MIDCAPS : LET’S BUY NOW

MIDCAPS : LET’S BUY NOW

The volatility in the markets in the last 5-6 trading sessions would have caused lot of anxiety to most of us .These are times when we make wrong decisions. When markets fall drastically, all big analysts says that Further Fall is possible. This adds to another drastic fall .No big analysts predict the Movements in advance. Therefore investors should select their picks wisely ,based on Valuations ,52 Week High & Low , Industry Prospects ,Growth Prospects ,Earning etc.

My Tips on investing in such a market :
1. Don’t sell off totally :Reduce Exposure
Explanation :I had some stocks in 250 nos ,having good propsects.Due to uncertainty and to have liquidity (for investment at further falls),I reduced my exposure to 150 nos ,when the markets recovered a bit.
2. Don’t always keep on Averaging
Explanation :When some scrips keep going below & below ,it is not a good decision to keep on averaging.Buy other fundamentally sound & good valuation scrips.It is not necessary to make up your money in the same scrip.

I would say that Buying in small quantities is the best to get the best stocks at this time . As usual ,my focus point being the Small Investor -I am recommending a Portfolio of 7 stocks for the short term .

1. ALLAHABAD BANK (Rs 133)
Allahabad Bank is one of the scrips ,which is lowest on valuations & top on performance.It is also one scrip ,which is holding very strong in a bearish market.

2. ASAHI INDIA (Rs 126)
Holding very strong in a bearish market. Buying is recommended with a short term vision.

3. APOLLO TYRES (Rs.55)

Subsidiary Dunlop is doing well .Posted excellent results this quarter.Expansion plans plus overseas acquisitions.Highly profitable company.Stock is not affected by recent market sentiments

4. ASSAM COMPANY (Rs.47)

Has good stake in Exploration .Recently many gas fields found.Has tie-up with a Canadian partner in Exploration business.

5.GUJARAT STATE PETRONET (Rs 88)

I had recommended this before at 36.This is now fully valued at about Rs 100 /- but can hold this with a 12 month perspective .Also fundamentally strong and having maximum lengths of Transporation lines for LNG Transportation.Orders from Reliance for Gas Transporation.

8.RANE HOLDINGS (Rs 185)

Very few shares are traded per day ,but unlocking of value will happen soon by March 08 ,as cross holdings between Group companies will be unlocked .Good demand and also fundamentally an excellent play in the Automotive sector.

9.BINANI ZINC

All analysts say to avoid Metals.But in performance this stock is an exception.This went to 226 3 days back and yesterday reached 252. I think this is a holding company also for Binani Cement.This is an excellent stock at 226-230 levels .I think 255 is a resistance level for this stock.But in long term,this would be an excellent play.


All these can give good value in the next 3 months.

Apart from this ,I would recommend United Breweies@330 ,United Breweries Holdings@1065-1075 .These stocks are bound to appreciate strongly in the next 6-12 months time frame. GMR Infrastructure @210-217 levels is a good play ,considering the opening of Airports in Delhi & Bangalore by March 2008.

Short term (quick money) for High Risk Investor : Oswal Fertilizers / Geojit Securities /HB
Stock holdings


I have holdings & interest in all above stocks at the time of recommendation.Investment decisions should be made by the investor .All recommended stocks are for Delivery based investment only

IT'S BUYING TIME : 8 PICKS FOR YOU

IT'S BUYING TIME : 8 PICKS FOR YOU

The markets are passing through a highly volatile phase with drops and gains & uncertainity,the reasons being a combination of the following :

Commodities markets on LME crashing ,Global stock markets dipping,FII's withdrawing after circular on CBDT announcement ,New Taxation announcement affecting profits of trading houses .On top of it loose words from the FM stating that " All falls in the markets do not require a clarification" etc....Plus some Fund houses like CLSA and JP Morgan saying that Indian Markets are Overvalued and fair value exists at 9600 blah blah ....

I would say that the Long Term Fundamentals are intact and bullish.Selling by FII's and Financial Institutions causing panic selling among retail investors being the main cause of this market fall...I would say that Buying in small quantities is the best to get the best stocks at this time .We calll it Bottom Fishing ....Fishing when the water is low..

As usual ,my focus point being the Small Investor -I am recommending a Portfolio of 7 stocks for the short term .

1.ALLAHABAD BANK (Rs 81.3)

Allahabad Bank has posted an encouraging Q4FY06 result with a jump of 90% in
its net profit from Rs. 793 mn to Rs. 1.50bn. Such a significant performance has
been observed on the back of strong business growth with nearly 36% advances
growth. However, a drag on the performance is higher than expected provisioning,which is up from Rs. 1.21 bn to Rs. 1.70 bn during the quarter.

2.PETRONET LNG (Rs 49.4)

Petronet LNG Ltd (PLL) on Thursday reported a net profit of Rs 661.4 mn
in the fourth quarter ended March 31, 2006 against a profit of Rs 76.1 mn
reported during same period last year.

3.CRANES SOFTWARE INTERNATIONAL (105.5): Keep Stop loss of 99.5

Holding very strong even in the weakest market with minimum fluctuation & quick recovery.

4.TRIVENI ENGINEERING (Rs 90.95)

Splitting of Sugar and Engineering into separate entities would unlock value.Turbine Orders in hand currently at 510 Crore Rupees.

5.NTPC (118.5)- Can buy it from 90-100 levels if market falls again .


6.GUJARAT STATE PETRONET (Rs 36.2)

Holding very strong even in the weakest market with minimum fluctuation & quick recovery.Also fundamentally strong and having maximum lengths of Transporation lines for LNG Transportation

7.ASSAM COMPANY (26.1) –Can buy now at Rs 25 levels

Anil Ambani Group has taken a 105 stake in this company last week.

8.CIPLA

Investors with Surplus money can invest in India's Best and Cheapest Stock -RELIANCE INDUSTRIES at Rs.850 levels and small quantities (to take care of any unexpected market falls) and averaging at every fall.

You can probably make about Rs35000/- in a month's time ,if you buy Reliance (100 nos) at 850 levels now.

SOUTH INDIAN BANK

THE SOUTH INDIAN BANK LTD

Recommendation :BUY
CMP:Rs.67
NSECODE:SOUTHBANK
Timeframe :3 months -6 months

HIGHLIGHTS

1. The FIRST among the private sector banks in Kerala to become a scheduled bank in 1946 under the RBI Act.
2. The FIRST bank in the private sector in India to open a Currency Chest on behalf of the RBI in April 1992.
3. The FIRST private sector bank to open a NRI branch in November 1992. The FIRST among the Kerala based banks to offer a Credit Card to customers in November 1992.
4. The FIRST bank in the private sector to start an Industrial Finance Branch in March 1993.
5. The FIRST among the private sector banks in Kerala to open an "Overseas Branch" to cater exclusively to the export and import business in June 1993.
6. Second largest network of branches amongst the old private sector banks - 450 branches and 45 Extension Counters spread over 19 States/UT .
7. The FIRST bank in Kerala to develop an in-house, a fully integrated branch automation software in addition to the in-house partial automation solution operational since 1992.

FINANCIAL HIGHLIGHTS :

Net Profit for Quarter Ended 31st March 2005 :-137 lakhs

Net Profit for Quarter Ended 31st March 2006 : 1631 lakhs

Net Profit for YEAR Ended 31st March 2006 : 5090 lakhs

Dividend declared :18 % (First time in several years)

SHARE HOLDING PATTERN :

Foreign Institutional Investors :18.48 % (including Goldman Sachs)

Banks /Govt Inst./Non Govt InstMutual Funds & UTI :12.07 %

Non Resident Indians :4.7 %

Indian Public :57.70 %

THE RETURNS CALCULATOR

THE 6 MONTH RETURNS CALCULATOR :Following Fundamental Analysis

Reference :My post titled "PORTFOLIO OF 10 STOCKS" dt. Nov 07 ,2005

See the Returns a small investor would have got on his investment if he had invested in November 2005 in my recommended time frame of 6 months .

1.ITC

Price as on Nov 07 : Approx: Rs 125
CMP (as on 06 May 2006) : Rs 210

2.NTPC

Price as on Nov 07 : Approx: Rs 90
CMP (as on 06 May 2006) : Rs 135

3.BALRAMPUR CHINI MILLS

Price as on Nov 07 : Approx: Rs 88
CMP (as on 06 May 2006) : Rs 185 (after going to Rs.203)

4.GATEWAY DISTRIPARKS LTD

Price as on Nov 07 : Approx: Rs 190
CMP (as on 06 May 2006) : Rs 250(after going to 310)

5.PETRONET LNG

Price as on Nov 07 : Approx: Rs 51
CMP (as on 06 May 2006) : Rs 59

6.RAJESH EXPORTS

Price as on Nov 07 : Approx: Rs 145
CMP (as on 06 May 2006) : Rs 335

7.DCM SHRIRAM CONSOLIDATED

Price as on Nov 07 : Approx: Rs 84
CMP (as on 06 May 2006) : Rs 124

8.WIPRO

Price as on Nov 07 : Approx: Rs 396
CMP (as on 06 May 2006) : Rs 530 (after going to 560)

9.ALOK TEXTILES

Price as on Nov 07 : Approx: Rs 70
CMP (as on 06 May 2006) : Rs 86

10.TAMIL NADU NEWSPRINT

Price as on Nov 07 : Approx: Rs 95
CMP (as on 06 May 2006) : Rs 125 (after going to 135)

PORTFOLIO OF 10 STOCKS

PORTFOLIO OF 10 STOCKS : FOR SMALL RETAIL INVESTORS

Time Frame : Medium to Long Term (3 months /6 months /1 year+)

Risk :Minimal

My views :Outperformers /Performers

1.ITC
2.NTPC
3.BALRAMPUR CHINI MILLS
4.GATEWAY DISTRIPARKS LTD
5.PETRONET LNG
6.RAJESH EXPORTS
7.DCM SHRIRAM CONSOLIDATED
8.WIPRO
9.ALOK TEXTILES
10.TAMILNADU NEWSPRINT

The Great Sugar Story

BALRAMPUR CHINI MILLS :The Great Indian Sugar Story

Balrampur Chini Mills, the country largest integrated sugar company, today announced that it had signed a deal to acquire Rauzagaon unit of Dhampur Sugar for Rs 182 crore.

Kishor Shah, chief finance officer of Balrampur Chini Mills, said the proposed acquisition would add 7,500 tonnes crushing per day (TCD) to the company capacity. The acquisition would also include a 12 MW power generation unit at Rauzagaon. Shah added the takeover would help Balrampur Chini to have a capacity of 47,000 tcd by this weekend.

The company was implementing an expansion plan of Rs 250 crore to scale up the capacity by 7,000 tcd by a year, he pointed out. After the proposed divestment of the Rauzagaon unit in eastern Uttar Pradesh, the Delhi-based Goel family-promoted Dhampur Sugar will be left with two units in western Uttar Pradesh. ICICI Securities was the advisor to Dhampur Sugar for this deal. The decision to sell the unit, however, is subject to necessary approvals.


The Balrampur Chini stock closed at Rs 88.70 on BSE today, 5.22 per cent higher than the previous closing of Rs 84.30.

The Kolkata-based Saraogi family, promoters of Balrampur Chini, has been expanding the capacity of the company for the past few years through a combination of organic and inorganic growth. Its expansion programmes, so far, were financed by borrowing and internal accruals.

The company has lined up plans to raise funds from the overseas market through global depository receipt (GDR) and foreign currency convertible bonds (FCCB) to finance its expansion plans. It has decided to raised up million from this route.

The company has set up a 7,000 tcd plant at Akbarpur, which is expected to start production this month. In the first instance of sugar industry receiving foreign direct investment, the company placed 19.33 lakh shares at Rs 585 to Citicorp International Finance Corporation to part finance the Akbarpur project.

Out of the total proceeds of over Rs 113 crore, the company has spent over Rs 79 crore for the Akbarpur project while the balance will be used for the Manakpur plant. The Manakpur project will also have a 24 MW power plant, and 60 kilolitre per day distillery.


EXCELLENT RESULTS POSTED


Balrampur Chini Mills registered profit after tax of Rs 34.6 crore in the second quarter ended September 30, 2005, compared with Rs 1.6 crore in the same period last year. Net revenues increased by 67.7 per cent increase to Rs 287.9 crore. The company's profit before interest, depreciation and taxes increased by 227.7 per cent to Rs 56.3 crore from Rs 17.2 crore. EPS increased from Rs 0.08 to Rs 1.49.

ANALYSIS- RAJESH EXPORTS

RAJESH EXPORTS LTD :

CMP -Rs 150 after stock split in Sept 2005 .Face value :Rs 2

Listed on BSE & NSE

(REL) is engaged in the Manufacture, Export and Wholesale of gold jewellery.

News :

Benettt & Coleman to pick up 5.27% shares of this company

Minerals & Metals Trading Corporation to buy jewellery from REL

HIGHLIGHTS

1) The company is the largest exporter of gold jewellery from the country.

2) REL has set up the world's largest and the most modern and sophisticated jewellery manufacturing unit at White Field, Bangalore in the year 2002.

3) REL is the only Trading House which has been recognized by Government of India in the field of gold jewellery

4) Received several Central and State Government Awards for its excellent performance in exports.

5) In addition to export sales, Rajesh has also diversified its activities into domestic wholesale of gold jewellery and has received overwhelming response for its products. The company is the largest manufacturer of 22-carat gold jewellery in the world.

6) The company has, over a period of time, acquired expertise in the manufacture of gold jewellery and is currently in a position to produce the finest gold jewellery in the world at the most competitive price,

7) The company has also setup an excellent supply chain management system, both for international and domestic market which is capable of expanding many folds.

8) The most organized player in. the vast unorganized domestic market.

EXPORTS

Currently the company exports about 34% of the total Indian plain gold jewellery exports with a potential to acquire more than 50% of the Indian export market share. The company also has capacity and plans to compete with the products of other countries and corner the share of large exporting countries like Italy, Israel and Singapore.

DOMESTIC MARKET :The company's share in the domestic Indian jewellery market is miniscule and has a potential to at least acquire about 10% of the Indian jewellery market share, which would amount in value wise to about 7500 crores.

TECHNOLOGY: The company is in the process of developing several new designs, technologies, processes in jewellery manufacturing which would be unique both in the global and Indian markets. The company has a unique capability to manufacture fusion jewellery which is a combination of machine made and hand made jewellery. Very few jewellery units across the world have the capacity to manufacture fusion jewellery.

MARKETING TIE-UPS:

The company has a well experienced marketing teams both for global and Indian markets, The company has developed an extensive global marketing network through leading wholesalers in respective countries with which the company has exclusive marketing arrangements to ensure continuous and growing business. The company exports its jewellery to USA, UK, UAE, Kuwait, Muscat, Singapore etc, The company has maintained excellent professional and cordial relations with most of the overseas buyers since the commencement of the company's exports. The entire operation of the company is computerised and credit limits have been set for each of the parties in export and for local wholesale. There is a strong credit policy in place, reducing its business risk.

ANALYSIS -ITL Industries

ITL Industries : CMP –Rs 36.BSE Stock

(Price on 6th September 2005 :Rs 38.Fluctuated to a low of Rs 29 recently.

9 % upper circuit for trading on 6th & 7th October 2005)

ITL Industries is into the business of Machine Manufacturing(Bandsaw Machines/Bi-Metallic Oil,Band saw Blades-Bimetal machines e.t.c) & Hydraulics.ITL offers 60 different models of Bandsaw machine ranging from 100 mm to 1500 mm cutting capacity with manual, semi automatic, automatic and fourth generation CNC machines.

HIGHLIGHTS :

Collaboraton with KASTO Maschinenfabrik GmbH Germany to manufacture state-of-the-art High Speed Power Hacksawing Machines in India


ITL has received good orders for production of Tubes & Pipes manufacturing machines during the current year as well as many enquiries have been received from home and international market


ITL is now a hub for Tube Technology of leading manufacturers technical know-how from USA, Europe and Japan and offers state of the art equipment crafted by highly experienced technical team


DOMESTIC CLIENTS

All the major Steel Plants, MNCs, Defense Establishments, Railways workshops, Bharat Heavy Electrical Units, Steel Tube Plants, Research Organizations like BARC, NFC, DMRL, ISRO, MIDHANI etc. and Heavy Engineering Industries are the customers of ITL Industries Ltd.

EXPORT CLIENTS

ABB,BURGMANN,DELSY,ECHLIN,GE,HAGLUNDS,HONDA,FORD,SANDVIK
KSB,WENDT e.t.c.

FINANCIALS

ITL's financials were not so exciting till now but the trend is likely to change dramatically in the coming years as both the capital good sector and the engg sector is looking up and also the company has a strong order book position which will increase its topline and bottomline by quite a margin.

DIVIDEND
ITL also gives a decent dividend of 10% which at the cmp of 33rs gives a dividend yield of more than 3%.

YES BANK LTD

Buy with a Stop loss of Rs 64 (Medium –Long Term Holding)


Highlights:

1.Experienced Promoters & Holding by reputed Institutions


a) Ashok Kapur and Rana Kapur (27.6 %)
b) Doit ,Mags & Morgan ( 24.6 %)
c) Rabo bank International (20 %)
d) Citicorp (10 %)
e) AIF Capital (7.5 %)
f) Chryscapital (7.5 %)

Ashok Kapur, chairman, is a graduate from Institute of Bankers, U K. He had a long stint with ANZ Grindlays Bank in various capacities. He was also Regional Manager (Executive Vice-President), ABN Amro Bank, Singapore and has the distinction of being the first Asian to be appointed “Country Manager” of ABN Amro Bank, India. Before joining YES Bank, he was the Managing Director of Rabo India.


Rana Kapoor, managing director and chief executive officer, holds management degree from Rutzers University, US. He has over 20 years of experience with foreign banks like ANZ Grindlays and Bank of America. He was the managing director and CEO of Rabo India.
Apart from the experienced promoters, the senior management team includes reputed names like Wouter Kolff, Hans ten Cate, Ajay Relan, Ashish Dhawan, Ajay Lal to name a few.

2.GROWTH OF MORE THAN 1500 %
Net Profit of Rs 1125 lakhs (June 2005 Quarter) from a loss of 376 lakhs in previous quarter (March 2005).

3.Technology & Branch Expansion to bring in positives

MATRIX LABORATORIES

Highlights :


1. Dividend Paying, High Operating Profits

2. Many recent overseas acquisitions

3. Entering into new high profit and niche areas of pharma with backward integration with inventors and research companies, also entering into forward integration for higher sales in Europe.

4. All production facilities are already approved by the USFDA and leading International and European Pharma Regulatory Authorities.

5. Filed more than 80 DMF's in the US and Europe and have also filed more than 35 innovative patents.

6. Matrix successfully developed non infringing process for Citalopram and so far generated revenues of US 3 Million with average gross margins of more than 75%.

7. Best operating margins in the industry. Matrix has more than 200 scientists working on Research and Developments of New Molecules and Products.

8. Contract Manufacturing for large foreign Pharma Majors.

9. Matrix Labs has sales and marketing offices in many countries. Prism Cement

10. Stock having holding by Temasek (Singapore Government’s Investment wing)