Weekly forecast 11th Aug - 14th Aug.

• Markets have closed well above 15 K mark. This is one good news.
• Inflation is at a 13 years high of 12.01% went up 0.03% from 11.98% last week.
• US Federal Reserve kept the interest rates steady at 2% and the discount rate at 2.25% against the backdrop of expanded economic activity in the second quarter on account of growth in consumer spending and exports.
• Heavy profit booking was seen at higher levels.
• IIP data is to be released on 12th Aug. at 12 pm. (So be careful)
• The NYMEX Crude Oil is trading well below 116$ per barrel.

Conclusion: -

• Profit booking expected at a higher level.
• Crude expected to fall much further.
• Inflation is one big concern.
• IIP data is the second concern.
• Senxex safe above 15,300 mark.
• Target from our side till the end of the week is 15,600.

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Rich-i-ness Counts - All on the youngest billionaire.

You dream to be rich , every one dreams to be rich but dost know how can we be rich.I am sure most of you must be knowing about Mark Zuckerberg, the founder of Facebook and the youngest billionaire in Earth’s history. He is just 23 years old and already is a billionaire. With the growth of the internet, the future is surely going to have several more billionaires just out of high-school. Anybody with a great idea or innovation can access tremendous amounts of wealth today.

The internet automatically helps those who have something unique and automatically eliminates those who aren't offering something that is needed. Companies like Facebook haven’t spent millions on advertising on TV, instead they have used the power of people and communication to grow and evolve.

For those of you who might still not be aware, Facebook is a social networking site that lets people connect better with each other, besides offering a lot of other interesting applications and tools. One can visit it www.facebook.com

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A Penny Stock Idea - Jenson & Nicholson (India) Ltd.

Scrip: - Jenson & Nicholson (India) Ltd.
CMP: - 6.90 Rs.
BSE Code: - 523592
Market Cap: - 26.55 Cr.
Target: - 11 Rs.

Summary: -
This company is involved in manufacturing and selling paints for Industrial and decorative applications. It has 33 centers all over India with manufacturing plants at Naihati , Sikandrabad and Panvel. the companies financial have fallen drastically in the current fiscal year the company has managed a turnover of just 24 cr. The companies EPS and PE both are running in Negative.

Financials are not so good why is it a must buy ?
The story is that it has got lucrative real estates in form of its panvel factory land which has been closed.The company has further got some land in naihati where its operation has been suspended.If i add up the too the present marketcap of the company would look too little. Company has got lots of debts in its book which ARCIL has taken over aggregating to nearly 39% from IDBI, SBI, UBI, BOB and BOI.On words of the management," They are actively involved in the restructuring process and is likely to take over the remaining debts from other Banks and Institutions".Further AAIFR has appointed SBI Capital Markets Ltd. as Consultants to conduct the TEV study and valuation of assets. It is expected that once the process is complete, total restructuring plan made with the help of ARCIL will be submitted before the BIFR for their final approval.

Key Positive: -
Lots of land near Mumbai in Panvel.
Restructuring taking place.

Key Negative: -
Negative EPS & PE.
Not a dividend paying stock.
Less turnover every year.

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Stock Idea - Suzlon Energy.

Scrip: - Suzlon Energy Ltd.
BSE Code: - 532667
CMP: - 233 Rs.
Market Cap: - 35813.33 Cr.
52 Week H/L: - 460.00 - 174.50
Target : - 350 (5-6 months)

Summary: -
This company was started in the year 1995 by Mr. Tulsi Tanti who was primarily in the textile business and was introduced to wind energy through a wind power project that he had commissioned for his textile factory. The first subscribers to the Memorandum were the family members and friends of Tulsi Tanti.
Later in the year they collaborated with a German Company sudwind to acquire technology to produce wind energy in India.

Financial Snapshots: -
If you look at their balance sheet you will wonder that its a must buy. Their operating income in 03-04 was 791.15 Cr Rs. and in the current year it is 6,926.01 Cr Rs. On an average a 950 + % up move in OI . With an EPS of 8.46 I find that the company is currently undervalued compared to its assets.

Why is it a must buy ?
All factors are in favor to buy this scrip. Oil prices are well above 100 $ / barrel. We need an alternative source and an environmental friendly fuel which is wind . One day oil will be depleted but wind wont. Suzlon is a best bet in the current power sector. The companies financial are quite good assuring that it has a good future.

Please Read Disclaimer.
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7 Reasons for not investing in Reliance SIP+Insure Plan.

1] The type of Insurance is Group Insurance Policy. The cheapest and easiest form of insurance policy available with any insurance company.

2] Only the 1st Holder is insured. So, in case, a couple subscribes to SIP +Insure then only one person can avail of the insurance benefits.

3] The Sum Assured, in case of death is not paid to the nominee, but shall go back to the scheme of the AMC(Reliance Asset Management Company). Remember, the scheme benfits more than the dependents of the deceased in case of death of the holder.

4] Huge exit load of 2% for discontinued SIP. If you agree to pay your SIP for 11 yrs but pay only for 10 long and tiring yrs, still the scheme charges you 2% for the remaining 1 yr which you do not wish to continue.

5] No insurance upto 90 days (exception to it is accident cases only) , i.e 3 months. In case of death within 3 months, except of accidental deaths, the scheme shall not pay the dependents a penny.

6] The dependents will end up paying the scheme 2% back if the death occurs within 3 months due to reasons other than accidental death.

7] Minimum period of investment is 3 yrs and Rs 2,000 for each installment, i.e totalling to Rs 36,000 for Group insurance worth less than 10 lacs.

There are group insurance polices availables at a very low costs, which can be availed of for insurance requirements. Insurance worth of Rs 10 lacs may or may not be sufficient for your entire family’s needs.

The Exit loads are relatively very high even if investor is paying his SIP for a long period, if he discontinues even 1 day prior, he ends up paying 2% Exit loads.

Sunny Side to life :

SIP is also available without this offer.

Source: - Mutual Funds online.

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Stock Idea - Shree Ashtavinayak Cine Vision Ltd.

Scrip - Shree Ashtavinayak Cine Vision Ltd.
CMP: - 554
BSE Code: - 532793
Market Cap: - 554 Cr.
Target: - 625 Rs (3-4 Months)

Summary.
Shree Ashtavinayak Cine Vision is currently in producing Hindi Movies. Welcome , Jab We Met are the famous movies produced by them. They are coming out with 14 more films.

In The News.
The first release would be Shivam Nair's suspense thriller 'MAHARATHI' starting Nasseruddin Shah, Om puri, Boman Irani, Paresh Rawal, Tara Sharma & Neha Dhupia. The other releases include 'KIDNAP' by Sanjay Gadhvi starting Sanjay Dutt, Minnisha Lamba, Vidya Malvade, Rahul Dev, Imran Khan & 'GOLMAAL RETURNS' by Rohit Shetty starring Ajay Devgan, Arshad Warsi, Tusshar Kapoor, Shreyas Talpade, Kareena Kapoor, Celina Jaitley, Amrita Arora & Anajana Sukhani.

The other projects in the pipe line include Neeraj Vora's 'Run Bhola Run' starring Govinda, Tussar Kapoor, Tanushree Dutta, Amisha Patel & 'One Way Ticket' casting Anil Kapoor, Akshaye Khanna & two more heroines.

Other ongoing projects are 'Blue' directed by Anthony D'souza starring Sanjay Dutt, Akshaye Kumar, Lara Dutta, Katrina kaif, & Zayad Khan along with Soham Shah's 'Luck' which will have the debut of Shruti Hassan with Sanjay Dutt, Imran Khan, Danny Denzongpa, Ravi Kisshan with Mithun Chakraborthy.

The future projects include a co-production with Shri. Jaganaath Entertainment 'Mudh Mudh Ke Na Dekh Mudh Mudh ke' starring Himmesh Reshammiya, Niharika Singh & Jenifer Kotwal directed by Seema & Sudhir & Bond in association with Sanjay Dutt Productions Pvt Ltd to be directed by Anthony D'Souza starring Sanjay Dutt with two other heros.

Key Positive Points: -

• With a EPS of 13.64 which is much higher than the face value the stock looks a good buy bet for short to medium term.
• Its P/E too is trailing excellent at around 40.24
• 14 Movies in pipeline.
• Good Past record.
• Profits rising every year.
• Sales are also rising.
• Paid 12% Dividend this year.
  

Key Negative Points: -

• It is a "T" Group scrip.
• Operator driven scrip.

Rating: - 4/5

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Mutual Funds Idea - DSP ML World Gold Fund.

Mutual Funds Idea - DSP ML World Gold Fund: -
Current NAV: - 13.19 Rs.
Min Investment: - 5000 Rs.
Total Assets: - 2062.44 ( June 30, 2008 )

Summary: -
This is an open ended growth scheme. Launched last September . The fund has never sliped below 10 Rs at which the company gave to the public. Its all time low is 11.50 and all time high is 16.30.
This fund basically invests in gold mining companies. Its an open-ended fund of funds scheme, investing in gold mining companies through an international fund, with the primary objective of seeking capital appreciation by investing predominantly in units of Merrill Lynch International Investment Funds – World Gold Fund (MLIIF –WGF).
Objective: -
The primary investment objective of the Scheme is to seek capital appreciation by investing predominantly in units of MLIIF - WGF. The Scheme may, at the discretion of the Investment Manager, also invest in the units of other similar overseas mutual fund schemes, which may constitute a significant part of its corpus. The Scheme may also invest a certain portion of its corpus in money market securities and/or units of money market/liquid schemes of DSP Merrill Lynch Mutual Fund, in order to meet liquidity requirements from time to time.
Why to invest ?
Gold prices are rising at a never stopping rate. Currently gold is giving a side ways movement. A much uptrend is left to be seen in gold. Gold is currently trading range bounded within 12200 - 13250 Rs.
Portfolio: -

Top 10 Sectors		Top 10 Stocks
Industry	% to Net Assets	Name of Instrument	% to Net Assets
Gold	76.70%	Newcrest Mining	7.90%
Platinum	11.30%	Barrick Gold	6.90%
Silver/ Gold	8.90%	Kinross Gold	6.60%
Cash	2.30%	Impala	5.50%
Diamonds	0.80%	Minas Buenaventura	5.40%
		INDS Penoles	4.10%
		Goldcorp	5.40%
		Lihir Gold	4.60%
		Agnico Eagle Mines	4.00%
		Newmont Mining	4.00%

Verdict: -Buy.
Ratings: -3.5/5

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Stock Idea - Marksans Pharma.

Scrip : - Marksans Pharma.
BSE Code: - 524404
52 Week H/L:- 35.16 / 4.51
CMP: - 20.00
Target : - 30 Medium term.
Market Cap: - 718.80 Cr.

Summary.
Markets have crashed considerably and so has this scrip. This stock had split in Feb 08 in 1:10 ratio. History - TASC Industries (India) Ltd. was incorporated on 16th April 1992 as a Public Limited Company under the Companies Act 1956 at Bombay in the state of Maharshtra. The certificate of commencement of business was obtained on 5th June 1992.
The company has been promoted by Mr. Vijay Thakkar, Mr. Sanjay Thakkar and Mr. Sanjay Sahu to set up a plant for manufacture of Ciprofloxacin, Chloramphenicol and Chloramphenicol Palmoate. The promoterws have been trading in bulk drugs and formulations for the past eight years through their associate concern Tasc Chemical India Pvt. Ltd.
Pharma has always been my favourate as it didn't have any big or long bull run. It has always been underperformed sector. But it has many things to show in the near future. With almost most of the Indian have medicines it is a good time for these companies as their sales will increase.
With a PE of almost 41 rs. And EPS of 0.46 this is an attractive buy around any levels below Rs23.
Promoters holdings is 50.02% and aprox 29% with general Public.
Key Negative Points: -
Not a Dividend paying Stock.
This quarter Sales is Expected to Decline due to global factors.
Low profits Year Over Year.

Read the Disclaimer.
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Weekly Stock Market Forecast - 4th Aug - 8th Aug

Last week, the Reserve Bank of India (RBI) took everyone by surprise by a 50 basis points (bps) and 25 bps hike in the repo rate and the cash reserve ratio (CRR) respectively taking each to 9% and it left the reverse repo and bank rates unchanged. Thus, even when the terror strikes (serial bomb blasts) failed to have any major impact on market sentiments, the markets reacted in a knee jerk manner to the monetary policy announcement.

However, crude prices which hit its three month low during the week to USD 120.42 a barrel and short covering ahead of the July derivatives segment expiry helped the markets to recover most of its losses even as volatility continued to remain at its peak. Notably, the higher than expected inflation (@ 11.98 %) numbers announced on Thursday too did not cause any major damage as its impact seemed already discounted. The sentiment was further boosted on the last trading day with the first visible sign of a pro-liberalization announcement by the new UPA formation, namely the 3G spectrum.

International market too witnessed huge volatility against the backdrop of battered U.S. economy which grew at a 1.9% annual rate for the second quarter of 2008. Furthermore, the rise in the initial jobless claims to its highest level in last four years too weighed heavily on the international bourses. Resultantly, the US market ended the week on a negative note.

Back home, the Central Bank has now scaled back its expectations of economic growth to 8% from 8.5%. However, it still remains on the higher side considering the slew of headwinds both, domestic as well as international. Further, the tone of the monetary policy remains hawkish as the RBI wants to bring down inflation to 7% before the fiscal end, now notably higher than its earlier medium-term target of 5%.

Though it is clear that the measures taken have been influenced by spiraling inflation, it may have little impact on prices as that is mostly linked to international factors (higher commodity and crude oil prices).

Thus, the Central bank using monetary tools to solve a supply-side problem may have minimal impact on inflation but could adversely impact growth, as spiraling cost pressures coupled with increased cost of funds would lead to further slowdown in the earnings growth of the Indian Inc.

Overall then , the market reflects several concerns and with the Q1 June 2008 earnings season almost over, major near term trigger for the domestic bourses could come from the announcement on the reforms side. Though major pro-liberalization announcement by the new UPA formation remains unlikely as the primary focus would still be taming the inflation beast ahead of key state polls and parliamentary elections due in May 2009, any pronouncement on the reforms side could trigger a rally at the relatively oversold Indian bourses. A good monsoon and a steep fall in crude oil prices coupled with positive global cues could further boost investor confidence in the near term.
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IPO Analysis Note - Nu Tek India Ltd.

Price Band: Rs 170 - Rs 192
Issue Size : Rs 765 million – Rs 864 million
Issue opens-closes : 29th July – 1st August 2008
Listing : BSE, NSE

Nu Tek India Ltd, is a Gurgoan based telecom infrastructure services provider that offers infrastructure roll-out solutions to wireless and wire line telecommunications networks. The company offers services to Telecom Equipment manufacturers, Telecom Operators as well as third party infrastructure leasing companies in installing and maintaining Telecom Network equipment and infrastructure and offers all outsourced services related to design, installation, construction, operation and maintenance of telecom networks. NTIL is also registered with Department of Telecommunication as Infrastructure Provider - Category I.

The company set up a subsidiary in Turkey which commenced its operations in Jan 2008 to carry on telecom infrastructure services and has recently entered into a contract with Ericsson AB, Dubai, to provide technical support services to their operations in the West Asia

Major clients of the company include national and international names such as Nokia, Ericsson, Motorola, ZTE Telecom India Private Limited, Tata Teleservices, Reliance Communication, Vodafone and Bharti Airtel to name a few.

The company has entered the capital markets to raise funds for capital expenditure, overseas acquisitions and augmenting its long-term working capital requirements and thus proposes to raise Rs 864 million at the upper price band of the issue, of which the offer for sale amounts to Rs 192 million i.e. over one-fifth of the total capital to be raised.

KEY POSITIVES

• With its experience track record of over 15 years in managing and executing various projects coupled with designing and service skills, NTIL is capable of offering end to end telecom solutions for Wireless networks (GSM & CDMA), Fixed line networks (Switching Equipments), Broadband (Voice & Data) and Transmission Networks. In addition, the company has successfully implemented new technology projects such as WiMax and underground network for Delhi Metro Rail. Thus with its vast expertise and experience relatively newer technologies, the company seems to be well positioned to capitalize on the fast growing opportunity offered by the telecom industry.
  
  
• The Present orders-in-hand of Rs 1366 million and letters of intent worth Rs 385 million take its total to order book Rs 1751 million. Resultantly, the current size of order-book translates into 1.84 times its revenues for FY08 offering significant visibility in terms of sales and profits of the company going forward.
  
  
• On the financial front, company registered a CAGR growth of 45% during the period FY05 to FY08. At the same time, the net profit of the company registered a growth of close to 56%. Operating margins improved from 17% in FY06 to 33% in FY08 and net profit margins improved from 11% in FY06 to close to 22% in FY08. Strong financial performance coupled with improving profitability and a comfortable order book position provides decent growth visibility for future.
  
  
• Though the company claims to have a Pan-India presence it derives major portion (upto 70% in FY08) of its revenues from the Northern India region. The company is therefore aggressively strengthening its presence in the eastern and southern regions and expanding into regions outside of India, such as, Turkey and Gulf to mitigate the risk of geographical concentration.
  
  
• The Indian telecom industry is faced with lower reach even as the overall tele density during the month on June 2008 reached 28.3%. Further, tele-density in the urban areas is over 50 percent and for rural areas it remains below 10%, representing a wide gap and opportunity for higher penetration. Growing tele-density coupled with a wide gap between the urban and rural areas would lead to significant investment into this sector which in turn could lead to higher demand for NTIL’s products and services.
  
  
• Further, with upcoming new technologies such as WIMAX, 3G and mobile number portability there is a need for upgradation of the networks by the telecom operators leading to higher investments and increased demand for experienced infrastructure companies like NTIL. Even though the argument is further supported by higher entry barriers in this space due to requirement of larger spectrum of service and project execution skills coupled with higher working capital management, bigger players are better placed to capitalize on this opportunity.
  

KEY CONCERNS

• Though the company has grown at a robust rate, the working capital position has deteriorated since FY07 due to a 300% increase in the debtors in FY08. Debtors as a percentage of Net sales increased from 18% in FY07 to 50% in FY08. Due to industry practice, a portion of the project value (5-10%), is usually withheld by the client as retention money and released after 12 months of completion of the project putting further pressure on bad debts and increased working capital requirement. Increased working capital requirements could result into an adverse impact on the margins of the company going forward.
  
  
• Negative cash flows from operating activities for four consecutive years starting FY05. Net cash flow from operating activities in FY08 stands close to 106 million due to substantial increase in projects under execution and debtors.
  
  
• The telecom Infrastructure Service market is highly competitive with a few organized players and smaller unorganized players. The company faces competition from well known established players having greater financial and technical resources and expertise which could enable them to provide better service at lower prices as the competition intensifies, thereby resulting into lower margins for the company.
  
  
• Significant client concentration risk as during FY08, top client (ZTE Telecom India Private Limited) contributed 18% of income from operations, with top 5 clients and top 10 clients contributing 58% and 82% respectively.
  
  
• The company has earmarked Rs 210 million towards setting up a new subsidiary in the overseas markets. The management of the company however lacks overseas experience thereby increasing the risk of execution. Further, successful scalability of the overseas business model remains to be tested.
  
  
• In case TRAI allows sharing of infrastructure by telecom operators, it could have an adverse impact on the number of telecom sites being installed across India which, in turn, could have an adverse impact on the company’s business revenues and profitability. However, as these shared sites have higher capital costs involved, it could lead to higher per unit of revenue for telecom infrastructure services providers thereby negating the impact.
  
  
• Fully Priced – At a historical P/E of 16 times FY08 earnings, the company has left little on the table for its investors. Listed peers like GTL currently trade at a PE of 16 times its trailing earnings.

Our Verdict - AVOID.

Though the negatives of the company clearly outweigh the positives, NTIL’s plans to capitalise on the exponential growth in the domestic telecom industry and explore new opportunities arising out of increasing telecom density, geographical expansion and robust order-book position cannot be overlooked. However, over 20% of the IPO comprises an Offer for Sale and thus not benefit the company to that extent.

Investors could skip this issue given the pricing but could consider an entry at lower levels post-listing.

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