Tower Talk
* SAIL is seeking a breakout from the clutches of the government. The first attempt was today. This week, it may touch Rs.197 and later Rs.226.
* Infosys and HCL Tech have proved beyond doubt that pleasant surprises are in store from quarters least expected.
* Gitanjali Gems is the scrip to watch as the gem and stone exports get a new life in the export policy document.
* Local players are treading where even FIIs feared to tread trade! Look at the volume statistics of deliveries by FIIs and local MFs in lesser known scrips.
* TTML, Chambal Fertilisers and Ispat Industries are once again in the limelight. The old hands are working on it.
* GMR Infra has a long way to go if the rumours of the development of 38 airports is true.
* GTL is a scrip to watch going by its FY08 results.
* Micro Technologies has tied up with MTNL to offer Micro LMTS (Lost Mobile Tracking System) to secure 2 million mobile handsets of MTNL subscribers. The scrip is being accumulated by few HNIs.
* Bihar Caustic has commissioned its 60 TPD stable bleaching powder plant. The scrip is available cheap at an EV/EBIDTA of less than 3 times and P/E ratio of 4 despite being an Aditya Birla group company.
* Eastern Silk may surprise the market by announcing robust numbers for March 2008 quarter on 23rd April. Keep a close watch on this counter.
* Surana Telecom and Bhagyanagar India have both announced a buy back scheme. While the share price of Surana Telecom has shot up by over 40% Bhagyanagar is still around the same level. Exit Surana Telecom and shift to Bhagyanagar.
* Tera Software holds surplus land worth Rs.40 cr. Thus the company’s business is available at a mere Rs.20 per share. A screaming buy.
* Stone India, engaged in meeting the spare requirements of Indian Railways, is available at attractive levels considering its earning potential. A value buy.
* Ansal Housing & Construction is available lower than what was paid by strategic investors. The stock can appreciate sharply considering its earnings potential.
* Orchid Chemicals has had a good run and is taking a breather. Partial profit booking is in order for those who entered Rs.150 level.
* IT stocks like Infosys, Wipro, Satyam, I-flex are available at reasonable P/E as compared to the past and can be considered for accumulation in small lots.
* The improved market sentiment has impacted the gray market too with the unofficial premium of Kiri Dyes shooting up to Rs.18-22 and Aishwarya Telecom at Rs.8/9.
* MIRC Electroincs on news of dividend could go up to Rs.24 from Rs.18 now.
* Vimta Labs may touch Rs.108 on news of some developments.
* SAIL is seeking a breakout from the clutches of the government. The first attempt was today. This week, it may touch Rs.197 and later Rs.226.
* Infosys and HCL Tech have proved beyond doubt that pleasant surprises are in store from quarters least expected.
* Gitanjali Gems is the scrip to watch as the gem and stone exports get a new life in the export policy document.
* Local players are treading where even FIIs feared to tread trade! Look at the volume statistics of deliveries by FIIs and local MFs in lesser known scrips.
* TTML, Chambal Fertilisers and Ispat Industries are once again in the limelight. The old hands are working on it.
* GMR Infra has a long way to go if the rumours of the development of 38 airports is true.
* GTL is a scrip to watch going by its FY08 results.
* Micro Technologies has tied up with MTNL to offer Micro LMTS (Lost Mobile Tracking System) to secure 2 million mobile handsets of MTNL subscribers. The scrip is being accumulated by few HNIs.
* Bihar Caustic has commissioned its 60 TPD stable bleaching powder plant. The scrip is available cheap at an EV/EBIDTA of less than 3 times and P/E ratio of 4 despite being an Aditya Birla group company.
* Eastern Silk may surprise the market by announcing robust numbers for March 2008 quarter on 23rd April. Keep a close watch on this counter.
* Surana Telecom and Bhagyanagar India have both announced a buy back scheme. While the share price of Surana Telecom has shot up by over 40% Bhagyanagar is still around the same level. Exit Surana Telecom and shift to Bhagyanagar.
* Tera Software holds surplus land worth Rs.40 cr. Thus the company’s business is available at a mere Rs.20 per share. A screaming buy.
* Stone India, engaged in meeting the spare requirements of Indian Railways, is available at attractive levels considering its earning potential. A value buy.
* Ansal Housing & Construction is available lower than what was paid by strategic investors. The stock can appreciate sharply considering its earnings potential.
* Orchid Chemicals has had a good run and is taking a breather. Partial profit booking is in order for those who entered Rs.150 level.
* IT stocks like Infosys, Wipro, Satyam, I-flex are available at reasonable P/E as compared to the past and can be considered for accumulation in small lots.
* The improved market sentiment has impacted the gray market too with the unofficial premium of Kiri Dyes shooting up to Rs.18-22 and Aishwarya Telecom at Rs.8/9.
* MIRC Electroincs on news of dividend could go up to Rs.24 from Rs.18 now.
* Vimta Labs may touch Rs.108 on news of some developments.
Market Guidance
* MTNL (Rs.105) has received a total refund of Rs.2860 cr. in the last ten months, which works out to Rs.45 a share. It is claiming full benefits under Sec 80IA as against the partial benefit granted to it. Grant of the full benefit would be a key positive trigger for the stock.
Its valuation is attractive with a book value of about Rs.190 and dividend of 40% over the last few years. The stock has reacted from high of Rs.219.
* Indbank Merchant Banking Services (Rs.27) has declared dividend of 15%. The stock was recommended last week at Rs.24. Book partial profit at above Rs.32 level.
* PNB Gilts (Rs.29) is considering dividend at its board meeting on 21st April. Stay invested. If dividend is around 18%, the stock may go up to Rs.35/40 level. The stock has already given 45-50% return from lower levels.
* New developments in Khoday India (Rs.141) are said to be favourable. Those who bought it at higher levels average out by buying at current levels. Q3FY08 results were very encouraging and Q4FY08 results are also expected to be on the same lines. Seeing to its high of Rs.425, current valuations are very attractive.
* HOV Services (Rs.97) is a leading BPO provider servicing the finance and accounting sector. The company entered the capital market in September 2006, offering 40,50,000 equity shares of Rs.10 each to the public at Rs.200 per equity share. The stock is under accumulation by knowledgeable investors. Book value is Rs.64, yearly high Rs.248.
* PG Foils’ (Rs.64) FY08 profit is likely to be around Rs.8 cr. posting an attractive EPS of around Rs.10. The book value of the share is around Rs.75 while the current year outlook is very encouraging. The company’s product range is similar to that of Ess Dee Aluminum but it is an older player in this industry. While Ess Dee Aluminum is trading at a P/E ratio of 26, PG Foils is trading at a P/E of just 8. The stock reacted from its high of Rs.127 to CMP of Rs.26 where it looks attractive.
* Religare Enterprises (Rs.376) is for momentum players or traders as it may see a good upside.
* Sharyans Resources (Rs.198) is a good long-term wealth creation story. There will be good unlocking of values over the next two years together with more acquisitions.
* Rohit Ferro-Tech (Rs.87) is likely to remain in the bull grip as the company is said to be faring exceeding well and is likely to acquire chrome ore mines. Full FY08 EPS likely to be around Rs.20. Current valuation is very attractive at Rs.86 level since its trading at a P/E of less than 5.
* EIH Ltd. (Rs.146) has good built in values. Its food catering business caters to international airlines worth about Rs.90 cr. EBITDA in 2007. With 50% EBITDA margin, very high ROE growing at 25%, this business can account for 30-40% of its market cap if demerged. In addition, EIH has a large property bank of about 15% of market cap. Investments in international hotels is 10-15% of market cap. Bandra Kurla land could be worth 25-35% of market cap. The publishing & printing business worth Rs.35 cr. revenue should grow substantially this year with Rs.100 cr. capex. The car rental business clocked Rs.58 cr. in revenues. In addition, its investment in the preferential shares of EIH Associates and equity stake in EIH Associates makes the hotel business is almost free. Long-term investors can take a small exposure in this stock on every dip.
* Assam Company (Rs.26) among the oldest tea companies is faring well. With its other business of oil & gas exploration, the company is expected to give good returns over the long run. Having reacted from a high of Rs.57, the stock looks attractive around Rs.25 level for good long-term investment.
* Industrial gear boxes manufacturers have increased prices by around 20-25% to pass on the increase in input costs like steel, castings, forgings etc. Some of these manufacturers are Elecon Engg. (Rs.173), Shanthi Gears (Rs.59), International Combsution (Rs.384).
* Similarly, motor manufacturers have increased rates by 5-10% recently. Some of the manufacturers are Crompton Greaves (Rs.358), Siemens (Rs.647), Kirlosker Eletric (Rs.195) etc.
* Kalpana Industries (Rs.119), Nelco (Rs.93), RPG Cables (Rs.36), Torrent Cables (Rs.230) are under accumulation by informed smart investors.
Note: Bulls are likely to take grip of the market as FY08 results seem to have been discounted at current valuations and FII selling seems to be over. We may now see positive inflows from FIIs. Nifty is very likely to touch 5100/5200 level by next week on short covering supported by strong investment buying.
Stability at current levels will attract good inflow of funds in mutual funds. The real estate market may also stabilise in the near future.
Stability in market will also help industry raise required funds for ongoing projects, which will help in reviving some of the sectors, which witnessed a slowdown.
* MTNL (Rs.105) has received a total refund of Rs.2860 cr. in the last ten months, which works out to Rs.45 a share. It is claiming full benefits under Sec 80IA as against the partial benefit granted to it. Grant of the full benefit would be a key positive trigger for the stock.
Its valuation is attractive with a book value of about Rs.190 and dividend of 40% over the last few years. The stock has reacted from high of Rs.219.
* Indbank Merchant Banking Services (Rs.27) has declared dividend of 15%. The stock was recommended last week at Rs.24. Book partial profit at above Rs.32 level.
* PNB Gilts (Rs.29) is considering dividend at its board meeting on 21st April. Stay invested. If dividend is around 18%, the stock may go up to Rs.35/40 level. The stock has already given 45-50% return from lower levels.
* New developments in Khoday India (Rs.141) are said to be favourable. Those who bought it at higher levels average out by buying at current levels. Q3FY08 results were very encouraging and Q4FY08 results are also expected to be on the same lines. Seeing to its high of Rs.425, current valuations are very attractive.
* HOV Services (Rs.97) is a leading BPO provider servicing the finance and accounting sector. The company entered the capital market in September 2006, offering 40,50,000 equity shares of Rs.10 each to the public at Rs.200 per equity share. The stock is under accumulation by knowledgeable investors. Book value is Rs.64, yearly high Rs.248.
* PG Foils’ (Rs.64) FY08 profit is likely to be around Rs.8 cr. posting an attractive EPS of around Rs.10. The book value of the share is around Rs.75 while the current year outlook is very encouraging. The company’s product range is similar to that of Ess Dee Aluminum but it is an older player in this industry. While Ess Dee Aluminum is trading at a P/E ratio of 26, PG Foils is trading at a P/E of just 8. The stock reacted from its high of Rs.127 to CMP of Rs.26 where it looks attractive.
* Religare Enterprises (Rs.376) is for momentum players or traders as it may see a good upside.
* Sharyans Resources (Rs.198) is a good long-term wealth creation story. There will be good unlocking of values over the next two years together with more acquisitions.
* Rohit Ferro-Tech (Rs.87) is likely to remain in the bull grip as the company is said to be faring exceeding well and is likely to acquire chrome ore mines. Full FY08 EPS likely to be around Rs.20. Current valuation is very attractive at Rs.86 level since its trading at a P/E of less than 5.
* EIH Ltd. (Rs.146) has good built in values. Its food catering business caters to international airlines worth about Rs.90 cr. EBITDA in 2007. With 50% EBITDA margin, very high ROE growing at 25%, this business can account for 30-40% of its market cap if demerged. In addition, EIH has a large property bank of about 15% of market cap. Investments in international hotels is 10-15% of market cap. Bandra Kurla land could be worth 25-35% of market cap. The publishing & printing business worth Rs.35 cr. revenue should grow substantially this year with Rs.100 cr. capex. The car rental business clocked Rs.58 cr. in revenues. In addition, its investment in the preferential shares of EIH Associates and equity stake in EIH Associates makes the hotel business is almost free. Long-term investors can take a small exposure in this stock on every dip.
* Assam Company (Rs.26) among the oldest tea companies is faring well. With its other business of oil & gas exploration, the company is expected to give good returns over the long run. Having reacted from a high of Rs.57, the stock looks attractive around Rs.25 level for good long-term investment.
* Industrial gear boxes manufacturers have increased prices by around 20-25% to pass on the increase in input costs like steel, castings, forgings etc. Some of these manufacturers are Elecon Engg. (Rs.173), Shanthi Gears (Rs.59), International Combsution (Rs.384).
* Similarly, motor manufacturers have increased rates by 5-10% recently. Some of the manufacturers are Crompton Greaves (Rs.358), Siemens (Rs.647), Kirlosker Eletric (Rs.195) etc.
* Kalpana Industries (Rs.119), Nelco (Rs.93), RPG Cables (Rs.36), Torrent Cables (Rs.230) are under accumulation by informed smart investors.
Note: Bulls are likely to take grip of the market as FY08 results seem to have been discounted at current valuations and FII selling seems to be over. We may now see positive inflows from FIIs. Nifty is very likely to touch 5100/5200 level by next week on short covering supported by strong investment buying.
Stability at current levels will attract good inflow of funds in mutual funds. The real estate market may also stabilise in the near future.
Stability in market will also help industry raise required funds for ongoing projects, which will help in reviving some of the sectors, which witnessed a slowdown.
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