Saturday, January 30, 2010

Weekly Nifty Update 29 Jan, 2010 by Tanmay G Purohit
Nifty has closed down 3.06% or 154points week-on-week and it has hit fresh 11-week low at 4766 which was a crucial support and it has been able to hold on to that very well. Results season for Q3 is getting over and for 1467 companies announcing results so far Sales growth has been 11.8% while Profits have grown 38%. Nifty has fallen more than 6% in Jan'10 and this correction in markets has brought Nifty P/E back to 21 which was above 23 to start this year. 
RBI raised CRR by 75bps in its monetary review on Friday but kept Repo and Rev Repo rates unchanged. The central bank lifted its WPI inflation forecast for the end of the fiscal year in March to 8.5% from 6.5%. It said it expected inflation to moderate from July, assuming a normal monsoon and global oil prices holding at current levels, but the new forecast convinced many analysts an interest rate rise was on the cards. It also lifted its forecast for GDP growth for India in the current fiscal year to 7.5% from 6%, and said that the current rate of growth was likely to be sustained in 2010-11.
RBI policy is now out of the way and next most important event would be Budget which is expected to be presented on 26 Feb and it would be interesting to see how government handles the problem of fiscal deficit which is likely to cross estimates after the government has postponed to the next fiscal auction of spectrum for 3G telephony which was expected to bring in Rs 35,000 crore to the exchequer. This deficit is a large number and even with disinvestment, it is difficult to bridge the gap in just 2 months period. India's fiscal deficit for April to December was Rs 3.09 trillion ($66.9 billion), or 77.3% of the full-year target, the government said on Friday. Major candidate for Disinvestment has been NTPC and the public issue is scheduled to start next week, pricing is awaited.
Nifty has taken support at channel as can be seen from below graph and it looks set for some bounce after this fall; next week is expected to start positively. Nifty may bounce towards 4968 which is a good resistance and above that even 5090 is not ruled out. The bounce may sustain for 2-3 sessions but if Nifty is able to close past 5090 in that period the rally may continue also. Below 4770 only the case for bounce would be negated.

Supp 4770/4688/4542 Res 4950/5040/5128
PSU stocks can perform when NTPC IPO succeeds - MRPL, MTNL, STC, SAIL look good on graph

Thursday, January 28, 2010

TATA STEEL announces stellar set of numbers:-

  • Tata Steel, India largest private steel producing company reported a higher than market estimate net profit at Rs 1,191 crore, a growth of 155% for the quarter ended December 31, 2009 as compared to a profit of Rs 466 crore posted during the same quarter a year earlier. 
  • Total income of the company for the reporting quarter grew by 37.66% to Rs 6,638 crore as against Rs 4,822 crore recorded in the corresponding period a year ago. 
  • Tata Steel is world's No. 8 Steel-maker  has achieved strong growth on a high base as Auto and Construction demand helped the company post handsome results. Consolidated results along with Corus would be out next month.
  • The growth comes after Global steel production fell 8% in 2009 as demand from key industries shrank amidst a global economic downturn. As economies improve and steel stocks are run down, experts expect demand to rise about 10% this year.
  • Globally Steel prices have risen in recent past but Nippon Steel, which is world's 2nd Steel company has halved its full-year profit forecast to far below the market consensus on sluggish demand for construction-use steel and higher raw materials costs.
  • But now Tata Steel and Nippon have joined hands together as Tata Steel Board today approved a framework for co-operation between Tata Steel Ltd and Nippon Steel Corporation for the production and sales of automotive cold-rolled flat products at Jamshedpur to address the localisation needs of Indian automotive customers. 
  • Tata Steel will hold 51% and Nippon Steel will hold 49% of equity capital of the Joint Venture Company. The above joint venture aims to capture the growing demand for high-grade automotive cold-rolled flat products in India by setting up a capacity of 600,000 tonnes. 
  • Nippon will help Tata Steel by transferring its technology for producing high-grade cold-rolled steel sheet for automotive application, including skin panels and high tensile steels.

Technical View about Tata Steel CMP Rs 587:-
TATA STEEL has fallen towards Rs 553 from Rs 661 high in early January and the stock looks to trade in a range of Rs 570 to Rs 620 and dips may be used to buy this stock in short-term.

Wednesday, January 27, 2010

DEEPAK FERT announces Q3FY10 results:-

  • Deepak Fert & Petrochemicals has announced Q3 results and the company's Net Profit was Rs 53Crore Vs Rs 22Crore, growth of nearly 141%.
  • Sales were flat at Rs 362Cr Vs Rs 363Cr in same period last year.


  • Poor monsoons may have kept the sales growth flat, but profit growth was strong which must have been on the back of various cost-cutting measures taken up by India Inc after slowdown and many fertilizer units benefitted after RELIANCE D6 gas was supplied to them on priority basis. 
  • The industry continues to remain under pressure under the controlled regime; there is considerable inflexibility in pricing and production. However latest measure to impose import parity pricing on excess production is expected to augur well for the fertilizer industry.
  • The measure to pay-off the subsidy in cash instead of bonds and also to reimburse the losses incurred on sale of these bonds at discount will enable the industry to avoid unnecessary losses.Any change in Fertilizer policy towards nutrient-based subsidy would be a positive trigger for the stocks as the industry is looking up after many years of downturn.

See original post on DEEPAK FERT -

Monday, January 25, 2010

Weekly Update 24 Jan, 2010 by Tanmay G Purohit
Nifty ended the week down 4.12% or 216pts and it has hit a fresh 4-week low at 4954 which is 20-day low also. 4947 is 100DEMA and previous bottom around 4943 are crucial supports going ahead below which more panic sales not ruled out. Rupee has hit 3-week low at 46.15 as FII selling in F&O as well as Cash markets has accentuated this week; Provisional Figures indicate FIIs sold Net Rs 3748Cr in Cash market in this week alone.
Major results last week included RELIANCE IND which reported its first increase in net profit in five quarters -- a 15.8% rise to Rs 4,008 crore in the period ended December 31, as higher natural gas sales outweighed lower earnings from oil refining. Reliance earned $5.9 on processing every barrel of crude oil in the quarter, lower than $10 per barrel gross refining margin (GRM) in the corresponding period in the previous year. Gas helped 92.7% rise in turnover in October- December to Rs 58,848 crore. So far for the 603 companies announcing results, Sales have risen 20% and Net Profits have grown 57%; gains in profits were helped by rupee appreciation as it resulted in savings of interest costs and many cost-cutting strategies that were started in slowdown days started paying off. MARUTI reported 222% rise in Net Profits for Q3 to Rs 687Cr and Total Income shot up 58% to Rs 7594 Cr but sustaining similar growth rates would be difficult this year as competition hits up. 
Coming week would have a very crucial event of Expiry for F&O contracts for January and many more results would also be out. One more eventful day would be 29 Jan when RBI will come out with its policy review and banks will be in focus this week. 
Nifty has corrected nearly 7% from its peak but many stocks have already corrected between 10-15% or more which goes to show even if markets remain flat the individual stock corrections can be much bigger. So it is better to raise cash levels in the portfolios and try to get out of stuck positions as the markets move up in a pullback. Any correction starting from here would be deep and may last longer than we expect also. Nifty may bounce from current levels if we can stay above 4540 on a closing  basis for day or two more, but it is advisable to be in stocks where growth over next 2-3 years is visible. Avoid leverage and invest only in cash. Nifty may face resistance near 5180-5200 in bounce.
Supp 4940/4810/4738 Res 5112/5179/5293
Stocks that may outperform when markets stabilize :- GUJ NRE COKE, JUBILANT ORG, SKUMARSYNF, GREAVES COTT, RCOM

Core sector notches 6 per cent growth in December
Kolkata Seminar on 6 Feb, 2010
After success of Delhi seminar now Kolkata seminar on 6th February Saturday 9:00 AM to 8:00 PM @ THE PALLADIAN LOUNGE,  Registration Cost 3500 / per head 
A seminar on Technical cum Fundamental Analysis conducted by MR A K PRABHAKAR and assited by Dinesh C Nagpal, Navneet Singhal, Rohit Mankotia, Tanmay Purohit & Vikram Doogar will be held at THE PALLADIAN LOUNGE, Kolkata on February 6, 2010.

The presentation will be done with audio video projections and shall include lunch for those who attend along with tea / coffee.

Contact Mr. Dinesh for  details please check the link below
Rush for early booking. Limited seats

Thursday, January 21, 2010

BSE AUTO Showing Signs Of Tiredness
BSE AUTO INDEX (7549) is showing signs of tiredness and technically there is a rising wedge developing which is yet to break down. 7400 and 7000 are important supports for the index and if these are taken out the correction can be deep. Euphoric rally is not ruled out in Autos only if breakout from wedge to upside happens but given individual stock structures and the great run-up of Autos in 2009 it is advisable to take profits in these stocks. Valuation-wise P/E of Auto Index shown by BSE is above 23 currently, which may go lower after Q3 results as they are expected to be very good but Year 2010 may not be so easy for Auto companies as the base of 2009 is high now. 

Nifty is also showing similar pattern of rising wedge and if broader markets correct AUTO may underperform.

Indian auto cos to fast-track R&D
Indian automakers are under growing pressure to scale up spends by 25-30% on R&D and new product launches. A change of habit is in order in the face of fierce competition from global rivals looking to lure consumers with superior product innovations and cheaper, compact models in the Indian automobile market, among the last bastions of growth.
Even though they spend more on R&D, raising prices would be a worry after a point of time as increasing competition would keep check on prices automatically.

Auto industry may be heading towards excess capacity by 2012
The domestic auto industry may turn into a buyer's market by 2012. This is because consumers are set to get spoilt for choice with the variety of competing products slated to be launched in the next few years. There is, however, a lingering fear that the capacity addition across the industry may lead to a far higher supply growth than the demand, which is expected to grow only by 10-12 per cent. This, however, may just be to the benefit of the consumer, as with increased competition across segments, manufacturers are expected to price products even more competitively.

Auto Expo 2010: Over 2 million visitors, 25 new launches

World Bank Says Asia Faces Asset Bubbles, Overheating Risks

Scripwise Weightages in BSE AUTO as on 20-Jan-2010
Scrip CodeCompanyClose PriceFull Mkt. Cap.
(Rs. crore)
Free-Float Adj. FactorFree-Float Mkt. Cap
(Rs. crore)
Weight in Index
500520MAHINDRA & M1,145.8532,063.320.7524,047.4919.06
500570TATA MOTORS803.2038,531.470.6023,118.8818.32
500182HEROHONDA M1,678.5533,518.550.5016,759.2713.28
532977BAJAJ AUTO1,820.2026,335.290.5013,167.6510.44
500086EXIDE INDUS119.009,520.000.555,236.004.15
500530BOSCH LTD4,925.1515,464.430.304,639.333.68
500480CUMMINS INDI446.108,832.780.504,416.393.50
500493BHARAT FORGE293.406,532.620.603,919.573.11
500477ASHOK LEYLND55.607,396.680.503,698.342.93
520077AMTEK AUTO L182.402,662.510.701,863.761.48
500877APOLLO TYRE.54.352,739.370.651,780.591.41
500290M.R.F LTD6,174.202,618.570.601,571.141.25
500495ESCORTS LTD.141.051,279.460.70895.620.71

Wednesday, January 20, 2010


CMP Rs 122 EPS Rs 16.86 (FY09) Book Value Rs 91 D/E Ratio 0.75

  • Deepak Fert & Petrochem (DFPCL) manufactures Methanol, various grades of Nitric Acid, Iso Propyl Alcohol, Carbon dioxide and Hydrogen. With a capacity of 70,000mtpa, it is the only company in India to manufacture IPA (Iso Propyl Alcohol),a solvent with primary usage in the electronics and pharma industry and its products are benchmarked against the best in the world with world class manufacturing and quality standards. The domestic demand is roughly in the same range and no competition is foreseen going forward. Its IPA plant is certified by US Pharmacopoeia.
  • Moving from fertilisers to being a complete provider of nutrients to the Indian farmer, its Mahadhan Saarrthie Centres reach out to nearly 5000 farmers across Western India. The Mahadhan and Bhoodhan brands are among the best known fertilisers in the country. DFPCL markets its products through a network of over 1000 dealers.
  • It is the only player in the country with the capability to manufacture prilled ammonium nitrate. Prilled ammonium nitrate decreases the transportation and storage cost significantly and has use in
  • explosives. The company is putting up another plant of 300,000mtpa capacity at Taloja with an investment of Rs6.3bn. The plant should be in full production by Q3FY11.
  • With expansion of TAN capacity and possible forays into new business segments (ammonia derivates, mining consultancy, micronutrients), the company presents an exciting future going forward. The company has been supplying ammonium nitrate for the mining industry. With the expertise gathered, it is planning to venture into mining consultancy in over-burden stripping related work. The company is currently in talks with MNCs for technology partnership.
  • Gas availability has improved with the Company now in a position to source nearly 90% of its requirement from a variety of gas suppliers. The company uses roughly 1mmscmd of natural gas. The usage is primarily in manufacturing methanol, nitrogenous fertilizers and generating power. While the company uses APM gas for fertilizers and power generation, the rest of its needs are met by R-LNG from Hazira and gas from GAIL.
  • DFPCL owns Ishanya, India's largest Design Centre and Specialty Mall. Ishanya is a pan-India destination for consumers shopping for the home or the office, the specialty retailers, the architect,  space designer, or the builder / developer. With 5,50,000 square feet of retail and services space, Ishanya is a single sourcing point for over 52 categories of products and services, materials and knowledge, drawn from across the best in India and across the globe. It offers over 100 outlets, over 5,000 brands and services plus a knowledge and research centre, mock up and simulation centres and a creativity centre. Its range offers choices right from the ultra-designer league to the cost-competitive. Concept Ishanya -
  • In the last 5 years Deepak Fert has never missed a dividend, at current price of Rs 122 also the dividend yield is quite strong at 3.27% (Last dividend paid in July-2009 Rs 4/- per share)
Technical Outlook:-
Stock of DEEPAK FERT has been in a consistent up trend and has so far outperformed the broader market. The stock has broken out above Rs 110 which has been a big resistance for the last 20 months and now the stock has started trading in large volumes also. The target can be Rs 151 for the stock in current up trend and one can accumulate this stock for investing.

Monday, January 18, 2010

Investing like Branson & Buffet:-
Following is taken from a very popular book called "The Dhandho Investor" by Mohnish Pabrai where the author explains a lot about Low Risks and High Returs, main principle concentrated is "Heads I win, Tails I don't lose much!". Below that I have added a few points for readers, its a little long story but its very interesting and worth the time.

The year was 1984 and Richard Branson knew nothing about the airline business. He started his entrepreneurial journey at 15 and was very successful in building an amazing music recording and distribution business. Somebody sent Branson a business plan about starting an all business class airline flying between London and New York. Branson noted that when an executive in the music business received a business plan to start an airline involving a 747 jumbo jet, he knew that the business plan had been turned down in at least three thousand other places before landing on his desk. He was also aware that the other businessmen with strong domain knowledge had turned it down. The business plan claimed that the sector was underserved by the existing players. All weekend long he tried calling the other major discount airlines flying that route but could never get through.

1)  His conclusion was that they either were lousy businessmen or were overwhelmed by demand—which meant that there was an opportunity to start competing against them.
He also changed the original business plan significantly—opting for a unique dual-class service. He thought about it carefully all weekend long. On Monday, he went to his partners and senior executives at the music business and told them of his interest in starting the airline. They told him, “Richard, you’ve got to be off your rocker.” They told him he’d need a 747 jumbo jet, the most expensive plane around. And they asked, “Do you know what that costs?” They told him they had no interest and did not support this wild idea. Branson persisted. He called directory assistance in Seattle to get the main number for Boeing. When the receptionist answered, he said that he’d like to talk to someone about leasing a 747 jumbo jet. After he was transferred several times, he got to what seemed like the right person and asked if Boeing had an old jumbo lying around? The guy said they did, and Branson asked if they would consider doing a one-year lease. The Boeing employee, likely amused by the British accent, said that they have a small list of customers but they might consider doing such a lease with one of their regular customers. Branson persisted and asked for some numbers.

2)  Boeing gave him some ballpark numbers, and Branson figured out that his total outlay and maximum liability for starting Virgin Atlantic Airlines (if it failed) was just $2 million. His record company was on track to earn $12 million that year and $20 million the next year.
Branson noted that in the airline business with a single plane, he would pay for the fuel 30 days after the airplane landed and for staff wages 15 to 20 days after the airplane landed, but he would get paid for all the tickets about 20 days before the plane took off. Working capital needs in this scenario were pretty low and, with a very favorable short-term lease from Boeing, there was no need to buy an airplane. Branson figured he could hire a small ground staff, place a few ads in the paper, and start taking reservations. Boy George’s records were produced by Virgin, and Branson and he were good friends. To boost the morale of the early Virgin Atlantic employees and get them all excited, he took Boy George over to the cargo hanger at Gatwick Airport,
This served as the headquarters for Virgin Atlantic, to meet the staff. The employees loved it, but Boy George was quite stunned at the apparent chaos at the facility. He later told Branson, “I’m glad my feet are firmly on the ground.” It was a very messy startup.
3) Now if someone came up with this idea in Silicon Valley, there would be a fancy   business plan put together along with the mandatory elevator pitch. It would be based on at least $60 million in startup capital to build out the basic infrastructure, and so on. Branson did not go down this path. The “business plan” was done in a weekend and resided in Branson’s head.
There was no business plan ever written, there was no board of directors or advisors at startup, no venture capitalists (VCs), or angels. It was done by a person with no prior experience or expertise in the airline industry. My take on Virgin Atlantic is simply this: if you can start a business that requires a $200 million 747 jumbo jet and a boatload of employees in a tightly regulated industry for virtually no capital, then virtually any business that you want to start can be gotten off the ground with minimal capital. All you need to do is replace capital with creative thinking and solutions. Branson found a service gap and went after it. By the time that gap narrowed and British Airways and his other competitors woke up, he had already built a strong brand. Even today, Virgin Atlantic offers a very unique product in a very tough industry. The Virgin Group today is a privately held group of 200+ businesses with about $7 billion in annual revenue. It generates about $600 to $700 million a year in free cash flow. The common ingredient in virtually all 200+ businesses is that there was very little money invested in any of them at startup. Heads, I win; tails, I don’t lose much! In 2005, they put a line of electronic products called Virgin Pulse into Target stores.
4) Target asked them to develop an exclusive line of designer personal electronics only for Target. Target guaranteed them prime floor space, so Virgin had zero distribution cost or risk. It had Ecco, a chic design shop, create the line, and they found a Chinese company to manufacture it—retaining good margins for Virgin. Its downside was very limited and upside was huge. The parties who took much of the risk were the manufacturers, who had to commit capacity beyond confirmed orders, and Target, which had to set aside valuable shelf space in every store. To launch it, the Virgin Group leveraged Branson at a New York party dancing with some hot models wearing the Virgin Pulse line on their person. It put very little money into it— 
Another example of classic is Virgin Mobile, Virgin’s cell phone service in the United States. Virgin Mobile does not own or operate a cell phone network. Sprint provides the entire backend and delivers the service under the Virgin Mobile brand. Virgin targeted teens with this service and focused the offering to be very attractive to teens—cool phones and phone skins, prepaid phone cards, and the teen-centric Virgin brand. Virgin’s investment was very low. If it failed, it had virtually no downside. Sprint provided all the technology, billing, and customer service infrastructure. Virgin provided the branding and product positioning, and it took a large chunk of the profits. If it worked, there was huge upside for Virgin and a negligible downside if it failed. Virgin Mobile scaled very rapidly. It set a record for the fastest business to move from startup to over $1 billion in revenues—less than three years.
5) Branson owns his own private island in the British Virgin Islands called Necker Island.6 It is a spectacular property and was featured in the last episode of The Rebel Billionaire on Fox. The island was on sale for £3,000,000 a few years ago. Branson’s starting offer: £150,000—95 percent off the list price. His offer was laughed at, but a few weeks later he bought the island for just £180,000. Needless to say, Sir Richard has had a very spectacular return on his vacation home investment over the years. Now you and 13 other friends can spend time on Necker Island for just $30,000 per night.

Gist of all:-
  • With minimal downsides, failure rates don’t matter to Sir Richard Branson. Even if half these ventures fail or never scale up, it doesn’t matter. He was so focused on his business and its profits that he always found some creative thinking to get the business started with minimal capital. There’s virtually no money put into them to begin with. Venture capitalists ought to look at the Virgin model because the Virgin model is the VC model of the future. Branson is an ultra low-risk, ultra high-return VC. People keep feeding him ideas, and he acts on a select few. He gets large equity stakes, sometimes 50/50 equity stakes in these businesses without putting any money in them. In some cases, like Virgin Atlantic, it is a 100 percent stake with very little invested.
  • Virgin has also invested in India through their JV with TTSL here, Virgin Mobile where many new schemes were launched, and now they are starting GSM services also. Virgin Mobile attracted customers through making them aware of a need for a new brand, same way they tried with Virgin Atlantic. They promised people with everything that can become an excuse to switch from existing service provider, they tapped the youth of India with words like "simple tariff plans, no hidden charges, totally dedicated and caring customer care, awesome downloads, games on the go, wallpapers, superior coverage, top-notch call quality, blazing new technology" and much more. Virgin has used TTSL network for CDMA with a revenue sharing agreement, two brands came together to create an important image in the minds of mobile users, which really worked.
  • But there is something which didn't work for Sir Branson also: He tried to compete with Coca Cola with Virgin Coke but the idea didn't succeed so well as others, Warren Buffet in one of his AGMs told his shareholders - "Richard Branson is a marketing genius. He came in with Virgin Cola, we're not sure what the name means, perhaps it turns you back into one, but he couldn't knock off Coke. We look for wide moats around great economic castles. Growth is good too, but we prefer strong economics. 

  • Buffet summarizes by saying that there are 3 kinds of businesses, The Great, The Good and The Gruesome!These investments are like three savings account where the great one pays you an extraordinarily high rate of interest which rises as the years rise, the good one pays an attractive rate of return which will be earned also on deposits that are added. The gruesome is one which pays an inadequate rate of interest and also makes requires an investor to keep adding money in order to make that low interest rate. As investors, we have to choose businesses that are simple to understand, Mr Buffet likes to invest in companies that have: a) a business he understands; b) favourable long-term economics; c) able and trustworthy management; and d) a sensible price tag.
  • All of us can't be as great as the Oracle of Omaha but at least walking on such principles one can invest in solid companies. As small investors, we have to always diversify, we need to take calculated risks, and take them on regular basis. Ideas must always be welcomed!

Monday, January 11, 2010

Delhi Seminar Excerpts:-
Even if Delhi had freezing cold temperature the response for the Seminar was very good; it was very much appreciated by the participants and people liked the way it was presented. Speakers included Mr A K Prabhakar, Navneet Singhal, Dinesh Nagpal, Rohit Mankotia, Abhay Mehrotra and Tanmay G Purohit, each one talking about his own skill sets. Mr Prabhakar talked about his outlook on Indian markets and overall how investors need to avoid traps and make profits consistently. Main aim of the seminar was to make investors empowered to use their own methods for buying/selling decisions and how to look beyond vicissitudes of markets. Be it bull market or bear, there are always opportunities for investing and as investors we need to always look forward for money-making opportunitiesm, we hope the aim was achieved to a great extent:-

Mr A K Prabhakar:-
Prabhakarji talked about his outlook on Indian markets and how he expects Year 2010 to be an year of Midcap stocks. He exemplified SAIL :- how Dinesh Nagpal, a steel trader found attitude change in SAIL and how the approach of the company was changing while handling customers, suddenly he discussed the idea with Mr Prabhakar and Prabhakarji advised buying this PSU steel stock at Rs 40-50 which is now above Rs 250. He explained his predictions about Year 2010 and where can Indian markets be in the next 5-6 years. He also explained very easily the big story called India and how this country can grow even with so many problems. What can be pitfalls in investing here, what care needs to be taken while investing in any kind of equity stocks? His main focus was about stock-picking skills and even in bad times how to find the best of the lot. 

Navneet Singhal:-
Navneet introduced all of the participating speakers and he himself is a Chartered Accountant who has great interest in stock market analysis also. He showed the crowd how even the simplest tools in Technical Analysis could have helped an investor from the fall in 2008, how the opportunity for investing could have been grabbed in early 2009 for buying also. He also explained why Ranbaxy was a sell even after Dai-Ichi Sankyo deal price was more than 40% above market price at that time and similarly why it became a buy around Rs 250. When many were bearish about telecom stocks how there was an opportunity for buying in Bharti Airtel and why the stock outperformed after that. As all know, Navneet was the organizer of the seminar and it was conducted very well in my view.

Dinesh Nagpal:-
A businessman from Kolkatta but has great belief in studying markets and making money through that! He explained about some great stories in the making in individual stocks and how one can take full benefit of them. Dinesh talked about many stocks from Power, Infrastructure, Agriculature, Financial sectors and how one can take benefit from the budget-related stocks. Very openly and in a straight-forward way he talked about what the main pitfalls of investors are and how consistent yearly returns are better than blidnly going after multi-bagger stocks.

Rohit Mankotia:-
Rohit explained the crowd about using Elliot Wave to our benefits and how the wave structure can be analyzed. He explained the types of charts and why he feels bar charts are great for analyzing along with Candlesticks. Rohit was bang-on point when he explained in the easiest way how Elliot Waves can be used for day-to-day trading decisions, what is to be focused the most from Elliot Wave Analysis for day-traders was his main focus of explanation and he showed us all true examples of how he used very basic principles for trading.

Abhay Mehrotra:-
Abhay is a commodity trader and very much focused on his principles of trading. His stress was on Discipline in trading and how indisciplined traders fail. He explained the use of oscillators like MACD, RSI to use in trading and talked about how Gold can be used for trading. Also he explained how even small stops can be sufficient to trail positions and take full benefit of the intraday trend.

Tanmay G Purohit:-
Tanmay talked about both Technical Analysis and Fundamental Analysis where he stressed on a need for Techno-Fundamental approach. He started with patterns in Technical analysis and how traditional analysis can be clubbed with Elliot waves to arrive at investing decisions. The focus was on detecting the patterns in the most easiest way and how to find price targets through simple techniques with real-life examples. In Fundamental Analysis, he talked about reading the balance sheet and what are the vital numbers to analyze when it comes to fundamentals. Also he showed how a casual walk in a city also can be a way to analyze fundamentals and why Fundamentals are not just about reading balance sheets or accounting statements, how a vision can be developed for investing and how to find next winning stories.

Sunday, January 03, 2010

Coal - Black Diamond!

India is 3rd largest producer of Coal in the world but we are way behind first two, China produced 2466MT of coal in 2007, USA did 981MT while India produced 454MT. Among the non-OECD countries, China accounts for over 47% of world hard coal production and nearly 64% of non-OECD production. China’s production has more than doubled since 2000, which allows the country to meet fast growing demand for coal to generate electricity and steel making. India is the second largest non-OECD hard coal producer and third in the world.
If we see our energy mix -  India is well endowed with coal. However, it is poorly endowed with oil assets and has to depend on crude imports to meet a major share of its needs. Coal is the key contributor, with 51% of the country’s total commercial energy needs met by coal electricity generation, 36% by Oil and 9% by Gas (2006 figures). So Coal will continue to occupy a central place in India’s energy supply. 

Coal prices:-
Rising coal prices could hit the coffers of import-based domestic power generators soon. Spot prices for the fuel at Australia’s Newcastle port, a benchmark for Asia, have appreciated almost 10 per cent in November and rates at China’s Qinhuangdao port, a standard for the world’s largest coal consumer, have also seen a steady increase over the last two months.

Need to shift to other sources of Power:-
India produces just 9% of its electricity needs from Gas and now India having large gas reserves in KG basin, we need to make more gas available for power plants. Reliance Industries has become the largest natural gas producer in the country with its over 50 million standard cubic metres per day (mscmd) output surpassing that of state-run Oil and Natural Gas Corp’s (ONGC). When available, coal outcompetes natural gas in the power sector and industrial use. The experience in India suggests that coal use could be constrained because of lack of investment in new production capacity or the resolution of transportation bottlenecks. Such constraints on coal could lead to a much larger role for natural gas. But we don't possess right infrastructure for gas transportation. Pakistan is nearly six times ahead of India in terms of gas pipeline network as its pipeline network stands around 56,400 KM as against 10,500 KM  that of India with its current pipeline density measuring at 1044 KM/MMSCMD per day compared to 116 KM/MMSCMD (million metric standard cubic meter per day) of India, according to The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Stocks that will be beneficial:-

GUJ NRE COKE :- Coke is a derivative of coking coal. It plays a very significant role in the metallurgical process. Coke is the main source of heat and is also the reducing agent required to facilitate the conversion of metallurgical ores into metal during the smelting process. Gujarat NRE Coke is the largest independent producer of Met Coke in India and is the only Indian company with coking coal mines in Australia having more than 500 million tons of Metallurgical Coal with excellent coking properties. The company is set to emerge as one of the largest coking coal producers in Australia over the next few years. The coal mines are owned through its subsidiaries – Gujarat NRE Minerals Limited. Besides ownership of these coal mines, the company has done cornerstone investments in resource prospecting companies that are scouting for coal, gold, iron-ore and various other base metals. The company has 87.5 MW wind power energy and has also set up mini steel mill in Gujarat to recycle steel scraps using green wind energy to manufacture TMT Bars.

NEYVELI LIGNITE:- The company plans to venture into power generation and mining industry business. NLC plans to participate in development of coal blocks allotted to state governments or coal-based power generation under public private partnership with state government undertakings, a release said. The company has also proposed to participate in competitive bidding of power for taking up ultra mega power projects (UMPPs) floated by the Power Ministry, it said.

GSPL:-GSPL, a GSPC subsidiary, has taken a lead in developing energy transportation Infrastructure in Gujarat and connecting major natural gas supply sources and demand markets. Gujarat State Petronet Limited is first company in India to transport natural gas on open access basis and is a Pure Natural Gas Transmission Company. The transmission network of the company envisages development of systematic and seamless pipeline network across Gujarat connecting various suppliers and users. The suppliers of natural gas include traders, producers and LNG terminals. The users comprise industries such as power, fertilizer, steel, chemical plants and local distribution companies. 

GAIL:- Centre is planning to build a national gas highway network criss crossing the country to transport the environment friendly fuel to regions untouched till now. GAIL having vast experience in building gas pipelines would be a large beneficiary of the project.

India 6 Times Behind Pak In Gas Pipeline Network: ASSOCHAM
‘Indian Imports Could Swing Global Coal Prices’

Friday, January 01, 2010

Delhi Seminar on Techno-Fundamental Analysis on 9 & 10 January 2010

9:30 AM – 05:00 PM, Saturday 09 January 2010 &
9:30 AM – 02:30 PM, Sunday 10 January, 2010
Seminar Overview

  • Fundamental Analysis Introduction.
  • Technical Analysis Introduction.
  • Technical Analysis Vs Fundamental Analysis and how they both can be used together to give a better Analysis.
  • How to select a stock for Investment or Trading.
  • How to determine a Value buy in a falling market? Example: Telecom sector, Ranbaxy etc.
  • Principles of Technical Analysis.
  • Basics of Technical Analysis.

Contact if you want to join:
Navneet Singhal Ph- +91 9899593340

Flash point of the meet:
A K Prabhakar is a big treasure of knowledge and experience and I have learned many things from him. I feel this is a great opportunity for investors to come and learn a new experience in stock markets from Mr A K Prabhakar. There are many students of him and all would be present at this seminar including myself. I would just list out names of people whom you would be meeting through this seminar-  
Myself, Tanmay G Purohit
The response for the seminar has been amazing and I would request all readers of this blog to try and make it for the seminar as it would be a memorable experience for them!