Friends, I have been silent on this blog for some time. Well, no prizes for guessing, most of the talking has been done by FIIs and foreign funds elevating SENSEX & Nifty to all time highs for the 2nd time in Indian Finance history. Sensex touched 20000 mark once again in 2.5 years time - an incredible achievement - it happens only in INDIA !!
Folks who are invested in blue chips make the merry - ON TOP - as we all know this whole Sept rally (Nifty zoomed from 5400 odd levels to peak @6030) was led by large caps primarily. I will suggest all such folks to remain invested as we can see prolific buying in next quarter. There might be a genuine monthly October correction (partly due to continuous 10 days of FII rally and partly, on historic October downfall trends) probably to 5700 levels, take a breather and then Sensex should rally again in November & December (I assume there is no -ve financial storm in any foreign market)
I also foresee that small caps & even mid caps to some extent, can rally in near time as they were silent spectators to current Sept FII rally. On contrary, lot of recommended stocks have corrected a bit and this is aother golden oppurtunity to enter at current levels. Lastly, I will say that we wont see a similar turmoil as seen post Feb2008 Sensex peak. We dont expect a sharp correction this time as rally is rationally supported by great Indian Inc growth story and corporate earnings. With above than normal monsoons, we are on edge of another fruitful financial quarter and soon I will update with Sept Q results for all recommended stocks.
Happy investing :)
Thursday, September 23, 2010
Thursday, September 2, 2010
SATHAVAHANA ISPAT LIMITED - BUY!
Business : Today I bring to limelight another dark horse in Iron & Steel industry - SATHAVAHANA ISPAT LIMITED - a growing player in production of Pig Iron & metallurgical Coke. Established in 1989, Hyderabad based SIL is engaged in the manufacture and sale of pig iron in core sector of the iron and steel industry. SIL has also started production of metallurgical coke - a key input material for Iron making. Off late, SIL is on a mass expansion spree – raising funds via issue of convertible warrants - to finance scaling its coke and pig iron producing capacities & increasing its market presence with a dual play! It recently started operation in its newly build 30MW co-generation of power in the Bellary district of Karnataka completing all background formalities along with signing Power Purchase Agreement (PPA) too. This co-generation facility would now take up expansion of the coke facility by 1.5 Lakhs TPA (Total of 4.5 L TPA now) and co-generation power to 10 MW with surplus metallurgical coke production to be sold in nearby market. Therefore, with the augmentation of enhanced pig iron and coke capacity together with upcoming cogeneration of power at the Greenfield site, SIL takes fullest possible advantage of the current uptrend in the Indian Iron and Steel industry.
Financials : The company has posted a trailing EPS of 7.73 (80% jump over FY09) for FY2009-10 with a topline of 384.7 crores and Profit of 25.44 crores (67% up from FY09). The company continues to grow as per its expansion plans declaring strong June10 Q results – an EPS of 3.48 (double of last FYQ1 earnings) with sales zooming to 105.6 cores. Going forward, considering strong core market penetration, this company is heading for an annualized EPS of 14 or so this FY. At current price of 50 Rs – SIL is dirt cheap and available at a PE of less than 4. The stock is a MUST BUY!!
Positives – The company has a consistent SHP which increased from 25% to 36% around in last 8 years – promoters are quite confident.
- Trouble time for Chinese Iron & Steel Industry - Chinese government decision for removal of tax rebates on steel products and ongoing appreciation of Chinese Yuan currency will put Chinese Steel companies to pass on the additional costs to the exporting countries, making Indian exports much more competitive!!
- India being the fifth largest steel producer is currently witnessing a boom in Iron & Steel industry with 2008 recession story left far behind.
Negatives – There are some competitors in the organized sector.
Conclusion : At a price of around 50 Rs, SATHAVAHANA ISPAT LIMITED is seriously lying abegging for buy. Start accumulating the scrip within 49-53 range and I can foresee a target of around 80+ in next 6 months visualizing a future annualized EPS of 14 this FY. In the long term the scrip can turn out to be a multibagger.
Financials : The company has posted a trailing EPS of 7.73 (80% jump over FY09) for FY2009-10 with a topline of 384.7 crores and Profit of 25.44 crores (67% up from FY09). The company continues to grow as per its expansion plans declaring strong June10 Q results – an EPS of 3.48 (double of last FYQ1 earnings) with sales zooming to 105.6 cores. Going forward, considering strong core market penetration, this company is heading for an annualized EPS of 14 or so this FY. At current price of 50 Rs – SIL is dirt cheap and available at a PE of less than 4. The stock is a MUST BUY!!
Positives – The company has a consistent SHP which increased from 25% to 36% around in last 8 years – promoters are quite confident.
- Trouble time for Chinese Iron & Steel Industry - Chinese government decision for removal of tax rebates on steel products and ongoing appreciation of Chinese Yuan currency will put Chinese Steel companies to pass on the additional costs to the exporting countries, making Indian exports much more competitive!!
- India being the fifth largest steel producer is currently witnessing a boom in Iron & Steel industry with 2008 recession story left far behind.
Negatives – There are some competitors in the organized sector.
Conclusion : At a price of around 50 Rs, SATHAVAHANA ISPAT LIMITED is seriously lying abegging for buy. Start accumulating the scrip within 49-53 range and I can foresee a target of around 80+ in next 6 months visualizing a future annualized EPS of 14 this FY. In the long term the scrip can turn out to be a multibagger.
Tuesday, August 31, 2010
Market Correction - Buy on dips ..
Are you worried with the current market correction?? Not be so.. it's a healthy sign for further rallies .. Nifty has corrected by around 4% from a peak of around 5530 mid August & currently at 5350 levels. All my stocks are available @recommended prices or on slight dips which is a golden chance for those to enter who have missed the bus so far!! Correction are wonderful buying oppurtunities & India Inc is a growing chapter after 2008 recession.. So BUY NOW... Make use of current market dip...
I believe Nifty is poised to make new highs - cross 6250 mark by 2011 March !! So make the right move... Please dont be disturbed by -ve market sentiments from a few analysts ..
REMEMBER : Undervalued Stocks of stable companies with strong earnings growth will continue to ride on beyond market corrections ... The only thing we should be cautious is a near recession which I dont see currently !
I believe Nifty is poised to make new highs - cross 6250 mark by 2011 March !! So make the right move... Please dont be disturbed by -ve market sentiments from a few analysts ..
REMEMBER : Undervalued Stocks of stable companies with strong earnings growth will continue to ride on beyond market corrections ... The only thing we should be cautious is a near recession which I dont see currently !
Monday, August 30, 2010
Dujodwala Products Limited - BUY NOW!
Business: Today I bring up another star player in field of Commodity chemicals & Resins – DUJODWALA PRODUCTS LIMITED – a pioneer in the field of Rosin and Terpene Chemicals. Based out of Maharashtra, DPL changed gears a couple of years back & forayed into producing variety resins – comes out to be the Game changer for the company which has been inflating its bottom-line and earnings exponentially Q over Q. DPL has its own indigenous state-of–art production plants equipped with most modern machinery and test laboratory facilities to meet the toughest norms of international quality controls. They produce Camphor derivatives, pine oils, Rosin, Turpentine oil derivatives and a range of Resin variants covering the following potential big markets:
- Pharmaceuticals / Pesticides
- Adhesives/Paints/Benzon
- Perfumery products / Pooja & Aarti products / Agarbathis / Nail polishes / varnishes
- Tyres / Rubber
- Textile / Leather derivatives
- Printing Inks
… & many more industries.. the list is endless.. the market reach & base is infinite …
Financials : The company has posted a Trailing Twelve Months - TTM EPS of 8.36 (whopping 1200% up from FY09) with a topline of 145.8 crores and Profit of 7.21 crores (whopping 1300% from FY09). The company continues to grow zooming northwards declaring mind-blowing June10 Q results (believe me !!) – an EPS of 5.23 (compared to 0.76 last FYQ1). Going forward, considering infinite addressable market and strong earnings growth, this company seems heading straight for an annualized EPS of more than 15 this FY itself. At current price of 57 Rs – you don’t have to think twice .. DPL is seriously undervalued and available at a PE of less than 4. The stock is a SURE SHOT BUY!!
Positives – The company has a strong SHP which increased from 41% to 44% now in last 4 years – you see that promoters are very confident about future performance & growth.
- Paid up equity capital has not increased in last 2-3 years.
- DPL has reach in almost every business vertical & in a country of 120 crores population you can easily imagine the horizontal demand explosion.
- This stock is recession proof.
Negatives – There are a few competitors in the organized sector.
Conclusion : The stock has a decent run so far this year to reach 54-58 levels. Time to HURRY UP to buy DUJODWALA PRODUCTS LIMITED at current levels before DII & FII start investing. Beyond doubt, this stock has the potential to double in next 6-7 months duration visualizing an EPS of 15+ on a conservative basis this FY. If the company continues to perform well as shown by its profits & earnings, the stock is a long term hold.
- Pharmaceuticals / Pesticides
- Adhesives/Paints/Benzon
- Perfumery products / Pooja & Aarti products / Agarbathis / Nail polishes / varnishes
- Tyres / Rubber
- Textile / Leather derivatives
- Printing Inks
… & many more industries.. the list is endless.. the market reach & base is infinite …
Financials : The company has posted a Trailing Twelve Months - TTM EPS of 8.36 (whopping 1200% up from FY09) with a topline of 145.8 crores and Profit of 7.21 crores (whopping 1300% from FY09). The company continues to grow zooming northwards declaring mind-blowing June10 Q results (believe me !!) – an EPS of 5.23 (compared to 0.76 last FYQ1). Going forward, considering infinite addressable market and strong earnings growth, this company seems heading straight for an annualized EPS of more than 15 this FY itself. At current price of 57 Rs – you don’t have to think twice .. DPL is seriously undervalued and available at a PE of less than 4. The stock is a SURE SHOT BUY!!
Positives – The company has a strong SHP which increased from 41% to 44% now in last 4 years – you see that promoters are very confident about future performance & growth.
- Paid up equity capital has not increased in last 2-3 years.
- DPL has reach in almost every business vertical & in a country of 120 crores population you can easily imagine the horizontal demand explosion.
- This stock is recession proof.
Negatives – There are a few competitors in the organized sector.
Conclusion : The stock has a decent run so far this year to reach 54-58 levels. Time to HURRY UP to buy DUJODWALA PRODUCTS LIMITED at current levels before DII & FII start investing. Beyond doubt, this stock has the potential to double in next 6-7 months duration visualizing an EPS of 15+ on a conservative basis this FY. If the company continues to perform well as shown by its profits & earnings, the stock is a long term hold.
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