STRATEGY TO TRADE THE MARKET AT THIS POINT OF TIME- INDIANAWIZARD

well friends,

yesterday we were talking about nifty support and reistance lavels(nifty spot has res at4530 and support at 4400), lets chq the closing....

todays nifty high is 4530.05 (ekks .05 points mistake ! haha)

and todays nifty low is 4390.80 (just only 10 points? lolz)

but what will happen tomorrow? i can see dow is crashing and about -200 point !

haha! another gap down.. okey, we are prepared! in my last msg i gave a chart to trade in gaps..

you guyes following it?? grat haa? the above mentioned chart generated a short sell at todays gap up, and it workd fine. tomorrow? i think again a gap! near 4350.. we may go dwn to 4300 a maximum, but after that? yes the third rule of that chart, dead cat bounce.. just use this gap to cover your shorts and go long..

nifty spot has supports at 4350 and 4300, res. at 4430.

fresh buy is advisable at lows. only fundamental blue chips should be considered to accumulate.

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UNEXPECTED VISITS FROM V.I.Ps

Friends!!!! see here who are visiting our blog!!....above pic shows the list of visitors, net provider and country
but ISP identification is off probably because they r using their own net...
Its an open and free site, any one can spend time here .But its one humble request to every visitor. Please gives us
few minutes of your valuable time and please post your esteemed comments here .Let us know how we can improve our subject and our presentation.
The contributors id and profile is given to you and they are all online online on yahoo thank you all- heartily
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WEDNESDAY TELE FOLIO

CAPITA TELE RECOMMENDATION DT:08.08.07Ador Fontech

Adorable and affordable

In spite of being a niche engineering company growing sales, profits and dividends consistently every year, the company is available at a forward P/E of just 5.1

Buy
Ador Fontech

BSE Code
530431

NSE Code
Not listed

Bloomberg
CSFT@IN

Reuter
ADOF.BO

52-week High/Low
Rs 110 / Rs 62

Current Price
Rs 96 (as on 8th August 2007)


Ador Fontech (AFL) is an associate company of Ador Welding. It focuses on niche maintenance welding segment.

AFL was incorporated in August 1974, as Cosmics Fontech. It subsequently changed its name to Ador Fontech. In 1992, it acquired Fist India (P) Ltd and Kostech India Pvt Ltd. These companies were subsequently merged with the company as a division.

Sharp growth rates during lean season

The company has registered strong 19% growth in sales, 56% jump in operating profits and a whopping 117% growth in net profits for the first quarter ended June 2007.

While sales rose 19% to Rs 15.97 crore, OPM jumped by 180 basis points to 7.6%. Thus, operating profit jumped by 56% to Rs 1.22 crore.

PBT was up by 82% to Rs 1.09 crore. PAT soared 117% to Rs 65 lakh. June quarter is seasonally lean quarter for the company.

Revenues from the Products Division rose 14% to Rs 14.84 crore. It accounted for 92% of the company’s revenues for the quarter. PBIT from the same increased by 11% to Rs 2.07 crore. It accounted for 80% of the company’s PBIT.

Revenues from the Services Division rose 111% to Rs 1.29 crore. It accounted for 8% of the company’s revenues for the quarter. PBIT from the same increased by 300% to Rs 52 lakh. It accounted for 20% of the company’s PBIT.

Operational and financial efficiency lead growth

Factors that contributed to the growth include benign economic environment, major thrust on key product portfolios like repair welding and ceramics, focused training imparted by foreign principals and the Company's in-house training division ‘DOTES’ (Documentation, Training and educational Services), besides an overall improvement in the KSAO’s (Knowledge, Skill, Attitudes and Other attributes) of the employees.

On the financial front, the company repaid its entire borrowing on working capital, amounting to rupees three crores and forty lakhs (classified under secured loans). This may be deemed to be a major step in the area of operational efficiency.

Niche business on a consistent growth platform

Ador Fontech focuses on maintenance welding, which is a niche segment requiring specialised skills. It offers products and solutions for reclamation welding and recycling of vital machinery components.

The company caters to the ‘Life Enhancement of Vital Machinery Components’. The domain expertise in this sector calls for application of high level of skills covering metallurgy, chemical and repair welding processes. There are quite a few players in this market and competition is keen. Nonetheless, the underlying fact is the contribution that this segment offers to the world at large, in terms of conservation of depleting natural resources, which is substantial. Further, industries in general are benefited by way of greater productivity, resulting from lesser downtime. This unique predisposition, places the organisation on a consistent growth platform.

The company’s product basket includes filler wires, welding equipment/accessori es, wire feeders, wearplates and cladded pipes. Apart from manufacturing the said products the company also acts as a value added reseller for Alloy Steel International, Australia; Berkenhoff, Germany; CEA, Italy; Cepro, Netherlands; Degussa, Germany; Delora Stellite, Germany; Euromate, Netherlands; Gasflux, USA; Protector, Australia/Singapore ; Sulzer Metco, Swiz /USA for their products in India. It also offers high temperature process for maintenance products from AREMCO, USA for the repair and corrosion protection of metal and refractory materials. Ador Fontech supplies products and services to almost all the core sector and several engineering industries. The focus of its activities is to provide metal joining, reclamation welding and surfacing solutions.

Caters to almost all the core sectors and several engineering industries

Ador Fontech supplies products and services to almost all the core sectors and several engineering industries. Weld repair is commonly used to improve, update, and rework parts so that they equal or exceed the usefulness of the original part. Its major customer base includes mining industries, steel and other metallurgical complexes, power plants, railways, road transport workshops, shipping industries, sugar mills, cement plants, fertilizer and chemical plants, oil drilling and refining sector, defence units and numerous engineering industries.

Almost all its customers now have optimistic growth plans. Worldwide, the demand for metals, alloys and mineral resources is on the rise. This augurs well for Ador Fontech. The other opportunities are in the fields of high productivity welding and cutting systems, welding fume extraction systems, specialised surfacing and hard-facing alloys and deposition equipment.

High dividend yield

In FY 2007, the company gave dividend of Rs 5 per share. During the last 10 years, the company has never missed on dividends and in fact its dividend payout ratio has hovered in between 33% and 68%. This makes the company a high dividend yield stock.

Outlook

Strong growth in manufacturing, shipping and oil industries have increased the requirements of maintenance welding to make best use of available resources (machinery, ships and rigs). Moreover, better demand scenario has lead to old machinery and old factories to get back to operation, increasing the demand for maintenance welding. Increased activity in ship building industry also boosts demand for specialized and reclamation welding.

Further the number of steps initiated by the company to improve customer focus and continuous addition of world class brands to its product spectrum will help it fully capitalise on the better demand scenario.

An important segment of life enhancement solutions is repair and refurbishment, many organisations are strategically outsourcing these business functions. This offers great opportunities for growth and development. Further, technological developments are transforming business processes and operations at phenomenal speed. New product additions, ease in handling of machines/equipment etc. are providing new dimensions towards value added business solutions.

Looking ahead, the company plans to increase its value chain in the manufacture of low heat input welding alloys. The management believes that this coupled with other allied businesses, would provide the necessary growth momentum, that has been set in pace.

Valuation

On the financial front, the company has been a consistent performer with respectable sales and profitability right since 1992. Notably, even during the adverse times, it has never made losses and has always paid dividends.

The company has declared a dividend of 50% for the year ended March 2007 as against 40% in FY 2007. The company has increased dividend rate consecutively for the past four years. Going by the trend one can expect dividend of 60% for FY 2008, giving a dividend yield of 6.25% at the current price.

One can expect the company to report sales and net profit of Rs 92.31 crore and Rs 6.57 crore for FY 08. On a small equity of Rs 3.50 crore and face value of Rs 10 per share, EPS works out to a solid Rs 18.8.

Current price of Rs 96 discounts the FY 2007 actual EPS of Rs 14.6 just 6.6 times. P/E on FY 2008 EPS of Rs 18.8 falls to even more attractive 5.1 times. This means the company is available at a market cap of Rs 33.60 crore, which is only one-third of its expected FY 2008 revenues.

Ador Fontech: Financials





0403 (12)
0503 (12)
0603 (12)
0703 (12)
0803 (12 P)

Net sales
40.36
54.62
68.95
79.61
92.31

OPM (%)
6.7
7.9
11.2
10.8
11.3

OP
2.70
4.31
7.71
8.62
10.41

Other Inc.
0.91
0.93
1.06
1.11
1.16

PBIDT
3.61
5.24
8.77
9.73
11.57

Interest
0.50
0.44
0.32
0.34
0.14

PBDT
3.11
4.80
8.45
9.39
11.43

Dep.
0.79
0.92
1.06
1.04
1.10

PBT
2.32
3.88
7.39
8.35
10.33

Tax
0.81
0.99
2.94
3.23
3.77

PAT
1.51
2.89
4.45
5.12
6.57

EO
0.00
-0.99
0.00
0.00
0.00

PAT after EO
1.51
1.90
4.45
5.12
6.57

EPS* (Rs)
4.3
8.3
12.7
14.6
18.8

* Annualised on current equity of Rs 3.50 crore; Face Value: Rs 10
EPS is calculated on PAT without considering EO
Figures in Rs crore
EO: Extraordinary items (P): Projections
Source: Capitaline Corporate Databases




Ador Fontech: Results





0706 (3)
0606 (3)
Var. (%)
0703 (12)
0603 (12)
Var. (%)

Sales
15.97
13.46
19
79.61
68.95
15

OPM (%)
7.6
5.8

10.8
11.2


OP
1.22
0.78
56
8.62
7.71
12

Other inc.
0.16
0.16
0
1.11
1.06
5

PBIDT
1.38
0.94
47
9.73
8.77
11

Interest
0.00
0.07
-100
0.34
0.32
6

PBDT
1.38
0.87
59
9.39
8.45
11

Dep.
0.29
0.27
7
1.04
1.06
-2

PBT
1.09
0.60
82
8.35
7.39
13

Tax
0.44
0.29
52
3.23
2.94
10

Deferred Tax
0.00
0.01
-100
0.00
0.00
--

PAT
0.65
0.30
117
5.12
4.45
15

EPS* (Rs)
#
#

14.6
12.7


* Annualised on current equity of Rs 3.50 crore; Face Value: Rs 10
# EPS cannot be annualized due to seasonality in business
EPS is calculated on PAT without considering EO
Figures in Rs crore
EO: Extraordinary items
Source: Capitaline Corporate Databases




Ador Fontech: Segment results




Sales
0706 (3)
0606 (3)
Var. (%)
% to total
0703 (12)
0603 (12)
Var. (%)
% to total

Products
14.84
13.00
14
92
74.66
65.82
13
92

Services
1.29
0.61
111
8
6.06
4.19
45
8

Total
16.13
13.61
19
100
80.72
70.01
15
100

Less Inter segment revenue
0.00
0.00


0.00
0.00



Net sales
16.13
13.61

100
80.72
70.01

100

PBIT









Products
2.07
1.87
11
80
11.75
11.63
1
80

Services
0.52
0.13
300
20
2.85
2.08
37
20

PBT before tax and interest
2.59
2.00
30
100
14.60
13.71
6
100

Less: Interest
0
0


0.34
0.32



Less: Other unallocable income
1.50
1.33


5.91
6.00



EO
0.00
0.00


0.00
0.00



PBT
1.09
0.67
63

8.35
7.39
13


Capital Employed









Products
17.37
15.01
16
95
16.97
13.81
23
98

Services
0.82
0.33
148
5
0.42
0.68
-38
2

Total
18.19
15.34
19
100
17.39
14.49
20
100

Figures in Rs crore
Source: Capitaline Corporate Databases
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some long and short tech on GAP

by Indianawizard

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Strategy to Trade the Market at this Point

well we made a top at 4550-4650, hv come dwn frm thr, touched the support 4300 and now we are moving up,. fib and 200 ema supports were at 4150, 4080, but nifty took its support at 50 ema( prev top) , and we are up. the qstn is the correction over? or still some pain is left? if we see the candels , thr wr two gaps, between 4620-4450 on 27/7, and 4530-4350 on 1/8. but i think nifty may retaste the prev lows to fill the gaps before finally moving up.

nifty spot has res at4530 and support at 4400 ,

fresh strong funda stocks accumulation is advisable at these lower lavels. supports are 4400,4360,4300,4260,4180,4050last

stocks to watch, LT, bhel, rpl, idea, rcom, suzlon and dlf

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ADLABS

Adlabs is at support. Buy and hold for target of about 550 (disclaimer- I have position in this counter)

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NTPC one of the bluechip bet

One can look in to NTPC aug future for target of 200 this is strongly recommened bye firdaus kaka ahmedabad.

COURTESY:- FIRDAUS LALKAKA,AHMEDABAD

Discloser:-I"m holding this script
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ALPA LABS

TRADING STRATEGY Indore based Alpa Labs is listing today U may see speculative activities in this counter issue was managed by Allianz 86 ( first quote) then immedeatly at 70 then again lower quote then if Vol increses People will go Short and Operator will startpicking price People will again short to average & they may be trapped The pramoter even did not told even to their stockest & dealer to subscribe Sold entire issue to allianz Ahambebad based Patel & Shah people & family subscribed maxm sharews even they did not like others to subscribe
COURTESY :- SANDEEP BHAI,INDORE Read more!

FRIDAY CAPITA TELE RECOMMENDATION

CAPITA TELE RECOMMENDATION DT:3RD AUGUST 2007





GEI Industrial Systems

Condensing the hot Power and Oil & Gas sectors

The regulatory compulsion and the fast growth in user industries augur well for the company’s growth

Buy
GEI Industrial Systems

BSE Code
530743

NSE Code
Not listed

Bloomberg
GEIH@IN

Reuter
GEIH.BO

52-week High/Low
Rs 93 / Rs 38

Current Price
Rs 82 (as on 3rd August 2007)


Formerly known as GEI Hamon Industries, GEI Industrial Systems (GEI) is a specialist in Heat Transfer Technology. It is into Design, Engineering and laying of condensers, power transmission and other auxiliary engineering services for Power Plants (combined cycle steam based and gas turbine based plants, nuclear power plant, hydroelectric power plants and gas and diesel engine based power plants), Petroleum refineries, LNG terminals, Petrochemical and chemical plants, Oil and gas fields, Off shore gas processing platforms, CNG filling station, Electrical locomotives, Fertilizers plants, Metallurgical industry, Cement plants and Power utilizing equipments.

Traditional water condensers are not environment- friendly

GEI focuses on air-cooled condenser technology. Traditionally, in power plants and in any industry wherever co-generation plant is utilized water is used as a medium to keep the condensers cool. Particularly in large industry or large power plants, whenever hot steam is generated, the entire steam is collected in a big container through connected pipeline and then purified water is passed from the other side of the container, converting the hot steam into water. Further that impure water, which may be filled with chemicals etc depending upon the industry and the fuel used to generate power, needs to be removed or eliminated or often mixed with earth water. This impure the earth water. This makes the natural water hazardous. However industry keep on using this water condensing technology as it is much cheaper to any other alternatives. However gradually with increasing government regulations and environment- consciousness, use of this traditional technology is giving way to air-cooled condensing, where air replaces water as a cooling medium. GEI stands to benefit from this trend in a big way.

Governments have started focusing on efficient utilization of water

Having realized the disadvantage and harmful side effects of the water used in condensing technology, TamilNadu was the first state to ban the use of water for this purpose. This was followed by the States of Chattisgarh and Rajasthan, where water availability is a problem.

Recently, PMO has formed an advisory council to ensure the effective utilization of earth water. So slowly but surely the Government is understanding the unproductive and harmful utilization of water. Equally with the industry moving towards the EURO norms and other industrial standards, and increasing environment consciousness, the players have started to shift away from the water condensers to its alternative Air Cooled Condensers. This augurs well for GEI as it is the largest player in Air cooled condensers apart from other two unorganized players in the industry.

The target industry of the company’s product is growing fast

There are two types of Air Cooled condensers that are manufactured by GEI, namely air-cooled heat condensers, used in oil & gas & refinery sectors and air-cooled steam condensers, utilized in power stations.

In Oil & Gas sector, the air-cooled heat condensers are utilized at all the stages of oil exploration, processing and transportation stages. Also it is used in refinery sector to condense the vapour at different temperature to result in petrol, diesel, kerosene, LSHS, asphalt etc depending upon the temperature. With massive amount of investments happening in oil & gas sector and in refineries, there is good opportunity for the growth of the company’s products. Although the company’s product will cater to small portion of the total investment, this will still augur well for the company considering its present size.

In power sector, the steam condensers are utilized in all sizes of power generation plants whether they are captive or ultra-mega projects. The hot steam is allowed to enter in the company’s equipment and on the other side, natural air is allowed to pass. The fans inside the equipments will convert the hot steam into cool air and will pass it on to the atmosphere through a connected chimney.

As per the projections in the 10th and 11th Five Year Plan of the Govt. of India, new capacity addition in Power Generation have been projected as 1,10,000 MW. This translates to an investment of Rs 400000 crore approximately in the power generation field. Of this, upto 50000 MW of power capacity contracts has already been awarded and another 28000 MW of the capacity contracts will be awarded by this year-end. Correspondingly there will be huge investment in the transmission and distribution area, which is estimated to be about Rs 450000 crore.

Wants to venture into electrical package apart from the present mechanical presence

The company so far caters to a small segment of the entire power elector mechanical equipment market. Also its presence in power transmission business is very limited. Often with power technology becoming more sophisticated and considering the vast requirement of power, it is very economical to go for higher capacity power generation. Also it is equally economical for a power utility player to call for bids and award an entire EPC contract to the most competitive player.

Already players like Thermax India are into this sort of business. It produces boilers and collects the other requirements like turbines, alternators, auxiliaries etc from other players. It collects condensers from GEI.

Hence GEI has plans to venture into EPC contract and also to scale up its Transmission line business. However in the initial stage the company would only be a regional player in the states of Tamilnadu, Chattisgarh and Rajasthan where it has its strong foothold.

Very recently, the company has formed a separate business group viz. GEI- Power Transmission Business Group to avail of the tremendous potential of the power transmission business.

At present, the company is engaged in the field of 33 KV sub-stations, including control buildings, erection of new sub-stations, upgradation/ renovation of existing sub-stations, capacity augmentation of switchyards. It has enough capability for executing Switchyard Project in Higher KV range also. Its experienced manpower includes engineers who have experience with BHEL, Power Grid Corp. of India (PGCIL) and ABB.

GEI’s engineering services business unit offers services primarily in the areas of Heat Exchanger & Condenser Services, 33 KV / 11 KV Switchyards, Switchgear Applications and Transportation Systems.

Strong order book

As on July 2007, the company had Rs 175 crore worth of orders in hand out of which export orders were around Rs 35 crore. Further there are many orders, which are under negotiations. NTPC is one such company with which GEI is negotiating for converting the water condensers to air-cooled condensers.

The financials are growing stronger

In engineering company, quarterly results never give a true picture of the entire year. Nevertheless, for the quarter ended June’07, the net sales grew by 685% to Rs 27.64 crore. The PAT was up by 314% to Rs 1.53 crore. First quarter accounts for very small portion of the annual revenues and profits.

In FY 2007, the sales grew 57% to Rs 108.39 crore and PAT went up 50% to Rs 5.30 crore.

Attractive valuation

For FY’08, we expect the company to register net sales and net profit of Rs 175 crore and Rs 11.73 crore. This gives an EPS of Rs 8.2 on equity share capital of Rs 14.13 crore. Current market price of Rs 82 discounts this only 10 times.

GEI Industrial Systems: Financials





0303 (12)
0403 (12)
0503 (12)
0603(12)
0703(12)
0803(12P)

Net sales
37.24
48.67
60.83
69.18
108.39
175.00

OPM %
9.2
12.0
12.2
15.3
13.4
14.0

OP
3.44
5.85
7.42
10.6
14.54
24.50

Other income
2.55
1.83
1.95
0.09
0.42
0.65

PBIDT
5.99
7.68
9.37
10.69
14.96
25.15

Interest
4.47
5.16
5.26
4.58
4.66
5.60

PBDT
1.52
2.52
4.11
6.11
10.3
19.55

Depreciation
1.13
1.72
1.49
1.48
1.47
1.77

PBT
0.39
0.8
2.62
4.63
8.83
17.78

Tax
0.30
0
0.40
1.09
3.53
6.05

PAT
0.09
0.80
2.22
3.54
5.30
11.73


0.1
0.6
1.6
2.5
3.7
8.2

* Annualised on current equity of Rs 14.13 crore of face value of Rs 10 each
Figures in crore, Source: Capitaline Corporate Database




GEI Industrial Systems: Result





0706(03)
0606(03)
Var. (%)
0703(12)
0603(12)
Var. (%)

Sales
27.64
3.52
685
108.39
69.18
57

OPM %
12.9
49.1

13.4
15.3


OP
3.56
1.73
106
14.54
10.6
37

Other Income
0.32
0.03
967
0.42
0.09
367

PBIDT
3.88
1.76
120
14.96
10.69
40

Interest
1.4
1.02
37
4.66
4.58
2

PBDT
2.48
0.74
235
10.3
6.11
69

Depreciation
0.39
0.37
5
1.47
1.48
-1

PBT
2.09
0.37
465
8.83
4.63
91

Tax
0.56
0

3.53
1.09
224

PAT
1.53
0.37
314
5.30
3.54
50

EPS (Rs)*



3.8
2.5


* Annualised on current equity of Rs 14.13 crore of face value of Rs 10 each
Figures in crore, Source: Capitaline Corporate Database


Terms & Disclaimer :
Keep all our advice strictly confidential. It should not be shared in any form with others.
Though all care is taken in arriving at recommendations, the equity shares may rise or fall in a manner not foreseen.
Hence Capital Market or any of its employees will not be liable for any loss suffered.

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THANK GOD THAT CORRECTION IS SHARP

Its really good that market has corrected sharply,it clearly indicated that there is no distribution so far... sharp fall is due to excess speculation on index and few index stocks....this time one more diff we see in market is ppl are not unloading their holding and thats why advance decline ratio is looking better then past record of such fall....we hope to get major support at 13950 and if break that level then only major panic else up trend is intact for the long term target of 20k...its very common that "AAM JANTA" will be bulish at 15500 and cant see 14000 and very bearish at this level and cant predict 20000...if $ falls from 45 to 40 is good sign and what if it fall further to 35???? rupee getting more stronger there is nothing wrong with indian economy we are doing fine....bulls can start shopping near 14000 as it is support area...so far we have seen rising wedge patern on daily chart then on weekly chart and now its making same chart patern on monthly chart



Thanks to Mr.Paresh C.Patel USA for sharing his view on $ and giving overall view on indian as well as US economy Read more!