PM


Apollo Sindhoori Capital Investments Ltd has informed BSE that the Board of Directors of the Company in its meeting to be held on May 03, 2006, inter alia, will also consider issue of bonus shares.
Apollo Sindhoori bounces on bonus issue proposal
 


United Breweries Board approves stock split


by Stock Market India on 27/04/2006 11:45 PM


United Breweries Ltd has informed BSE that the Board of Directors of the Company at its meeting held on April 26, 2006, inter alia, has approved the sub division of 21,600,125 Equity shares of Rs 10/- each of the Company into Equity shares of Re 1/- each. The sub division is subject to the approval of the Members at the Extraordinary General Meeting (EGM) and will be effective from the date to be decided in due course.

The EGM of the Members is proposed to be held on May 24, 2006 to consider the above business.

Ahad on job

 

Arvind Mill

 target 130.

It is now textile boom time. It is one power stock.

Lingering at 94.

Best buy @ 91. Hold it on for a short term gain of 130.

Cheers

Abdul Ahad

RELIANCE COMMUNICATION VENTURE

 
Target Price - Rs.400 +

RCVL is a holding company for the telecom businesses of the Reliance Anil Dhirubhai Ambani Group which has successfully demonstrated the largest CDMA deployment in the world. The company’s EBIDTA margins have shown a substantial improvement over the last four quarters as the economies of scale are improving. The company has a huge technological edge which will slowly get translated into tangible financials. On the technical front, in the adjacent chart one can notice that the stock has broken out of a rectangle and is headed for higher levels. It has closed above its previous high of Rs.339 which was made in the first week after listing. The demand for this stock in the FII circles is increasing and the chart structure indicates that the stock is headed for higher levels.

Bombay Dyeing

 Dear Friends,
Bombay Dyeing has formed an Evening Star pattern on the candlesticks charts. As this comes after a huge run up in this stock, it has a high significance. Those holding it can consider an exit from this counter and re-enter at a lower level.
Stoploss: 934
Warm regards,
Sanat Agrawal

 Dear All,
Attaching the updated chart of SCI for your reference. The stoploss has not been violated on a closing basis during the most turbulent times. Therefore, the trend and original view remains intact. Target 200, stoploss 155 on a closing basis.
Warm regards,
Sanat Agrawal

ING Vysya bank

 Dear All,
ING Vysya bank has been on a downtrend since quite some time. However, the stock seems to be giving reversal signals. The stock has formed a morning star reversal pattern on the candle stick charts. So also, the stock has shown positive divergence on the oscillator charts. Short term, medium term and long term investors can consider a buy with a stop of 135 on a closing basis. A break above 145 can take this stock all the way to 200. With a stoploss just 7 rupees away and a potential gain of 58, the risk return is extremely favourable for this stock.
Warm regards,
Sanat Agrawal

Dredging Corporation of India

 Capita Telefolio Volume No 12, Issue No 8 dated Saturday, 14th January 2006.

The following recommendation is based on price as on Friday, 13th January 2006.


BUY: Dredging Corporation of India at Rs 693

Now full details:

BUY: Dredging Corporation of India at Rs 693
BSE Code: 523618
NSE Symbol: DREDGECORP
Market Lot: 1

Dredging Corporation of India is a key player in maintenance dredging in India. Increasing investment in India's port and canal infrastructure, the company's PSU status and its tie-ups with MNC players will drive its growth in the long term.


Actual EPS for year ended March 2004: Rs 60.7
Actual EPS for year ended March 2005: Rs 40.5
Projected EPS for year ended March 2006: Rs 63.9



End of Capita Telefolio Volume No 12, Issue No 8 dated Saturday, 14th January 2006.
Keep all our advice strictly confidential. It should not be shared in any form with others.

Though all care is taken in arriving at recommendations, the equity shares may rise or fall in a manner not foreseen. Hence Capital Market or any of its employees will not be liable for any loss suffered.

Ambuja Cement Eastern

 Ambuja Cement Eastern-Are the first steps to a merger with ACC being taken?
BSE 532201; CMP Rs 94, BUY
12 month target: Rs 160
Upside: +70 per cent
Equity Capital: Rs 193 crore
Market Cap: Rs 1814 crore
Promoter holding: Holcim 97 per cent
Public Holding: 50 lakh shares worth Rs 47 crore
CY05 EPS Rs 3
CY06 EPS e Rs 7 to Rs 8
To merger or to sell-out?
The new Sebi norms for listing of shares which have come into effect from May 1, 2006 provide that the minimum public shareholding in a corporate entity seeking listing is 25 per cent. There are two exemptions to this rule; one, the corporate has a market capitalisation in excess of Rs 1000 crore which ACEL has and the company should be in the infrastructure segment.
Though it is debatable whether Cement can be considered a infrastructure sector or not, it is clear that ACEL has a public holding of less than 10 per cent, which is lower than even the most liberal norms provide.
Now, there are two options available to ACEL-to sell its stock in the market so as to bring public ownership to 75 per cent, or to Buy-Out the remaininig stakeholders through the Reverse Book Building route, which process can be expensive but fast. Or merge ACEL with one of its two other companies in India-ACC and Gujarat Ambuja.
Latest Developments
On Saturday, in a block deal executed at 9.55 AM, Ambuja Cement India the Holding company for Holcim in India, sold 10.73 lakh shares of ACEL at a price of Rs 87.5. Incidentally, the buyers identity was not revealed.
However, the media has speculated that the Swiss cement giant Holcim is learnt to have indicated to the Securities and Exchange Board of India (Sebi) that it is weighing the option of merging ACC — in which it owns 34.7per cent through majority-held Ambuja Cement India (ACIL) — with Ambuja Cement Eastern (ACEL).

Holcim’s plan, it is learnt, was conveyed to the markets watchdog after it clarified that ACEL, in which ACIL owns 97 per cent, needs to shore up its public shareholding — which is way below the mandatory 10 per cent — in case it wants to remain a publicly-listed entity.

Although ACEL has taken a year’s time since the open offer in May 2005 it has not been able to increase the public shareholding. It seems Holcim has apparently made it clear that the need to do so may not arise as it does not see the need to have two listed firms in India, and would work towards amalgamating them.
Apart from the regulatory compulsions, however, the move to marry ACC with ACEL would serve another crucial purpose: Holcim, which failed to make ACC its subsidiary through an open offer, could end up with a 50 per cent shareholding in the merged entity. Given the fact that the Holcim-controlled ACIL holds a 97 per cent stake in ACEL, which also has a fairly large capital base. The exact shareholding, however, would depend on the swap ratio.

ACEL’s share capital at Rs 192.4 crore is higher than that of ACC at Rs 179.6 crore, and a merger would allow Holcim to use the former’s large capital base as a currency to shore up its shareholding in the merged entity.
ACEL’s cement capacity however is just around 2m tonne, as against 18m tonne of ACC. ACIL, which owns stakes in both ACC and ACEL, is 67per cent owned by the Swiss firm, while the balance 33 per cent is owned by Gujarat Ambuja Cements, the country’s fourth largest cement producer.
Early on in 2005, the media had reported that Holcim was looking at merging ACC with ACEL. Holcim spokesperson Ronald Walker had then said: "We are still in the process of completing the acquisition of ACC stock tendered under the open offer. As such it is premature to discuss future options for increasing stake in ACC.
Specifically, a potential merger between ACC and ACEL is not under consideration at this time."

Industry observers believe that the move to merge ACC and ACEL could now gather momentum. Moreover, with ACC and ACEL having a strong presence in the eastern region, a merger will bring in a lot of synergies and augur well for shareholders, say analysts.

Holcim, which was targeting a shareholding of 50 per cent in ACC through the open offer, fell short after it failed to get the desired response from shareholders. Industry observers say that the creeping acquisition route — which allows a promoter to buy 5per cent in the company every year — could be a little tedious as Holcim would then have to wait another three years to hit the magic figure of 50per cent in ACC.

A creeping acquisition would delay Holcim’s plans to consolidate ACC with its worldwide operations. And after pumping in $ 1 bn in India already, Holcim may not want to wait that long.
Another point is the changed Cement dynamics
For the first time in a decade Cement manufacturers are able to extract price increases from buyers, as the country’s growth catches speed. Investors would note that inspite of a large Equity and a low EPS for calendar 2005, Ambuja Cement Eastern paid a huge tax of Rs 54 crore in CY05.
Post tax it still managed to report profits of Rs 60 crore. So profitability of this unit is not bad at all.
At the same time Q1 Revenues at Rs 171 crore (Rs 157 crore) are 8 per cent higher than Q1 CY05. Tax paid is Rs 20 crore and after tax profits at Rs 26 crore (Rs 14.7 crore) are 76 per cent higher over Q1 CY05. This confirms my view that ACEL could report post tax profits of Rs 134 to Rs 153 crore in CY06, or an EPS of Rs 7 to Rs 8 per share.
Companies like ACC are fetching a PE of 45 on CY06 earnings forecast and a PE of 30 on CY 07 forecast earnings. A very conservative PE of 20 on CY 06 expected earnings gives ACEL a price target of Rs 140 to Rs 160.
More importantly, Holcim has announced a Rs 850 crore expansion at the Bhatpara Unit of ACEL, located in the State of Chattisgarh which would raise manufacturing capacity to nearly 3.5 mn tonnes per annum in about 2 years.
Thus ACEL is an emerging growth story and the stock needs to be picked up by investors with a 1-2 year investment view.



Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations, outlook etc are included in this update to help investors / analysts get a better comprehension of the Company's prospects and make informed investment decisions. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
Investers are advised to consult their certified financial advisors before making any investments to meet their financial goals.


Rajiv Handa
011-91-11-2712 9653

Bulls Eye Recos from ET

 ABB

Research: CLSA
Recommendation: Buy
CMP: Rs 3,097 (Face Value Rs 10)
12-Month Price Target: Rs 3,500

ABB's first quarter results were above expectations, as a 2.5ppt expansion in EBITDA margin drove net profit 87% higher, to Rs 51.3 crore. Since Q1 is seasonally weak, CLSA is not effecting any revisions at this stage. However, there is potential for upgrades to revenue and profit estimates; ABB's market leading growth will help sustain its premium valuations. During Q1, ABB saw an order inflow of Rs 1,400 crore – a new record – buoyed by a large Rs 430 crore order for an enterprise-wide Supervisory Control and Data Acquisition (SCADA) system from E&P major ONGC and equipment orders from rural electrification projects. Revenue growth, at 32% YoY, was in line with the expectations, but faster than that in Q42005. EBITDA margin expanded 254bps YoY, led by reduction in material cost/sales. ABB witnessed 2-4 pt expansion in EBITDA margin in three of its four key business segments, as gains from its initiatives on cost management and economies of scale kicked in. New products also contributed positively to growth and profitability. Stronger growth in higher-margin standard products also boosted overall margin. With the order book up 68% YoY and buoyancy in investment in power T&D infrastructure as well as industrial projects, CLSA sees potential for acceleration in revenue growth. Ongoing augmentation of capacity and product range will help ABB capture the opportunity. While rising prices of inputs such as copper and steel and the expanding wage bill (up 40% YoY in 1Q) are challenges, CLSA's current assumptions on margin expansion (180 bps) in '06 are well below that seen in Q1. With 40% EPS growth forecast for CY2006, CY2007, ABB is near the top of CLSA's coverage universe; Q1 trends suggest further earnings upgrades. ABB's automation business (40% of revenues) is growing at 40% in terms of sales and 100% in terms of operating profit. In the longer term, exports and rising services income can help sustain high growth in revenues and earnings.

YES Bank

Research: JP Morgan
Recommendation: Buy
CMP: Rs 99 (Face Value Rs 10)
12-Month Price Target: Rs 130

High and sustainable earnings growth in line with its peers 10 years ago, improving profitability, the management team's experience and incentives to execute smoothly, and finally the attractiveness of the bank as a potential target post-'09 make JP Morgan believe that YES Bank is likely to trade at similar multiples enjoyed by HDFC Bank and ICICI Bank in their early stages. As witnessed in these banks, the multiple is likely to normalise as YES Bank raises capital to meet growth requirements while maintaining profitability (measured by ROA). Despite the 58% appreciation since listing, the stock still has a lot to offer given the 57% earnings CAGR forecast over the next four years and a normalised ROE of 22.6%. JP Morgan initiates coverage with an overweight rating and a price target of Rs130, representing a potential 36% upside. Despite the relative outperformance since listing, the stock trades at an attractive multiple of 2.6 times forward book. JP Morgan uses the Gordon Growth Model to value the stock using a normalised RoE of 22.6% and a cost of capital of 13.4%, implying a fair P/B of 3.62 times. At this multiple, the stock is valued at a 1.4% discount to HDFC Bank and a 4.5% discount to Centurion Bank. Though the implied value of growth at current prices is higher, it is justified given that the bank enjoys relatively higher growth prospects. JP Morgan is factoring in close to 18% additional equity issuance in FY07E which would be sufficient to meet the capital requirements for the next couple of years as the bank continues to expand branches and grow its asset book. Excluding the capital infusion, the stock would trade at 3.9 times forward book. Key potential drivers of ROA improvement beyond F08E are higher low-cost deposit and retail loan mix leading to higher margins, and an improvement in the cost-assets ratio as more branches and businesses break even. Finally, improving leverage driven by a ramp up in asset growth is likely to benefit RoE.

Aban Loyd Chiles Offshore

Research: UBS Investment
Recommendation: Buy
CMP: Rs 1,399 (Face Value Rs 2)
12-Month Price Target: Rs 1,750

UBS Investment believes robust demand growth, tight supply, lack of new discoveries and geopolitical issues will keep oil prices high, fuelling large exploration and production (E&P) capex—which it estimates will rise 50% in the next two years. The increase should lead to higher demand for offshore services. In India, ONGC and private companies are ramping up E&P capex. Aban Loyd is well equipped to ride this strong upswing in global offshore E&P activity. High oil prices, low spare capacity and ageing fields are forcing oil firms in the Middle East to increase exploration capex. Saudi Aramco alone needs to hire 15 rigs. On the supply side, new rigs will take time to come on stream, as the gestation period is 27-30 months. Also, construction yards are facing capacity constraints because of equipment shortages. The tight demand-supply situation for offshore assets is leading to high rig utilisation and a sharp rise in operating rates. Aban Loyd is the largest Indian offshore service company, and its diversified fleet should benefit from the upswing in demand and rates. A well-timed asset addition and its low-cost operation and strong relationship with E&P companies have put Aban Loyd in a strong position. Aban Loyd plans to add two more new assets and reprice day rates over the next two years. UBS Investment forecast 110%- plus EPS CAGR during FY06-09.

Paper Products

Research: Religare Securities
Recommendation: Outperformer
CMP: Rs415 (Face Value Rs 10)
12-Month Price Target: Rs 531

Paper Products (PPL), one of India's leading consumer packaging players, offers a wide portfolio of packaging solutions that include flexible packaging, labeling and other decorative technologies and specialised packaging cartons. All this is also supported by the packaging machine division to provide the customer with a total packaging solution. PPL is a joint venture with global packaging major Huhtamaki of Finland, which holds 59% stake in the company. PPL has attained a 10% topline growth for the year ending CY05 after a difficult CY04 which saw an input price increase of 60%. The company has been able to achieve the same on the back of its strategic decisions that involves being innovative on the product front. Over the years, it has been successful in the innovation path enabling it to cater to a huge base of leading FMCG players in the industry. A new production facility is being set up in North India that will enable PPL to cater to the growing demand from the FMCG industry. PPL has two manufacturing units in the west and one in the south, thus the new facility will help cater to the north Indian market. Also, with many FMCG companies moving their production to the north, this new facility will enable the company to focus more on servicing clients. The new facility will also enable it to avail of tax benefits. In the past few years, the company has proved proficient in keeping its balance sheet debt-free. It also has accumulated a decent amount of cash that has enabled it to fund its new expansion plans through the internal accruals route. Religare expects the company to maintain its debt-free status over the years. PPL's revenues are expected to grow at a CAGR of 15% and net profit at a CAGR of 19% over CY06E-08E. The company is expected to grow on the wave of increased demand from the FMCG sector and the company's well received NASP initiatives and innovation policy. At the current price, the stock is discounting CY07E and CY08E earnings of Rs 26.9 and Rs 32.4 at 16.1 times and 13.3 times respectively. It trades at an EV/EBIDTA of 7.1 times and 5.6 times for CY07E and CY08E respectively.
CMP as of April 28, '06

Jhagadia Copper

 


BSE Code: 504920

CMP=21
Recommendation: Strong Buy
Price Targets:
Medium Term: 28+
Med-Long Term: 35+

Introduction



Jhagadia Copper Ltd. (Formerly SWIL Ltd.): SWIL was originally promoted by Mr. Satya Narayan Khaitan as Shalimar Wires & Industries in 1962. Originally the company was engaged in production of consumables and machinery for paper industry, synthetic fibres, copper and copper alloy wires, copper alloy and nickel silver strips. The company started setting up a 50000 tpa copper plant in 1996. The project ran into trouble right from beginning resulting in delays and huge cost over runs. In 2002 the consortium of financial institutional took over the 1185 crore project from its original promoters. The institutions managing the company had planned to sell the controlling stake in the company in 2001, when Sterlite Industries, Indo-Gulf and the UK-based Metdist did the due diligence, but due to adverse market conditions the process could not be completed. From January 01, 2006 the name of the company has been changed to Jhagadia Copper Limited to bring it in line with the present activity of the company.
SWIL has set up project for production of 50,000 tpa copper cathodes conforming to LME Grade 'A' specifications and additional 20,000 tpa copper anodes through Secondary Route using Top Blown Rotary Converter (Kaldo) Technology in technical collaboration with Outokumpu Technology AB, Sweden. The company has entered into 'Project Supervision, Management and Completion Contract with Outokumpu Technology AB. The company has also an agreement with Mount Isa Mines Limited, Australia for technical know-how for electrolytic refining of copper under ISA process. This process ensures the production of LME Grade 'A' copper cathodes.
The company would be the pioneer in India in using secondary smelting technology. This technology allows maximum flexibility amongst all available smelting technologies in sourcing and usage of raw materials. The project can use low sulphur copper concentrates, oxide concentrates, copper slags, reverts, shredded cables, electric motors and other copper bearing raw materials for production of copper cathodes. The project can also handle environmentally hazardous / semi-hazardous wastes as defined under the Basle Convention and will represent the only such smelter easter part of the globe.
SWIL has entered into a Memorandum of Understanding (MoU) with MSTC for supply of raw materials like copper concentrate, copper bearing, scrap, copper ashes and residues etc. for the manufacture of copper anodes and copper cathodes. The company is also importing the raw material directly from various sources.
Empowered Group of Corporate Debt Restructuring Cell approved the restructuring of debts of the company. As per the approval the rates of interest on various loans are realigned resulting in reduction of weighted rate of interest from 11.5% p.a. to 9.5% p.a. The repayment of principal of various loans is deferred upto April 2007 and the interest for the period upto March 2007 shall be converted into Optionally Convertible Cumulative Redeemable Preference Shares.
ICICI Bank Limited and Dena Bank have sanctioned working capital facilities aggregating Rs. 15,020 lakhs. Further, after close of the period ended on 30th September 2005, Industrial Development Bank of India Limited has sanctioned working capital facilities aggregating Rs. 4,000 lakhs. During the period, the company allotted to Financial Institutions/Banks, 6% Optionally Convertible Cumulative Redeemable Preference Shares aggregating Rs. 7046.91 lakhs and Optionally Fully Convertible Debentures of Rs. 780.69 lakhs through private placement.
Latest Equity 124.30 crs.
Latest Reserve 38.59 crs.
Latest Book Value Rs.13.10

Share Holding Pattern
------------------------------------
Description No. of Shares % Holding
NRIs 282466 0.29
Domestic Institutional 48486311 49.86
Holding
Govt. Holding 5519457 5.68
Non Promoter 7315490 7.52
Corporate Holding
Promoters Holding 14900872 15.32
Public & Others 20744505 21.33
Totals 97249101 100
Prospects: In 2005, copper prices had gone up by 70%. However, same trend continues in 2006 as well. In fact, since March 01, 2006, copper prices have gone up by 40% to USD 6635 per ton.
Copper Companies are likely to report bumper profits. As a result, Hindalco Re. 1/- Face Value iss quoting at Rs. 225/- and Sterlite Rs. 5/- Face Value is quoting at Rs. 2800/-. SWIL had gone upto Rs. 29/- when Sensex was 7000 and hence, at Rs. 22/- it has bottomed out. Main reason for such low price level is wrong perception of the market that Plant of Jhagadia Copper is still incomplete and that, production has still not started. Company has not made official announcement of commercial production (it is a normal practice world wide for metal companies to announce commencement of production at much later stage after achieving rated capacity). Actually, Jhagadia has already started production and had produced 10332 MT copper cathodes for period ended Sept. 2005. At present, company is producing around 1300 - 1500 MT per month against installed capacity of 4200 MT p.m. Company had recently executed order for Hindustan Copper worth Rs. 90 crs. Now, BHP Bilton of Australia (world giant in mining and metal) has placed an order for 10,000 MT of copper cathode with Jhagadia.
Copper demand in India is much higher than the supply. Jhagadia is able to sell whatever it is producing. However, it is not able to operate at full capacity due to working capital shortage. Company has already started making profit at EBIDTA level even at such low capacity utilization. Company is aiming to increase its capacity utilization to 60% in next 2-3 months. At that time, ICICI Bank may relase some more funds to ramp up production to 100% capacity. Jhagadia needs hardly 60-70 crs. to double its production capacity to 100,000 MT.
Valuation: Market capitalization of Jhagadia is hardly 250 crs. although, similar project will cost more than Rs. 700 crs. These days when heavy loss making companies like I.G. Petro, Andhra Cement, Moschip are quoting at such high levels, Jhagadia Copper is extremely cheap.
Conclusion=ICICI and other lenders would certainly want to sell the project to recoup their heavy investments. Divestment process should be completed in 10-12 months. As per highly placed sources, ICICI Bank has put Jhagadia valuation at Rs. 75/- per share. Sterlite and Hindalco will be the strongest contenders. Although company may not report NP until full capacity utilization is achieved, its share price can shoot up to much highr levels depending upon when ICICI Bank invites bids for divestment. The Copper Outlook is expected to remain strong for next 15-18 months atleast. In view of same, Jhagadia Copper is available at ridiculously low valuations with potential of multibagger appreciation.So considering all the facts,We assign a value buy on the counter with a target price of 35rs

It is time to pick Stocks which have still not recovered

 The bloodbath, market carnage has been opportunity for new investors to jump in and take the advantage of the fall. LIC bought stocks worth 200 crore.
On monday, I had invested around 2.8 lakhs and now it 3 lakhs. My losses are down to 10% from 15%. I hoping for the speedy recovery.

There are stocks which have still not recovered from the carnage. This is yet another opportunity to enter them.
To name few..

1. ESSAR OIL           52
   
2. MANALI PETRO 16
   
3. HIND.MOTORS   40
   
4. NAGAR.FERT        13
   
5. SAIL                          76
   

My Monday's Shopping list

  After burning the midnight oil for last two days, I have come up with this list. It was a tedious job but it will indeed fetch returns in the future. I have made the list in a sector wise distribution perspective.

I have made this list on a emerging business perspective, low P/E, PEG, and projected growth.
On Friday, my shopping list consisted of RIL & Infosys.


1. In the IT Sector
Infosys & Satyam. I have already taken a long position on infosys.

2. In auto sector,

Escort, Ashok Leyland & Hindustan Motor.

3. In Metals,

Hindalco

4. In Media,

Zee

5. In Cement

ACC & Grasim

6. In pharma,

Cipla

My Monday's Shopping list

  After burning the midnight oil for last two days, I have come up with this list. It was a tedious job but it will indeed fetch returns in the future. I have made the list in a sector wise distribution perspective.

I have made this list on a emerging business perspective, low P/E, PEG, and projected growth.
On Friday, my shopping list consisted of RIL & Infosys.


1. In the IT Sector
Infosys & Satyam. I have already taken a long position on infosys.

2. In auto sector,

Escort, Ashok Leyland & Hindustan Motor.

3. In Metals,

Hindalco

4. In Media,

Zee

5. In Cement

ACC & Grasim

6. In pharma,

Cipla


For the investor this list help you corner your own list.

Cheers

Abdul Ahad