WISH U A HAPPY & PROSPEROUS NEW YEAR 2008 : - CUT LONGS IF NIFTY BREAKS 5980

TRADING PICKS FOR FRESH DERIVATIVES AND NIFTY , SENSEX LEVELS

SENSEX TRADING RANGE: 19700 - 20940

NIFTY TRADING RANGE: 5880 - 6260

F & O PICKS :

CHAMBAL FERTILISERS : CMP : 87 TGT: 150

ITC : CMP :207 TGT: 275

CASH PICKS :

CELESTIAL LABS : CMP :61.95TGT:150

TRIL(TRANSFORMER&
RECTIFIERS) NEW : CMP :730 TGT:1250

ROHIT FERRO : CMP :99 TGT:150

Wishing all the readers a prosperous and bountiful Sensex year.
Read more!

Earn more Spend much MORE

"SAVING IS SIN, SPENDING IS VIRTUE" - Jagdish N Bhagwati

Japanese save a lot. They do not spend much. Also Japan exports far
more than it imports. Has an annual trade surplus of over $100 billion.
Yet Japanese economy is considered weak, even collapsing. Americans
spend, save little. Also US import more than it exports. Has an annual trade
deficit of over $400 billion. Yet, the American economy is considered
strong and trusted to get stronger.

But where from do Americans get money to spend? They borrow from
Japan, China and even India... Virtually others save for the US to spend.
Global savings are mostly invested in US, in dollars. India itself keeps its
foreign currency assets of over $50 billion in US securities. China has
sunk over $160 billion in US securities. Japan's stakes in US securities
is in trillions.

Result: The US has taken over $5 trillion from the world. So, as the
world saves for the US, Americans spend freely. Today, to keep the US
consumption going, that is for the US economy to work, other countries
have to remit $180 billion every quarter, which is $2 billion a day, to
the US! Otherwise the US economy would go for a six. So will the
global economy. The result will be no different if US consumers begin
consuming less.

A Chinese economist asked a neat question. Who has invested more, US
in China, or China in US? The US has invested in China less than half of
what China has invested in US. The same is the case with India... We have
invested in US over $50 billion. But the US has invested less than $20
billion in India ... Why the world is after US?

The secret lies in the American spending, that they hardly save. In
fact they use their credit cards to spend their future income. That the US
spends is what makes it attractive to export to the US. So US imports
more than what it exports year after year.

The result:
The world is dependent on US consumption for its growth. By its
deepening culture of consumption, the US has habituated the world to feed on US
consumption. But as the US needs money to finance its consumption,
the world provides the money. It's like a shopkeeper providing the money
to a customer so that the customer keeps buying from the shop. If the
customer will not buy, the shop won't have business, unless the shopkeeper
funds him. The US is like the lucky customer. And the world is like the
helpless shopkeeper financier. Who is America's biggest shopkeeper
financier? Japan of course. Yet it's Japan which is regarded as weak.
Modern economists complain that Japanese do not spend, so they do not
grow. To force the Japanese to spend, the Japanese government exerted
it self, reduced the savings rates, even charged the savers. Even then
the Japanese did not spend (habits don't change, even with taxes, do
they?).
Their traditional postal savings alone is over $1.2 trillions, about
three times the Indian GDP. Thus, savings, far from being the strength of
Japan, has become its pain.


Hence, what is the lesson? That is, a nation cannot grow unless the
people spend, not save. Not just spend, but borrow and spend. Dr. Jagdish
Bhagwati, the famous Indian-born economist in the US, told Manmohan
Singh that Indians wastefully save. Ask them to spend, on imported cars
and, seriously, even on cosmetics! This will put India on a growth curve.
"Saving is sin, and spending is virtue." Before you follow this neo
economics, get some fools to save so that you can borrow from them
and spend.

This is what US has successfully done in last few decades.

Professor Jagdish N Bhagwati

courtesy:-vishnu shanbhag

Read more!

Must Read

The $3.8 trillion pro-notes depreciating by the hour
"The dollar reserves of countries that sell goods to the US represent moneys lent to the US to help it buy goods from them, like a shopkeeper lending money to his clients and asking them to buy his goods. It’s worse in fact. It is more like the shopkeeper selling his goods on credit against the client’s pro-notes".
Five years ago, 86 US cents could buy one euro. Today one needs some 147 US cents to buy one — meaning, in terms of euro, the dollar has fallen by 75 per cent in five years. Benchmarked with gold, less than $275 could get an ounce of gold in 2002; today $800 cannot. So, the dollar, rated with gold, has depreciated by over 290 per cent.
Take the black gold — crude. One needed, as 2002 turned, $21 to buy one barrel of crude which now costs $90. Rated in crude prices, the dollar has fallen by 430 per cent.
The sick dollar
It needs no seer to say that the greenback is dwarfing in real terms. Recently, The Economist magazine quoted Jim Rogers of Quantum Fund, whom it praised as "a shrewdly famous investor," as asking "why would anyone buy dollars."
Ironically, the magazine also recalled, in the same breath, the Iranian President Mr. Mahmoud Ahmadinejad’s derisive comment that the US dollar is a "worthless piece of paper." The Economist warned that the dollar ‘has been infected by a sense of crisis that bedevils its economy and financial markets.’ The ‘sick’ dollar is the scare of the world today. But why, and how, did the once robust dollar become sick? And where will the dollar illness lead the world to?
Dominating forex
Jim Rogers says – after, perhaps, hedging his falling dollar stocks against other currencies! – that the dollar is not worthy of buy. But what about those who already hold dollar stocks in trillions? As of the second quarter 2007, the total forex reserves held by different countries is $5.7 trillion. Many nations do, but some do not, name the currencies in which they hold their reserves.
Of the global forex of $3.6 trillion held in named currencies, two-thirds, that is $2.4 trillion, are invested in the dollar. In what currencies the balance $2.1 trillion is held is not known. Assuming two-thirds of it is invested in dollars; the global forex reserves invested in the dollar will top $3.8 trillion. That others hold $3.8 trillion means that they hold US securities or assets. Like bank deposits are to a bank, the $3.8 trillion held by others is a debt, a liability of the US to other countries.
Why did this huge debt occur? In one word: the Fed. In less than 15 years, by calibrated strokes of the pen, the US Fed has habituated the once responsible American households to spend beyond their current income and turned them into reckless gluttons.
When individual households spend more than their current income it is micro-economic behaviour. But when that turns into a universal pattern, it becomes a macro-economic issue. More so, if such a nation lacks domestic savings and it is compelled to borrow money from outside to pay for household consumption imports.
This is what has happened to the US. And it happened by design, not accident. The US Fed, led by Mr. Alan Greenspan for an uninterrupted period of 20 years, designed policies to achieve this end. Fed policies simply shifted economic power from families to corporates by promoting compulsive household buying.
And the direct effect of the very policies forced the Federal government to take over household responsibilities by state-organised social security. It is a fascinating story, even a frightening one, because the US Fed is, in substance, today the central banker for the global financial system, whose policies are adopted, or forced to be adopted, by many countries. This is a topic in itself.
Savings deficit
See how the US Fed achieved this result. By repeated interest cuts, from 20 per cent to just 1 per cent in 20 years from 1981 to 2001, the US Fed got US households addicted to buying regardless of needs. At rates of 1 per cent interest, US households saw no meaning in saving. No wonder they felt justified in spending beyond their income.
The fallout? The US savings rate to GDP, which was 18 per cent in 1970s, first came down to 9 per cent in 1990, then to an average of 2.8 per cent in 10 years from 1996 to 2005 and finally to a negative figure of 0.6 per cent in 2006. This drift directly led to households getting addicted to borrow and to spend.
The US household dues on credit cards rose from $338 billion in 1990, when the Fed rates were around 8 per cent, to $1.5 trillion in 2003, when the Fed rate became 1 per cent. Today the dues on credit cards are over $2.46 trillion and the number of credit cards in use is 1.2 billion.
An average American is addicted to 13 credit obligations, nine credit cards and four installment loans! It is difficult to de-addict them today. The result, in just 15 years, US households have handed over all their money to the corporates and become indebted, like Indian farmers have.
Wall Street obsession
The story is not complete without the other effect of the rate cut. As Fed cut interest rates, more and more US households threw their money in stocks in search of higher returns. In 1981, when Fed rate was 20 per cent, some 5.7 per cent US households had held stocks.
When, in 1990, the interest rate was cut to 8 per cent and less, some 25 per cent households frequented Wall Street, a five-fold increase in 10 years. When, in the year 2001, Fed rates were 1 per cent, some 52 per cent of the US households became obsessed with Wall Street, a ten-fold increase in 20 years.
The tail end of the story is still to come. When the stocks that the households held appreciated in the market, they began spending more by borrowing against the unrealised and illusory stock values. This unrealised asset-based lending and spending, yet another topic in itself, is another reason for spending beyond current income.
The appreciation in house values, like appreciation in stock values, also encouraged the households to borrow and spend. This has led to the sub-prime crisis in US. Thus, the US Fed policy that intended to shift money from households to corporates and family responsibility from households to government seems to have worked to perfection.
Trade liberalisation
The Fed’s spend-beyond-incomes policy risked domestic inflation. To de-risk against it, the US government had to go for liberalised imports, cut the import tariffs and make import of foreign goods cheap in the US. So trade liberalisation became more a domestic compulsion of the US rather than, as it pretends, a global obligation.
Consequently, the US began buying more goods and services from the rest of the world, than it supplied to them. This led to in increasing deficit on the US current account with the rest of the world. Once this trend started, it intensified like virus.
The numbers are startling. For the 10-year period from 1990 to 1999, the aggregate deficit of the US was $300 billion.
In the subsequent five years from 2000 to 2004 alone, the deficit had aggregated to $2.5 trillion – more than eight times the aggregate for the previous 10 years! Meaning that during the five years 2000-2004, the US has borrowed $2.5 trillion from other countries to settle its current account deficit.
Funding US consumption
Experts describe, even dismiss, the US current account deficit, to manage which US borrows almost three-fourths of all global savings – two-thirds of which is generated in Asia – as just ‘global imbalance’. On a closer look, it is American domestic imbalance that is unbalancing the world.
Yes, it is true that today US consumption drives global economy. But who funds the US consumption? The very countries that sell goods to the US, like China and Japan, Korea and Taiwan, Malaysia and Indonesia, Hong Kong and Singapore, and finally, India too.
Their dollar reserves represent moneys lent to the US to help the US buy goods from them, like a shopkeeper lending money to his clients and asking them to buy his goods. It’s worse in fact. It is more like the shopkeeper selling his goods on credit against the client’s pro-notes.
After all, in the end, the $3.8 trillion securities held by other countries are merely pro-notes of the US. So all that those who exported goods or securities to the US have on hand are the accumulated pro-notes for $3.8 trillion. Are they not just unpaid vendors? The pro-notes held by them are losing value by the day and hour against the euro, gold, oil and also against the rupee.
courtesy:- vishnu shanbhag Read more!

SENSEX,,NIFTY TRADING LEVELS & TRADING PICKS F & O AND SPECIFIC STOCKS ALSO

EXPECTING RALLY IN MARKETS DUE TO Q3 RESULTS

KEY FACTORS CAN BE EFFECTED ON MARKET @ THIS LEVEL:
GUJARAT ELECTIONS
DERIVATIVES EXPIRY

SENSEX RESISTANCE LEVELS :19540,19800
NIFTY RESISTANCE LEVELS :5840 ,5960

EXPECTING RALLY IN IT, PHARMA SECTORS

TAKE OPPURTUNITY FOR BUYING ON DECLINES IN METAL & FERTILISER SECTORS

TRADING PICKS FOR F & O :-

POLARIS CMP:120 TARGET:160

ILFCI CMP:76 TARGET:100



CASH PICKS :

NATCO PHARMA CMP:140 TARGET:225

RSYSTEMS INTLCMP:102 TARGET:150


Read more!

INDHOTEL LOOKS HOT

Read more!

Good picks for a longer term

Dear All,

Spurned by a messgae on yahoo, I give here some four scrips in financial field.

Joindre capital(Rs53), Market creators (Rs 28), Transwarraty finance( TFL in NSE) ( Rs 39),Action finance (Rs 32)

These are good for 6 months to a year. The charts posted are self explainatory. I suggest all at cmp and any declines.

Please note that I may be having position in these or will do so in near future. This post does not proffess to be a reccomendation for buying. It is only my personal view and those who act on this should do so on their own risk.

All the best- Vishnu

Read more!

First time BIG dady on blog

Friends pls go through chart given here it looks like it will shoot up 15% to 20% which is giving a target of 3000 to 3100 b4 takeing next dip if this happens market can go 21k for sure
Read more!

SENSEX & NIFTY TRADING BAND AND TRADING PICKS FOR F & O AND CASH FOR THIS WEEK 17.12.007-21.12.07

INDEX SCRIPS FACING PROFIT BOOKING

RALLY WILL CONTINUE IN SMALL CAP,MIDCAP

MOMENTUM FOR SPECIFIC STOCKS ONLY

SENSEX TRADING BAND : 19300 - 20600

NIFTY TRADING BAND : 5840 - 6300

IF NIFTY FALLS BELOW 5920 SHORT TERM TRADERS BETTER TO CUT THEIR POSITIONS

F & O PICKS :-

ARVIND MILLS : CMP : 83 TGT :120

CAIRN ENERFY : CMP :224 TGT :260

CASH PICKS :-

ANDHRA SUGARS : CMP :110 TGT :200

KALYANI STEEL : CMP :500 TGT :750

TERA SOFTWARE : CMP : 90 TGT :150

DISCLAIMER :- WE (OUR GROUP) ALREADY HOLDING IN ABOVE STOCKS AND WE MAY TRADE IN THIS WEEK ALSO
Read more!

Hindustan oil exp. 4 short term

Read more!

ASHOK LEYLAND will run like Ferrari

Read more!

Karuturi net nse KNL

strong buy at cmp target 400
Read more!

NIFTY , SENSEX LEVELS & TRADING PICKS FOR THIS WEEK FROM RAJESH DT:10.12.07 TO 14.12.07

FED MEETING 11TH WILL BE JUDGEMENT DAY FOR INDIAN MARKETS ALSO, EXPECTING 0.5BPS CUT, AND EXPECTING RALLY IN MIDCAP STOCKS, SMALL CAP STOCKS

SESNEX SUPPORT LEVELS : 19700 ,19300

NIFTY SUPPORT LEVELS ; 5880 ,5760

INDEX CAN TOUCH NEW HIGHS IN THIS WEEK ITSELF

EXPECTING RALLY IN IT, FERTILISER,BANKING STOCKS



TRADING PICKS FOR F & O :

DABUR : CMP 125 TGT :150

MOSERBAER : CMP 305 TGT :350

ANDHRA BANK : CMP 105 TGT :160



CASH STOCKS :

CENTURION BANK OF PUNJAB : CMP :55 TGT :85

ZYLOG SYSTEMS : CMP ;380 TGT :500

SICAL LOGISTICS : CMP :225 TGT :350

DISCLOSURE:- WE (OUR GROUP) ARE ALREADY HOLDING THESE STOCKS AND WE MAY TRADE IN THIS WEEK
Read more!

FRIDAY TELE FOLIO DT:7.12.07

CAPITA TELE RECOMMENDATION

Phoenix Lamps

Illuminating prospects

With Actis, a strategic investment fund, at the helm, one can look forward to aggressive growth as well as value unlocking once Actis decides to exit

Buy


Phoenix Lamps

BSE Code


517296

NSE Code


PHOENIXLMP

Bloomberg


PL@IN

Reuter


PHLM.BO

52-week High/Low


Rs 211 / 108

Current Price


Rs 184 (as on 7th December 2007)

Phoenix Lamps is India's number 1 manufacturer of lighting sources for automotive and general lighting applications including Automotive Halogen Lamps and Compact Fluorescent Lamps (CFLs). It manufactures lamps at 5 state of the art facilities. Phoenix sells its lighting products under its own ‘Halonix’ brand, and also does white label manufacturing for other leading brands in India. A pioneer in lighting products in India, Phoenix Lamps is recognized and trusted for its high quality, technologically advanced and innovative products.

The company’s products include automobile headlamps under the Halonix brand, H3 type halogen lamps for fog lamps, J-type halogen lamps for general lighting applications, compact fluorescent lamps (single/double H-type), etc.

Actis at the helm

During May 2006, the company identified potential foreign investors namely Argon India Limited and Argon South Asia Limited (controlled by Actis, which manages funds of Commonwealth Development Corporation) to invest into its expansion project by way of Convertible Share Warrants. During the process of obtaining statutory approvals for the same, the Acquirers had also expressed desire to purchase 87,35,727 equity shares held by the Gupta Family (the main promoters of Phoenix Lamps) thereby acquiring controlling stake into the Company. Accordingly, a warrant subscription and share purchase agreement was entered on 3rd July, 2006 which was subsequently amended on 28th December, 2006, wherein Gupta family agreed to sell their shares at Rs.190/- per share.

As per the requirements of SEBI Takeover Regulations, the acquirers made an open offer to acquire 56,03, 860 equity shares from public at Rs 190 per share. Having complied with the SEBI Takeover Regulations, Acquirers have acquired the control of management of the company and inducted their representatives as well as independent directors on the Board. The company has also redeemed the entire preference share capital of IDBI Ltd. The new Board of Directors has thorough knowledge, expertise in every field and is confident of further strengthening the company and improve wealth of investors in the years to come.

Market leader in growing market

The company enjoys the status of Market Leader in automotive Halogen Lamp segment in India with supplies to all Major OEMs. Continued growth in automotive segment with increasing demand from replacement market has enabled the company to perform well on consistent basis.

The company is also leading player in Compact Fluorescent Lamps and other General Lighting Halogen Lamps. In case of General Lighting Lamps a rapid shift is taking place from Ordinary incandescent lamps to energy efficient Compact Fluorescent Lamps (CFLs). In FY 2007, this segment recorded a growth of over 27%. CFLs will be the main growth driver of the Company in next couple of years.

Consistent financial growth

Even when other automobile ancillaries have not registered good results, PLL has managed to register robust growth. And importantly, the company has been successful in expanding its profit margins along with handsome rise in sales.

For the quarter ended September 2007, while its sales rose 26% to Rs 91.31 crore, OPM improved by 90 basis points to 17.9%. This took OP up by 32% to Rs 16.36 crore. Falling interest cost (down 18% to Rs 1.59 crore) and lower depreciation growth (up 14% to Rs 2.76 crore), saw its PBT rise by a good 46% to Rs 12.59 crore. Even as taxation grew 211% to Rs 1.15 crore, PAT rose by a solid 38% to Rs 11.44 crore.

For the six month ended September 2007, while its sales rose 21% to Rs 162.02 crore, OPM improved by 70 basis points to 16.6%. This took OP up by 26% to Rs 26.92 crore. PBT went up 42% to Rs 19.85 crore. Even as taxation grew 305% to Rs 85 lakh, PAT for the six month too rose by a solid 38% to Rs 19.00 crore.

New facility, overwhelming demand and new strategic markets to boost performance further

The company is riding high on the increased production with the start of the Haridwar facility having been commissioned since July 2007. Buoyed by the overwhelming response from the export market, Phoenix Lamps has also entered new strategic markets for auto exports and plans to increase market penetration in the coming years.

Buoyant outlook; Management confident of robust future and significantly higher margins

Rajeev Prasad, Managing Director, says. "The growth in profit is mainly because of better planning, forward and backward integration of units, better realization of value addition products, and working capital management .The management expects the current fiscal to be robust on account of capacity enhancement with the commissioning of Haridwar plant. We are confident of achieving significantly higher margins in the current year. In addition the company has started looking at acquiring synergistic businesses in India and Abroad".

Setting up of a new Unit at Haridwar will result in further tax saving for the company. The management’s stringent focus on cost management to remain competitive will enhance operating margins.

The company has also introduced new generation lamps like LED, HID etc.

Moreover, the management is confident that the Compact Fluorescent Lamp shall witness exponential growth going forward.

Valuation

Actis is a strategic investor in Phoenix Lamps. Normally Actis enters into a company when it feels it is undervalued and it can add value to it. Over a period of time when appropriate value is realised it exits from the company. In the process minority shareholders also gets the benefit of its management and value creation strategies.

We expect the company to register sales and net profit of Rs 336.12 crore and Rs 40.29 crore respectively in FY 2008. On equity of Rs 28.02 crore and face value of Rs 10 per share, EPS works out to Rs 14.4. This EPS is expected to rise to 18.7 in FY 2009 on sales of Rs 420.15 crore and PAT of Rs 52.51 crore. The share price trades at Rs 184. While the P/E on FY 2008 EPS is just 12.8, it falls to an attractive 9.8 on FY 2009 EPS. Expectations are building up that automobile industry will soon come back on growth track and interest rates will come down. This will help rerating of Phoenix Lamps, which in any case is doing well in spite of the recent sluggish phase in the auto industry. With Actis, a strategic investment fund, at the helm, one can look forward to aggressive growth as well as value unlocking once Actis decides to sell its 66% stake which it bought from earlier promoters at Rs 190.

Phoenix Lamps: Financials






0403 (12)


0503 (12)


0603 (12)


0703 (12)


0803 (12P)


0903 (12P)

Sales


162.83


202.75


232.72


277.83


336.12


420.15

OPM (%)


20.3


18.7


17.4


15.9


16.9


17.2

OP


33.03


37.86


40.60


44.24


56.93


72.27

Other Inc.


1.64


1.5


5.44


2.78


3.31


3.50

PBIDT


34.67


39.36


46.04


47.02


60.25


75.77

Interest


7.16


7.51


6.88


7.23


5.90


5.50

PBDT


27.51


31.85


39.16


39.79


54.35


70.27

Dep.


14.18


14.83


14.30


10.75


12.33


13.81

PBT


13.33


17.02


24.86


29.04


42.02


56.46

Tax


3.89


4.18


0.97


-2.43


1.74


3.95

PAT


9.44


12.84


23.89


31.47


40.28


52.51

EPS* (Rs)


3.9


5.5


8.5


11.2


14.4


18.7

*Annualised on current equity of Rs 28.02 crore;
Face value of Rs 10 each
(P) Projections,
Figures in crore,
Source: Capitaline Corporate Databases



Phoenix Lamps: Results






0709 (3)


0609 (3)


Var. (%)


0709 (6)


0609 (6)


Var. (%)


0703 (12)


0603 (12)


Var. (%)

Sales


91.31


72.71


26


162.02


134.42


21


277.83


232.72


19

OPM (%)


17.9


17.0





16.6


15.9





15.9


17.4




OP


16.36


12.38


32


26.92


21.33


26


44.24


40.60


9

Other inc.


0.58


0.60


-3


1.58


1.31


21


2.78


5.44


-49

PBIDT


16.94


12.98


31


28.50


22.64


26


47.02


46.04


2

Interest


1.59


1.93


-18


3.05


3.80


-20


7.23


6.88


5

PBDT


15.35


11.05


39


25.45


18.84


35


39.79


39.16


2

Dep.


2.76


2.42


14


5.60


4.90


14


10.75


14.30


-25

PBT


12.59


8.63


46


19.85


13.94


42


29.04


24.86


17

Tax


1.11


1.06


5


1.64


1.99


-18


0.62


3.71


-83

Deferred Tax


0.04


-0.69


-106


-0.79


-1.78


-56


-3.05


-2.74


11

PAT


11.44


8.26


38


19.00


13.73


38


31.47


23.89


32

EPS* (Rs)


16.3


11.8





13.6


9.8





11.2


8.5




*Annualised on current equity of Rs 28.02 crore;
Face value of Rs 10 each
Figures in crore,
Source: Capitaline Corporate Databases
Read more!

WEDNESDAY TELEFOLIO DT:5.12.07

CAPITA TELE FOLIO RECOMMENDATION

W S Industries (India)

Has a winning formula for strong growth

Surging investment in power T & D sector, yield improvement in tie-up with PPC Insulators, USA and commissioning of a new plant will keep this insulator major on strong growth path

Buy


W S Industries (India)

BSE Code


504220

NSE Code


WSI

Bloomberg


WSI@IN

Reuter


WSIN.BO

52-week High/Low


Rs 107/41

Current Price


Rs 106 (as on 05/12/07)

W S Industries (India) (WS) manufactures insulators within the power equipment sector. Insulators are basically protective tools, which subdues the current. They are non-conductors which are used in transmission and distributing (T&D) segment. Often when the current from grid say of 400 KV needs to be stepped down to around 4 MW to reach to household, one needs a strong equipment to withstand or hold the current and to act as a safety wall so that only that portion of the electricity which is required passes and the rest is distributed to various locations as per the capacity norms specified.

WS manufactures insulators of high end starting from 220 KV till 1200 KV. Various types of insulators manufactured by WS are Hollow insulators, Pin insulators, solid core insulators and hollow porcelain insulators.

Strong visibility in Power Transmission and Distribution (T&D) sector

The government has planned a capacity addition of 78000 MW in the 11th plan to reach the overall target of 2 GW by 2012. This massive requirement of the power addition would require huge investment both in power generation and in power transmission and distribution sector. Also the power sector performance is very critical for maintaining the growth rate of 8-9% of GDP. The country was able to achieve 52% of the planned generation capacity in 10th plan.

T&D sector however is not entirely dependent on the generation sector. Although the growth in generation sector would of course provide additional requirement for power transmission and distribution sector, the current imbalances in the inter regional grid capacities will augur well for the growth of entire T&D sector. There is a surplus in the north-grid whereas deficit in west-grid. So power grid, rural electrification etc present tremendous opportunity for T&D sector and anything from new generation capacity will be a bonus. The inter-regional capacity for power evacuation increased to 14000 MW, which the government has planned to reach to 34000 MW in 11th plan. Insulators form about 8% of the total power T&D requirement. Aditya Birla Nuvo, Bhel are some other existing players in insulator industry. The company has technology, which is at par or even better than its competitors.

The company has installed capacity of 8000 tons of substation insulators and 8000 tons of transmission insulators. The company is operating at more than 100% of the installed capacity.

Nearly 95% of the transmission insulators manufactured are being sold domestically. Power Grid is the largest customer with more than 50% of the transmission insulators being sold to it.

Of the total production of substation insulator, most of the insulators are exported to OEM’s like ABB, Siemens, Areva etc. There is a huge demand for substation insulators both in India and in exports and the company has set a standard of 50:50 on domestic and export to balance out any risk in both the markets. Relaisations even at the current appreciated rupee levels are better in exports compared to domestic markets.

The company has rolled out an expansion plan to increase the installed capacity of substation insulators from 8000 tons to 18000 tons in two phases. This is a Greenfield expansion in Visakhapatnam, Andhra Pradesh. For this the company had raised Rs 107 crore by preferential allotment to Schroder Credit Renaissance fund at Rs 67 per share. Phase 1 of 8000 tons new capacity will be on stream from July’08. Gradually the phase 2 will be operational by end of FY’09. Once again the company will balance out the geographical risk by sales to domestic and export markets in ratio of 50:50.

Enters into turnkey projects

The company has also entered into turnkey projects from FY’07 onwards. The company renders the design, execution, and construction work of insulators and transmission lines of below 220 KV as against its manufacturing insulator facility of above 220 KV. Since the company is new in this business, it is moving cautiously and is currently into lower end turnkey projects. The company is looking for strategic alliance in this business and going forward will scale up the capacity but with a cautious view. Of the total sales of Rs 165 crore in FY’07, insulators formed Rs 145 crore of sales and the rest came from turnkey projects. The company has order book position of Rs 180 crore for insulators (Rs 145 crore last year) and Rs 30 crore for turnkey projects (Rs 15 crore last year).

After a year of consolidation in FY 2007, a new growth phase has started

The company has rationalized its products by manufacturing only high capacity products. In 2007, the prices of fuel (kerosene) increased by 46%. It was not possible for the company to manufacture at this level some of the low end products. Hence the company rationalized its product base and concentrated only on high voltage capacity of above 220 KV. So FY’07 was a low growth year for the company in terms of topline. As against a CAGR of 20% growth in previous three years, the company reported a modest 12% growth in sales in FY 2007. However, the product rationalization advantage helped the margins to increase by 200 basis points.

In Chennai, now the company uses LPG along with kerosene as a fuel and hence has reduced to some extent its high fuel cost. The new capacity, which will come up in Andhra Pradesh, will use gas as its fuel. Hence there will be overall significant savings in fuel cost.

This has resulted in optimum capacity utilization and economies of scale advantage, which are seen in the first half results. The company reported topline growth of 30% in H1 FY’07 to Rs 104.49 crore and OPM improved by 340 basis points to 15.3%.

The company has technology collaborations with Westinghouse Electric, US and MWB AG, Germany from its inception. Later on the company absorbed the entire technology and is presently working independently.

In order to further increase the yield in manufacturing insulators, the company has entered into strategic alliance with PPC Insulators USA, who are the world’s largest insulator manufacturer having 23 geographical presences across the globe. It is a mutual sharing agreement where both the parties share their technologies and benefit each other. This is one of the important reasons for optimum output and hence better margins in the current year. Also there is a possibility of PPC using WS manufacturing facilities as a base going forward, due to the cost advantage.

The subsidiary will generate rental/sale of property income in future without any investment

The company has 60% stake in WS Electric, which has surplus land of more than 2 Million sq feet in industrial estate of Chennai. The company has entered into an agreement with one of the developers in Chennai, whereof the company has allocated its land to the developer and will have a stake in the developed property. Hence there will be no capex on part of the company except the land. There will be a total development of 2000 thousand sq feet area in four phases. FY’09 will see completion of the phase 1 of 300 thousand sq feet area and the company has the right to sell or lease 60 thousand sq feet area.

The above will bring regular or one-time cashflow depending on the company’s decision on sale/lease and will boost its financials further. However we have not taken in to account these incomes/cash flows in our projections.

Financials are surging

During the quarter-ended Sep’07, the company reported topline growth of 38% to Rs 56.83 crore, The OPM stood at 15.7% from 12% last year. The insulator sales stood at Rs 51.72 crore and the PBIT stood at Rs 7.64 crore. The revenues from turnkey projects stood at Rs 5.10 crore and company booked profits of Rs 0.34 crore in this quarter. After providing interest cost and deprecation of Rs 1.60 crore and Rs 0.93 crore respectively, the PAT stood at 3.17 crore, up by 68%.

For the half year ended Sep’07, the company reported topline growth of 30% to Rs 104.49 crore, The OPM stood at 15.3% from 11.9% last year. The PAT stood at Rs 7.11 crore, up by 104%.

Valuation

For the year ended Mar’08, we expect the company to report net sales and PAT of Rs 206.20 crore and Rs 14.24 crore. For Mar’09, we expect the company to register net sales and PAT of Rs 303.13 crore and Rs 23.63 crore. This gives an EPS of Rs 6.7 for FY’08 and Rs 11.2 for FY’09. At current market of Rs 106, the scrip is available at 15.8 times its FY’08 earnings and 9.5 times its FY’09 earnings.

WS Industries (India): Standalone Financials






0403 (12)


0503 (12)


0603 (12)


0703 (12)


0803(12P)


0903(12P)

Net Sales


103.73


120


147.06


165.25


206.20


303.13

OPM %


14.1


10.2


10.1


12.1


15.2


15.5

OP


14.63


12.29


14.89


19.95


31.28


46.99

Other income


1.75


0.21


0.19


0.42


0.32


0.32

PBIDT


16.38


12.5


15.08


20.37


31.60


47.31

Interest


6.49


6.2


6.36


7.12


6.63


7.00

PBDT


9.89


6.3


8.72


13.25


24.97


40.31

Depreciation


4.07


4


3.32


3.24


3.29


5.04

PBT


5.82


2.3


5.4


10.01


21.68


35.27

Tax


0


0.19


1.08


3.46


7.44


11.64

PAT


5.82


2.11


4.32


6.55


14.24


23.63

EPS


2.8


1.0


2.0


3.1


6.7


11.2

* Annualised on current equity of Rs 21.41 crore of face value of Rs 10 each
(P): Projections,
Figures in crore,
Source: Capitaline corporate database



WS industries (India): Standalone Result






0706(03)


0606(03)


Var


0706(06)


0606(06)


Var


0703(12)


0603(12)


Var

Sales


56.83


41.07


38


104.49


80.49


30


165.25


147.06


12

OPM%


15.7


12.0





15.3


11.9





12.1


10.1




OP


8.90


4.91


81


16.02


9.56


68


19.96


14.90


34

Other Income


0.01


0.01


0


0.03


0.05


-40


0.34


0.07


386

PBIDT


8.91


4.92


81


16.05


9.61


67


20.3


14.97


36

Interest


1.6


1.79


-11


3.33


3.68


-10


7.04


6.25


13

PBDT


7.31


3.13


134


12.72


5.93


115


13.26


8.72


52

Depreciation


0.93


0.95


-2


1.84


1.91


-4


3.24


3.32


-2

PBT


6.38


2.18


193


10.88


4.02


171


10.02


5.4


86

Tax


3.21


0.29


999


3.77


0.53


611


3.46


1.08


220

PAT


3.17


1.89


68


7.11


3.49


104


6.56


4.32


52

*EPS


6.0


3.6





6.7


3.3





3.1


2.0




* Annualised on current equity of Rs 21.41 crore of face value of Rs 10 each
Figures in crore,
Source: Capitaine Corporate database
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NIFTY on the edge

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10k hits party with ABN-amro

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POLARIS FOR SHORT TERM

FRIENDS OUR FRIEND JATIN SHAH HAD GIVEN BUY CALL ON THIS WITH TARGET OF 140 SOME TIME BACK AND SINCE THEN WE ARE TRACKING THIS SCRIPT AND NOW WE GIVE OUR BUY CALL ON THIS FOR THE SAME TARGET FOR DEC EXP. ENJOY UR PLAY IN FUTURES AND OPTIONS
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DLF FOR SHORT TERM SWING

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Torrent Pharma... investment pick

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SENSEX & NIFTY LEVELS , F&O AND CASH TRADING PICKS FROM RAJESH FORTHIS WEEK DT:3.12.07 TO 7.12.07

HOLD THE POSITIONS IF U HAVE ANY, DONT SHORT SELL ,SHORT SELLINGIS NOT GOOD @ THIS LEVEL , MARKTS CAN TOUCH NEW RECORD HIGHS IN COMING DAYS

SENSEX RESISTANCE LEVELS: 19700 -20200

NIFTY RESISTANCE LEVELS: 5840 -6000

FUTURES & OPTIONS PICKS FOR THIS WEEK AS WELL AS FOR THIS DERIVATES ALSO;-

CESC : CMP :- 630 TGT :750

STERITE INDUSTRIES: CMP: 1030 TGT; 1200



CASH PICKS :-

HALDYN GLASS :CMP : 71.6 TGT :125

TVS ELECTRONICS :CMP ; 48.8 TGT :100

MP DISTELERIES :CMP : 295 TGT :400 (CODE EDL IN PIB)

DISCLOSURE:- WE (OUR GROUP) ARE ALREADY HOLDING THESE STOCKS AND WE MAY TRADE IN THIS WEEK
Read more!

FLASH NEWS DT:1ST DEC 2007

Flash News Volume 23- No. 31

Stay Put In Frontline Stocks

Studies have demonstrated that bull run more often tends to last longer than bear run and this is quite evident from the Indian stock market performance over the last five years; barring a very few exception in the past. So we want to assure our readers yet again that the Indian stock market is in the long-term secular bull-run and short-term volatility should only be looked at as minor wrinkles in this run. In the last issue of Flash News we discussed the alarming volatility of the market, where the correction was almost six per cent. However, this week has comparatively better as the market remained more or less subdued, much to our expectation. The Sensex, since the closing on last Thursday (November 22, 2007) has gained just over 2.22 per cent. The weekly data of FIIs and MFs shows that FIIs have turned net sellers to the tune of Rs 3033.20 crore, while mutual funds have been net buyers to the tune of Rs 870.3 crore.
It is important to note here that we are reaching the end of the calendar year and historically it has been noticed that FIIs have turned net sellers during this time of the year only to return in January next year, when new fund allocations take place. We believe that the current scenario is only an indication of this historical trend. Secondly, the sub-prime fears have picked up in the US again after financial services companies have reduced their revenues guidance, while some continue to cut cost by downsizing, following mortgage losses. For example, the US based Bear Stearns announced 650 job cuts, taking its fourth quarter jobs cuts to 10 per cent of its total workforce. So, though India is not affected by the US sub-prime crisis, the Indian market will surely face a ripple effect. This will be inline with its Asian and global peers.
On the global front, it is quite clear now that the US economy is slowing down. The US Federal Reserve has already cut its economic growth forecast for 2008 in a range of 1.8-2.5 per cent from 2.5-2.7 per cent growth it predicted earlier. Of course, this revision comes on account of tight credit markets and weakening of US housing market – perhaps the worst recession in US housing market in 16 years. Even demand for other durables in the US has declined, indicating the sharpest fall in more than three years.
But what everybody is looking out for is the meeting of Federal Open Market Committee (FOMC), which is scheduled for December 11, 2007. A further rate cut cannot be ruled out in this meet. Recently, Vice Chairman of US Federal Reserve, Donald Kohn, accepted that the turbulence in the financial market was much more than anticipated and the possibility of it impacting credit to businesses and consumers is higher. And the fact that the FOMC will be discussing this issue in its December 11 meet, investors are already expecting another quarter-point reduction in the interest rate to 4.25 per cent. The impact of this expectation is already seen in the global market indices including emerging markets, which are already up in green.
While these mixed signals and sentiments float around in the market, we want investors to stay invested. But if you want to take some fresh exposure, the market has also given good opportunities and the current trend only suggests that investors are just doing this. Whenever the market has shed points it has also shown quick recovery and domestic mutual funds have been following this since long. But our advice to investors is to stay with the front-runners or large caps rather than mid and small caps. The mid and small caps have already witnessed a good run-up. Our data analysis of the advance-decline ratio also indicates that Group-A is still the most preferred group in terms of investment considering the fact that its advances were 136 compared to 74 in decline (see table).
The list of the F&O segment is only getting bigger and recently 16 companies were added to the list of F&O segment and these counters were quick to demonstrate good performance. Even the SEBI is planning to reduce the lot size of currently listed companies, which are being traded in F&O segment. This effectively means that as and when the lot size reduces, going forward, the liquidity will only increase.
On the new listings front, Mundra Port and SEZ was listed on November 27, 2007 at Rs 770 over its issue price of Rs 440, giving a gain of 75 per cent and touching an intra-day high of Rs 1150. Currently trading at Rs 895, it is still up 103.39 per cent over its issue price. Phenomenal performance! Perhaps, these are positive signals of Indian investment culture and the robustness of Indian capital market. Way to go…



Review Of Past Recommendations
Issue 39 (February 19, 2007)
Company Reco CMP on Profit/ % Recomm.
Price Rs (28.11.07) Rs (Loss) Rs change
L&T 1615 4113.7 2498.7 154.7 Hold
Subhash Projects 225 332.35 107.35 47.7 Hold
Bilcare 536 1199.95 663.95 123.9 BPP
Issue 40 (February 26, 2007)
Jain Irrigation 440 593.8 153.8 35.0 Hold
JMC Projects 230 493.1 263.1 114.4 Hold
Bharat Electronics 1593 1799.95 206.95 13.0 Hold

ExchangeGroup Advances Declines Unchanged
A 136 74 2
B1 356 357 5
B2 319 400 6
F 1 1 2
S 199 211 5
T 174 286 2
TS 35 45 2
Z 59 62
Advance Decline ratio from November 21 - 27, 2007

Recommendations
Orchid Chemicals Face Value - Rs 10 Buy Rs 253
Ticker: 524372 Equity: Rs 65.83 crore H/L: Rs 285/176
• Orchid Chemicals and Pharmaceuticals (OCPL) is a integrated pharmaceutical company with core competencies in the development and manufacture of Active Pharmaceutical Ingredients (APIs), Finished Dosage Forms and drug discovery
• We recommend OCPL for its strong performance for H1FY08. With good performance and good market share in the US for its Cefdinir, Macesson, Cefoxitin and Cefazolin in H1FY08, the company has managed to register a topline of Rs 569.10 crore and bottomline of Rs 109.45 crore as compared to Rs 474.08 crore and Rs 35.24 crore respectively in H1FY07.
• In addition, the company has received approval from the USFDA for its Abbreviated New Drug Application for Cefpodoxime Proxetilt tablet. With limited generic competition in this product, OCPL hopes to garner a sizeable market share and revenues in the US market.
• According to the management, OCPL will be able to maintain this healthy financial figures, if not improve them, in the current and the following quarter. In addition, the next trigger is going to be Tazobactam and Pipracillin, for which the company is waiting for the approval and if that happens between January and March, 2008, this will trigger further growth for the year 2008-09.
• On the valuation front, the company is trading at 10x of its trailing 12 months earnings. With similar or better growth expected in the next two quarters we feel the valuations are cheap and hence investors can go for the scrip at the current level.

Finolex Cables Face Value - Rs 2 Buy Rs 89.50
Ticker: 500144 Rs 30.59 crore H/L: Rs 109.85/62.55
• Finolex Cables (FCL) has come out with strong results for H1FY08 on account of strong growth in the electrical cables segment. For H1FY08, the topline has showed a strong growth and stood at Rs 636.40 crore whereas the bottomline is at Rs 58.60 crore as compared to Rs 487.80 crore and Rs 44.10 crore respectively in H1FY07.
• Although the EBITDA margins for H1FY08 have declined to 10.70 per cent as compared to 13.10 per cent in H1FY07 on account of increased copper prices, the sequential quarters show some signs of recovery in the margins. We expect the recovery in the margins to continue and expect the bottomline to improve further going forward.
• The board has approved Rs 60 crore capex to enhance capacity for compact fluorescent lamps (CFL) and cables. The only concern for FCl is the new power cables capacities in Uttarakhand have been delayed till April 2009.
• On the valuation front, the company is trading at 16.50x of the trailing 12 months earnings. But we feel, with improvement in the margins, the company is expected to improve its bottomline. Hence, we recommend investors to buy the scrip at current levels.

Jammu & Kashmir Bank Face Value - Rs 10 Buy Rs 729
Ticker: 532209 Equity: Rs 48.49 crore H/L: Rs 800/521
• Jammu & Kashmir Bank is one of the leading private sector banks with a network of 520 branches and has showed a strong growth in the last three years. This can be seen from the fact that fee based income has increased to Rs 160.21 crore in FY07 as compared to just Rs 95 crore in FY05.
• In H1FY08 the operating income of the bank stood at Rs 478.63 crore (Rs 427.87 crore). Although it has not managed to improve its interest income, banks fee based income has increased to Rs 93.90 crore as compared to Rs 57.48 crore.
• The NIM for the Q2FY08 has increased to 2.97 per cent against 2.90 per cent. On the operational front, as on September 30, 2007, the low cost CASA deposits stood at 35.21 per cent, deposits at Rs 18102 crore and advances at Rs 25954 crore. Even the CAR stands strong at 12.86 per cent and it is again expected to improve after the GDR issue of 62 lakh shares.
• On the valuation front, the bank is now trading at 1.80x of its current book value. With the bank showing significant growth in the fund-based and fee-based income, it is expected to put another strong financial performance in H2FY08 and hence we recommend investors to buy the scrip at current levels.


DIVIDENDS DECLARED IN LAST FEW DAYS
Company Name Per cent XDividend Date
Jetking Infotrain 100 NA
Walchandnagar Industries 100 NA
Mayur Leather Products 8 NA
Siemens 240 NA
Shriram City Union Finance 10 NA
Automotive Axles 65 NA
Usher Agro 5 7/12/2007
Bannari Amman Sugars 70 NA
Triveni Engineering & Industries 10 NA
Swasti Vinayaka Synthetics 5 4/12/2007
Deepak Spinners 5 27/11/2007
Garware Marine Industries 5 NA
Mahalaxmi Seamless 5 27/11/2007
Crazy Infotech 5 28/11/2007
Colgate-Palmolive (India) 600 29/11/2007
Prime Securities 30 22/11/2007
Greaves Cotton 20 NA
Manugraph India 100 NA
Shree Precoated Steels 11 NA
Television Eighteen India 25 NA
Dollex Industries 5 15/11/2007
Elgi Equipments 60 15/11/2007
Taparia Tools 20 7/11/2007
Kilitch Drugs(I) 10 15/11/2007
Nods Worldwide 350 15/11/2007
Khoday India 10 7/12/2007
United Spirits 10 20/11/2007
Sagar Cements 15 15/11/2007
GMM Pfaudler 35 15/11/2007
Shakti Pumps (India) 10 NA
Patels Airtemp (India) 5 16/11/2007
ISMT 20 15/11/2007
SB&T International 5 21/11/2007
Monsanto India 120 14/11/2007
Kingfisher Properties & Holdings 10 22/11/2007
FIEM Industries 25 7/12/2007
Avaya GlobalConnect 67.5 NA
Nile 20 15/11/2007
KSB Pumps 20 8/11/2007
Lakshmi Machine Works 200 20/11/2007
Nicco Parks & Resorts 12 NA
JK Paper 22.5 29/11/2007
Tamil Nadu Newsprint And Papers 20 12/11/2007
Jagran Prakashan 50 15/11/2007
Splits declared in last few days
Company Name Ratio* XSplit Date
Action Construction Equipment 10:02 NA
Arrow Webtex 10:01 NA
B L Kashyap & Sons 10:05 NA
Cinevistaas 10:02 NA
GEE 10:02 NA
Jagran Prakashan 10:02 NA
Jai Prakash Associates 10:02 NA
Jindal Steel & Power 5:01 NA
Kanoria Chemicals & Industries 10:05 NA
Lancor Holding 10:02 NA
Orient Paper & Industries 10:01 NA
Rajesh Exports 2:01 NA
Suzlon Energy 10:02 NA
T Spiritual World 2:10 NA
Walchandnagar Industries 10:02 NA
(*10:2 means old FV Rs 10 & New FV of Rs 2)


BONUS DECLARED IN LAST FEW DAYS
Company Name Ratio XBonus Date
Anjani Synthetics 1:01 NA
Ashiana Housing & Finance (India) 5:02 NA
Axon Infotech 3:01 15-Nov-07
Brady & Morris Engg Co 1:02 NA
Freshtrop Fruits 1:01 NA
Kanoria Chemicals & Industries 1:02 NA
Mediaone Global Entertainment 5:01 NA
Rajesh Exports 2:01 NA
Rolta India 1:01 NA
Satra Properties (India) 2:01 NA
Siemens 1:01 NA
State Trading Corporation Of India 1:01 NA
Ushdev International 1:01 NA
Vinati Organics 2:01 22-Nov-07
W H Brady & Company 1:02 NA
Walchandnagar Industries 1:01 NA
3:1 means, 3 bonus shares for one share held

TECHNICALS
SENSEX ON A CORRECTION PATH
The Sensex seems to have continued its corrective phase but keeping in mind the higher base (since it is still in the proximity of its all-time high, there are just a few resistance levels), the volatility could continue to be an inherent part of the movements and doesn't seem to be in a mood to go away in a hurry while a small negative bias has creeped in. The Sensex has come under pressure and has taken support on its trading range between 18300 on the downside and 20200 on the upside. It hasn't posted a fresh all-time high while strong resistance can be expected from the 19950 - 20200 level.

Trend (Index): Sideways Last Index Closing: 18938.87
Support: 18833, 18327 Resistance: 19276, 19621
55-WEEK EMA: 15268.47 100-WEEK EMA: 13514.73
MACD: BUY MODE RMI: BUY MODE
ROC: SELL MODE RSI: SELL MODE
STOCHASTIC: SELL MODE



GRAUER & WEIL. BUY RS 186
1ST TARGET: RS 211 2ND TARGET: RS 218 STOPLOSS: RS 155


Grauer & Weil bottomed out by posting an intra-day low of Rs 65.10 on 22.03.07, moved upwards for quite a few trading sessions while continuous support came in the form of the 65 level (congestion area) and continuous resistance came in the form of the 55-day EMA. The scrip finally posted an intra-day low of Rs 64.70 on 14.05.07 and these levels have not been seen very often since then. Grauer & Weil commenced a short-term uptrend from here (there was enough clarity on the medium-term front), struggled but overcame the 55-day EMA, posted a series of progressively higher tops and bottoms, started moving within the confines of an upward slopping channel, almost gave a throwover from this channel and finally peaked at an intra-day high of Rs 106.40 on 14.08.07. The scrip almost gave a downward key reversal from here, couldn't sustain these levels for long, entered a corrective phase, declined to post an intra-day low of Rs 85 on 22.08.07, rebounded smartly from here, posted a good but unsustainable rally to post a high of Rs 218.70 on 30.10. 07 only for the scrip to enter a sharp correction. Currently, Grauer & Weil seems to be on the verge of entering a short-term uptrend (could commence a medium-term uptrend), has overcome the 55-day EMA and with the oscillators looking positive indicating the possibility of a further upside from here.

Trading Pointers
Indicators: MACD-Buy RMI-Buy Stochastic-Buy ROC-Buy RSI-Buy
Support: 155,122 Resistance: 184, 219
BSE code: 505710 55-day EMA: 155.95


GITANJALI GEMS BUY RS 403.95
1ST TARGET: RS 427 2ND TARGET: RS 436 STOPLOSS: RS 378


Gitanjali Gems peaked by posting an intra-day high of Rs 225 on 17.05.06, but couldn't sustain these levels for long and finally declined to bottom out by posting an intra-day low of Rs 126.60 on 13.06.06 where strong support prevented further downside. The scrip finally posted an intra-day low of Rs 108.65 on 24.07.06 and these levels have rarely been seen since. Gitanjali Gems commenced a short-term uptrend from here (this time around there wasn't enough clarity on the medium-term front), struggled but eventually overcame the 55-day EMA, posted a series of progressively higher tops and bottoms, started moving within the confines of an upward slopping channel, almost gave a throwover from this channel and finally peaked by posting an intra-day high of Rs 258.30 on 02.02.07. The scrip almost gave a downward key reversal from here, couldn't sustain these levels for long, entered a corrective downmove, declined to post an intra-day low of Rs 176.50 on 30.06.07, recovered sharply from here, posted a smart but slightly unsustainable upmove to post a high of Rs 416.70 on 26.10.07. Currently, Gitanjali Gems is in the midst of commencing a medium-term uptrend, while it seems to have exhausted its weekly downmove (has recently sustained above the 55-day EMA) and with the mechanical indicators looking positive, a further upside from these levels cannot be ruled out.

Trading Pointers
Indicators: MACD-Buy RMI-Sell Stochastic-Buy ROC-Buy RSI-Buy
Support: 378, 343 Resistance: 400, 449
BSE code: 532715 55-day EMA: 351.81



Street Talk
Grab it early
There is a rumour that an institution might be picking up big stake in GNFC (BSE code: 500670) at a higher price. It is trading at Rs 169.90 and likely to catch momentum soon. Investors with high risk appetite can take exposure in this scrip.

Land story
With some land bank story raking up in SRF (BSE code 503806), market sources believe a run up in this scrip in the coming days and hence medium-term investors can go for it.

Read more!

INFOMEDIA sl 195 target 260

Friends one of our froup member ENA SHAH from BARODA has bought for us this script....pls nore females are no where behind any more and work hard too...enjoy the next bull run

Discoser:- ENA SHAH is holding this sript and i too have intrest in it
Courtecy:- ENA SHAH BARODA (GUJRAT)
Read more!

ASHOK LEYLAND still a strong buy for target 60

Hinduja Group flagship company Ashok Leyland plans to launch its next-generation commercial vehicles with state-of-the-art technology in the next two to three years.

Using its in-house R&D set-up, the company is developing electronic shift-by-wire transmission technology and electronic-controlled engine management systems to take fuel efficiency to a new level. It will also be launching a range of hybrid trucks and buses next year.

Read more!

STRONG buy even at this level

===========================================
news in reverse chronological order nov to sep 07
===========================================
Net Accrual to Assam Company shareholders works out to Rs 248 per share on the low end, Rs 1069 per share on the higher end and Rs 740 per share on the Best Recoverable Estimate basis, over the course of Oil Production from the Amguri and AA-ON7 Blocks.



This is against the current market price of Rs 25.60 per share of Assam Company.



A. Amguri Development Block 53 sq kms

Oil discovered



Amguri 5 588 bbls/d



Amguri 6 405 bbls/d



Amguri 10B 1000 bbls/d



Amguri 11 4100 bbls/d



Amguri 10B and Amguri 11 will be put on Commercial Production in the Q4, CY2007.



B. AA-ON7 Development Block 1445 sq kms



Drilling Operations are continuing



C. Summary of Exploitable Reserves and Share accruable to Assam Company



Amguri & AA-ON7 Prospective Resources-Gross



Probabilistic Estimate of Resources



Production Sharing Contract



60 per cent participating interest, & operator for Amguri



40 per cent participating interest-Assam Company



65 per cent participating interest and operator AA-ON7



35 per cent participating interest-Assam Company



World Oil Prices paid



25 Year Term plus optional extensions



100 per cent cost Recovery



Royalties $ 3.95 per bbl and gas 10 per cent



7 Year Tax Holiday from initial production



Unrisked report prepared by Sproule International
----------------------------------------------------------------------------------------------------
Assam Company-Amguri Oilfields Shaping Up As An Exciting Find

BSE 500024, CMP Rs 22



Assam Company and Canoro, the Canadian Oil field operator for the Amguri Oilfields in Assam announced on Wednesday that they had met success in the Amguri 11 Oil Well, with the Oil/Gas flow at the tip head of 3100 boe/d.



Earlier this year, Assam Company had informed the BSE that it had met success at the Amguri 10B well, with tip head Oil/Gas flow of 1000 boe/d. Put together the 2 wells can produce well over 4100 barrels of oil equivalent or roughly 1.5 million barrels of Oil per annum, worth approximately Rs 478 crore per annum. (That is 4100*365*80* 40).



If the Amguri fields last for another 15 years, we are roughly talking of Oil equivalent reserves worth $ 1.5 to $ 2 bn or Rs 8000 crore.



This is the contribution from just the Amguri fields, that apart Assam Company has joint operatorship with Canoro, for the AAON7 Block that stretches from Assam to tracts well inside Nagaland, where testing and drilling operations continue. Here 2D and 3D Seismic studies and geographic mapping services are being carried out by Asian Oilfields on behalf of the Assam Company-Canoro combine.



Further to Amguri and AAON7 blocks Assam Company is refurbishing the Laxmijan Oil fields discovered by Ongc and given over to Assam Company for the work over, which too could result in additional oil finds.



The North East, cradle of the first onshore Oil finds in India has access to the Bongaigaon and Numaligarh Refineries of IOC and Oil India, which can process gas and crude produced by Assam company.



Gas supplies are already being made to these Refineries. If the Amguri prospect shapes up well, then Assam Company would made an equally significant Oil discovery as Cairns has made in Rajasthan.



What about the market cap of Assam Company?



Investors must note that Assam Company as a standalone entity fetches a market capitalisation of a mere Rs 484 crore (22 crore shares at Rs 22 per share), which represents essentially its Tea plantation business in Assam. The Tea business generates about Rs 200 crore in Annual Revenues and brings in marginal profits.



The Oil business thus comes for free.



Agreed there will be development costs for the Oil fields in Assam, but apart from the initial money put in by Canoro, the Canadian concern has raised an additional $ 10 mn to fund drilling of new wells and Assam Company has raised $ 46 mn through FCCBs for carrying out the Exploration and Oil Field development work.



Amguri 10B update



Assam Company Ltd has successfully completed testing operations of the Amguri 10B well. The upper portion of the zone was perforated to determine the hydrocarbon potential of the zone. The flow from the total completion interval confirmed the presence of a gas-condensate reservoir throughout the entire zone of 32 meters.



Due to difficulties in establishing stable flow rates in high pressure gas-condensate

situations and having regard for testing equipment limitations and safety precautions,

the well was not tested to its full potential.



The well had a tested tubing head pressure of 2,500 psi with an 18/64 inch choke from

both intervals.



Management believes that the 10B well could produce in excess of 1,000 boe/d once connected to the production facilities.



With existing well site facilities located at Amguri 6, approximately 200 meters from the surface location of Amguri 10B, new production from Amguri 10B is expected to be on stream during the fourth quarter, generating increased cash flow and production to the Company.



The existing purchaser of the natural gas has recently indicated that they will be able to handle the additional supply from Amguri 10B. Drilling of the next well, Amguri 11, is expected to commence during the second week of August 2007.



Development of the Laxmijan field



Assam Company had been awarded the Laxmijan Field in April 2004 which was a discovered field by ONGC. The well number 1 A available with the Company, after reprocessing of old logs and due diligence, was taken up for work over job.



Latest state of art technology was deployed during cased hole logging. Three promising Zones between 3100 m and 3520 meters have been identified to hold potential Oil & Gas.



The first Zone at around 3500m has been taken up for cement squeeze and under balanced perforation after correct diagnosis. Around 40 ft of sand has been perforated.



The well has established the commercial flow of oil and gas.



All necessary prerequisites are being mobilized to put the well under sustained oil production where expected Oil rate is likely to be good as the pressure indications at surface are encouraging.



Funding In Place



Assam Company has successfully raised US$ 46 million through zero coupon unsecured Foreign Currency Convertible Bonds (FCCBs). The Bonds will be convertible into equity shares at a conversion price of INR 28.75 which represents 19% premium to closing price of November 23, 2006. The bonds have a tenure of 5 year and 7 days, with yield-to-maturity of 8.25%.



Silverdale Services Ltd, London, was the Sole Lead Manager for the offering.



A Rs 2000 crore Hydrocarbon Park in Gujarat alonwith GSPC



Assam Company has signed a Memorandum of Understanding (MOU) with Gujarat State Petroleum Corporation Ltd (GSPC) tor development of SEZ (Special Economic Zone) Hydrocarbon Park. The salient features of the MOU are as follows:



1. The estimated project cost would be about Rs 2,000 Crores.



2. SEZ to be made operational by January 2010.



3. The said Joint Venture would be through SPV (Special Purpose Vehicle) route.



4. GSPC shall be entitled to nominate the Chairman of the Board of SPV.



5. Joint Working Group to be formed and both the parties would nominate two members each to the Joint Working Group.

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Five leading foreign institutional investors have bought 3.83 per cent of Assam Company in the two weeks between August 10 and 24.



“We believe the FIIs have invested with a long term outlook on our oil and gas business. We have already commenced drilling at Amguri block 10B and struck hydrocarbon. We are in the process of linking the block to our production process,” said Abhay Chowdhry, chief financial officer of Assam Company Limited.



In August, Goldman Sachs Investments (Mauritius) bought 29.78 lakh shares or 1.33 per cent of the company’s equity capital. Global Asia Fund’s Global Proprietar picked up 26.23 lakh shares or 1.17 per cent in the company.



Merrill Lynch Capital Markets Espana purchased 10.93 lakh shares, Credit Suisee (Singapore) 9.80 lakh shares and Citi Global Markets Mauritius bought 8.85 lakh shares in the same month.



Other leading FIIs such as Quantam (125 lakh shares or 5.61 per cent) and Macquire Bank (65.4 lakh shares or 2.92 per cent) together held 190.4 lakh shares or 8.53 per cent of the equity shares as on June 30, 2007.



Assam Company has already started drilling at Amguri block 5, 6 and 8A. It is extracting 250 barrels of oil equivalent per day from 5 and 6, generating Rs 2-2.5 lakh per day.



courtecy:- Dr udaybhaskar sana (UAE)
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TRADING PICKS FROM RAJESH FOR THIS WEEK 26.11.07 to 30.11.07

SENSEX RESISTANCE LEVELS :19300 .19800

NIFTY RESISTANCE LEVELS : 5730.5840

F & o PICKS :-

3I INFOTECH :- CMP 131 TGT 160

POLARIS :- CMP 110 TGT 140

TECH MAHINDRA: CMP 1020TGT 1200

RELIANCE :- CMP2820 TGT 3000
CASH PICKS: -

NITIN FIRE :- CMP 410 TGT 600

GTOFFSHORE :- CMP 879 TGT 1200

SHRINGAR CINEMAS:- CMP 92 TGT 140

DISCLOSURE:- WE OUR GROUP ALREADY HOLDING IN THESE COUNTERS AND WE MAY DO TRADES IN THIS WEEK ALSO

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NIFTY's triangle move

friends we are seing unexpected bounce and unexpected fall these days.....we are at jn from where trend is gonna change and that time only will say as of now what i see in nifty chart is
Ascending Continuation Triangle Chart Pattern
An Ascending Continuation Triangle is considered a bullish signal. It indicates a possible continuation of the current uptrend.

An Ascending Continuation Triangle shows two converging trendlines. The lower trendline is rising and the upper trendline is horizontal.

This pattern occurs because the lows are moving increasingly higher but the highs are maintaining a constant price level.

The pattern will have two highs and two lows, all touching the trendlines.

This pattern is confirmed when the price breaks out of the triangle formation to close above the upper trendline. which is around 6023....keep eye on it cheers

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FDC and NIFTY view

credits- Pankaj G patel Read more!

TRADING PICKS FROM RAJESH FOR THIS WEEK

SENSEX TRADING RANGE 18800 -20600 ; NIFTY TRADING RANGE : 5780 - 6180;


F&O PICKS FOR THIS WEEK AS WELL AS THIS DERIVATIVES:-

BALLARPUR INDUSTRIES: -CMP : 160 TGT:200

CENTRAL BANK OF INDIA: CMP : 136 TGT:175

DECCAN AVIATION : CMP : 158 TGT:190


TRADING PICKS IN CASH AS WELL AS GOOD FOR COMING MONTH ALSO:-

TIMEX :CMP ;38 TGT:60

BALMER LAWRIE :CMP :675 TGT:1000

RAYMON LIMITED :CMP :410 TGT:600

RADICO KHAITAN :CMP :169 TGT:225


DISCLOSURE: WE ARE ALREADY IN ABOVE COUNTERS AND MAY TRADE IN THIS WEEK ALSO
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Bartronics

Telefolio Friday- dated 16-nov-2007
52-week High/Low
Rs 288 / Rs 92
Current Price
Rs 224 (as on 16th November 2007)
Incorporated in 1990, Bartronics started its business in the field of bar coding and smart card technology. Later it started experimenting with the new Automatic Identification & Data Capture (AIDC) solutions.
The company is involved mainly with the manufacturing sector and has implemented a number of projects across companies in their manufacturing set-ups. The projects primarily involved inventory & logistics management, time & attendance and asset tracking systems. AIDC is seen as an enhancing technology as it automates the data collection for the main systems. Currently, the company offers diverse range of AIDC technologies – barcode, biometrics, radio frequency identification (RFID), radio frequency data communications (RFDC) and electronic article surveillance (EAS).
Established player in the fast-growing business
Being one of the first organized players to provide end-to-end AIDC solutions in India with more than 1,600 clients and five international distribution centers, BIL has the advantage of being the first mover. Strong technical know-how has helped the company move up the value chain from bar code to RFID solutions and increase realization per client. The company has also diversified into the retail space considering the low penetration of organized retail.
BIL has established a brand value amongst its clients (about 1,600) over a period of 16 years. The work includes system integration for barcode solutions, which has applications in areas such as inventory management, attendance recording, dispatch management etc. The companies clientele includes Tata Steel, Tata Motors, HLL, ITC, Ashok Leyland, TVS, CMC, Ranbaxy, Compaq, VST, Whirlpool, ITW, Dr. Reddy’s to name a few. The company also provides services to the devotees of Lord Balaji (Tirupati) by managing the inflow logistics of the pilgrims. Some of its multinational clients include Compaq, Panasonic, IBM, GM, Mercedes Benz, etc. The company has also started providing RFID solutions to the same set of customers and moving up the value chain.
The AIDC industry is rapidly moving towards the use of RFID in a number of high value and high volume market segment. The RFID market is expected to grow from $1.4 billion annually to $6.1 billion in 2010. RFID and biometrics solutions are growing at an exponential rate with retail and manufacturing growth in India.
Host of foreign alliances
To take the company into a new league, BIL constantly strikes alliances with the best in the industry across the globe. To offer state-of-the- art AIDC solutions, it has associations with companies worldwide who are the leaders in their respective range of AIDC equipment and solutions. They manufacture hardware and associated communications software too. The alliances are with Intermec, US; Escort Memory Systems, US; IDMicro, US and Synel Industries Ltd, Israel. Intermec is the world’s largest manufacturer of bar coding scanners; Synel Industries is the leading manufacturer of security products globally. In case of Synel Industries, BIL has an exclusive arrangement to market its products in India. Escort Memory Systems and IDMicro are the global leaders in RFID products and BIL markets their products in India. In the area of smart cards, it has entered into a MoU with Muhlbauer AG, Germany, for implementing projects based on RFID, AIDC and smart cards and a software and marketing tie-up with Watchdata Technologies, Singapore. These companies are acknowledged leaders in their areas of operations and BIL actively derives its competence from these companies.
Taping the smart card potential
The Indian smart card market is at a nascent stage with the demand coming from various sectors such as banking, retail, telecom, healthcare and government organizations which are likely to witness exponential growth over next three years with most companies looking at data security and collection.
To capture the demand for smart cards estimated at more than 150 million units per year and growing at a CAGR of 48%, BIL set up the first smart card manufacturing plant in India having a capacity of 80 million units. Initially, BIL plans to capture around 70% of the SIM card market,. A further fillip to the smart card market is expected from the proposed Multipurpose National Identity Card to be implemented by the central government. BIL is among the companies shortlisted and the pilot project in underway. The banking sector will also drive this industry with switch from the current magnetic tapecards as Visa & Master Card deadline will expire in next three years.
Good geographical spread
In order to have strong global presence the company has five international distribution centers. These centers cater to the growing AIDC demand in the countries such as Malaysia, Sri Lanka, Bangladesh and Dubai. Having strong relations with clients has also helped the company expand to newer geographies as the clients moved to the other markets and wanted BIL to provide solutions. These new geographies will help the company expand the market and gain market share.
Strong financial performance
On consolidated basis, during half year ended September 2007, Bartronics has registered revenue of Rs 93.27 crore. This is against standalone revenue of Rs 54.74 crore (up 93%). And consolidated PAT stood at Rs 17.29 crore against Rs 8.93 crore (up 63%).
Forex loss for the quarter was Rs 50 lakh against Rs 38 lakh in the sequential quarter. Currently 50% of the revenues is export. The company has a natural hedge with regards to import of chips.
The Company has established a wholly owned subsidiary based at Singapore during the period June 2007 to cater to the need of South East Asia countries and reorganised business for better focus. Hence the comparable consolidated figures for the corresponding period previous year are not available.
Full benefits of smart card plant will be reflected in future
The company started dispatches from its smart card facility. For Q2FY08, it is working at 20% capacity with dispatched 4 million cards with revenues at Rs 14.4 crore and EBITDA of 15%. The target net margin for the business is 20%. The company has plans to work at 50% capacity (total capacity 80 million) by end FY08 meaning dispatch of 40 million cards for FY08.
The company has contract for 56 million smart cards every year for next 2 years from Giesecke & Devrient, Germany. G&D supplies smart cards with SIM technology to Indian Telecom players and for South East Asian market.
Phase II wherein the company would set up the chip manufacturing facility would be commissioned in January 2008. Currently, the company has tied up with ST Microelectronics and Infineon for the chips.
Revenues to grow handsomely in coming years
For FY08, the company expects revenues of Rs 200 crore of which Rs 100 crore would be from smart card segment and Rs 100 crore from solutions segment. The net margins expected are 20%.
For FY09, the revenue target is Rs 350-400 crore with net margins of 20%.
The current year promises to be a very exciting year for the company: On one hand the traditional business of the company viz. providing solutions is showing a healthy trend while on the other hand, the company has invested significantly into a smart cards manufacturing facility. Smart cards as the emerging technology in the AIDC umbrella offers the company a great chance to break into the big league.
Valuation In FY 2008, we expect the company to register consolidated sales and net profit of Rs 232.33 crore and Rs 41.50 crore respectively. The diluted equity of the company post conversion of FCCBs and preferential allotment would be Rs 30 crore. Thus on fully diluted basis and face value of Rs 10 per share, EPS works out to Rs 13.8. The share price trades at Rs 224. P/E works out to 16.2, which is reasonable for a fast growing company. Read more!

ESCORTS for short term

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GABRIEL for short term

Fiends GABRIEL INDIA is small cap company with equity of 7.18 crore,ot of which 39.66% is promoter holding,10% is held by instituits and mutual fund,5.15% federal mogul corp 15.52% gabriel inernation inc.,so retail investors holding in open market if 27% company is demerging its bearing division and company shut down its loss making unit at greater noida so profit is expected to rise,for demerging bearing unit company is awaiting permision from federam mogul who has to get senction from US court......one can buy at this stage as down side looks limited. Read more!

Bajaj Electricals

Wednsday telefolio-14-nov
Current Price
Rs 366 (as on 14th November 2007)
A part of the Shekhar Bajaj Group (Promoter holding: 67.49%), Bajaj Electricals (BEL) is a 69-year-old Engineering company, with interest in Lighting, Luminaires, Appliances, Fans, and Engineering & Projects.
It has 19 branch offices, a chain of 600 distributors, 3000 authorised dealers, over 1,20,000 retail outlets and over 200 service franchises spread across the country.
PAT more than doubles for the quarter and six months ended September 2007
The company has been focusing on enhancing revenue growth through introduction of new products, expansion of the dealer and retailer network along with good brand building efforts. The various actions that the company had taken for effective cost control, value engineering, competitive sourcing and improving credit discipline including introduction of channel finance continue and are giving good results.
For the quarter ended Sep’07 Bajaj Electricals has reported a 31% growth in net sales to Rs 304.89 crore. Operating profit margins shot up to 9.7% (up by 250 bps), leading the operating profit to increase by 77% to Rs 29.70 crore. Other Income increased by 129% to Rs 0.64 crore. Interest expenses went up 23% to Rs 7.66 crore while provision for depreciation has increased by 8% to Rs 1.82 crore. Thus PBT before EO zoomed by 128% to Rs 20.86 crore. EO was nil as against an expense of Rs 0.15 crore, representing amortization of expenditure in respect of voluntary retirement schemes. Thus, PBT after EO stood at Rs 20.86 crore (up by 132%). The provision for tax (including FBT and deferred tax) for the quarter was Rs 7.67 crore as against Rs 2.96 crore in the corresponding previous quarter. Finally, PAT reported a scintillating growth of 121% at Rs 13.19 crore.
For the half year ended Sep’07, net sales increased by 32% to Rs 557.16 crore. The Net profit recorded a growth of 117% at Rs 20.96 crore.
All business segments are on strong growth path
Lighting division- poised for improved growth in the future:
The Lighting BU markets a wide range of lamps and tube lights, which includes General Lighting Service (GLS) filament lamps, Fluorescent Tube Lights (FTL), Compact Fluorescent Lamps (CFL), miniature lamps and special purpose lamps. A strong distribution network exists for marketing these lamps both in urban and rural areas. The manufacturing of GLS and FTL lamps is undertaken at Hind Lamps, an associate company of BEL, located in U.P. Other lamps such as High Intensity Discharge (HID) lamps like mercury vapour and sodium vapour lamps, metal halide lamps and tungsten halogen lamps are marketed by the luminaires division.
For the quarter ended Sep’07 the lighting division has reported growth in revenue of 22% to Rs 95.93 crore contributing almost 31% to the total revenue and the segment PBIT of the same reported a 39% growth at Rs 5.07 crore (contributing to 17% of total PBIT).
For the six month ended Sep’07 the lighting division reported growth in revenue of 21% to Rs 164.25 crore contributing almost 29% to the total revenue and the segment PBIT of the same reported a 21% growth at Rs 7.01 crore (contributing to 14% of total PBIT).
This BU has successfully introduced new models like Ecospot, Ecofocus and Eline range of energy efficient consumer luminaries and completed Reliance Consumer Project by selling 6 million CFLs. The BU has continued to improve its retail presence by expanding its network and reaching in over 165000 outlets.
Consumer Durables- introducing new products and increasing competitive advantage:
The consumer durables division has reported growth in revenue of 35% to Rs 127.85 crore contributing 42% to the total revenue and the segment PBIT for the quarter stood at Rs 11.80 crore which was 101% higher as compared to the corresponding previous quarter and contributed around 40% to the results.
For the six month ended the consumer durables division has reported revenue growth of 36% to Rs 257.90 crore contributing 46% to the total revenue and the segment PBIT for the quarter stood at Rs 23.98 crore which was 87% higher and contributed around 50% to the results.
This division continues to remain a celebrant leader in small appliances and Mixer category with sales of over 4,00,000 number in the Mixer category. The BU continues to dominate the Iron category by achieving a record sale of over 1 million Irons in a financial year. This BU has entered the Modern Retail format in a big way with a sale of over Rs 12 crore in 2006-07.
The company’s Morphy Richard brand products like Ovens, Mixers, Irons, Toasters, etc. introduced in the premium segment continued to receive a good consumer acceptance across 100 cities in the country where it has been introduced. The contribution from this product range is expected to grow significantly in the coming years.
The company has continued to introduce new products and different models in the existing Bajaj range of products and improve the technology and quality, wherever possible, in order to have a competitive advantage. Recent new product categories include inverters and UPS, both of which have excellent growth potential.
Engineering & Project division-ever increasing demands from the Infrastructure, & Power Transmission offers significant opportunity:
During the quarter ended September 2007, this division registered net sales of Rs 80.50 crore compared to Rs 59.20 crore and a segment PBIT of Rs 11.66 crore as against Rs 5.58 crore. This division contributed 26% to total revenue and 40% to total PBIT of the company.
During the six month quarter ended September 2007, this division reported net sales of Rs 134.26 crore, up 37%. It contributed to 24% of the total sales for the six months. This division registered segment PBIT of Rs 17.43 crore, up 74% and contributed 36% of the total PBIT.
The E & P BU has maintained its capacity utilisation of 100%. In FY 2007, this division produced 2,970 nos. of Highmasts and 17,181 nos. of Poles as against 1,760 nos. and 14,951 nos. respectively in the previous year. The Unit also manufactured 25,223 MT of transmission line towers as against 22,822 MT in the previous year.
The Unit continues to enjoy dominance in Highmast business with over 65% market share. The continued focus of the government on infrastructure offers a good opportunity to this BU's various business portfolios viz. Power Transmission, Highmast Street Lighting and Special Projects, to improve its growth and profitability in the future too.
This BU has received prestigious orders from BHEL for power plant illumination and the work at 14 different power station sites is under execution.
On track for achieving targeted revenue of Rs 2000 crore by 2010
The company had targeted Rs 1000 crore of sales in FY 2007. Against this, it has achieved sales of Rs 1079 crore.
For the six month of FY 2008 ended September 2007, its sales have improved by 32% to Rs 557.16 crore.
Through both organic and inorganic growth strategies, the company aims to reach the targeted turnover of Rs 2,000 crore in 2010.
By acquiring Starlite Lighting the company will grow its lightning business in a big way
The company has acquired 32% stake in Starlite Lighting Limited. This Equity participation in Starlite Lighting Ltd., a CFL manufacturer, is one of the major events that took place during FY 2007, which is expected to help the BU in a big way both in terms of quality and volumes. The proposed star ratings for energy efficient products being introduced from April 2007 will provide a good thrust to the FTL segments in 2007-08 as against a sluggish market situation in 2006-07.
Starlite has a production capacity of 10 million CFLs per annum, of which more than half is consumed by Bajaj Electricals. It exports more than 50% of its production and supplies lighting equipment to Sweden-based furniture retailer IKEA and other supermarket chains in Europe.
Has secured orders for 2007 and 2008 national games to provide impetus to the financials; frontrunner for 2010 Commonwealth Games
The company has bagged orders to provide lights for the 2007 National Games in Guwahati and the 2008 National Games in Ranchi. These orders will provide the company with steady growth for the next two years.
On the other hand, Bajaj Electricals is one of the front-runners for lighting-up New Delhi for the Commonwealth Games 2010. The Rs 500 crore project includes illumination of streets, stadiums and games villages. The company is planning to decorate the capital with designed lamps of various hues and high masts.
New light and fresh air from Licencing agreements with leading foreign companies
The company announced a tie-up with a UK-based company ‘Helver’ to act as a brand licensee for distributing lighting controls and dimmable ballasts. These include high-tech products that adjust lighting for rooms based on actual lighting situations.
The Luminaire business of the company has successfully launched the Trilux products in India through a distribution arrangement with M/s.Trilux Lenze of Germany, who are a leading Luminaire Company in Europe. The lighting BU with its improved distribution network, wide product range, and efficient sourcing strategies is poised for improved growth in the future.
It markets Morphy Richard-branded products like ovens, mixers, irons and toasters catering to the premium segment.
Major contribution to come from the Engineering and project business to achieve Rs 2000 crore sales mark in FY 2010; others will also contribute significantly
Engineering and projects business unit will play an important role in its plans of being a Rs 2000 crore company by FY 2010. Currently, this segment accounts for just over 28% of the total revenues. Contribution from this business unit will increase along with the rise in the revenues.
Till recently, the company was only into the manufacture of power transmission towers. It has recently also entered in to the erection and commissioning of power transmission towers, which will be the main growth driver for the future. This division also deals with telecom transmission towers were companies like Reliance, Bharti, Tatas are all its customers. BEL is also into wind energy towers.
The BU's strategy of growth with diversification in related areas has been paying rich dividends. The successful launch of India's first 400 KV Transmission Line Monopole for Powergrid Corporation of India has opened new avenues of growth. The highmast and street lighting business has also crossed Rs 100 crore mark, with record dispatch of over 2900 masts and over 17000 street light poles. This BU's Ranjangaon Unit has achieved 100% capacity utilization and dispatched over 30,000 MT of galvanized material.
This BU has received prestigious orders from BHEL for power plant illumination and the work at 14 different power station sites is under execution.
In FY 2007 the BU has ventured into the rural electrification sector and is currently executing a project worth Rs 53 crore in Chattisgarh District, which will provide electricity to nearly 40,000 below poverty line (BPL) homes.
The company plans to invest Rs 30 crore in its Ranjangaon facility to raise the processing capacity from 30,000 tonnes of steel to 50,000 tonnes. The higher capacity of the high mast plant would help in total substitution of imports from the UK and West Asia till now. The plant would also cater to the hot dip galvanising needs of the infrastructure sector, particularly in Maharashtra and neighbouring states.
The company supplies masts of 11-60 m height. It has a market share of over 65% in this business. It had recently supplied complete turnkey solutions comprising high masts and lights to the Chennai Port and Guwahati Stadium
The company sees opportunity in urban projects being undertaken by various municipal corporations. Using of pole-hoisted signages by petrol stations is also a major boost for our business. There is also huge scope in the transmission line towers (TLTs) and other lattice structures business.
Illuminating outlook
The company has a good business portfolio with both consumer facing and industry facing businesses. The higher propensity to spend by the Indian consumer, increasing urbanisation and accelerating growth in organised retail augurs well for the consumer facing businesses of Appliances, Fans and Lighting. Increasing availability of power in the long-run will also benefit its consumer electrical business.
With increasing industrial activity, growing investments, higher capacity creation and greater infrastructure focus, the Luminaires and Engineering & Projects businesses are also likely to enjoy healthy growth rates.
The company’s business strategy is going in the right direction and will contribute to strengthening the organization in the years ahead. The company will emphasize to have a healthy mix of high-end products contributing to the bottom-line along with achieving Rs 2000 crore sales mark in FY 2010.
Attractive valuation
We expect the company to register sales and net profit of Rs 1377.01 crore and Rs 60.69 crore in FY 2008. On equity of Rs 17.29 crore and face value of Rs 10 per share, EPS works out to Rs 35.1. At current price of Rs 366, the scrip is available at a P/E of just 10.4. Read more!