Monday, January 4, 2010

Best stock bets for 2010

ET spoke to some of the savviest players to feel their pulse . Here are some of their picks...

Honda Siel Power

By: CJ George, MD, Geojit BNP Paribas Financial Services

CMP: 263
1Yr Return: 75% P/E: -45.0
Market Cap: Rs 267 crore

Production is on in full swing at Honda Siel Power’s Greater Noida plant, as part of its parent company’s bigger game plans for India. Consolidation of component making and assembly operations at one place is expected to save costs considerably, thereby boosting profitability margins. Current market price of Rs 250 is backed by Rs 160 cash surplus per share and Rs 45 cash earnings per share for FY11.

TTK Healthcare

By: CJ George, MD, Geojit BNP Paribas Financial Services

CMP: Rs 237
1Yr Return: 235% P/E: 20.7
Market Cap: Rs 192 crore

TTK Healthcare is into niche businesses in pharma, FMCG, foods, medical devices etc. It is also working on development of coronary stent, vascular graft and stent graft for thoracic aortic aneurysm and abdominal aortic aneurysm repair. In the coming years, medical devices business will grow at a faster rate with an operating profit margin of 45%.


By: Nirmal Jain, CMD, India Infoline

CMP: Rs 694
1Yr Return: 199% P/E: 25.4
Market Cap:
Rs 1,01,841 crore

Wipro’s focus on cost control has helped it improve its operating margins. The company has diversified its pricing model the most over the past one-year. Contribution from fixed price projects is up almost 10 percentage points YoY. In fact, its onsite realisations are around 5% better than Infosys. Also, better integration among its diversified service offerings are enabling it to win large multi-service deals.


By: Nirmal Jain, CMD, India Infoline

CMP: Rs 1,061
1Yr Return: 281% P/E: 19
Market Cap: Rs 29,712 crore

M&M is perhaps the only player in the auto industry that does not face any significant competitive threat in its core business of tractors from foreign auto-makers. The Centre’s thrust on the rural economy and the rise in outlay of capital has increased the tractor demand. We see tractor industry volumes growing above 15% this year and maintain a double-digit growth for the next two years.

GVK Power & Infra

By: Anup Bagchi, ED, ICICI Securities

CMP: Rs 48
1Yr Return: 108% P/E: 432.3
Market Cap: Rs 7,509 crore

GVK Power & Infra is gaining momentum in all its operational verticals. It is now managing two major airports (Mumbai & Bangalore) in the emerging aviation space, thereby controlling around 29% market share of the aviation passenger segment. The power business is expected to drive operational performance in the medium term on the back of overall generation capacity of around 900 MW.

Indian Hotels

By: Anup Bagchi, ED, ICICI Securities

CMP: Rs 96.4
1Yr Return: 109.6% P/E: 46.4
Market Cap: Rs 6,974 crore

Improving GDP outlook, rising confidence in economic prospects and the ‘Incredible India’ campaign have improved the industry outlook. With travel and tourism demand expected to grow at 8.2% a year in the next 10 years, Indian Hotels is well poised to reap this benefit through addition of around 3,000 rooms across segments over the next two years.


By: Motilal Oswal, CMD, Motilal Oswal Financial Services

CMP: Rs 165
1Yr Return: 139% P/E: 27.2
Market Cap: Rs 4,256 crore

NCC has a strong order book of four times its revenues, and has the potential to grow its earnings at a 33% CAGR over FY09-11. With the Centre giving a strong focus on infra, NCC’s business opportunities will rise manifold. It will witness a significant order intake on the road construction in the next 12 months. Margins will rise due to operating leverage and we also expect working capital ratios to rise.

Sintex Industries

By: Motilal Oswal, CMD, Motilal Oswal Financial Services

CMP: Rs 256
1Yr Return: 34% P/E: 14
Market Cap: Rs 3,502 crore

The worst is over for Sintex and earnings growth is expected to be 30% through FY12, with a return on equity of over 18%. The global economy is recovering from deep recession and Sintex’s overseas units — Nief (France) and Wausaukee (US)— are doing well. Monolithic construction (22% of FY10 sales) has a healthy order book of Rs 1,800 crore, and should grow 60% in FY10 and FY11.

Axis Bank

By: Dinesh Thakkar , CMD, Angel Broking
CMP: Rs 987
1Yr Return: 102% P/E: 18.3
Market Cap: Rs 39,802 crore

Axis bank has raised substantial equity capital to fund growth plans and is poised for market share gains as GDP and capital market activity revives. The banking sector has the potential to grow at a CAGR of 18-20%, and Axis Bank has the ability to grow at least 5% faster than the industry. NPA concerns are receding and could provide upside to the market’s earnings estimates.

Sunday, November 8, 2009

Technical Event® Alerts at Close of Business November 06, 2009

AJAN BSE Amrutanjan Health Care Ltd Continuation Wedge (Bullish) 465.45 638.00 - 678.00

Intermediate-Term Bullish
ANLP BSE Anil Products Ltd Continuation Wedge (Bullish) 130.00 150.00 - 155.00

Intermediate-Term Bullish
CBI NSE Central Bank Of India Continuation Wedge (Bullish) 135.60 172.00 - 180.00

Intermediate-Term Bullish
HYDI NSE Hyderabad Industries Ltd Continuation Diamond (Bullish) 408.00 501.00 - 522.00

Intermediate-Term Bullish
NAFT NSE National Fertilisers Ltd Symmetrical Continuation Triangle (Bullish)

60.70 96.00 - 104.00

Long-Term Bullish
UTVS BSE UTV Software Communications Ltd Continuation Wedge (Bullish) 440.20 566.00 - 596.00

Intermediate-Term Bullish
VYPR BSE Vyapar Industries Ltd Double BottomW 46.10 84.00 - 94.00 Long-Term Bullish

Accumulate Bharti Airtel, target of Rs 358

Angel Broking has come out with a research report on Bharti Airtel's Q2FY10 earnings. The research firm has maintained an accumulate rating on the stock, with a target price of Rs 358, including Rs 56 being the value of its Towerco business, in its report dated November 6, 2009.

"Going ahead, we expect Bharti to record a CAGR of 8.8% and 2% in its topline and bottomline, respectively, over FY2009-11E. At the CMP, the stock is trading at 13.8x FY2011E EPS, at an EV/EBITDA of 7x FY2011E EBITDA and at an EV/subscriber of US $115 on our FY2011E subscriber base. However, considering: 1) The specific nature of the telecom sector, wherein new players are at a material cost disadvantage to incumbents who are enjoying huge economies of scale, 2) Established brands, comprehensive network coverage and widespread distribution also bring down customer acquisition costs for the incumbents, and 3) In the medium-term, we believe that the customer base that the new entrants acquire will have value in the hands of incumbents and consolidation appears the most likely scenario, which will be beneficial for Bharti, we maintain an Accumulate on the stock, with a target price of Rs 358, including Rs 56 being the value of its Towerco business", says Angel Broking.

Angel Broking has come out with a research report on Lloyd Electric's Q2FY10 earnings. The research firm has upgraded recommendation on the stock from

Angel Broking has come out with a research report on Lloyd Electric's Q2FY10 earnings. The research firm has upgraded recommendation on the stock from neutral to buy, with a target price of Rs 76, in its report dated November 6, 2009.

"Lloyd is the largest manufacturer of AC coils in India and also manufactures completely built units of ACs on a contract basis. Most of the AC manufacturers in India feature in the client list of Lloyd. The penetration of ACs is very low in India, at approximately 1.5 - 2%, compared to approximately 20% in developed countries, which will continue to drive the Sales of ACs in India. Further, during FY2009, the company has acquired a plant in Czechoslovakia, from Luvata, which would give Lloyd a foothold in Europe and add to its top-line and bottom-line. At the CMP, the stock trades at 3.4x its FY2011E EPS of Rs 15.1. The company enjoys excellent positioning in the AC market in India and, we believe, that the stock has a limited downside from its current level. In light of the changed business dynamics and consequently revised estimates, we upgrade our recommendation from neutral to buy, with a target price of Rs76", says Angel Broking.

Monday, April 27, 2009

Stock Market Trading Tips

1) We all purchase the vegetables & fruits of the season. For example, if it is the season of Tomatoes, we buy tomatoes more and not Brinjals. This way we get fresh tomatoes at a cheap price. Similarly, in Equities also, we should buy the Equities of the season. I mean equities plentily available in that season. If Banking Sector stocks are beaten down in a particular season, then we should buy banking stocks in that season. That way we get such banking stocks cheap and can cherry pick blue chips of Banking Sector at a cheap price (like fresh tomatoes for a cheap price in the season).

2) Growth is good and welcome at a young age. A child will be thrilled for growing-up. Growth is not so welcome at a middle age and old age. Middle & Old-aged people are scared of growing up and ageing. Before paying a fancy price for any stock for growth, you should consider this rustic rule. Only if the sector is in a nascent stage of growth and the child (company) is healthy, then only you should pay a high price for any growth stock.

3) Even if the tomatoes are fresh, cheap and plentily available in the season, we buy maximum a week's requirement or fortnight's appetite. If you buy more than your appetite (requirement) , they will rot away. Similarly, in the stock market also, even if the shares are available cheap, you should not buy more than your appetite (pocket), by heavily leveraging. Otherwise, you will rot away.

4) While selecting a groom, the parents not only see the boy's earnings, but also his lineage, education, honesty etc., Similarly, while selecting a company for equity investment, we have to not only see its earnings (P/E ratio) but also see its lineage (promoters), its education (corporate governance) and its honesty (fair sharing of riches with all the stakeholders) etc.,

Saturday, March 8, 2008

Global markets all have corrected lately. Irrespective of which market you are investing in, you would have been affected by the recent volatility. You could be an investor in America, India, China, Korea or anywhere else in the world- your situation would be pretty much the same. Many of you who are new investors might have entered panic mode, where you are unable to relax and have lots of stress and depression. I understand how it must be for somebody who just started investing in either stocks or mutual funds two months ago to see a notional loss of 30% or more now.

I remember the first time several years ago when I witnessed a stock market correction, my portfolio was down by over 50% and I too had entered panic mode. But thankfully after reading books on investing and listening to more experienced investors, I decided not to panic and hold my quality stocks. I am a much happier person today thanks to that decision.

Here are seven simple ways to survive a stock market correction as an investor:

1. Stop Listening To Analysts

Most analysts in the media instead of providing you with a solution will just confuse you. Somebody will say everything is doomed while others will say things are great in the long term. Forget listening to analysts- most of them won’t be of any help. The reason people listen to analysts is because they are looking for peace and hope. Trust me you will get none of that by listening to somebody else. Peace and hope are all within you.

2. Stop Staring At Your Portfolio Every Thirty Minutes

Another mistake people make is that they get up every morning and wait for the markets to open. Once markets open they start staring at their stock prices. A fall makes you feel worse and small rise makes you feel a little better. This won’t help either. Instead keep track of the fundamentals of your company every time the results are out. If your company is profitable and growing - be happy. If it isn’t, find out if you need to exit. The stock price will catch up in the near future if business is growing. Do you stare at your money kept in a bank FD everyday? Most probably not. Use the same principle when you invest in stocks or mutual funds.

3. Be Patient

Many of you might not have a lot of cash to buy cheap now; however please be patient with whatever you have bought. Even the youngest billionaire on Earth today is 23 years old. It took him 23 years to be a billionaire and he didn’t do it in few days or weeks. The youngest billionaire probably in history is 23-year-old Mark Zuckerberg - the founder of the social networking site-Facebook.

4. Speak To Actual Investors With Experience

Instead of interacting with analysts or your broker, speak with people who are actual investors and who have been in the market for longer periods of time than you. They will tell you how they have survived various stock market corrections and what has made them richer. Read and learn more about people who have actually created wealth and sustained it over a long period of time.

5. Stop Following Crazy Tips

Please for heaven’s sake stop following ‘hot’ tips which promise to make you a millionaire in a matter of months. Maybe the ‘hot’ tip is only meant for billionaires who would end up as millionaires in case they do follow the tip. If it seems to good to be true, it is probably just a scam, which hopes to take money away from retail investors and put them in the hands of greedy manipulators. Similarly stop following rumours about how fundamentally strong companies are going to be shut down and go bankrupt in the next few months. Use your own head and trust yourself.

6. Understand Market Cycles

Every asset class has a cycle. Stock markets, mutual funds, real estate all move in cycles. Please realize that nothing can keep going up forever in a single direction. There will be phases when prices will come down and again move up. If you go back into history you will see several instances when stock prices came down, however over a period of time quality companies always reward investors. Understand market cycles, and don’t become a slave to them.

7. Follow The Guru

Today the richest man on earth, Warren Buffett, is an investor who has created wealth because he has stayed away from what everybody else is doing and has simply invested in quality companies for the long term. He invested in Gillette, for the simple reason that he believed that men won’t stop shaving. It makes sense to follow, as I call him, “The Guru” and think long term and remember people who create wealth do things that others don’t.

I’m sure if you follow the simple techniques above you will be a much happier and a calmer investor. Investing is about controlling your emotions and being disciplined about what you do.

Wednesday, February 6, 2008

JSW Energy filed papers for IPO

JSW Energy has filed its papers with SEBI for its proposed initial public offering of 6,32,25,000 shares of Rs10 each. JSW Energy plans to raise over Rs 3,500 crore from the issue, to finance construction and development of identified projects aggregating to 3,410 MW in capacity and to repay debt. It has 3,670 MW of generating capacity in the operational, construction or implementation phase as well as has power generation projects at early stages of development with a combined installed capacity of 9,600 MW.

JSW Energy is part of the Sajjan Jindal-led JSW group, which has presence in steel, power, cement, aluminium, software, and infrastructure sectors. JM Financial, Kotak Mahindra Capital and ICICI Securities are book running lead managers to the issue.