Monday, August 27, 2012
Saturday, August 25, 2012
GUESS THIS STOCK
' ONAM ' – The harvest festival of Kerala is celebrating during this week.This is the time of enjoyment ,celebration , and friendly competitions.During this week I am not recommending any stock for you , instead you just try to find out a stock based on the following clues.
# This stock is listed only in BSE and not an ‘A’ group stock.
# This is the second largest stand alone listed company ( based on turnover)from the sector in which it is operating.
# The industry in which it is operating is highly fluctuating one and passes through many up and downs in the past , but this company is successfully operating for the past 22 years.
# Company having very low,negligible debt and not a single share is pledged by the promoters.
# It never posted a loss in last five years on an annualised basis.
# It is a dividend paying company.
# Its 52 week high price is below Rs.52
#For the past six years, company is reporting an increase of at least 50% in its turnover in every two years.
# During the latest June quarter company posted an EPS which is 100% higher than the EPS posted in the entire FY 2011-12.
# The most important point - surprisingly this entire company is available for just Rs.10 Cr ( Market Cap) which is almost 1/20 of its last year turnover.
* Data taken directly from BSE web site for your easy calculation .
Try to find it out and send the answers to me@ valuepick@rediffmail.com.
This is not a competition and not any offers for anyone on the basis of the right answer,but I know ,at least few of you will re check the numbers of some mid-small cap companies which will help you at least in future.Correct answer will be posted along with company details on next Saturday.
# This stock is listed only in BSE and not an ‘A’ group stock.
# This is the second largest stand alone listed company ( based on turnover)from the sector in which it is operating.
# The industry in which it is operating is highly fluctuating one and passes through many up and downs in the past , but this company is successfully operating for the past 22 years.
# Company having very low,negligible debt and not a single share is pledged by the promoters.
# It never posted a loss in last five years on an annualised basis.
# It is a dividend paying company.
# Its 52 week high price is below Rs.52
#For the past six years, company is reporting an increase of at least 50% in its turnover in every two years.
# During the latest June quarter company posted an EPS which is 100% higher than the EPS posted in the entire FY 2011-12.
# The most important point - surprisingly this entire company is available for just Rs.10 Cr ( Market Cap) which is almost 1/20 of its last year turnover.
* Data taken directly from BSE web site for your easy calculation .
Try to find it out and send the answers to me@ valuepick@rediffmail.com.
This is not a competition and not any offers for anyone on the basis of the right answer,but I know ,at least few of you will re check the numbers of some mid-small cap companies which will help you at least in future.Correct answer will be posted along with company details on next Saturday.
Thursday, August 23, 2012
VADILAL INDUSTRIES - BOOK PARTIAL PROFIT
I have recommended this stock just two months back @ Rs.105 ( For old posting click HERE) which today closed in the upper circuit @ Rs.209 , an appreciation of 100 % . Recommending to sell 50% of the holding and keep the balance cost free.
Saturday, August 18, 2012
BLUE STAR LTD - BUY
Passing through tough business environment during the life cycles of any company / business is common.Some managements will learn new lesson from such experience ,take corrective measures and grow even faster.In some rare cases ,such down trends will help managements to open up new business opportunities through diversification or act as an eye opener to look beyond their conventional businesses. On the other hand some others will surrender their business even without a fight.We ,as investors, always interested only in the first case.So let us look into BLUE STAR Ltd. Till few years back It was a star in Indian Air Conditioning Industry .Its main expertise was in Centralised Airconditioning and Commercial Refrigeration. In FY 2010-11 ,company posted a turnover of Rs 2888 Cr and a net profit of Rs.155 Cr .From there ,just after one year in FY 2012 company posted a loss of Rs.90 cr ! .Sharp slump in commercial real estate developments including the construction of shopping malls severely affected company’s performance during this period.Some communication gaps and lack of integration between the marketing and project execution wings of the company added fuel to the fire .The marketing wing accepted fixed rate orders without accurately assessing the possible increase in raw material cost which ultimately ends in a bleeding bottom line.Realising the seriousness of the situation management accepted their fault and has taken corrective actions which include concentrating in bottom line rather than increasing top line,strict measures to ensure profitability in a case to case basis,concentration in home air conditioning business to beat the slump in commercial segment ..etc.With all these efforts, company back to black in latest June quarter with a pre tax profit of Rs.13 Cr( excluding other income ). Actually , the business of air conditioning having good potential at a time of global warming,need of cold chains to preserve food and vegetables..etc.Blue star is India’s one of the largest air conditioning companies with vast marketing and service network and good brand value.I feel ,company will back to its past glory supported by the initiatives taken by the management and it is the right time to enter in this stock with a long term view. From the peak of Rs.548 ( post FV split) stock is now trading around Rs.192/-
Thursday, August 16, 2012
EPC INDUSTRIE' LTD - UPDATE
I have recommended this Mahindra Group company at least five times in the past .In a big positive development ,today company decided to amend its object clause of Memorandum of Association to enable it to diversify into other agri related areas like seeds, fertilizers, pesticides, agri chemicals, tractors implements, pumps, greenhouses, power, fruits and vegetables, meat and poultry, dairy, aquaculture, marine culture, grains and fast moving consumer goods. Recently the top officials of Mahindra indicated that their next important concentration will be in sun rise industries like Agriculture .I believe EPC Industrie' will be a key beneficiary of their decision and their latest plan to amend the object clause is the first step in this direction.
Happy investing ...
Discl : I have vested interest in EPC
Wednesday, August 15, 2012
10 mistakes that can derail your financial life and ways to avoid them..
COURTESY : ECONOMIC TIMES
To err is human. But some mistakes can completely derail your financial life. In fact, managing your finances and making smart money decisions can be a challenge and it is inevitable that mistakes will be made.
However, "sometimes even a single financial mistake may be detrimental to your financial goals. In fact, for so many aspects of financial planning, there is no going back, at least without some sort of penalty", according to Harminder Garg, a certified financial planner for Financial Planning Standards Board India.
Let's take a look at some of these mistakes and ways to avoid them:
Mistake #1: Having No Financial Plan
Too many people put financial planning on the backburner until they get older, when panic starts to set in. But having no financial plan or putting off financial planning may be the biggest mistake of all.
"People generally only seek the services of an accountant, for example, when they need to file tax returns. Financial planning is something you can put off easily as there is no requirement for instant gratification - unlike if you have a pain in your body. However, just as putting off visits to a doctor can lead to huge complications, so can delaying an annual check-up with a financial planner.
Therefore, if you want to adequately save for your family and your future or simply retire rich, you first need to get your financial house in order and that can be done only through proper financial planning.
"Financial planning requires thinking through and setting of lifetime financial goals which enable one to determine the appropriate asset allocation required for oneself and one's family. If this asset allocation is followed in a disciplined manner, goals can be achieved without the uncertainties of the market," Lovaii Navlakhi, MD & Chief Financial Planner of the Bangalore-based International Money Matters, says.
Therefore, figure out where you are, where you want to be and put in place a realistic plan for getting there.
Mistake #2: Not Starting Early In Life
Even if some people want to plan for their future, they generally think they need not plan early. Depending upon their individual time frame, thus, they do not like planning for more than three weeks or three months or, rarely, three years in advance.
"Let's imagine that we are kicking off from the centre in a football match. We need to score a goal more than the other team to win. You can't hope that you will defend your goal for 89 minutes and then attack in the last minute and score the winning goal," Navlakhi says.
It is just like planning funds for retirement about a year before the actual retirement date, or even taking a life insurance policy a month before one's death, according to Navlakhi. Having a goal and starting early to meet that goal are absolute musts.
Mistake #3: Not Investing Slowly & Systematically
The problem for many people is that they live month to month and don't develop healthy saving habits until they are in their thirties or forties.
"Contributions to a savings plan should be recognized as the first of your necessary monthly expenses, so that money saved will never be thought of as money that can be spent. Even if you start saving in small amounts now, you can always increase in the future," Navlakhi says.
However, "sometimes even a single financial mistake may be detrimental to your financial goals. In fact, for so many aspects of financial planning, there is no going back, at least without some sort of penalty", according to Harminder Garg, a certified financial planner for Financial Planning Standards Board India.
Let's take a look at some of these mistakes and ways to avoid them:
Mistake #1: Having No Financial Plan
Too many people put financial planning on the backburner until they get older, when panic starts to set in. But having no financial plan or putting off financial planning may be the biggest mistake of all.
"People generally only seek the services of an accountant, for example, when they need to file tax returns. Financial planning is something you can put off easily as there is no requirement for instant gratification - unlike if you have a pain in your body. However, just as putting off visits to a doctor can lead to huge complications, so can delaying an annual check-up with a financial planner.
Therefore, if you want to adequately save for your family and your future or simply retire rich, you first need to get your financial house in order and that can be done only through proper financial planning.
"Financial planning requires thinking through and setting of lifetime financial goals which enable one to determine the appropriate asset allocation required for oneself and one's family. If this asset allocation is followed in a disciplined manner, goals can be achieved without the uncertainties of the market," Lovaii Navlakhi, MD & Chief Financial Planner of the Bangalore-based International Money Matters, says.
Therefore, figure out where you are, where you want to be and put in place a realistic plan for getting there.
Mistake #2: Not Starting Early In Life
Even if some people want to plan for their future, they generally think they need not plan early. Depending upon their individual time frame, thus, they do not like planning for more than three weeks or three months or, rarely, three years in advance.
"Let's imagine that we are kicking off from the centre in a football match. We need to score a goal more than the other team to win. You can't hope that you will defend your goal for 89 minutes and then attack in the last minute and score the winning goal," Navlakhi says.
It is just like planning funds for retirement about a year before the actual retirement date, or even taking a life insurance policy a month before one's death, according to Navlakhi. Having a goal and starting early to meet that goal are absolute musts.
Mistake #3: Not Investing Slowly & Systematically
The problem for many people is that they live month to month and don't develop healthy saving habits until they are in their thirties or forties.
"Contributions to a savings plan should be recognized as the first of your necessary monthly expenses, so that money saved will never be thought of as money that can be spent. Even if you start saving in small amounts now, you can always increase in the future," Navlakhi says.
Mistake #4: Putting All Eggs In One Basket
Another common mistake is non-diversification of portfolio. In this case, a major part of the portfolio is invested in a single or same type of financial instrument which increases risks, resulting in high losses/profits.
"Individuals should, therefore, diversify their portfolio, i.e. all your money should not be invested in the same asset class. Investment portfolios should be diversified in accordance to one's risk appetite," Garg says.
There are two primary reasons to diversify your portfolio - one is to take maximum advantage of the market conditions, and the other is to protect yourself against downturns. The basic concept is to divide your investments among asset classes where returns are inversely proportional to each other.
Mistake #5: Having Unrealistic Expectations
There's nothing wrong with hoping for the 'best' from your investments, but you could be heading for trouble if your financial goals are based on unrealistic assumptions.
For instance, lots of stocks have generated more than 50 per cent returns during the bull run in recent years. However, it doesn't mean you should always expect the same kind of return from the stock markets. Similarly, if your property prices more than doubled during 2004-07, it doesn't mean you should expect at least 30 per cent annual return from real estate in the future. The bursting of stock market bubbles is a case in point.
Therefore, when renowned investor Warren Buffett says earning more than 12 per cent in a stock is pure dumb luck and you laugh at it, you're surely in for trouble!
Mistake #6: Not Sticking To The Budget
You are more likely to face financial problems if you have been extravagant in your expenses. However, in a bid to tide over the current crisis and also avoid such crises in the future, you need to adhere to some financial discipline -- making abudget and sticking to it is one of them. However, to do that it is important to keep track of your spends on a day to day basis to ensure your money is going to the right places. If you are already in the habit of making budgets, then you can also readjust your budget to suit your aims.
Always remember that a rupee saved is a rupee earned. Therefore, stick to discretionary budgets so you can handle the uncertainty in non-discretionary expenses.
Mistake #7: Having No Rainy Day Fund
The need for having an emergency fund, particularly keeping some cash at home or in a bank account, has always been emphasised by investment planners.
"Even standard financial principles suggest that you should keep aside cash to cover three to six months of living expenses, which would also be able to cover most emergency expenses," Garg says.
In real life, however, very few people see the importance of keeping an emergency fund in their portfolio. Forget those who can't afford it. It's true even for those who heavily invest in stocks, real estate and other assets - and sometimes pay heavily for their mistake.
Another common mistake is non-diversification of portfolio. In this case, a major part of the portfolio is invested in a single or same type of financial instrument which increases risks, resulting in high losses/profits.
"Individuals should, therefore, diversify their portfolio, i.e. all your money should not be invested in the same asset class. Investment portfolios should be diversified in accordance to one's risk appetite," Garg says.
There are two primary reasons to diversify your portfolio - one is to take maximum advantage of the market conditions, and the other is to protect yourself against downturns. The basic concept is to divide your investments among asset classes where returns are inversely proportional to each other.
Mistake #5: Having Unrealistic Expectations
There's nothing wrong with hoping for the 'best' from your investments, but you could be heading for trouble if your financial goals are based on unrealistic assumptions.
For instance, lots of stocks have generated more than 50 per cent returns during the bull run in recent years. However, it doesn't mean you should always expect the same kind of return from the stock markets. Similarly, if your property prices more than doubled during 2004-07, it doesn't mean you should expect at least 30 per cent annual return from real estate in the future. The bursting of stock market bubbles is a case in point.
Therefore, when renowned investor Warren Buffett says earning more than 12 per cent in a stock is pure dumb luck and you laugh at it, you're surely in for trouble!
Mistake #6: Not Sticking To The Budget
You are more likely to face financial problems if you have been extravagant in your expenses. However, in a bid to tide over the current crisis and also avoid such crises in the future, you need to adhere to some financial discipline -- making abudget and sticking to it is one of them. However, to do that it is important to keep track of your spends on a day to day basis to ensure your money is going to the right places. If you are already in the habit of making budgets, then you can also readjust your budget to suit your aims.
Always remember that a rupee saved is a rupee earned. Therefore, stick to discretionary budgets so you can handle the uncertainty in non-discretionary expenses.
Mistake #7: Having No Rainy Day Fund
The need for having an emergency fund, particularly keeping some cash at home or in a bank account, has always been emphasised by investment planners.
"Even standard financial principles suggest that you should keep aside cash to cover three to six months of living expenses, which would also be able to cover most emergency expenses," Garg says.
In real life, however, very few people see the importance of keeping an emergency fund in their portfolio. Forget those who can't afford it. It's true even for those who heavily invest in stocks, real estate and other assets - and sometimes pay heavily for their mistake.
Mistake #8: Not Having Adequate Cover
It is pretty evident that an economic recession , a pay cut or higher interest rates on loans would all have much less of a negative impact on your family's financial future than the death of the bread winner of the family. However, few people realize the importance of having sufficient risk cover as most people look at insurance as a no-return investment. Also, as the financial needs of individuals have evolved over time, there is heightened importance of risk protection combined with wealth creation.
"Insurance products can help provide an important protective shield around one's financial goals and retirement savings. They also help in effectively managing a diversity of risks and allows one to enter their retirement years with more confidence," Atul Surana, CFP at Catalyst Financial Planning, says.
Mistake #9: Counting on Tomorrow's Income
Counting on tomorrow'sincome to spend today is a big mistake which has already been proved by the current crisis. In fact, until the financial meltdown hit us, the spending levels of individuals, especially in the 25-35-year age group, have been almost equal to their income, if not more.
"With easily available loans and credit cards, they were tempted to indulge even without being able to afford the expense. Now with pay cuts and job losses, they are facing the worse. However, even if you keep your job now, the prevalence of pay cuts makes it clear that you can't count on an ever-expanding paycheck to make up for your spending," Navlakhi says.
Therefore, you should avoid counting on tomorrow's income as far as possible.
Mistake #10: Being Guided By Fear & Greed
Many investors have been losing money, particularly in stock markets, due to their inability to control fear and greed. In a bull market, for instance, the lure of quick wealth is difficult to resist. Greed augments when investors hear stories of fabulous returns being made in the stock market in a short period of time.
"This leads them to speculate, buy shares of unknown companies or create heavy positions in the futures segment without really understanding the risks involved," Ashish Kapur, CEO, Invest Shoppe India, says.
Instead of creating wealth, such investors, thus, burn their fingers the moment market sentiment reverses. In a bear market, on the other hand, investors panic and sell their shares at rock bottom prices, thus losing money again.
It is pretty evident that an economic recession , a pay cut or higher interest rates on loans would all have much less of a negative impact on your family's financial future than the death of the bread winner of the family. However, few people realize the importance of having sufficient risk cover as most people look at insurance as a no-return investment. Also, as the financial needs of individuals have evolved over time, there is heightened importance of risk protection combined with wealth creation.
"Insurance products can help provide an important protective shield around one's financial goals and retirement savings. They also help in effectively managing a diversity of risks and allows one to enter their retirement years with more confidence," Atul Surana, CFP at Catalyst Financial Planning, says.
Mistake #9: Counting on Tomorrow's Income
Counting on tomorrow'sincome to spend today is a big mistake which has already been proved by the current crisis. In fact, until the financial meltdown hit us, the spending levels of individuals, especially in the 25-35-year age group, have been almost equal to their income, if not more.
"With easily available loans and credit cards, they were tempted to indulge even without being able to afford the expense. Now with pay cuts and job losses, they are facing the worse. However, even if you keep your job now, the prevalence of pay cuts makes it clear that you can't count on an ever-expanding paycheck to make up for your spending," Navlakhi says.
Therefore, you should avoid counting on tomorrow's income as far as possible.
Mistake #10: Being Guided By Fear & Greed
Many investors have been losing money, particularly in stock markets, due to their inability to control fear and greed. In a bull market, for instance, the lure of quick wealth is difficult to resist. Greed augments when investors hear stories of fabulous returns being made in the stock market in a short period of time.
"This leads them to speculate, buy shares of unknown companies or create heavy positions in the futures segment without really understanding the risks involved," Ashish Kapur, CEO, Invest Shoppe India, says.
Instead of creating wealth, such investors, thus, burn their fingers the moment market sentiment reverses. In a bear market, on the other hand, investors panic and sell their shares at rock bottom prices, thus losing money again.
Tuesday, August 14, 2012
KAVERI SEED COMPANY - RESULT UPDATES
KAVERI SEED COMPANY
Recommended @ Rs.272 and currently trading @ Rs.803 /- posted an increase of 114 % in net profit for the June quarter (Rs.101 Cr ) . Company's sales also jumped 100% to Rs.480 Cr .June quarter EPS is Rs.74
For old posting ,Click HERE
Recommended @ Rs.272 and currently trading @ Rs.803 /- posted an increase of 114 % in net profit for the June quarter (Rs.101 Cr ) . Company's sales also jumped 100% to Rs.480 Cr .June quarter EPS is Rs.74
For old posting ,Click HERE
Saturday, August 11, 2012
ION EXCHANGE (INDIA) LTD - REPEAT
ION Exchange is one of my old recommendations @ Rs.135 ,which is now trading almost 5 % lower @ Rs.126/-. In my previous posting I clearly mentioned that ,attitude of its promoters towards this listed entity is the major cause of concern for this company even if it is operating in an industry with huge potential.We know ,the potential of water/waste water treatment business is huge and scope is increasing with decreasing availability and increasing demand of water.Even this company is a pioneer in this sector and one among the few listed players from this segment ,till now investors are not enthused mainly due to the conflict of interest factor.Promoters of this company having some privately held companies in the same line of business.But now , after a long wait there is some early signs of a change in their attitude.Now they decided to merge one of their biggest privately held company ION Exchange Services(IESL) with the listed entity.IESL is operating in water/waste water treatment plant construction ,operation and allied services.Company having 27 offices across India and 2 abroad with an employee strength of 1200.Even the current turnover of of IESL is close to Rs.100 Cr,company having concrete plans to increase its business by 5 fold mainly through acquisitions and expansions to other territories like South Asia, Middle East and African nations.On merger of this company with ION Exchange , these plans will materialize through the listed entity.This merger will also increase the promoter stake in ION exchange and chances are there for higher promoter commitment. In another important development ,company decided to aggressively concentrate in the Rs.4000 Cr retail water purifier market with its flagship brand ‘Zero-B’. Even if this brand is the pioneer in this segment ,company lost its market share to Aquaguard,Pure it..etc.Now it is planning to revive its marketing network and spend more for advertisement. In the financial front too company is showing better performance in recent times.For the FY2012 ,company posted a turnover of Rs.651 Cr and a net profit of Rs.18 Cr compared with Rs.573 Cr and Rs.12 Cr in previous year. Promoters are currently holding 41% stake (pre-merger) and big investors including Rakesh Jhunjunwala holding another 12 % in this company .I believe the management at last realized the potential of the company they are possessing (Listing of VA Tech Wabag may acted as an eye opener) and decided to correct their past mistakes.If it happens so ,ION Exchange which is operating in an industry with huge potential and with well experienced promoters may turn as a multi bagger even from current level of Rs.126/-
Related Readings :
1) Ion Exchange Services Ltd. launches Remote Monitoring of Water Treatment Plants
2 ) Zero B plans comeback in water purifier market
3 ) Ion Exchange (India) Limited signs a joint venture with Safic
Related Readings :
1) Ion Exchange Services Ltd. launches Remote Monitoring of Water Treatment Plants
2 ) Zero B plans comeback in water purifier market
3 ) Ion Exchange (India) Limited signs a joint venture with Safic
Monday, August 6, 2012
NITTA GELATINE , WPIL , GRANULES INDIA - UPDATES
NITTA GELATINE
Recommended @ Rs.86 / - and currently trading @ Rs.150 /- posted an increase of 847 % in net profit for the June quarter .
For old posting ,Click HERE
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WPIL
Recommended @ Rs.187 / - and currently trading @ Rs.412 /- , posted an increase of 30 % in net profit for the June quarter .
For old posting ,Click HERE
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GRANULES INDIA
Recommended @ Rs.79 / - and currently trading @ Rs.145 /-
For old posting ,Click HERE
Mr. Vijay Ramanavarapu ( Head - Strategic Sourcing in the Company) purchased 15000 shares from open market at an average rate of Rs.145/- per share.
---------------------------------------------------------------------------------------------------------------------------
Recommended @ Rs.86 / - and currently trading @ Rs.150 /- posted an increase of 847 % in net profit for the June quarter .
For old posting ,Click HERE
---------------------------------------------------------------------------------------------------------------------------
WPIL
Recommended @ Rs.187 / - and currently trading @ Rs.412 /- , posted an increase of 30 % in net profit for the June quarter .
For old posting ,Click HERE
GRANULES INDIA
Recommended @ Rs.79 / - and currently trading @ Rs.145 /-
For old posting ,Click HERE
Mr. Vijay Ramanavarapu ( Head - Strategic Sourcing in the Company) purchased 15000 shares from open market at an average rate of Rs.145/- per share.
---------------------------------------------------------------------------------------------------------------------------
Saturday, August 4, 2012
TAYO ROLLS - LONG TERM BUY
Tayo Rolls is a Tata Group company manufacturing Cast Iron,Steel Rolls, Forged Hardened Rolls and Engineering Forgings and Pig iron.This company is a joint venture between Tata Group and Yodogawa Steels of Japan.Tata Steel holding about 55% stake and the foreign promoter holding about 15%. Company having technical collaboration with Austria based ESW and Sheffield Forgemasters International Ltd. of UK.About 40 % of company’s turnover is from exports to countries like Australia, Austria, Bangladesh, Belgium, Canada, Egypt, Germany, Indonesia, Kazakhstan, Nepal, Norway, New Zealand, Oman, Quatar, Saudi Arabia, Sweden, Singapore USA..etc. Company went through massive capacity addition in past few years but at the time of the completion of this projects its user industries including Steel Industry slipped into lower demand mainly due to lower construction activities and general slowness in many Industries.Lower demand for its products and higher interest outgo due to spending for capacity expansion resulted pathetic performance in past few quarters. To address this problem,recently company raised about Rs.85 Cr from its promoters through a preference share issue at lower interest rate. Now company is showing some initial signs of revival.In the latest quarter company increased its turnover from Rs.29 Cr to Rs.49 Cr and reduced loss substantially from Rs.13 Cr to Rs.3.5 Cr .I feel ,the worst time of TAYO will end soon and it will back to black in near future.After touching a high of Rs.465/- in 2008 its share price is now quoting around Rs.77/-. Recommending a BUY only for those having patience to hold it more than one year @ CMP of Rs.77/-
Thursday, August 2, 2012
DE- NORA INDIA - RESULT UPDATE
DE-NORA INDIA (CMP Rs.110) NET PROFIT UP 469 % IN JUNE QUARTER
For Old posting on this company ,click HERE
Wednesday, August 1, 2012
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