If you go to see the current stock market rally the stocks which were down over 60 to 70% were the maximum gainers in the last 2-3 weeks. We didnt by them we have missed the opportunity. But one thing to remember is "Every thing which has gone up has to come down again". Few stocks which have further upside after they bottom out are :
Scrip - Apollo Tyres Ltd. CMP - Rs 29.55 BSE Code - 500877 Market Cap - 1489.32 Crores.
Introduction: Apollo Tyres Ltd. (ATD) is engaged in the global tire industry. It launched Regal brand of radials for truck and bus commercial vehicles. Its products include truck/bus radial, Off-The-Road (OTR) tires, retreading and allied automotive services. It EnduRace, a truck-bus radial is undergoing road tests. Its light truck product range includes LT3+ and SP Endura. ATD’s retreaded tire, Apollo DuraTyre was launched in May 2007. As of March 31, 2008, the Company had launched its two retail stores: National Tyres in Patiala, Punjab and Lal Tyre Centre, Chennai, Tamil Nadu.
Snap Shot of the Key Business : The company is engaged in production of tyres from rubber. It is from Tyre and Tubes Industry. Its key competitors are JK Tyres, MRF , Etc.
Key Financial : Net Profit if compared to March 08 and March 09. Sept 2008 - 918.87 Cr. March 2009 - 1110.56 Cr.
The financial are looking strong as Turn over and net profit is always increasing.
Key Risks: The rubber has been volatile since past 4-5 months. There has been a 20% increase in the price of rubber. This has lead to increase in the rice of Raw Material as the inventory stored is of maximum of 7 days or so. Rubber is the basic component in the manufacture of tyres so increase in the price of rubber = less of profits.
Vredestein Banden: Recently the company acquired a Dutch Company Vredestein Banden , which can result in the company to increase its profits and way to global expansion.The deal is expected to be for a consideration of around $300 million. Vredestein is a premium tier I tyre manufacturer with a portfolio of high-end, high speed rated passenger car tyres going up to a speed of 300 kilometers per hour.
Best price to buy Apollo Tyres: Due to current stock market political rise the stock rose fro 14 levels to 28 levels. So technically speaking the support of the stock 22 is the best price to buy this stock.
Multibagger Tip - Jaiprakash Associates. BSE Code: - 532532 CMP: - 65.85 Target: - 85 (3 - 4 months) Long term target - 140 (12 - 18 months)
This is one of the badly beaten up stock in this great bear market. this scrip had made a high of 510 this December 08 and now is down almost 85%. Real estates have seen their worst days all thanks to the US sub prime crises. What I think at the movement this is a good scrip to accumulate for long term view. This company is engagedin the business of heavy civil engineering construction, expressways, cement and real estate and hospitality. The performance of the company has been quite good. One thing to notice is when there is any short covering in this sector which this script is the first to cherish. JP Associates has a strong order book value of various Express highway more over it owns a fully owned subsidiary Himalian Express way. One must buy this scrip in dips and book profits in sharp rise.
Summary: - OnMobile Global Limited is a provider of mobile value added services and products (MVAS) in India. The Company has a range of applications that are delivered by its customers, who are telecom operators and media companies, to their subscribers. The products of the Company are Network based in-call solutions like caller ringback tones, dynamic voicemail and missed call alert service, Voice-based multi-modal portal which allows subscribers to access informational and entertainment content such as music, sports updates, news, stock and commodity price updates, in multiple languages using speech-based navigation; on-device client software applications; interactive media solutions, such as tele-voting, interactive programming, mobile auditioning and auctions; mobile commerce solutions like ticketing (movie and railway ticketing), utility payments and mobile marketing services, and business support solutions like phone backup and pre-paid and post-paid bill payments.
Key Factors/ Drivers: - OnMobile Global is India’s largest VAS (value-added services) operator (35% share) in a rapidly growing market FY08-11 (estimated) CAGR at 51%.
The estimated 36% EPS (earnings per share) CAGR over FY08-11 (estimated), was due to the company’s increasing international presence.
The domestic VAS has graduated from being a glorified sub-set of p-to-p SMS to a well-demarcated segment. “The current contribution of the company at 3.4% of wire-less revenues is likely to increase to 6% by FY12E.
Key Positive: - Mobile sector will see a boom as it is keeping on adding numbers of subscribers on a daily basis. More over every one need a cell phone. Strong growth potential.
Key Negative: - Markets looking volatile so this is the biggest threat to the stock. Technicals are not in favor.
Now as the markets have come down people are stuck as they don't have much money to buy good scripts. There is no liquidity in the markets. But one can take position in few stocks bellow Rs 20/- and more over which are of good fundamentals. I have jotted down the list of few stocks which are my favourite.
Dish TV - It is one of the leading company in DTH service.
Marksans Pharma - The script tumbled from 30 rs to 5 rs. A gem of a kind.
Karuturi Global - A company engaged in floriculture business especially roses.
(I would soon be posting a full research analysis on these Scripts along with their targets)
Scrip: - Praj Industry Ltd. CMP: - 49.50 BSE Code: - 522205 52 Week H/L: - 221.90 - 49.10 Market Cap: - 904.36 Target: - 110 (Only for Long term investors - 1 Years view.)
World Economic Forum (WEF) have bought out a list of 200 growth companies out of which 22 companies are from India. These companies generally considered as having potential to change the global economic landscape. Praj Industry stands at 6th in the Indian List.
Summary: - Pune-based Praj Industries is an engineering company and is the market leader in ethanol technology. It provides turnkey project implementation services to set up ethanol distillation units. The company has developed technologies to produce ethanol from a variety of feedstock such as sugarcane, sweet sorghum, corn etc and is trying to develop a commercially viable method to convert cellulose into ethanol.Besides ethanol - which accounts for over 80% of its revenues - the company also carries out distillation for breweries and plans to enter the bio-diesel space. Praj has executed projects in over 35 countries. Over the past couple of years, it has taken steps to strengthen its global presence. These include an acquisition in the US and tie-ups with foreign companies in Europe and Brazil. With this, the company has established its presence in key markets across the world.
Key Financials: - Praj's net profit has witnessed a cumulative annual growth rate (CAGR) of 43.2% over the past 10 years. Considering Praj's current order book, ability to win new orders and investment in research & development, we expect the company to maintain its EBIDTA margins above 20%. For FY09, we expect Praj to report earnings per share (EPS) of Rs 10.1 At present Praj has a PE of 5.98 with a CMP of 49.90. If it meets the target of growth its market price would automatically rise. Target of 89.90 (by year end)
Key Negative: - The shareholding of the promoters and public has fallen, while institutional holding is on the rise. Technicals are not in favour.
Key Positive: - Ethanol and bio-diesel are gaining acceptance worldwide as eco-friendly fuels. Ethanol blending has already become mandatory for petrol in a number of countries, including its largest consumer, the US. The proportion of blending is slated to go up, with governments in the US and India mandating 10% blending over the next 2-4 years. The company already has an order book of Rs 900 crore, which will be executed over the next 12 months. Praj is gearing up to cater to the fastpaced growth in future by expanding its capabilities. It has increased its manpower and set up its second manufacturing unit at Kandla SEZ. It has also established a full-fledged research centre for bio-fuels to develop new technologies in this field.
Rating - Short term - 6/10 Medium Term - 6/10 Long Term - 9/10
Subscribe for free Email Updates - Click here. Free SMS Updates subscribe - Click here
Scrip: - Financial Technology. BSE Code: -526881 CMP: -423.60 (BSE) Market Cap: -1944.32Cr 52 Week H/L : - 2190.00 - 404.00 Summary: - Financial Technology one of the favorite scrip of investors floated by Mr. Jignesh Shah. Financial technology has many products working in the financial trading markets. It has products like ODIN, Inet.net, iWin, FXDirect, etc. These cover all stages of trading – pre trade, trade and post trade. These products cater to Exchanges, Brokers, AMCs,, Depositories, Custodians, Banks, etc. Financial technologies has set up two commodity exchanges Multi Commodity Exchange (MCX) and Dubai Gold and Commodity Exchange (DGCX). Over the next few years the commodities market is expected to experience exponential growth and Financial Technologies should be a huge beneficiary. And Also has Stake in Singapore Mercantile Exchange.
Analysis: - I am recommending this scrip as MCX IPO is awaiting to enter the markets. Its not entering the market due to a bad economy. Value of MCX as per Fidelity's entry price: (50/9*100)*45.5=Rs.25200 million= Rs 2500 crores(approx.) Share of Financial Tech=64 p.c. Value of Investment in MCX for Financial Tech=64 p.c. of 2500=1600 crores.
The total value of India’s agri produce is equal to US $ 85 billion. Assuming a multiple of 10 times to the commodities futures market the total size should be to the order of US $ 850 billion. It stands at less then US $b 2 billion today.
Financial: - At a PE of 2.02 the stock looks attractive and cheep. Paid a dividend of 100% this year on a FV of 2.
Some Facts - MCX is the biggest market in India dealing in Futures. BOLT is a software designed by Fin Tech.
Risks - A bad economy so Fin Tech is not winning many new orders. MCX IPO can be delayed before it comes in to markets.
Maximum down side - I expect a maximum down side of 340 on this scrip. (This is not a technical view)
Rating - Short term - 5/10 Medium Term - 6/10 Long Term - 8/10
" This is a best scrip only for Long Term Investors"
Subscribe for free Email Updates - Click here. Free SMS Updates subscribe - Click here
Summary - Educomp Solutions Limited (Educomp) is a provider of technology-based education products and services for kindergarten to twelfth grade (K-12) education. The Company’s principal business areas include Business-to-Business (B2B) initiatives and Direct Initiatives. Educomp provides technology enabled products and services to both public and private schools, including Smart Class, instructional and computing technology solutions (ICT solutions) and teacher training programmes (Professional Development). The Company sells educational aid, compact disk-read only memory (CD-ROM) and learning content through its online initiatives (including Mathguru and Learning Hour) and its offering initiatives (including establishing pre-schools, K-12 schools and higher education institutions). In May 2008, the Company acquired a 51% stake in Learning.com. In October 2008, the Company acquired a 51% stake in Takshila Management Services Pvt. Ltd.
Recent Happenings - Educomp Solutions has won orders from the State Governments of Uttar Pradesh (UP) and Assam for a total of 2,042 schools and the total size of these orders stands at Rs120 crore. With these wins, Educomp has achieved its target of 12,000 schools in its ICT Business (government schools). Educomp will supply computer hardware, software and connected accessories and provide computer-aided education in the specified schools and intermediate colleges from Classes VI to XII. The company will also provide one full-time instructor, supply courseware, impart training and provide electricity and internet connections at each school.
Key Drivers - The retail segment, a tutorial service led by the math Web site mathguru.com is growing at over 600 per cent, and from insignificant contribution a couple of years ago now contributes 11 per cent of its revenues. The business enjoys a 70 per cent margin and would contribute to higher margins as it adds users.
Results - Educomp Saw a 61.36 per cent jump in net profit at Rs 31.83 crore for the third quarter ended December 31, 2008
Subscribe for free Email Updates - Click here. Free SMS Updates subscribe - Click here
Summary: - Rajesh Exports is involved is business of exporting gold and diamond cutting. Recently this stock has hammered due to weakening rupee. Dollar has appreciated at Rs 50 which comes to 40 months low. The second reason why it came down is Gold from 14 K sliped to10.8K. But now GOLD is back again at 14K levels. Rajesh Export now is the largest established private gold buyer, accounting for 1.2% of the global gold trade. Having attained this scale of operation, the company is now shifting its focus to find ways of increasing its net profit margin. In order to meet its objective of increasing its net profit margin, Rajesh Exports has identified three major divers of growth: Jewellery retailing: increasing presence across value chain by catering to different segments of consumer needs Diamond jewellery: expanding product range with higher margins White labels: expanding its market by supplying white labels to retail chain stores across the world. The Real Estate: - Rajesh Exports has about four million sq.ft. land in Bangalore and Kerala. It is now planning to develop these properties and acquire competence in property development by setting up a 100% subsidiary, Bangalore Infra. The company may look at property development as a separate business in future.
Calculations: - Calculating all the above points and the real estate it has the Market cap should be the double of what it is now. So the stock prices will give 100 - 200 % returns in 1 Year.
Positive Factors: - World’s largest gold exporter at lowest cost. Stock is currently trading at low valuations. Big order book. Foreign investors increased their stake by 10% . FIIs bought this stock at around Rs 95 then why should you wait to grab this stock at Rs 25.
Key Concerns: - Continued volatility in gold prices and adverse market conditions have forced Rajesh Exports, India’s leading gold and diamond manufacturer to go slow on its retail expansion plans.
The 100 Shubh stores which were expected to be rolled out by FY09, has been reduced to 40 due to continued volatility in gold prices and adverse market conditions. It is not expanding its Laabh stores either, and would keep the number of stores at a 30 in FY09.
However, the growth in bulk business to Middle East would compensate for the loss of growth in retail, according to company sources.
The company expects its other businesses of bulk exports,white labels and diamond jewellery to more than compensate for the slowdown in its retail division.
The slowdown in its retail business is likely to affect its overall financial performance.
The net has declined so there is a cause to worry.
Summary: - One of the badly beaten out scrip in the Indian markets is LNT. Larsen & Toubro Limited operates in four segments. The Engineering & Construction segment comprise execution of engineering and construction projects to provide solutions in civil, mechanical, electrical and instrumentation engineering to core sectors/infrastructure industries, shipbuilding and supply of complex plant and equipment to core sectors. The Electrical & Electronics segment comprises manufacture and sale of low-voltage switchgear and control gear, custom-built switchboards, petroleum dispensing pumps and systems, electronic energy meters/protection (relays) systems, control and automation products and medical equipment. The Machinery & Industrial Products segment comprises manufacture and sale of industrial machinery & equipment, marketing of industrial valves, construction equipment and welding/industrial products. Others include ready-mix concrete, property development activity, and engineering services and embedded systems.
Stake in Satyam - Recently LNT hiked its stake in Satyam from 4% to 12%. Satyam has won few new coustomers. The new management of Satyam Computers can change the phase of Satyam Computers which will directly benefit LNT.
A long term bet: - It is India’s largest Engineering and Construction giant. L&T is the best managed company in India – Business Today survey. Larsen and Toubro will benefit from huge infrastructure investments in India and Gulf regions. Strong Order book. L&T will be demerged into Power, IT, Ship building and Railway units along with engineering division. Investors will get very good returns after the demerger.
Employees- LNT is reported to recrute 10,000 people in 3 yrs. This is because of its expansion.
Ratings - Short term: - 5/10 Medium Term: - 7/10 Long term: - 10/10
Company has good financial. Good management also. A safe bet for long term investors.
I had given this stock advice earlier on 8th September last year. The stock gave a 20% odd return because of N-Deal (N Deal was passed out) and later went down badly due to volatility in the markets in India and also globally. More over there was a Split in the Scrip.
Summary: - Areva T & D India Ltd. is an India-based company engaged in the business of power transmission and distribution. The Company’s products and systems serve to transmit and distribute electricity, as well as operate networks through information management. Areva T & D India Ltd. is present at all stages of the supply power chain, from the generator to the end user, backed by a services portfolio. The Company has a presence in more than 30 countries.
Business: - Areva has many ‘firsts’ to its credit, thus gaining market leadership in a number of products; The company commissioned India’s first Extra High Voltage substation of 765 kV for NTPC in 2007. It built the largest power generating transformer for Reliance Energy in the same year. It is also a market leader in GIS (Gas Insulated Switchgear) substation. GIS are much more compact as they occupy significantly lesser space compared to AIS (Air Insulted Switchgear). Given the demand for space in the country, the company quickly capitalised on this need especially in urban substations. Areva is also expanding capacities for the high voltage transformers and GIS switchgears to cater to the growing market and retain leadership position.
Expansion: - Areva plans to double its capacity over the next two years with Rs 700 crore investments in Greenfield projects. The expansion move appears timely as the company, apart from catering to local demand, has also started receiving outsourced orders from its parent. With this Rs 700 crore investment, these facilities are coming up at Padappai and Hosur in Tamil Nadu and Vadodra in Gujarat by March 2009. With the expansions in place Areva would be able to double its Revenues over the next three years.
N Deal: - The company already makes nuclear reactors and rotors. Its parent company is a world leader in conventional nuclear projects. It makes turbines for nuclear power stations. It supplies steam turbines to over 30% of nuke power stations globally.
Key Positive - Areva T& D has an order book that exceeds at least one year of Revenues, thereby provding earnings visibility. The company, even during this slow down has not witnessed any major deferments that could disturb its revenue stream. The Expansion is a key positive factor. N Deal has been passed which is one major positive factor for this scrip to benefit. Good Order Book. Financials are strong.
Ambareesh Baliga of Karvy Stock Broking says Stock-specific, we would say it’s NTPC, BHEL, L&T, Infy, SBI and P&B. In infrastructure, it’s GMR and Punj Lloyd.
Samir Arora of Helios Capital advises investors to have a 15-20% exposure to gold, as the yellow metal will do well in next 1-2 years.
He is bullish on financials, infrastructure, select media and broking stocks. "We don't like commodities, pharma, consumer staples, and technology.".
Outlook Money has chosen Bank of India, Titan Inds, HDFC Bank, KS Oils, Mphasis, Bharti Airtel, Indraprasta Gas and Emami.
Angel Broking's top picks are HDFC Bank and Axis Bank.
Nirmal Bang is bullish on GEShipping, JPAssociate, Moser-Baer and SBI. Nirmal Bang also felt Stock specific counters like: GEShipping, SCI, Ster, TataSteel and Welspun Gujarat looks attractive to buy on dip.
KRChoksey Research's top picks are Reliance Industries, State Bank of India (SBI), Infrastructure Development Finance Company (IDFC), Housing Development Finance Corporation (HDFC), Bharat Electronics (BEL), BEML, Bharat Forge, Tata Steel, Glenmark Pharma, Mundra Port, Bharti Airtel, Hindustan Zinc.
Prabhudas Lilladher's top picks are Hero Honda, Amtek India, ICICI Bank, State Bank of India, Bank of India, Bank of Baroda, Crompton Greaves, Voltas, Jyoti Structures, IVRCL, Hindustan Unilever, Tata Chemicals, HDFC, Sun TV, IBN18 Broadcast, Aban Offshore, Bharati Shipyard, GAIL, Reliance Industries, Sun Pharma, Dishman Pharma, Lupin, Jindal Steel & Power, Reliance Communication, Tulip Telecom, Bombay Rayon Fashions, XL Telecom & Energy, Country Club, Parekh Aluminex.
According to Anagram Research's report, be invested in upstream crude companies and buy more if the commodity dips to newer 2009 lows, (which obviously means Stocks like Reliance Petroleum, Chennai Petro, MRPL, Cairn).
UBS AG in its Top 10 Picks for Asia has picked up only one stock from India and that stock is not suprisingly is Bharti Airtel Ltd!!
Financial Chronicle has picked Sun Pharma, Glaxo, Exide, GSPL, HDIL, AIA Engg, IVRCL and Everest Kanto as its top picks for the year 2009.
Money Today picked up AIA Engg, Cairn India, MTNL, NMDC, PTC, Biocon, MIC Electronics, Champagne Indage, Raymond and Gitanjali Gems as its top picks for 2009 based on the Low Debt levels and trading below Book Value.
Sharekhan's Top Picks are Bharat Heavy Electricals Ltd, Reliance Industries Ltd, LUPIN LTD, Housing Development Finance Corp.Ltd, ITC Ltd, Maruti Udyog Ltd, Shiv Vani Universal Ltd, Marico Ltd, Hindustan Lever Ltd, Larsen & Toubro Ltd, Bharti Airtel Ltd and Aban Offshore Ltd.
Anup Bagchi, Executive Director, ICICI Securities, said infrastructure will tend to do well. Places like NTPC, etc. will tend to do well. On the defensive plays, some of the pharma will do well, Glenmark is one of our top picks and one can play on the FMCG stocks as well the HLL, etc. will do well because the input prices are correcting sharply and that will lead to increase in margins.
India Infoline feels that Reliance will be elevated to top Global League and were bullish on the stock. Besides, Reliance, India Infoline felt that SBI, ITC, Bharti Airtel and RCom should outperform in 2009.
Religare feels that Reliance, BHEL, Tata Steel, DLF and L&T should do well.
Besides Banking Stocks, Angel Broking is bullish on Reliance, Bharti and RCom.
ICICI Securities top picks are SBI, L&T, NTPC, Maruti and Bharti Airtel.
Geojit has chosen Tata Power, Infosys, SBI, HDFC and ICICI Bank as its pick for 2009.
Khandwala Securities is very bullish on the Sensex and expects a high of 15975 for the Sensex in 2009 and feel Reliance, Tata Steel RCom, ICICI and JP Associates should be bought at every declines.
Centrum Broking has picked up Hindustan Unilever besides Airtel, Infosys, LT, ICICI.
Most brokerages seem to believe that Reliace Industries and Bharti Airtel should outperform the Sensex in 2009 and should form part of every investor portfolio. Hat – Srikanth. S.
Noida Toll Bridge - The traffic on the flyway is expected to increase at a healthy rate, mainly due to the ongoing residential and commercial development in Noida and Greater Noida.
Land bank on the either sides of the bridge is an additional asset. The company expects further 40% growth in its average daily traffic over next two years due to Commonwealth games to be held in Delhi NCR in 2010.
State Bank of India - Investors looking for a large-cap stock which will add value to their portfolio can consider accumulating the State Bank of India stock in declines.
Beaten down valuations, strong financials in an extremely challenging macro environment, with sustainable growth in advances, make the bank stock attractive. Though the bank trades at a premium to all public sector banks, this appears justified given the size of its balance-sheet and the huge market share, despite which it has delivered better financial performance than its peers.
Market share for the bank has improved in recent quarters.
NTPC - With its existing operations, ongoing expansion plans and high profitability, NTPC is favourably placed in the power generation space.
Further, the shortage in power supply, which is expected to remain in the medium to long term, will keep the capacity utilization of power plants at a high level.
Infosys - The best known IT stock from India.
Well reputed as a quality solution provider, has very long established relationships with a number of leading banks and corporates in the US and other places, impeccable record of transparency and good corporate governance and strong balance sheet are some of the features why we feel Infosys is a must in every investor’s portfolio.
LNT - India’s infrastructure story is best captured by L&T.
Strong management, healthy order book position, diversification across product categories and geographies are some of the strong points of this bellwether engineering company.
BHEL - Largest power component manufacturer in India. Strong order backlog, capacity expansion to meet demand and robust capex lined up for power projects augur well for the company's earnings growth.
Bank Of India - Bank of India has a strong balance sheet growth, stable margins and good quality assets.
The reduction in NPAs, increased book value and improvement in return on assets are indicators of the bank’s superior performance across parameters.
Bajaj Hindustan - The largest manufacturer of sugar in India. Sugar cycle seems to be turning around making this company, which has used the two year downturn to substantially increase its capacity, an extremely attractive buy.
By-product of ethanol and co generation of power are other strong points of this company. - ET
