Remember the following points when investing in the market:-
1)Sentiments change overnight as people are emotional.
2)If analysis really workd all the time market would have become very boring.They are interesting because we cannot predict human behaviour.
3)When you get information on a stock find out if market already knows it.Know your level ofinformation ladder
4)Life is never fair.You may find incompetent people being highly successful.Dont feel bad,they are reaping the rewards of their past karma,lolz……
5)You cannot get investment opportunities everyday.5-6 of them in a quarter would be great.
6)Patience is always rewarded.The law of firm is applicable in walks of life.
7)Control your emotions.Do not follow the herd blindly.
8)You never miss the buss in the markets.If you have the money opportunities would always come.Preserve your money and don't forget "cash is the king"
9)Bear markets offer better investment opportunities than bull markets.
10)Avoid margin trading.You are only enriching your broker.Ask your margin trading friends how they are treated in the present market situation.
11)Derivatines are good hedging instruments.Unfortunately they are used as speculative instruments.They only enrich the intermediary at the expense of the investor.Avoid them.
Tuesday, January 8, 2008
Sunday, January 6, 2008
ITL Industry:-The undervalued smallcap for your portfolio
Scripscan=ITL Industry
BSE code:522183
CMP=63
Target=96
Return expected:52%+
Duration=5-7 months.
Introduction-
ITL is an established leading metal cutting solution provider offering wide range of machines,tools and cuting lubricants.ITL has been the pioneer in introducing India;s first double column type metal cutting machinein the year 1990 and since then, ITL has supplied more than 2000 machines across the country and global markets.
ITL has started designing and manufacturing of complete turnkey projects as well as equipments for production of tube and pipes which includes tubes mills, draw benches,straightning machines etc, Which are neccesary for production of ERW, Seamless pipes and stainless pipes.ITL developed and manufactured India's first high speed CNC circular sawing machines and the same has been well accepted by most of the engineering industries.It is a perfect solution for cutting requirements of most of the automotive component manufactures and its expected that in times to come, they will shift from conventional cutting machines to circular sawing machines because of their higher productivity and high degree of automotion along with quality cuts.
For FY07, Company had acheived sales of 22 CRS with a NP of 1.32crs. On equity of 3.30 CRS., EPS stood at 4.ITL's profits were not high because steel prices had gone up substantially over last 2 years.The company had undertaken export orders based on the then prevailing steel prices at low margins to enter the export market. With surge in steel prices, Its margins were effected.Now the company has been succesful in putting price escalation clause into its contracts resulting in better margins.
Future Prospects-
The engineetring industry in India is on an upswing on the back of huge demand from the contruction,infrastructure and capital goods sector. This has resulted in an increase in the demand for metal cutting machines.
ITL is well placed to take advantage ofthis oppurtunity as its a leader in high speed sawing technology and is in the process of establishing itself in the domestic and global markets as an innovative and reliable "Cutting solution provider".It would be prudent to note that there are 9 Engineering,2 Polytechnic and 3 ITI colleges at Indore, Thereby giving the company a locational advantage to attract new talent.
Wide Product Range:
Itl has a wide product range in metal cutting solutions.The company offers 60 different models of brandsaw machines ranging from 100 MM TO 1,500 MM cutting capacity with Manual, Semi Automatic, Automatic and fourth generation CNC machines. On the back of its technical tie up with a German company ,ITL manufactures 3 models of Kato Sawing machines with cutting capacities of 250 MM and 400 MM diameter in India as per KLasto technology.
Further, ITL is the hub fortube technology for leading manufactures.With technical know-how from varios Mnc, Itl offers state of art equipment crafted by a highly experienced technical team.Its tube mills have acapacity of making 20 inch diameter tubes/pipes.
All this makes ITL a Pioneer in cutting technology and also places it at an advantage over it peers,Thus ITL is best positioned to capitalize on the demand arising from the tube and pipe manufacturing sector.
The company has represntatives in U.S.A. and Germany, which helps it to maintain relationship with its exisiting customers and also acquire new customers.It is beleived that ITL has appointed dealers in some of european as well as african countries to capture a larger pie of the export market.It completed its modernisation and expansion project with a capex of Rs.2.5 cr. and has also acquired land in the SEZ in Pithampur for meeting global opportunities.Notably,its orders in hand is at a historic high with more than Rs.20 crs. due to the good demand for tube & pipe manufacturing machines along with its recently launched circular saw machine.
For H1FY08, ITL has acheived sales of rs 15.5 CRS. and the PAT stands at 1.05 lakhs.Due to nature of its business,Company reports higher performance in H2. ITL IS EXPECTED TO ACHIEVE SALES OF RS. 40-42 CRS. AND NP OF RS. 2.65 CRS. WHICH WILL TRANSLATE INTO EPS OF 8.
The company has got a good dividend payout ratio and over the last 6 years it has consistently rewarded the shareholders with rich dividends.With the company expected to come out with much higher profits the company may just put a hike in its dividend ratio.
ITL is available at extremly low valuations.Considering high valuations enjoyed by engineering companies these days.The scrips like Gei Hamon, Petron eng, International Combustion E.t.c. are quoting at PE ratio of 12-25 times.With growth in size, ITL IS BOUND TO HAVE MUCH HIGHER VALUATIONS.The stock is currently traded at 17x FY2007 earnings.I strongly recommend BUY on the stock with target price of Rs 96 for the stock,at 12x FY2008E earnings (EPS Rs 8x12).
BSE code:522183
CMP=63
Target=96
Return expected:52%+
Duration=5-7 months.
Introduction-
ITL is an established leading metal cutting solution provider offering wide range of machines,tools and cuting lubricants.ITL has been the pioneer in introducing India;s first double column type metal cutting machinein the year 1990 and since then, ITL has supplied more than 2000 machines across the country and global markets.
ITL has started designing and manufacturing of complete turnkey projects as well as equipments for production of tube and pipes which includes tubes mills, draw benches,straightning machines etc, Which are neccesary for production of ERW, Seamless pipes and stainless pipes.ITL developed and manufactured India's first high speed CNC circular sawing machines and the same has been well accepted by most of the engineering industries.It is a perfect solution for cutting requirements of most of the automotive component manufactures and its expected that in times to come, they will shift from conventional cutting machines to circular sawing machines because of their higher productivity and high degree of automotion along with quality cuts.
For FY07, Company had acheived sales of 22 CRS with a NP of 1.32crs. On equity of 3.30 CRS., EPS stood at 4.ITL's profits were not high because steel prices had gone up substantially over last 2 years.The company had undertaken export orders based on the then prevailing steel prices at low margins to enter the export market. With surge in steel prices, Its margins were effected.Now the company has been succesful in putting price escalation clause into its contracts resulting in better margins.
Future Prospects-
The engineetring industry in India is on an upswing on the back of huge demand from the contruction,infrastructure and capital goods sector. This has resulted in an increase in the demand for metal cutting machines.
ITL is well placed to take advantage ofthis oppurtunity as its a leader in high speed sawing technology and is in the process of establishing itself in the domestic and global markets as an innovative and reliable "Cutting solution provider".It would be prudent to note that there are 9 Engineering,2 Polytechnic and 3 ITI colleges at Indore, Thereby giving the company a locational advantage to attract new talent.
Wide Product Range:
Itl has a wide product range in metal cutting solutions.The company offers 60 different models of brandsaw machines ranging from 100 MM TO 1,500 MM cutting capacity with Manual, Semi Automatic, Automatic and fourth generation CNC machines. On the back of its technical tie up with a German company ,ITL manufactures 3 models of Kato Sawing machines with cutting capacities of 250 MM and 400 MM diameter in India as per KLasto technology.
Further, ITL is the hub fortube technology for leading manufactures.With technical know-how from varios Mnc, Itl offers state of art equipment crafted by a highly experienced technical team.Its tube mills have acapacity of making 20 inch diameter tubes/pipes.
All this makes ITL a Pioneer in cutting technology and also places it at an advantage over it peers,Thus ITL is best positioned to capitalize on the demand arising from the tube and pipe manufacturing sector.
The company has represntatives in U.S.A. and Germany, which helps it to maintain relationship with its exisiting customers and also acquire new customers.It is beleived that ITL has appointed dealers in some of european as well as african countries to capture a larger pie of the export market.It completed its modernisation and expansion project with a capex of Rs.2.5 cr. and has also acquired land in the SEZ in Pithampur for meeting global opportunities.Notably,its orders in hand is at a historic high with more than Rs.20 crs. due to the good demand for tube & pipe manufacturing machines along with its recently launched circular saw machine.
For H1FY08, ITL has acheived sales of rs 15.5 CRS. and the PAT stands at 1.05 lakhs.Due to nature of its business,Company reports higher performance in H2. ITL IS EXPECTED TO ACHIEVE SALES OF RS. 40-42 CRS. AND NP OF RS. 2.65 CRS. WHICH WILL TRANSLATE INTO EPS OF 8.
The company has got a good dividend payout ratio and over the last 6 years it has consistently rewarded the shareholders with rich dividends.With the company expected to come out with much higher profits the company may just put a hike in its dividend ratio.
ITL is available at extremly low valuations.Considering high valuations enjoyed by engineering companies these days.The scrips like Gei Hamon, Petron eng, International Combustion E.t.c. are quoting at PE ratio of 12-25 times.With growth in size, ITL IS BOUND TO HAVE MUCH HIGHER VALUATIONS.The stock is currently traded at 17x FY2007 earnings.I strongly recommend BUY on the stock with target price of Rs 96 for the stock,at 12x FY2008E earnings (EPS Rs 8x12).
Thursday, January 3, 2008
Garnet construction:-High risk high gain bet
High risk-return bet:-Only go for it if you have got a very high risk apetite.
SCRIPSCAN:Garnet construction
Cmp:91
BSE code:-526727
Present turnover=35crs(2007)
Expected turnover in 08=125crsExpected turnover in 09=240crs
Introduction=
Garnet Construction Limited (GCL is engaged in the business of Industrial and residential construction.The company promoted by Kishan Kumar Kedia and Arun Kumar Kedia has has already acquired about 280 acre of land at Express Highway near Panvel in Navi Mumbai for Residential and Industrial project, which will require a total of 400 acre.Presently the company is involved in a 117 bunglows project at Lonavala.Now what has interested me to recomend the company is the fact that it is having a huge landbank of over 400 acres with company having a mere equity capital of 8crs.With projected revenues of 125cr in 08 its sure to give a huge boost to its earnings and i expect a EPS of around 16 rs.The scrip at rs 90 quotes just a odd 5.5 times its 1 year forward exrnings.With real estate and deleloping companies attracting huge valuation garnet may well continue its journey in the northwards.
Tuesday, January 1, 2008
Interworld Digital:-The 2rs penny stock with multibagger potential
Scripscan - Interworld Digital Ltd
Code-532072
CMP-2 (FV-1)
Target-4
Duration-12 months.
Introduction-
Interworld Digital is in the business of development of end-to-end distribution technology and support services for the delivery of digital cinema to theaters worldwide.It provides a complete range of capabilities to serve the emerging digital distribution needs for the motion picture industry based on an open standard that covers all of the stages for taking a movie from a studio master to a theater's digital projection system. This includes compressing, encrypting, and transferring the master onto a deliverable media, delivering the content to the theater-either by physical media or via satellite-for storage scheduling and playback.
Positives of Digital cinema -
One of the major revenue-streams for D-Cinema can be in the form of advertisements.It is expensive to copy advertisements to 35mm, and the distribution costs are high. This will limit the market to only large national/international advertisers. By using digital format, it is only necessary to hand in a disc, or down load the content. Distribution can take place centrally from a hub, which will control the running of each individual advertisement for each cinema through a large server, or it can be done by each individual cinema. The reduced cost of distribution, will reduce the advertising costs, and make cinema advertisement more competitive against other media.
Apart from advertising potentially Interworld Digital will enable new revenue opportunities for theater owners by extending their revenue base to include corporate presentations, live events, large-scale training and seminars, and multi-location interactive conferences. But the biggest advantage will come for distribution. Making and distributing copies is a lot easier with digital files than with physical film. Digital copies of a movie save millions by eliminating the cost of creating 100 or 1,000 odd movie prints. A film print can cost up to Rs 600,00 per print so making 100 prints or for a wide-release movie can cost up to Rs 60 lakh.By distributing them electronically,the cost savings on the distribution to the theater and back alone saves millions of rupees.Apart from this, D-Cinema will be of great benefit to B and C cities where 70% movies are of poor quality (B-grade, C Grade and X movies) or are movies that were released a couple of years back. With D-Cinema, they will able to view A-grade movies simultaneously along with their counterparts in cities.
Negatives -
On the downside, the upfront costs for converting theaters to digital are high: up to $150,000. Theatres may be reluctant to switch without a cost-sharing arrangement with distributors.
Prospect -
Interworld Digital Ltd is in the market with the first digital movies that will be transmitted to theatres through satellite. In the first phase, Interworld Digital plans to digitise 50 theatres across the country.Movies transported in encoded format, which would have the highest quality of print, would be shown in these theatres. Digitising of movies would render piracy practically impossible for two reasons. One, the quality of the pirated version would be pathetic. And two, a watermark on the theatre screen would show the place and date on which the pirated copy was made.One big gain for producers would be that they would save huge amounts on prints as each print costs about Rs 8000 and they need to make scores of prints to distribute across the country and abroad.
Outlook-
To achieve its object of setting up fully featured Digital Cinema Model, the Company has engaged famous film Director, Mr. Partho Ghosh, for producing and directing various feature film under consideration and M/s Cyberlogy (India) Pvt. Ltd. for setting up a Network Operating Centre in Mumbai for the Company and for also arranging various other activities.
As the Indian economy grows and merges further with the global economy, the focus of demand for IT and entertainment services will shift from large deals signed by the large enterprises to increasing number of mid-size and small enterprises signing IT and entertainment services which is expected to be the next phase of growth in the Indian IT and entertainment services market.
Conclusion-
Digital technology is already taking over a big chunk of the home entertainment market. Movies might not be able to escape the digital onslaught for long. While digital cinema is yet to take off in a big way in India, it is surely showing prospects of cinema without reels.For viewers, digital projection offers crisp pictures that don't fade or scratch, no matter how many times they are shown. Create the content once and deliver to millions without any generational loss or image degradation.
"Interworld looks to have a bright future ahead.Its quoting at a mere 2rs and upsides can be huge from these level.The promoters too realising the huge potential has been increasing their stakes in the counter.Digital cinema is set to be the next boom for sure and the company having the first mover advantage deserves a better valuation.Interworld basically is following the business model of a Belgium-based company called EVS Belgium.In the US,Dolby Digital is the leader in this industry segment.Being a 2rs counter there is not much to loose but chances are always there that the scrip may just turn out to be the next multibagger."So watch out for it".
Code-532072
CMP-2 (FV-1)
Target-4
Duration-12 months.
Introduction-
Interworld Digital is in the business of development of end-to-end distribution technology and support services for the delivery of digital cinema to theaters worldwide.It provides a complete range of capabilities to serve the emerging digital distribution needs for the motion picture industry based on an open standard that covers all of the stages for taking a movie from a studio master to a theater's digital projection system. This includes compressing, encrypting, and transferring the master onto a deliverable media, delivering the content to the theater-either by physical media or via satellite-for storage scheduling and playback.
Positives of Digital cinema -
One of the major revenue-streams for D-Cinema can be in the form of advertisements.It is expensive to copy advertisements to 35mm, and the distribution costs are high. This will limit the market to only large national/international advertisers. By using digital format, it is only necessary to hand in a disc, or down load the content. Distribution can take place centrally from a hub, which will control the running of each individual advertisement for each cinema through a large server, or it can be done by each individual cinema. The reduced cost of distribution, will reduce the advertising costs, and make cinema advertisement more competitive against other media.
Apart from advertising potentially Interworld Digital will enable new revenue opportunities for theater owners by extending their revenue base to include corporate presentations, live events, large-scale training and seminars, and multi-location interactive conferences. But the biggest advantage will come for distribution. Making and distributing copies is a lot easier with digital files than with physical film. Digital copies of a movie save millions by eliminating the cost of creating 100 or 1,000 odd movie prints. A film print can cost up to Rs 600,00 per print so making 100 prints or for a wide-release movie can cost up to Rs 60 lakh.By distributing them electronically,the cost savings on the distribution to the theater and back alone saves millions of rupees.Apart from this, D-Cinema will be of great benefit to B and C cities where 70% movies are of poor quality (B-grade, C Grade and X movies) or are movies that were released a couple of years back. With D-Cinema, they will able to view A-grade movies simultaneously along with their counterparts in cities.
Negatives -
On the downside, the upfront costs for converting theaters to digital are high: up to $150,000. Theatres may be reluctant to switch without a cost-sharing arrangement with distributors.
Prospect -
Interworld Digital Ltd is in the market with the first digital movies that will be transmitted to theatres through satellite. In the first phase, Interworld Digital plans to digitise 50 theatres across the country.Movies transported in encoded format, which would have the highest quality of print, would be shown in these theatres. Digitising of movies would render piracy practically impossible for two reasons. One, the quality of the pirated version would be pathetic. And two, a watermark on the theatre screen would show the place and date on which the pirated copy was made.One big gain for producers would be that they would save huge amounts on prints as each print costs about Rs 8000 and they need to make scores of prints to distribute across the country and abroad.
Outlook-
To achieve its object of setting up fully featured Digital Cinema Model, the Company has engaged famous film Director, Mr. Partho Ghosh, for producing and directing various feature film under consideration and M/s Cyberlogy (India) Pvt. Ltd. for setting up a Network Operating Centre in Mumbai for the Company and for also arranging various other activities.
As the Indian economy grows and merges further with the global economy, the focus of demand for IT and entertainment services will shift from large deals signed by the large enterprises to increasing number of mid-size and small enterprises signing IT and entertainment services which is expected to be the next phase of growth in the Indian IT and entertainment services market.
Conclusion-
Digital technology is already taking over a big chunk of the home entertainment market. Movies might not be able to escape the digital onslaught for long. While digital cinema is yet to take off in a big way in India, it is surely showing prospects of cinema without reels.For viewers, digital projection offers crisp pictures that don't fade or scratch, no matter how many times they are shown. Create the content once and deliver to millions without any generational loss or image degradation.
"Interworld looks to have a bright future ahead.Its quoting at a mere 2rs and upsides can be huge from these level.The promoters too realising the huge potential has been increasing their stakes in the counter.Digital cinema is set to be the next boom for sure and the company having the first mover advantage deserves a better valuation.Interworld basically is following the business model of a Belgium-based company called EVS Belgium.In the US,Dolby Digital is the leader in this industry segment.Being a 2rs counter there is not much to loose but chances are always there that the scrip may just turn out to be the next multibagger."So watch out for it".
Thursday, December 27, 2007
Vinati Organics:-Undervalued star
Scripscan:Vinati Organics Ltd
Code:524200
Cmp:100
Target:160
Duration:6-9 months
Traded on:BSE
Introduction:
Vinati Organics is engaged in the business of producing IBB (Iso Butyl Benzene) and ATBS (2-Acrylamido 2 Methylpropanesulfonic Acid).
Why i like the counter?
1)The company with a capex of about Rs.35crs is presently expanding its ATBS facilities from 3k MT to 8k MT and the same is expected to be completed by June 2008.This expansion will make the company the world's second largest producer of ATBS.ATBS is a specialty monomer used in oilfield and mining chemicals, water-treatment, acrylic fiber, personal care, emulsions, adhesives etc. The world demand for ATBS is growing steadily and is expected to increase 2 to 3 fold with the production of enhanced oil recovery polymers.The company is in the process of finalizing long-term supply agreements for ATBS with worlds largest buyers based in USA and Europe.
2)The company has entered into a long-term supply agreement with BASF, USA, world's lamest producer of Ibuprofen. The company has increased its Isobutyl benzene (IBB) manufacturing capacity to 14000 TPA and is the world's largest producer with 70% market share.IBB is one of the key raw materials for making Ibuprofen.The supply agreement warrants BASF to buy majority of its IBB requirements from the company up to 2011. The contract can be renewed for additional three years and is expected to contribute up to Rs 240 crore in revenue in the first five years. As per the contract the monthly selling price of IBB is adjusted based on monthly world prices of key raw materials and exchange rate, thus minimizing the company's exposure to these variables.The production and supplies have ramped up since July and the coming quarters should reflect all the developments.
3)The company is planning to convert its ATBS production facility into an Export Oriented Unit from a Domestic Tariff Area.It is understood that the process would get completed by these year itself.It means that the profits from the sale of ATBS could be tax-free for the next couple of years.
4)ATBS/Na-ATBS&TBA:At present except the company there are only 2 other major producers of these monomers in the world.As suppliers of these products are limited,customers remain very keen to work for a new source of supply.All the major users of these products are based in Europe or U.S.A.,thus they prefer to enter into annual contracts.
5)The company falls on the vagaries of currency fluctuation as it exports its products mostly.At present on some cases its passing the extra costs to its customer.Going forward,The Company is aiming at minimizing foreign currency exposure by entering in to forward contracts and negotiating currency risk-sharing deals with customers.
6)Crude oil is one of the prime inputs for the products of the company and in the last few months it increased significantly.Vinati on to a certain extent was able to pass the hike to its customers. Incase of IBB,Vinati has a long term price escalation clause with BASF.On the ATBS front the company faces competition in terms of dollar pricing from majors like Lubrizol.The company though is confident of maintaining margins in this specialty monomer by passing the price fluctuation to its customers.
7)On asking the management about their new product application,they clarifies by saying "We are working on projects such as producing the versatile and high value monomer Tertiary Butyl Acrylamide (TBA.TBA is a high margin product for us and realization per kg is in the range of $5.We have already sent samples to various customers and we expect trial orders to begin soon".Tertiary Butyl Acrylamide or TBA finds its application mainly in the making of hair gel and water treatment polymers.
8)The company recently rewarded its shareholders by issuing them 1 free shares for every 2 shares held.These certainly entails a lot of conviction in the company as it shows the confidence of the management in the growth prospects of the company.
Conclusion:
The company is expected to end the year with sales of about 150crs.Profits could be around 15crs resulting an EPS over 15rs.At present price of 100 its just quoting at 6.6 times its fy08 earnings.With escalating product prices,industry leadership,enhanced capacity utilization,new long-term contracts and roubust business prospects,Vinati organics may just prove to be another of my scrips which satiates ones desires through tremendous capital appreciation in the coming days.
Code:524200
Cmp:100
Target:160
Duration:6-9 months
Traded on:BSE
Introduction:
Vinati Organics is engaged in the business of producing IBB (Iso Butyl Benzene) and ATBS (2-Acrylamido 2 Methylpropanesulfonic Acid).
Why i like the counter?
1)The company with a capex of about Rs.35crs is presently expanding its ATBS facilities from 3k MT to 8k MT and the same is expected to be completed by June 2008.This expansion will make the company the world's second largest producer of ATBS.ATBS is a specialty monomer used in oilfield and mining chemicals, water-treatment, acrylic fiber, personal care, emulsions, adhesives etc. The world demand for ATBS is growing steadily and is expected to increase 2 to 3 fold with the production of enhanced oil recovery polymers.The company is in the process of finalizing long-term supply agreements for ATBS with worlds largest buyers based in USA and Europe.
2)The company has entered into a long-term supply agreement with BASF, USA, world's lamest producer of Ibuprofen. The company has increased its Isobutyl benzene (IBB) manufacturing capacity to 14000 TPA and is the world's largest producer with 70% market share.IBB is one of the key raw materials for making Ibuprofen.The supply agreement warrants BASF to buy majority of its IBB requirements from the company up to 2011. The contract can be renewed for additional three years and is expected to contribute up to Rs 240 crore in revenue in the first five years. As per the contract the monthly selling price of IBB is adjusted based on monthly world prices of key raw materials and exchange rate, thus minimizing the company's exposure to these variables.The production and supplies have ramped up since July and the coming quarters should reflect all the developments.
3)The company is planning to convert its ATBS production facility into an Export Oriented Unit from a Domestic Tariff Area.It is understood that the process would get completed by these year itself.It means that the profits from the sale of ATBS could be tax-free for the next couple of years.
4)ATBS/Na-ATBS&TBA:At present except the company there are only 2 other major producers of these monomers in the world.As suppliers of these products are limited,customers remain very keen to work for a new source of supply.All the major users of these products are based in Europe or U.S.A.,thus they prefer to enter into annual contracts.
5)The company falls on the vagaries of currency fluctuation as it exports its products mostly.At present on some cases its passing the extra costs to its customer.Going forward,The Company is aiming at minimizing foreign currency exposure by entering in to forward contracts and negotiating currency risk-sharing deals with customers.
6)Crude oil is one of the prime inputs for the products of the company and in the last few months it increased significantly.Vinati on to a certain extent was able to pass the hike to its customers. Incase of IBB,Vinati has a long term price escalation clause with BASF.On the ATBS front the company faces competition in terms of dollar pricing from majors like Lubrizol.The company though is confident of maintaining margins in this specialty monomer by passing the price fluctuation to its customers.
7)On asking the management about their new product application,they clarifies by saying "We are working on projects such as producing the versatile and high value monomer Tertiary Butyl Acrylamide (TBA.TBA is a high margin product for us and realization per kg is in the range of $5.We have already sent samples to various customers and we expect trial orders to begin soon".Tertiary Butyl Acrylamide or TBA finds its application mainly in the making of hair gel and water treatment polymers.
8)The company recently rewarded its shareholders by issuing them 1 free shares for every 2 shares held.These certainly entails a lot of conviction in the company as it shows the confidence of the management in the growth prospects of the company.
Conclusion:
The company is expected to end the year with sales of about 150crs.Profits could be around 15crs resulting an EPS over 15rs.At present price of 100 its just quoting at 6.6 times its fy08 earnings.With escalating product prices,industry leadership,enhanced capacity utilization,new long-term contracts and roubust business prospects,Vinati organics may just prove to be another of my scrips which satiates ones desires through tremendous capital appreciation in the coming days.
Tuesday, December 25, 2007
Market Outlook !!!
Market shorter to medium term Outlook:
The $500 billion, 20-day loan, handed out to banks by European Central Bank has eased short term lending rates in the EU and helped the banks breath easy over the year-end. The amount is twice that the ECB thought the market would need and this dwarfs the $ 20 billion auction by the US Fed earlier. I believe this is a painkiller that has been administered to a tight economy and is not a remedy that will eliminate the root cause of the malady.So while short term looks assured, the crunch will come back to haunt the markets in the New Year.The markets were closed on Friday and then would open for a day on Monday next week to close on Tuesday for Christmas. Logically thinking, punters would not like to trade much in these sort of environment.Lighten up your positions from volatile scrips.
Market longer term Outlook:
The Sensex, at current levels, trades at around 19 times its expected 09 earnings which appears decent from an investment point of view. This takes into account expectations that the top companies will grow bottomlines by over 20% in FY09.However, the fact that most of the results declared so far have been in-line or above expectations, have provided the bulls with another reason to continue to pump in money into Indian equities. The results out-performance from major companies from sectors such as real estate,infrastructure has led to continuing euphoria on the street.I would, however, advise investors to remain cautious, as stocks have discounted valuations of the next 4 to 6 quarters which makes it a rather risky proposition to invest at the current juncture, as any financial disappointments by India Inc could have serious negative repercussions on investors' portfolios.
Happy and safe investing!
The $500 billion, 20-day loan, handed out to banks by European Central Bank has eased short term lending rates in the EU and helped the banks breath easy over the year-end. The amount is twice that the ECB thought the market would need and this dwarfs the $ 20 billion auction by the US Fed earlier. I believe this is a painkiller that has been administered to a tight economy and is not a remedy that will eliminate the root cause of the malady.So while short term looks assured, the crunch will come back to haunt the markets in the New Year.The markets were closed on Friday and then would open for a day on Monday next week to close on Tuesday for Christmas. Logically thinking, punters would not like to trade much in these sort of environment.Lighten up your positions from volatile scrips.
Market longer term Outlook:
The Sensex, at current levels, trades at around 19 times its expected 09 earnings which appears decent from an investment point of view. This takes into account expectations that the top companies will grow bottomlines by over 20% in FY09.However, the fact that most of the results declared so far have been in-line or above expectations, have provided the bulls with another reason to continue to pump in money into Indian equities. The results out-performance from major companies from sectors such as real estate,infrastructure has led to continuing euphoria on the street.I would, however, advise investors to remain cautious, as stocks have discounted valuations of the next 4 to 6 quarters which makes it a rather risky proposition to invest at the current juncture, as any financial disappointments by India Inc could have serious negative repercussions on investors' portfolios.
Happy and safe investing!
Saturday, December 22, 2007
18900 ....crucial level on closing basis..
Sensex technical View :
Crucial supports for sensex is placed at 18900 zone which should not be breached on a closing basis. Be highly stock specific. Caution was advised for last few days to the clients as seen in the newsletters posted to them. Keep stoplosses and trailing stoplosses as conserving capital is more important then making profits.
Stocks to watchout for :
Panorama Universal ( 531816 )
High risk traders can buy the stock slowly betwen 124-118 and stop would be 114 on closing basis for a 140-165.
Weird Small cap ideas :
Two Birla Group companies in the highest risk segment.
Birla VXL
The stock has bounced back strongly after being beaten down and shifted to T2T segment and is now all set for possible fresh moves.Risky penny pickers can buy it for 3 months .
Shloka Info (511607)
A yash Birla group co which is into education software and publications !! Earlier the stock was to named Birla Lifestyles !! but with the current trend the new name is going to be Birla Shloka Edutech as per the announcements.... Very high risk stock !!!
Crucial supports for sensex is placed at 18900 zone which should not be breached on a closing basis. Be highly stock specific. Caution was advised for last few days to the clients as seen in the newsletters posted to them. Keep stoplosses and trailing stoplosses as conserving capital is more important then making profits.
Stocks to watchout for :
Panorama Universal ( 531816 )
High risk traders can buy the stock slowly betwen 124-118 and stop would be 114 on closing basis for a 140-165.
Weird Small cap ideas :
Two Birla Group companies in the highest risk segment.
Birla VXL
The stock has bounced back strongly after being beaten down and shifted to T2T segment and is now all set for possible fresh moves.Risky penny pickers can buy it for 3 months .
Shloka Info (511607)
A yash Birla group co which is into education software and publications !! Earlier the stock was to named Birla Lifestyles !! but with the current trend the new name is going to be Birla Shloka Edutech as per the announcements.... Very high risk stock !!!
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