Small Cap Stock To Buy With Good Dividend Yield

SUPREME Industries (SIL), one of India’s largest plastic products makers, looks a good bet for longterm investors. The company riding high on Indias growing appetite for plastic products saw its net profit treble in the quarter ended June.

It is building a 10-storey office complex on a plot owned by it in Andheri West, a prime locality in Mumbai suburbs. This will boost its profitability over the next couple of years. At the same time SILs scrip is trading at a lower price-to-earnings ratio than other big players in the industry.

BUSINESS:
Established in 1942, Supreme Industries operates 19 plants across India and produces a range of plastic products such as pipes, furniture, industrial and packaging products. In fact, it claims to have the countrys largest plastic products portfolio. The company has an annual turnover of Rs 1,650 crore and a market capitalisation of Rs 760 crore.

Plastic pipes systems accounted for 43% of its total turnover in the year ended June 2009, while industrial components, including automotive parts, brought in one-fifths of its earnings. It is also a leading player in cross-laminated films, furniture, protective packaging and material handling materials. Exports account for a negligible 5-6 % portion of its total sales. Supreme Industries has restructured its business over last couple of years by selling off unprofitable divisions and investing in the others. It divested its PVC film business at Malanpur in Madhya Pradesh, food serviceware plant in Daman and flexible film division at Pondicherry.

GROWTH DRIVERS:
The company is developing its land at Andheri (West) by constructing a 10-storey commercial complex, set to be ready by October . The project, which will offer 2.5 lakh square feet office area for sale, is coming up in a prime locality. The proceeds from this project will boost the companys earnings, while providing necessary funds to invest in its main business.

Supreme Industries achieved 29% volume growth in FY09 despite the weak economic conditions and is expected to grow by over 20% for next couple of years as well. With overall indirect taxes coming down, the demand for plastic products is growing fast in India. At the same time, additional polymer capacities coming up in the Middle East are expected to suppress the prices of polymer over next couple of years. Both developments augur well for the firms future.


FINANCIALS:
Supreme Industries has a history of steady growth with the net profits growing at a cumulative annual growth rate (CAGR) of 35.9% over the last five years, with net sales growing at 15.7%. The company has not missed a dividend in at least 15 years. Its operating cash flows also have been strong over last five years.
The company recently carried out a share buyback scheme reducing its paid-up capital by 8% to Rs 25.4 crore. Although, Supreme Industries performance during the first half FY09 was under pressure due to crash in polymer prices, it reported 90% jump in its net profit to Rs 97.4 crore for 2008-09 with the net sales growing by 26% to Rs 1651.9 crore.

Market Cap 786.80
EPS (TTM) 38.33
P/E 8.08
P/C 5.25
Book Value 134.94
Price/Book 2.30
Div(%) 80.00
Div Yield(%) 2.58
Market Lot 1.00
Face Value 10.00
Industry P/E 7.38

VALUATIONS:
At the current market price of Rs 303.5, the scrip is trading at 7.9 times its earnings for last 12 months, which is cheaper compared to its key rivals Sintex Industries (P/E of 10.3), Nilkamal (P/E of 12.3) and Time Technoplast (P/E of 14.2). We expect the company to post EPS of Rs 57.8 for the year ending June 2010, which discounts the current market price by 5.3 times. For FY10, Supreme Industries has declared a payout of Rs 12 per share, which translates in 4% dividend yield at the current market price.
Source: EconomicTimes

Apollo Tyres - Mid Cap Growth Stock

APOLLO Tyres , the second largest player in the tyre industry, (in terms of revenues) is likely to overtake MRF to become Indias largest tyre-maker after the recent acquisition of Dutch company Vredestein Banden BV.

Inorganic growth, expansion in domestic market and improving operational efficiency make Apollo Tyres a good long-term bet for the investors.

BUSINESS:
Apollo Tyres (ATL), the flagship company of the Raunaq Singh Group primarily engaged in manufacturing of automobile tyres, tubes and flaps had consolidated revenues of Rs 4,984 crore for the year ended March 09. It has production capacity of around 850 tonnes/day in the domestic market and 300 tonnes/day from international operations. The company is a dominant player in the commercial vehicles segment. Till FY09, the company had a 27.3% market share in truck & bus tyres and 24% share in the domestic light commercial vehicle tyres. Introduction of radial tyres in the passenger car category helped the company to increase its presence in the car segment in the recent years. The company is building up capacity for radial tyres for trucks, thus readying itself for the next generation trucks.

GROWTH PLANS:
The company has undertaken couple of overseas acquisitions in the last one year. This is as per its strategy to diversify its presence globally and generate nearly 60% of its revenues from the overseas market.

Recently in May this year, Apollo announced the acquisition of Dutch tyre-maker Vredestein Banden BV for Rs 1,200-1 ,500 crore. Apollo Tyres plans to fund this acquisition with a mix of internal accruals and debt financing. Vredestein Banden BV has a strong sales and marketing network besides a production unit in Enschede, The Netherlands with capacity of 55 lakh tyres. It will give Apollo access to the challenging European market. Revenues from Vredestein Banden BV will be reflected in Apollos accounts from the current quarter of April June 2009. The company is also planning a greenfield unit in Hungary. But this project has now been deferred due to global economic slowdown, which has hit the auto sector badly.

However, the company is bullish on the domestic demand and is making investment also expanding to tap the market in the country. To increase its presence in the radial tyres segment of commercial vehicles, Apollo Tyres has made an investment of about Rs 1,300 crore in Chennai for a greenfield project, which is likely to be operational by the end of this year. This plant, with facilities to make radial tyres for both trucks and cars, is going to have capacity of 180 tonnes/day, which can be augmented, to 450 tonnes/day depending on the demand .

On a consolidated basis, Apollo Tyres turnover is projected to reach around Rs 7,500-8 ,000 crore for the year ending March 10, making it the largest tyre company in India in terms of revenues. In 2006, Apollo Tyres had acquired Dunlop South Africa. The acquisition gave the company a strong foothold in the African continent including a sales network of branded Dunlop Zones, besides two manufacturing units in Durban and Ladysmith.

FINANCIALS:
The year ended March 09 had been a challenging year for the company. Sales growth slowed to 6% from compounded annual growth (CAGR) of 18% in the previous three years on the consolidated basis. But the positive news is that rubber price has come down and is expected to get reflected in the financials in the coming quarters. Further, with demand for automobiles improving, the company is expected to register reasonable sales growth in the coming quarters.

The industry, which registered a growth of only 2.2% for nine months ending Dec 08, has since recovered and is estimated to have recorded better demand as auto sales have improved. During the latest quarter ended June 09, Apollo Tyres topline rose 10% to Rs 1,180 crore from the year-ago level on the standalone basis. Operating profit grew 75% to Rs 194 crore, while net profit nearly doubled to Rs 94 crore.

Market Cap 1,930.41
EPS (TTM) 3.06
P/E 12.52
P/C 7.66
* Book Value 26.84
Price/Book 1.43
Div(%) 45.00
Div Yield(%) 1.17
Market Lot 1.00
Face Value 1.00
Industry P/E 13.74

VALUATIONS:
At its current market price of around Rs 38 per share, the stock is trading at 13.78 times its earnings per share (EPS) for the yearended march 09 on the consolidated basis. In contrast its closest competitor, MRF is trading at a price-to-earnings (P/E) multiple of nearly 24. Assuming a modest 12-15 % annual growth in revenues and continued improvement in operating margins, Apollo Tyres oneyear forward P/E ratio works out to around 9.4, which provides ample upside potential to long-term investors. Besides, Apollo Tyre has a dividend yield of 1.2%, which will only improve as profit grows.
Source: EconomicTimes

Rakesh Jhunjhunwala

Rakesh Jhunjhunwala is an Chartered Accountant by education and an stock market investor and stock trader by profession. Forbes magazine has rated him in year 2007 as India's 51st and the world's #1062 richest man with wealth of $1.1 billion.

He is one of the most famous and respected stock investors in India and only manages his own portfolio as a partner in his asset management firm, Rare Enterprises. Many investors in India follow Rakesh Jhunjhunwala Portfolio curiously to identify next multi-bagger stock. A large man in his late 40s, Rakesh Jhunjhunwala was described earlier this year in a magazine as the “pin-up boy of the current bull run”. He is well known as 'India's Warren Buffett'.

Rakesh Jhunjhunwala stays at Malabar Hill and works from his office at Nariman Point in South Mumbai. He regularly appears on various business channels on television to share his ideas and opinions on the Indian stock markets. He is well known among the investing circles as 'Rocky' and among his close associates as 'Bhaiyya'. He considers Mr Radhakrishnan Damani as his guru (mentor) and best friend.

Rakesh Jhunjhunwala’s Investment Philosophy
Much like Warren Buffet, Rakesh Jhunjhunwala buys into the business model of a company and for judging the longevity and growth potential, he gives top priority to 'competitive ability', 'scalability' and 'management quality' of the enterprise. The 'entrepreneur', according to him is what makes an invaluable difference to his expected investment returns. According to him, believing in the vision and the beliefs of the entrepreneur and validating the risks that may not be perceived by the entrepreneur are the key success factors for an investor.

Checkout all stocks in Rakesh Jhunjhunwala Portfolio

Profile
Rakesh Jhunjhunwala is the Chairman of Aptech Limited and Hungama Digital Media Entertainment Pvt. Ltd and also sits on the Board of Directors of various Indian listed/ unlisted companies like Prime Focus Limited, Geojit Financial Services Limited, Bilcare Limited, Praj Industries Limited, Provogue India Limited, Concord Biotech Limited, Innovasynth Technologies (I) Limited, Mid Day Multimedia Limited, Nagarjuna Construction Company Limited, Viceroy Hotels Limited & Tops Security Limited.

He started his career with Rs. 5000 in 1985 when the BSE Sensex was at 150. He made his first big profit of Rs 0.5 million in 1986 when he sold 5,000 shares of Tata Tea at a price of Rs 143 which he had purchased for Rs 43 a share just 3 months prior. Between 1986 and 1989 he earned Rs 20-25 lakhs. His first major successful bet was iron ore mining company Sesa Goa. He bought 4 lakh shares of Sesa Goa in forward trading, worth Rs 1 crore and sold about 2-2.5 lakh shares at Rs 60-65 and another 1 lakh at Rs 150-175. The prices then went up to Rs 2200 and he sold some shares.

Successful multi bagger stocks portfolio
Rakesh Jhunjhunwala has managed to identify numerous multi-baggers in the past decade, notable being Karur Vysya Bank, Praj Industries, Crisil, Titan, Nagarjuna, HOEL and PSUs like BEML and Bharat Electronics, among others. The typical traits to look for while identifying potential multi-baggers, according to Rakesh Jhunjhunwala are - low institutional holding, under-researched and general pessimism about the stock.

Checkout all stocks in Rakesh Jhunjhunwala Portfolio

Adani Power IPO Analysis - SUBSCRIBE Rating By KR Choksey

Checkout detailed research report and analysis of Adani Power IPO published by KR Choksey Shares & Securities.

The company's management team has strong execution capabilities with an established track record, knowledge in the power generation sector and strong understanding of the domestic market.

Further, the vertically integrated business model, long-term fuel tie ups and the tax exemptions enjoyed at the Mundra Power plants on account of APL being a co – developer in Mundra SEZ (and Tiroda project will be subject to MAT), would lead to higher margins and thus result in higher RoE (50%).

We have valued the company based on the profitability (EV per EBITDA) and capacity (EV per MW). Based on both these parameters, we believe that the company’s fair value is slightly higher than the price band of the IPO (Rs 90 – 100). Further, given the current market sentiment towards the power sector and interest in the sector by the investors, we expect the issue to get significantly over-subscribed.

Thus, we would recommend our investors to 'SUBSCRIBE' to the company’s IPO. Based on our calculation, the company’s fair value comes at Rs 104 per share, we thus believe that the downside risk is negligible and one can look into the issue for listing gains.

Download Adani Power IPO research report

Top 10 Stocks From Shipping & Logistics Sector

The growth of shipping and logistics sector depends on growth of the overall economy. In fact, this sector is said to be a proxy of the economy . As the economy revives there will be a rise in demand resulting in greater movement of goods, which would benefit the overall industry. According to experts the industry is expected to grow at 12%. Here is a list of top 10 stocks from Shipping & logistics sector published in Economic Times.

LARGE CAP STOCKS
Recommended By: Prabhudas Lilladher and KR Choksey Shares and Securities

MUNDRA PORT & SEZ
CMP:Rs 558
The port revenue of Mundra Port and Special Economic Zone (MPSEZ) grew by 17.4%. Mundra port clocked in volumes of 9.5m tonne for the quarter and 35.7m tones for FY09, representing growth of 12% and 24%, respectively. Growth in volumes was dominated by bulk cargo, which grew by 14.6% for the quarter.

CONTAINER CORP OF INDIA
CMP:Rs 1,051
The company exhibited reasonable performance in FY09 amidst the slowdown. The companys management is anticipating a recovery in the business environment, which is evident from its guidance of 10-12 % volume growth for FY10. We believe that the managements target for volume growth can be achieved.

MID CAP STOCKS
Recommended By: Karvy Stock Broking and SKP Securities

GREAT EASTERN SHIPPING
CMP:Rs 255
It reported revenue growth of 24% YoY to Rs 560 crore in the fourth quarter of FY09 due to decline in freight rates in dry bulk segment and 18% decline in operating days. The revenue was in line with our expectation of Rs 550 crore. Also, the consolidated revenue increased by 21.1% to Rs 3,791 cr during the for FY09.

GREAT OFFSHORE
CMP:Rs 422
It is the largest offshore oilfield service provider to upstream oil and gas companies to carry out offshore exploration and production activities . It recently forayed in to port management and single point mooring operations by acquiring 100% equity stake in KEI-RSOS Maritime and Rajamahendri Shipp. & Oilfield Services for Rs 1,600 crore.

SMALL CAP STOCKS
Recommended By: Emkay Global Financial Services

SEAMEC
CMP:Rs 172
During the beginning of the last quarter the company was sitting on committed contracts worth $40 million. As per management guidance all of its vessels will be fully available for operation in calendar year 2009. Consequently on expected full utilisation of fleet and currency appreciation we have upgraded the earnings estimates.

GARWARE OFFSHORE SERVICES
CMP:Rs 159
Revenues for the quarter increased by 88.9% to Rs 44 crore primarily on account of re-pricing of assets at higher day rates and addition of three new vessels PSV Mana & Makalu and AHTSV Poorna. Operating profit for the quarter increased by 62.9%. Also, the operating profit for the quarter increased by 62.9% y-o-y to Rs 23 crore.
Source: Economic Times

Advt: Learn about Domestic Shipping.

Jim Rogger's Investment Guidance On Where To Invest Now..

Jim Rogers is a legendary investor, a swashbuckling traveller, a man who made his fortune before he turned 40. Now, he is an author and commentator. The man Times magazine once called the Indiana Jones of the world of investing has now morphed himself into a modern dad. In an exclusive interview with Ramesh Damani on CNBC-TV18's show RD 360, Roger discusses his latest book, A Gift to My Children: A Father’s Lesson in life and investing.

On the economic scenario right now, Rogers said we are in for an extended period of difficult times.

Jim Rogers' investment strategy is to look countries where valuations are cheap or paths that are less trodden. He said, "I do try to find things that are cheap. Normally if something is cheap, it is because it is in the dustbin. People are not looking at it. If everybody is looking at something or if everybody is investing in something, you know as well as I do that it is not cheap. That is how he said he realised commodities was a good play in the 90s. I came to the conclusion at the end of the ‘90s that the commodities had been in a bear market for about 20 years because there had been excess supply in the 70s. But by the end of the 90s, I came to the conclusion that nobody built a drilling rig for 20 years and nobody had been discovering oil, farming had been a terrible business, farmers were going bankrupt all over the world. So, I realised that is going to mean there is less supply."


Here is a verbatim transcript of Jim Roger’s exclusive interview on CNBC-TV18.

Q: You came into fatherhood fairly late, didn’t you?
A: Yes. I always felt sorry for people who had children. I never wanted to have a child. I thought children were a terrible waste of time, energy, and money. I literally felt very sorry for people who had children. I was never going to do something so foolish. I was totally, unbelievably wrong. I am telling you, it is the best thing that has happened to me. If there is anybody watching this show who has not had children, I urge you to get home and get on with it. You take a day off if you have to. You don’t take a day off these days, go home for lunch. But you should definitely have children.

Q: Let’s talk about the lessons in investing, some of which you have outlined in your book. The first lesson is, how do you size up a country? Can you give us an example of which country you are sizing now?
A: As I look around the world right now, I am not investing in many countries because if I am right about the world economy, we are in for an extended period of difficult times. So, the only place where I bought shares in the past year or so has been China. I have got Sri Lanka on my mind. It is just that I have been busy doing other things that I haven’t been able to get to Sri Lanka. But one of the things that I have learnt is that if you get to a country after a long and bitter war, you usually will find that things are very cheap, you will find a lack of capital, there is low morale, and everything is despondent, and there are usually great opportunities. So, Sri Lanka is on my list as a place where that sort of thing is happening, but there are not many, not these days.

Q: How do you size up a country? What are you looking for?
A: I am looking for two things. I am looking for them to be cheap, for whatever reason: War is a good reason. Cheap and change, where there is some kind of positive change taking place. Sri Lanka is cheap, because it has had a 30-year war and if I am right there is positive change because the war is over now. So, there is going to be peace and so the country can spend a lot of its time, energy and money on pursuing peaceful pursuits.

Q: When you gave an idea and people laughed, is that actually a good sign?
A: Yes. You know that, you have been investing a long time that the more sceptical people are – it doesn’t mean you are right because sometimes I am wrong anyway and I am sure you are wrong too sometimes and sometimes the sceptics are right. But the more scepticism there is, in my experience anyway usually you are probably on to something good, especially if there is a lot of scepticism or ridicule. Ridicule is even better. When they ridicule your idea you are probably really on the right track.


Q: The way your method works is. You look at the dustbins; you look where people are bearish because that is where you find the bargains?
A: Frequently, I do try to find things that are cheap. Normally if something is cheap, it is because it is in the dustbin; people are not looking at it. If everybody is looking at something or if everybody is investing in something, you know as well as I do, it is not cheap.

Q: More certainty equals less profit?
A: Exactly.

Q: A good lesson in investing is learning the laws of supply and demand. Can you explain that to us?
A: It is very simple. I came to the conclusion at the end of the ‘90s that the commodities had been in a bear market for about 20 years because there had been excess supply in the ‘70s, people found oil and a lot of things happened, huge inventories of food buildup. But then by the end of the ‘90s, I came to the conclusion that nobody built a drilling rig for 20 years and nobody had been discovering oil, farming had been a terrible business, farmers were going bankrupt all over the world. So, I realised that is going to mean there is less supply.

I had driven around the world a couple of times as you know, and I could see that demand was booming. I mean Asia was exploding. The difference in Asia in 1998 and in 1978 was very dramatic. So, I could see that demand was going up for 20 years, and supply going down and that had to mean that the bear market in commodities was going to come to an end. So, I started buying commodities for the first time in the last 15-20 years at that time. Lo and behold, I got it right. Sometimes I get it right.

Q: That works every time, the law of supply and demand. No dictator, no monetary authority has ever been able to change that?
A: They all try. Not just dictators, democracies try. I mean the Indian government, the American government. They all try to abolish the laws of supply and demand, think that they are smarter than anybody else. Periodically, governments put price controls on to food. Recently, the Filipinos put price controls on rice. Now if you were a farmer, you are not going to go into the field over 12 hours a day in the hot sun to raise rice if the government says you can only sell it for 2 pesos. You are just not going to do it.

Q: As Russia found out also?
A: As everybody finds it, every time they try it they always find out. No politician is going out there in the hot sun to work 12 hours a day to sell rice for 2 pesos, I promise you. Indians find out periodically. Your government’s always doing absurd things, so is mine. It just doesn’t work. You cannot repeal the laws of supply and demand.


Q: So the black market price is a good indicator of government policies?
A: Yes. You will need to find that there is a black market price with a very high premium or you’ll find that there is no supply at any price depending on how draconian the government is. If they execute you for selling something on the black market, there is usually nothing at any price. The government’s can sit there and yell all day long. Evil capitalists or evil speculators. Listen, you set the price too low, nobody is going to produce and you will have nothing.

Q: Whenever you hear the word new era or this time it is different, what are the lessons that you learn and are you seeing anywhere that people are talking?
A: Anybody who has read anything to do with financial history knows that every time there is a new era or that it is different this time, or that there is a new economy, those are signals. You hear a bell ring; you know that something is wrong. Some of the most dangerous words are, it is different this time, because it is not different this time. The laws of supply and demand, the laws of greed and fear, the laws of economics just don’t change.

Q: But markets can remain irrational for long periods of time?
A: Oh yes. It was Keynes who said that, “The market can stay irrational longer than you can stay solvent”. Well it certainly happened to me at times you know. I would sell something short. No way, it is too high, only to see it go higher and higher. I’ve learned the difficult way. Some of the things right now, right now everybody seems to be convinced that government bonds are going to go through the roof and that government bonds are a safe investment. Everybody seems to be convinced that there is deflation in the world. Long-term government bonds are yielding nothing.


Q: The perceived safety?
A: They perceive safety and they perceive – you don’t have to worry about inflation, deflation is here. So, you can buy long-term government bonds. In my view that is one of the next great bubbles, which is developing. I am not short bonds at the moment. I have them but I cover. That is a huge bubble. Apparently if you look at the market, most people don’t think inflation is coming – if government bond yields are any indication – nobody thinks that inflation would ever come back. So, I am afraid, I think that that is probably the next bubble developing.


Q: Let’s talk about something that you have been bullish on, the dustbin of history: Airline stocks?
A: Yes, I have been, they are not doing much good right now. I think I see that the supply demand – I mean nobody has been building airplanes. All the airlines have lost huge amounts of money over the past nine years now. It is a terrible place to be. Many of them went bankrupt. Normally, when I see a lot of companies in an industry going bankrupt, it is a good sign that we are near a bottom, which is what initially attracted me to the airlines this time around. So, I have been buying international airline stocks. Most of them are down from where I bought them, fortunately not down a whole lot.

I am still convinced because I don’t see anybody building a lot of planes. I don’t think we are all going to take boats to London again, or New York. I think we are probably going to continue to fly.

Q: It is almost an irreplaceable business?
A: It seems to me. We also know that throughout history many people who have managed airlines haven’t done a horrible job of managing airlines, which again means that if you don’t have enough seats eventually we’re probably all going to fly on planes and eventually they are going to make money. So, I am convinced this is one of the places that will come out of this, if we have to come out of this in a good way. I am much more optimistic about commodities than I am about any stocks right now. But that is one place where I bought some shares a year or so ago.

Q: One lesson you mentioned that you wanted to teach your daughter is that, economics and markets are two different things. Can you explain that?
A: Yes. Let’s look at China. The Chinese economy has boomed for quite some time. But between 2001 and 2005, the Chinese stock market went down every year for four years in a row, even though the economy was going through the roof. So, just because an economy is strong doesn’t mean you can have a good stock market, and just because an economy is weak – they don’t necessarily go together. In the long-term of course there is some correlation. But don’t think that good news means good stock market.

Q: Philosophy and history are important subjects to learn?
A: In my view, yes. Philosophy teaches you how to think. I was not very good when I was in university in philosophy. In fact I think that was probably one of my worst subjects. Later I realised what they were trying to do. They were trying to teach me after I had graduated but it certainly did teach me.

Q: Why is it important in investing?
A: It teaches you to be sceptical. It teaches you to think. Like if you hear something from somebody it makes you stop and think. Now, could that possibly be true? Merrill Lynch says it, Morgan Stanley says it then it must be true. I don’t know if it was the philosophy that I studied or what but I have learnt that when you hear all that kind of stuff, when everybody is thinking the same way, somebody is probably not thinking and so you better do your scepticism. That is one of the things that philosophy taught me, as I though I wasn’t very good at it when I was in University. History teaches you that the world is always changing. Pick any decade, 15 or 20 years later the world is dramatically different.

Q: There are lessons that you interrelate to the market with this, in terms of Asian or the American century?
A: Again, whatever you see now is not going to be true if somebody comes to you and says that this company is a great growth stock and in 15 years they are going to own the world. Rarely has that been the case. Remember the projections that were made about dotcom companies, only 10 years ago. Well if those projections had been true, the whole world would be one big dotcom. Dotcom has come a long way but it not one big dotcom world.

Q: One of the things you stress, in your own personal life and for your daughters, is savings. Tell me about it, tell me about the lessons, savings you did and how you teach your daughters?
A: My oldest daughter is six years old. When she was born, I got her a piggy bank and a globe, an atlas so that she can learn about the world, but she’s got five piggy banks now and I tell her that she has to earn her money and she has to save her money and if she wants to buy something like a Barbie doll, which she loves, she has got to go take her own money.

She always tries to get her daddy to buy it for her. I certainly buy her clothes and things like that. But things like Barbie Doll and she has got to get her own Barbie doll, and I see that she is learning the value of money because I see that she doesn’t want to take her money out of the bank and put it to buy something. So, I think she is learning the value of money and that is the main thing.

You must know this, many people just don’t seem to understand money or be able to handle money or control themselves with money. I know that is extremely important. If you have savings, and something goes wrong, you are in much better shape than the people who don’t have savings when something goes wrong and you can cope better.

Equally important, if you have some money saved up and an opportunity comes along, you can do something about it. If you have got Rs 10,000 and you see a great opportunity, you can see opportunity. But if you are Rs 10,000 in debt, and a great opportunity walks in the door, you sit there helpless.

Q: The one thing that stood out in your career and a lot of successful investors is passion, the importance of being 24 hours in the market. Talk to me about the importance, why is it important to have that in children?
A: I try to speak to my little girl. The thing that I have found, people who love what they do are normally successful people. It doesn’t matter what you love. If you want to be a gardener, and your parents say no you’ve got to be a lawyer, or a doctor or an accountant, you should really go be a gardener because that is what you are going to love.

People may laugh at you but you love it so much, you’ll never go to work. You wake up every day and you can hardly wait to have fun. You are going to be much more successful at it. Some day you are going to be the gardener at Buckingham Palace, some day you are going to be the gardener for Hyde Park, some day you are going to have a chain of gardening shops all over the world, and be listed on the Mumbai Stock Exchange or the New York Stock Exchange. And you will be extremely rich and really successful, and even if you are not terribly rich and successful you are going to be a lot better off than all those guys who are lawyers who hate being lawyers and are doing it because they have to make money because their parents said become a lawyer, or their wives said we need the money. No, pursue your own passion. And that is where you will be successful.

Q: The best advice that you said in the book that you could give anyone was learn Mandarin. Why?
A: If I am right in the 21st century then China is going to be the great country of the 21st century. The 19th century was the century of the UK. The 20th century was the century of the US. The 21st century is going to be the century of China.

My little girls were born in 2003 and in 2008. I think that the best skill that I can give people born in those years is to know Mandarin and to know Asia. We sold our place in New York and we moved to Asia because I want my little girls to know Asia and specifically I want them to know Mandarin. There are other countries in Asia; there are other countries in the world. But in my view, China is the one that is going to dominate this century and Mandarin is going to be the most important language.

Q: What would be the best piece of investment advice that you ever got?
A: Buy low and sell high. No, the real one is do your homework. Do not listen to what other people tell you.


Q: Attention to detail?
A: Be very attentive to detail. Cover all the bases; most people don’t cover the bases. If you read an annual report for a company on Wall Street, you would have done more than 98% of the people on Wall Street.

Q: Really?
A: Come on, you know that. How many people in India ever bother to read the annual report? They get hot tips if somebody says, they see it on TV or read it in the newspaper and very few of them read the annual report. None of them read the notes to the annual report. If you just do simple things like that, you’re way ahead of everybody else, but that does not mean you are going to be successful. I promise you. But if you’ve learnt to cover all the bases, if you cover attention to detail, and you are sceptical, chances are that you’ll be a successful investor.

Q: You also said stock traders should learn how to drive tractors? That is where the money is, the next decade?
A: What I said was, the last 30 years has been an era in the developed world where finance has been the centre. The ‘80s, ‘90s and this decade, people in Wall Street, the City of London, once you had all the money and the influence. We’ve had many periods like that in history but we have also had many periods in history when it is the people who produce real things, whether it is miners or farmers or whatever, where they have been the centre. In my view, we are in a historic shift now away from the financial centres to the people who produce real goods.

Farming has been one of the worst professions, the worst jobs for the past 30 years. I am telling you that in my view, farming is going to be one of the great professions in the next 30 years. All these people who were stockbrokers should turn in their degrees and go down and learn how to drive a tractor. They will be a lot better off. Atleast they will be working for rich farmers if nothing else and if they are smart they will become the rich farmer themselves.
Source: MoneyControl.com

Adani Power IPO Price Band At Rs 90-100/share

Adani Power, a flagship company of Adani Group, has fixed IPO (initial public offering) price band at Rs 90-100/share. The minimum IPO bid slot set at 65 shares.

A power project development company, promoted by Adani Enterprises Limited, with total revenues of Rs 196 billion, is entering the capital markets with an initial public offering of 301,652,031 equity shares of Rs 10 each for cash at a price to be decided through a 100% book-building process.

The issue will open on July 28, 2009, and close on July 31, 2009.

The issue would constitute 13.84% of the post-issue paid-up equity share capital of the company. The issue includes a reservation of up to 8,000,000 equity shares of Rs 10 each for eligible employees. The issue less the employee reservation portion comprises a net issue of 293,652,031 equity shares. The net issue will constitute 13.47% of the post-issue paid-up equity share capital of the company.

Quintegra Solutions Ltd - Is It A Stock To Buy?

One of the visitors (Mr. Ramesh Hariharan, Director, Leadcap Ventures) asked me about Quintegra Solutions Ltd. a software development and services company and my take on it's present situation. I had published a report more than 1 year back on this site for this company when all of the things were going fine and company was zooming ahead.

A lot has happened since then. World economies have gone thru one of the worst financial credit crisis and slowdown. Many of the giants came on their knees. Small companies like Quintegra have also slowed down substantially & their growth came to hault with sudden jault.

I quickly went thru the Quintegra Solutions details thru various resources and what I found as on date is:

** Quintegra's sales turnover has consistently dropped from sept 08 quarter onwards consistently in the range of 20 - 30% every quarter

** Annually this has been dropf of ~50% in revenues

** Company has made a loss in quarters discussed above due to drop in revenues

** The biggest loss has been in quarter sept - dec 08

** Shareholding from promoters has been pledged in tunes of 68% of their holdings

** The biggest investor in company Roseburg Inc. has reduced it's shareholding from over 50% to only 18% as on date, perhaps this is the biggest reason of fall in price of this stock apart from losses made

** Rest of the investors are still invested in company

** One of the investors is Mavi investments, which is being said as operators and big investors driven investments firm, they are still invested!

Another factor to consider is, this was the most difficult time for all IT companies in India and overall world due to slowdown / financial crisis where companies came to standstill.

Quintegra also shown the negative growth in terms of revenues in this period.

In Dec. quarter company had sales turnover of 10 crores and loss of 10.5 crores!

This changed in March quarter with 8.5 crores sales and 2.6 croes loss. Company seems to be controlling it's losses and taking preventive measures.

Still this company has lot to do in terms of sales and profitbility but it seems this could turnaround with time and change in overall situation in world economy.

Company has good IT Solutions and products catering business sectors like hospital and health care, insurance, education and training etc.

There are chances that company could turnover in due course and so might turn the fortunes for shareholders as well.

One can take a bet and buy stocks from long term perspective. Who knows it could prove multibagger stock if everything goes well. Afterall stock market is all about calculated risks! More the risk bigger the rewards.

Comments are invited. Please do share If you know something more.

Stocks Which Posted Very Good Results

Checkout the list of companies which have posted very good financial results for the past quarter.

Triveni Engineering and Industries Ltd :
Net profit of Triveni Engineering and Industries rose 61.83% to Rs 39.81 crore in the quarter ended June 2009 as against Rs 24.60 crore during the previous quarter ended June 2008. Sales rose 17.62% to Rs 518.32 crore in the quarter ended June 2009 as against Rs 440.68 crore during the previous quarter ended June 2008.

Tinplate Company of India Ltd :
Net profit of Tinplate Company of India rose 538.48% to Rs 21.90 crore in the quarter ended June 2009 as against Rs 3.43 crore during the previous quarter ended June 2008. Sales rose 69.97% to Rs 195.33 crore in the quarter ended June 2009 as against Rs 114.92 crore during the previous quarter ended June 2008.

Henkel India Ltd :
Net profit of Henkel India rose 418.92% to Rs 5.76 crore in the quarter ended June 2009 as against Rs 1.11 crore during the previous quarter ended June 2008. Sales rose 12.89% to Rs 152.36 crore in the quarter ended June 2009 as against Rs 134.96 crore during the previous quarter ended June 2008.

Supreme Industries Ltd :
Net profit of Supreme Industries rose 192.58% to Rs 59.95 crore in the quarter ended June 2009 as against Rs 20.49 crore during the previous quarter ended June 2008. Sales rose 27.59% to Rs 563.85 crore in the quarter ended June 2009 as against Rs 441.91 crore during the previous quarter ended June 2008.

Essar Oil Ltd :
Net profit of Essar Oil rose 463.33% to Rs 169.00 crore in the quarter ended June 2009 as against Rs 30.00 crore during the previous quarter ended June 2008. Sales declined 24.41% to Rs 6774.00 crore in the quarter ended June 2009 as against Rs 8961.00 crore during the previous quarter ended June 2008.

Sterlite Technologies Ltd :
Net profit of Sterlite Technologies rose 416.82% to Rs 45.48 crore in the quarter ended June 2009 as against Rs 8.80 crore during the previous quarter ended June 2008. Sales rose 7.92% to Rs 436.18 crore in the quarter ended June 2009 as against Rs 404.18 crore during the previous quarter ended June 2008.

Oil India IPO To Open On Sept 7

Government sources said Oil India initial public offering (IPO)would open on September 7, 2009 and close on Setpember 11, 2009.

As per DRHP filed on December 14, 2007, the company was coming out with public issue of up to 26,449,982 equity shares of Rs 10 each. The issue comprised a net issue to the public of up to 24,045,438 equity shares and a reservation of up to 2,404,544 equity shares for subscription by eligible employees. The issue shall constitute 11% of the fully diluted post-issue capital of the company.

The objects of the issue were to fund requirements for fiscal 2009 and fiscal 2010 towards (a) exploration and appraisal activities; (b) development activities in producing fields; (c) purchase of capital equipments and contracts for facilities; and d) diversification of our existing business in downstream activities.

The company is engaged in the exploration, development, production and transportation of crude oil and natural gas onshore in India.

JM Financial Consultants Private Limited, Morgan Stanley India Company Private Limited, Citigroup Global Markets India Private Limited and HSBC Securities and Capital Markets (India) Private Limited were the book running lead managers to the issue. Karvy Computershare Private Limited was the registrar.

Top 25 Companies In Indian Stock Market - ET List

Many of the companies failed in this global economic downturn. Economic Times has published a list of big corporates who fought this slowdown successfully and have emerged as winners. Checkout..

The winners in the slowdown conundrum that took the top 10 positions, a couple surprisingly so, include Reliance Industries, Indian Oil Corporation, NTPC, MMTC, Bharti Airtel , NMDC, State Bank of India, Bharat Heavy Electricals Limited, Infosys Technologies and Larsen & Toubro.

SIZE DID MATTER
While Reliance Industries topped the list, Indian Oil Corporation (IOC) occupied the second position . Size did matter for them. Reliance Industries, although, did not show any impressive growth figures but the absolute numbers have been so large that there was no close competition and so it made the top billing quite easily. The net sales of Reliance Industries went up by merely 10% in FY09, whereas, net profit grew by just 2%. And while stocks of Reliance Industries did not perform remarkably well during the last one-year , the market capitalisation appreciated by 3%.

The second ranker, Indian Oil Corporation (IOC) posted a net sales growth of 16% during FY09 against 14% a year ago. However, though there was a dip in net profit in FY09, the market performance was impressive. The market capitalisation of the company went up by 48%.

National Thermal Power Corporation (NTPC) was at third position. In fact, NTPC gave cut-throat competition to IOC. The performance of NTPC in the ranking was much better than IOC on every front, but since net sales of IOC was much higher than that of NTPC, IOC scored higher. As far as financial performance of NTPC was concerned, net sales and net profit grew by around 14% and 11% respectively during FY09.
The next three positions 4th, 5th and 6th were occupied by MMTC, Bharti Airtel and NMDC respectively. Telecom major, Bharti Airtel , which posted an impressive financial performance , however, failed to rake in good returns for its investors, as performance on Dalal Street was poor. The market capitalisation of the company declined marginally.

A BANKERS DREAM
As we all know the banking sector has a high degree of correlation with the economic factors, and any macro level changes directly impacts the system. Not just size but also the robust growth of State Bank of India (SBI), the largest bank in India, helped it to feature among the top ten league at the 7th position. It maintained 30% growth in its net sales and net profit. In fact, the market capitalisation also increased by almost the same percentage.

Among the other top rankers in the banking industry were ICICI Bank and HDFC Bank. While ICICI Bank secured the 11th position, HDFC Bank came at 18th. HDFC Bank not only showed healthy financial results but also gave good returns in terms of appreciation in the market capitalisation . It gave a return of over 30% in the last one year. Paresh Sukthankar, executive director, HDFC Bank said, What really helped us was not what we did during the slowdown period itself, but what we did not do during the preceding boom period. We moderated our growth rates in certain areas while continuing to invest in growing businesses. We almost doubled our distribution network from 761 to 1,412 branches organically and through the Centurion Bank of Punjab (CBoP) merger. As retail loan demand picks up, we are extremely well entrenched as a market leader in almost all the loan products. In the wholesale customer segment, we see growth in transactional banking, working capital and term loans, and treasury products. With a wider distribution network, multiple customer and product franchises, a growing retail deposit base and a strong capital adequacy ratio of 15.7%, we are well positioned to grow at a healthy clip, particularly as the economy picks up further.

FMCG MOVES
The almost recession-proof FMCG sector ensured that there was not much of an impact on Hindustan Unilever (HUL). Not just in terms of financial performance, it also fared well in the equity market . Its net sales and net profit grew by 15% and 11% respectively in FY09. Consequently, the company bagged 21st position. Said Harish Manwani , chairman of HUL in the AGM, India is a diverse country but all of them hope for a better life hence we focus on a strategy called straddling the pyramid. Under this we focus on every category. He further explained it by giving an example; Wheel caters to the bottom of the pyramid, Rin serves mid-segment and Surf Excel serves the upper strata. Also, in other categories Hair, Oral Care and Tea we use the lucrative prices and small unit packs to serve the whole pyramid. In order to lower the cost, we started a new model called Go-To-Market .

IN TOP GEAR
Similarly, in the auto sector, which was one of the major losers in the slowdown battle, Maruti Suzuki India, the largest domestic car manufacturer, ranked 24th despite the fact that its net profit declined by almost 30%. On the other hand, it showered investors with good returns in the equity market. In the last one year, it gave a return of around 40%. A company spokesperson of Maruti Suzuki India said that reaching new markets, improved products, service development and increasing exports helped them to get the higher ranking. To sustain the sales level, we penetrated the unexplored local rural market. We also launched a brand new engine (K series engines) and two global car models: A-star and Ritz. Apart from this we enhanced our after sales service network across the nation to support the increasing volumes of sales. On the production front, we expanded our capacities to reach a million units annually. These factors have helped us and we are proud to register an all-time high sales figure of 7,92,167 units during 2008-09 .

Also, Hero Honda Motors, the largest manufacturer of motorcycles with a marketshare of over 55%, occupied the 31st position. In order to combat the slowdown and come out as a winner, the strategy that Hero Honda took was a sharper focus on topline growth, building a contemporary portfolio with a wide range of models and increased spending on advertisements.

Said Anil Dua, Sr VP marketing & sales, Hero Honda Motors, Our performance is better mainly because of the six strategies that we took. Our main focus was on top-line growth. Second, building absolutely robust contemporary product portfolio with a wide range of models. Third, we did serious brand building activities. Besides, we also kept spending on sales and marketing. In the last three years we have doubled the total touch points to more than 4,000 from 2,000 earlier. Under the rural vertical, we have more than 500 rural sales executives, who literally go to all villages. We have a multi-focal approach and focus on bikes for every segment from 100cc to 150 cc and above. And for women we launched scooters, too.

Another public sector bank, UCO Bank registered robust net sales and net profit growth. Both the top and bottom line grew by 25% and 35% in FY09 and it positioned itself in the 119th place. According to S K Goel, CMD at UCO bank, going forward to improve the financial strength of the company , the focus would be on reducing non-performing assets (NPA), increasing the CASA and fee-based income. Among the financial service companies, equity broking companies were also affected adversely as the trading volume came down substantially. Among the listed players, companies such as Geojit BNP Paribas Financial Services witnessed a decline of 27% and 70% respectively in its net sales and net profit during FY09. It bagged the 348 th position. But it has also shown a sharp recovery as in the first quarter of FY10 its net sales went up by 84%. According to C J George, MD of Geojit BNP Paribas Financial Services, adequate steps have already been taken in terms of decreasing the cost and strengthening the existing channel and launching new products such as currency derivative and real estate broking.

REALTY BITES
Again it was an bad year for real estate companies. Parsvnath Developers and Sobha Developers found themselves in the 263rd and 261st positions respectively. During the last year, the demand in real estate dried up completely. Also, these were the stocks, which lost relatively higher in the stock market. Both of the above mentioned companies lost above 45% of their market capitalisation during the last one year.

Small Cap Stock To Buy - Banswara Syntex Ltd

Banswara Syntex Limited has been in spinning, historically. Over time, it has stepped across the textiles value chain. Value-added businesses fetch high margins and Banswara is looking to increase its share from such products.


It started with weaving and later diversified into cotton spinning and readymade garment manufacturing.A separate unit was set up at Daman to manufacture trousers under the brand name of ‘Integration’. The production is exported to more than 50 countries including US, UK, Canada and Spain. With its plan of positioning itself as an integrated textiles company, it has taken several steps.

Recently, it installed 10 jacquard looms to make upholstery fabric and set up a new plant for readymade garments at Surat. This plant also has the capacity of producing 11,250 jackets per month. Its foray into jackets will ensure another revenue source. The share of fabric and garments in its total revenue is rising and is expected to reach 60% by 2010. While integration is the goal, its focus on the yarn business will remain unchanged. This is clear from the increase in its spinning capacity. As competition for cotton yarn business has intensified, it has converted spindles for cotton yarn spinning into blended yarn production.

The company enjoys a strong customer base. It includes Levi’s Strauss (Dockers), Marks & Spencer, Next, Perry Ellis,Liz Clairborne and domestic players like Raymond and Pantaloon. It has set up an 18MW thermal power plant in Banswara which meets 90% of its power requirements. Changing over to coal has also helped to save on fuel costs.

Market Cap 53.67
* EPS (TTM) 7.12
* P/E 5.75
* P/C 1.38
* Book Value 70.09
* Price/Book 0.58
Div(%) 12.00
Div Yield(%) 2.93
Market Lot 1.00
Face Value 10.00
Industry P/E 145.04

The March quarter has been good for the company. Sales and operating profit have grown 18% and 135%,respectively.The five-quarter average sales and operating profit growth are 27% and 42%,respectively. It operates with a margin of 13%. The most compelling reason to buy this stock are its valuations. At the current levels of Rs 40, it's market-capitalisation is 0.1 times its sales and 0.9 times its operating profit. We can’t get too many stocks at cheaper valuations than this.

A great stock to buy on declines.

Raj Oil Mills IPO To Open On July 20

Raj Oil Mills is going public with an initial public offering of 95,00,000 equity shares of Rs 10 each with a price band of Rs 100 to Rs 120 per equity share.


The issue size will be Rs 95 crore at the lower end of the price band and Rs 114 crore at the upper end of the price band. The issue would constitute 26.38% of the fully diluted post-issue paid-up capital of the company.

The issue will open on July 20, 2009, and will close on July 23, 2009.

The proceeds from the proposed issue are expected to be deployed for setting up various facilities at Manor, Thane district, Maharashtra. These would include a refinery of 200 TPD, which can process Sunflower, Soyabean, Groundnut, Palm, Cotton Seed oils; a crushing unit of 200 TPD for Groundnut and Copra; a Palm Fractionation unit of 100 TPD; and a Vanaspati Ghee unit of 50 TPD, a Ayurvedic and Cosmetic unit of 5 TPD and In-house Blow Moulding Plant for PET Bottles.

The proposed issue will also fund setting up of crushing unit of 200 TPD for sesame and mustard at Bagru, Jaipur district, Rajasthan; for brand promotion, expansion of Marketing & Distribution network and for setting up of Research and Development facilities. The margin money for working capital requirement and issue expenses will also be met out of issue proceeds.

The book running lead manager is Karvy Investor Services Limited. The co-book running lead managers are India Capital Markets Private Limited and PL Capital Markets Private Limited.

The equity shares offered through the Red Herring Prospectus of the company are proposed to be listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE).

Raj Oil Mills is engaged in the business of Crushing and Oil Filtration with a capacity of 5,000 TPA and 30,000 TPA respectively. It markets products under the following brands: Cocoraj (Coconut Oil), Cocoraj Cool (Ayurvedic Oil), Guinea Groundnut Oil (Double Filtered Oil), Guinea Lite Groundnut Oil (Refined Oil), Guinea Lite Sunflower Oil (Refined Oil), Guinea Lite Cottonseed Oil (Refined Oil), Guinea Lite Soyabean Oil(Refined Oil), Tilraj Til Oil, Mustraj Mustard Oil and Cocoraj Jasmine. The aforementioned products are sold under three umbrella brands --- ‘Cocoraj’, ‘Guinea’ and ‘Raj’. These brands are in existence for more than 5 decades. Due to its vast experience in the edible oils business, the company has strong in-house manufacturing capabilities, wide product portfolio and brand presence.

The company’s business strategy is to maintain versatile manufacturing capabilities, produce high quality products and market a wide product range. The company’s networth comprising share capital, reserves and surplus as on December 31, 2008, is at Rs 100.33 crore. Its total assets are at Rs 162.47 crore.

NHPC IPO On August 7

The state-owned PSU, NHPC IPO (initial public offering) will open for subscription on August 7 and close on August 12. The company is going to raise over Rs 2,500 crore via IPO.

As per the DRHP filed on August 5, 2008, the company is coming out with a public issue of 1,67,73,74,015 shares of Rs 10 each. The issue comprises a fresh issue of 1,11,82,49,343 equity shares by NHPC and an offer for sale of 55,91,24,672 equity shares by the president of india acting through the ministry of power, government of India.

The issue comprises a net issue to the public of up to 1,63,54,39,665 equity shares and a reservation of up to 4,19,34,350 equity shares for subscription by eligible employees. The issue shall constitute 13.64% of the post-issue capital of NHPC.

The company is into hydroelectric power generation. It has developed and constructed 13 hydroelectric power stations and its total installed capacity was 5,175 MW. The money raised from the issue would be utilised for its power projects. The shares issued via IPO are proposed to be listed on the BSE and NSE.

The book running lead managers to the issue are Enam Securities Private Limited, Kotak Mahindra Capital Company Limited and SBI Capital Markets Limited, and the registrar is Karvy Computershare Private Limited.

Marico - Growth Mid Cap Stock From FMCG Sector

Marico generates 75% of its revenue from domestic FMCG, which has been largely unaffected by the current slowdown.

We can expect strong volume growth with margin expansion to drive an EPS growth of 22% in FY09-11. Marico''s "Parachute" brand has maintained market share over the past two years, with volume growth of 11-12% pa driven by the consumer shift from loose unbranded oil to branded oil.


The positioning of "Saffola" edible oil has been successfully transformed from a ''curative'' product to a ''preventive'' measure, thus driving increased penetration.

Although premium skin care is discretionary spending and likely to slow in the current environment, it provides Marico with a strong long-term growth avenue. BNP expect Kaya clinics to grow to 8% by FY11 from 5% of revenue in FY08 on aggressive new clinic additions, and contribute 7% of net profit versus almost 0% in FY09.

Marico is also exploiting the power of its two key brands by extending them to new products/variants, although estimate do not include any revenue from these new products.

Market Cap 4,887.23
EPS (TTM) 2.33
* P/E 34.44
* P/C 30.75
* Book Value 6.04
* Price/Book 13.29
Div(%) 65.50
Div Yield(%) 0.82
Market Lot 1.00
Face Value 1.00
Industry P/E 26.04

The target price based on 20x FY10 EPS, based on a PEG (price earning to growth ratio) of 0.9x, is in line with the historical 4-year average.A great safe and steady stock to buy for the long term investors.

Checkout:
Top 10 FMCG Stocks To Buy Now
Stocks You Must Buy - Consumer Durables (FMCG Sector)

More on Retail-FMCG Sector

Adani Power IPO To Open For Subscription On July 28

Adani Power, a power project development company, promoted by Adani Enterprises Limited, flagship company of Adani Group, with total revenues of Rs 196 billion, is entering the capital markets with an initial public offering of 301,652,031 equity shares of Rs 10 each for cash at a price to be decided through a 100% book-building process.

The issue will open on July 28, 2009, and close on July 31, 2009. The company filed the Red Herring Prospectus (RHP) with the Registrar of Companies, Gujarat, Dadra and Nagar Haveli (RoC) on July 14, 2009.

The issue would constitute 13.84% of the post-issue paid-up equity share capital of the company. The issue includes a reservation of up to 8,000,000 equity shares of Rs 10 each for eligible employees. The issue less the employee reservation portion comprises a net issue of 293,652,031 equity shares. The net issue will constitute 13.47% of the post-issue paid-up equity share capital of the company.

The equity shares offered through the RHP of the company are proposed to be listed on National Stock Exchange of India Limited (NSE) and the Bombay Stock Exchange Limited (BSE).

The global coordinator and book running lead manager for the issue is DSP Merrill Lynch Limited. Other book running lead managers for the issue are Enam Securities Private Limited, IDFC-SSKI Limited, JM Financial Consultants Private Limited, Kotak Mahindra Capital Company Limited, Morgan Stanley India Company Private Limited, ICICI Securities Limited and SBI Capital Markets Limited.

Interview And Short Biography Of Rakesh Jhunjhunwala Published In UAE Newspapaer

An interview and short biography of Rakesh Jhunjhunwala published in UAE Newspapaer. Checkout some of the stocks mentioned in this article

On the day I meet him, Rakesh Jhunjhunwala is front-page news. He has just told ET Now, a new financial news channel, that he thinks India’s Sensex index will touch the 19,000-point mark before the end of this year. That would be a 30 per cent rise from today’s prices, even during global economic turmoil, and it has won him the top spot on both the channel and the website of the Economic Times, its sister paper.

This is exactly the kind of call that made Mr Jhunjhunwala the star of India’s bull run between 2003 and last year’s market crash, and the most sought-after commentator on India’s budget unveiled last week. He was one of the few businessmen willing to publicly criticise a budget many felt would be bad for investors.

When I am ushered into his office, his bulky frame is propped up in front of three screens of flickering red and green stock prices. His eyes do not leave the constantly updating quotes for more than 15 seconds at any point in the interview. It seems that I am lucky to get even half of his attention.

I ask him what has prompted his new phase of bullishness. “Markets are dynamic, they’re constantly changing,” he says as he watches those markets morph on screen. “They’ve got reversed now. I think that, when at last confidence comes back, a lot of other things will come back.”

In 2005, when the Sensex had tipped above 5,000, Mr Jhunjhunwala declared it could hit 25,000 within five to six years. That brash prediction, not to mention his larger-than-life persona, helped him become a fixture on India’s financial news networks. And he came close to seeing what some considered a ridiculously bullish forecast come true. At the end of the bull run in January last year, the Sensex had passed 21,000.

Since the market crash, the 31 publicly traded stocks of which Mr Jhunjhunwala holds more than a 1 per cent stake lost about 60 per cent of their combined value, even underperforming the Sensex.

I ask him if he ever doubted his judgements on the India story. “Well, I examined my thoughts again,” he concedes. “But I could never lose my conviction about India’s growth. I held on to my stocks, very much so.”

Doing so has resulted in him losing much of the paper wealth that propelled him into the Forbes Rich List last year. “I have much less than what most people think, but much more than I need,” he tells me.

Mr Jhunjhunwala is frequently dubbed “India’s Warren Buffett”, but in many ways the two could not be more different. The Oracle of Omaha is a teetotaller and a non-smoker. Mr Jhunjhunwala constantly alternates between his preferred 555 cigarettes, sweet chewing paan and Indian snacks. He is known for his taste for cigars and Blue Label whisky.

While Mr Buffett still lives in the same house in Omaha he had when he began, Mr Jhunjhunwala has moved his family into a plush flat in Mumbai’s upmarket Malabar Hill neighbourhood. The only time he breaks away from his trading screens is when he shows me a slide show of his mountain-top mansion in the Mumbai hill station of Lonavla, one designed by the Indian architect Nitin Killawala.

Like Mr Buffett, however, Mr Jhunjhunwala is primarily a value investor and both are willing to share their investments and the rationale behind them with the public.

When Mr Jhunjhunwala invests, it is generally in unloved small and mid-cap stocks, such as Geometric, Zen Technologies and Aptech in the software sector, consumer goods companies such as Agrotech Foods and Titan watches, and service companies such as Tops Securities and a school management firm. None is really a household name.

“Rakesh is a classic bottom-up stock-picker, who gets into companies with strong managements and/or compelling long-term stories and then holds them through market cycles,” says Shankar Sharma, the managing director of First Global, who has been seen as the bear to Mr Jhunjhunwala’s bull. “I can’t see too many flaws in his make-up as a long-term investor.”

Mr Jhunjhunwala says his fascination with balance sheets began young. “I had a childhood love for stocks,” he says. “My father used to invest a bit and I used to talk about it with him in the evening. I was a very curious child, so I was always quizzing my dad. He said, ‘Instead of quizzing me all the time, why don’t you find out yourself’?”

This enchantment with profit-and-loss figures continued into his studies as a chartered accountant at Mumbai’s main business school, Sydenham College. He always knew he wanted to be in the market, although it was a business frowned upon by his family.

His father was a bureaucrat, a commissioner in India’s income tax department. The Jhunjhunwalas are from Rajasthan’s Marwari business community, traders in goods rather than on the Bombay Stock Exchange, which at the time was dominated by Gujaratis. “I initially wanted to become a broker, but I didn’t have the capital to be a broker, so I started investing,” Mr Jhunjhunwala says.

He entered the market in 1984, aged 25, with a 5,000-rupee investment (equivalent to about Dh1,000 today) in the iron-ore exporter Sesa Goa. Just three years later, he had turned that into 10 million rupees.

A quarter of a century later, Mr Jhunjhunwala has an office in Nariman Point, India’s financial district, where the walls bear line drawings of Mr Buffett, George Soros, John Templeton, Peter Lynch and other legendary investors, each accompanied by a few of their pithiest quotes written out in italic script. There is also a prayer room occupied by Ganesh, Lakshmi and other Hindu deities. “We pray that this room remains the best used part of our property for our future prosperity,” a sign reads.

Each of them, from Lynch to Lakshmi, have made him the businessman he is today, Mr Jhunjhunwala says. “Markets are my life, they’re my passion.” He does take time off, but not without his BlackBerry. However, he protests that looking at his BlackBerry is the second thing he does every day. The first is kissing his daughter.

Before his partner Utpal Sheth joined in 2004, Mr Jhunjhunwala was a one-man army, operating out of tiny offices in the warren-like streets around Dalal Street, Mumbai’s historic stock market district.

“We’ve gone from being ‘the wild east’ to one of the world’s most developed markets,” he says. “It’s more organised, more regulated. As the size and the breadth of the market increases, it will be more difficult to manipulate.”

Since the dark days of March, India’s Sensex has rallied almost 50 per cent, its biggest quarterly gain in 17 years. It is starting to look as if Mr Jhunjhunwala’s prediction of a long bull run may have been right, albeit one interrupted by a global financial crisis he could never have predicted.

Asked to list his reasons to be positive on India, Mr Jhunjhunwala veers into delphic, almost poetic language: “That India is a tortoise, slow but sure; that the forces that are driving India are irreversible; that in India everything is bottom up, not top down; and that India is biological.”

Asked what he means by “biological”, he says: “What is India? India is organised chaos, and therefore growth has never come through order, always through chaos. What’s driven India’s growth is the democracy, its demographic advantage and the tolerant nature of the Indian people.”

Checkout: Rakesh Jhunjhunwala's latest portfolio

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20 Stocks You Must Buy - Forbes India Stock Picks

Forbes India magazine had recently published a list of 20 stocks to buy. These stocks could prove winner in stock market.

The Indian stock market took a severe beating last year. Valuation benchmarks were so distorted that even penny stocks began to look respectable in comparison to mid cap stocks and small cap stocks. So how do you get the juicy stocks and avoid the dregs?

Remember that the financial crisis, like Swine flu, came from foreign shores. So avoid stocks with global linkages, mostly. Go for companies that feed off domestic demand.

Thus, the prospects for automobile companies may look better if they continue to get access to cheap raw material. But that may not be the case for metal and oil suppliers, who still suffer the overhang of poor prices globally. We think four themes act as superb filters to get to the cream. Within these four themes, we have picked companies that have high return on capital employed, profit and revenue growth along with a strong connection to the domestic market. This is by no means an exhaustive list. In our judgment, the companies we’ve selected exemplify the kind of plays investors will benefit from. There may well be several other stocks among the 4,000-odd listed companies that could qualify to be selected under each of these categories.

This list is designed to offer a variety of opportunities for both the long-term value investor as well as those with a slightly higher risk appetite.

Checkout the list classified under various heads of top stock picks from Forbes India.

Consumer Durables (FMCG Sector) Stock Picks

Infrastructure Sector Stock Picks

Banking, Insurance, Retail and Airlines Stock Picks

Volatile & Trading Stocks For Short Term Gains


You may want to checkout: Stock Market in 2009 - Stocks to Buy

Source: Forbes Business Magazine

Stocks You Must Buy - Volatile & Trading Stocks For Short Term Gains

The Vulture Play
These stocks have fallen like there’s no bottom. But the levels at which they are trading offer huge opportunities.

Strategy: Buy on rumours and sell on news.

Suzlon:
Debt is high and so are the receivables. But Tulsi Tanti is willing to dilute his stake and meet commitments. If US President Barack Obama backs energy generation from green sources, Suzlon’s 5 MW wind turbines will be hot. The stock has gained nearly 300 percent since the time it fell to Rs. 35.

Ranbaxy:
The last 12 months have been bad. Sales are down, research hasn’t paid off and US FDA is after it for manufacturing lapses. But the new Japanese owner Daiichi Sankyo has had great successes in research and working with the FDA. Expect them to put Ranbaxy back on an even keel.

NIIT:
As IT crashed so did the IT trainer. Its stock fell 85 percent to Rs. 14. But it is moving beyond IT and is training professionals for banking jobs. The amount spent on education doubled in the last five years and NIIT grew twice as fast, quadrupling its top line. The stock has recovered to half its 52-week high.

Wockhardt:
Its core business is in fine fettle. Its problems are foreign loan repayments and derivative losses. Banks are taking over the company operations and Habil Khorakiwala has put some businesses on the block to pay off debtors. Wockhardt’s strong cash flow should return it to good health in two years.

Hindalco:
The acquisition of Novelis tripled Hindalco’s sales but caused an 11 percent decline in net profits. But aluminum prices are rising and credit is beginning to flow. Hindalco’s nine-month profits look nice. It now has the space to fix Novelis. Tricky but not impossible.

Risk: This one’s clearly a high risk strategy. There could be serious heart ache before the gains come.


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Consumer Durables (FMCG Sector) Stock Picks

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Stocks You Must Buy - Banking, Insurance, Retail and Airlines Stock Picks

The Liberalisation Play
Government moves out, lets in private capital, it works more efficiently and delivers great returns. That’s liberalisation. The new government has the mandate to open up sectors like banking, insurance, retail and airlines to private investors. When it does, be there.

Strategy: Simply select the best performers in these sectors.

Crisil:
The 800-pound gorilla of rating agencies, it rates 1,000 firms today. If the financial sector is liberalised, that number could go up to 10,000. Crisil has retained earnings of 75 percent with an ROCE of 42 percent. It is the fourth largest credit rating agency in the world.

ICRA:
There is room for both Crisil and ICRA in the space. At Rs. 788, the company is getting close to its 52-week high of Rs. 900. But the number doesn’t capture the potential arising from RBI’s new rule that all debt products be rated.

HDFC Bank:
A cautious and solid bank, it is safe because its government bond holdings are 3 percent over the statutory liquidity ratio (SLR) requirement.Fiscal liberalisation will benefit this bank because it is in a position to scale up quickly. At Rs. 1,569, the price looks steep based on 2009-10 P/E multiple of 4. This is very much the stock for those who like conservative growth.

Kingfisher Airlines:
The company has a debt-equity ratio of 3:1. And it makes losses. If foreign capital is allowed, you can be sure of one thing: Vijay Mallya will make sure Kingfisher gets it. That will make life a lot easier for the airline.

Oracle Financial:
It suffered when oreign banks went broke. But its earnings jumped 77 percent and revenues rose 23 percent in 2008-09. As its clients come off the ventilator, they will need to be rewired. Oracle Financial will be waiting.

Risk: The ambiguity of regulatory changes, however, gives them some additional risk. Given that US banks have behaved so badly, it is going to be hard for government to liberalise the financial sector.


Other stocks recommended in "20 Stocks You Must Buy - Forbes India Stock Picks"

Consumer Durables (FMCG Sector) Stock Picks

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Stocks You Must Buy - Infrastructure Sector Stock Picks

The Infrastructure Play
India needs new roads, ports, airports, railway lines and huge amounts of power. Apart from steel and cement, there are several ancillary plays as well. For instance, warehouse network will be needed along the roads and near ports. As more small towns get connected to big cities through roads, vehicle sales will benefit.

Strategy: Not good for paying school fees; great for college education kitty.

Blue Star:
Two decades to reach Rs. 1,000 crore in sales; two years to reach Rs. 2,000 crore in 2008. Non-core businesses are gone and 90 percent of revenues come from refrigeration and cooling products. It’s almost debt-free with an ROCE of over 50 percent. Growing demand for cold storage, outsourcing outfits and other commercial offices in Tier II cities put the estimated non-residential demand for air conditioning at Rs. 38,000 crore.

BHEL:
For 2009-10, the company is increasing its capacity from 10 GW to 15 GW. Capacity additions are ahead of schedule. The slowdown in the global economy has brought down input costs significantly. The company has also taken control of its salary costs that were eroding its profit margins. BHEL will be among the top beneficiaries as India begins to add 20,000 MW of generation capacity each year for the next five years.

Power Finance Corporation:
At about 25 percent, the company’s net profit margin is close to what the best software companies earn at half their price-to-earnings ratio. This public sector company also enjoys the preferred lender status for all the mega power projects in the country. Its employee expenses are just 1 percent of sales.

Mahindra & Mahindra:
Rural India is earning well because of infrastructure boom. M&M’s SUVs are selling briskly and its market share in the SUV space has gone from 51 percent to 57 percent in the last two years. A week after Xylo was launched, M&M received 9,000 bookings, or one-fifth of its annual SUV sales. The stock may be fully priced now but the upshot comes from prosperity in the hinterland that better infrastructure will bring.

Allcargo Global Logistics:
This stock was one of the earliest to recover after it fell dramatically in October. It has already recovered all the lost ground as the company managed to keep its net profits margin above 15 percent. The stock is available at a P/E of 17 on trailing earnings, just as expensive as the broad market. Allcargo, a complete logistics provider, is positioned well to exploit the projected 17 percent in port traffic and the increasing trend of outsourcing of logistics by manufacturing companies.

Risk: Long payback periods are par for the course in infrastructure. As a result, earnings in the near term could be depressed, often in proportion to the borrowed funds. If costs of funds go up, returns could diminish. In some cases, regulatory glitches can also slow down the process as is the case with mega power plants coming up in Uttar Pradesh.


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Stocks You Must Buy - Consumer Durables (FMCG Sector) Stock Picks

The Consumer Play
Between 2000 and 2005, nearly a third of the incremental expenditure came from the middle class. Their non-food expenditure rose 70 percent, while expenditure on education doubled. In these years, as per capita income rose 80 percent, Indians also increased their expenses by nearly the same degree.

The same theme will play out in the coming years. The five broad areas to look for companies are: food, essential non-food, education, healthcare (lifestyle) and discretionary expenditure that will include consumer durables and automobiles.

Strategy: Buy it, stash it and have a good night’s sleep.

Page Industries:
A small company that makes a small product with big margins: male underwear. This Rs. 200-crore company makes the Jockey brand and has a net margin of 12 percent and ROCE of 36 percent. The company has effectively positioned its brand in a largely unbranded and unorganised Rs. 900 crore innerwear market. The company is worth a little over $100 million — cheap to even buy as an ongoing business for global competitors.

Pidilite Industries:
Pidilite has brands like Fevicol, M-Seal, car polish Motomax and other assorted consumer art materials and specialised home paints. The three brands are also clear market leaders in their category. The company is available at a market capitalisation of 1.6 times its sales. With a sales growth rate of more than 22 percent for the last five years, there is a lot of steam left as its brands touch fast-growing areas like education, home décor and automobiles.

Dabur:
This company has focus. Five years ago, Dabur got out of the pharmaceutical business and put all its effort, like the best brand companies, behind five of its brands. Since then, its ROCE has consistently remained above 50 percent. It touched 80 percent in 2008. Dabur strategy of focussing on health foods like fruit juices sold under its Real brand is starting to pay dividends.

Procter and Gamble Hygiene:
Over the last three years, the money that P&G invested did not translate into market cap gains. The worm has now turned. Its feminine hygiene line, Whisper, grew at 21 percent and is also the category leader in value terms. Its ROCE, which started dipping since 2006, has again picked up indicating that its new investments are now paying dividends. The stock is trading at its three years highs but is still priced 20 percent below its peers.

Marico:
Till 2008-09 came by, the company’s sales and profits had grown for 30 consecutive quarters, indicating a stable track record. Over the last five years, the company averaged a 20 percent growth in sales and profits. It recently launched its Saffola range of food products, which is expected to give the company its next round of growth. The stock looks fully priced but its international business and Kaya Skin Clinics have started to deliver returns. Analysts expect these businesses to expand rapidly in the coming years.

Risk: People love this sector when the chips are down. But when bulls are roaming the streets, returns from this sector fall. These stocks have higher valuations than the general market, making them look expensive.


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Banking, Insurance, Retail and Airlines Stock Picks

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