Monday, October 31, 2011
METALS, CEMENT AND OIL & GAS DRAG SENSEX
The stocks that will be active with bias towards upward movement in the next 2-3 trading sessions are L&T, Coal India, RIL, HINDALCO, Hero Motor corp, Axis bank, SBI and ICICI bank.
Sunday, October 30, 2011
IPO ANALYSIS: CARE – TRUSTWORTHY OFFER - INVEST

The Canara and IDBI Bank promoted CARE will be shortly hitting the market with an IPO, an offer for sale.
Being a rating agency which has graded many IPOs knows the importance of right pricing. The IPO would be priced be priced appropriately, keeping in mind the retail investors interest.
CARE is a leading, full service credit rating company and in terms of rating income, for the year ended March 31, 2011, CARE is the second largest rating company in the country.
The primary focus has been to provide credit rating services. CARE has 18 years of experience in rating debt instruments and related obligations covering a wide range of sectors, such as manufacturing, services, banks and infrastructure. The list of clients includes banks and other financial institutions, private sector companies, central public sector undertakings, sub-sovereign entities, small and medium enterprises and micro-finance institutions, among others.
Strengths:
1. Established presence in rating debt instruments and bank loans.
2. Domain experience across a range of sectors.
3. Strong rating credibility and brand presence.
4. Strong origination capabilities and relationship management.
5. Experienced management.
6. Strong financial position and profitability - the total income has increased from Rs. 301.39 million for the financial year 2007 to Rs. 1,766.28 million for the financial year 2011, at a CAGR of 55.6% during such period. The profit after tax has increased from Rs. 135.61 million for the financial year 2007 to Rs. 910.59 million for the financial year 2011, at a CAGR of 61.0% during the same period.
AWAIT DEATILED ANALYSIS.
Friday, October 28, 2011
METALS, INFRA AND BANKS STOCK RALLIES, SENSEX UP BY 500 POINTS
FIIs have turned very bullish on our market and net purchased in excess of Rs 2100Cr, for the first time in recent months, in cash market.
DIIs have net sold Rs around Rs1100Cr in cash market.
Delivery, as a percentage of traded volume, is in excess of 60% for TCS, Hero, Infy, Axis, Hindalco,RIL,Cairn, Coal India,HDFC Bank,Tata Power,ITC,BHEL,ONGC,Sun Pharma,Dr Reddys and ICICI. For L&T, Sterlite and ACC it is in excess of 50%.
The NIFTY is likely to test 5500 level next week.
Thursday, October 27, 2011
HINDALCO, SBI AND ICICI BANK POISED FOR SUBSTANTIAL UPWARD MOVEMENT
HINDALCO counter is likely to be active with positive bias ahead of its Q2 results.
Wednesday, October 26, 2011
SAVINGS RATE DEREGULATION WILL NOT DENT PROFITABILITY OF BANKS

The popular perception of the new guidelines issued by the RBI on savings rate is that that will considerably hit the profitability of banks.
This is based on the view that there would be rate war among banks and savings deposit rate would move up. Close examination of components of total bank deposits and the likely impact of the new guidelines on the profitability reveal a different story.
On an average CASA accounts for 40% of the total deposits of a bank and SA accounts for less than 20% in CASA. And in that 20% more than 90% of the accounts falls under the category of Rs 1lac or less, for which fixed uniform rate applies. In effect, the savings account which may qualify or compete for higher rate will be around 1% of a bank’s total deposit. The outgo of additional interest on account of this would be negligible and would not affect the NIM of banks.
The banks to offset the additional interest out go on savings accounts, due to new guidelines, will revisit the interest rates for loan products to maintain the desired NIM.
The new guideline is likely to attract more deposits, which hither to invested elsewhere. And this will help the banks in improving the overall profitability.
BUY WELL MANAGED BANK STOCKS. WE RECOMMEND BUYING - SBI, AXIS,CANARA AND ICICI AT CMP.
Tuesday, October 25, 2011
RATE HIKE ON EXPECTED LINE PUSHES NIFTY BY 100 POINTS
Barring Kotak and ICICI, other bank stocks in the NIFTY, closed in the negative, reacting to the rate hike and policy announcement made by RBI in respect of savings rate deregulation.
FIIs net bought in excess of Rs 400Cr in cash market.
STOCK WATCH : BUY L&T, CMP RS 1274
Monday, October 24, 2011
FIIs TURNS NET BUYER
The controversial IPO Vaswani Industries got listed today. As against the issue price of Rs 49, the stock closed at Rs 19.
Saturday, October 22, 2011
EXPECT GAP UP OPENING ON MONDAY
The Asian stock markets on Monday are expected to open and trade in green. The U S markets on Friday closed strongly. The net selling by FIIs in the last 3 trading sessions is likely to be reversed. Some short positions are still to be covered in pivotols which may further push the Sensex. And this may continue for one or two trading sessions.
Friday, October 21, 2011
L&T, MARUTI AND BHARTI PULL DOWN NIFTY
FIIs net sold to the extent of Rs 234Cr and DIIs net purchased to the extent of Rs 73Cr in cash market. NIFTY stocks turnover (CM) was one of the lowest.
Thursday, October 20, 2011
NIFTY POISED FOR POSITIVE MOVEMENT
Wednesday, October 19, 2011
P E INVESTORS IN SKS MICRO SUFFER HUGE LOSSES
SKS Micro IPO was managed by Kotak Mahindra Capital Company, Citigroup Global Markets and Credit Suisse Securities (India). The IPO was priced at Rs 985, with Rs 50 discount to retail investors. The BRLMs justified the high premium basing on the company’s past CAGR, future growth prospects and picking of equity by well-known PE investors.
The IPO was sold telling investors that this company is next Infosys and TCS. Investors believed them.
The PE investors included Sandstone, Kismet, Bajaj Allianz, ICP Holdings, Catamaran, Quantum and Tree Line Master Fund. The total holdings of these investors are around 25% of SKS Micro’s paid up capital. The first five picked at Rs 300 per share and the last two picked up at Rs 636 per share. Apart from opportunity cost, all these investors have suffered huge losses.
What perplexes the investing community is how come the PE investors paid such a huge premium for a company which had limited track record and no record of dividend payment.
Not only they have suffered huge losses, they made many retail investors to lose their money too, who had invested relying on the expertise and wisdom PE investors.
There are unconfirmed reports that Quantum and ICP Holdings have exited SKS, booking losses.
SHORT COVERING PUSHES SENSEX BY 300 POINTS
Monday, October 17, 2011
SIX STOCKS WHICH WILL BE VERY ACTIVE ON 18-10-11
1. HINDALCO
2. MARUTI
3. CAIRN
4. SBI
5. HERO MOTOR CORP
6. AXIS BANK
Sunday, October 16, 2011
JOYALUKKAS GETS GRADE 3 FROM CRISIL
Joyalukkas, Kochi-based Company engaged in retail jewellery business, which is planning an IPO, has been assigned grade 3 by CRISIL.
Through the IPO, Joyalukkas plans to issue 18 mn new shares and has outlined a capex of Rs 5.2 bn.
Friday, October 14, 2011
KNOW YOUR BRLM – KOTAK MAHINDRA CAPITAL COMPANY
From Nov 1 this year, BRLMs have to disclose their past track record in managing the IPOs. Starting from today First Choice IPO will publish the track record of all merchant bankers. We shall start with the so called number ‘one’ merchant banker in the country – Kotak Mahindra Capital. The statistics is for the period starting from 01-01-10 till date. Along side, the recommendations of the First Choice IPO are also mentioned. Judge yourself.
NAME OF THE COMPANY |
MONTH |
ISSUE PRICE |
CMP 13-10-11 |
FIRST CHOICE RECOMMENDATIONS |
VASCON | 2010 JAN |
165 |
49 |
AVOID |
DB REALTY |
JAN |
468 |
52 |
AVOID |
JUBILIANT FOOD |
JAN |
145 |
900 |
AVOID |
NTPC |
FEB |
201 |
174 |
AVOID |
HATHWAY |
FEB |
240 |
102 |
AVOID |
REC-FPO
|
FEB |
193 |
178 |
INVEST |
NMDC-FPO |
MAR |
300 |
252 |
INVEST |
NITESH ESTATES |
APR |
54 |
17 |
AVOID |
JAYPEE INFRA |
MAY |
102 |
51 |
AVOID |
STD. CHRTD. BK IDR |
MAY |
104 |
88 |
INVEST |
SKS MICRO |
JUL |
985 |
218 |
AVOID |
HM MEDIA VENTURE |
JUL
|
166
|
146 |
INVEST |
BAJAJ CORP |
AUG |
660 |
510 |
INVEST |
GPPL |
AUG |
46 | 73 | INVEST |
TECPRO | SEP | 355 | 213 | INVEST |
EROS | SEP | 175 | 253 | INVEST |
OBEROI REALTY | OCT | 260 | 231 | INVEST |
COAL INDIA | OCT | 245 | 332 | INVEST |
PRESTIGE ESTATES |
OCT 2010 |
183 |
109 |
AVOID |
TATA STEEL FPO |
JAN 2011 |
610 |
454 |
INVEST |
MUTHOOT FINANCE |
APR 2011 |
175 |
170 |
INVEST |
FUTURE VENTURES |
APR 2011 |
10 |
9 |
AVOID |
Thursday, October 13, 2011
STOCK WATCH: COAL INDIA - BUY
The share price of Coal India has corrected more than 10% in the last few trading days, due to the following reasons:
- The clearance of draft mining bill by the cabinet.
- Threat of strike by employees for better pay and bonus.
- The decision of the coal ministry agreeing to the demand of power ministry to divert a portion of e-auction sale of coal to the power sector.
The consequences:
The draft bill envisages that the companies would have to share 26% of the profit with locals. This is applicable to all mining companies, including Coal India. Being the largest producer and reserve holder of coal, it would not be difficult for the company to adjust its pricing and maintain profitability. In the long run, what is good for the locals will be good to Coal India too. Growth in any sector / region should always be inclusive. This policy move of the government is in the right direction.
Coal India is one of the largest employer in the country, has successfully implemented many wage settlements in the past. The company reviews the coal prices regularly. They should have factored the possible wage increase and other demands of the workers in to it. Hence this may not have any impact on its earnings.
The company, in the e-auction, sales around 10% of its total productions, gets a premium of Rs 900 a tonne, compared to the regular sales. By diverting a portion to coal starved power sector, as agreed by respective ministries, its profitability to some extent may be hit. However Coal India may rework its coal prices for both e-auction and others, to maintain and improve its profitability. Coal India has almost monopoly power over production, pricing and supply of coal in India. Coal India’s prices are cheaper by 30-35% compared to international prices.
At Rs 335 the share is trading around 10 PE of its FY 13 earnings, which is very attractive. Investors can accumulate at this level.
Tuesday, October 11, 2011
VERY BULLISH UNDER CURRENT
Monday, October 10, 2011
PERFORMANCE OF IPOS RECOMMENDED BY FIRST CHOICE IPO
NAME OF THE COMPANY |
ISSUE PRICE |
CMP |
GODREJ PROPERTIES |
490 |
660 |
TANGAMAYI | 75 | 154 |
REC | 193 | 161 |
UBI | 66 | 72 |
NMDC | 285 | 237 |
PERSISTANT | 310 | 300 |
PRAKASH STEELAGE | 110 | 121 |
MANDHANA | 130 | 211 |
HM MEDIA VENTURES | 166 | 126 |
MOIL | 375 | 266 |
PFC | 90 | 98 |
PSB | 120 | 65 |
GRAVITA | 125 | 370 |
COAL INDIA | 245 | 338 |
ACROPETAL | 90 | 15 |
VATECH# | 1310 | 1945 |
EROS | 175 | 235 |
OMKAR | 98 | 68 |
BAJAJ CORP# | 660 | 500 |
INVENTIVE | 117 | 81 |
GPPL | 46 | 68 |
ASHOKA BUILDCON | 324 | 240 |
MUTHOOT | 175 | 159 |
TREE HOUSE | 135 | 173 |
EIL | 276 | 249 |
# ADJUSTED TO SPLIT.