Valuable Stocks

Technically, on the upside if the Sensex can sustain above 17,475 level, it is likely to test the 18,526 and 18,715 levels. The Sensex has support at the 17,475 and 16,545 levels. On the upside, if the Nifty manages to sustain above 5156, it is likely to test the 5519 and 5575 levels. The 5156 and 4482 levels are important support levels for the Nifty.

The exciting corporate scorecard given hereunder can be considered for medium to long-term investment.
* Tata Steel: The company clocked in Rs.9646 cr. as the first half net profit on a turnover of Rs.63872 cr. The financial results of Corus came in handy to post the H1 profits, which is twice to the previous year’s net profit. On standalone basis, the company posts a net profit of Rs.2412 cr. on a turnover of Rs.9223 cr. the scrip has corrected from a high of Rs.950 by almost two thirds and has turned into a very promising story.
* ACE (Action Construction Equipment): A leading crane manufacturer reports a 75% increase in turnover at Rs.108 cr. for Q3FY08 with net profit rising 102% to Rs.9.5 cr. in an economy growing at 9%, infrastructure support companies like ACE have a way to go.
* PNB: With total revenues for the nine months ending 21st December’07 rising to Rs.10,385 cr. from Rs.8118 cr. with net profit at Rs.1505 cr. in the previous corresponding nine months gives it an EPS of Rs.48. Focused on inclusive growth and centred in customer solutions, this bank scrip is headed to break new grounds in coming weeks.
* Bank of India: The third quarter reports a 100% jump in net profits at Rs.512 cr. on the back of 72% rise in non-interest income. The operating profit for Q3FY08 is up at Rs.971 cr. – a neat rise of 75% over Q3FY07. Cumulatively, net profit for the nine months stands at Rs.1252 cr. up by 85%.
BOI’s planned qualified institutional placement (QIP) of 5% stake from the government’s holding will act as a trigger in the medium to long-term. Efforts are on to discover the price for the sale of such a holding. Investments bankers put the price of this scrip at beyond Rs.550 mark in the medium to long-term.
* Lupin Ltd.: Its robust Q3FY08 profit of Rs.181 cr. is the result of its overall good performance led by the advanced markets and the domestic formulations business along with monetization of its investments into R&D through sale of intellectual property rights (IPR). The company also received € 20 million payment from Servier Laboratories as payments for certain patents on Perindopril.
The company’s growth momentum may remain intact, now that it enters Japan through acquisition of Kyowa.
* Tanla Solutions: The company posts an 88%rise in its bottomline at Rs.43 cr. as against Rs.23 cr. in the corresponding period last year. A scrip to watch in these telecom times.
* Gujarat NRE Coke: India’s largest independent producer of low ash-metallurgical coke and the only company to own and operate coal mines in Australia. It is also into power generation through wind mills and has a mini steel mill producing TMT bars form steel scrap.
Its Q3FY08 performance registered a 39% rise in sales at Rs.243 cr. whereas the net profit zoomed 263% to Rs.50 cr. year on year, mainly due to decline in raw material expenses (58% v/s 74% of net sales). This led to improved operating margins at 35% from 21% and net margins at 12% from 8%. Both, firming coal prices and the cheaper dollar will benefit the company immensely. A scrip to watch in 2008.

Traders and speculators could buy Maruti with a target price of Rs.950 and a stop loss of Rs.862.

* The IPOs of Wockhardt Hospitals and Emaar MGF were the first casualties of the poor market sentiment as they both had to reduce their offer price bands.
TOWER TALK
- Nayan Patel
Oath of a chastened trader
“Main aaj pratigya leta hoon ki F&O mein sauda nahin karunga jab tak circuit breaker ya physical settlement nahin chaalu hota.”
* A research report by a leading investment broker puts Kaveri Telecom’s price at over Rs.600 a year from now.
* Bank of India shall offer QIP at Rs.430 to Rs.450 per share and sell 5% of the stake for the government.
* Reliance Power on listing may gallop beyond Rs.800 as the allotment is very poor.
* KEI Industries is seemingly among the best mid-cap bets to offers handsome returns a year form now.
* After hitting a high of Rs.305 in December 2007, SEAMEC has corrected sharply to below Rs.200 levels. This debt free MNC may not be available at this rate after its December 2007 numbers. Just buy it and sit tight.
* To de-risk its business model and capitalise on the construction boom, Aro Granites is getting into the domestic retail business. Besides, the scrip stood strong in the recent carnage. Keep accumulating at declines.
* As per reliable sources, Accurate Transformers has bagged some good orders and is sitting on a healthy order book position. The scrip has bottomed out. Grab it before it shoots up.
* Ansal Housing has been mercilessly beaten down by 50% in the last few days. The company has come out with decent set of numbers which may bring about a smart pull-back. Keep a close watch.
* A leading broking firm is bullish on 3i Infotech and has been recommending it to its clients. Technically also it looks strong and may see a smart rally in the short-term.
* Gandhi Special Tubes stock is being split, which will increase its liquidity. A stock to accumulate.
* Indsil Electrosmelt has come up with encouraging Q3 results with an EPS of over Rs.5. The company’s power generation business has been yielding substantial profits and making up for difficulties faced in the ferro alloys sector.
* Indrasprastha Medical is a hospital stock available at an attractive valuation. With Wockhardt Hospitals completing its IPO, hospital stocks are being re-rated. A risk-free buy.
* Despite consistent
performance Suraj Diamonds has not yet found favour among marketmen. But things may change. The company is going for preferential share at Rs.85 against the market price of Rs.66. A buy for patient investors.
* The grey market premium on IPOs weakened last week with Reliance Power at Rs.120/125, IRB Infrastructure at Rs.15/20, On Mobile at Rs.10 and Emaar MGF at Rs.35/40.

Numeric Power Systems Ltd. (Code: 532051) (Rs.732) is India’s No. 1 manufacturer of uninterrupted power supply (UPS) systems, stabilizers and power conditioners. It also undertakes turnkey projects and offers end to end solution for SCADA/EMS package, large network of industrial process, power transmission support systems and distribution management. For the December’07 quarter, its sales increased by 45% to Rs.100 cr. whereas NP shot up 70% to Rs.10.60 cr. thereby posting a highest ever EPS of Rs.21 for the quarter. Last year, the company entered into a joint venture with the French UPS major SOCOMEC SA to distribute, market and service the 3 phase range of UPS systems (greater than 10 KVA) products to customers in India. Ironically, around 75% of the ATMs in the country are fitted with UPS supplied by the company. With India's significant power deficits and the ubiquitous outages and voltage fluctuations the company’s products still have significant market potential in the country. For FY08, it may report sales of Rs.375 cr. and profit of Rs.38 cr. i.e. EPS of Rs.75. Secondly, with an estimated reserve of more than Rs.125 cr. on a tiny equity of Rs.5.05 cr., the scrip is fully ripe for liberal bonus. A solid bet for the medium-to-long-term.

Accumulate some good fundamentally strong momentum cash stocks at current level.
PAE Ltd.
BSE Code: 517230
Traded on NSE as PAEL
Last close: Rs.27.90
Company has an equity of just Rs.9.52 cr. and promoters hold 46% stake in the company. For the first nine months, the company has declared marvelous numbers. Net sales jumped 45.05% and net profit jumped by more than 161.78%. Last year’s profit was only Rs.3.25 cr.
It is good bet for the short-medium-to-long-term. Buy with stop loss of Rs.25.50 for an intra-day target of Rs.30.50 and weekly target of Rs.34

Ador Fontech
BSE Code: 530431
Last close: Rs.117
The company paid 50% dividend last year but a bumper dividend is expected this year. It has an equity of just Rs.3.50 cr. and has declared excellent numbers for the December 2007 quarter as net profit jumped by 151.35%. For the first nine months, the company’s net sales zoomed 24.56% while net profit jumped 97.69%. Buy with a stop loss of Rs.113. On the upper side, it will go up to Rs.126-130 level in the short-term.

Hawkins Cooker
BSE Code: 508486
Traded on NSE as HAWKINCOOK
Last close: Rs.185
The 70% dividend paying stock is available at Rs.185. Company has reported full year’s profit during the first nine months of FY08. Net sales in the first nine months jumped 25.57% while net profit jumped 71.21% and full year EPS may be Rs.18-20 in FY08. Stock is available at dirt cheap. Buy with stop loss of Rs.181. On the upper side, it will go up to Rs.200-205 level in the short term.

Steel Strip Wheels
BSE Code: 513262
Traded on NSE as SSWL
Last Close: Rs.171
Last week, we recommended this stock with full details. The company declared December 2007 quarterly results last week when its net profit jumped 30%. Its new ultra modern plant will start from May 2008.
Hold this stock will stop loss of Rs.152. On the upper side, expect Rs.205 level in the short-term while the stock can go up to Rs.256 level in the next one year.