Tuesday, December 30, 2008


  • SUN TV was launched in 1993 by Mr Kalanithi Maran.It is a South-India based company and holds a bouquet of 20 top-rated channels in four Indian languages (Tamil, Telugu, Kannada, Malayalam) and 43 FM Radio stations. Every single South Indian channel that boasts of a No. 1 slot among its viewers belongs to the SunTV Network.
  • Sun TV Network has a unique business strategy and enjoys a monopoly-like status in south India with an all-India audience share of 19%. Shift to digital distribution market, high advertising income, stable broadcasting revenues and good radio advertisement revenues can help the company register healthy growth in the next 2-3 years. Sun TV, through its new division, Sun Pictures, has released its first film, "Kadhalil Vizunthen" (Tamil) on 26 Sep 2008.
  • The stock came down from above 450 levels to 122 in just a year or so on conflicts between Marans and M Karunanidhi. But recently the feud has been resolved and the stock once again started trending up.
SUN TV CMP 169 has broken out of a down-channel and can see levels of 205-210 in days to come. Buy with SL 150.

Monday, December 29, 2008

Maruti Suzuki Ltd:-

  • Maruti Suzuki India Limited (MSIL, formerly Maruti Udyog Limited), a subsidiary of Suzuki Motor Corporation of Japan, is India's largest passenger car company, accounting for over 50 per cent of the domestic car market. Maruti offers full range of cars- from entry level Maruti 800 & Alto to stylish hatchback A star, Swift, Wagon R, Estillo and sedans DZire, SX4 and Sports Utility vehicle Grand Vitara.
  • Since inception, they have produced and sold over 7.5 million vehicles in India and exported over 500,000 units to Europe and other countries.
  • Turnover for the fiscal 2007-08 stood at Rs. 178603 Million & Profit After Tax at Rs. 17308 Million. The company has maintained more than 50% market share for the last 7 years on trot.
  • At current valuations, Maruti stock has more market cap than even General Motors, indicating more interest from global investors. US Auto industry has its own problems but Indian story is having temporary problems. Car sales may have risen in December after economic stimulus from government and price-cuts from car companies.
  • Maruti Suzuki on Friday said its domestic car sales - boosted by price discounts and other incentives - are likely to rebound in December after two consecutive months of decline. Compared with November, December sales should be higher by 22%-25%," a Maruti Suzuki executive, who asked not to be named, told Dow Jones. Versus December last year, it should be a rise of 11%-12%." Company sold 58,401 vehicles in December 2007.
  • Maruti says to start Nissan shipment by March2009. Maruti Suzuki's 1st A-Star Export Batch On Way To Port, Maruti Suzuki is Suzuki's exclusive global manufacturer for the A-Star, which will be sold as the Suzuki Alto in Europe, the company said.

Buy Maruti CMP 510 for target 600-620 and above in 2-3 months.

Sunday, December 28, 2008


Company Web Site http://www.rcom.co.in/webapp/Communications/rcom/index.jsp

About the company:-

RCOM is an integrated player in the Indian telecoms sector. It was listed following the de-merger of Reliance Industries. RCOM is the second-largest player in the mobile segment, has an 80,000km-long India-wide optic-fiber network and owns the FLAG submarine cable network. RCOM has three business units: 1) Wireless, which includes a nationwide wireless network on CDMA and GSM; 2) Global Business comprising wholesale voice and data; and 3) Broadband for both retail and enterprise.

Near-term triggers:-

  • RCom wants to do a big rollout of their GSM network – market sources say it will happen in early January 2009. Looking at aggressive marketing of the group so far, this service can help RCom increase market share also.

  • RCom has been the first company to buy back FCCBs in global market:- RCom’s FCCBs are listed on the Singapore Stock Exchange and, till about two weeks ago, the company’s shares in the domestic bourses were trading at a discount of more than 50 per cent to the FCCB conversion price. It is like you take a loan of Rs 10 and have to pay back only Rs 5, it’s something like that. http://www.thehindubusinessline.com/2008/12/12/stories/2008121251801000.htm

  • Recent media reports (Economic Times) stated that potential strategic investors, including Europe/US telcos are in talks with the promoter group of Reliance Communications to acquire 20-26% stake in RCOM via a combination of fresh equity issuance and stake purchase in the secondary market. In a press release on Dec 11, RCOM has stated that it receives proposals from international telcos for expressing an interest in acquiring a strategic stake from time to time. http://www.bseindia.com/qresann/news.asp?newsid={890B4F9E-9E70-469B-A998-04B4B766EA2B}&param1=1

  • Only three months after launch, Big TV, Reliance Communications’ DTH service in India, has passed 1 million subscribers. The key drivers have been aggressive sub acquisition through subsidies of set-top boxes and monthly fees, as well as an impressive marketing and distribution network across 4,000 towns and 103,000 retail outlets.

The company is one of leaders in Indian Telecom sector and warrants a place in the portfolio given its size and brand image.

Buy around 200-220 for investment target of 300 and above in 3-4 months. (Even 1-year timeframe is good enough for such a target of 35-40%)

Friday, December 26, 2008

Market Outlook for Year 2009 by A K Prabhakar (Please wait some time to load the document)
Market Outlook for the Year 2009

Monday, December 22, 2008

BGR Energy Report (please wait some time for loading the report)

CMP Rs 157.70 Book Value Rs 231 EPS Rs 33.60 NPA 1% RoE 14.8%
(2008 figures)

  • OBC, established in the year 1943, is a state owned bank with government ownership at 51.1%. As on 31st March 2008, it has a balance sheet size of Rs. 909 bn with deposits at Rs. 779 bn and advances at Rs. 546 bn. All the 1323 branches of the bank are under Core Banking Solutions. OBC has a predominant presence in metro and urban centres with 55% of its branches in these centres.
  • Alliance with Indian Bank and Corporation Bank
  • The bank has entered into an alliance with Indian Bank and Corporation Bank for building E Payment systems, sharing of IT and Treasury resources, bancassurance,business syndication and sharing of training resources and common procurement of IT and other assets where feasible.
  • Life insurance joint venture with Canara Bank and HSBC
  • OBC has entered into a joint venture for life insurance business with Canara Bank and HSBC Insurance (Asia Pacific). Canara Bank would be holding 51%, HSBC 26% and OBC would hold the remaining 23%.
  • GTB losses a thing of the past
  • Post its merger with erstwhile Global Trust Bank, the bank had to take a hit on its net worth. The bank has been providing Rs. 2.4 bn. per annum on account of write off of GTB losses. However, in FY08, the bank has written off the entire losses with the result that the bank would not have to take further hit on its profits going forward.
  • Short-term goals for the company
  • 100 new branches to be opened in current year and increasing customer base, thrust for business into Semi-urban and rural areas, creat branch network of 1500 branches by March 2010.

The stock is moving up with very good delivery volumes. It broken out and can target 195-200 levels in next 3-4 months. One can keep SL of 140.


  • One of the earliest banks in South India, "South Indian Bank" came into being during the Swadeshi movement. The establishment of the bank was the fulfillment of the dreams of a group of enterprising men who joined together at Thrissur, a major town (now known as the Cultural Capital of Kerala), in the erstwhile State of Cochin to provide for the people a safe, efficient and service oriented repository of savings of the community on one hand and to free the business community from the clutches of greedy money lenders on the other by providing need based credit at reasonable rates of interest.
  • South Indian Bank has a technology enabled network of 500 branches and 210 ATMs, with presence in 23 states and 2 union territories. This is a professionally run bank with widely held ownership making it ripe for takeover once Banking regulation bill is passed. South Indian Bank(SIB) has now established the largest network , in the private sector, of Core Banking branches next only to ICICI Bank , HDFC Bank and AXIS Bank.
  • South Indian Bank(SIB) Is The Best Performer In Asset Quality - In the "Analyst 2008 Survey of Indian banks" conducted by the 'Institute for Chartered Financial Analysts of India' ,South Indian Bank has emerged as the 'Best Performer in Asset Quality' category among private sector banks which include the new generation and the traditional banks in India .
  • The bank has recently tied up with ICICI Prudential life insurance for the selling of insurance products at over 296 SIB branches in Kerala. The bank also has made available Mutual Fund products to their clients.
  • A Host of Many Firsts: SIB has many firsts to its credit . Chief among them are - the first private sector bank from India to provide managerial support to an Exchange House in the Middle East , the first Kerala-based bank to start extended banking hours (12 Hours Banking ), the first Kerala-based bank to go on-line through a centralized Core Banking solution, the first Kerala-based bank to introduce a credit card, the first in the private sector in India to open an NRI branch, the first private sector bank to start an Industrial Finance branch in India, the first Kerala-based bank in private sector to become a scheduled bank, the first private sector bank from Kerala to implement 100% CBS.

Buy Rs.56-58 Target Rs.70-74 Stop Loss Rs.52 on closing basis Term 4-6 months.

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Saturday, December 20, 2008

BGR Energy CMP 155

  • The Company was originally incorporated in 1985, as a joint venture between GEA Energietechnik GmbH, Germany and the Promoter, Mr. B. G. Raghupathy, to produce and sell On-line Condenser Tube Cleaning Systems, Debris Filters and Rubber Cleaning Balls used in Thermal and Nuclear Power Plants. On June 28, 2007 the Company name was changed from GEA Energy System (India) Limited, to BGR Energy Systems Limited.
  • BGR is one of the leading players providing BOP (Balance of Plant) and EPC services for power sector. With recent wins of Rs 8000 Cr orders, BGR is now a much bigger name in the EPC space.
  • BGR energy has a current order book of approx. Rs.11000 Cr diversified across power, oil and gas, air fin coolers, environmental engineering, captive power, electrical and infrastructure division. The current order book to sales ratio on FY08 sales stands as 7.2x which gives strong revenue visibility for the next 2-3 years at least.
  • The company came out with IPO when market was at all time highs and the stock was issued at Rs 480. Looking at the position of the company and healthy correction in the price, it is a very good buy at current valuations.

Buy BGR Energy between 150-155 SL 140 Target 195-200 in 2-3 months

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Thursday, December 18, 2008

Buy BHEL around 1410-1425 SL 1370 Target 1570-1590
ABB Buy around Rs.440-460 target Rs. 550-570 2-3 months period

Monday, December 15, 2008

Punj Lloyd CMP 155 Book Value Rs 79.50 http://www.punjlloyd.com
  • Spanning five continents, Punj Lloyd Group provides integrated design, engineering, procurement, construction and project management services for the energy, infrastructure and petrochemical sectors. The group comprises of Punj Lloyd (India), Sembawang Engineers and Const (Singapore) and Simon Carves (UK). They offer a wide range of EPC services including Oil & Gas, Process, Renewables, Power, Utilities, Infrastructure, Buildings, Asset Mgmt, Telecom and Broadband.
  • As on 30 September 2008, Punj Lloyd Group had a healthy order backlog of Rs 21,675 crore which provides strong visibility for the next 18 months.
  • Punj Lloyd recently entered into an MoU with Thorium Power. The MoU establishes a framework to explore and identify the strengths of Thorium Power in areas of the deployment of Thorium Power's nuclear fuel designs in India, Southeast Asia and other territories. The Indo-US Nuclear Deal has opened up many investment opportunities and with this MoU, Punj Lloyd aims to take forward India's long-standing commitment to the thorium fuel cycle, notwithstanding the opening up of trade in conventional uranium technology. India has the second largest deposit of thorium in the world and the successful launch of thorium technology will make India self reliant with its own fuel in the long run.
  • Share holding:- Promoters hold 45% in the company, MFs 18% and FII holding has come down to 15% from around 38% a year ago. Reasons can be redemption and genuine selling also. But as broader markets have stabilized and looking to go up, the stock looks well-set to be once again a favourite with low FII holding. Buy for investment as well as for short-term.
BUY BETWEEN 145-149 SL 127 TARGET 188-192
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ICICIBANK Investing + Short-term Pick

  • ICICI bank is a huge financial conglomerate in India spanning across all financial services. It is India's second-largest bank (after SBI) with total assets of Rs. 3,849.70 billion (US$ 82 billion) at September 30, 2008 and profit after tax Rs. 17.42 billion for the half year ended September 30, 2008.
  • The Bank has a network of about 1,400 branches and 4,530 ATMs in India and presence in 18 countries.
  • ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking (ICICI Securities), life (ICICI Prudential) and non-life (ICICI Lombard) insurance, venture capital (ICICI Ventures) and asset management (ICICI Pru AMC).
  • The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium and Germany.
  • ICICI Bank fell largely on account of various rumours in recent past but the management has time and again came out and stressed about strength of company's fundamentals. Its CAR (Capital Adequacy Ratio) rose to 14% in first half of FY09 from 13.4% at the end of FY07.
  • ICICI Bank currently holds 74% stake in each of ICICI Life and ICICI General Insurance, it has 51% of ICICI AMC stake.ICICI Life holds 29% market share in private insurance and overall 9% share. ICICI General has around 36% share in private sector and 13% overall. Both of these are the largest private insurers in India and ICICI AMC (market share around 12%) is among the largest Mutual Funds in India. These subsidiaries are expected to add a lot of value to the bank.

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State Bank of India CMP 1216

  • SBI is India's largest bank with around 16% market share in deposits and loans
  • Together with its seven associate banks (ownership ranging from 75% to 100%), the SBI group has more than 20% market share in deposits and loans, has stupendous network of branches of more than 14000, 8500 ATMs and more than 90 million customers.
  • The Government of India owns majority stake (around 60%) of the bank. SBI is a banker to most state governments, and has a dominant share of government fee business.
  • SBI has a presence in other financial services through subsidiaries and joint ventures. It has a joint venture with Cardiff for life insurance and with GE Capital for credit cards. It also has a presence in asset management, investment banking and primary dealership.
  • State Bank is the largest provider of infrastructure debt and the largest arranger of external commercial borrowings in the country. It is the only Indian bank to feature in the Fortune 500 list.
  • The bank intends to expand Rural Banking base and aims to cover 100,000 villages in the next 2 years or so.
Click graph to see chart and comments on it

Sunday, December 14, 2008

Cement Sector: The recent reduction in excise duty from 12% to 8% and the Government's effort to revive the ailing realty sector brought in new hopes for the battered cement stocks over the week. The cut in excise duty and drop in coal prices will bring down cost of production to Rs 12.50 for a 50 kg bag.

Diesel down Cement transportation cost domestically may also come down with the cut in diesel prices. The reduction of 5 to 6% in diesel prices will result in 1.5 to 2% drop in freight rates for cement companies, depending on the road and rail transport mix. Companies will also benefit on transportation of fly ash — an important raw material — besides clinker to the grinding units-BL


India Cement: Cmp=Rs.95

Book value=Rs.92

Face value=Rs.10

Trailing 12 earning=20.89 P/E=4.55


  • The Company is the largest producer of cement in South India.
  • The Company's plants are well spread with three in Tamilnadu and four in Andhra Pradesh which cater to all major markets in South India and Maharashtra.
  • The Company is the market leader with a market share of 28% in the South. It aims to achieve a 35% market share in the near future. The Company has access to huge limestone resources and plans to expand capacity by de-bottlenecking and optimization of existing plants as well as by acquisitions.
  • India Cements also acquired the franchisee rights of the Chennai Super Kings cricket team in the recent Indian Premier League for a phased US$91m payment through a bidding process. Media reports suggest that the team broke even in the first year itself. Its stake in the Chennai Super Kings cricket team of the Indian Premier League may be value-accretive given the huge success of the team and its good performance.
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Corporation Bank: Cmp Rs.181 http://www.corpbank.in

Book value: Rs.294.80 FV: 10 Dividend Yield= 5.8%

Trailing 12 earning=53.86 P/E=3.36
  • Limited exposure to sectors that have been hit by recent recession in world markets - real estate sector (Rs 800 Cr as on 30-9-2008) and textile sector around 5% exposure
  • In this quarter on account of declining yields of bonds, the bank should be able to write back a major part of investment depreciation provisions made in Q1, positively impacting the profits.
  • The bank has 981 branches, 15 extension counters and 975 ATMs to serve its clientele.
  • Started about 102 years ago in 1906, with an initial capital of just Rs.5000, Corporation Bank is all set to cross Rs. One Lakh Crore mark in business this year.
  • The Bank has many " firsts " to its credit - Cash Management Services, Gold Banking, m-Commerce, " Online " approvals for Educational loans, 100% CBS Compliance and more recently, its pioneering efforts to take the technology to the rural masses in remotest villages through low-cost branchless banking - Business Correspondent model.
Please click graph to see enlarged image and comments

Friday, December 12, 2008

Raymond is a potential turnaround story Cmp Rs.91

Raymond is zeroing in on smaller cities with less than 1 million populations for expansion in a bid to avoid being crowded out and take advantage of lower real estate cost. The company plans to open 50 stores, mostly franchisee, in smaller cities by the end of current financial year http://www.raymond.in Raymond With a capacity of 33 million meters in wool & wool-blended fabrics, Raymond commands over 60% market share in worsted suiting in India and ranks amongst the first three fully integrated manufacturers of worsted suiting in the world.

  • Raymond runs 390 stores, of which 60 are owned by the company http://www.raymond.in/grp.asp#2
  • Raymond also has hidden assets in the form of real estate120 acres of land in Thane, current plant shifting by Raymond could unlock value of ~US$250m.
  • To shut down denim facility in US and Europe by 4QFY09

Raymond has made Loss in June2008 Quarter results due to VRS scheme and loss made in denim unit.

Face value: 10

Book value: Rs.227

Raymond forayed into garmenting through highly successful ventures like Silver Spark Apparel Ltd. and Regency Texteis Portuguesa Lda (for fine Tailored Suits, Trousers and Jackets), EverBlue Apparel Ltd. (Jeanswear) and Celebrations Apparel Ltd. (Shirts).

Raymond most highly respected apparel brands: Raymond, Raymond Finely Crafted Garments, Manzoni, Park Avenue, Color Plus, Parx, Zapp! and Notting Hill.

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