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Kernex Microsystems – Stock Investments

admin — Fri, 22 May 2009 02:51:32 +0000

Kernex Microsystems is engaged into manufacturing of Networked Anti-Collision Devices (ACD) for Indian Railways and had installed over 2,500 kms. in Indian Railways since 04 – 05.

· These ACDs are supplied by the company to Railways, through Konkan Railways, under its exclusive Technology and Production Tie-up.

· Railways Board, after review of ACD Pilot Project in North Frontier Railways, set by the company, declared it to be completed, commissioned and proved to be successful. According to Railway Safety Plan, ACD Systems will be deployed in the entire Indian Railway Network by 2013 and survey over 10,000 kms is in progress.

· Railway Minister Lalu Prasad Yadav has cleared deploying thee ACDs under Railway Safety Plan, in its 08 – 09 budget. This was pending for quite a long time, which finally saw light of the day.

· The total outlay by Railways on these ACDs, till 2013 – 14 is estimated to be about Rs.3,500 crores, taking cost escalation and design changes into consideration and for about 56,000 kms., covering all routes of Indian Railways. So, annual flow of orders to the company, could be about Rs.400 crores.

· For FY 07, total income of the company was at Rs.29.68 crores, of which Rs.6.90 crores came via bank interest and provisions written back. Due to this, EPS for the year, was at Rs.5.61. The income of Rs.21.80 crores from its core business is purely of maintenance of ACDs supplied earlier by the company, which is about 15% annually, of cost of equipment.

· Even in first nine months of FY 08, total operational income of about Rs.15 crores is purely from AMC of ACDs supplied by the company to Railways, earlier. Even this activity would give an EPS of about Rs.5 to the company.

· The present paid-up equity of the company is at Rs.12.50 crores, which got raised due to 1 bonus share, issued on every 10 shares held, by the company. Of this, promoters holding is 58% while 42% is held by the public.

· The EBITDA margin of the company on these ACDs are over 40% and costs about 35% to 40% against similar devices, if imported. Also, any supply of ACDs gives an assured AMC of 15%, every year, to the company, on equipments supplied. ACDs supplied by the company in 05 – 06 is enabling the company to earn an AMC revenue of Rs.20 crores, annually, by which EPS of about Rs.5 is being earned.

· Once this supply will start to Railways, the performance of the company, would come in new orbit with EBITDA in excess of Rs.50 crores, depending upon the quantum of order flow from Railways. Even bottomline could be close to Rs.25 crores, giving an EPS of Rs.20 as the company has least interest and depreciation burden.

· The company is also aiming to capture the major segments of medium to light density Rail routes in developing countries, as the ACD system is efficiently suited and cost effective. The company is hopeful of securing ACD orders from countries like Egypt, South Africa, Brazil, Argentina, Venezuela, Indonesia, Cambodia and Vietnam.

· Even continuous upgradation keep happening in ACDs as R&D is the main focus of the company. This would keep demand of improved version products in place, which shall assure continuous and assured business to the company.

· The company also makes Advanced Railway Signal Systems, for which major trust has been given by Railways in its recent budget. This could be another area of growth for the company.

· The company is also developing “Multi Section Digital Axle Counter” in collaboration with Altpro, Zerob, Croatia and Indian Railways has requirement of about Rs.600 crores, in the next five year for this product.

· The company also makes Auto Driving Devices for Metro Railway, which would be developed once Indian Market for the same is developed.

· The company is a debt free company and Rs.99 crores, raised by the company from IPO is still available with the company.

· With expectation of these Railway orders, working of the company would improve sharply from FY 09. Since the sector enjoys a very high PE multiple, share had potential to cross Rs.500 mark in the next 10 – 12 months. Long term prospects are extremely bright.

· Share at Rs.220 is a safe bet which can give a return of 100% in the next 12 months and a consistent return of 40% to 50%, annualized, over the next 2 – 3 years.

Stock Advice On Mangalam and JK Cement

admin — Sun, 26 Apr 2009 03:07:42 +0000

SMALL CAP
ICICI Securities & PINC

JK CEMENT CMP: Rs 59
JK Cement’s 3 mt greenfield plant at Karnataka is likely to be commissioned in Q1FY10, which will increase grey cement capacity by 68% to 7.4 mt. Also, with softening interest rates, a sharp decline in pet coke prices and firming up of cement prices in key markets, the macroeconomic conditions of JK Cement have improved significantly.

MANGALAM CEMENT CMP: Rs 81
MCL recently made an entry in the western market by tapping Pune in Maharashtra. It caters to the northern part of the country. The capacity addition of 0.5mn tonne following modification and upgradation was completed in September 2008 and the full impact of the same is expected to be realized from Q4FY09.

Stock Advice On Prism and Madras Cement

admin — Sun, 26 Apr 2009 03:05:21 +0000

MID CAP
Anagram StockBroking & Emkay Global Financial Services
PRISM CEMENT CMP: Rs 29
We expect another 100 mt of capacity to be added over three years. The company has placed orders for core equipment with F L Smidth & Co AS, Denmark, and Koeppern, Germany, for the brown-field expansion at Satna and has finalised civil, mechanical & other contracts. It has targeted the commissioning of the plant in September 2010.

MADRAS CEMENT CMP: Rs 84
We expect Madras Cement to be the prime beneficiary of 60% drop in global coal prices in the subsequent quarters because it imports 70% of its coal requirements from abroad. We are likely to revise upward our FY2010 earnings estimates to reflect benefits on lower freight & packaging cost, lower coal prices and revised excise duty.

Stock Advice On Grasim and Ultra Tech

admin — Sun, 26 Apr 2009 03:01:23 +0000

LARGE CAP
Sharekhan & Karvy Stock Broking
GRASIM INDUSTRIES CMP: Rs 1,803

The management expects a 10% volume growth in FY2010 over FY2009. Grasim has raised cement price by Rs 5 to Rs 8 per bag in the past couple of months (February 2008–March 2009) and is expected to sustain the higher price. On the other hand, investment in captive power plant (CPP) will bring down the power cost.

ULTRATECH CEMENT CMP: Rs 566
It has an installed capacity of 19.5 mt, which will rise to 23.1 mt in Q1FY10. The company is in the last leg of its capex plan to the tune of Rs 4,470 crore for increasing capacity by 4.9 mt. The volume growth, which is higher than the industry’s growth, and cost reduction by Rs 288/t would increase its market share by 110 bps.

Stock Advice On Infosys Technologies Ltd

admin — Thu, 23 Apr 2009 13:14:07 +0000

Stock Advice On Infosys Technologies Ltd. – INDIABULLS

near-term outlook
Infosys Technologies Limited (Infosys)’s result for FY09 was in line with our estimates. For Q4’09, Infosys reported a decline of 2.6% qoq to Rs. 56.4 bn in its top line largely due to increasing pricing pressure and sluggish volume growth, partially offset by the depreciation in the rupee against the dollar. Besides, revenues in the USD terms went down by ~4.5% qoq. Other than this, weak operational performance and increase in the SG&A expenses led
to fall in the EBITDA margin by 154 bps qoq to 33.6%.Price erosion is inevitable
Billing rate for the quarter went down 2% and 4.2% qoq for onsite and offshore, respectively, indicating that clients renegotiated their contracts and new deals were signed at lower pricing. In our view, this trend is likely to continue, considering that the large clients from the developed economies are likely to demand price cuts. Thus, we expect billing to decline by 2–3% per quarter for the next 4–5 quarters.

Client engagement to help in the medium term
Infosys is focusing on client engagement and has guided to increase its selling & marketing efforts in the near term. Consequently, we expect SG&A expenses to increase by ~5% in FY10, which will strain the margins in the near term. However, this can benefit the Company in winning large deals in the medium term.

Potential strategic acquisitions to strengthen its positioning
Infosys has a strong balance sheet position along with a huge liquidity advantage in the current weak market scenario as it maintains a cash balance of USD 2.2 bn. In our view, the Company can use cash for strategic acquisitions in the next 12–15 months, which will strengthen its service offerings. Moreover, potential acquisitions in high end services such as consulting and system integration space can help to revive the margins.

Stock Advice On YES Bank

admin — Thu, 23 Apr 2009 13:04:09 +0000

About The Company

yes bank is a small scale bank , having a limited working area with counted customer group and very less familiar among the public in the domestic market.

The stock has been fairly fancied on account of developing bank unit but still not in lime light as other banks.About The Results

Yes Bank has posted good results for Q4 with total income rising to Rs.656 crores against Rs.494 crores in the corresponding quarter of the previous year. PAT for the quarter is at Rs.80.11 crores against Rs.64.50 crores, resulting in an EPS of Rs.2.70 for Q4, against Rs.2.18 of the corresponding quarter of the previous year.

On an annualized basis, the performance of the bank has been quite exemplary with total income at Rs.2,438 crores against Rs.1,665 crores of FY 08 while EPS for FY 09 touched in double digit at Rs.10.25 against Rs.7 of FY 08. It has been feared that NPAs of bank will rise, due to defaults and slowdown, but, this has not seen happening adversely in case of the bank. Net NPA of the Bank, as at 31-03-09, has been at 0.33%, while gross NPA is at 0.68% with capital adequacy ratio of 16.63%. Even, average return on assets has been at 1.52% on annualized basis.

About The Stock

Share touched its 52 week low of Rs.41, on 9th March 09, when all the private sector banking stocks took a beating. Since then, it has been going up and now ruling at Rs.77, which discounts its historic earnings by less than 8 times. It is certain to see growth from bank, even in FY 10 and an EPS of Rs.12 is most likely, which discounts the current price by about 6.50 times. Those who have 6 months view can expect the share price to move in three digits. Price behavior of this stock remind us of old price movement pattern of HDFC Bank, about 12 years back, which has now become a private sector giant. This Bank also has all such ingredients to grow big in the long run.

Some partial investment could be made in dips.

Stock Advice – Tata Steel

admin — Thu, 23 Apr 2009 01:51:11 +0000

Sell Tata Steel and Sterlite at higher levels of course that is a very short-term strategy because Tata Steel on March 6, it was just below Rs 150, it has already advanced by about more than 100% in 40 calendar days time. Today is the 45th day, so here you expect some kind of correction because it may actually come down some more and after that you actually take positions in that. Similarly for Sterlite, I would wait for some correction to happen before I enter into it.

My reasons for doing so is that if you look at the commodity complex globally both metals well as the other commodities the distance contract of May 2010 other than the soybean complex is attracting 17% to about 27% carry charges – these are too high. So immediately either metals or other commodities may not show a good bounce except soybean, which may correct a bit and then move up further. So I would rather prefer to buy Tata Steel and Sterlite and other metal stocks on decline and not here.

Birla Cotsyn India Ltd – Stock Investment

admin — Sun, 12 Apr 2009 06:02:51 +0000

Birla Cotsyn India Ltd

BSE CODE – 533006
PRICE ON 10/04 – 03.86
SECTOR – Textile
BUY RANGE – - 04.00 – 05.00
52W Low/High – 03.00/17.50

Birla Cotsyn (India) is engaged in cotton ginning, pressing and oil expelling. It was converted into a public limited company with effect from May 30, 2006 and is part of the Yash Birla group.

The company has its units located in Khamgaon, Ghatanji and Dhulia. The textile project at Malkapur has been granted the mega project status by the Maharashtra government and will get fiscal benefits over the next 5 years.

As part of phase II of its expansions plans, the company will manufacture finished cloth with an installed capacity of 50,000 meters per day by setting up a dyeing and processing unit. In addition to the current expansion plans, it plans to start manufacturing its own branded garments in 2009 and has put up around 20 retail outlets across major cities in the country.

EVINIX ACCESSORIES LTD – Short Term Investment

admin — Sun, 12 Apr 2009 05:58:03 +0000

EVINIX ACCESSORIES LTD

BSE CODE – 532818
PRICE ON 10/04 – 02.40
SECTOR – Fashion Accessories/Apparels
BUY RANGE – - 01.50 – 3.00
52W Low/High – 01.49/18.70

Evinix Accessories (EVINIX) is in the business of designing and manufacturing fashion accessories and garments for exports as well as domestic markets. The company offers products in two categories. Fashion accessories includes caps, hats and bandanas, sports bags, ladies fashion bags, soft travel bags, wallets, leather belts, fashion belts, coin purses, travel kits, gift giveaways, wraps, stoles, scarves and shawls, baby bibs, cribs blanket and beddings. Fashion apparels include kidswear like trousers and tops (denim and non denim) and women`s wear like tops and dresses.

The company also undertakes bulk trading of processed and greigh fabrics. Two plants including a 100% export oriented unit in Faridabad, Haryana have in-house facilities for fabrication, washing and embroidery.

The combined installed capacity for fashion accessories and garments is 2 million pieces. The capacity after ongoing expansion, including the unit at NSEZ, Noida, would be 3,000,000 garments and 3,500,000 accessories.

The major buyer of products in the domestic markets includes Adidas India Marketing, Gokaldas India and Arvind Brands in Bangalore, V & S International Haryana. The company has entered into a licensing and sales agreement for caps and bags in the Gini & Jony brand. Overseas buyers include The GAP USA; Esprit Europe Trading & Product Development, Germany; Next Retail, UK; H & M Hennes & Mauritz, Sweden; Fashion Box Industries, Italy; and Debenhams Retail, UK.

Some of the new international brands on this division’s client list include American Eagle (US), Cecil (Germany), Next (UK), Fun & Basics (Spain), along with domestic brands like Puma and Gant. Evinix has been adding new products and new buyers at a very rapid pace in the Fashion Accessories segment. The company employs more than 700 people in the manufacturing facilities and also has a management and administrative staff of 150 people.

Cut Stores

CUT, a MaBS (Many Brand Store), addresses the young audience between 16 and 35 years, and is a home to 61 global brands (Adidas, Puma, Kappa, 454, Purple Wine, Reebok, Lee, Levi’s, Mercedes Benz, to name a fews). CUT is an acronym for Comfortable, Urban and Trendy. Evinix is setting up CUT stores (averaging 4000-5000 sq feet) in fast urbanizing young Indian towns. Company-owned and company managed, the CUT stores are brand selective and sell merchandise across the entire range of Apparel, Footwear and Accessories for young men and women. Strategically located on the high streets, close to universities and youth hang-outs, the stores boast of truly youthful and high spirited ambience.

Certifications/Awards
Registration by the Fair Trade Organisation, UK, as per international standards set by the international certification body, Fairtrade Labelling Organisation International (FLO).

Worldwide Responsible Apparel Production (WRAP) registration, USA, as a mark of compliance with a growing list of retailer requirements and audits of factories, based upon 12 principles established by WRAP.

Garmenting, knitting and processing operations have been evaluated, approved and certified by Control Union, Switzerland, earlier known as SKAL.

Awarded Silver Trophy, the second highest award in the 100% EOU/EPZ- Made-ups category, for determined marketing and promotional efforts that led to cotton made-ups exports of over Rs. 5 crores (for outstanding export performance in the year 2001-02) by TEXPROCIL, The Cotton Textiles Export Promotion Council, India.

One of the few companies to get a certificate of quality from Flocert, Germany, for maternity wear.

PASS (Perfect Asia Sourcing Services) is a hologram of quality certification. Every product quality-checked through CUT, is fixated with a unique PASS hologram, doubly assuring the authenticity of the quality of the product.

I expect, this scrip will be a multibagger with in few years or after the recession menace. They have all that stuff to make our teens addicted.

Western India Shipyard Limited – Multibagger

admin — Sun, 12 Apr 2009 05:52:16 +0000

BSE CODE – 531217
PRICE ON 10/04 – 5.20
SECTOR – Ship/Rig Repairing/Manufacturing
BUY RANGE – - 3.00 – 5.00
52W Low/High – 03.10/35.00