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Friday, October 31, 2008

Results Analysis - Divi's Lab - Everonn Systems - Bannari Amman - Mahindra & Mahindra - GMR Infra

1. Divi's Laboratories:


Excellent results as expected. Hyderabad based CRAMS company reported 37% rise in sales and 51% increase in net profit. Divis Labs is a must have stock in every "Growth investor portfolio". Divi's is a favourite stock of Reliance mutual funds. Accumulate on every fall without hesitation for long term gains.

CMP: 975; P/E: 15.5

2. Everonn Systems India:

Excellent results and reasonable valuations. Company announced 50% rise in sales and 200% increase in net profit. This stock will give excellent results for long term investors. Buy in SIP and maximize profits. But FIIs may spoil the sentiment over short term. Pick your favourite education stock among Educomp, Everonn and Core Projects.

CMP: 157; P/E: 12

3. Bannari Amman Sugars:

Turnaround story. South India based sugar company reported Rs 30 crore profit in Q2 2008 Vs net loss of 1.24 crore in Q2 2007. Excellent performance. Bannari Amman spinning mills also announced good results in this quarter.

CMP: 450; P/E: 7.5; Book value: 393.

4. Mahindra and Mahindra: Expected negative results. Company announced 11% increase in sales but 20% fall in net profit. But scrip has excellent future potential for long term investors due to recent acquisitions by aggressive management. Accumulate around 250. Forex losses dented margins.

CMP: 302.

5. Vakrangee Software: Good results and good opportunities due to election year. I generally do not recommend software stocks but this is a "stock in limelight" before every major election. Company reported 62% increase in sales and 50% rise in net profit.


6. GMR Infrastructure:

Excellent results but unreasonable valuations. Infrastructure giant announced 158% increase in sales and 170% rise in net profit. One can accumulate this stock from below 40 levels. Bear market may not bear such high valuations despite good growth. GMR Infra is a "must buy" for growth investors at around 35. Will it touch those levels?

CMP: 52; P/E: 91; Book value: 31.

7. Bharti Shipyard:

Positive surprise. Company reported 48% rise in sales while net profit increased by 29%. Shipping industry is facing many problems due to drastic slowdown in International economy. Huge order book is a positive point. Value investors may look at this stock due to very cheap valuations. Huge debt is a concern. Shipping companies will face serious problems over short-medium term as Baltic index touched 6-year low.

CMP: 68; P/E: 1.5; Book value: 208.

8. TIL (Tractors India Limited): Good performance. Company reported 49% increase in both sales and net profit.

9. Gujarat Fluorochemicals: Safe business and excellent results. Company reported 57% rise in sales and 45% increase in net profit. Huge debt is a big burden.

CMP: 73; P/E: 2.3; Book value: 86.

Decent results:

Britannia Industries (safe stock), National Fertilizer, Assam Company, Karur Vysya Bank, S. Kumars Nationwide, Blue Bird (India), Fortis Healthcare, Bannari Amman Spinning Mills, Tata tea, Adhunik Metaliks and Areva T and D.

Poor results:

Sical Logistics (worst), Numeric Power Systems (worst), Value Industries, Alok industries, Aksh Optifibre, Bal Pharma, Sundaram Finance, Consolidated Construction, Subex, 3M India, V-Guard Industries, Zenith Computers, Piramal Glass, RPG Cables, Bombay Dyeing, Bosch Chassis Systems India and Pritish Nandy Communications.

Must read:

1. Are stocks really cheap? Don't follow Warren Buffett. This is not the time to buy many blue chips.

2. Get a ringside view on American economy and economic crisis.

3. Is it wrong to invest for long term?

Final verdict: Overconfident short term investors and traders will get severe shocks in the coming days. DIIs may not succeed to meet FII outflows but falling inflation and crude oil prices are big positives. Job losses will spoil the consumption outlook which will increase NPAs in the banking system. Complete mess-up! New investors should not even look at stock markets in these unpredictable times. Long term investors should concentrate on companies which are posting outstanding results and accumulate them on every major fall.
Source: Stock Market Guide
 


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