While reading through various business magazines as usual, I came across an interesting story written by MoneyLife magazine on a small company called Concurrent (India) Infrastructure Ltd. I searched through MoneyLife magazine website and what I found was very interesting to read articles about company which entertained me a lot!! Literally. Just read these articles and you would come to know how common investors like you and me are fooled by companies.
P.S. Do not forget to read the comments below articles in MoneyLife website or you would miss all the action!
Following is the series of articles published by MoneyLife magazine on Concurrent (India) Infrastructure Ltd. These are the links that directly take you to the articles in magazine website.
Concurrent India: A bunch of investors taking others for a ride
Concurrent fools investors with false announcement on Sikkim power project
Holes in Concurrent’s claims, as manipulators ramp up prices and SEBI & BSE look away
Concurrent revenues, net profit, OPM and EPS get a sudden boost in March quarter
It is not new for small companies to change the company results and other declared information for manipulating their stock prices to earn quick money fooling retail investors. If Satyam Computer Services can do it, anyone else on this earth can surely! What do you say?
Rakesh Jhunjhunwala on good and bad stocks in his portfolio
Rakesh Jhunjhunwala has recently turned 50. He was interviewed by CNBC TV-18 for his views ahead for Indian stocks and about his good and bad investments till now. There are many people out there who follow Rakesh Jhunjhunwala portfolio religiously and his investment philisophy. If you are one of them, you would certainly be interested in knowing his bad stocks.
I am posting excerpts only about good and bad stocks held by Rakesh Jhunjhunwala from Moneycontrol.com website, click here to read entire interview about celebration of his 5oth birthday and his views on future.
Mukherjee: I want to come back to your portfolio, since we are talking 50 years, what is the best stock you have ever owned, your all time favourite stock?
Jhunjhunwala: Titan, I wear it on my hand.
Mukherjee: Just because it has made you money? There is no other emotional attachment to any other stock?
Jhunjhunwala: Look at the company.
Checkout Rakesh Jhunjhunwala Portfolio : updated as per June 2010 data.
Mukherjee: It has done superbly, phenomenally well; I thought it might be a close contest with Lupin, which is another stock, which has made you a lot of money?
Jhunjhunwala: No, I think a stock in which I have emotions is Karur Vysya Bank.
Mukherjee: Why? What is the story?
Jhunjhunwala: Look at the sheer performance. There is 21% compounded growth in profits for the last ten years, comes from a place nobody knows called Karur. It is not a small bank now, its profitability is about USD 90 million, growing at 20-25% and I own it since 1992-1993-94.
Mukherjee: You haven’t sold anything?
Jhunjhunwala: No, I haven’t sold. I think this investment has given me I don’t know how much thousand percent return.
Mukherjee: In the listed space, one stock which really makes you angry that you bought that?
Jhunjhunwala: Infomedia 18. I sold it just about six months back. But if you look at the stats, special interest publication magazine with a market in America, leadership in yellow pages and I held the stock for at least for seven-eight years.
Mukherjee: Eight years?
Jhunjhunwala: May be seven-eight years and then I sold it, maybe with some loss. Though I think good industry, good positioning, but I never made money.
Mukherjee: You bought VIP recently, what attracted you to that story?
Jhunjhunwala: It is a no-brainer in terms of growth. In travel, it dominates. I started buying it at Rs 65. My average cost would not be more than Rs 120 or maybe less. So, it is a no-brainer, according to me.
Mukherjee: What do you think of banks? You have never spoken about that, it is a big industry, you have spoken once or twice about State Bank to me in the past, are you bullish or bearish, because it seems like the bellwether in the system right now?
Jhunjhunwala: I was very bullish on State Bank, but now I am negative on the stock because I don’t like a bank who cannot provide for its bad debts. They are under providing every quarter and they need time from RBI to make 70% provision. But one thing they may have upside and uprun now, but over a medium time period all of them will need capital, which is one thing, which will dilute returns.
Checkout Rakesh Jhunjhunwala Portfolio updated as per June 2010 data.
I am posting excerpts only about good and bad stocks held by Rakesh Jhunjhunwala from Moneycontrol.com website, click here to read entire interview about celebration of his 5oth birthday and his views on future.
Mukherjee: I want to come back to your portfolio, since we are talking 50 years, what is the best stock you have ever owned, your all time favourite stock?
Jhunjhunwala: Titan, I wear it on my hand.
Mukherjee: Just because it has made you money? There is no other emotional attachment to any other stock?
Jhunjhunwala: Look at the company.
Checkout Rakesh Jhunjhunwala Portfolio : updated as per June 2010 data.
Mukherjee: It has done superbly, phenomenally well; I thought it might be a close contest with Lupin, which is another stock, which has made you a lot of money?
Jhunjhunwala: No, I think a stock in which I have emotions is Karur Vysya Bank.
Mukherjee: Why? What is the story?
Jhunjhunwala: Look at the sheer performance. There is 21% compounded growth in profits for the last ten years, comes from a place nobody knows called Karur. It is not a small bank now, its profitability is about USD 90 million, growing at 20-25% and I own it since 1992-1993-94.
Mukherjee: You haven’t sold anything?
Jhunjhunwala: No, I haven’t sold. I think this investment has given me I don’t know how much thousand percent return.
Mukherjee: In the listed space, one stock which really makes you angry that you bought that?
Jhunjhunwala: Infomedia 18. I sold it just about six months back. But if you look at the stats, special interest publication magazine with a market in America, leadership in yellow pages and I held the stock for at least for seven-eight years.
Mukherjee: Eight years?
Jhunjhunwala: May be seven-eight years and then I sold it, maybe with some loss. Though I think good industry, good positioning, but I never made money.
Mukherjee: You bought VIP recently, what attracted you to that story?
Jhunjhunwala: It is a no-brainer in terms of growth. In travel, it dominates. I started buying it at Rs 65. My average cost would not be more than Rs 120 or maybe less. So, it is a no-brainer, according to me.
Mukherjee: What do you think of banks? You have never spoken about that, it is a big industry, you have spoken once or twice about State Bank to me in the past, are you bullish or bearish, because it seems like the bellwether in the system right now?
Jhunjhunwala: I was very bullish on State Bank, but now I am negative on the stock because I don’t like a bank who cannot provide for its bad debts. They are under providing every quarter and they need time from RBI to make 70% provision. But one thing they may have upside and uprun now, but over a medium time period all of them will need capital, which is one thing, which will dilute returns.
Checkout Rakesh Jhunjhunwala Portfolio updated as per June 2010 data.
Topsgrup planning it's IPO in 2011-12
Security services provider Topsgrup is planning it's Initial Public Offering (IPO) in year FY 2011-12.
Security services provider Topsgroup is looking for acquisitions worth up to Rs 1,000 crore in India and US. These acquisitions are going to be partially funded by an initial public offering (IPO) which company is planning is soon.
The company is planning for the IPO to raise around Rs 300 crore in 2011-12. "The money raised through the IPO will be used to part fund the possible acquisitions, predominantly in India and the US. The additional money required for the buyouts will come from internal accruals,” as per Ramesh Iyer's statement in The Telegraph. Ramesh Iyer is managing director of Topsgrup India.
Tops Security Limited, the flagship company of Topsgrup, is the first security firm in India to get private equity funding in 2007. ICICI Venture invested Rs 115 crore for a 13.69 per cent equity stake, while Indivision (the investment arm of Future Group) increased its stake in the company to 7.08 per cent from 4.94 per cent with an additional investment of Rs 25 crore. Stock investor Rakesh Jhunjhunwala owns a 10.8 per cent stake and is a director on the board.
In 2008, Topsgrup acquired a 51 per cent stake in a UK security service provider — The Shield Guarding Company — for about Rs 125 crore. In the same year, it had bought Bangalore-based Guardwell Detective Services Pvt Ltd for an undisclosed amount. Topsgrup had also acquired a 14.69 per cent stake in Chennai-based security systems integrator firm Adtech Systems.
Security services provider Topsgroup is looking for acquisitions worth up to Rs 1,000 crore in India and US. These acquisitions are going to be partially funded by an initial public offering (IPO) which company is planning is soon.The company is planning for the IPO to raise around Rs 300 crore in 2011-12. "The money raised through the IPO will be used to part fund the possible acquisitions, predominantly in India and the US. The additional money required for the buyouts will come from internal accruals,” as per Ramesh Iyer's statement in The Telegraph. Ramesh Iyer is managing director of Topsgrup India.
Tops Security Limited, the flagship company of Topsgrup, is the first security firm in India to get private equity funding in 2007. ICICI Venture invested Rs 115 crore for a 13.69 per cent equity stake, while Indivision (the investment arm of Future Group) increased its stake in the company to 7.08 per cent from 4.94 per cent with an additional investment of Rs 25 crore. Stock investor Rakesh Jhunjhunwala owns a 10.8 per cent stake and is a director on the board.
In 2008, Topsgrup acquired a 51 per cent stake in a UK security service provider — The Shield Guarding Company — for about Rs 125 crore. In the same year, it had bought Bangalore-based Guardwell Detective Services Pvt Ltd for an undisclosed amount. Topsgrup had also acquired a 14.69 per cent stake in Chennai-based security systems integrator firm Adtech Systems.
Stock report - TCS after recent results
Stock report on TCS after it's recent results declaration. TCS does not need any introduction as India's largest software exporter. It leads the IT companies in India in terms of revenues earned. Is it a stock to buy post it's Q1 result? For what target should one buy stock of TCS now?
The company has reported better than expected revenue and earnings for Q1 FY 2011 observing the strong rebound in demand. Revenue on a constant currency basis has increased by 7.3% Q-O-Q against the stock market expectations of 5.7%.
The growth rate is better than that of rival Infosys (6%). This level has not been seen since Q3 FY 2008. It looks like corporate IT spending has increased and played a prominent role in improving the performance of the company. Steps taken by the company to maintain better margins has definitely helped it.
USD revenue has increased by 6.4% Q-O-Q on strong volume growth of 8.1%. Despite wage hikes in the quarter, the profit margin fall is just 36 bps leading to a better than expected EPS growth. Order flow for TCS is picking up with 10 deals in Q1 and 15 more in the pipeline.
Stock dividend from TCS is at 20 Rs/share. At current stock price, Rs. 840, this dividend yield stands at 2.38%. This makes TCS a good dividend yielding stock and keep in mind that this is one of the safe stock to buy from IT pack in Indian stock markets. Tata sons ltd. holds more than 73% shares of TCS and dividend income from TCS is one of the biggest income source for TATA sons which they reinvest in other group companies. The biggest beneficiary of good dividend yield from TCS is TATA company itself and this very fact would keep clocking good dividend income year after year for investors.
EPS projection for FY 2011 - 13 has been hiked by 4 -5%. The projected/estimated EPS for FY 2011 comes at approx. 36-37 range. IT Industry has always commanded a P/E ratio of around 21. And TCS, being largest IT company commands premium P/E on top of this. It's current P/E is at 27.87. If we consider P/E of 25 for our future calculations, it takes us towards target stock price of Rs. 900 - 925. One may buy stock for long term investment portfolio.
The company has reported better than expected revenue and earnings for Q1 FY 2011 observing the strong rebound in demand. Revenue on a constant currency basis has increased by 7.3% Q-O-Q against the stock market expectations of 5.7%.
The growth rate is better than that of rival Infosys (6%). This level has not been seen since Q3 FY 2008. It looks like corporate IT spending has increased and played a prominent role in improving the performance of the company. Steps taken by the company to maintain better margins has definitely helped it.
USD revenue has increased by 6.4% Q-O-Q on strong volume growth of 8.1%. Despite wage hikes in the quarter, the profit margin fall is just 36 bps leading to a better than expected EPS growth. Order flow for TCS is picking up with 10 deals in Q1 and 15 more in the pipeline.
Stock dividend from TCS is at 20 Rs/share. At current stock price, Rs. 840, this dividend yield stands at 2.38%. This makes TCS a good dividend yielding stock and keep in mind that this is one of the safe stock to buy from IT pack in Indian stock markets. Tata sons ltd. holds more than 73% shares of TCS and dividend income from TCS is one of the biggest income source for TATA sons which they reinvest in other group companies. The biggest beneficiary of good dividend yield from TCS is TATA company itself and this very fact would keep clocking good dividend income year after year for investors.
EPS projection for FY 2011 - 13 has been hiked by 4 -5%. The projected/estimated EPS for FY 2011 comes at approx. 36-37 range. IT Industry has always commanded a P/E ratio of around 21. And TCS, being largest IT company commands premium P/E on top of this. It's current P/E is at 27.87. If we consider P/E of 25 for our future calculations, it takes us towards target stock price of Rs. 900 - 925. One may buy stock for long term investment portfolio.
SEL Manufacturing - Stock report and comments
Kapil Madan, one of Indian Stocks News readers had commented on my year old article, Small Cap Stock Analysis - SEL Manufacturing and asked me to post my recent views. Taking this opportunity to revisit the article and renew my opinion with a few latest facts.
---Kapil's comment---
I could figure out that you wrote this analysis almost an year back when share price of SEL was 67 a share. In the last one year, the share price has seen much ups & downs, specially in the last one month or so. Promotors holdings is going down as well. Also company is coming with an IPO in future. I read somewhere that more than 80% of the equity (other than that of promoters) have changed hands past one month!!
Amidst all this, whats your views now on SEL. I am sure 2010 balance sheet is now available for you to review. I and many small & medium investors are curious to know your view on this.
Personally, i do not hold any shares of SEL, but definitely planning to acquire some.
-----
Another regular reader of Indian Stocks News, Devkinandan, have commented on the same:
SEL March 2010 Equity - 30.35cr.
net profit- 7.79cr.
EPS Qtr - 2
Promotors holding Mar 08 - 64.5%
Dec 08 - 57.27%
Sep 09 - 47.43%
Mar 10 - 38.67%
Promotors lagatar apni holding decreas kar raha hai.March 10 quarter ka net proffit March 09 aur Dec 09 ke adhe se bhi kam hai.DEBT ke bare main Vinay Bhai ne bataya hi hai.
-----
I just had a look at SEL's latest result ... it says that promoters shareholding is now 19.45% (yes ..it is nineteen). Promoters shareholding is 19.45% and rest 80.55% is with aam aadami (retail investor).
You may have a look at the latest SEL manufacturing Results here.
The debt on company in March 2009 was Rs. 623 crores. I do not know how much it is in 2010 as I did not get to see it anywhere. But I did get to see that Rs. 34.50 crores was the interest paid by company on it's debt as on DEC. 09 in nine months result.
As Devkinandan has pointed out about constantly decreasing promoters shareholding and looking at the latest figures, I don't know why anyone would like to risk one's hard earned money to buy stocks of SEL Manufacturing. Do you want to help promoters in offloading their stocks?
---Kapil's comment---
I could figure out that you wrote this analysis almost an year back when share price of SEL was 67 a share. In the last one year, the share price has seen much ups & downs, specially in the last one month or so. Promotors holdings is going down as well. Also company is coming with an IPO in future. I read somewhere that more than 80% of the equity (other than that of promoters) have changed hands past one month!!
Amidst all this, whats your views now on SEL. I am sure 2010 balance sheet is now available for you to review. I and many small & medium investors are curious to know your view on this.
Personally, i do not hold any shares of SEL, but definitely planning to acquire some.
-----
Another regular reader of Indian Stocks News, Devkinandan, have commented on the same:
SEL March 2010 Equity - 30.35cr.
net profit- 7.79cr.
EPS Qtr - 2
Promotors holding Mar 08 - 64.5%
Dec 08 - 57.27%
Sep 09 - 47.43%
Mar 10 - 38.67%
Promotors lagatar apni holding decreas kar raha hai.March 10 quarter ka net proffit March 09 aur Dec 09 ke adhe se bhi kam hai.DEBT ke bare main Vinay Bhai ne bataya hi hai.
-----
I just had a look at SEL's latest result ... it says that promoters shareholding is now 19.45% (yes ..it is nineteen). Promoters shareholding is 19.45% and rest 80.55% is with aam aadami (retail investor).
You may have a look at the latest SEL manufacturing Results here.
The debt on company in March 2009 was Rs. 623 crores. I do not know how much it is in 2010 as I did not get to see it anywhere. But I did get to see that Rs. 34.50 crores was the interest paid by company on it's debt as on DEC. 09 in nine months result.
As Devkinandan has pointed out about constantly decreasing promoters shareholding and looking at the latest figures, I don't know why anyone would like to risk one's hard earned money to buy stocks of SEL Manufacturing. Do you want to help promoters in offloading their stocks?
Why did Hero Honda stock lost so much in a day?
Hero Honda Motors lost 7.46% (Rs 146.05 to close at Rs 1,811.85) on Monday. There were pending sell orders of 55 shares, with no buyers available.
CNBC-TV18 reported that Japanese Honda Motor company is likely to divest about 6% stake in Hero Honda as per their sources. At present, Honda Motor company holds 26% stake in the joint venture company HERO HONDA.
You may check the news video here.
As per CNBC TV18 news report, Honda is talking to private equity players for this stake sale in Hero Honda. This stake dilution could impact technology transfer and product sharing from HONDA Motor company to HERO HONDA as the sources said.
Why would HONDA do this? This is what my guess is. Japanese HONDA company holds only 26% in HERO HONDA. So they get only 26% of profits from HERO HONDA, whereas, most of the products technology in HERO HONDA products would be from HONDA Motors. Few years back, HONDA has launched it's own products line such as HONDA Unicorn and HONDA Activa.
This could be the long term strategy from HONDA Motors to go alone in Indian markets and minimize the dependence on JV partners such as HERO. If you look at the HONDA website (http://www.honda2wheelersindia.com/) and the product line, they are surely gearing up to take the market share from other bike makers in India like BAJAJ auto and of course HERO HONDA too. Who knows, HONDA's wings might be ready to fly!
Management of Hero Honda has denied this news.
CNBC-TV18 reported that Japanese Honda Motor company is likely to divest about 6% stake in Hero Honda as per their sources. At present, Honda Motor company holds 26% stake in the joint venture company HERO HONDA.You may check the news video here.
As per CNBC TV18 news report, Honda is talking to private equity players for this stake sale in Hero Honda. This stake dilution could impact technology transfer and product sharing from HONDA Motor company to HERO HONDA as the sources said.
Why would HONDA do this? This is what my guess is. Japanese HONDA company holds only 26% in HERO HONDA. So they get only 26% of profits from HERO HONDA, whereas, most of the products technology in HERO HONDA products would be from HONDA Motors. Few years back, HONDA has launched it's own products line such as HONDA Unicorn and HONDA Activa.
This could be the long term strategy from HONDA Motors to go alone in Indian markets and minimize the dependence on JV partners such as HERO. If you look at the HONDA website (http://www.honda2wheelersindia.com/) and the product line, they are surely gearing up to take the market share from other bike makers in India like BAJAJ auto and of course HERO HONDA too. Who knows, HONDA's wings might be ready to fly!Management of Hero Honda has denied this news.
SKS Microfinance IPO Information
Checkout IPO information of SKS MICROFINANCE and whether you should buy IPO of the company. A public offering of 16,791,579 equity shares of SKS Microfinance will open on July 28, 2010.
IPO Information:
Issue Open: July 28, 2010
Issue close: July 30, 2010
Price Band: Rs. 850 - Rs. 985 Per Equity Share
Minimum Bid Size: 7 Equity Shares
Face Value: Rs. 10 Per Equity Share
Issue Type: 100% book building
Maximum Subscription Amount for Retail Investor: Rs. 100000
Incorporated in 2003, SKS Microfinance Ltd is the largest MFI in India in terms of total value of loans outstanding, number of borrowers, who they call members, and number of branches, according to the October 2009 CRISIL report titled India Top 50 Microfinance Institutions, or the CRISIL Research report.
SKS Microfinance is a non-banking finance company, or NBFC, registered with and regulated by the Reserve Bank of India, or RBI. They are engaged in providing microfinance services to individuals from poor segments of rural India.
The public offering is going to constitute 21.6% of the fully diluted post issue paid-up capital of the company. The issue would close on July 30, 2010 for QIBs and on August 2, 2010 for retail and non-institutional applicants.
IPO Grading / Rating:
CARE has assigned an IPO Grade 4 to SKS Microfinance Ltd IPO. This means as per CARE company has 'Above Average Fundamentals'.
SKS Micro Finance earned a profit before tax of Rs 267.70 crore on its total income of Rs 958.92cr for the FY 2010. The basic Earnings Per Share(EPS) of the company is Rs 33 as per the financial information provided by it. P/E ratio stands at 25.75 at lower band and 29.84 at upper price band. This looks reasonable looking at higher P/E ratios of other NBFC's in market like Reliance capital and Bajaj finserv. One may buy IPO for some listing gains and good returns in mid term.
Sequoia Capital India selling stocks
At the upper end of the price band, Sequoia Capital India II LLC will be selling 9,346,256 equity shares (part of it's holding) with returns of over 16x in its three year old investment. It has invested through two funds SCI II Llc and SCIGI I with average cost of purchase pegged at Rs 61.18 and Rs 137.53 per share, respectively. SCI II is a part of the group of shareholders who have together offered to sell a part of their holding in the IPO.
IPO Information:
Issue Open: July 28, 2010
Issue close: July 30, 2010
Price Band: Rs. 850 - Rs. 985 Per Equity Share
Minimum Bid Size: 7 Equity Shares
Face Value: Rs. 10 Per Equity Share
Issue Type: 100% book building
Maximum Subscription Amount for Retail Investor: Rs. 100000
Incorporated in 2003, SKS Microfinance Ltd is the largest MFI in India in terms of total value of loans outstanding, number of borrowers, who they call members, and number of branches, according to the October 2009 CRISIL report titled India Top 50 Microfinance Institutions, or the CRISIL Research report.
SKS Microfinance is a non-banking finance company, or NBFC, registered with and regulated by the Reserve Bank of India, or RBI. They are engaged in providing microfinance services to individuals from poor segments of rural India.
The public offering is going to constitute 21.6% of the fully diluted post issue paid-up capital of the company. The issue would close on July 30, 2010 for QIBs and on August 2, 2010 for retail and non-institutional applicants.
IPO Grading / Rating:
CARE has assigned an IPO Grade 4 to SKS Microfinance Ltd IPO. This means as per CARE company has 'Above Average Fundamentals'.
SKS Micro Finance earned a profit before tax of Rs 267.70 crore on its total income of Rs 958.92cr for the FY 2010. The basic Earnings Per Share(EPS) of the company is Rs 33 as per the financial information provided by it. P/E ratio stands at 25.75 at lower band and 29.84 at upper price band. This looks reasonable looking at higher P/E ratios of other NBFC's in market like Reliance capital and Bajaj finserv. One may buy IPO for some listing gains and good returns in mid term.
Sequoia Capital India selling stocks
At the upper end of the price band, Sequoia Capital India II LLC will be selling 9,346,256 equity shares (part of it's holding) with returns of over 16x in its three year old investment. It has invested through two funds SCI II Llc and SCIGI I with average cost of purchase pegged at Rs 61.18 and Rs 137.53 per share, respectively. SCI II is a part of the group of shareholders who have together offered to sell a part of their holding in the IPO.
Small cap stock to buy - Acrysil India
Checkout a new small cap stock to buy, Acrysil India, recommended by Ashish Chugh, investment analyst and author of Hidden Gems. He has recently appeared on CNBC TV-18 interview and unearthed his two hidden gem small cap stocks for investors.
He has advised investors to buy stock for long-term investment portfolio.
Acrysil India is a very small company, which has created a niche for itself in the product which it manufactures. This company manufactures granite and quartz kitchen sinks, which no other company manufactures in India. It has got a virtual monopoly in the granite and quartz kitchen sink. The products of this company has sold under Carysil brand name and that brand is basically become a premium brand for kitchen sinks.
Checkout entire verbatim transcript of his interview published on Moneycontrol here.
Checkout another small cap stock recommended by Ashish Chugh: Cosmo Films
Checkout earlier Hidden Gems by Ashish Chugh
He has advised investors to buy stock for long-term investment portfolio.
Acrysil India is a very small company, which has created a niche for itself in the product which it manufactures. This company manufactures granite and quartz kitchen sinks, which no other company manufactures in India. It has got a virtual monopoly in the granite and quartz kitchen sink. The products of this company has sold under Carysil brand name and that brand is basically become a premium brand for kitchen sinks.
Checkout entire verbatim transcript of his interview published on Moneycontrol here.
Checkout another small cap stock recommended by Ashish Chugh: Cosmo Films
Checkout earlier Hidden Gems by Ashish Chugh
Small cap stock to buy - Cosmo Films
Checkout another small cap stock to buy, Cosmo Films, recommended by Ashish Chugh, investment analyst and author of Hidden Gems. He has recently appeared on CNBC TV-18 interview and unearthed his two hidden gem small cap stocks for investors.
He has advised investors to buy stock for long-term investment portfolio.
Cosmo Films is a company which manufacturers Bi-axially Oriented Polypropylene Films (BOPP) films and also thermal insulation film. In the thermal insulation film segment this company is the largest player. This company has got two manufacturing plants in Aurangabad, two in Gujarat and besides this the company has got overseas manufacturing facilities in Korea, US and Netherlands.
Checkout the entire verbatim transcript of his interview published on Moneycontrol here.
Checkout another small cap stock to buy recommended by Ashish Chugh: Acrysil India
Checkout earlier Hidden Gems by Ashish Chugh
He has advised investors to buy stock for long-term investment portfolio.
Cosmo Films is a company which manufacturers Bi-axially Oriented Polypropylene Films (BOPP) films and also thermal insulation film. In the thermal insulation film segment this company is the largest player. This company has got two manufacturing plants in Aurangabad, two in Gujarat and besides this the company has got overseas manufacturing facilities in Korea, US and Netherlands.
Checkout the entire verbatim transcript of his interview published on Moneycontrol here.
Checkout another small cap stock to buy recommended by Ashish Chugh: Acrysil India
Checkout earlier Hidden Gems by Ashish Chugh
Rupee symbol - India get's Rupee a face to recognize
I am excited to see the new rupee symbol. Finally Indian government decided and shortlisted the face to Indian rupee.
Since the day I had seen the computer keyboard in my childhood, I wondered for the sign of $ on number 4 key. When I realized the reason behind it, I understood the power of US as economy and a country of innovations where computer was made. The wondering went on increasing as I came into field of computer engineering and started using the computers for most of my day. I look at the $ symbol on my keypad several hundred times a day. I use to think about the day when Indian rupee will get it's sign and when would we have it on computer keyboard. I have always seen my one of favorite cartoon characters Donald Duck with $ symbols flashing in his eyes, when can we have a donald duck playing with gold coins embossed with Rupee symbol on it? Sounds foolish ... huh ... but I guess we should be able to see it soon! And as an Indian, I would feel proud.
I am sure the day is not far when we can have the rupee symbol embossed laptop keypads to use along with $.
During the Union Budget 2010 Finance Minister Pranab Mukherjee mentioned that proposed symbol would reflect and capture the Indian ethos and culture. Five symbols had been short listed and the Cabinet selected the definitive symbol created by D Udaya Kumar on 15 July 2010.
The symbol is a taken from the Devanagari ‘र’. The parallel lines at the top (with white space between them) make an allusion to the tricolor Indian flag and also depict an equality sign which symbolizes the nation's desire to reduce economic disparity. The Indian government will try to adopt the symbol within six months in the country and globally within 18 to 24 months. Prior to this, the most commonly used symbols for the rupee have been Rs., Re. or रू.
Since the day I had seen the computer keyboard in my childhood, I wondered for the sign of $ on number 4 key. When I realized the reason behind it, I understood the power of US as economy and a country of innovations where computer was made. The wondering went on increasing as I came into field of computer engineering and started using the computers for most of my day. I look at the $ symbol on my keypad several hundred times a day. I use to think about the day when Indian rupee will get it's sign and when would we have it on computer keyboard. I have always seen my one of favorite cartoon characters Donald Duck with $ symbols flashing in his eyes, when can we have a donald duck playing with gold coins embossed with Rupee symbol on it? Sounds foolish ... huh ... but I guess we should be able to see it soon! And as an Indian, I would feel proud.I am sure the day is not far when we can have the rupee symbol embossed laptop keypads to use along with $.
During the Union Budget 2010 Finance Minister Pranab Mukherjee mentioned that proposed symbol would reflect and capture the Indian ethos and culture. Five symbols had been short listed and the Cabinet selected the definitive symbol created by D Udaya Kumar on 15 July 2010.The symbol is a taken from the Devanagari ‘र’. The parallel lines at the top (with white space between them) make an allusion to the tricolor Indian flag and also depict an equality sign which symbolizes the nation's desire to reduce economic disparity. The Indian government will try to adopt the symbol within six months in the country and globally within 18 to 24 months. Prior to this, the most commonly used symbols for the rupee have been Rs., Re. or रू.
Small Cap Stock To Buy - Mahindra Ugine Steel Company
Stock to buy in metals and steel sector, Mahindra Ugine Steel company, had caught my attention when I looked at it's negative PE ratio of -5.21 in FY 2009. It is a small cap stock with big company name tag (Mahindra) around it.
I was actually looking for good stocks which were making losses but bare the potential to turn around and start making profits again. There has been a slight delay from my side in posting on Mahindra Ugine as I have already bought stocks of this company at 64 levels around 2 months back. I ignored it meanwhile for sometime as I got busy in my professional life and that I have invested in Mahindra Ugine for long term. 2 - 3 days back I saw some surge in this stock and realised it is already trading at 70 levels now. SO I decided to post asap before it is too late and Indian Stocks News subscribers start cursing me for posting it late.
Mahindra Ugine Steel Co. Ltd. (MUSCO, under SYSTECH sector, belonging to the Mahindra Group is the pioneer & well known manufacturers of alloy steel in the country. The company has three stampings division to manufacture pressed sheet metal components and assemblies in India. The client list is very impressive and all are big names in industry. You can view the client list here.
When you look at the EPS data of company, it was -5.80 for FY 2009, as I have stated earlier about company having negative earnings to price ratio. for FY 2010 EPS was 1.44, company started making profits again. The guidance (estimated EPS) for FY 2011 stands at 5.8 and 7.7 for FY 2012. With this, the P/E ratio for FY 12 is at 9.18 which is very reasonable.
Dividend:
Company has proposed dividend of Rs 1/- per equity share of Rs. 10/- each, as recommended by the Board of Directors. If it is declared on July 27, 2010, it will be paid on or after July 30, 2010. This dividend return is okay and could increase in coming years as company looks well set for future with capex and expansion plans announced.
Stock price target
The current stock price is at Rs. 70 Medium term stock price target could be around Rs 80. A good long term stock to buy. And a buy on dips.
I was actually looking for good stocks which were making losses but bare the potential to turn around and start making profits again. There has been a slight delay from my side in posting on Mahindra Ugine as I have already bought stocks of this company at 64 levels around 2 months back. I ignored it meanwhile for sometime as I got busy in my professional life and that I have invested in Mahindra Ugine for long term. 2 - 3 days back I saw some surge in this stock and realised it is already trading at 70 levels now. SO I decided to post asap before it is too late and Indian Stocks News subscribers start cursing me for posting it late.
Mahindra Ugine Steel Co. Ltd. (MUSCO, under SYSTECH sector, belonging to the Mahindra Group is the pioneer & well known manufacturers of alloy steel in the country. The company has three stampings division to manufacture pressed sheet metal components and assemblies in India. The client list is very impressive and all are big names in industry. You can view the client list here.
When you look at the EPS data of company, it was -5.80 for FY 2009, as I have stated earlier about company having negative earnings to price ratio. for FY 2010 EPS was 1.44, company started making profits again. The guidance (estimated EPS) for FY 2011 stands at 5.8 and 7.7 for FY 2012. With this, the P/E ratio for FY 12 is at 9.18 which is very reasonable.
Dividend:
Company has proposed dividend of Rs 1/- per equity share of Rs. 10/- each, as recommended by the Board of Directors. If it is declared on July 27, 2010, it will be paid on or after July 30, 2010. This dividend return is okay and could increase in coming years as company looks well set for future with capex and expansion plans announced.
Stock price target
The current stock price is at Rs. 70 Medium term stock price target could be around Rs 80. A good long term stock to buy. And a buy on dips.
Stock report : Jaiprakash Associates - a big conglomerate in making
This stock report on Jaiprakash Associates was requested by long time reader and follower of Indian Stocks News, Mr. Janak Soni. He has sent me a small list of large cap stocks he wants to invest in for 2 - 3 years time frame. I am going to write on each of them one by one.
The first stock report from his list was on Punj Lloyd.
The Jaypee Group is a 27,700 crore market cap diversified infrastructural industrial conglomerate. It operates through its various subsidiaries in different business segments.
Jaiprakash Power Ventures Limited (JPVL)
The company with its operational power plants - 300 MW Baspa-II (Himachal Pradesh) and 400 MW Vishnuprayag (Uttarakhand) is India’s largest Private sector Hydropower producer and is on its way to be an integrated power producer with expansion in Thermal & Power Transmission.
www.jppowerventures.com
Jaypee Karcham Hydro Corporation Limited (JKHCL)
The Government of Himachal Pradesh again invited the group for the Karcham Wangtoo a 1000 MW project. The group formulated JKHCL for this project. Still under execution, the project is to commence its operations in the year 2011. View details
Jaypee Arunachal Power Limited
The company is setting up two hydropower projects - Lower Siang Project (2700 MW) and the Hirong Project (500 MW) in Joint Venture with the Government of Arunachal Pradesh.
Bina Power Supply Co. Limited
BPSCL shall set up a 1250 MW (two phase of 625 MW each) coal fired Thermal Power Plant at Bina in the State of Madhya Pradesh.
Jaypee Power Grid Ltd.(JPL)
JPL has been formed for execution of the transmission system between Wangtoo in Kinnaur district of Himachal Pradesh & Abdullapur in Yamuna Nagar district of Haryana for evacuation of 1000 MW power from Karcham Wangtoo HEP in Himachal Pradesh.
www.jaypeepowergrid.com
Bhilai Jaypee Cement Limited (BJCL)
Incorporated in the state of Chhattisgarh as a Joint Venture with Steel Authority of India Ltd. (SAIL). The said company is to produce a 2.2 MTPA split-located Cement Plant at Bhilai in the State of Chattisgarh and at Babupur, Satna in the State of Madhya Pradesh.
www.bjcl.co.in
Gujarat Jaypee Cement & Infrastructure Limited (GJCIL)
The Group has signed an Agreement with Gujarat Mineral Development Corporation Limited (GMDCL) for setting up of a 2.4 MTPA capacity cement manufacturing plant with captive power station and captive Jetty in district Kutch of Gujarat.
Bokaro Jaypee Cement Limited (BOJCL)
BOJCL, the second joint venture between the Company and SAIL with management control vested in the Company, is incorporated to set up a 2.1 MTPA capacity cement plant at Bokaro in Jharkhand.
Madhya Pradesh Jaypee Minerals Limited (MPJML)
A Joint Venture company between JAL and the Madhya Pradesh State Mining Corporation Limited (MPSMCL) to develop the Amelia (North) Coal block.
Jaypee Infratech Limited (JIL)
A subsidiary of Jaiprakash Associates Ltd. which would undertake the implementation of prestigious Yamuna Expressway Project comprising of 165 KM, 6 Lane Access Controlled Expressway connecting Greater Noida with Agra.
www.jaypeeinfratech.com
Jaypee Ganga Infrastructure Corporation Limited (JGICL)
JGICL a wholly owned subsidiary of the Company for implementation of the prestigious 1047 km, long 8-lane Access-Controlled Expressway connecting Greater Noida with Ghazipur- Ballia.
Himalayan Expressway Ltd.
The Company will undertake the construction of Zirakpur-Parwanoo Highway connecting Punjab, Haryana & Himachal Pradesh on BOT basis. The total length of the highway would be 28.690 kms.
JPSK Sports Pvt. Ltd.
JPSK Sports Pvt. Ltd. is incorporated for developing a Greenfield state-of-the-art Sports Complex including Car Race track for motor sports with related integrated support infrastructure including townships, cricket stadium, go karting track and auxiliary facilities.
Why should one buy stocks of Jaiprakash associates, if at all?
Let's have a look at where the group businesses are contributing in growth:
Cement business This is the cash cow for group. Jaiprakash Associates’ (JPA’s) current capacity stands at 22.8m tonnes has an attractive realization and EBITDA/tonne on account of savings in terms of tax, captive power and market positioning. The company is expected to add another 9-10m tonnes in the next two years, making it a ‘33.5m tonne giant’ (This is only next to giants Holcim and UltraTech Group).
Power business: The next cash cow. JPA’s 76.3% subsidiary, Jaiprakash Power Ventures, (JPVL) (current operational hydro power capacity of 700MW), has capacity addition plans of 8x under construction. JPVL is expected to reach an installed capacity of 5590MW in FY15E, with a 70:30 hydro-thermal mix.
Jaypee Infratech (JPI) is creating long term value. The biggest expressway, Yamuna Expressway (YEW), is expected to create a virgin 530 million sq.ft civilization development around it which is likely to establish JPI as one of the biggest real estate players in India. The company has sold close to 23.5m sq.ft out of this 530m sq. feet till now at an average rate of Rs2,900/sq.ft.
Concerns over investing
Before rushing to make a decision to buy stocks of company, let's have a look at few concerns.
All the above mentioned growth targets are tremendous and if achieved, would certainly create huge value for company and shareholders. But, yes there is a but, to achieve this huge growth, company needs huge cash. Huge amount of money is needed to realize all these plans. Total requirement of funds by JPA stands at
Rs 99bn for power, cement and YEW. The company is dependent on external funds for hydro power projects (till the present plants under construction get operational) and higher internal accruals for cement business. Inability in raising this money would dampen the future projects and pose a setback to all 0aggressive growth targets.
Any delay in power plant commissioning would increase the initial cost and prolong the benefits and cash flow. Interest cost would be rising and eat away profits.
Then there is a real estate play in picture. NCR region, where company has most of it's real estate, have seen oversupply of housing by various real estate companies. Most of the land company has for development is around the expressway which is slightly remote to the main city of Delhi and Noida. I was in Greater Noida for some time recently and I have seen most of the area around myself. Greater noida has still a long way to go to be called as big city. Reports of airport in Jewar (still in dreams and air!) to be moved to Meerut might dampen the real estate prices further. Any fall in real estate prices would lead to lower realizations of all land.
Stock price target
Looking at all the numbers, (recent results are here) , and at historic values, if we expect a growth of on an average 25% in revenue and profit numbers, one can expect the upside of 15% in stock price in an years time. So at current stock price of Rs 130, the target price comes to be around Rs 150. The stock could do even better year on year in long term over the period of 4 - 5 years considering all the projects lined up.
The first stock report from his list was on Punj Lloyd.
The Jaypee Group is a 27,700 crore market cap diversified infrastructural industrial conglomerate. It operates through its various subsidiaries in different business segments.
Jaiprakash Power Ventures Limited (JPVL)
The company with its operational power plants - 300 MW Baspa-II (Himachal Pradesh) and 400 MW Vishnuprayag (Uttarakhand) is India’s largest Private sector Hydropower producer and is on its way to be an integrated power producer with expansion in Thermal & Power Transmission.
www.jppowerventures.com
Jaypee Karcham Hydro Corporation Limited (JKHCL)
The Government of Himachal Pradesh again invited the group for the Karcham Wangtoo a 1000 MW project. The group formulated JKHCL for this project. Still under execution, the project is to commence its operations in the year 2011. View details
Jaypee Arunachal Power Limited
The company is setting up two hydropower projects - Lower Siang Project (2700 MW) and the Hirong Project (500 MW) in Joint Venture with the Government of Arunachal Pradesh.
Bina Power Supply Co. Limited
BPSCL shall set up a 1250 MW (two phase of 625 MW each) coal fired Thermal Power Plant at Bina in the State of Madhya Pradesh.
Jaypee Power Grid Ltd.(JPL)
JPL has been formed for execution of the transmission system between Wangtoo in Kinnaur district of Himachal Pradesh & Abdullapur in Yamuna Nagar district of Haryana for evacuation of 1000 MW power from Karcham Wangtoo HEP in Himachal Pradesh.
www.jaypeepowergrid.com
Bhilai Jaypee Cement Limited (BJCL)
Incorporated in the state of Chhattisgarh as a Joint Venture with Steel Authority of India Ltd. (SAIL). The said company is to produce a 2.2 MTPA split-located Cement Plant at Bhilai in the State of Chattisgarh and at Babupur, Satna in the State of Madhya Pradesh.
www.bjcl.co.in
Gujarat Jaypee Cement & Infrastructure Limited (GJCIL)
The Group has signed an Agreement with Gujarat Mineral Development Corporation Limited (GMDCL) for setting up of a 2.4 MTPA capacity cement manufacturing plant with captive power station and captive Jetty in district Kutch of Gujarat.
Bokaro Jaypee Cement Limited (BOJCL)
BOJCL, the second joint venture between the Company and SAIL with management control vested in the Company, is incorporated to set up a 2.1 MTPA capacity cement plant at Bokaro in Jharkhand.
Madhya Pradesh Jaypee Minerals Limited (MPJML)
A Joint Venture company between JAL and the Madhya Pradesh State Mining Corporation Limited (MPSMCL) to develop the Amelia (North) Coal block.
Jaypee Infratech Limited (JIL)
A subsidiary of Jaiprakash Associates Ltd. which would undertake the implementation of prestigious Yamuna Expressway Project comprising of 165 KM, 6 Lane Access Controlled Expressway connecting Greater Noida with Agra.
www.jaypeeinfratech.com
Jaypee Ganga Infrastructure Corporation Limited (JGICL)
JGICL a wholly owned subsidiary of the Company for implementation of the prestigious 1047 km, long 8-lane Access-Controlled Expressway connecting Greater Noida with Ghazipur- Ballia.
Himalayan Expressway Ltd.
The Company will undertake the construction of Zirakpur-Parwanoo Highway connecting Punjab, Haryana & Himachal Pradesh on BOT basis. The total length of the highway would be 28.690 kms.
JPSK Sports Pvt. Ltd.
JPSK Sports Pvt. Ltd. is incorporated for developing a Greenfield state-of-the-art Sports Complex including Car Race track for motor sports with related integrated support infrastructure including townships, cricket stadium, go karting track and auxiliary facilities.
Why should one buy stocks of Jaiprakash associates, if at all?
Let's have a look at where the group businesses are contributing in growth:
Cement business This is the cash cow for group. Jaiprakash Associates’ (JPA’s) current capacity stands at 22.8m tonnes has an attractive realization and EBITDA/tonne on account of savings in terms of tax, captive power and market positioning. The company is expected to add another 9-10m tonnes in the next two years, making it a ‘33.5m tonne giant’ (This is only next to giants Holcim and UltraTech Group).
Power business: The next cash cow. JPA’s 76.3% subsidiary, Jaiprakash Power Ventures, (JPVL) (current operational hydro power capacity of 700MW), has capacity addition plans of 8x under construction. JPVL is expected to reach an installed capacity of 5590MW in FY15E, with a 70:30 hydro-thermal mix.
Jaypee Infratech (JPI) is creating long term value. The biggest expressway, Yamuna Expressway (YEW), is expected to create a virgin 530 million sq.ft civilization development around it which is likely to establish JPI as one of the biggest real estate players in India. The company has sold close to 23.5m sq.ft out of this 530m sq. feet till now at an average rate of Rs2,900/sq.ft.
Concerns over investing
Before rushing to make a decision to buy stocks of company, let's have a look at few concerns.
All the above mentioned growth targets are tremendous and if achieved, would certainly create huge value for company and shareholders. But, yes there is a but, to achieve this huge growth, company needs huge cash. Huge amount of money is needed to realize all these plans. Total requirement of funds by JPA stands at
Rs 99bn for power, cement and YEW. The company is dependent on external funds for hydro power projects (till the present plants under construction get operational) and higher internal accruals for cement business. Inability in raising this money would dampen the future projects and pose a setback to all 0aggressive growth targets.
Any delay in power plant commissioning would increase the initial cost and prolong the benefits and cash flow. Interest cost would be rising and eat away profits.
Then there is a real estate play in picture. NCR region, where company has most of it's real estate, have seen oversupply of housing by various real estate companies. Most of the land company has for development is around the expressway which is slightly remote to the main city of Delhi and Noida. I was in Greater Noida for some time recently and I have seen most of the area around myself. Greater noida has still a long way to go to be called as big city. Reports of airport in Jewar (still in dreams and air!) to be moved to Meerut might dampen the real estate prices further. Any fall in real estate prices would lead to lower realizations of all land.
Stock price target
Looking at all the numbers, (recent results are here) , and at historic values, if we expect a growth of on an average 25% in revenue and profit numbers, one can expect the upside of 15% in stock price in an years time. So at current stock price of Rs 130, the target price comes to be around Rs 150. The stock could do even better year on year in long term over the period of 4 - 5 years considering all the projects lined up.
Should you buy stocks of IT companies for long term?
I came across an article while researching on future of Indian IT Stocks and to make a decision whether I should buy stocks of IT companies for my long term investment portfolio. Here is my opinion.
The article talks about "Stop Outsourcing and Create American Jobs Act of 2010", an act that is targeted to punish American companies who "outsource" the projects and work to offshore companies such as IT companies in India.
Title and link of article: Another Proposed Law To Stop Offshore Outsourcing. If you read the first immediate comment of an American reader just below the article, you would understand the sentiments people carry against outsourcing, specially India. Why India? Because Indian IT companies have largest share of outsourcing from American corporates.
Last month, Congressmen Gary Peters, Tim Bishop and Jerry McNerney proposed this legislation to curb outsourcing to countries such as India. The Stop Outsourcing and Create American Jobs Act of 2010, the Bill clearly aims to discourage US firms from shipping jobs overseas.
So how does it bothers IT stocks in India? If this act passes, American government could go barring the American companies, who are outsourcing the work, from participating in government contracts. So these companies have to think twice before outsourcing.
A lot is being written against the outsourcing and to keep the American jobs in America. The Bill, being initiated by Senator Charles Schumer, is expected to focus on H-1B and L1 visas given to IT and other professionals and could possibly impose some restrictions on them. The similar is expected to be done to keep jobs in American soil and with Americans, as a very common feeling is developing that recession has took a toll on millions of American jobs and Americans are losing their jobs to other countries.
The elections to the US Senate are scheduled to be held in November 2010 and the sentiment against outsourcing will only rise in time to come.
Another fact lies in the title of this article "China replaces India as preferred outsourcing destination". Though at the moment the country has still not reached the level of maturity seen in India, the growth of China's outsourcing market is significant. Indian IT companies have got a big competitor right next door and it is rising!
With these developments, I strongly feel that it is going to be extremely difficult in future for Indian IT companies to even keep up the growth rates they are accustomed to in last 10 years. This ultimately is going to take toll on their overall profitability and profit growth. The kind of explosive growth experienced by Indian IT companies in past few years could stall in future and so would freeze the growth of their stock price.
Finding a multibagger stock out of Indian IT companies stable is going to be extremely difficult in future. It is my gut feeling to not to keep my portfolio relied on IT stocks for growth. I would be glad to know your opinions, you may use comment form below to post your opinions.
The article talks about "Stop Outsourcing and Create American Jobs Act of 2010", an act that is targeted to punish American companies who "outsource" the projects and work to offshore companies such as IT companies in India.
Title and link of article: Another Proposed Law To Stop Offshore Outsourcing. If you read the first immediate comment of an American reader just below the article, you would understand the sentiments people carry against outsourcing, specially India. Why India? Because Indian IT companies have largest share of outsourcing from American corporates.
Last month, Congressmen Gary Peters, Tim Bishop and Jerry McNerney proposed this legislation to curb outsourcing to countries such as India. The Stop Outsourcing and Create American Jobs Act of 2010, the Bill clearly aims to discourage US firms from shipping jobs overseas.
So how does it bothers IT stocks in India? If this act passes, American government could go barring the American companies, who are outsourcing the work, from participating in government contracts. So these companies have to think twice before outsourcing.
A lot is being written against the outsourcing and to keep the American jobs in America. The Bill, being initiated by Senator Charles Schumer, is expected to focus on H-1B and L1 visas given to IT and other professionals and could possibly impose some restrictions on them. The similar is expected to be done to keep jobs in American soil and with Americans, as a very common feeling is developing that recession has took a toll on millions of American jobs and Americans are losing their jobs to other countries.
The elections to the US Senate are scheduled to be held in November 2010 and the sentiment against outsourcing will only rise in time to come.
Another fact lies in the title of this article "China replaces India as preferred outsourcing destination". Though at the moment the country has still not reached the level of maturity seen in India, the growth of China's outsourcing market is significant. Indian IT companies have got a big competitor right next door and it is rising!
With these developments, I strongly feel that it is going to be extremely difficult in future for Indian IT companies to even keep up the growth rates they are accustomed to in last 10 years. This ultimately is going to take toll on their overall profitability and profit growth. The kind of explosive growth experienced by Indian IT companies in past few years could stall in future and so would freeze the growth of their stock price.
Finding a multibagger stock out of Indian IT companies stable is going to be extremely difficult in future. It is my gut feeling to not to keep my portfolio relied on IT stocks for growth. I would be glad to know your opinions, you may use comment form below to post your opinions.
Should you buy stocks of Infosys post Q1 FY11 results?
Infosys, the second largest IT exporter from India, announced their Q1 FY 2011 results. The company’s net profit for the first quarter of FY11 slumped a surprising 7.98% The stock price has slipped by Rs.100 (3.44%) in markets. Should you buy stocks of Infosys now?
The net profit came in at Rs 1,488 crore as against Rs 1,617 crore, on quarter-on-quarter basis (QoQ). However its revenues jumped to Rs 6,198 crore from Rs 5,944 crore, a jump of 4.27%.
Infosys has increased its dollar revenue guidance for entire FY11 to a growth of 21% on the higher end of the band from the earlier estimate in April of 18%. This gives a strong signal of demand recovery for company services from it's clients. Infy’s top five and the top 25 clients grew faster than it's rest of the customer base. This reflects revival in IT spending of larger US companies. Infy also bagged eight bigger deals — worth more than $100 million each.
The stock price of Infy at present is at Rs 2792. The stock is fully valued at this price. If it trades below Rs 2760-2770 for a day or two, it could turn bearish and go up to Rs 2600 or worst ~ Rs 2550-2500. These levels would be the best levels to buy stocks of Infy as these are relatively cheaper levels in terms of valuations.
It is definitely not a strong buy right now. One may start accumulating at lower levels than today's. Long term stock price target, looking at future guidance, could be around Rs 3100.
The net profit came in at Rs 1,488 crore as against Rs 1,617 crore, on quarter-on-quarter basis (QoQ). However its revenues jumped to Rs 6,198 crore from Rs 5,944 crore, a jump of 4.27%.
Infosys has increased its dollar revenue guidance for entire FY11 to a growth of 21% on the higher end of the band from the earlier estimate in April of 18%. This gives a strong signal of demand recovery for company services from it's clients. Infy’s top five and the top 25 clients grew faster than it's rest of the customer base. This reflects revival in IT spending of larger US companies. Infy also bagged eight bigger deals — worth more than $100 million each.
The stock price of Infy at present is at Rs 2792. The stock is fully valued at this price. If it trades below Rs 2760-2770 for a day or two, it could turn bearish and go up to Rs 2600 or worst ~ Rs 2550-2500. These levels would be the best levels to buy stocks of Infy as these are relatively cheaper levels in terms of valuations.
It is definitely not a strong buy right now. One may start accumulating at lower levels than today's. Long term stock price target, looking at future guidance, could be around Rs 3100.
Stock Report : Mahindra Lifespace Development Ltd (MLDL)
Checkout stock report and stock price target for Mahindra Lifespace, earlier known as Mahindra Gesco Developers Ltd.This is the real estate development arm of $6 billion Mahindra Group and is a subsidiary of Mahindra & Mahindra Limited.
Mahindra Lifespace Development Ltd has been in the forefront of Urban Development in the country.
This stock report discusses the current developments in the company and looks for the guidance for stock price target for next one year.
Being part of $6.3 billion Mahindra Group, MLDL a reputation of being a pioneer in the development of integrated business cities & delivering quality living spaces. The company has developed premium residential & commercial properties in Mumbai, Pune, Delhi, Chennai & the Mahindra World Cities at Chennai & Jaipur.
The company’s current project list includes Mahindra Eminente at Goregaon-Mumbai, Mahindra Splendour at Bhandup-Mumbai Mahindra Royale at Pune,& Mahindra Chloris at Faridabad and these are progressing as per schedule. Sylvan Country at Mahindra World City-Chennai has been completed during the year while approvals have been received for starting construction on Mahindra Aura at Gurgaon NCR. Mahindra Lifespace Development Ltd (MLDL) has completed 10 residential & 8 commercial projects in Mumbai/Pune/Chennai/Banglore/Delhi/Gurgaon.
Upcoming projects are Mahindra Aura Phase II in Gurgaon & a project in MIHAN SEZ Nagpur.
The demand for commercial & residential premises in metros is likely to see an uptick with revival in the economy in both domestic & global, more and more foreign firms setting up offices and improving demand for residential property for expats.
The near term concern could be surplus in commercial & residential premises, but this could be short term negative as the projects of MLDL are at location where there is land shortfall for development.
Market Cap 1977.8
* EPS (TTM) 19.44
* P/E 24.92
* Book Value 232.26
* Price/Book 2.09
Div(%) 35.00%
* Div Yield(%) 0.72
Market Lot 1.00
Face Value 10.00
Industry P/E 20.76
Mahindra Lifespace Development Ltd (MLDL) has reported 225% growth in income from operations in Q4 F-2010,PAT was up 65%.The company has also given a dividend of 35%.
MLDL has observed net profit margins of almost 25% which is very health percentile. If company achieves the 25% growth in sales, which has been their historical growth avarage and say even 25% growth in net profits (company has observed more growth in past few years), expected forward EPS in one year could be RS. 24.31. At current stock price of MLDL, Rs. 484, P/E Ratio stands at 24.92. The forward EPS leads to forward P/E of 19.90 at current stock price.
With above calculations in mind, one year stock price target for MLDL could be around Rs.600
Mahindra Lifespace Development Ltd has been in the forefront of Urban Development in the country.
This stock report discusses the current developments in the company and looks for the guidance for stock price target for next one year.
Being part of $6.3 billion Mahindra Group, MLDL a reputation of being a pioneer in the development of integrated business cities & delivering quality living spaces. The company has developed premium residential & commercial properties in Mumbai, Pune, Delhi, Chennai & the Mahindra World Cities at Chennai & Jaipur.
The company’s current project list includes Mahindra Eminente at Goregaon-Mumbai, Mahindra Splendour at Bhandup-Mumbai Mahindra Royale at Pune,& Mahindra Chloris at Faridabad and these are progressing as per schedule. Sylvan Country at Mahindra World City-Chennai has been completed during the year while approvals have been received for starting construction on Mahindra Aura at Gurgaon NCR. Mahindra Lifespace Development Ltd (MLDL) has completed 10 residential & 8 commercial projects in Mumbai/Pune/Chennai/Banglore/Delhi/Gurgaon.
Upcoming projects are Mahindra Aura Phase II in Gurgaon & a project in MIHAN SEZ Nagpur.
The demand for commercial & residential premises in metros is likely to see an uptick with revival in the economy in both domestic & global, more and more foreign firms setting up offices and improving demand for residential property for expats.
The near term concern could be surplus in commercial & residential premises, but this could be short term negative as the projects of MLDL are at location where there is land shortfall for development.
Market Cap 1977.8
* EPS (TTM) 19.44
* P/E 24.92
* Book Value 232.26
* Price/Book 2.09
Div(%) 35.00%
* Div Yield(%) 0.72
Market Lot 1.00
Face Value 10.00
Industry P/E 20.76
Mahindra Lifespace Development Ltd (MLDL) has reported 225% growth in income from operations in Q4 F-2010,PAT was up 65%.The company has also given a dividend of 35%.
MLDL has observed net profit margins of almost 25% which is very health percentile. If company achieves the 25% growth in sales, which has been their historical growth avarage and say even 25% growth in net profits (company has observed more growth in past few years), expected forward EPS in one year could be RS. 24.31. At current stock price of MLDL, Rs. 484, P/E Ratio stands at 24.92. The forward EPS leads to forward P/E of 19.90 at current stock price.
With above calculations in mind, one year stock price target for MLDL could be around Rs.600
TV 18 India Restructuring - Hold The Stocks
TV-18 India is going to be restructured in order to align its group businesses. The company will be split in to IBN 18 and Network 18.
IBN 18 will get the broadcasting business while Network 18 gets the rest.
All television businesses under the new regime will be consolidated under IBN18, which will be rechristened as TV18. This includes TV channels like CNBC-TV18, CNN-IBN, IBN7, CNBC-Awaaz and the group’s 50% stake in Colors, MTV, Nick, VH1 and IBN Lokmat.
The new Network18 will hold a controlling interest in new TV18 and will be the operating company for the group’s digital, publishing, sports and event management businesses.
The new Network18 is going to hold all group investments in HomeShop18, Newswire18, DEN, Yatra and Capital18. As per company press release, the new structure will offer shareholders the choice of investing in either the entire Network18 Group or only in the broadcast TV business. It will also create opportunities for harnessing greater operational synergies.
For every 100 shares of TV -18 India, shareholders get 68 shares of IBN 18 and 13 shares of Network 18. Future price of each stock would depend upon the valuation of IBN 18 and Network 18.
Investors who have already invested in TV-18 India may hold the stocks until the valuations and probable pricing is clear.
IBN 18 will get the broadcasting business while Network 18 gets the rest.
All television businesses under the new regime will be consolidated under IBN18, which will be rechristened as TV18. This includes TV channels like CNBC-TV18, CNN-IBN, IBN7, CNBC-Awaaz and the group’s 50% stake in Colors, MTV, Nick, VH1 and IBN Lokmat.
The new Network18 will hold a controlling interest in new TV18 and will be the operating company for the group’s digital, publishing, sports and event management businesses.
The new Network18 is going to hold all group investments in HomeShop18, Newswire18, DEN, Yatra and Capital18. As per company press release, the new structure will offer shareholders the choice of investing in either the entire Network18 Group or only in the broadcast TV business. It will also create opportunities for harnessing greater operational synergies.
For every 100 shares of TV -18 India, shareholders get 68 shares of IBN 18 and 13 shares of Network 18. Future price of each stock would depend upon the valuation of IBN 18 and Network 18.
Investors who have already invested in TV-18 India may hold the stocks until the valuations and probable pricing is clear.
Stock To Buy From Banking Domain: Development Credit Bank
Stock to buy as medium term investment for next one year; Development Credit Bank (DCB) is a definite one. This bank is going thru a significant transformation to address the losses it has suffered in past two years.
DCB is a private sector bank with 80 branches all over India and having a loan book of Rs.3500 crore spread across the corporate, retail and SME segments. The bank has recently cleaned up its books by writing off non performing loans and cutting down exposure to risky assets. Steps have also been initiated to cut down its dependence on wholesale funding and to shore up capital adequacy. The bank is restructuring it's distribution network and to raise non interest income.
For FY 2010, loan book increased by 6% on Y-O-Y basis with stable net interest margin at 2.8%. The bank has also managed to bring down net non performing loans by 80 bps to 3.1% in FY 2010.
Considering all the changes, the bank is expected to break even by third quarter of FY 2011. The stock could be re-rated in stock markets due to significant improvement in its performance in all core areas.
Stock Price & Guidance
Current stock price is in the range of Rs.40-45. The stock price could be Rs.60 in next one year time frame. At Rs.60 target price, the stock valuation would stand at 1.9 times of its expected adjusted book value for FY 2012.
DCB is a private sector bank with 80 branches all over India and having a loan book of Rs.3500 crore spread across the corporate, retail and SME segments. The bank has recently cleaned up its books by writing off non performing loans and cutting down exposure to risky assets. Steps have also been initiated to cut down its dependence on wholesale funding and to shore up capital adequacy. The bank is restructuring it's distribution network and to raise non interest income.
For FY 2010, loan book increased by 6% on Y-O-Y basis with stable net interest margin at 2.8%. The bank has also managed to bring down net non performing loans by 80 bps to 3.1% in FY 2010.
Considering all the changes, the bank is expected to break even by third quarter of FY 2011. The stock could be re-rated in stock markets due to significant improvement in its performance in all core areas.
Stock Price & Guidance
Current stock price is in the range of Rs.40-45. The stock price could be Rs.60 in next one year time frame. At Rs.60 target price, the stock valuation would stand at 1.9 times of its expected adjusted book value for FY 2012.
USE : United Stock Exchange - India's New Stock Exchange
United Stock Exchange, India’s newest stock exchange, marks the beginning of a new chapter in the development of Indian financial markets.
USE overview: What is United Stock Exchange (USE)
USE represents the commitment of ALL 21 Indian public sector banks, respected private banks and corporate houses to build an institution that is on its way to becoming an enduring symbol of India’s modern financial markets.
Sophisticated financial products such as currency and interest rate derivatives are exciting introductions to Indian markets and hold immense opportunities for businesses and trading institutions alike. Consequently, USE’s strong bank promoter base allows a build-up of a highly liquid marketplace for these products. It also provides the necessary expertise to reach out to Indian businesses and individuals, educate them on the benefits of these markets and facilitate easy access to them.
Public Sector Banks that are stakeholders of USE include Allahabad Bank, Corporation Bank, Punjab National Bank, Andhra Bank, Dena Bank, State Bank of India, Bank of Baroda, IDBI Bank, Syndicate Bank, Bank of India, Indian Bank, UCO Bank, Bank of Maharashtra, Indian Overseas Bank, Union Bank of India, Canara Bank, Oriental Bank of Commerce, United Bank of India, Central Bank of India, Punjab and Sind Bank, Vijaya Bank. Private Sector Banks like Axis Bank, Federal Bank, J & K Bank, HDFC Bank. Corporate Institutions such as Jaypee Capital, MMTC and India Potash are also associated with United Stock Exchange.
USE also boasts of Bombay Stock Exchange, as a strategic partner. As Asia’s oldest stock exchange, BSE lends decades of unparalleled expertise in exchange technology, clearing & settlement, regulatory structure and governance. Leveraging the collective experience of its founding partners, USE has developed a trustworthy and state of the art exchange platform that provides a truly world class trading experience.
Products and services
USE would begin operations in the future contracts in each of the following currency pairs:
- United States Dollar-Indian Rupee (USD-INR)
- Euro-Indian Rupee (EUR-INR)
- Pound Sterling-Indian Rupee (GBP-INR)
- Japanese Yen-Indian Rupee (JPY-INR)
There would be 12 contracts i.e one for each of the next 12 months in each of the above currency pair Outright contracts as well as calendar spread contracts are available in each pair for trading.
In the years to come, USE aims to become India’s most preferred stock exchange, providing a range of sophisticated financial instruments for diverse market participants to trade on and manage their risks efficiently.
From: USE Website - http://www.useindia.com
USE overview: What is United Stock Exchange (USE)
USE represents the commitment of ALL 21 Indian public sector banks, respected private banks and corporate houses to build an institution that is on its way to becoming an enduring symbol of India’s modern financial markets.
Sophisticated financial products such as currency and interest rate derivatives are exciting introductions to Indian markets and hold immense opportunities for businesses and trading institutions alike. Consequently, USE’s strong bank promoter base allows a build-up of a highly liquid marketplace for these products. It also provides the necessary expertise to reach out to Indian businesses and individuals, educate them on the benefits of these markets and facilitate easy access to them.
Public Sector Banks that are stakeholders of USE include Allahabad Bank, Corporation Bank, Punjab National Bank, Andhra Bank, Dena Bank, State Bank of India, Bank of Baroda, IDBI Bank, Syndicate Bank, Bank of India, Indian Bank, UCO Bank, Bank of Maharashtra, Indian Overseas Bank, Union Bank of India, Canara Bank, Oriental Bank of Commerce, United Bank of India, Central Bank of India, Punjab and Sind Bank, Vijaya Bank. Private Sector Banks like Axis Bank, Federal Bank, J & K Bank, HDFC Bank. Corporate Institutions such as Jaypee Capital, MMTC and India Potash are also associated with United Stock Exchange.
USE also boasts of Bombay Stock Exchange, as a strategic partner. As Asia’s oldest stock exchange, BSE lends decades of unparalleled expertise in exchange technology, clearing & settlement, regulatory structure and governance. Leveraging the collective experience of its founding partners, USE has developed a trustworthy and state of the art exchange platform that provides a truly world class trading experience.
Products and services
USE would begin operations in the future contracts in each of the following currency pairs:
- United States Dollar-Indian Rupee (USD-INR)
- Euro-Indian Rupee (EUR-INR)
- Pound Sterling-Indian Rupee (GBP-INR)
- Japanese Yen-Indian Rupee (JPY-INR)
There would be 12 contracts i.e one for each of the next 12 months in each of the above currency pair Outright contracts as well as calendar spread contracts are available in each pair for trading.
In the years to come, USE aims to become India’s most preferred stock exchange, providing a range of sophisticated financial instruments for diverse market participants to trade on and manage their risks efficiently.
From: USE Website - http://www.useindia.com
Sector Scan - Automobile Stocks
Automobile sector is very happening sector in India. Even the rising fuel price constraints are not enough for auto companies to slow down. In such scenario, should one consider buying stocks of automobile companies?
Cut throat competition among top companies, lots of new car and vehicle model launches at regular intervals keeps the Indian auto sector moving. Industry veterans have opined on recent fuel price hike that it could affect only for very short frame of time. It won't affect in long term.
The reason behind this optimism is that auto sector is likely to remain buoyant in FY 2011 with strong volume growth and better than present margins for auto stocks.
Conservative projection for automobile sales volume growth is of 13 - 14% and the actual expectation for FY 2011 is of ~20% volume growth in car segment. Same growth is expected in two wheelers. And check this, heavy trucks segment volume is expected to grow at astonishing 25%. This view is being expressed with inputs from vehicle dealers, vehicle financiers, truck operators, auto component suppliers and such entities. Vehicle dealers have confirmed the demand for vehicles continue to remain strong and that their inventory levels are very low. They don't need to stock up the vehicles for long and that the demand is buoyant.
On the other hands, commodity prices are loosing it's shine. With commodity (steel and other metals) prices dropping, automobile sector stocks would benefit by reduced input costs.
Based on all these inputs, bullish trends are being predicted for auto market. Earnings for FY 2011 are expected to increase by 1 -12% and again at 0 - 10% in FY 2012. Since earnings prospects are looking bright, automobile sector stocks may appreciate by up to 5 - 15%. Top stocks to buy at this moment from auto sector are could be Tata Motors, Ashok Leyland and Bajaj Auto. Maruti excludes this list as one of their largest export market is in Europe and EURO as a currency could reduce their gains overall.
Cut throat competition among top companies, lots of new car and vehicle model launches at regular intervals keeps the Indian auto sector moving. Industry veterans have opined on recent fuel price hike that it could affect only for very short frame of time. It won't affect in long term.
The reason behind this optimism is that auto sector is likely to remain buoyant in FY 2011 with strong volume growth and better than present margins for auto stocks.
Conservative projection for automobile sales volume growth is of 13 - 14% and the actual expectation for FY 2011 is of ~20% volume growth in car segment. Same growth is expected in two wheelers. And check this, heavy trucks segment volume is expected to grow at astonishing 25%. This view is being expressed with inputs from vehicle dealers, vehicle financiers, truck operators, auto component suppliers and such entities. Vehicle dealers have confirmed the demand for vehicles continue to remain strong and that their inventory levels are very low. They don't need to stock up the vehicles for long and that the demand is buoyant.
On the other hands, commodity prices are loosing it's shine. With commodity (steel and other metals) prices dropping, automobile sector stocks would benefit by reduced input costs.
Based on all these inputs, bullish trends are being predicted for auto market. Earnings for FY 2011 are expected to increase by 1 -12% and again at 0 - 10% in FY 2012. Since earnings prospects are looking bright, automobile sector stocks may appreciate by up to 5 - 15%. Top stocks to buy at this moment from auto sector are could be Tata Motors, Ashok Leyland and Bajaj Auto. Maruti excludes this list as one of their largest export market is in Europe and EURO as a currency could reduce their gains overall.
Marc Faber: U.S. debt crisis in next 5 to 10 years
I just read an article on Digital Journal on the topic of United States Debt. Actually it is an article stating forecast from world famous economic forecaster and “Mr. Doom” himself, Marc Faber.
I am trying to figure out the next course of stock markets,like everyone else in the world is trying to do, just to protect my investments from "crashes" and may be; to be prepared for next big opportunity.
I am reproducing this article as it is, for reference purpose only. I strongly believe, the financial crisis is not over. It is going to be a multi-year affair with some ups and downs periodically. Just as in 2008-2009 it was American financial crisis, Dubai financial crisis in 2009 and recent 2010 European debt crisis, which I believe is just a beginning in Europe. The amount of debt on many of the countries is just bulging every day. I found an interesting US Debt Clock which tries to display US debt and associated figures real time. Check this out. As I am writing this article, the figure is astonishing 13.15 Trillion US Dollars. The way to get out of this debt is literally to "print money". But this would lead to a crash in value of that currency which again would lead to a financial crisis.
Here is the article from Digital Journal.
The United States debt is more than $12 trillion and financial guru Marc Faber believes the country will see the consequences of that within the next five to ten years through defaulting on their debt, most likely by printing large quantities of money.
On Wednesday, economic forecaster and “Mr. Doom” himself, Marc Faber, spoke to "Tech Ticker" about the state of the current economic downturn within the United States and, in original fashion, stated that he doesn’t see much hope for the US economy because of its major debt crisis it will face, according to Yahoo! Finance. Faber, publisher of Gloom Boom Doom, said the US won’t see a debt crisis next year or the year after but within the next five to ten years.
Faber explained that every financial crisis there’s a sovereign debt problem because countries borrowed large amounts of money during the boom from other nations and then when there is a downturn, such as the current one, they have a hard time to back their lenders.
Most countries that will blow up will be the “PIIGS,” which are Portugal, Ireland, Italy, Greece and Spain and he expects that at least one of them will default in the next couple of years. If that does truly happen then it will be the death of the Euro.
According to the Business Insider, when it comes to the US, Faber believes the two main problems when it comes to destroying the US Dollar are the ballooning debt and the future interest costs, which amounts to 12 per cent of the government’s tax revenue but he expects it to largely increase to 35 per cent.
The only solutions the government has, according to Faber, will be to cut spending, which he finds unlikely to happen, or print money at astronomical levels.
Digital Journal reported on Thursday that Jim Rogers, Chairman of Rogers Holdings, strongly criticized Jim Chanos’ prediction that the Chinese economy will collapse. Rogers said a guy like Chanos “couldn’t spell China 10 years ago and now they’re experts.”
GuruFocus reports that Faber does believe the Chinese economy will collapse because of its excessive credit but it won’t be for quite some time. “It is very difficult to pinpoint a day when China will implode; I don’t think it will happen right away.”
I am trying to figure out the next course of stock markets,like everyone else in the world is trying to do, just to protect my investments from "crashes" and may be; to be prepared for next big opportunity.
I am reproducing this article as it is, for reference purpose only. I strongly believe, the financial crisis is not over. It is going to be a multi-year affair with some ups and downs periodically. Just as in 2008-2009 it was American financial crisis, Dubai financial crisis in 2009 and recent 2010 European debt crisis, which I believe is just a beginning in Europe. The amount of debt on many of the countries is just bulging every day. I found an interesting US Debt Clock which tries to display US debt and associated figures real time. Check this out. As I am writing this article, the figure is astonishing 13.15 Trillion US Dollars. The way to get out of this debt is literally to "print money". But this would lead to a crash in value of that currency which again would lead to a financial crisis.
Here is the article from Digital Journal.
The United States debt is more than $12 trillion and financial guru Marc Faber believes the country will see the consequences of that within the next five to ten years through defaulting on their debt, most likely by printing large quantities of money.
On Wednesday, economic forecaster and “Mr. Doom” himself, Marc Faber, spoke to "Tech Ticker" about the state of the current economic downturn within the United States and, in original fashion, stated that he doesn’t see much hope for the US economy because of its major debt crisis it will face, according to Yahoo! Finance. Faber, publisher of Gloom Boom Doom, said the US won’t see a debt crisis next year or the year after but within the next five to ten years.
Faber explained that every financial crisis there’s a sovereign debt problem because countries borrowed large amounts of money during the boom from other nations and then when there is a downturn, such as the current one, they have a hard time to back their lenders.
Most countries that will blow up will be the “PIIGS,” which are Portugal, Ireland, Italy, Greece and Spain and he expects that at least one of them will default in the next couple of years. If that does truly happen then it will be the death of the Euro.
According to the Business Insider, when it comes to the US, Faber believes the two main problems when it comes to destroying the US Dollar are the ballooning debt and the future interest costs, which amounts to 12 per cent of the government’s tax revenue but he expects it to largely increase to 35 per cent.
The only solutions the government has, according to Faber, will be to cut spending, which he finds unlikely to happen, or print money at astronomical levels.
Digital Journal reported on Thursday that Jim Rogers, Chairman of Rogers Holdings, strongly criticized Jim Chanos’ prediction that the Chinese economy will collapse. Rogers said a guy like Chanos “couldn’t spell China 10 years ago and now they’re experts.”
GuruFocus reports that Faber does believe the Chinese economy will collapse because of its excessive credit but it won’t be for quite some time. “It is very difficult to pinpoint a day when China will implode; I don’t think it will happen right away.”
Rakesh Jhunjhunwala Portfolio
Checkout Rakesh Jhunjhunwala's latest portfolio.
I verify this Rakesh Jhunjhunwala portfolio shareholding details on BSE website periodically to keep the details updated.
I verify this Rakesh Jhunjhunwala portfolio shareholding details on BSE website periodically to keep the details updated.
Stock Report - Punj Lloyd - Large Cap Stock To Buy
Punj Lloyd Group is a diversified global conglomerate providing Engineering & Construction services in Oil & Gas, Infrastructure and Petrochemicals. Checkout the stock report to find out if this is a stock to buy.
Punj Lloyd also has interests in Defence, Aviation, Marine and Upstream sectors.
Recently I read a news publishing big plans of Punj Lloyd in power sector. They are doing BOP (Balance of Plant) equipment for 600 MW and 1,200 MW power projects. Currently Punj Lloyd is working on four power projects. The company supplied, erected the steel structures, civil work including power house, auxiliary buildings, cooling towers, drainage and road for the 1,000 MW coal-based thermal power project of Jindal Power Ltd.
The company has formed a joint venture with Singapore-based Delta Renewables. It is basically a renewable energy arm known as Punj Lloyd Delta Renewables. The company has already become the largest Indian engineering, procurement and construction (EPC) player in solar power, thanks to its first mover advantage. This new company has bagged about Rs 300 crore (Rs 3 billion) worth of orders in the field of Solar power generation, a majority of which are from the Bihar government. Checkout company announcement here. Punj Lloyd is also providing solar lighting for the Commonwealth Games Village in Delhi.
There are few issues with company. One of them is, company has high levels of Debt in it's balance sheet. Company had 2,937.85 Crores as debt in March 2009. This makes their debt to equity ratio 1.13 which is high. A high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a result of the additional interest expense.
Market Cap 4431.69
* EPS (TTM) 11.06
* P/E 12.07
* P/C 8.86
* Book Value 89.80
* Price/Book 1.49
Div(%) 15.00%
* Div Yield(%) 0.22
Market Lot 1.00
Face Value 2.00
Industry P/E 17.24
A factor to consider is that Punj Lloyd has it's services mainly in oil and gas sector. Oil and gas prices would go up in next few quarters as the overall economic scenario improves. With that, the sentiments for this sector would come back and so this stock could benefit from that.
This stock has corrected from Rs 220 levels in Jan.2010 to current Rs 130 levels. The stock price correction has taken off the sheen of high expectations and valuations from over optimistic levels to attractive levels. At CMP of Rs 129, Punj Lloyd is trading at P/BV of 1.2X FY11E and 1.1X FY12E with book value of Rs 105/Share and Rs 118/Share respectively.
To conclude the stock report, company definitely have a positive outlook from future perspectives. If you are a mid term investor, this stock can go up to Rs 200 levels in next 6 months. This definitely is a long term stock to buy.
Punj Lloyd also has interests in Defence, Aviation, Marine and Upstream sectors.
Recently I read a news publishing big plans of Punj Lloyd in power sector. They are doing BOP (Balance of Plant) equipment for 600 MW and 1,200 MW power projects. Currently Punj Lloyd is working on four power projects. The company supplied, erected the steel structures, civil work including power house, auxiliary buildings, cooling towers, drainage and road for the 1,000 MW coal-based thermal power project of Jindal Power Ltd.
The company has formed a joint venture with Singapore-based Delta Renewables. It is basically a renewable energy arm known as Punj Lloyd Delta Renewables. The company has already become the largest Indian engineering, procurement and construction (EPC) player in solar power, thanks to its first mover advantage. This new company has bagged about Rs 300 crore (Rs 3 billion) worth of orders in the field of Solar power generation, a majority of which are from the Bihar government. Checkout company announcement here. Punj Lloyd is also providing solar lighting for the Commonwealth Games Village in Delhi.
There are few issues with company. One of them is, company has high levels of Debt in it's balance sheet. Company had 2,937.85 Crores as debt in March 2009. This makes their debt to equity ratio 1.13 which is high. A high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a result of the additional interest expense.
Market Cap 4431.69
* EPS (TTM) 11.06
* P/E 12.07
* P/C 8.86
* Book Value 89.80
* Price/Book 1.49
Div(%) 15.00%
* Div Yield(%) 0.22
Market Lot 1.00
Face Value 2.00
Industry P/E 17.24
A factor to consider is that Punj Lloyd has it's services mainly in oil and gas sector. Oil and gas prices would go up in next few quarters as the overall economic scenario improves. With that, the sentiments for this sector would come back and so this stock could benefit from that.
This stock has corrected from Rs 220 levels in Jan.2010 to current Rs 130 levels. The stock price correction has taken off the sheen of high expectations and valuations from over optimistic levels to attractive levels. At CMP of Rs 129, Punj Lloyd is trading at P/BV of 1.2X FY11E and 1.1X FY12E with book value of Rs 105/Share and Rs 118/Share respectively.
To conclude the stock report, company definitely have a positive outlook from future perspectives. If you are a mid term investor, this stock can go up to Rs 200 levels in next 6 months. This definitely is a long term stock to buy.
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