Friday, May 25, 2007

Technical Indicator forming Head & Shoulder Pattern

S-ROC (Rate of Change) Indicator is forming Head & shoulder pattern in Nifty on daily chart.

Head & shoulde patern is considered to be the most reliable pattern in Technical Analysis. One needs to check for the indicator to break the neck line for further confirmation.


Please check the Disclaimer on this blog.

Disclosure: I may have position or maybe trading in above said stocks for myself/ family members / friends / Associates.

Tuesday, May 22, 2007

Nagarjuna fertilizer - Re-Rating Candidate

Biggest Advantage to this urea manufacturing company in kakinada port is its proximity to KG Basin & all the pipe lines has to go through this area.
Till date naphtha and APM gas are being used as raw material, which are considerably expensive. Also due to Government subsidy, Nagarjuna fertilizer is facing a loss of almost 25 crores. More ever the company has two loss making subsidiaries Nagarjuna Power Corporation in Mangalore & Nagarjuna Oil Corporation in TN which is affecting the balance sheet drastically.

Raise of hopes are being seen in this counter, as company has appealed for permission for using gas as raw source instead of the other two expensive alternatives. Also Reliance has proposed a long term contract for gas supply. Only hiccup is both the things require Government permission.
The company is also planning to sale the stake in the loss making companies to the biggies of the Indian Industries, Reliance & TATA.

All this above factors & the interest shown by the likes of Big R – a Fundamental Bull, can change the equations for this counter. For years, Nagarjuna Fertilizer was languishing below 20 & now maybe in a year it can double from here.
So do watch this re-rating candidate as it has moved out of his band with a bang.

Please go through Disclaimer on this blog.

Disclosure: I may have position in above said stocks for myself/ family members / friends.

Thursday, May 17, 2007

South East Asia Marine - Value Pick

The Company is engaged in the Business of operation of multi support for underwater/sub sea engineering services, deep sea diving, inspection of underwater structures, repairs and maintenance of offshore platforms fire fighting services and rescue operations.

SEAMEC has three of the five MSVs owned by Indian companies. The other two belong to ONGC. SEAMEC recently owned Oceanic Princess in June 2006.

Technip, a French company is the parent company of SEAMEC, holding 78% in it. Basically Technip belongs to CSO group, a global player in sub-sea engineering and has complete supremacy of construction services in deep-sea underwater pipeline business in the world for the leading oil and gas companies. This has given an edge to SEAMEC over other Indian peers.


Share holding Pattern

Promoters - 78.24%
Institutional Investor - 6.5 %
Other investor – 6.5%
Public – 10.3 %

Mutual fund Holdings this script

Sundaram BNP Paribas Select Midcap

Reliance Monthly Income Plan - Growth

Birla Sun Life

Kotak MNC


A debt free company With EPS of 17 & Net profit of 59 crores on a small equity of 34 crores.

Stock is trading at just 6 x its estimated 07 Earnings. Stock is hugely underpriced and offers good scope for sharp appreciation. Comparing to its peer, Shivvani trades at 46 X , Alphageo at 18 X.
SEAMEC is worth much more than what its trading at(188). The fair price can be at least Rs.250/-

Please go through Disclaimer on this blog.

Disclosure: I may have position in above said stocks for myself/ family members / friends.

Market Hints

Market Hint (M-HINT)

Watch Micro Technologies. Goldy has taken a stake of 8% in it from the open market. Chances of going up aggressively.

Leading Brokerage House has given target of 250/- for GDL

Strong Bull is all set to take MTNL to new highs.

SRF is likely to gain substantially from the sale of carbon credits.
Also at current market price, the share price is at discount in compare to the industry average P/E. The script seems to have a good risk reward ratio & can be a good rewarding trade.


Above are market hints & I don’t necessarily subscribe to it. Please confirm it at your end before taking any action.

Please check the Disclaimer on this blog.

Disclosure: I may have position or maybe trading in above said stocks for myself/ family members / friends / Associates.

Friday, May 11, 2007

IFCI - True Worth - A probability?

IFCI total equity is 63.8 crores of shares outstanding. It's Post Tax Profit for 06-07 is Rs.898 crores or about Rs.14 per share.
Almost entire Non Performing Assets (NPA) or Loans of about Rs.6000 crores (Rs.94 per share) has been fully provided for. Its NET WORTH has turned positive. Its actual business of corporate lending has resumed, granting fresh advance of Rs.1000 crores and additional Rs.2500 crores will be sanctioned this year.

IFCI's earlier major lending had been to Steel and Textile sector both of whom are riding high on the back of higher steel prices and higher real estate prices for their land holdings. Most investments in corporate were made at bottom prices and have zoomed several times. For example, it bought LIC Housing Finance (over 2 Million shares) and UTI Bank below Rs.20 against current market price of Rs.155 and Rs.470 per share. Because, the investments are generally valued at Cost price or Market price, whichever lower, the gains or earning gets understated several times. New taking over institution will adopt more realistic model for earning reporting.

Presuming that regular EPS (from Interest earning) will be in the region of Rs.8 per share, unrealized gains on BSE holding at about Rs.650 crores (Rs.10 per share), the potential gains on ICRA sale, the EPS will zoom to over Rs.30 per share.

Further, it is normal practice that the Bank or FI's bad debts generally get realized at about 65% of outstanding value. It is safe to guess that out of Rs 6000 crores of bad debts fully provided for, it is likely that they would realize about Rs 3900 crores or massive Rs 61 per share. This will get unlocked over next 3 years (because limitation period runs for just 3 years)

In all, the EPS will consistently be over Rs.35 per share (including special gains) for next 3 years. Considering potential PE ratio of just 10 times, the stock could go over Rs.300 in just under one year time. Every quarter will give massive boost.

It may come to Dividend payment by next year. IFCI board has passed resolution to attract foreign strategic partner to give stake up to 74%. If some foreign brokerage takes over this institution, the PE rating will increase to 18 times, which translate stock prices to 500 or more.

As per latest development, 8 foreign institutions have expressed interest to take 51% equity or more. If such things do happen, there has to be public offer for remaining 49% or 26% as the case may be, under existing takeover rules.
In all probability, the take over price could shape into Rs.80 to Rs.120 per share.

If some foreign brokerage like Lehman Bros takes over, the valuation will be higher as above. If it is taken over by some foreign banks like Citicorp, then valuation will be lower, because brokerage firms usually boost the stock prices of their holding by feeding the market with good news in constant stream. Banks do not. So, if some brokerage like Lehman Bros takes over, stock could go to over Rs.500 and if taken over by Citicorp or its ilk, the valuation will come down to modest Rs.250 to Rs.300


Note: Special Thanks to my friend who have contributed the above details.


Together We Prosper.


Please go through Disclaimer on this blog.

Disclosure: I may have position in above said stocks for myself/ family members / friends.

Tuesday, May 08, 2007

IFCI - Once Again

Market Hint (M-HINT) - IFCI can perform shortly going beyond 50 plus in couple of trading sessions as IFCI is planning to sell 10% stake to a leading global bank around Rs.65 per share.

Please confirm at your end before taking any action.


Does IFCI with such a fabulous turnaround result worth only Rs.65?
One of our friend has came out with details which can reveal the probable price of IFCI.
Will post it soon. Stay Tuned.

Together We Prosper.


Please go through Disclaimer on this blog.

Disclosure: I am having position in above said stocks for myself/ family members / friends.

Monday, May 07, 2007

IDBI – Peek into Next Multi Bagger

History of IDBI


IDBI was established in 1964 as a wholly owned subsidiary of the Reserve Bank of India (RBI). In 1976, ownership was transferred to Government of India (GoI) & in 1995, GOI disinvested 18 % of its stake through IPO.

IDBI is a largest DFI in India. It has played an important role in providing project financing & are among largest debt issuers in domestic markets.
It has strong brands created with over more than 5 million investors. Pioneered capital market development by setting up National Stock Exchange – an electronic Stock Exchange, NSDL – a Securities Depository, CARE – a Rating Agency, SHCIL – a Depository, etc.

Some Fact about IDBI


IDBI is holding following investments
25% stake in NSDL ( 20 lac shares)
Majority stake in SIDBI
17% stake in NSE
18% stake in Stockholding Corporation ( 38 lac shares )
28% stake in IFCI?( 18 cr shares)


According to sources, Fin min has issued a LOI to IDBI to sell 15%
stake in NSDL, majority holding in SIDBI, at least 10% from NSE and
entire 18% in Stockholding Corporation to raise sizable funds to meet the
growing requirement of infrastructure requirement.


a.) NSE stake is now openly valued at Rs.2400 crs i.e. Rs.35 per share

b.) NSDL is valued at Rs.800 crs on rough estimates and 15% dilution could mean Rs.110 crs in the hands of IDBI i.e Rs.1.50 per share


c.) 38 lac shares of Stock holding @ Rs.1400 works out to Rs.500 crs in the hands of IDBI. Rs.7 per share

d.) 18 cr shares of IFCI could fetch at least 540 crs to IDBI which is around Rs.7.5 per share


Totaling all this works out to Rs.51 per share whereas there is cash reserve of Rs.30 plus/share in the Balance Sheet. It means IDBI is available at Rs.10 per share minus cost of investments and life insurance biz coming into.


Public holding is around 14% whereas FII holding is nearly 13% so more scope for hiking it IFCI's way.


So it’s for anyone guess, the Valuations per share for the largest Industrial Financial Institution.


Note: Special Thanks to my friends who have contributed the above details.


Disclosure: I may have position or maybe trading in above said stocks for myself/ family members / friends / Associates.

Sunday, May 06, 2007

Gold ETF - Secure way of accumulating Gold

ETF are basically a passively managed fund similar to Index Funds which tracks benchmark index. They can be traded like stocks.

Gold ETF are open ended fund through which investor can invest in gold without taking physical delivery. The fund tracks prices of gold.
The best part of it is one can do intra day trade on it which is not possible for regular mutual fund units. They are cheapest, easiest & provide more tax benefits than other funds.


With Security as a prime concern & Bank lockers difficult to get, Gold ETF offers a more safe way of stocking gold in a form of Demat. It’s a more practical investment since it offers easy liquidity & a security.

Since every commodity & equity has its own cyclical demand, one needs to understand it properly for a prudent decision to invest.


Disclaimer & Disclosure as regular from previous posts.