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Wednesday, June 19, 2013

e-Dynamics Solutions IPO - Are You Planning To Invest?

Are you planning to buy IPO of e-Dynamics? I just read few details of e-Dynamics IPO and could not resist to post it for readers to make their own decision.

The biggest and foremost deterrent for me about this company; their email ID.

An e-commerce technology company, apparently running e-commerce portal, have an email address hosted at They can't even have the email address hosted at their own domain name? Shows their expertise and dedication to technology.

Now take a look at their website. A non-functioning website for e-commerce technology solutions company! I tried visiting the website different times in the span of 12 hours and all the time all I could see was Magento error! Such a non-serious e-commerce company who can afford such a long downtime.

These two things are good enough to show how serious company is in their business of "technology". I don't even need to go into their financial details which are even shady.

Read this article about their financial shady practices.

e-Dynamics solutions IPO red herring prospectus on BSE Website.

Wednesday, January 23, 2013

Mid Cap Stock Analysis - Oberoi Realty Limited

Stock analysis of Oberoi Realty Limited based upon 3QFY13 results along with recommendation.

3QFY13 revenues for Oberoi Realty Limited are at Rs. 310 crore, it is up 41% yoy and 9% qoq. These numbers are higher than stock analysts’ estimates.

EBITDA margin has improved by about 100 bps on a qoq basis for company. Operating margins for its hospitality business improved significantly to 20.8% compared to 9.2% last year and 4.9% in the previous quarter.

Contracted volume sales remained flat at 0.12 million sq ft vs 0.13 million sq ft in 2QFY13 and 0.12 million sq ft in 3QFY12.

Note the company has not included contracted sales volume from the Worli real estate project. This lower contracted sales volume is due to lack of no major launches.

Operating Cash Flows for company have moved back to positive territory. One may 'buy stocks’ of Oberoi Realty Limited with stock price target of Rs.351 in medium term.


Tuesday, January 22, 2013

Reliance Industries - What should you do with stock?

Some notes meant to provide guidance on what to do with stock of Reliance Industries, especially after the recent rally in stock.

The recent rally in Reliance Industries was driven by a possible increase in gas price and E&P approvals to re-start the drilling activities. Refining margins for company were better than expected in 3QFY13. Petchem remained flat with little signs of near term demand revival.

Possible upside in stock price is expected from the gas price hike. Recent initiatives by the government of India enable the company to renew exploration activities in key

The initial E&P results will take six to twelve months, after which a case for a possible reserve upgrade could be made. While petchem capacity additions are a step in the right direction, the then macro mood will determine EBITDA growth but will be hard to predict.

One may 'hold stocks’ of Reliance Industries in portfolio if already owned.


Large Cap Stock Analysis - Wipro Limited

Here are stock research notes based on 3QFY13 results of large cap stock Wipro.

3QFY13 USD services revenue went up 2.4% qoq and it is slightly better than market estimates. IT services EBIT margin was up 16 bps as productivity gains and forex gains offset lower utilization and promotion costs. This and higher other income led to an EPS beat.

Company's 4QFY13 services growth guidance of 0.5 – 3.00% qoq is not very exciting but it does not derail the growth prospects.

Volumes declined 1% qoq but offshore – onsite realizations grew 3.0 – 3.2% qoq, continuing the trend of productivity gains in fixed price contracts that started last year.

The company noted that its pipeline had expanded 1.7 times since 3QFY12 and pointed out improved deal closures and a perceptible change in client sentiment over the past quarter.

Analysts are not overly worried about Wipro’s poor volumes as 3Q is seasonally weak and peers also saw a drop in volume growth.

It looks like that 4Q guidance factors in macro headwinds like US debt ceiling etc, delays in some project starts and about 20 tail accounts that Wipro plans to de-emphasise.

USD revenue growth is expected to pick up to 12.9% in FY14 from 5.6% in FY13.

Positives in 3Q: the top 10 accounts continued to grow ahead of the company’s average on sales investments; realization was up 4-5% yoy; and attrition was much lower yoy at 14.2% vs 19%.

In medium term, more upsides are expected in Wipro’s margins when the growth picks up.One may buy stocks of Wipro with a target price of Rs.460.


Sunday, December 9, 2012


Bharti Infratel's initial public offering (IPO) of over 18.89 crore equity shares of face value of Rs 10 each opens for subscription on December 11.

Issue Snapshot
Issue Open: 11-December-12
Issue Close: 14-December-12
Price Band: INR 210-INR 240
Issue Size: INR 39,669 mn - INR 45,336 mn
Market Cap: INR 396,615 mn - INR 453,274 mn
IPO Grading: CRISIL IPO Grade 4/5
Listing: NSE & BSE
Lot Size: 50 or multiples of 50 equity shares
Discount: A discount of Rs. 10/- to the issue priceis being offered to Retail Individual Bidders.

Bharti Infratel is one of the oldest cellular tower infrastructure companies with towers allover India (all 22 circles). Bharti Infratel also owns 42% stake in Indus Towers. So, combinely Bharti Infratel has 80,656 towers (34,220 BIL and 46,436 Indus). It builds, operates and owns towers which are then rented to Telecom operators across the country. Revenues for company were INR 94.5bn with Net profits of INR 7.5bn in FY12.

The Company caters to Bharti , Vodafone and Idea which reflects stable annuity business with huge growth potential for the company from these top 3 telecom companies in India. The Telecom tower infrastructure business is in a growth phase with rural penetration still at a paltry 38.3%, this presents huge opportunity to expand network base further.

New technologies like 3G and 4G, made available at high frequency (lower wavelength) by the government, require wider tower base and hence new tower installations/infrastructure.

Tuesday, August 14, 2012

Buy Stocks of India Cements - Stock Research Notes

India Cements is rated to ‘buy stocks’ at currently traded price at Rs.85. Checkout the target stock price.


Friday, August 3, 2012

Tamilnad Mercantile Bank IPO on the way

Tamilnad Mercantile Bank (TMB) will soon be coming up with it's Initial Public Offering (IPO).

It's CEO Mr. Nagendra Murthy was recently quoted "Paperwork and ground work is almost done. We are ready. But the timing can be decided only after the court sets the date for the AGM".

Tamilnad Mercantile Bank (TMB) is a 92-year old bank. It has a paid-up capital of just Rs.28 lakh. And it's reserves (excluding revaluation reserve) are in excess of Rs.1634 crore.

Shares of TMB has a face value of Rs 10/share. But people say that these shares are traded more than Rs.45000/share in the grey market.


Wednesday, July 18, 2012

The shallowness of IT industry and India shining

IT Superpower. IT Behemoth. IT Capital of World. This is how India was used to being tagged in past 10 years. BJP's India shining was fuelled in reality by 'IT'. Congress tried to ride this 'shining India' and then became the reason of whining of India. Is Indian IT industry really so strong today? In just 10 years, this so called IT superpower has started loosing it's glammer, growth and .... shine too.

Read below fact from an article Golden age of Indian IT is over for good

"Recently, I read an article about this year's Google's Code Jam contest, which is a sort of Olympics for programming skills. At the qualifying stage, 17% of the contestants were Indians. By the third round, as the competition intensified, Indians were down to 0.7%.

Although India began with the highest number of participants, just three Indians lasted till round three, compared to 83 Chinese, 77 Russians, 36 Japanese, 25 Americans, 21 Poles, 13 Belarusians, 11 South Koreans etc. In fact, the code Olympics look much like the sports Olympics. So much for the IT superpower."

This is what the reality is. Indian IT industry hardly produces any 'products'. All it does is to provide cheap labour to western clients for offshore work rather than creating any Intellectual property. It is like modern day labourers who earn for the work completed on hourly basis, at slightly different scale though. And their contractors are so called Indian IT giants!!

How does it matter for stock market? The so called IT superpower is loosing it's position thanks to rising costs in India due to inflation and ever growing wages which are becoming increasingly unaffordable for offshoring client who looks for cheaper labour, especially in this era of slowdown. Another reason is slowdown/recession in developed world itself. This will stall growth of these IT bellwethers further in future loosing investor interest. Read: Should You Buy Stocks of IT Companies now?


Friday, July 13, 2012

Should You Buy Stocks of IT Companies now?

Q1 results of Infosys and TCS are out and both the companies have published contrasting results that create confusion in one's mind. Results of both the companies are generally benchmarked for entire IT industry and these recent results do not clarify situation of IT industry at all this time! What should you do at this time? Buy stocks of IT companies or not?

Infosys stock is dragging in red while TCS is up in green. Sheer contradiction by two biggest IT supremos of India creating state of confusion in small investor's mind.

US dollar income of Infosys has declined by 1.1% compared to previous quarter earnings. Also, achieving growth in the US dollar revenues for company could be difficult, especially when major corporations across Europe and US are reducing IT expenditures and so the number of projects that IT companies in India receive from them are decreasing. Also, Infosys has stopped providing quarterly guidance that will make guesswork more difficult for stock market analysts.

I was reading an article that explains how the IT industry is facing reduction in number of projects from their clients. Since the number of projects coming to companies are reducing constantly from bleak economies of Europe and US, the employees that IT companies had recruited are becoming overhead expenses for them. Normally, IT companies would recruit more employees than what they need, in anticipation of future flow of projects. It is called bench strength. Number of projects are not flowing in as they use to be in past few years but IT companies have to pay salaries and benefits to their bench strength without earning any revenues using their services. And looking at Europe and US, the trend seems to be continuing for next few quarters at least. You can read the article here.

Near future will certainly be difficult for most of the IT companies in India as they are dependent on Europe and US for major chunk of their revenues. Their first target will be to sustain the current levels of their revenues and then think of growth. From stock market's perspective, it tells you that these are the companies which may sustain but growing from here? Could be extremely difficult. And when there is no growth anticipated in near future, the stock remains range bound (call it dud) on bourses or it even declines.

In my opinion, stay away from IT sector stocks unless the economic scenario of Europe and US improves (which may take years!!), do not buy stocks of IT companies for now.

Monday, June 25, 2012

United Phosphorus..Are shareholders at correct place?

I was watching latest episode of Aamir Khan's TV show Satymev Jayate. CMD of United Phosphrous, Mr. Shroff had participated in this show and the way he was talking about sensitive issue of health absolutely insensitively, I really wonder if money of shareholders of United Phosphorus is in safe hands!

As an educated person (I think I am!) and follower/user of organic food for a past few years, I felt Mr.Shroff was trying hard to insult my intelligence.

At the very same moment, the way he was endorsing pesticides (I felt it was foolishly), looking at his way of fooling around the sensitive issue of pesticides very insensitively, I strongly felt how he would be running his company and how he would steer the company in future.

Has he really been able to run the company with futuristic vision? Or the business of company is just to manufacture poison and sell it allover India as "medicine" for crops? Why this company has not been able to find something which is organic and non-harmful? Why they are not researching on 'organic pesticides'? Why can not we (and they) think differently?

Being stock analyst, I felt Mr. Shroff's vision in this direction is completely blocked. The way he represented the company on national television, was totally inappropriate in my opinion and so, the question, if shareholders of United Phosphorus have deployed their money at correct place? Feel free to express your opinion, we are world's biggest democracy and no one can and should dare suppress our voice!


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