Budget 2008 ( Main Points)

Top of Form
- Dividend Distribution Tax unchanged at 15%
- Central Sales Tax cut to 2% from 3% - Positive for Food Processing companies - Buy Nestle
- India to start GST from April 1, 2010
- No Change in STT Rates
- To withdraw banking cash transaction tax from April 1, 2009
- To give 5 Year Tax Holiday for Hotels in some areas
- Increase in short term capital gain tax from 10% to 15%
- On an income of Rs5 lakhs - savings amount to Rs 45,000
- To grant 5 year tax holiday for new hospitals to be setup in specified areas - +ve for Apollo Hospital, Fortis etc.
- Weighted deduction of 125% for R&D - Recommended Buy on Ranbaxy Labs and Dr Reddy Labs
- Major Income tax Changes - to boost consumer spending -Recommended Buy Marico and GSK Consumer
- No change in corporate tax rate and no change even in surcharge
- In case of Women, Exemption limit increased to Rs1,80,000
- Senior citizen exemption raised from 1,95,000 to 2,25,000
- Proposes to increase personal income tax exemption limit to Rs1,50,000
- Minimum relief Rs4000 for every assesse
- Excise duty on bulk cement imposed at Rs400/tonne or 14% Ad valorem whichever is higher - Neutral for Cement companies
- Customised software under service tax net
- Higher excise on packaged software (8% to 12%) - Negative for Software sector
- To tax Filter and Non Filter Cigarettes on Par - Marginally negative for ITC
- Fall in duty on wireless data cords from 16% to Nil - Positive for Telecom Sector
- No change in excise duty structure on Retail Cement
- To cut excise duty on all goods in Pharma from 16% to 8% - Positive for Pharma Sector
- To cut excise on some papers, paper products
- To reduce excise duty on two wheelers from 16% to 12% - Recommended Buy Bajaj Auto
- To reduce excise duty on small cars from 16% to 12% - Recommended Buy Maruti and Tata Motors
- To reduce General CENVAT rate from 16% to 14%
- To cut customs duty on crude, unrefined sulphur
- To cut project import duty to 5% from 7.5%
- Custom Duty reduced to Nil on Steel melting scrap from 5% - Positive for Non Integrated Steel Players
- India to cut duty on certan bulk drugs to 5% - Positive for Pharma Sector
- Proposes No Change in Peak Customs Duty
- Current Tax-GDP ratio at 12.5%
- Fiscal Deficit to be 2.5% by FY09 - Need only 1 year to eliminate Revenue Deficit
- Revenue Deficit to be 1.4% and Fiscal Deficit to be 3.1% of GDP
- Planned Expenditure about 34.2% of total expenditure
- India to spend Rs 1.05Trn on Defense sector, up 10% - Positive for Defense Companies
- Allocation for TUF loan hiked about 20% - +ve for Textile Sector
- Thrust on Smart Cards - recommended Buy on Bartronics India
- Accelerating bidding process for 5 UMPPs - +ve for PFC
- Likelky Subvention of agri loans waivers to neutralise impact on banks
- Government allocates RS16.8bn for IT Sector - Recommended Buy on 3i Infotech and TCS
- India to spend more on Textile Sector - recommended Buy on Bombay Dyeing & Alok Ind
- India to get as much as $8bn from latest Gas, Oil Auction
- India to allocate Rs129 bn for highways - recommended Buy on HCC,IVRCL
- National Fund for Power Transmission and Distribution
- To award 4th UMPP shortly - +ve for Power Sector
- India to achive power expansion target in 11th plan - +ve for Companies like BHEL
- Waiver of previous loans and fresh loans - Positive for Agriculture/ Fertiliser companies
- India to spend more on Rural Development and Roads - Positive for Infrastructure sector
- Manufacturing slowdown due to rising rates and rupee
- Growth in capital goods still high at 20.2%
- Savings Rate at 35.6% and Investment Rate at 36.3% by end of 2008
- Total value of overdue loans including OTS at Rs60,000cr
- Debt Waiver to be completed by June 30 2008 - Farmers to be eligible for fresh loans post waiver
- Clarity awaited on details of scheme regarding reimbursement to banks of waiver amounts
- Waiver Amounts to 4% of Total Bank Loans
- Scheme of debt waiver of all agri loans upto March 2007 - Negative for Banking Sector
- FM eyeing Elections - Slew of populist measures announced
- Complete waiver of loans for marginal and small farmers
- Government introduces scheme for debt waivers for farmers
- FM says fertiliser subsidy to continue
- 5 lac hectare increased irrigation potential
- India to spend Rs200bn on irrigation-Positive for Finolex Ind and Jain Irrigation
- Government to spend additional Rs120bn on 5-Yr plan programs
- Government increases thrust on santitation - recommended Buy Electrosteel Castings
- Increase in sanitation allocation positive for DI pipe makers such as Electrosteel castings
- Increased allocation to Rajiv Gandhi Drinking water scheme to Rs7300cr from Rs6500cr, beneficial to companies like IVRCL
- Increased spending on polio to benefit Panacea Biotech
- India to spend Rs120bn on National Rural Health Plan
- Education and Health Sector to be twin pillars of growth
- 16,534cr allocated for Health Sector an increase of about 15%
-Additional allocation for education beneficial for Everonn,Educomp,Core Projects,NIIT etc
- India to increase spending on Bharat Nirman plan
- Allocation for education to be raised to Rs34,400cr from Rs28,674cr
- Allocation for education to be increased by 20%
- India to increase Gross Budgetary support in FY09
- Agriculture estimates to grow at 2.6% for FY08
- FM confident of maintaining 8.8% GDP growth average
- FM says agri growth disappointing

Bottom of Form

Markets For 28-02-2007

POWERGRID ( Power Grid Corporation of India Ltd)
ActionTrigger Price Stop LossTarget 1 Target 2
BUY ABOVE110108113118
S.SELL BELOW10610910499
IRB ( IRB Infrastructure Developers Limited)
Action
Trigger Price
Stop Loss
Target 1
Target 2
BUY ABOVE
204
199
212
222
S.SELL BELOW
196
202
190
176

PUNJLLOYD ( Punj Lloyd Limited)
Action
Trigger Price
Stop Loss
Target 1
Target 2
BUY ABOVE
395
389
404
415
S.SELL BELOW
386
392
380
365

Hot Stocks for 28th February 08
PUNJLLOYD, RANBAXY, SIEMENS, INDIABULLS, RENUKA,M&M, CROMPGREAV, TATACHEM, LT, MARUTI, CIPLA, APTECHT,AXISBANK, IVRCLINFRA, MOSERBAER, GESHIP, TV-18, CESC.

Keep your eyes on the following stocks:
ISPAT Industries - CMP : Rs. 44.95
ABAN Offshore - CMP : Rs. 4019.55
IRB Infra - CMP : Rs. 203.60
India Infoline - CMP : Rs.1169.25
Reliance Industries - CMP : Rs.2587.55
Buy SIEMENS LTD - (BSE CODE : 500550) CMP : 1674.60, Buy above 1676, Target : Rs.1723-1738,Stop Loss : Rs.1652-1648
Buy Punjab Lloyd - (BSE CODE : 532693) CMP : 393.35, Buy above 395, Target : Rs.418,Stop Loss : Rs.384.
Nifty supports 5210-5233Nifty resistance 5285-5300

Issue & Markets ( The Road Ahead )

Serious negative risks to watch out for:
New:
>ICICI Venture told Jaiprakash Infratech that the marriage of $800 million is
OFF.
The bossperson of ICICI Venture isn't into taking any more risks based on her/his
fears about the future economic environment in the country.
>Kishore Biyani's Indivision Partners told Subhash Goel's Dish TV that the
Rs.250 cr deal is OFF.
>Consumer confidence in the US fell to a five year low. The US Producer
Price Index rose again. House sales fell to their lowest in nine years. The S&P
Case/Shiller Home Price index showed the biggest annual drop in its 20-
year history.
>REL say they'll buyback. Why? Why so much pressure on ADA to impress?
The key thing is that there is "pressure" on him like never before. Funding from
Wall Street is OFF, OFF, OFF .... .....that's why.
>When the Railway Budget says it's kneeling and going prostrate before
the Indian electorate...you know how desperate the Government is about its
own future. It also tells us that elections will be earlier than the scheduled one in
May 2009.
>Bloomberg cites the ET in saying that IDBI will sell shares to the government,
its shareholders and to the public. Why would they be doing this? At THIS time of
the markets? Is it then true about their own "retail" loans being in trouble?
Questions, questions.
Existing:
>Credit-inflation funded by petrodollars and cheap money
>Housing loan default in the US
>Housing loan delinquencies in India
>Malls being converted into office space
>2-Wheeler borrowing-delinquencies here
>Credit card default in the US
>Sub-prime blowups in the US
>Personal-spend dropping in the US
>Dropping prices for new houses/apartments in India
>Bank-blowups in India, and so "mergers" into larger ones
>Bonus issues by desperate promoters to shore up share prices.
>When bank mergers or corporate demergers fail to excite markets.
>When Citibank downgrades Goldman and Morgan.
...When Morgan downgrades Citibank and Goldman.
...When Goldman downgrades Citi, Morgan, Fannie Mae and Freddie Mae.
...Competitive hatred and repugnance at Wall Street is now to the fore.
Issues
>See how every crash is preceded by massive availability of cheap credit :
1. Near the end of a massive economic expansion funded by an even higher
expansion of credit, few lenders expect defaults, which is why they lend freely to
weak borrowers.
2.Even fewer borrowers, at this stage, expect their personal fortunes to change,
which is why they borrow even more freely.
Whatever it was that the borrowers were using that money for, it always creates
an asset-bubble or super-over-valuation.
And that has to get self-deflated one day.
This is what's happening in the US housing bubble right now.
India isn't too far from getting the same disease.
>Read what Robert Prechter says about credit and the "social mood" in every
boom and crash in his book Conquer the Crash: You Can Survive and
Prosper in a Deflationary Depression
http://www.amazon.com/Conquer-Crash-Survive-Deflationary-
Depression/dp/0470849827
A trend of credit expansion has two components: the general willingness to lend
and borrow and the general ability of borrowers to pay interest and principal.
These components depend respectively upon (1) the trend of people’s
confidence, i.e., whether both creditors and debtors think that debtors will be
able to pay, and (2) the trend of production, which makes it either easier or
harder in actuality for debtors to pay. So as long as confidence and production
increase, the supply of credit tends to expand. The expansion of credit ends
when the desire or ability to sustain the trend can no longer be maintained. As
confidence and production decrease, the supply of credit contracts.
The psychological aspect of deflation and depression cannot be overstated.
When the social mood trend changes from optimism to pessimism, creditors,
debtors, producers and consumers change their primary orientation from
expansion to conservation. As creditors become more conservative, they slow
their lending. As debtors and potential debtors become more conservative, they
borrow less or not at all. As producers become more conservative, they reduce
expansion plans. As consumers become more conservative, they save more and
spend less. These behaviors reduce the "velocity" of money, i.e., the speed with
which it circulates to make purchases, thus putting downside pressure on prices.
These forces reverse the former trend.
The structural aspect of deflation and depression is also crucial. The ability of the
financial system to sustain increasing levels of credit rests upon a vibrant
economy. At some point, a rising debt level requires so much energy to sustain -
in terms of meeting interest payments, monitoring credit ratings, chasing
delinquent borrowers and writing off bad loans - that it slows overall economic
performance. A high-debt situation becomes unsustainable when the rate of
economic growth falls beneath the prevailing rate of interest on money owed and
creditors refuse to underwrite the interest payments with more credit.
When the burden becomes too great for the economy to support and the trend
reverses, reductions in lending, spending and production cause debtors to earn
less money with which to pay off their debts, so defaults rise. Default and fear of
default exacerbate the new trend in psychology, which in turn causes creditors to
reduce lending further. A downward " spiral" begins, feeding on pessimism just
as the previous boom fed on optimism. The resulting cascade of debt liquidation
is a deflationary crash. Debts are retired by paying them off, " restructuring" or
default. In the first case, no value is lost; in the second, some value; in the third,
all value. In desperately trying to raise cash to pay off loans, borrowers bring all
kinds of assets to market, including stocks, bonds, commodities and real estate,
causing their prices to plummet. The process ends only after the supply of credit
falls to a level at which it is collateralized acceptably to the surviving creditors.
Why Deflationary Crashes and Depressions Go Together
A deflationary crash is characterized in part by a persistent, sustained, deep,
general decline in people's desire and ability to lend and borrow. A depression is
characterized in part by a persistent, sustained, deep, general decline in
production. Since a decline in production reduces debtors' means to repay and
service debt, a depression supports deflation. Since a decline in credit reduces
new investment in economic activity, deflation supports depression. Because
both credit and production support prices for investment assets, their prices fall in
a deflationary depression. As asset prices fall, people lose wealth, which reduces
their ability to offer credit, service debt and support production. This mix of forces
is self-reinforcing.
The U.S. has experienced two major deflationary depressions, which lasted from
1835 to 1842 and from 1929 to 1932 respectively. Each one followed a period of
substantial credit expansion. Credit expansion schemes have always ended in
bust. The credit expansion scheme fostered by worldwide central banking (see
Chapter 10) is the greatest ever. The bust, however long it takes, will be
commensurate. If my outlook is correct, the deflationary crash that lies ahead will
be even bigger than the two largest such episodes of the past 200 years.
Financial Values Can Disappear
People seem to take for granted that financial values can be created endlessly
seemingly out of nowhere and pile up to the moon. Turn the direction around and
mention that financial values can disappear into nowhere, and they insist that it is
not possible. "The money has to go somewhere...It just moves from stocks to
bonds to money funds...It never goes away...For every buyer, there is a seller, so
the money just changes hands." That is true of the money, just as it was all the
way up, but it's not true of the values, which changed all the way up.
Asset prices rise not because of "buying" per se, because indeed for every
buyer, there is a seller. They rise because those transacting agree that their
prices should be higher. All that everyone else - including those who own some
of that asset and those who do not - need do is nothing. Conversely, for prices of
assets to fall, it takes only one seller and one buyer who agree that the former
value of an asset was too high. If no other bids are competing with that buyer's,
then the value of the asset falls, and it falls for everyone who owns it. If a million
other people own it, then their net worth goes down even though they did
nothing. Two investors made it happen by transacting, and the rest of the
investors made it happen by choosing not to disagree with their price. Financial
values can disappear through a decrease in prices for any type of investment
asset, including bonds, stocks and land.
Anyone who watches the stock or commodity markets closely has seen this
phenomenon on a small scale many times. Whenever a market "gaps" up or
down on an opening, it simply registers a new value on the first trade, which can
be conducted by as few as two people. It did not take everyone's action to make
it happen, just most people's inaction on the other side. In financial market
"explosions" and panics, there are prices at which assets do not trade at all as
they cascade from one trade to the next in great leaps.
A similar dynamic holds in the creation and destruction of credit. Let's suppose
that a lender starts with a million dollars and the borrower starts with zero. Upon
extending the loan, the borrower possesses the million dollars, yet the lender
feels that he still owns the million dollars that he lent out. If anyone asks the
lender what he is worth, he says, "a million dollars," and shows the note to prove
it. Because of this conviction, there is, in the minds of the debtor and the creditor
combined, two million dollars worth of value where before there was only one.
When the lender calls in the debt and the borrower pays it, he gets back his
million dollars. If the borrower can't pay it, the value of the note goes to zero.
Either way, the extra value disappears. If the original lender sold his note for
cash, then someone else down the line loses. In an actively traded bond market,
the result of a sudden default is like a game of "hot potato": whoever holds it last
loses. When the volume of credit is large, investors can perceive vast sums of
money and value where in fact there are only repayment contracts, which are
financial assets dependent upon consensus valuation and the ability of debtors to
pay. IOUs can be issued indefinitely, but they have value only as long as their
debtors can live up to them and only to the extent that people believe that they
will.
The dynamics of value expansion and contraction explain why a bear market can
bankrupt millions of people. At the peak of a credit expansion or a bull market,
assets have been valued upward, and all participants are wealthy - both the
people who sold the assets and the people who hold the assets. The latter group
is far larger than the former, because the total supply of money has been
relatively stable while the total value of financial assets has ballooned. When the
market turns down, the dynamic goes into reverse. Only a very few owners of a
collapsing financial asset trade it for money at 90 percent of peak value. Some
others may get out at 80 percent, 50 percent or 30 percent of peak value. In each
case, sellers are simply transforming the remaining future value losses to
someone else. In a bear market, the vast, vast majority does nothing and gets
stuck holding assets with low or non-existent valuations. The "million dollars" that
a wealthy investor might have thought he had in his bond portfolio or at a stock's
peak value can quite rapidly become $50,000 or $5000 or $50. The rest of it just
disappears. You see, he never really had a million dollars; all he had was IOUs
or stock certificates. The idea that it had a certain financial value was in his head
and the heads of others who agreed. When the point of agreement changed, so
did the value. Poof! Gone in a flash of aggregated neurons. This is exactly what
happens to most investment assets in a period of deflation.
>ICICI Venture have called off their Private Equity funding of $800 million in
Jaiprakash Infratech.
The first announcement to marry into Jaiprakash was made with much fanfare
many weeks ago by ICICI. When such deals are called off, you should know that
the lender has gone into a funk. The lender would have taken this decision after
much pain within the lending-organisation. But the key issue is that "risk taking"
has reduced in the current crash-like environment.
But can you see how much trouble Jaiprakash are now in?
They won't have the cash six months from now. And in any case, Manoj Gaur
has said "the plan is on hold".
Can you read into the inability of lenders to take any more risks?
Can you also see how much problem ICICI Venture are in, in deploying that $800
million?
Whom do they give that cash to now?
How do they service the cash lying in their books now?
Can you see how this decision of ICICI would influence hundreds of other banks
and VCs and Private Equity players and Hedge Funds and FIIs and every kind of
till-now-freely-lending-risk-taking-lenders?
This is part of the "collective emotion" that's hurting from the change in the
"collective mood".
http://www.vccircle.com/2008/02/26/now-icici-venture-jaypee-infratechs-800-
million-deal-called-off/
>Yet another such biggish deal that's been called off is the Rs.250 cr investment
by the Kishore Biyani promoted Indivison Partners in Subhash Goel's Dish TV.
http://www.indiape.com/blog
The site above says Zee may go to court.
For what?
To force lenders to take risks just when risk taking is dead?
And to get Biyani, of all the chaps, to keep his word?
WHAT?
Coming from Biyani, nothing is surprising. Nothing at all.
But the fact remains that risk-taking is off for now.
Can you see here too how stock markets will suffer even more in the months
ahead?
Can you see how former risk takers have lost their mojos?
And how each of them contribute their bit into further depressing the "collective
emotion"?
>IBM said they'd buy back $15 billion of stock.
Wall Street took that as a sign of strength.
Meanwhile, REL here said they'd meet on 5th March to announce a buyback.
AJ of ADAG might think Dalal Street would whoop and jump with joy.
But players in this business live on the edge of cynicism, vitriol, ascerbia and love
the ulceritis-view of life...anyday... over the rosy and sweet one.
Dalal Street isn't confused about this buyback coming from REL.
ADA is getting more desperate than imagined.
It's getting obvious that the obsession with the "share price" will do more damage
than help.
It's also obvious that the investor of all sizes in India has closed his cheque book.
All these tricks won't help the share to shine.
And Wall Street, London, Tokyo and Singapore have anyway closed their own
cheque books long ago after the co-ordinated global selloff on 17th January.
Can you see the extent of the problem for our stock markets in the months
ahead?
Are you psychologically readying yourself to go short in the weeks ahead after
the Budget is fully priced in? That directional trade is where the bacon will come
from
>Oil crossed $100. When oil goes up, so does gold. And when both those go up,
cash leaves the dollar. The former king of all currencies fell to an alltime low on
the euro to 1.5006.
However, we're no long going negative about the dollar.
After 18th March, after Bernanke springs some surprise for the markets, we
could see a reversal in all this mayhem in the dollar. Adding ofcourse, to the
mayhem in global stock markets.
>Reports from the US yesterday saw home sales tumbling, producer price
indices rising and consumer confidence falling the most in five years.
>The "economists" that Bloomberg and CNN interview for their estimates seem
to be chaps who're way way off reality. That's now. But in the earlier days till the
booming month of December 2007, these same chaps had the booming numbers
pat on.
But now?
Now they're so so far off from what's really happening.
To us, it's the same old issue of wish-fulfillment of those individuals who cannot
get why stock markets and economies have fallen or slowed down. They express
those formerly-super-positive wishes into their "estimates" when they speak to
Bloomberg or CNN.
Look at these:
...Economists surveyed by Briefing.com expected the Jan Producer Price Index
(PPI) to rise by 0.4%
The reality was that PPI rose by 1%.
...Economists expected a 0.2% rise in "core PPI", which is the PPI stripped of
volatile food and energy prices.
The reality was a 0.4% gain.
...Economists estimated consumer confidence in Feb would fall 82.0.
The reality was that it fell to 75. That was also a five-year low !
>A report showed that home prices in 20 key markets slumped 9.1% in 2007.
The S&P Case/Shiller Home Price index showed the biggest annual drop in its
20-year history.
NOW do you see why the American house-borrwer is in the deepest hole of his
life?
And why his confidence is shattered, his savings gone, and has no free cash to
buy chewing gum or coffee at Starbucks.
View on currencies, interest rates and commodities
>Euro/Dollar: Home sales fell more in the US, Consumer confidence fell the
most in five years and Producer Price Indices rose even more. All these added
fuel to the booming commodity-futures markets in all parts of the world. Oil
crossed $100 while Hedge Funds shifted cash there, gold rose even more to
$955 as a hedge against looming-inflation and the mood is one of abject gloom
for the future of stock markets.
The dollar crashed to an alltime low on the euro to cross 1.5000.... to 1.5006.
Yes, it will slip more. But see an end to all this mayhem in the dollar once the Fed
says its say on 18th March.
Be ready to reverse all dollar-shorts.
Be very ready to earn from the oncoming shift-back of global cash to the dollar.
>Gold: Oil and gold have a decent corelationship. Oil at $100 helped gold to rise
to its own alltime close at $955.
Here too, don't assume that gold will rise forever.
Don't believe all the internet pages and emails and TV donkeys who tell you to
buy gold, buy gold company shares etc.
There's a craziness going on in gold like it went on in stock markets till just two
months ago.
And all this rise in glod is because leveraged monies of Hedge Funds are
pushing it higher and higher.
This too will end soon.
So be ready with your reversal stops for long-gold.
>Silver: This metal zoomed in yesterdays' craziness in all commodities led by oil
and gold. The stop here stays far at 21776.
>Crude: The stop is now at 3763. Just ride this uptrend but always watch your
back.
>Zinc: The stop stays at 93.
The Mood
>Punting-hopes are back in full swing.
>The Railway Budget did everything to beg you to please-please-vote-us-back.
In slumping economic times, no incumbent government is voted back. That's a
queer behaviour of the electorate for hundreds of years. They tend to blame the
government for all the failings in stock markets, money markets, housing prices,
depression, unemployment etcetera.
So while the Congress may think it's done a lot in this Railway thing to come
back to power just because they cut train tickets by 5%, they really have a long
thing coming !
>However, now we know that the FM, who would've anyway cleared Laloo
Prasad's populism with the PM before Laloo could announce yesterday, will also
do the same stupid things of handing out lollies and gifts to the electorate in his
Budget on Friday.
Not that it'll cut any ice to the bad bad mood of punters who got ravaged since
18th January.
But the post-Budget mood is one of the last big rally this year.
Be ready to exit your deliveries at that stage.

What to expect today, this week, and going forward.

From March onwards after the Budget:
>A "surprisingly good rally" after the Budget.
>That might last a week to ten days.
>And then the mayhem nearer to the Fed's meet on 18th March.

Day trades ...Only with TIGHT stops...DO NOT c/o
>Buy Onmobile for today with tight stops
>Buy JP Associates...noise will go on that since ICICI Venture told them to take
a walk about that $800 funding, JP will announce the next financier "any minute"
now.... Which it cannot, won't and shouldn't. But the punting market would love to
believe itself into anything just when a big blow occurred on a large group like
that of Jaiprakash and Manoj Gaur.
>Buy the Nifty for the day...as well as to carryover the longs till after the Budget
gets priced in.

Talks & Recommendations

Ansal Housing & Construction Ltd. (Code: 507828) (Rs.208) is the pioneer introduce of large integrated residential townships in the country and was also the first to enter Tier – II, Tier - III cities like Ghaziabad, Noida, Allahabad, Lucknow, Ludhiana, Agra, Bhopal, Haridwar etc. Till now, the company has constructed a massive 67.6 million sq. ft. of commercial and residential project across India. Further, it has lined up a gigantic 56.10 million sq. ft. of development (80% in the residential segment) spread over 22 cities over the next five years. Recently, it has launched residential townships branded as ‘Ansal Town’ across several cities. It will also be developing an I.T. Park in Bangalore apart from venturing into construction of budget hotels and service apartments. Currently, the company has a rich land bank of 2500 acres with almost 50% in its own name while the rest under firm collaborator agreements. The total value of the projects with the company and under joint ventures is massive Rs.6000 cr. Few weeks back, the company made a preferential allotment of 17 lakh warrants to the promoters at Rs.208 and 29.50 lakh warrants at Rs.225 to others. For FY08, on a standalone basis, it may register a topline of Rs.260 cr. with bottomline of Rs.58 cr. i.e. an EPS of Rs.35 on its current equity of Rs.16.70 cr. A real good bet on the real estate story.
*****
Honda Siel Power Products Ltd. (Code: 522064) (Rs.227) engaged in manufacturing and marketing of portable generator sets, portable engines, internal combustion engines, pumping sets, water pumps, lawn mowers, spare parts and other related products in India. A 67% subsidiary of Honda Motor Co. Japan, it is the undisputed leader in portable generators with its ‘Honda’ brand commanding more than 70% market share. The company also boasts of launching India’s first LPG run gensets along with its super silent series which are doing extremely well. Going forward, however, its major growth is expected to come from its engine and water pump sets division on the back of strong industrial growth and increased mechanisation in the agriculture/ floriculture/ horticulture sectors. To consolidate its manufacturing operations, the company is shifting its Rudrapur (Uttarakhandl) plant to its factory at Greater Noida in Uttar Pradesh. Hence for the short-term, the company is incurring substantial costs along with production loss. But this restructuring will prove beneficial in the long-term. Accordingly, it may end FY08 with sales of Rs.240 cr. with PAT of Rs.20 cr. i.e. EPS of Rs.20 on its equity of Rs.10 cr. Accumulate at sharp declines only as the scrip may drift below Rs.200 level.
*****
Belonging to the high profile RPG group, Phillips Carbon Black Ltd. (Code: 506590) (Rs.200) is the pioneer and largest manufacturer of carbon black in the country. In fact, it is the undisputed leader with a capacity of 2,70,000 MTPA, which is almost 47% of the total installed capacity of carbon black in India. It has also established a strong goodwill in the global markets with more
than 25% revenue coming from exports to over 15 countries including China, Japan, Indonesia, Iran, Sri Lanka, Vietnam, Turkey, Philippines, Australia, New Zealand and East African countries. To cash on the buoyant economic condition, the company has chalked out a massive Rs.350 cr. expansion plan to be completed by December 2008, whereafter it will have carbon black capacity of 3,95,000 MTPA and power generation capacity of 74.50 MW. Importantly, to protect its profit margin, the company has re-negotiated the pricing formula with its customers with a built-in escalation clause. Accordingly, it is estimated to clock a turnover of Rs.1050 cr. with profit of Rs.85 cr. for FY08 i.e. EPS of Rs.30 on a conservative basis. For FY09, it has the potential to post an EPS of Rs.40. Accumulate at declines.
*****
Blue Bird (India) Ltd. (Code: 532781) (Rs.48) is one of the leading manufacturers of paper based notebooks and office stationery products like executive notepads, diaries, arch-lever files, perforated pads, registers, filler papers and folders. Although notebook forms the core business with more than 80% revenue, the company has also ventured into publishing academic textbooks and self-study books for children apart from general publications on subjects such as ayurveda and biographies. It also offers commercial printing under which it designs and prints annual reports, brochures, catalogues, offer documents, coffee table books, calendars, greeting cards, magazines, text books, publications etc. In order to cater to central and south India markets efficiently, the company has recently put up two new plants at Indore and Bangalore apart from having its main plant in Pune. It is also expanding its distribution network and has ambitious growth plans for its publication division. The company operates with a very high interest cost. Otherwise, it’s trading extremely cheap at an EV/EBIDTA of hardly 4 times. For the current fiscal, it is expected to report total revenue of Rs.485 cr. with net profit of Rs.28 cr. i.e. EPS of Rs.8 on its equity of Rs.35 cr. Considering its IPO at Rs.105 in November 2006 and 52 week high/low as Rs.94/44, it’s a screaming buy at current market cap of merely Rs.170 cr.

Investment Calls
* Garware-Wall Ropes (Rs.134.15) specializes in providing customized solutions to the Cordage and Infrastructure industry across the globe.
Its Geo-synthetics Division specialises in providing customized solutions using Geo synthetics products for various applications in the Infrastructure industry. Geo-synthetic products find application in roads, railways, canals, groundfills and waste management. This division is expected to grow at the rate 50% per year over the next year in view of the huge demand for this product.
The company has reported sales of Rs.290 cr. with net profit Rs.18 cr. for the first nine months of FY08 against Rs.241 cr. and net profit of Rs.15.5 cr. in the same period of FY07. Full year sales are likely to be around Rs.390/400 cr. with net profit of Rs.24 cr. yielding an attractive EPS of Rs.12. The stock has reacted from the high of Rs.259 to the current level of Rs.124 where it looks attractive for long-term investment. Investors can keep a watch on this stock to add on reactions.
* Indian Hume Pipes (Rs.745.15) - The Central and State governments are laying emphasis on infrastructure development in the country and water supply has always been an important infrastructural activity for any populous location. For urban and rural water supply projects, the main customers have always been the Public Health Engineering Departments of various State Governments, Corporations, Municipalities, Water & Sewerage Boards etc. There is huge potential for water supply, sewage disposal, head works, treatment plants etc. Investors should stay invested. The company has total 28 manufacturing units some of which are closed. Thus it has huge real estate worth which is a big trigger for the stock. Although the stock has already flared from the levels when we first recommended it but investors can still continue to hold for better targets.
At present, the order position of the company is around Rs.950 cr. on its very small equity base of Rs.4.84 cr. For FY07, sales were Rs.340 cr. with net profit of Rs.14 cr. For Fy08, its full year sales are likely to be between Rs.375 to 390 cr. Stock is at almost half the price of its 52-week high. Investors can add this stock on reactions for good long-term target.

* PNB Gilts (Rs.30.20) - In 1996, the RBI introduced the system of Primary Dealers with a view to strengthen the institutional infrastructure of the Government Securities market. Six entities were granted licences of which PNB Gilts was one. The company was established as a wholly owned subsidiary of Punjab National Bank with an initial paid up capital of Rs.50 cr. which is also the minimum capital requirement for a Primary Dealer.
It came out with an IPO of Rs.3.5 cr. shares at an offer price of Rs.30 per share aggregating Rs.105 cr. in July 2000, which increased its paid-up capital to Rs.135.01 cr. and reduced the holding of Punjab National Bank to 74.07%.
During the years, the company has emerged as a leading primary dealer in the country. It has to its credits:
> The first standalone Primary Dealer to come with an IPO and get listed.
> The first PD to achieve ISO 9001:2000 certification.
> The first to obtain a P1+ rating from CRISIL for its short-term borrowing programme.
At present, the rating from CRISIL is for borrowing up to Rs.250 cr. For the first nine months of FY08, the company has achieved higher income of Rs.137 cr. against Rs.88 cr. while net profit shot up by almost 100% from Rs.26 cr. to 51 cr. With the interest rate expected to come down, the company is very likely to report higher profits in coming years.
The book value of the share is around Rs.40 and with expected EPS of Rs.5.5 in the current year, the stock looks very attractive at Rs.29/30 levels while the 52-week high is Rs.54. The stock is available at issue price of Rs.30 when it came out with IPO about 8 years back. Investors are advised to accumulate this stock as a safe investment with good long-term view for target price of Rs.60 over the next one year.

Rohit Ferro Tech Ltd. (RFTL) (Code: 532731) (Rs.82.30)
has announced highly encouraging results for Q3FY08 wherein its net profit moved up sharply by 309% to Rs.20 cr. Based on this, the scrip is likely to clock an EPS of Rs.18 for FY08. Since the share is trading at a P/E of just 4, it has all the potential to advance smartly in the medium-term.
A well-differentiated player from the ferro alloys sector with 60% revenue coming from exports RFTL manufactures High Carbon Ferro Chrome, Ferro Manganese and Silico Manganese through the Submerged Arc Furnace (SAF) route. The total capacity works out to 1,50,000 TPA with its two plants in West Bengal and Orissa.
The company has recently converted two of its 9 MVA furnaces (30,000 TPA) to produce ferro manganese in place of high carbon ferro chrome.
The management's decision to diversify into manganese alloys is due to higher production, better margins and better availability of raw-materials. Ferro manganese requires only 2800-3000 units of electricity whereas ferro chrome needs about 4000 units. Hence the same 9 MVA furnaces will produce more tonnage of ferro manganese than ferro chrome. RFTL is ISO 9001:2000 certified and enjoys ‘Two Star Export House’ status exporting ferro chrome to China, Japan, Iran, Korea, Taiwan, Germany, Turkey, USA and European countries. China is its major export market accounting for about 80% of its total exports.
During FY07, its sales advanced by 56% to Rs.196 cr. but net profit was up by 79% at Rs.20 cr. Its EPS was Rs.5.8 and it paid a dividend of 10%.
During Q3FY08, sales grew by 220% to Rs.140 cr. and net profit shot up by 309% to Rs.20 cr. For the first nine months of FY08, net profit advanced by 218% to Rs.42 cr. on 191% higher sales of Rs.354 cr. while the EPS for the nine month period was Rs.12.
RFTL’s equity capital is Rs.34.5 cr. and with reserves of Rs.88 cr., the book value of the share works out to Rs.36. The promoters hold 61% in the equity capital, foreign holding is 1%, PCBs hold 17% leaving 21% with the investing public.
Power is the major cost and accounts for about 40% of its production cost. RFTL has tied-up with the West Bengal State Electricity Board (WBSEB), which supplies power at a competitive rate of Rs.2 per unit at its existing Bishnupur plant.
For its new projects, the company has entered into an agreement with Northern Electric Supply Corporation (NESCO) and Grid Corporation of Orissa (GRIDCO) for uninterrupted power supply for the next five years at the rate of Rs.2.06 per unit against Rs.3 to Rs.3.50 per unit in other states. The lower power and fuel costs will have a positive impact on RFTL’s operating margins.
The company has applied to the Government of Orissa for a mining lease for chrome ore as well as manganese ore, which will make it an integrated player to some extent.
It has decided to enter into a joint venture with its Iranian partners, in the form of a Company to be incorporated in Iran, to explore the possibilities of marketing as well as sourcing raw materials. Currently, the company exports its finished products and also imports raw materials from Iran.
The company is increasing its ferro chrome capacity from 1,50,000 TPA to 2,00,000 TPA to be completed by 2010 and is also planning forward integration into stainless steel manufacturing. RFTL is also setting up a coal-based power plant of 110 MW for the captive purpose for which it has already been allotted land by the Orissa government. The plant would be commissioned in the next 18 months according to company sources.
Ferro alloys are a blend of iron with a high proportion of elements such as manganese, silicon, chromium and molybdenum are used for manufacturing all grades of steel including stainless steel, alloy steel, castings and other engineering products. It is used as an additive for imparting strength and quality needed for a particular grade of steel and has a good demand.
The growth of the ferro alloys industry is in direct proportion to the growth of the steel industry, which is currently booming. Buoyed by the upsurge in industrial activity, especially in construction, automobiles consumer durables, the ferro alloys sector is growing at a healthy 20% per annum. Globally, the upturn in international aerospace and industrial gas turbine markets is also fuelling the demand for ferro alloys.
The company expects to wind up FY08 with sales of Rs.550 cr. and net profit of about Rs.62 cr., which would result in an EPS of Rs.18. Sales are expected to move up to Rs.650 cr. in FY09 with net profit increasing to Rs.75 cr., which would yield an EPS of Rs.21.7.
At CMP of Rs.82.30, the share is trading at a P/E of 4 on FY08 estimated EPS of Rs.18 and 3.3 on FY09 projected EPS of Rs.21.7. At a reasonable P/E of 6, the share is likely to move up to Rs.108 by the time the annual results are announced and Rs.130 in the medium term. The 52-week high and the low of the share has been Rs.127/24.

Micro Inks Ltd. (MIL) (Code: 523886) (Rs.316.25)

an MNC with over 70% stake by the German major Huber Group. It has produced excellent results for CY2007 posting an EPS of Rs.26.7. Incorporated in 1991 as Hindustan Inks & Resins, MIL is one of the largest printing ink companies in the country with its presence in liquid inks, resins, adhesives and enamels. The company started its operations in the early Nineties and emerged as a market leader in India by 1999. Today, it has established its presence in over 70 countries and is among the Top 5 in the world.In February 2006, MHM Holding (Huber Group of Germany) acquired 50.5% shares from the Bilakhia Group and 20% through a public offer at Rs.675 per share taking its total holding to 70.5% in the company. With this acquisition, the Huber Group has become the 5th largest group in the ink industry globally. The Huber Group has a global presence through 25 companies in Europe and 9 companies outside Europe.
MIL has a wide product portfolio and is the market leader in India. The printing ink industry essentially consists of four elements viz. pigments, resins, additives and solvents and MIL. It has diversified into a number of related products and undertaken backward integration to manufacture pigments, flushes, resins and additives - the critical raw materials for inks. Its products are resins, varnishes, pigments, waxes, flushes and printing inks and it is the second largest manufacturer of alkali blue, a special pigment. Packaging, printing and publishing are the main user industries of printing inks.
MIL is headquartered at Vapi, Gujrat and has three manufacturing units in Vapi, two units in Silvassa and one in Daman in India and another in Chicago, USA through its wholly-owned subsidiary. Its Silvassa manufacturing facility is one of the largest single-location ink plants in the world. In September 2004, it commissioned a PLC controlled liquid ink plant and sheet fed ink plant at Silvassa.
Its production capacity of printing inks, resins and varnish, adhesives, wire enamels, fine chemicals and press chemicals stand at 3,03,000 TPA, 52,600 TPA, 7,800 TPA, 3,450 TPA, 640 TPA and 5,000 TPA respectively. In June 2007, MIL commissioned a plant to manufacture 18,000 TPA intermediates in Vapi at an investment of nearly Rs.28 cr. for captive use.
For calendar year ending 31st December 2007, MIL recorded consolidated sales of Rs.1500 cr. against Rs.885 cr. in the previous nine months ended 31st December 2006 reflecting a rise of 28% on an annualized basis. Net profit for the CY07 was Rs.66 cr. against a net loss of Rs.45 cr. in the previous nine months. Its consolidated EPS works out to Rs.26.7.
MIL’s equity capital is Rs.24.9 cr. and with reserves of Rs.422 cr., its consolidated book value of the share works out to Rs.180. The promoters, Huber Group, holds 70.5% in the equity capital, Indian promoters, Bilakhias, hold 4.5%, Reliance Capital Trustee holds 4% while mutual funds like HDFC and HSBC together hold 8% and the balance 13% is held by the investing public.
The outlook for the ink industry is positive and USA, Japan, Germany, UK, France, Spain, Italy and China account for 80% of the global market and among them USA alone has a 35% market share.
Being the market leader in the ink industry and due to strong backward integration and effective cost management coupled with brand name, quality and distribution network of Huber Group, The MIL share is certainly a value buy. During CY08, sales are expected to go up to Rs.1950 cr. and net profit to Rs.90 cr., which would result in an EPS of Rs.36.
At the current market price of Rs.316.25, the share is trading at a P/E of 11.6 on CY07 EPS of Rs.26.8 and a multiple of 9.4 on its estimated EPS of Rs.36 for CY08. The share is recommended with a target price of Rs.500 in the medium-to-long-term. The 52-week high/low of the share has been Rs.495/253.
*****
GM BREWERIES
The shares of the breweries are attracting good interest in view of their bright prospects. Within this segment, the share of G. M. Breweries Ltd. (GMBL) (Code: 507488) (Rs.88.60) is recommended for decent appreciation in the long-term. Its excellent Q3FY08 results went unnoticed by marketmen. According to a technical analyst, who tracks the counter, the share looks quite attractive as it is in the long consolidation mode.
Incorporated in 1981, GMBL manufactures country liquor at Vasai near Mumbai and is the market leader in this segment. It came out with its IPO at a premium of Rs.5 aggregating Rs.8.44 cr. in September 1993 to part-finance its expansion. Although the company has the facility to blend and bottle both Indian made foreign liquor (IMFL) and country liquor, its concentration has been on country liquor due to the competitive market conditions in the IMFL segment.
GMBL has been achieving impressive progress both in terms of value and volume in the production of country liquor during the past three years. With the installation of additional bottling lines in FY07, GMBL now has the capacity to process 8.26 cr. bulk litres of country liquor per annum out of which only 63% has been utilised. The company has tremendous potential to utilise the balance capacity by penetrating into the interior districts of Maharashtra and taking advantage of its brand image.During FY07, its sales advanced by 12% to Rs.173 cr. but net profit declined by 11% to Rs.11.9 cr. when it posted an EPS of Rs.12.5 and paid a dividend of 18%. But during Q3FY08, although sales grew by 11% net profit jumped by 86% to Rs.4.4 cr. from Rs.2.4 cr. in Q3FY07. The EPS for Q3FY08 amounts to Rs.4.7.
During the first three quarters of FY08, net profit surged by 46% to Rs.12 cr. on 9% increased sales of Rs.137 cr. During this period, operating profit and net profit margins advanced to 15.3% and 12.3% from 8.8% and 6.7% respectively from the previous corresponding period. The EPS for the 9 months works out to Rs.12.8.
Its equity capital is Rs.9.4 cr. and with reserves of Rs.24.2 cr., the book value of its share works out to Rs.35.7. The value of its gross block has gone up to a whopping Rs.72 cr. up from Rs.59 cr. in FY06. It debt-equity ratio for FY07 improved to 0.4:1 from 1:1 in FY06. The promoters hold 68.4% in its equity capital, NRIs hold 2%, PCBs hold 3.7% leaving 25.9% with the investing public.
GMBL's products have been enjoying consistently good brand image for the past several years and enjoy a virtual monopoly in the country liquor segment in the districts of Mumbai, Navi Mumbai and Thane. It is the single largest manufacturer of country liquor in Maharashtra.
Given the tremendous potential in the interiors of Maharashtra, GMBL has recently doubled its capacity.
With the increase in the price of IMFL at the consumer level due to high taxation, there is a downward shift towards cheaper liquor where by country liquor is increasingly preferred by the lower middle class. With the increase in population, the prospect of country liquor is on the upsurge.
The valuations of the liquor industry have been improving due to accelerated consolidation and foreign majors have been showing great interest in taking over Indian liquor companies.
GMBL’s net profit is expected to increase to Rs.18 cr., which would give an EPS of Rs.19 in FY08. At the current market price of Rs.88.60, the share is trading at a P/E of 4.8 on FY08E against the industry average P/E of 34. A conservative P/E of even 10 will take the share price to Rs.190 in the medium-to-long term. The 52-week high/low of the share has been Rs.160/69.

Sarup Tannery
BSE Code: 514412
Last Close: Rs.34.20
This Jalandhar based leather products manufacturing company has an equity base of just Rs.3.25 cr. and the promoters hold 74.36% stake in the company. This year, the company posted mind blowing results. For the first nine months of FY08, while sales jumped 22.48% net profit jumped 66.67% as the nine month profit crossed last whole year’s profit. For Q3FY08, its sales jumped by 28.93% but profit skyrocketed by 103.85%. Last year, the company had declared 12% dividend.
Yesterday, the government made some positive announcement for the leather sector, which will benefit this company. Buy for investment purpose with a stop loss of Rs.31 for upper target of Rs.38 and Rs.40. The stock can go up to Rs.51 level in the long run. It is the best stock for short-term as well as medium-term investors in the current uncertain market. This stock is also for good dividend yield and is a low risk, high capital appreciation scrip.

Stocks To Watch Out For ( SELAN / SPANCO / IVR )

Spanco Telesystems & Solutions Ltd. (Code: 508976) Rs.197.90
Established in 1995 by Mr. Kapil Puri and Mr. Rajesh Chhabria primarily to manufacture and supply of EPABX, Spanco Telesystems & Solutions Ltd. (STSL) is one of the leading telecom systems integration and IT services company in India. From providing telecom integration services to MNCs, PSUs and the Defence sector, STSL has evolved to extend its expertise into the dynamic space of Business Process Outsourcing (BPO) and Radio-frequency identification (RFID). In short, the company is operating in following four business segments:
I. Turnkey Solutions: STSL’s core competency lies in offering telecom systems integration which includes implementation of multi-location, multi-services converged networks for carrying diverse multimedia traffic (voice, data & video) based on latest technologies like ATM, MPLS, Frame Relay, TCP/IP etc. In other words, the company undertakes the turnkey responsibility of supplying requisite products and services under the PDIM (Plan, Design, Implement & Manage) model, thereby taking care of the networking and networking infrastructure requirements of its customers. It also offers network engineering services and acts as an ideal intermediary between Network Equipment Providers and Operators for the roll out of GSM/CDMA infrastructure across the length and breadth of the country. Notably, STSL has alliances with leading global companies like Alcatel, Nortel, Key Mile, Apropos, DMC Stratex Networks which help it in bidding for large Indian contracts.
II. Business Process Outsourcing (BPO): After hiving off its domestic BPO ‘Sparsh’ to Intelenet, SSTL currently manages ‘Respondez’ state-of-the-art international call centre in Mumbai serving clients in the USA and UK. It offers BPO solutions in the entertainment, retail, telecom, healthcare, banking and financial services sectors and also provides technical support to gaming companies. Importantly, SSTL along with 50:50 joint venture with the Spice group bagged a 10-year contract to set up, operate and maintain Interactive Voice Response System (IVRS) and Regional Call Centres (RCC) for the Indian Railways. In alliance with BSNL as the telecom service provider, the company obtained the licence to operate the various passenger & tourism information services on behalf of Indian Railways. Accordingly, the Integrated Train Enquiry System (ITES) in the four North, East, West and South zones is serviced by SSTL only.
III. IT Services: SSTL offers specialized IT solutions for an extensive range of embedded systems comprising device drivers, OS porting on newly designed chips and mobile programming. Besides offering e-governance, ERP product etc., SSTL is among the early few to provide mobile application solutions like bill payments through the mobile etc. In fact, the company is looking to get patent for its M-Money product through which one can make payment or literally transfer money through the cell phone. Moreover, it is one of the pioneering companies in India in the field of GPS/GIS, which is actually a satellite-based locating and navigating utility that determines a user's precise latitude, longitude and altitude by tracking signals from satellites.
IV. Radio-frequency identification (RFID): In 2006, SSTL ventured into RFID space by acquiring 51% stake in Skandsoft Technologies - a pioneering software solutions company that is dedicated to revolutionise the upcoming world of automated business processes through technologies like Radio Frequency Identification (RFID) and Automatic Identification and Data Capture systems (AIDC). This company has a patented platform (middleware), SETU™, which allows organizations to make the optimal usage of RFID technology.
On the infrastructure front, apart from 8 regional offices in India, SSTL has over 60 service and support facilities across the country. Internationally, it is present in the US, UK, Singapore and UAE. Besides, the company has formed a joint venture ‘Spanco-GKS’ with Golden Key Solutions of Oman to replicate its Indian business in the Gulf region as well. It also has some technical tie-up with Great Wheel Corporation, Singapore. Further, the company is looking to acquire an RFID service entity having presence in the international market. In the BPO segment, the company is once again focusing largely on the domestic market and intends to become one of the largest domestic BPOs with about 25,000 employees and 15,000 seats in the next 2-3 years. Recently, SSTL has decided to transfer all its BPO related businesses including Respondez (international BPO), domestic call centre operations and the IRCTC project (a 50:50 JV with spice telecom group) into a separate subsidiary. This step may be a precursor to unlock value by hiving-off or de-merging its BPO business into separate listed company in future. Financially, the company is faring well. Considering its strong order book position, it may end FY08 with sales of Rs.625 cr. and profit of around Rs.48 cr. on a standalone basis. This translates into an EPS of Rs.23 on its current equity of Rs.20.65 cr. whereas on its diluted equity of Rs.23.50 cr. (post conversion of 28.50 lakh warrants) the EPS works out Rs.20. Investors are strongly recommended to buy at current levels with a price target of Rs.280 (i.e. 40% returns) in a year’s time.

Selan Explorations Technology Ltd. (Code: 530075) Rs.157.90
Incorporated in 1985, Selan Exploration Technology Ltd. (SETL) is one of the few private sector companies engaged in oil exploration and production. In fact, it was amongst the first private sector companies to have obtained rights to develop oilfields way back in 1992 when the government of India (GOI) opened the oil sector to the private sector for exploration and production of hydrocarbons. Earlier, it used to undertake seismic data acquisition work for ONGC because of which it has extensive domain knowledge and experience in geophysical data acquisition, processing and interpretation in petroleum exploration, development and production. Based on this expertise, it ventured into developing proven oil fields and was awarded three oil fields in 1993. Subsequently in 1997, SETL received Letters of Intent (LOI) for two additional fields of which one was a gas field. Since then, the company is involved in onshore drilling for exploration of oil and gas.
Presently, SETL boasts of owning four oil fields Bakrol, Indrora, Lohar, Ognaj and one gas field Karjisan - all in and around Ahmedabad in Gujarat. Incidentally, all the blocks have a well laid out infrastructure with easy accessibility and are in close proximity to the government's crude gathering station as well as in close proximity to a large industrial town. The company has been producing crude from three oilfields only as the mining lease for Ognaj oilfield is still awaited from the Government of Gujarat. But its Bakrol field alone is stated to have oil/gas reserves of around 45 million barrels, which is huge by any standard. But due to limitation of funds and conservative management, SETL produced only 100,000 barrels of crude in FY07 and is expected to produce 1,40,000 barrels in FY08, which may move up to 2,00,000 barrels in FY09. With assured offtake of the entire oil and gas production from these blocks by the government, as per the terms of the production sharing contract, there is zero marketing risk for the company. To take advantage of high crude oil prices, SETL has been aggressively drilling new wells and is busy analysing the well logging data to identify prospective drilling locations that could be taken up for drilling in the foreseeable future. Fortunately, these new wells are yielding good production levels.
With international crude oil prices hovering around US $100 per barrel and expected to remain high, the future earnings of the company appear very encouraging. Secondly, the company is constantly following up with the government of Gujarat for the mining lease of the Ognaj oilfield. Once this lease is obtained, the company will initiate the development activities in the block. Meanwhile, this debt-free company is expected to clock a turnover of Rs.35 cr. with net profit of Rs.15 cr. for FY08. This leads to an EPS of more than Rs.10 on its equity of Rs.14.40 cr. However, for FY09 it is estimated to post an EPS of Rs.15. Considering the company’s proven huge oil reserve and encouraging future prospects, the scrip is trading fairly cheap at the current market cap of merely Rs.225 cr. Investors are advised to accumulate at declines as the scrip can appreciate 50% in 15 months.

IVR Prime Urban Developers: A good contrarian pick
IVR Prime Urban Developers Ltd. (IVRPUD) is a 12-year old Hyderabad based company incorporated in 1996 as IVR Realtors Ltd. The company’s name was changed to the present one in 2001 and it is a subsidiary of IVRCL Infrastructures & Projects Ltd.
Since inception, the company has been in the business of real estate development. Its principal activity is to develop and construct properties and projects, which include residential and commercial construction including hotels, retail malls, IT parks, etc. in various parts of India. It is a growing real estate development company focused on integrated townships. Mr. E. Sudhir Reddy is the chairman while Mr. E. Sunil Reddy is the managing director of the company.
The company entered the capital market during 2007 with a public issue of 1,41,50,000 equity shares of face value of Rs.10 each at a premium of Rs.540 per share for cash, aggregating to Rs.7782.50 million by way of 100% book building process. The issue evoked good response from the investing public.
The company has 12 subsidiaries which include IVR Hotels & Resorts Ltd., IVRCL Mega Malls Ltd., Agaram Developers Pvt. Ltd., Annupampattu Developers Pvt. Ltd., Papankuzhi Developers Pvt. Ltd., M.M. Kuppam Developers Pvt. Ltd., Kunnam Developers Pvt. Ltd., Ilavampedu Developers Pvt. Ltd., Samatteri Developers Pvt. Ltd., Mummidi Developers Pvt. Ltd., Velursantha Developers Pvt. Ltd. and Tirumani Developers Pvt. Ltd. It has entered into a Master Agreement with IVRCL governing business arrangements and areas of cooperation and resProjects: IVRPUD’s projects include construction of shopping malls, SEZ, IT Parks, Hotels etc. in Hyderabad, Visakhapatnam, Chennai, Pune, Noida and Bangalore.
Land Reserves: The company has land reserves of 2850 acres in Tier-I cities of Chennai, Hyderabad, Pune, Bangalore, Visakhapatnam and Noida totalling approximately 75.45 million sq. ft. of saleable area including 0.1 million sq. ft. in relation to unsold villas and flats in Hill Ridge Project.
Performance: For FY07, its income from operations was Rs.1477.62 million with net profit of Rs.206.79 million netting an EPS of Rs.4.60ponsibility in relation to real estate projects between the company and IVRCL.
Latest Results: The company announced excellent results for Q3FY08 as it notched up an income of Rs.2959.51 million with net profit of Rs.1163.23 million posting a whopping basic & diluted EPS of Rs.18.13. The annualised EPS works out to a fabulous Rs.72.52.
Financials: The company has an equity base of Rs.64.15 cr. with a book value of Rs134.01 per share.
Share Profile: The share of IVRPUD with a face value of Rs.10 is listed and traded under the ‘A’ group the BSE and NSE. Its share price touched a high of Rs.509.90 and a low of Rs.165 since lisShareholding Pattern: The promoters hold around 77.94% while the balance of 22.06% is held by non-corporate promoters and the Indian public. A host of mutual funds like Kotak, DSP ML, Escorts, HSBC etc. have been adding the thing company’s share to their various schemes..
Conclusion: IVRPUD is the construction arm of the renowned infrastructure giant IVRCL. The company has carved out an enviable space in the construction business for constructing top quality projects in tier I cities.
At its current market price of Rs.246.55, the share price is discounted less than 4 times its estimated earnings against the industry average P/E multiple of over 40. The share is lying low in sympathy with other realty stocks, which are undergoing a sharp correction. The share is going very cheap and is available at more than 50% discount to its public issue price of Rs.550. Considering its good pedigree, fabulous performance; the share may be added even at the current levels for significant appreciation in the long-term. In this connection, it is pertinent to note that the land bank of 2850 acres has not been factored into its share price. The share is a good contrarian pick for long-term investment.

Talks & Buzz

Weekly resistance will be at 17652-18010. Weekly support will be at 16691-16457.
Strategy for the week
Pull-back rallies of 500-1000 are meant to generate cash. Use the higher levels to generate cash. A breakout and close above 19000 or 19400 could create trouble for the bears.

* Simplex Casting has bagged a good order from Indian Railways for supply of coco bogies taking its total order book position to over Rs.130 cr. Accumulate at declines.
* Some serious accumulation is on in Jupiter Bioscience as it closed 4% higher with decent volumes at a time when the Sensex is down by more than 400 points.
* Royal Orchid Hotels has entered a joint venture with the Parsvnath group to develop ten hotels at an investment of Rs.500 cr. Scrip is available fairly cheap and is a good bet at the current level.
* Although marketmen have turned bullish on Reliance Power on the bonus announcement, investors may do well to exit this scrip and shift to better options like Numeric Power, Indo Asian Fusegear, Easun Reyrolle, ICSA, KLG Systel, Asian Electronics etc.
* Vakrangee Software has held out in the recent carnage. It seems the scrip is in stronger hands and may shoot up sharply once the sentiment improves. A solid bet.
* Centurion Bank of Punjab is a good buy because of its merger proposal with HDFC Bank.
* Bihar Tubes has planned aggressive expansion by inorganic growth. A good stock to accumulate at declines.
* Bodal Chemicals is quoting at a single digit P/E and has a rights issue which is like a mini bonus. The share is languishing at Rs.93 and offers rights at Rs.10 premium. Record date is in March 2008.
* Will the bonus in Reliance Power change the mood of the market? Next week is crucial for the direction of the market.
* Himachal Futuristic is to be rechristened as Dynamic Infotel Ltd. and is likely to reduce its equity capital to offset heavy losses. A scrip to watch in coming years.
* Reliance’s gas find in the Krishna Godavri deepwater blocks will be a real money spinner for RIL.
* Elder Healthcare joins the trimming game with Vandana Luthra.
* Essar Shipping with its refocus on offshore is a great scrip in the making.
* Crompton Greaves, BHEL, Siemens and ABB are in for a stupendous rise in the capital goods segment.
* TVS Motors’ electric scooters for Rs.32,500 from will give Hero Honda, Bajaj Auto and Kinetic a tough time.
* Jain Irrigation Systems’ tie-up with Mekorot Water Co. from Israel for hydro infra projects will add a new dimension to its growth.
* Jaiprakash Associates’ ad campaign empowers its scrip. Around Rs.230, it offers a great opportunity for long-term investors.
* Kohinoor Broadcasting Corp. plans to launch KBC News, its Hindi News Channel by 15th April.
* Ennore Coke will start heating the metallurgical coke (metcoke) plant mid-March with production scheduled in the first week of April. The way metcoke prices are shooting up, the scrip is sure to head northward.
* The grey market premium on Rural Electrification Corporation has shot up to Rs.22/24.

Market Guidance

* Balmer Lawrie (Rs.417.25) is expected to report an EPS of Rs.61 and Rs.80 in FY08 and FY09 respectively. Compared to other logisitc stocks, it looks attractive at Rs.410 level with long-term view.
* Nile Ltd. (Rs.179.60) - Besides having a division for glass lined equipments, which is said to be doing well, the company is expanding its lead manufacturing capacity to 7500 MT. At present, lead prices are very firm which will reflect in better results in future. At the current price, its market cap is just Rs.54 cr. Investors are advised to accumulate this stock for good long-term growth.
* DIC India (Rs.187), after recent rights issue at Rs.225, the holding of foreign promoters has gone up to 71% from 65% before. The stock is available at below the issue price of its recent rights issue while the book value, too, is around Rs.200.
* Khoday India (Rs.244.85) - It is understood that complete restructuring is taking place in the company. The stock is very likely to get re-rated over the next few years. Long-term investors might see a good upside in the stock over long run. New developments are said to be positive for investors. Stay invested.
* Tribhuvan Housing (Rs.24.40) - New developments are said to be taking place. Hold on to the stock.

Markets For 27-02-2008

BUY COLPAL WITH STOP LOSS BELOW 364

Technical call-- Buy LITL above 458 SL 453.30 Tgt 472.00

BUY BHARTI 820 TO 850 WITH STOP LOSS BELOW 819 OR 789

CAIRN IS THE STAR PERFORMER - BUT WITH 2 SPEED BREAKS AT 226 & 234

Nifty supports 5285-5300Nifty resistance 5385-5430

ongc has closed above it's 200 dma level @ 1015 after 4 days.(chart annexed)now it is ripe for bounce up to 50 dma levels @ 1130supports exist at 980, 1005 while reistance exists at 1055,1095.buy ongc @ 1028 with sl 1005 tgt 1054 >>1090>>1128.above 1055 real momentum would be seen.
buy hoteleela @ 52.7 with sl 52 tgt 54.5 >>57.8>>60

Pivot Point trading levels for 27th FEB is as under. S2 S1 PIVOT R1 R2 R35171 5220 5251 5300 5331 5380

Buget Expectations By Different Newspapers

* The federal government may relax overseas borrowing norms
to make infrastructure projects more attractive to private
developers.
* Social welfare programmes may see only a modest increase in
outlay.
* The finance ministry is likely to exempt shipping companies
from minimum alternate tax on profits earned from sale of
vessels. Shipping firms may also get waiver on tax payable on
interest income from tonnage tax reserves.
* The finance minister may announce a
modernisation-cum-upgrade fund for auto components.
* The railway minister is likely to reduce both passenger
fares and freight rates.

* Companies exploring oil and gas in the country are likely
to be exempted from paying service tax of 12 percent.
* The automobile industry wants government to cut excise duty
on big cars.
* The rail ministry is expected to announce the second phase
of the Mumbai Urban Transport Project at an estimated outlay of
45.10 billion rupees.
* The government is likely to announce the commencement of
the construction of the eastern corridor in the Railway Budget.
* The government may cut duties on crude oil and petroleum
products to counter high global oil prices.
* The government is likely to extend income-tax incentives to
100 percent export-oriented units for one more year beyond March
2009.
* Income generated from agricultural advances by state
co-operative banks and district central co-operative banks is
likely to be exempted from tax from 2008/09.
* The agriculture ministry has proposed a cess of 1 percent
on direct taxes and 2 percent on indirect taxes to part-fund a
debt relief package for farmers.
* The government may extend 10-year tax exemption under the
Software Technology Parks of India (STPI) scheme, provided to
units located in STPIs.The scheme ends in March 2009.
* The federal budget may propose that Limited Liability
Partnerships (LLPs) be allowed to choose how they are taxed,
depending on their structure. A LLP is essentially a partnership
where the legal status of the LLP is separate from its partners.
* The Dividend Distribution Tax (DDT) rate may be cut from 15
percent to 12.5 percent.
* The government is set to increase the corpus of the Rural
Infrastructure Development Fund by 20 billion rupees to 140
billion in the forthcoming Budget. The corpus of the fund was
increased to 120 billion rupees from 100 billion rupees in the
last budget.
* The Rail ministry is likely to announce a slew of freight
incentives, aimed at producers of bulk commodities, such as
allowing customers to construct 'bulk terminals' which would
allow storage and transportation of a specific commodity.
* The government is considering a proposal to grant the
'declared goods' status to natural gas and biofuels, making these
petroleum products eligible for a lower and uniform sales tax
across the country.
* The government is considering extending tax exemption for
companies setting up ultra mega power projects by seven year. The
exemption, which under current rules will end in 2010, may be
extended to 2017.
* Oil firms engaged in the exploration and production work
are likely to be exempted from the 12 percent service tax.
* The finance ministry is neither planning a hike nor a
reduction in excise duty, which is currently levied at 16 percent.
* Leather, textile, marine and handicrafts sectors are likely
to get an extension of the 2 percent subvention in export credit
for another year.
* Information Technology ministry seeks duty cuts on
electronic and IT goods used by the hardware and software
industry. A reduction of excise duty from 16 percent to 12
percent likely to be announced.
* Service Tax rate likely to be unchanged; currently the
service tax rate is 12 percent.
* The government may revise the method of calculation of
excise duty on cement, resulting in lower payouts, and waive
import duty on coal and pet coke; key inputs in the making of
cement.
* The corporate tax rate, which stands at 33.9 percent,
including surcharge and cess, may be lowered by abolishing the
surcharge. The government may also reduce the number of
exemptions, which help companies reduce their tax burden.
* The bar for consumption loans for farmers may be raised by
more than 50,000 rupees, on a backdrop a wave of suicides in the
farming community that has rattled the government.
* Value-added tax for LPG and other declared goods, edible
oils, bread, ready-made garments and intermediate goods may be
raised to 5 percent from the present 4 percent, to offset revenue
loss the states incur due to lower central sales tax.
* Taxi, bus fleet owners and contractors providing raw
materials, electrical work and furniture in civil constructions
are likely to come under the presumptive income tax net.
* Corporates may have to pay tax on capital income arising
from money forfeited as part-payment for their shares.
* The government is considering waiving securities
transactions tax (STT) on unexercised options in the derivatives
market.
* The Goods and Services Tax (GST) rate and structure may be
announced. The Central Sales Tax (CST) rate may be cut by 1
percent to 2 percent and completely withdrawn by 2010-2011 once
the GST is in the final implementation phase.
* The government may increase the notified area under the
local urban development authority from the present 8 kilometres,
allowing it to impose capital gains tax on sale of agriculture
land, that has not been used for more than two years for farming.
* The government may raise the limit for Viability Gap
Funding (VGF) to 30 percent from 20 percent for urban transport
systems like metro, monorail and road rapid transport system.
VGF is a one-time grant by the government to an
infrastructure project with a long gestation period to improve
its viability.
* Interest or dividend earned on infrastructure bonds issued
by commercial banks may be exempted from tax.
* The existing 10 percent surcharge on personal and corporate
income tax may be halved or scrapped, reducing the burden of a
certain category of individuals, firms and companies between 1.54
to 3.09 percent.
* The Tirupur Exporters Association in a pre-budget
memorandum to the finance ministry has sought to raise the
depreciation on plant and machinery to 25 percent and wants
service tax and fringe benefit tax on sales promotion expenses to
be removed.
* The government may announce a new fund for providing
subsidised loans to companies for adoption of energy-efficient
and non-oil technologies, according to a survey by Federation of
India Chambers of Commerce and Industry.
* Oil companies seek review on the customs and excise duty
structure on oil and oil products.
* A pension scheme for widows, disabled and old people below
the poverty line. The government is also planning to reduce the
minimum age for beneficiaries of pension living below the poverty
line to 60 years from 65.
* The government may remove regulatory restrictions on
payments received by foreign companies from their Indian
partners, joint ventures and subsidiaries for providing funds and
technical assistance.
* The finance ministry may revive tax benefits for real
estate developers for constructing houses for the economically
weaker sections.
* About a dozen new services such as legal draft writing and
stamp paper vending, all unaided non-government schools, colleges
and hospitals and recreation and amusement parks, may be brought
under the service tax net.
* Interest earned on external commercial borrowings may be
taxed, making foreign debt more expensive and help moderate the
surplus on the capital account - expected to touch $103 billion
this fiscal.
* Duties on life-saving medicines used in the treatment of
cancer, AIDS and diabetes may be exempted.
* The federal civil aviation minister has demanded
rationalisation of aviation tax structure, a cut in sales tax on
aviation turbine fuel and scrapping of service tax on business
and first-class tickets for Indian international carriers.
* The standard tax deduction limit for individual tax payers
may be raised 20 percent to 120,000 rupees, allowing a taxpayer
to save up to 2,000 rupees in taxes every year.
* Indirect taxes on consumer goods may be moderated to boost
consumption.
* Imported set top boxes may attract a customs duty of 5
percent, in a move to encourage domestic goods.
* Public sector banks may be exempt from fringe benefit tax
on their contribution to statutory pension funds.
* Duties on consumer electronics goods may be cut to 12
percent from 16 percent.
* Pass-through status for venture capital funds investing in
food processing industry and infrastructure facilities such as
warehouses may be restored. The status allows tax exemption for
earnings of VC funds.
* Personal income tax exemption limit is likely to be raised
to 1.25 lakh rupees a year from 1.1 lakh rupees. Taxable income
of up to 1.5 lakh rupees may continue to attract 10 percent
income tax.
* The government is considering a proposal to waive taxes on
the provisioning of non-performing (NPA) assets by banks,
especially on farm sector lending. NPA provisioning is taxed at
the rate of 30 percent now.
* The 5 percent customs duty for liquefied natural gas used as fuel in power generation projects is likely to be withdrawn.

Budget Expectations

MUMBAI, Feb 22 (Reuters) - Following is a snapshot of analysts' expectations from the federal budget compiled from brokerage reports.
Indian Finance Minister Palaniappan Chidambaram will present the budget for 2008/09 on Feb 29.
AUTOMOBILES
Uniform excise duty rates of 16 percent for all cars, large and small. - Reduction in excise duty on two wheelers to 12 or 8 percent from 16 percent. - Reduction in the excise duty on buses to 16 percent from 24 percent.
BANKING
Raising FII/FDI limit in state-run banks to 49 percent from 20 percent. - Relaxation in the lock-in period to three years from five years for bank deposits to qualify for tax benefits. - Interest earned on long-term lending to infrastructure industries to be exempted from income tax.
CAPITAL
Reduction in excise duty on air conditioners meeting energy efficiency guidelines to 8 percent from 16 percent. - Reduction in excise duty on power equipment to 8 percent from 16 percent. - Rationalisation of tax structures with respect to dividend paid by subsidiaries and special purpose vehicles.
CEMENT
Abolish the 5 percent import duty on coal and pet coke. - Value Added Tax on cement and clinker be reduced and brought in line with similar construction materials, like steel, to 4 percent from 12.5 percent.
CONSUMER GOODS
Excise exemption on biscuits similar to other food mixes granted exemption in the last budget. - Reduction in excise duty on processed foods to 8 percent from 16 percent.
FRTILIZERS
Removal or reduction of customs duties on inputs like liquefied natural gas. - Reduction in customs duty on sulphuric acid to 5 percent from 7.5 percent. - General sales tax exemption for basic raw materials like natural gas, naphtha, etc. - Reduction in excise duty on pesticides to 8 percent from 16 percent.
HEALTHCARE
Infrastructure status for hospitals with certain eligibility norms. - Relaxation of income tax for mergers and acquisitions with conditions.
HOTELS
Raising depreciation on hotel buildings to 20 percent from 10 percent.
INFORMATION
Extension of Software Technology Park scheme, which is set to end by 2008/09. - Reduction in excise duty on personal computers to 8 percent from 12 percent. - Abolish excise duty of 8 percent on packaged software sold over the counter.
LOGISTICS
Infrastructure status for warehousing and shipping industry.
MEDIA
Abolish custom duty on digital exhibition equipment. - Abolish 16 percent excice duty on set-top boxes.
METALS
Reduce excise duty on long steel products to 8 percent from 16 percent. - Abolish 5 percent customs duty on import of scrap. - Increase in export tax to 2,500 rupees per tonne from 1,500 rupees on key raw materials for steel. OIL & GAS ---------- - Cut in excise duty on petrol and diesel. - Removal of service tax on exploration activities. PHARMACEUTICALS
Reduction in maximum retail price-based excise duty to 8 or 12 percent from 16 percent. - Excise duty exemption for all the 354 drugs specified in the national list of essential medicines. - Research & development tax exemption given to generic pharmaceutical companies to be extended to the hived off, pure play R&D companies. - Life saving drugs to be exempted from customs duty of 5-10 percent.
POWER
Extension of tax holidays for ultra-mega power projects till 2017. - Easing external commercial borrowing norms to enable mobilisation of funds from abroad. - Income tax exemptions for power infrastrcture bonds. - Cut in excise duty on power equipment and other inputs to 8 percent from 16 percent.
RETAIL
Industry status to retail.
REAL ESTATE
Lowering the foreign direct investment threshold below 50,000 square-feet. - Uniformity in stamp duty across states. - Clarity on norms governing real estate investment trusts with adequate tax benefits similar to mutual funds.
SUGAR
Lowering of excise duty on ethanol to give a boost to the mandatory blending with petrol- Uniform and lower sales tax among states. - Excise duty structure on molasses of 750 rupees per tonne to be replaced with an ad-valorem duty structure.
TEXTILES
Reduction of excise duty on man-made yarn to 4 percent from 8 percent. - To allow contract labour. - Reduction i0n license fees to a uniform 6 percent of adjusted gross revenue. - Removal of customs duty for telecoms equipment from the current rates of 4-37 percent. - Exemption of service tax on broadband services for the next five years.
Collated from the reports of following brokerages: Batlivala & Karani Securities, Edelweiss Securities, Kotak Securities, Religare Securities and Sharekhan

Railway Budget ( by Lalu P Yadav )

NEW DELHI, Feb 26 - Indian Railways Minister Lalu Prasad Yadav on Tuesday announced cuts in passenger and freight fares as he unveiled financial plans for one of the world's largest rail networks.
Following are the highlights from his budget speech.

PERFORMANCE: 2007/08
* Double digit growth in traffic earnings maintained in first nine months. * Growth in passenger earnings at 14 percent. * Expected growth in goods earnings at 14 percent. * Operating ratio likely to improve from the budgeted 79.6 percent to 76.3 percent, the best in last four decades. * Net revenue expected at 184.16 billion rupees and surplus after payment of dividend expected at 135.34 billion rupees.

BUDGET ESTIMATES

* Freight loading target: 850 million tonnes. * Revenues in freight earnings to be 527 billion rupees; passenger earnings to be 216.81 billion rupees. * Gross traffic receipts to be 819.01 billion rupees. * Cash surplus before dividend to be 247.83 billion rupees after making an ad-hoc provision of nearly 50 billon rupees for anticipated recommendations of the Pay Commission.

ANNUAL PLAN 2008/09
* Annual plan of 375 billion rupees is the largest so far. * Thrust areas include enhancement of high density network routes, improvement and expansion of traffic facility and network, construction of flyovers, bypasses and upgradation of goods sheds. * Expenditure on new lines - 17.30 billion rupees; Gauge conversion - 24.89 billion rupees; Electrification - 6.26 billion rupees; Metropolitan transport projects - 6.50 billion rupees * Expenditure on track renewal - 36 billion rupees; Bridges - 6 billion rupees; Signal & telecommunication works - 15.20 billion rupees; Road over/under bridges - 7 billion rupees and manning of unmanned level crossings - 6 billion rupees. * Spending on passenger amenities - 8.52 billion rupees, the highest so far. * Targets : New lines - 350 kms; Gauge conversion - 2,150 kms; Doubling - 1000 kms. PASSENGER SERVICES * 53 pairs of new trains. * 300 additional services in Mumbai suburban network. * Provision of on-line coach indication display board; on-line train arrival, departure information board; on-line reservation availability information board. * Provision of discharge-free environment-friendly toilets in all 36,000 coaches in the 11th Plan period at a cost of 40 billion rupees. * Senior citizen concession for women enhanced to 50 percent from current 30 percent. * Free monthly seasonal ticket to girl students up to graduation level in place of 12th standard and for boys up to 12th standard in place of 10th standard. * Termination of queues at ticket counters targeted in two years. * Ticket booking on mobile phones; e-ticket for waitlisted passengers. * One rupee discount per passenger for fares up to 50 rupees in ordinary and mail/express second class. * 5 percent discount across the board for passenger fares beyond 50 rupees for all ordinary and mail/express second class. * Increase in discount for travel in new design, high capacity reserved coaches. * Reduction in fare - AC-I : 7 percent; and AC-II : 4 percent (the reduction will be half for popular trains and during peak period).

FREIGHT BUSINESS
* 5 percent reduction in freight rates for petrol and diesel. * 14 percent reduction in freight rate for fly-ash. * 30 percent discount on entire traffic in place of incremental traffic booked from goods shed. * Increase in discount on incremental traffic booked from private sidings to 40 percent from 30 percent. * 6 percent freight concession for traffic booked from other states for stations in North Eastern states. * New/dedicated iron ore routes to be upgraded/constructed. * Work on eastern freight corridor from Ludhiana to Dankuni (Kolkata) and Western freight corridor from Delhi to JNPT to start in 2008-09. * Procurement of rolling stock: all time high of 20,000 wagons, 250 diesel and 220 electric locomotives to be manufactured. * New wagon leasing policy and wagon investment scheme formulated to increase availability of wagons in the system. * Discounts for development of bulk and non-bulk goods terminals.
FUTURE VISION
* Vision 2025 document aims to set roadmap for next 17 years. * Information Technology Vision 2012 aims at radical changes in IT applications on a common platform with focus on improvement in operational efficiency, transparency in working and better services to the customers. * Public-private partnership schemes to be launched for attracting an investment of 1 trillion rupees over the next five years for developing stations, rolling stock and other logistics. * Commercial use of railway land by rail land development authority to give a boost to railway revenues.

Markets For 26-12-2008

KSOILS ( K S Oils Limited)
Action
Trigger Price
Stop Loss
Target 1
Target 2
BUY ABOVE
97
94
101
107
S.SELL BELOW
92
95
89
80

GUJNRECOKE ( Gujarat NRE Coke Ltd.)
Action
Trigger Price
Stop Loss
Target 1
Target 2
BUY ABOVE
170
165
178
190
S.SELL BELOW
162
166
157
145

RPOWER ( Reliance Power Limited)
Action
Trigger Price
Stop Loss
Target 1
Target 2
BUY ABOVE
480
442
462
475
S.SELL BELOW
439
446
432
410

Hot Stocks for 26th February 08
REL, RPOWER, JPASSOCIAT, NTPC, NEYVELILIG, RCOM,KTKBANK, DLF, INFOSYSTCH, RANBAXY,STER, HEROHONDA, MARUTI, LT, INDIANB.

buy rel @ opening bell ---- mkt. news(Buy back news)....

Nifty supports 5200-5188Nifty resistance 5265-5289

Pivot Point trading levels for 26th FEB is as under. S2 S1 PIVOT R1 R2 4999 5100 5156 5257 5313

Pivot Point trading levels for the Week 25th - 29th FEB is as under. S2 S1 PIVOT R1 R24916 5013 5191 5288 5466

100-DMA 5649 50-DMA 5600
30-DMA 5280 20-DMA 5189
200-DMA 5031 50-WMA 4839

This on going Major correction cum consolidation will be termed as over, ONLY if Nifty closes above 5649.

Chart resistance is at 5293. Today if it stays above 5191, it can move upto 5293 where selling will be seen. On lower side 5030 should act as a good support before the budget presentation
· 08:58 AM Buy Nalco at Rs 432 Stop Loss Rs 420 Target Rs 442-446 in a week time.
· 08:57 AM Buy & hold Hindalco at Rs 196 Stop Loss Rs 187 Target Rs 206-222 in a week time.
· Buy these stocks at opening bell.. Gujarat NRE coke and Akruti city.