ticker is god

NIITTECH : VALUE BUY AT 132

2008-02-28T12:09:00.000-08:00

I spent quite a bit of time looking at NIIT-TECH numbers over the last couple of weeks.

At the current market-cap of INR 770 Crores I firmly believe the stock offers significant value.
>Quality Management ,

> Lower Concentration of Non-North American business ( 32% currently),

>Better EBITDA margin compared to peers ,

>Potential value unlocking through sale of 25% in NIIT-TECH which is held by NIIT

add to my level of comfort.
Snapshot of the model for the co which i built is shown.( I have assumed INR /USD 37.5 for the period with North-Am revenues as a % of Total Revenues decreasing by 0.75% on annualized basis)

HINDUSTAN PETROLEUM ( shaken but not out !!)

2007-01-18T10:28:00.000-08:00

CMP :321
Hindustan Petroleum has not participated in the Indian stock rally over the last 1 year
mainly because of crude oil price continuous rise.

With the crude cooling off to $54 levels from $80 levels the stock has also not gone up.

Some of the positives for the buyer:
1.The Book Value of the script is rs 270 .
2. It is all set to sell half its stake in the Vishakapatnam refinery to French firm Total SA, which will bring in Rs 6,000 crore.
3.HPCL to develop malls, multiplexes at unused depots.

Buying at 300 levels the risk reward is in favour of buyer.

ANSAL INFRA ( DETAILED REPORT)

2006-12-12T11:33:00.000-08:00

This is my latest reserch report .
Ansal Infrastructre offers can offer decent appreciation over
medium to long term.Worth a look.

Monthly Trading Idea : Real Estate Play....More Steam Left

2006-11-21T04:10:00.000-08:00

The indian real estate story could be a bubble but momentum is certainly left.
The general opinion is that of over heating in real estate markets but the valuations,
growth oppurtunities available compared to other emerging markets are less.
A compelling oppurtunity going ahead.

These 2 stocks have the least exposure to SEZs which is the riskiest thing that real estate
companies are undertaking .Hence we prefer these two.

Best Picks:
Bombay Dyeing cmp: 772
target: 930

Ansal Properties and Infrastructre cmp: 942
target: 1200

Detailed Report on Ansal Housing coming soon.

Monthly Trading IDEA : SESA GOA buy @ 1070-1090 levels

2006-10-11T10:37:00.000-07:00

On the charts SESA GOA has given a break out @ 1060 levels.

So far SESAGOA has underperformed the market to a tune of 34% in the last 4 months and an exepctation of firming up of ore price and a result season around the corner .A surge in price may be exepcted.

value pick : PYRAMID RETAIL ( accumulate @ 90 levels)

2006-09-30T23:41:00.000-07:00

investment idea : EMCO ( BUY @ 510 levels)

2006-09-19T07:11:00.000-07:00

value pick : VAIBHAV GEMS

2006-09-17T05:16:00.000-07:00

Vaibhav Gems (Vaibhav) is arguably the largest and among the lowest cost
producers of gemstone-studded jewelry.

Advantage Vaibhav Gems:

1.In the jewelry business, vertically integrated companies that control all segments of
the value chain enjoy a distinct competitive advantage compared to resellers. Thus,
with a view to achieve complete integration, Vaibhav Gems acquired the STS Group
for Rs3.1bn . The acquisition brings to Vaibhav’s fold expertise in raw material sourcing, manufacturing capabilities in Thailand & China, marketing network in USA, Canada and UK, and access to new markets like Japanwhile simultaneously adding capabilities in retailing.

2.Direct sale is another emerging trend in the jewelry industry. In select locations, the jewelry industry has been very successful in selling through alternative channels. To take advantage of this emerging opportunity, Vaibhav has set up a TV channel in the UK called The Jewelry
Channel (TJC). Through this vehicle, the company plans to tap into the US $10bn
jewelry market in the UK. Currently, it is estimated that only ~6% of jewelry sales
in UK are conducted through TV; the market is growing at a rapid pace (45%
CAGR over FY03-06).

3. Vaibhav Gems is foraying into diamond jewelry by leveraging on existing relationships. The toughest part of growing in the business is establishing credibility given that Vaibhav is already a well-established player in the gemstones segment, it would be easier for the company to penetrate into large retailers for diamond-studded jewelry. Also presence of Warburg Pincus which holds 27% direct investment in the co would go a long way improving its image and help it access business channels . The market is significantly bigger for diamonds 70% of the US market compared to 11% for gemstone jewelry,
and therefore will offer scale.

4.The price of allottment to Warburg Pincus was in the range of Rs 280 or less than Rs 275 apiece, it added. These shares or warrants convertible into equity shares will represent up to 27.29 per cent of the total post-issue paid-up capital of the company on a fully diluted basis.Since this developemnt in late 2005 we have not seen the current price levels and we think there would not be a huge downside from these levels.
Also the volumes have dries up indicating lack of interest for investors to sell out.

5.Also with festive season around the corner Diwali , Christmas the sales should zoom owing to the seasonality effect.

Considering these factors Vaibhav Gems @ 280 levels is an accumulate on dips.

STANDARD INDUSTRIES

2006-09-14T11:19:00.000-07:00

A strong accumulation has been going on...the real estate story is in play here too.
Company is loss making how ever there seems to be strong operator interest owing to value unlocking from the sale of land.

Point to be noted is that the company holds huge tracts of land in Mumbai which were earlier acquired for its textile operations.

HIGH RISK but worth a look..

ALLSEC Technologies : Carlyle's value add

2006-08-24T10:01:00.000-07:00

Allsec Technologies Limited has informed the Exchange that the Board of Directors in its made the following allotments of shares and warrants to the First Carlyle Ventures, Mauritius as per the details below :-

Name of the Allottee : First Carlyle Ventures Mauritius;
No. of Shares : 30,21,685 equity shares of Rs.10/- each at a premium of Rs.250/- per share; No. of Warrants : 1,60,728 warrants, each warrant convertible into one equity share of the Company at a conversion / exercise price of Rs.260/- per resultant equity share.
It is 20% full equity and 1% as warrants

Going ahead it seems Promoters would hold about 31%, and Probably Carlyle will end up holding 35 or 40%.
The promoters feel, " However Carlyle's fund has shown good incentives for us to run the company. For the next four years, we are pretty much on the win side for the company and we will be part of the management team running the company. "

It is confirmed that carlyle will take 30% of allsec and in the future it might outsource a portion of its work to allsec

Short to medium term( 3 months ) target 300+ .Have an eye on it.

SYNGENTA -- under valued comapred to peers

2006-08-21T23:16:00.000-07:00

With the news of certain American Hedge Funds taking position in the stock with reasonings like , " Syngenta in Switzerland is a big company trading at PE of 20-21. In India, one can buy at the component at PE of 8-9. If one sees the growth prospectus in India, there is a lot of potential." there seems to be lot of genuine buying interest coming into the counter.

Also on the valuation based on peer performance basis shown below we beleive that SYNGENTA deserves a re-rating.

Company Sales (rs cr.) PAT (rs cr.) Market Cap (rs cr.)
Novartis 525.30 107.89 1,518.26
Monsanto 378.90 76.78 1,357.84
Syngenta 767.13 80.22 977.99
Bayer Cropsc 679.05 37.15 581.42

2 high risk stocks with a 2-3 months outlook

2006-08-20T23:01:00.000-07:00

TITAGARH INDUSTRIES :
this Calcutta co is promoted by the Choudhry family.Recently ChrysCapital took a 10% stake in another company( Titagarh Wagons) owned by the same promoters paying in the region of $10-15 million.
This is not the first strategic investment in TWL, which plans to go public in 3-9 months.
Another private equity firm and a hedge fund already hold about 14 per cent stake in the company. According to Mr JP Chowdhary, Chairman of TWL, it has charted out an aggressive growth plan involving an investment of about Rs 100 crore. "Our plans include setting up a greenfield facility and we are also looking at acquisitions in both India and overseas."
Hence with TITAGARH WAGONS IPO hitting the market we expect Titagarh Ind to reap windfall gains , owing to the cross-holdings.

GEODESIC INFORMATION SYSTEMS:
all set to cross Rs 200 in the medium term. Have an eye on it

monthly pick: RELIACE COMM

2006-07-12T22:16:00.000-07:00

by around 265 targetting 300

weekly trading picks 3-7-06

2006-07-02T04:35:00.000-07:00

JINDAL SAW @ 260 levels targetting 285 with a stop-loss @ 240 levels.
call validity: 3 trading days.

AMTEKAUTO @ 290 levels targetting 350 .
call validity: 12 months.
more in the deatiled report.

trading calls 25-6-6

2006-06-24T04:44:00.000-07:00

BUY ATFL @92 levels targetting 98-100 levels
Time frame 15 days

BUY AMTEK AUTO @295-300 levels targetting 375
Time Frame 12 months

investment idea: BOSCH CHASSIS ( formerly Kalyani Brakes )

2006-06-15T05:10:00.000-07:00

BOSCH CHASSIS ( formerly Kalyani Brakes) is a part of the Robert Bosch group , Germany after Bosch in June 2005 signed an official agreement to purchase Kalyani’s stake for Rs2.75bn (US$63m), boosting its own share to 80%. Bosch and Kalyani Group owned a 40% stake each in the joint venture, while the remaining 20% is held by public shareholders. After completing the share transfer, Bosch has renamed the company Bosch Chassis Systems India.

The company manufactures hydraulic and air brakes and brake systems for light and heavy commercial vehicles and passenger cars.It produces brake systems such as tandem master cylinder, front caliper assembly, etc,. and supplies them to Original Equipment Manufacturers.
Bosch also plans to extend its worldwide manufacturing base for modern braking systems to India, including manufacture of the antilock braking system (ABS).

Shareholders (percentage ownership)
Foreign Promoters/ Collaborators 80.00%
Indian Public 11.92%
Private Corporate Bodies 3.87%
Mutual Funds & UTIs 2.63%
FIIs 1.43%
NRIs/OCBs 0.14%

INVESTMENT RATIONALE :

1>The effective acquistion price of Bosch Group works out to Rs 685 per share .The acquistion is not a trading investment. We have seen that whenever Bosch Group has started buying out from the open market as in the case of MICO which happened 4 years back the stock price has zoomed close to 10 times now from those levels.Heuristics makes the beleif stronger for this case.

2> Kalyani Group's exit was a part of overall strategy to focus on core business( Bharat Forge)
and not a desparate sell-off.

3> Low liquidity of stock.Prices can get driven up fast whenever the market realises the potential.

4> Huge potential of India as an auto outsourcing hub and low cost destination.
The Indian auto-ancillary sector has grown at a CAGR of 16% over the last eight years
(FY06 revenues at US$ 10bn). Exports accounted for 18% of revenues in FY06 and
have grown at a 24% CAGR over the period. US and Europe each account for 30% of
exports.
Over the next five years, the sector’s domestic revenues could grow by15% and exports
by over 30%. Several global auto OEMs/vendors are running into losses
due to competition from Asian OEMs, and wage and environment dynamics in those markets. More than being a strategy, outsourcing has become a survival issue for these companies.
Labour-intensive components will see maximum outsourcing as wage costs of global vendors in forgings are around 30-35% compared to 6- 8% for Indian vendors. India ranks ahead of China in cost competitiveness due to higher degree of engineering and processing skills in forgings, castings, stampings, and engineering services.

VALUATIONS:

Return on Total Assets (ROTA) 12.23%
Return on capital employed (ROCE) 23.17%
Net profit margin 8.81%
Current Ratio 1.16
Quick Ratio 0.91
Gearing Ratio 81.66
Interest Cover 55.91

Company Sales (rs cr.) PAT (rs cr.) Market Cap (rs cr.) PE P/BV
Amtek Auto . 655.53 92.85 3,680.30 25.7 4.41
Bosch Chassis . 365.63 32.43 881.24 15.4 8.77
ANG Auto Ltd. 19.00 1.01 327.39 34.2 1.41
Rane Brake 139.44 19.08 139.03 10.1 22.70

Thus we see Bosch Chassis depite superior parentage appears cheaper than its
peers on the basis of PE , P/BV and Sales/ MktCap .
With the macro signals positive and earnings visbility for the auto ancillary its
valuations are decent.

RECO: A BUY at current levels of INR800 and an accumulation at every fall with a medium to long term perspective