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A TIME COMMUNICATIONS PUBLICATION VOL. XIX No. 53 Monday, November 8 - 14, 2010 Pages 20 Rs.12 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Markets eye historical highs!

By Sanjay R. Bhatia The market trend remained firm but range bound on the back of positive global market cues and good fund flows. Although regular bouts of selling pressure and profit booking were witnessed at higher levels, the markets managed to hold on the back of regular buying support. The volumes recorded remained high amidst a positive breadth. A good listing of Coal India also helped the markets turn buoyant. Incidentally, the FIIs were net buyers in the cash as well as the derivatives segment. Mutual Funds, on the other hand, remained net sellers during the course of the week. Crude oil prices traded around the $87-85 levels and the US economy continued to paint a mixed picture. On the other hand, the RBI increased the Repo rate and Reverse Repo rate by 25 bps. Technically, The RSI is placed comfortably above its average but remains in the overbought zone on the weekly charts. The KST has also moved above its signal and trigger line, which augurs well for the markets and would help in garnering buying support at lower levels. However, a few technical negatives continue to hold good and could trigger a correction. The Stochastic is placed in the overbought zone on daily charts, which would trigger profit-booking at regular intervals. The MACD is placed in the negative below its respective signal line, which is a negative sign and could trigger some selling pressure. The negative divergence formation has still not been negated and holds good. The ADX continues to move sideways, but +DI line shows signs of moving higher. Now, it is important that the markets witness buying support at regular intervals for the Nifty to move higher. The markets would continue to witness profit booking and selling pressure at regular intervals. The overall trend is likely to remain range bound. Any negative news flow can lead to increase selling pressure on the bourses. In the meanwhile, the markets would continue to take cues from the global markets and crude prices. Technically on the upside, the Sensex faces resistance at the 21000, 21207 and 21500 but seeks support at the 20827, 20582 and 20290 levels. The support levels for the Nifty are placed at 6275, 6186 and 6050 while it faces resistance at the 6357 and 6450 levels. Traders and speculators can buy SBI with a target price of Rs.3600 and a stop loss of Rs.3350.

BAZAR.COM
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By Fakhri H. Sabuwala Shubh Muharat and my Saal Mubarak wishes to all Money Times readers. May the India Inc. Express gather further momentum and scale higher peaks in the new Samvat 2067. Diwali is traditionally a time to clean up our cupboards, wardrobes, drawers but more importantly our mind, heart and soul. This cleansing act would be incomplete if the firm resolve to participate in Indias growth is missing in your thoughts and actions. When the country is on the threshold of its second trillion dollar GDP by 2013 and a trillion dollar savings in three years from now, no sensible Indian can distance himself from this growth trajectory and not earn his slice of the pie and create wealth for himself. Creation of wealth must be the prime focus of every investor and let this be your firm resolve this Diwali. This thought, resolve and action on this path will make you a fortune, a real golden satisfying fortune. On the muhurat eve, lets dwell on the major investment themes and ideas that transports us from this Diwali to the next profitably. The future is now.at Dalal Street! Infrastructure: Power, roadways, railways, ports, airports, education and healthcare are the areas covered under infrastructure. The huge budgetary outlay in all these sectors will propel companies involved in them to break new grounds. Scrips from this sector are reviewed below. Consumption play: The resilience which India is known for finds its roots in rural consumption. Higher rural income and savings improves the scope for higher discretionary spending. This means that discretionary products are becoming necessities. The high growth in the sale of TVs, refrigerators, washing machines, cars and two-wheelers prove this point beyond doubt. * Coal India: The muharat listing of this Kaala Sona may be the best scrip for this Diwali. Coal prices are always on an up beat and with 65% of power generation in the thermal mode, there is just no downside to this scrip. A multi-bagger in coming days. * CESC: This regional integrated power utility is all geared to reap huge benefits of its expansion backward integration initiatives and the contribution from its other businesses. Available at one time book value, this Rs.23 EPS company will post a CAGR of 9% in revenues between FY10 to FY12 and a CAGR of 5% in the corresponding net profits. * Cairn India: It reports a sharp rise in net profits as its oil fields were ramped up to the approved peak production levels. Consolidated net profit in Q2FY11 zoomed to Rs.1585 cr. from Rs.469 cr. in Q2FY10. Revenue has leapt to Rs.2686 cr. from Rs.230 cr. a year ago. Its a multi-bagger in-the-making. * Onmobile Global: The Telecom industry is on a rebound and the introduction of 3G is expected to drive data revenues, which in turn will benefit Onmobile. The scrip can safely give 50% apperception from this Diwali till the next. * The Petroleum Trio: BPCL, HPCL and IOC. These three scrips are worth watching not only for this year but for the decade. With the government willing to bite the bullet of deregulation and reducing the subsidy burden this Rs.5,30,000 cr. turnover per annum trio with a meager Rs.3500 cr. equity base can go places, which are yet unthinkable and unimaginable.

The future is Now!

Muhurat Picks:

TRADING ON TECHNICALS

Indices almost at the peak

By Hitendra Vasudeo Last week, the BSE Sensex opened at 20272.49 registered a low at 20267.10 and moved up on a daily basis with a gap to 20917.03 and finally closed the week at 2089.57 thereby recording a net rise of 861 points on a week-to-week basis. Two things happened last week. First, 19700 was not violated, which meant that a further fall or extended correction was unlikely. Secondly, sustained gains with a daily gap up and a strong intra-day rise on Thursday, 4 November 2010, leads us to conclude that the near term probability of the historical peak of 21206.7 registered in 2008 is likely to be tested.
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On the eve of WEEKLY UP TREND STOCKS Let the price move below Center Point or Level 2 and when it move back above Center Point or Level 2 then buy with Diwali, if we shift what ever low registered below Center Point or Level 2 as the stop loss. After buying if the price moves to Level 3 or the focus from the above then look to book profits as the opportunity arises. If the close is below Weekly Reversal Value then the trend will weekly update to change from Up Trend to Down Trend. Check on Friday after 3.pm to confirm weekly reversal of the up Trend. the yearly update, Weekly Up Last Level Level Center Level Level Relative Stop Scrips Reversal Trend then the Sensex Close 1 2 Point 3 4 Strength Loss Value Date upper levels as per Stop Buy Buy Book Book yearly chart are Loss Price Price Profit Profit placed at 22656 and VIJAYA BANK 112.95 109.1 111.5 115.4 121.7 85.7 108.1 104 8-10-10 27291. The lower SYNDICATE BANK 147.50 141.5 145.0 151.1 160.7 82.5 139.4 134 01-10-10 range will be at FEDERAL BANK 492.90 474.3 487.6 506.3 538.3 81.6 468.3 459 20-08-10 481.15 458.8 472.4 494.8 530.8 80.2 401.8 450 08-10-10 191541-17391 and ABG SHIPYARD 192.80 183.7 188.7 197.8 212.0 76.8 176.2 179 13-08-10 12126. The IDBI probability of WEEKLY DOWN TREND STOCKS higher range Let the price move above Center Point or Level 3 and when it move back below Center Point or Level 3 then sell with getting tested is what ever high registered above Center Point or Level 3 as the stop loss. After selling if the prices moves to Level 2 or higher. The low for below then look to cover short positions as the opportunity arises. If the close is above Weekly Reversal Value then the the calendar year trend will change from Down Trend to Up Trend. Check on Friday after 3.pm to confirm weekly reversal of the Down 2010 is 15651. Trend. Weekly Up Hence till 15651 is Last Level Level Center Level Level Relative Stop Scrips Reversal Trend Close 1 2 Point 3 4 Strength Loss not violated, the Value Date Sensex is likely to Cover Cover Sell Sell Short Short Price Price move towards 419.00 24-09-10 MAHINDRA HOLIDAY 399.25 354.2 385.2 402.1 416.2 41.74 436.60 22656 at least and to 55.10 GMR INFRA 53.20 51.4 52.7 53.6 54.1 46.47 54.14 15-10-10 27291 on the outer 95.00 JAYPEE INFRATECH 88.10 76.2 84.7 89.9 93.2 47.74 88.58 04-11-10 extent. 171.00 15-10-10 KSK ENERGY VENT 161.95 147.6 158.0 164.5 168.4 48.01 167.83 On weekly chart, EIH 130.00 15-10-10 122.10 115.4 120.2 123.1 125.0 49.54 127.90 the low of 19768 registered in the last PUNTER'S PICKS couple of weeks hold the Note: Positional trade and exit at stop loss or target which ever is earlier. Not an intra-day trade. A delivery key from hereon. We had based trade for a possible time frame of 1-7 trading days. Exit at first target or above. BSE Last Buy On Risk indicated last week that CODE Close Rise Reward Scrips Buy Price Stop Loss Target 1 Target 2 the extended correction MEDIA ONE GLOBAL ENT 503685 103.10 98.00 109.90 93.60 120.0 136.3 1.78 can 532641 2.69 2.62 2.80 2.50 3.0 3.3 1.55 be seen only on a fall NANDAM EXIM below 19700, which PODDAR PIGMENTS 524570 55.65 54.00 56.70 50.40 60.6 66.9 0.94 effectively meant that if SUDARSHAN CHEMICALS 506655 643.55 625.05 650.00 600.00 680.9 730.9 0.86 19700 is not violated then U.P.HOTELS 509960 268.35 264.65 277.00 230.20 305.9 352.7 0.98 the market generates a 99.70 101.90 95.05 106.1 113.0 0.91 potential to move higher. WEST COAST PAPER MIL 500444 100.85 This means that there is weakness BUY LIST below 19700. Since the same was Last Buy Buy Buy Stop Target Target not seen, Scrip Close Price Price Price Loss 1 2 ADANI POWER 140.65 137.40 135.85 134.30 129.30 150.5 163.6 strength was witnessed. 172.90 168.51 166.50 164.49 158.00 185.5 202.5 Our broad strategy was to exit long INDIAN OVERSEAS BANK and take profits. Those who did that ICICI BANK 1262.00 1234.82 1225.50 1216.18 1186.00 1313.8 1392.8 would have generated cash and can L.G.BALAKRISHNAN & B 342.90 341.70 339.85 338.00 332.00 357.4 373.1 selectively invest in stock that show CHAMBAL FERTILISERS 93.80 91.82 89.85 87.88 81.50 108.5 125.2 good pattern formation and AMBUJA CEMENT 151.85 148.61 147.10 145.59 140.70 161.4 174.2 breakouts after a correction or HINDALCO INDUSTRIES 226.30 221.73 219.77 217.82 211.50 238.3 254.8 retracement of the earlier rising leg. LARSEN & TOUBRO 2171.00 2141.71 2120.00 2098.29 2028.00 2325.7 2509.7

The Broad Market

The BSE Mid Cap showed a strong rise with good candle formation, which suggests that 78.6%
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INFRA DEV FINANCE CO HDFC (HOUSING DEV.FI HDFC BANK

214.95 736.00 2385.00

210.09 722.90 2357.69

208.40 717.00

206.71 711.10

201.25 692.00

224.4 772.9 2473.7

238.7 822.9 2589.7

2344.00 2330.31 2286.00

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retracement will be crossed which is at 8610. If that happens at the end of this week with a strong weekly close with a positive candle then expect a rise to 9628-10245 levels. Support of 8190 is the base and only if that gets violated then will the rally get punctured. The BSE Small Cap index showed a good positive candle last week. Support will be at 10500. If the support is held, then BSE Small Cap can rise towards 11871 which is the 78.6% retracement for BSE Small Cap. The situation looks optimistic and positive till the supports are held. The same is likely to be held and upper range probability has increased on the back on the sentimental push to the Sensex.

Wave Tree:
Wave Tree Wave I Wave II Wave III Wave IV Wave IV Wave IV Wave IV Wave IV Wave IV Wave IV Wave IV Wave IV Wave IV Wave IV Wave W Wave X Wave X Wave X Wave X Wave X Wave X Wave X Wave X Wave X A B C C C C C C 5 5 5 5 5 I II III IV V Month Dec Feb March Jan Jan March March Jan May 25-May 19-Aug 31-Aug 14-Oct 29-Oct Year 1979 1986 1998 2008 2008 2009 2009 2010 2010 2010 2010 2010 2010 2010 Sensex 113 656 390 21206 21206 8047 8047 17790 15960 15960 18475 17819 20854 19768 Month Feb March Jan 04-Nov March 04-Nov Jan May 04-Nov 19-Aug 31-Aug 14-Oct 29-Oct 04-Nov Year 1986 1998 2008 2010 2009 2010 2010 2010 2010 2010 2010 2010 2010 2010 Sensex 656 390 21206 20917 8047 20917 17790 15960 20917 18475 17819 20854 19768 20917 Remark In progress In progress In progress In Progress

Conclusion
Aims for the 21206 peak of 2008 is to be tested and if the supports hold strong to cross this peak, then the rally can get extended.

Strategy for the week

Trading positions can be held, if any, with a stop loss of 19700 and expect 21206 and 22656 to get tested. All is good till the volatility happens above 19700.

SHUBH LAABH
Automobiles: * Buy Bajaj Auto on dips as FY11 estimated EPS is Rs.90 and FY12 projected EPS is Rs.99. * Hero Honda sells over 5 lakh bikes in October 2010 and is a volume play. Riding on the boom in rural purchasing power, this scrip even without the Honda tag is a multi-bagger from hereon. A bonus is on the cards! * Buying M&M is like buying a truly rural stock. A leader in tractors and utility vehicles, which are the only vehicles that rural India drives and thrives on. Now that superstar Aamir Khan is selling their two-wheelers with a no-nonsense attitude, M&M is poised for a decent rise with a very limited downside. Anand Mahindras enthusiasm gives it the wings! * Maruti Udyog selling over 1 lakh cars for the third consecutive month and a waiting period of over 6 months for a Swift and 3 months for other models, sums up MULs love story. Banks & Finance: When an economy grows rapidly banks are the first one to reflect the moves. * Bank of Baroda at 1.6 times FY12E book value and 7 times FY12E EPS qualifies to be in your portfolio. * Bank of India is thriving under the SBI shadow. This bank with the second largest branch network will keep up the pace of growth. Just await the results. * Federal Bank at 1.2 times FY12E book value and 13 times FY12E EPS qualifies for a buy only on declines. * HDFC Bank, ICICI Bank and Axis Bank are good trading stocks both ways. * Real estate finance companies are under pressure but LIC Housing Finance qualifies to be in your portfolio prior to the split in the face value of its share. * Sasta aur achcha South Indian Bank is a good low priced and high value banking play. Cement: * Ultratech, ACC and Ambuja Cement become good picks only on declines with the rising prices of cement bags. Although rising cost is cutting into their margins. Await a clean picture before the plunge. Engineering: * L&T and BHEL are the safest bets be it Diwali or Holi! * Crompton Greaves is a mini Larsen! * ABB and Siemens are good buys on declines.
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FMCG: * Consumer staples will do very well thanks to the controlled inflation and high rural income. So the choice is yours from HUL, Marico, ITC, Godrej Consumer, Britannia, Nestle, Colgate, Dabur and Glaxo SmithKline Consumer. * Consumer durables like Videocon, Whirlpool and IFB Industries. * IT: Go East or West, Infosys, Wipro and TCS are the best. * Construction: Nagarjuns Construction, HCC and Jaiprakash Associates qualify to be in your portfolio. * Gold ETF: A sure shot for small investors who can buy this as unit systematically till it reaches the Goldman Sachs target of gold touching $8000 an ounce by 2016.

MUHURAT PICKS
By Saarthi

Tulip Telecom Ltd. (Code: 532691) (Rs.180.15) is one of Indias largest enterprise data connectivity service
provider, a leading network integrator and managed services player with significant experience in creating and managing large networks across most verticals including banking, financial services and insurance (BFSI), telecom, manufacturing, logistics, media, retail, IT, education, healthcare and e-governance. It is also among the handful of companies that can boast of a data network reaching over 2000 locations backed by 3000+ employees and over 1600 customers across India. It offers data connectivity services (IPLC, DLC, MPLS VPN and Internet), that are complemented by its managed services like data centres, security and management, and total IT outsourcing. With a view to service 100% of the Enterprise Data Services market, the company started rolling out last-mile intra-city fibre based metro Ethernet network in early 2009. And within a short span, it has successfully laid out 4000 kms of fibre in Central Business Districts (CBD) across 250 cities, thereby emerging as the only company in India having such a large fibre network in the country. Thus after capturing the conventional wireless data network market, the TTL now strives to become a dominant player in fibre market by catering to higher bandwidth requirements and offering other services through fibre. In fact in the next 2 years, the company expects to derive 70% of its total revenue from the fibre network vis--vis the wireless network. For FY11 on a consolidated basis, the company expects to clock a turnover of Rs.2250 cr. with PAT of Rs.275 cr. This translates into a basic EPS of Rs.19 on its current equity of Rs.29 cr. and diluted EPS of Rs.17 for FY11. At a reasonable discounting by 14 times its share Special DIWALI price can appreciate to Rs.240 in 9-12 months. Offer Moreover, it seeks to raise fresh capital through QIB placement, which may trigger an upward move in its, share price in the near future. *******

Manaksia Ltd. (Code: 532932) (Rs.87)

is a well-known manufacturer of metal products and metal packaging products. It has a pan India presence with 15 manufacturing facilities spread across West Bengal, Andhra Pradesh, Gujarat, Assam, Madhya Pradesh & Silvassa. Besides, it has three units abroad two in Nigeria and 1 in Ghana. It primarily deals in aluminium & steel products. On the other hand, its metal packaging product portfolio includes roll-on pilfer-proof (ROPP) closures, crowns, plastic caps, expanded polyethylene liners as well as push-open and other metal containers. Lately, it has also diversified into manufacturing of mosquito repellant coil and has become the preferred supplier to leading brands like Mortein, Maxo, Poweron, Odomos etc. Under the aluminium business division, it produces value added products like aluminium alloy ingots, coloured aluminium sheets and coils, profiled sheets and corrugated roofing sheets.
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Techno Funda Plus is a weekly newsletter featuring stocks that qualify for investment both on fundamentals & technical considerations. A superior version of the Techno Funda column that has recorded nearly 90% success since launch three years ago, Techno Funda Plus presents one small cap, one mid cap and one large cap stock together with stop loss levels for short-term gains within 15 to 30 days and weekly review of past recommendations with new stop loss levels. Launched at Diwali 2009, Techno Funda Plus has successfully concluded its first year after recording handsome gains in 111 stocks out of the recommended 156 stocks, 23 stocks triggered the stop loss levels and saved the subscribers from losses and we exited 22 stocks on a cost-to-cost basis safeguarding any loss. Now in celebration of our 1st Anniversary and Diwali, we are pleased to announce a Special Discount Offer open for one month only till 30th November 2010. Diwali Special Offer: Quarterly: Rs.5000 (Save Rs.1000), Half Yearly: Rs.9000 (Save Rs.2000), Annual: Rs.14000 (Save Rs.4000) For payment details please refer to the Subscription Form.
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Whereas its value added steel products comprise galvanised plain as well as corrugated sheets and coloured galvanised sheets it has also backward integrated by producing sponge iron and mild steel ingots. To enhance shareholder value and take advantage of the bearish market sentiment, the company recently bought back approx 19 lakh shares at an average cost of Rs.105 utilising nearly Rs.20 cr. Due to the delay in obtaining the exemption u/s 212 for subsidiary companies, the company has extended the timeline for its AGM. For FY11, it is expected to clock a consolidated turnover of Rs.1600 cr. with net profit of Rs.175 cr. i.e. an EPS of Rs.26 on its current equity of Rs.13.50 cr. having face value of Rs.2 per share. The scrip can appreciate 50% from the current level within a year. ******* PSL Ltd. (Code: 526801) (Rs.112.25) is one of Indias largest manufacturer of high grade large diameter Helical Submerged Arc Welded (HSAW) pipes, which are mainly used for oil & gas and water transmission as well as structural and piling applications for both onshore and offshore sector. It also offers range of coating services including pipe corrosion protection service and the most stringent of pipe-coating applications like polyethylene, coal tar enamel, fusionbonded epoxy, concrete weight coating etc. It even undertakes turnkey projects for setting up pipe manufacturing and pipe coating plants from the green field stage for which it has technical collaboration with renowned design & engineering firms from Germany & Italy. Presently, the company is in the midst of producing Indias first ever API 5L X80 highest grade steel pipes for GAIL, aggregating around 150,000 MTPA, that will be completed by December 2010. PSL boasts of 13 HSAW pipe mills of which 11 pipe mills are in India, one in UAE and another in North America. Its combined pipe manufacturing capacity stands at 17,75,000 TPA (i.e. 14,00,000 TPA in India, 75,000 TPA in UAE and 3,00,000 TPA in USA). As of now, it has an order book position of over Rs.2000 cr., which is expected to rise in the coming few months as it awaits the results of a few bids. For FY11, it is estimated to clock a turnover of Rs.4,250 cr. with PAT of Rs.125 cr. posting an EPS of Rs.23 on its current equity. It is among the few scrips with a dividend yield of over 4% yet available 25% below its book value. A solid bet! ******* Geodesic Ltd (Code: 503699) (Rs.124) is an innovator in software products focused on Information, Communication and Entertainment for mobile phones, PDA, pocket PC and desktop computers. It has built an enviable product line including - Push Email, Interoperable IM, SMS over IP, Voice over IP as part of the communication stack and a content delivery platform for Audio and Video (Live streaming and on demand) over IP. Lately, it has also entered the voice communication space with Spokn- the definitive Internet telephony service. Recently, it launched the software for Facebook with the prospects of voicifying Facebook for the first time ever in its history. Its product-list is versatile and allencompassing ranging from an inherently simple hand-held Simputer to web-based mobile & wireless applications to the intricately complex Engage and Spyder applications. The company has broadly segmented its operations into five business units namely Unified Communication, Collabortation & CRM, Mobile Media & VAS, Electronic Computing Platform, Financial Products Suite & as a content provider. Incidentally, the company derives nearly 95% of revenue from the overseas market and is thus exposed to foreign exchange fluctuations. For FY11, it may register a consolidated topline of Rs.750 cr. with PAT of Rs.250 cr. i.e. an EPS of Rs.28 on its current equity of Rs.18 cr. having a face value as Rs.2 per share. With an OPM of 50% and NPM of 30% this technology company deserves much higher valuation. To enhance the shareholder value, it plans a buyback and has till date bought back nearly 19.45 lakh shares from the open market and may buy another 20-25 lakh shares in coming months. This will directly boost the EPS and eventually market price of its share.

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By V. H. Dave

Morganite Crucible (India) Ltd (MCIL) (Code: 523160) (Rs.287) manufactures resin-bonded silicon carbide
crucibles and clay graphite crucibles and caters to the non-ferrous metal industry. It acquired the present name after buying out Greave Cottons 25.5% stake in 2005-06. Morganite Crucibles, UK (MCL, UK) along with its associates Morgan Terrassen BV holds 75% stake in the company and Diamond Crucible Co. India at Mehsana, Gujarat is MCILs 100% subsidiary. MCILs strategy is to deliver targeted solutions for metal casters focused on improving metal quality, raising efficiency and reducing energy consumption and related carbon dioxide (CO2) emissions. Its technological capability is focused in its global research and product development facilities which form part of the Indian operations. During FY10, its net profit zoomed by 145% to Rs.7.2 cr. on 59% higher sales of Rs.66 cr. and EPS stood at Rs.25.7. During Q1FY11, its net profit on a standalone basis was Rs.1.8 cr. on 35% higher sales of Rs.17.3 cr. against a net loss of Rs.0.7cr. on sales of Rs.12.91 cr. in Q1FY10. Its tiny equity capital of Rs.2.8 cr. is supported by huge reserves of Rs.22.7 cr., which gives its share a book value of Rs.91. Due to the expansion initiated in 2008-09, the value of its gross block has shot up to Rs.42.5 cr. from Rs.27.5 cr. in FY09.

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EBGs 57 Winners in 2009-10

MCILs key growth opportunities are driven by multiple end-use markets. These include non-ferrous castings for the automotive, marine and rail markets and the recycling and refining of precious metals from mining projects, the production of pure aluminium for electronics applications. It is likely to post an EPS of Rs.35 in FY11 and Rs.40 in FY12. At the CMP of Rs.300, the MCIL share is trading at a P/E multiple of 8.6 on FY11 estimated earnings and 7.5 on FY12 projected earnings. The share is recommended with a target price of Rs.420 in the medium-term applying a reasonable P/E multiple of 12. *******
Early Bird Gains (EBG), our weekly investment newsletter specialising in multi-baggers for medium-to-long-term investment, has once again proved to be a market outperformer as each and every stock from the 57 recommended in 2009-10 has proved to be a winner with gains ranging from 900% to 21%.
2 stocks grew over 500% 1 stock grew between 400% - 500% 1 stocks grew between 300% - 400% 8 stocks grew between 200% - 300% 12 stocks grew between 100% - 200% 21 stocks grew between 50% - 100% 8 stocks grew between 30% - 50% 4 stocks grew between 20% - 30%

Now in its 7th year, EBG lives upto its promise of spotting multi-baggers early.
Issue No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 Date of Recom. 01-04-09 08-04-09 15-04-09 22-04-09 29-04-09 06-05-09 13-05-09 20-05-09 27-05-09 03-06-09 03-06-09 10-06-09 10-06-09 17-06-09 24-06-09 24-06-09 30-06-09 08-07-09 15-07-09 22-07-09 22-07-09 05-08-09 05-08-09 12-08-09 19-08-09 26-08-09 01-09-09 09-09-09 16-09-09 23-09-09 29-09-09 07-10-09 14-10-09 21-10-09 28-10-09 04-11-09 11-11-09 18-11-09 25-11-09 02-12-09 09-12-09 16-12-09 23-12-09 30-12-09 06-01-10 13-01-10 20-01-10 27-01-10 03-02-10 10-02-10 17-02-10 24-02-10 03-03-10 09-03-10 17-03-10 24-03-10 30-03-10 Scrip Name Jupiter Bioscience Ltd. Austin Engineering Co. Ltd. Sudarshan Chemicals Ltd. Aditya Birla Chemicals (I) Ltd. Orient Abrasives Ltd. Simpex Castings Ltd. Mazda Ltd. U-Flex Ltd Torrent Cables Ltd. Tutis Technologies Ltd. Relexo Footwear Ltd. Bharat Rasayan Ltd. Surya Pharmaceutical Ltd. Mangalam Cement Ltd. Insecticides India Ltd. Orient Carbon & Chemicals Ltd. Accurate Transformers Ltd. IDBI Bank Manaksia Ltd. Binani Cement Ltd Mahindra Composites Ltd. Finolex Cables Ltd. Heidleberg Cement Ltd. Narmada Gelatine Ltd. Banswara Syntex Ltd. Godavari Power & Ispat Ltd. Seshasayee Paper & Boards Ltd. Lumax Auto Technologies Ltd. Parekh Aluminex Ltd. Austin Engineering Co. Ltd. Wim Plast Ltd. Oil India Ltd. Celistial Labs Ltd. Simplex Castings Ltd. Globus Spirits Ltd. Paper Products Ltd. Lanco Industries Ltd. Mazda Ltd. Menon Piston Ltd. Frontier Springs Ltd. Manjushree Technopack Ltd. Superhouse Ltd. Ajanta Pharma Ltd. Jay Bharat Maruti Ltd. Kesoram Industries Ltd. Tulsyan NEC Ltd. Surya Pharmaceuticals Ltd. DIC India Ltd. Sarla Performance Fibres Ltd. Lloyd Electric Engineering Ltd. IOL Chemical & Pharma Ltd. Renaissance Jewellery Ltd. Hexaware Technologies Ltd. Anil Products Ltd. Sturdy Industries Ltd. Hi Tech Gears Ltd. Sahyadri Industries Ltd. Price of Rec. (Rs.) 37.70 46.00 104.00 44.50 21.25 69.60 46.00 71.35 113.00 28.00 46.00 71.60 100.40 115.00 60.30 30.55 62.10 103.00 46.25 60.35 55.80 40.10 43.55 66.00 48.25 129.65 111.00 43.80 115.25 70.00 145.00 1145.00 29.00 75.00 82.15 60.00 42.00 66.70 63.05 30.00 32.05 40.00 120.65 59.60 391.80 69.10 157.45 202.30 87.95 61.95 54.70 68.40 68.00 99.15 5.30 124.40 111.80 Highest Price since recom. (Rs.) 114 116 650 136 37 (Ex-bonus 1:1) 109 139 175 172 36 460 96 314 218 287 161 144 141 144 99 99 65 71 115 126 320 238 174 352 116 240 1500 44 109 197 76 80 139 132 50 87 71 257 86 475 101 314 330 146 93 75 95 103 226 6.7 214 195 Growth % 202 152 525 206 248 57 202 145 52 29 900 34 213 90 376 427 132 37 211 64 77 62 63 74 161 147 114 297 205 66 66 31 52 45 140 27 90 108 109 67 171 78 113 44 21 46 99 63 66 50 37 39 51 128 26 72 74

Surya Pharmaceuticals Ltd (SPL) (Code: 532516) (Rs.341)

has produced mind boggling Q2FY11 results wherein its net profit has shot up by 35% on 45% higher sales of Rs.397 cr. Based on its Q2 EPS of Rs.18 and H1FY11 EPS of Rs.34, SPL is likely to post an EPS of Rs.72 in FY11. The share which trades at a P/E multiple of just 4.8 is an excellent pick for the longterm with a price target of Rs.500. Incorporated in 1992, SPL is a Chandigarh-based pharmaceutical company with six manufacturing facilities of bulk drugs and intermediaries spread across three states of Himachal Pradesh, Haryana and Punjab. In 2001, it ventured into manufacturing of active pharmaceutical ingredients (APIs) and formulations. In June 2010, the company commissioned its sixth plant at its greenfield project site in Jammu. It has embarked on an ambitious journey to diversify into pharma retail and begun operations by launching its pharma retail store under the brand Viva through its subsidiary, Surya Healthcare. Starting with Delhi and NCR, it currently has 60 pharma retail stores. SPL plans a pan India presence with 500 stores in 3 years.
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Its modest equity capital of Rs.14.5 cr. is supported by huge reserves of Rs.305 cr., which gives its share a book value of Rs.210. SPL is going in for a major expansion of Rs.500 cr. which involves setting up a new API manufacturing unit near Chandigarh. The proposed unit will manufacture the entire range of APIs including cardio-vascular products, CNS products, hormonal products, steroids etc. The funds needed for the expansion will be raised through GDRs. The funds would also be utilised for expanding the Viva retail chain. From a market size of around $7 billion, the Indian pharmaceutical market is projected to grow to about $20 billion by 2015 maintaining 12.3% CAGR growing over 300% from $6 billion in 2005. In fact, the incremental growth of $13 billon is likely to be the 3rd largest among all markets after USA and China. Currently, Indias contribution to the global CRAMS markets accounts for about 3%. The overall CRAMS business worldwide estimated at $25 billion is targeted to touch $31 billion by 2011. In fact, the Indian CRAMS segment, which earned revenues of $895 million in 2006 is expected to touch $7 billion by 2013. USA is the biggest global consumer and contributes almost half the value (45%) with Europe following next at 24% and Japan at 11%. China contributes about 3% and the Indian contribution is 1.8%. According to industry analysts, IMS health and BCC Research, the global pharma market can grow at CAGR of about 5-5.5 % to US $825 billion in 2010 and reach over US $950 billion by 2013. SPL continues to maintain an upward, growing and successful track record and is well-positioned in the domestic and overseas markets. It has recently completed its expansion programme, which will contribute handsomely to its revenue & profitability. Investment in this share is likely to fetch a decent appreciation of 45-50% in about one year. The 52-week high/low of the share is Rs.355/110.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
By Hitendra Vasudeo

DISH TV
Corrective dips to Rs.63.5-59.4 level can be used for buying with a stop loss of Rs.56. Expect the stock to move towards Rs.70.674.7-81.80 level. The potential targets for the stock are Rs.80 and Rs.107. *******

GMDC
Corrective dips to Rs.157.5-143.8 level can be used for buying with a stop loss of Rs.129. Expect the higher range of Rs.179-192214 level to be tested. *******

MANUGRAPH INDUSTRIES
Corrective dips to Rs.61.50-55.8 level can be used for buying with a stop loss of Rs.53. Expect the higher range of Rs.64.5-67.573.2 level to be tested. The stock has potential to move towards Rs.81 at least and to Rs.119 on the outer extent. *******

Dish TV

NAGARJUNA FERTILISERS
Corrective dips to Rs.37.10-34 level can be used for buying with a stop loss of Rs.31. Expect Rs.41 level to be tested. Its potential target is Rs.59-66. *******

CHAMBAL FERTILISERS
The stock has the historical peak at Rs.96.50, which was registered in 2008. The same has been tested yesterday as it Nagarjune Fertilizer made a high at Rs.98.30. Therefore, minor intra-day correction could be seen in days to come. The stock can be bought at current level and more purchased on correction down to Rs.86.10-73.90 levels as and when the opportunity arises. Overall in the long-term, the stock can turn worse on a fall and close below Rs.67. On the upside, the stock has the potential to move towards Rs.150 with intermediate resistance and partial profit booking at Rs.115. *******

SUBEX
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The stock is likely to move towards the earlier lower top resistance range of Rs.94-120 in days to come. A trading breakout and close above Rs.63 is seen on weekly chart, which suggests that the near term bottom could be in place. Support range is Rs.68-60 level and resistance is at Rs.81. Trader and short-term investors can buy at current price or above Rs.81 or on decline to Rs.77-74 level with a broad stop loss of Rs.60. Expect the higher range of Rs.90-124 level to be tested, which can be used for profit-booking. Whenever the resistances of Rs.90-124 level are crossed, then the stock would generate a potential to move towards Rs.159 at least and may be to Rs.267 on the outer extent.

BEST BETS

Andhra Sugars Ltd. (Code: 590062)

Rs.117.30

Established in August 1947, Andhra Sugars Ltd. (ASL) manufactures over 25 different products comprising sugar, organic and inorganic chemicals at its plants at Tanuku, Kovvur, Taduvai, Saggonda and Bhimadole in Andhra Pradesh. Of these sugar and caustic soda form the major segments and it is the largest manufacturer of caustic soda in South India. It also has presence in petrochemicals through Andhra Petrochemicals Ltd. (APL), an associate company that produces 30,000 TPA of oxo-alcohols at Visakhapatnam in technical collaboration with M/s Davy Mckee of London using the latest LP Oxo process technology designed to produce 2-ethyl hexanol or butanols. With an investment of Rs.24.79 cr. ASL holds over 25% of the equity capital of APL. ASL operates in six segments: sugar, caustic soda, power generation, industrial chemicals, soap and others. Presently, the company has a sugar cane crushing capacity of 12,000 TPD that will stand enhanced to 16,500 TPD in the next couple of years. Sugar is manufactured at its 5000 TPD capacity plant at Sugar Unit-I, Tanuku, 5500 TPD capacity plant at Sugar Unit-II, Taduvai and 1600 TPD capacity plant at Sugar Unit-III, Bhimadole. It has integrated the inorganic chemical complexes at Kovvur and Saggonda, where hydrogen and chlorine are the by-products in the manufacture of caustic soda and are used in its hydrochloric acid plant, chlorosulfonic acid plant and other industries. Apart from modernising its caustic soda plant, it is in the midst of expanding its capacity for caustic potash, hydrochloric acid, single super phosphate and several other chemicals. In FY10, APL purchased land in the Jawaharlal Nehru Pharmacity, Visakhapatnam, to set up a plant as a strategy of forward integration for a full-fledged foray into pharmaceuticals for production of bulk drugs. Besides, ASL has interests in the power business with investments in the Andhra Pradesh Gas Power Corporation Ltd. (APGPCL), apart from its own 16 MW co-generation power plant and 11.60 MW wind farm. Power is one of the critical inputs in the manufacture of Caustic Soda and its major power requirement in the production of Caustic Soda is met out of this source by APGPCL at an economical rate. To supplement it and ensure adequate and continuous availability of power for production purposes non-conventional wind power is generated at Ramagiri in Andhra Pradesh and at Veeranam in Tirunelveli district of Tamil Nadu. One of its subsidiary company, Andhra Farm Chemicals Corporation Ltd. (AFCCL) is the largest manufacture of hydrazine hydrate (300 TPA), which finds extensive application in drug intermediates and thermal power stations using the technology provided by R.R. Labs, Hyderabad. ASL holds 76.82% in its equity capital in AFCCL at an investment of Rs.34.57 lakh. Another subsidiary JOCILGUNTUR produces fatty acids (67,500 TPA), glycerine (1,800 TPA), soaps (25,000 TPA). This company has also commissioned a 6 MW Bio-mass based co-generation facility and ASL holds 55.02% in its equity capital at an investment of Rs.4.41cr. ASL has consistent Dividend Track Record, Dividend declared for the year 2004-05 being 60%. India is the second largest producer of sugar in the world with 10-12% of the global production. The sugar industry has been the nucleus in the development of agriculture and the rural economy. Despite the industry playing a significant role in the economy, it is a matter of concern that the fortunes of sugar industry and sugarcane farmers are exposed to cyclical risks and variations. Although these variations are partly due to natural factors and partly due to lack of long term policies encompassing the vital aspects of this sector. The industry is still to be fully liberalised. The government regulates the cane price and despatches of sugar. For FY10, while ASLs total income declined by 3.8% of Rs.580.53 cr. but its net profit zoomed by 47.61% at Rs.66.84 cr. as against total income of Rs.603.78 cr. with net income of Rs.45.28 cr. in FY09. During Q2FY11, its total income was Rs.120.59 cr. with net profit of Rs.5.44 cr. with an EPS of Rs.2.01. Its equity capital stands at Rs.27.11 cr. with reserves of Rs.350.22 cr. and a sound debt:equity ratio of 0.56. At present, ASL produces ethanol on a limited scale but intends to enhance the capacity going forward. Even though the stock is trading near its 52-week low of Rs.105.60, considering its track record and management capability the scrip deserves a better discounting and it may maintain its dividend at 50%, which yields over 4% at CMP. Considering, its gross block of around Rs.900 cr. and the replacement cost, the company is trading fairly cheap at an enterprise value of

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just Rs.400 cr. It may end FY11 with consolidated sales of Rs.900 cr. with PAT of Rs.75 cr. i.e. an EPS of Rs.28 on its equity of Rs.27 cr. Long term investors can accumulate it at sharp declines for 50% appreciation within 12-15 months.

ANALYSIS

NRB Bearings Ltd: Buy on declines

By Devdas Mogili NRB Bearings Ltd. (NRBBL) is a 45-year old Mumbai, Maharashtra, based company established in 1965. It was promoted as a joint venture with the French company, Nadella and was the first company to manufacture Needle Roller Bearings in India. It became public limited company in 1995. Mr. Trilocharan Singh Sahney is the Chairman while Ms. Hasrshbeena Zaveri is the managing director. NRBBL is in the ball and roller bearings business and is among the few manufacturers making all types of bearings viz. ball bearings, needle/cylindrical/ spherical/tapered /thrust roller bearings. The annual production of the domestic organized sector has increased by 14% at Rs. 3200 cr. for 2009-10. The company has an excellent network of distribution centres and manufacturing units spread across India. Its market share in the domestic organized sector is 11.50%. The companys plants are located at Thane, Waluj, Jalna, and Aurangabad in Maharashtra, Pant Nagar in Uttarakhand, Ranchi in Jharkhand, Hyderabad in Andhra Pradesh and in Thailand. Its activities are organized into three divisions - general bearings, needle bearings and agency division. The general bearings division, set up in 1982, manufactures cylindrical roller bearings. It later diversified into spherical roller bearings and ball bearings in technical collaboration with Ransome Hoffman Pollard International (RHP), UK. In 1995, NRBBL diversified its product range by including taper roller bearings with technical know how from SNR Roulements, France. In April 1991, Sahney Steel and Press Works were merged with the company. Customer Profile: NRBBLs clientele include Maruti Udyog, Mahindra & Mahindra, Telco, Ashok Leyland, Bajaj Tempo, Bajaj Auto, LML, TAFE, Siemens, ABB, HMT, Kelvinator, Lucas TVS and LMW. Agency Division: The company's agency division, set up in 1980, acts as an intermediary for a number of foreign companies in UK, France, Germany and Switzerland such as RHP, Gamet, Nadella, Rollix, IBC, Rohm, Schneeberger, Kugler SA and Forsheda. NRBBL has set up an engineering centre at Thane to foster technological innovations and emerge as a bearings solutions provider. To develop knowledge on bearing applications, a full-fledged testing facility and computer aided design centre has been set up. The company has enhanced capacity in the general bearings division resulting in an additional capacity of 21 lakh ball and roller bearings of various types in 1999-2000. Joint Venture: NRBBL has a joint venture and two subsidiary companies. The joint venture company, NRB Torrington, was set up in collaboration with the Torrington Company, USA, to manufacture wide inner ring ball bearings and housed units. Essen Marketing Services Ltd., one of its subsidiaries, is into agency business. While the other SNL Bearings (SNL), formerly Shriram Needle Bearing Industries Ltd., is into manufacture of Needle Roller Bearings. The companys overseas subsidiary includes NRB Bearings (Thailand) Ltd. Performance: The company recorded a total income of Rs.349.95 cr. with a net profit of Rs.12.74 cr. netting a basic/diluted EPS of Rs.2.52. Financial Highlights: (Rs. in lakh) Particular Q2FY11 Q2FY10 FY10 Share Profile: NRBBLs share with a face value of Rs.2 are Income 11695 7973 34995 listed and traded on the BSE and NSE under the B group. Its Other Income 20 42 168 share price touched a 52-week high/low of Rs.62/Rs.23.63. Total Income 11715 8015 35163 At its CMP of Rs.57.95, the company has a market Total Expenditure 1588 7452 30850 capitalization of Rs.558 cr. Interest 118 205 787 Exceptional Items (201) (201) Dividends: The company has been consistently paying Taxation 863 160 1274 dividends as shown here: FY10 - 100%, FY09 - 80%, FY08 Net Profit 1396 379 2441 120%, FY07 - 145%, FY06 - 125%, FY05 - 100%, FY04 - 75%, Paid up Equity (FV: Rs.2) 1938 980 980 Res Ex Rev Reserves 17792 FY03 - 60%, FY02 - 50%, FY01 - 45%, FY00 - 40%, FY99 - 40%. Basic/Diluted EPS 1.44 0.39 2.52 The company recently issued 1:1 bonus in September 2010. This is its second bonus. Earlier, the company had issued a 5:3 bonus shares in March 1994. Shareholding Pattern: The promoters hold 73.77% stake and the balance of 26.23% is with non-corporate promoters, institutions, mutual funds and the investing public. Mutual funds like HDFC and Principal have been adding the companys shares over the past few months. Prospects: Road infrastructure development has been lagging in the 11th Five Year Plan with only 2.5 km of new roads built everyday. The government has recently reaffirmed its commitment to enhance this to 20 km and is aggressively
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pushing this agenda. This is expected to give impetus to greater people movement and to movement of goods by reducing per tonne-km transportation costs, with its consequential linkage to the bearings industry. This will be a big demand booster for companies like NRBBL. As part of its fiscal stimulus package, the government has already made clear its continuing focus on infrastructure viz. power, oil & gas roads, ports and airports. As per the Planning Commission estimates, the government has planned investments of Rs.146421 cr. (US $33 billion) for the oil and gas sector, Rs.177480 cr. (US $40 billion) for improving road and railway infrastructure, Rs.79866 cr. (US $18 billion) for ports and Rs.44370 cr. (US $10 billion) for airports, aggregating Rs.443700 cr. (US $100 billion). This infrastructure spending will lead to growth in the manufacturing sector which would invariably boost the bearings industry given the wide usage of bearings in all these sectors. As per the study of the Engineering Export Promotion Council (EEPC) and Ernst & Young, India's automotive exports should touch Rs.155295-Rs.186354 cr. (US $35-42 billion) by 2016.The auto industry will move out of Detroit and Germany as it was not possible for them to remain competitive with their wage rates and skill sets. The governments thrust on infrastructure will have a consequential benefit on the automotive sector in general and the ancillary sector in particular, which spells bright prospects for the bearings industry leaders like NRBBL. Conclusion: NRBBL is the pioneer in the manufacture of needle roller bearings in India. Over the past few years, the company has focused on implementing best-in-class production systems, technology development, slashing costs while upgrading quality and scaling up its manufacturing facilities. At its current market price of Rs.58, the NRBBL share price discounts around 22 times its FY10 earnings of Rs.2.52. Going forward, however the company may report an EPS of Rs.4 on its Rs.2 paid-up share, which will bring down the PE multiple to around 14. Considering its excellent quarterly performance, good leadership standing in the bearings industry and bright future prospects makes NRBBL a good pick on declines.

MARKET REVIEW

Time to book profits and exit?

By Ashok D. Singh The BSE Sensex advanced 861.23 points or 4.29% to settle at 20,893.57 for the week ended Thrusday, 4 November 2010. The CNX Nifty gained 264.1 points or 4.38% to end at 6,281.80. The BSE Small-Cap index rose 2.66% and the BSE Mid-Cap index gained 3.61% last week. Both these indices underperformed the Sensex. The market witnessed a festive boost last week. The market jumped on the decision of the US Federal Reserve to buy $600 billion in government bonds to stimulate the US economy, on consolidated corporate earnings and on sustained buying by foreign funds. Huge demand for Coal India shares during the IPO sent of it swinging on its debut on Thursday, 4 November 2010. The stock settled at Rs.342.35 on the BSE at 39.73% premium over the IPO price of Rs.245. Retail investors have more to cheer as they got the shares at 5% discount to the IPO price. The news that encouraged investors was that the Reserve Bank of India (RBI) on Tuesday, 2 November 2010, signalled a pause in its policy tightening drive that began in October 2009 as it hiked its lending and borrowing rates by a quarter per cent each to tackle inflationary pressures. The RBI raised its repurchase or repo rate to 6.25% while enhancing the reverse repo rate to 5.25%. It left the cash reserve ratio (CRR) unchanged at 6%. RBI Governor, D Subbarao said that some controls on debt flows will be maintained. It, however, imposed stringent norms on TF Positional Trader housing loans by commercial banks such A selection of just 4 fundamentally sound companies, whose stock prices as increasing the risk weights, higher are technically poised to grow over the next 3 months. provisioning for teaser rate loans among others. At present, there is no regulatory With at least two weekly updates from the monitoring team of Techno ceiling on the loan to value (LTV) ratio in Funda, you can sell and buy back the same stocks within the identified respect of banks' housing loan exposures. trading range. In order to prevent excessive leveraging, A highly focused product with constant updates, TF Positional Trader is RBI has proposed that the LTV ratio in ideal for those who wish to confine their trading to a select few strong respect of housing loans hereafter should stocks to minimize their downward risk. not exceed 80%. Foreign funds have made heavy Available quarterly by email with weekly updates by email/SMS TF purchases of Indian stocks this year. Net Positional Trader will be launched on Monday, 12th July 2010 at Rs.5000 equity inflows in year 2010 now stand at a per quarter. record $26.75 billion above last year's Contact Money Times on 022-22616970 or email [email protected] $17.45 billion. US Federal Reserve's asset
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purchase programme would further boost the fund flows into emerging markets like India and provide a further impetus to the rally. While global liquidity remains ample, a section of the market is worried that a strong equity issuance pipeline over the next six months will soak liquidity through the secondary equity markets. Indian companies are expected to raise about Rs.80000 cr. from equity and debt issues over the next three to six months. State-run Power Grid Corp, Steel Authority of India and Indian Oil Corp are some of the companies that are planning large share sales in coming months. Trading for the week started on a buoyant note. On Monday, 1 November 2010 the latest data which shows surge in manufacturing activity in October 2010, healthy Q2FY11 results, and firm global stocks boosted investor sentiments. The Sensex rose 323.29 points or 1.51% to close at 20,355.63 and Nifty was up 99.85 points or 1.66% to end at 6,117.55. The key indices were little changed at close after undergoing intra-day volatility on Tuesday, 2 November 2010. The Sensex dipped 9.94 points or 0.05% to close at 20,345.69 and the Nifty was up 1.45 points or 0.02% to end at 6,119. Banking, metal and PSU shares led modest gains on the bourses on Wednesday, 3 November 2010, a day after the RBI signalled a pause in its policy tightening drive that began in October 2009. Healthy Q2FY11 results and sustained buying by foreign funds underpinned sentiments. The Sensex rose 120.05 points or 0.59% to settle at 20,465.74 and Nifty was up 41.50 points or 0.68% to end at 6,160.50. The key indices surged to their highest level in nearly 34 months on Thursday, 4 November 2010, as stocks rose across the globe after the US Federal Reserve's decision to buy $600 billion in government bonds to stimulate the US economy. A rally in Coal India shares on its debut on the bourses, healthy Q2FY11 results, sustained buying by foreign funds, and data showing easing food inflation in late October 2010, underpinned the sentiment. The Sensex rose 427.83 points or 2.09% finally to settle at 20,893.57 and the Nifty was up 121.30 points or 1.97% to end at 6,281.80. The Sensex advanced 861.23 points to settle at 20,893.57 last week. Some of the key September 2010 results and economic data are in focus next week. The market will also eye announcements during US President, Barack Obama's 3-day India visit from Saturday, 6 November 2010 to Monday, 8 November 2010. In my personal opinion the indices are hovering around the peak of the current rally and the market may gradually start witnessing a major correct soon after Diwali and this could be the right time to book profit and exit. The stock market will remain closed on Friday, 5 November 2010, on account of Diwali. However there will be a special one hour Muhurat trading session on that day between 18:00 IST To 19:00 IST, to mark the begging of the Samavat Year 2067.

MARKET

Samvat 2066 ends on a cheerful note

As anticipated in the last issue, the stock markets remained buoyant and attempted a new high last week. This was evident as the BSE Sensex gained substantial ground on the opening day Monday, 1 November 2010, which was the first day of the week and also the first day of the month. This was in sharp contrast to the technical experts who were singing a chorus of correction on all the TV channels and the print media including technical columns in this weekly. They had anticipated an extended correction below Sensex 19700, which proved to be way off target and once again the markets were in sync with my forecast. Accordingly, the Sensex gained 323.29 points at 20353.63 while the CNX Nifty made a century gaining 99.85 points at 6117.55. Both the Sensex and the Nifty thus appeared headed to their recent highs of 20854 and 6280 respectively. It may be noted that the Sensex made an intra-day high of 20609.65. As stated a few weeks back, the market has entered into a higher orbit because of which the volatility will be high but there is no fear of a downward risk despite the Monetary Policy on Tuesday, 2 G.S. Roongta November 2010, when the market was hesitant to move up and remain range bound for the first two hours. In fact, the Sensex scaled a low of 20282 after having opened higher at 20407. But after the announcement of a hike in repo and reverse repo rates by 25 basis points (bps) by D. Subbarao, Governor of the Reserve Bank of India (RBI), blew away the fears of a stiffer rate hike and also raised hopes that interest rates are likely to remain stable for the corporate sector except the housing sector, wherein brakes have been put on big ticket housing loans and tightening the liquidity of housing loans above Rs.75 lakh or more by enhancing the risk weight from 100% to 125% necessitating the banks to set aside more capital for such loans. Also, the banks cannot lend more than 80% of the value and the owners margin contribution stands enhanced. This led the Sensex to close lower by just 10 points at 20345.69 whereas analysts were anticipating a deep correction leading to a fall below 20,000 on the Sensex and below 6000 on the Nifty. Ironically, the Nifty closed in the positive by 1 point at 6199 and dealt a blow to the bear lobby in general and technical analysts in particular with the turn of events. On Wednesday, 3 November 2010, the market continued to rise opening higher by over 130 points and continued its upward journey during the trading session to close with a gain of 120.05 points at Sensex 20465.74. Correspondingly, the Nifty rose 41.5 points to close 6160.50 keeping the bull sentiment alive.
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On Thursday, 4 November 2010 the last trading day of the week and Samvat 2066, the markets surprised one and all as the Sensex rose 427.83 points to close at 20893.57 while the Nifty rose 121.30 points to close at 6281.80. This was aided and abetted by the sensational listing of Coal India, which rose by Rs.97.35 to close at Rs.342.35. Thus both the benchmarks attempted to make a new high during the week as forecast by this column in the last issue and the primary market turned even more hopeful. It will come as no surprise if the benchmarks attain a new all time high in the coming week. Last weeks recommendation on Pearl Polymers attracted the upper circuit filters on the first two days on the back of higher volumes and the stock continued to rise steadily. As the release of this issue coincides with the Muhurat Trading at Diwali on Friday, 5 November 2010, we are happy to furnish some Muhurat recommendations, which are given in brief because most of these scrips have been featured in detail earlier. The stocks are categorized as: (a) fast moving scrips from A & B groups; (b) medium & small cap stocks and (c) stocks whose fortune is uncertain but there are hopes of fast turnaround whereafter they can be upgraded to the above (a) & (b) categories. Hence investors should buy them as rotten stocks that deliver enormous value on a turnaround. Steel: Many stocks from this sector hit a high during August September 2010 on reports that the global prices of steel were firming up based on the demand patterns but the Q2 performance of several companies disappointed those who bought steel stocks September 2010 onwards. The fact is that the fresh demand as anticipated was correct but its reflection can be seen only in Q3 or Q4 as Q2 performance was hit by lower steel prices. Tata Steel and SAIL look very good at current prices while Mukand Ltd and Sarda Energy & Minerals from mid-sized stocks appear promising while National Steel & Agro, Modern Steels and Ashirwad Steel from the small cap category are stocks to watch for. Cement: The performance of cement stocks in Q2 was below market expectations on the back of enhanced capacity build-up and a prolonged monsoon, which delayed construction of housing, road and infrastructure leading to idle capacities. But the recent rise of Rs.20-25 per cement bag in the South and Rs.15-20 in the North and North East will lead to better Q3 & Q4 results. ACC, Gujarat Ambuja and Shree Cement stock prices have already zoomed to the recent highs giving enough clues to the future outlook of the sector. Both JK Lakshmi Cement and JK Cement look attractive at current prices while JK Lakshmi Cement is definitely underpriced at Rs.62. Textiles: Money Times readers are well aware that this column had first hinted about the revival of textiles ahead of all TV channels and the print media as early as April 2010. The stocks first recommended in our Investment Advisory Service (IAS) at a nascent stage have brought windfall gains to IAS subscribers as narrated below: (1) Suryalata Spinning was regularly recommended around Rs.32 and hit a high of Rs.213 recording a gain of over 500% in just 10 months. (2) Suryaamba Spinning was also repeatedly recommended to IAS subscribers around Rs.28 and currently trades around Rs.110 recording a gain of around 300% in 8 months. (3) Arvind Ltd was recommended right from Rs.22 to Rs.32 till August 2010 Investment Advisory Service and hit a recent high of Rs.62.50 by G.S. Roongta recording a gain of over 184%. Money Times is pleased to introduce Investment Advisory (4) Priyadarshini Spinning was recommended at Rs.18 and has Service (IAS) by our renowned columnist Mr. G. S. Roongta, who touched a recent high of Rs.120 has over 25 years of experience and is well-know for his accurate yielding a gain of 566%. forecasts since 1986. Apart from these high performers, IAS Interested investors can visit Money Times office between 4 p.m. subscribers have also reaped a good harvest to 6 p.m. on Tuesday or Thursday every week after prior of 100-150% from stocks like Raymond, Shri appointment with our office. Outstation readers can consult him Dinesh Mills and Garden Silk Mills even by e-mail or phone. though these stocks were relatively high A minimum one time charge of Rs.1000 has to be paid in advance priced between Rs.80 and Rs.200 when first favouring Time Communications (India) Ltd. against which a recommended. maximum of 5 scrips will be recommended for investment and I am, however, still very bullish in the textile reviewed up to a period of three months. sector wherein the revival has just begun and Other services like portfolios analysis/restructuring will be is likely to continue for a year or more. There charged extra depending on the size of the portfolio & service. are several stocks in this sector since it is the Contact Money Times on 022-22654805 or second largest employer after agriculture with Telefax: 022-22616970 or email us at [email protected]. huge capital investment throughout the
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country. It has a number of laggards and dark horses, which we are researching on and will recommend them to IAS subscribers first as in the case of the above four stocks. Capital Goods: This sector, too, has not performed as per market expectations because the extended monsoon disrupted transportation and hampered the execution of several big projects. Stocks like L&T, BHEL and Siemens in the large caps and Elecon Engineering and Eimco Elecon from the small cap segments are worth buying at current prices. Miscellaneous: Apart from the above sectoral stocks, there are stocks like Cheslind Textiles, Hind Syntex, BCL Forgings, El Forge, Pearl Polymers, Sarda Plywood, Manaksia, Century Textiles, Hindalco, GE Shipping, Shanthi Gears, Clutch Auto, Garden Silk, BILT, which are regularly tracked for their performance and will be recommended on revival and confirmed information about improvement in their earnings and changed fortunes. Readers are well aware that recommendations made by me in this column and IAS have a success rate of over 90% providing exceptional returns compared to any other brokerage or fund. GSFC, SRF, Graphite India, Bajaj Auto, Bajaj Holdings and JK Lakshmi Cement are some of the spectacular performers from our stable. You are advised to stay with our recommendations, which are made for medium-to-long-term investment and not for short-term trading if you really wish to harvest a good fortune from Money Times. I wish all my readers a Very Happy and Prosperous New Samvat.

FIFTY FIFTY
By Kukku * Shanthi Gears (Rs.47.30), which is into manufactures industrial gears, has recorded higher net sales of Rs.35.94 cr. in Q2FY11 as against Rs.29.40 cr. in Q2FY10. Although tax expenses were higher at Rs.3.44 cr. in Q2FY11 from Rs.1.19 cr. in Q2FY10, net profit was sharply up at Rs.6.37 cr. compared to Rs.2.68 cr. in Q2FY10. With restructuring of its operational and organizational structure, its major production and related activities stand shifted to the unit located at Muthugoundanpudur, which has started yielding better results from this fiscal. The company is expected to fare very well. Investors can accumulate this stock for target price of Rs.60 over the next 6 months. * GEI Industrial Systemss (Rs.222.60) net profit shot up by 90.30% to Rs.7.65 cr. in Q2FY11 as against Rs.4.02 cr. in Q2FY10 while sales rose 70.29% to Rs.101.00 cr. as against Rs.59.31 cr. in Q2FY10. The company expects its order position to improve further. This stock was recommended at lower levels around Rs.90-95 levels. Investors can continue to hold this stock for revised targets of Rs.250 before review. * Indian Metal & Ferro Alloys (IMFA) (Rs.773.60) has fared exceedingly well in Q2FY11 as sales shot up to Rs.300 cr. and net profit jumped to Rs.57 cr. as against sales of Rs.116 cr. and net loss of Rs.2 cr. in Q2FY10. Higher profit is due to higher volumes despite of lower product price of around Rs.53,000 per tonne during the quarter. The current price of ferro chrome alloy is around Rs.60,000-62,000 per tonne. Hence we may see further improvement in profits over the next few quarters as this price trend is expected to firm up further. Investors can continue to hold this stock or even accumulate below Rs.725 levels on dips for a long-term target of Rs.1200 over the next 6/8 months. This stock has been recommended in this column from lower levels of around Rs.250 level. * Revathi Equipments (Rs.625) has reported encouraging results for the Q2FY11 as sales shot up to Rs.34 cr. from Rs.21 cr. in Q1FY11 and net profit, too, shot up to Rs.3.38 cr. from Rs.51 lakh of Q1FY11. The consolidated performance of the company is likely to be much better for this fiscal. Investors can keep a watch and accumulate this stock on dips for a long-term target of Rs.900 over the next 6/8 months. * Sambandam Spinning Mills (Rs.143.85) reported very good Q2FY11 as its sales shot up to Rs.53.6 cr. from Rs.33 cr. in Q2FY10 while net profit more than doubled to Rs.4.71 cr. from Rs.1.99 cr. from Q2FY10 giving an attractive quarterly EPS of Rs.11.1. Thus the company has reported an EPS of Rs.19.67 for H1FY11 and is expected to post encouraging results for H2FY11 too. The book value of the stock is Rs.80, market cap of the company is Rs.62 cr. while cash profit for FY11 is expected to touch Rs.35 cr. Investors can accumulate this stock for target price of Rs.200 over the next 6/8 months. * Manugraph India (Rs.61.55) has reported encouraging Q2FY11 results as sales rose to Rs.65.5 cr. while net profit zoomed to Rs.5.04 cr. as against sales of Rs.39 cr. and net profit of Rs.1.74 cr. in Q2FY10. For H1FY11, it reported net profit of Rs.8 cr. on its equity capital of Rs.6.08 cr. The company is expected to fare well and the share book value is Rs.81.4 while its market cap is Rs.171 cr. It has a gross block of is Rs.147 cr. with investments worth Rs.141 cr. and cash in hand of Rs.44 cr. Investors can accumulate this stock on dips to Rs.80 before review. * Dharani Sugar & Chemicals (Rs.49) manufactures sugar, alcohol including ethanol and is into co-generation of power. It has 3 units with sugar plants having a total capacity of 10,000 TCD, 37 MW co-generation power plant and a 160 KLPD distillery. Sugar prices have firmed up over the last few weeks. The downside is limited as its 52-week high/low is Rs.129/Rs.38.60 with market cap of is Rs.124 cr. Stock is likely to come down after announcement of Q2 results, which may not be good in line with the results of last quarter. But the worst is behind for the sugar sector and investors having patience can keep a watch on this stock for buying below Rs.45 level for good growth over the next 6/8 months.

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* Lloyd Electrics (Rs.77.85) Q2FY11 results are flat whereas other leading manufacturers reported a fall in margins. Investors can continue to hold this stock as H2FY11 is expected to be much better. * With a view to reap benefits of captive coal and iron ore mines, Jayaswal Neco (Rs.38) has planned for further development of its mines, setting up of coal washeries, enhancing capacities in sponge iron plants and their associated power plants, steel melt shop and rolling mill in its existing steel plant complex. Necessary steps are being taken for enhancement of the mining capacities also so as to cater to the future requirements of coal for the proposed expansions. Investors having patience can continue to hold this stock for good long-term growth. * AK Capital (Rs.891.50) reached a new high of Rs.944 during the week. Investors can book profit at every higher level in this stock. * Weizman Ltd (Rs.75.20) has got approval from the Court for demerger of its units. Investors can continue to hold this stock as there shall be good unlocking of value in this company over the next few months time. * Note: During the week, many of our recommended stocks touched new highs like Yuken at Rs.328, Dhunseri Petro at Rs.236, SRF at Rs.439, NR Agarwal at Rs.105, AK Capital at Rs.944, Weizman Ltd at Rs.76, Gandhimati at Rs.105, GEI Industrial Systems at Rs.228, Siyaram Silk at Rs.425, Ester at Rs.98, Sambandam Spinning at Rs.158, Nahar Spinning at Rs.144.

EXPERT EYE
By V. H. Dave

TT Ltd: Major turnaround

TT Ltd (TTL) (Code:514142) (Rs.39.95) has posted excellent results for Q2FY11 posting 217% higher net profit of Rs.4.5 cr. and it is expected to post an EPS of Rs.10 for FY11. TTL, incorporated in 1978 as Tirupati Texnit Ltd, manufactures combed cotton yarn, carded cotton yarn. In February 1990, it came out with a public issue of Rs.330 lakh to acquire certain balancing equipments and expand its network of franchise manufacturing units of Hosiery Goods/Knitwears. In 1993, the company set up a 100% EOU Spinning Mill at Gajroula with an installed capacity of 12,500 spindles. Since then, it initiated expansion/modernisation from time to time taking its spindles capacity to 57,500. TTL has manufacturing facilities at Gajroula in Uttar Pradesh, Avinashi and Tirupur in Tamil Nadu and Gondal in Gujarat. It currently has a long-term debt of Rs.140 cr. and a loan of Rs.120 cr. under the TUF scheme. Its products are marketed under the brand name of TT and Coco-Tea and it has been granted ISO 9001:2000 certification for quality management. It has presence in both domestic and overseas markets and exports yarn and cotton to various countries. It sells its products across India through a network of dealers and exports in over 20 countries. TTL has launched 51 new knitwear products across kids, men and ladies segments and has forayed into value-added organic products and received certification from Control Union, Europe, for export of organic yarn. TTL has received an encouraging response for its recently launched organic innerwear Green Vests and Briefs which are priced 25% over the non-organic wears. Knitwear made of organic yarn usually carries a premium of 70 to 100%. During FY10, it posted net profit of Rs.10.5 cr. as against a net loss of Rs.28 cr. in FY09. For Q2FY11, its net profit zoomed by 217% to Rs.4.5 cr. on 29% higher sales of Rs.98 cr. For H1FY11, net profit skyrocketed by 429% to Rs.8.8 cr. on 51% higher sales of Rs.212 cr. and the EPS works out to Rs.4.1. TTLs equity capital is Rs.21.5 cr. and with reserves of Rs.15.3 cr. the book value of its share works out to Rs.17. The promoters hold 53% in its equity capital, PCBs hold 9% leaving 38% with the investing public. It has chalked out plans to invest Rs.150 cr. to enhance its yarn making capacity and retail venture. It plans to tap the government-promoted Technology Upgradation Fund (TUF) scheme and internal accruals to fund its expansion. It will also raise additional funds by selling one of the two ginning factories at Gondal in Gujarat to invest in new projects. It will invest Rs.75 cr. to add 12,500 spindles by FY11 and another 25,000 spindles by FY13 to take its total yarn capacity to 95,000 spindles at Rajula near Pipavav Port in Gujarat where it owns about 100 acres. At Tirupur, TTL will invest Rs.25 cr. to enhance garmenting capacity by adding 100 sewing machines. It also plans to set up a wind farm for captive power generation in Gujarat with an investment of Rs.25 cr. while the rest of the funds will go into de-bottlenecking at various factories. TTL has targeted existing small retailers with 200-400 sq. ft. of space for its retail venture and has enrolled 20 franchises in the National Capital Region (NCR). Given the wide price range of its supplies, most of its franchisees are doing brisk business. Coming to its future prospects, the Indian textile industry contributes about 11% to industrial production, 4% to the country's GDP and 16.6% to export earnings. Nearly 40% of the textiles produced in the country are exported. The size of the Indian textile sector is currently pegged at US $63 billion.

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The global textile and apparel trade of US $600 billion market in 2009 is expected to touch US $800 billion by 2014. High labour cost in developed countries is driving out the textile and clothing business to low cost Asian countries such as India and China. TTL expects to reach out to the masses directly and provide a complete solution to the basic garmenting needs of a family, which in turn would provide a strong marketing/distribution backbone and will reduce its dependence on the intermediaries who are not focused to any particular brand due to the clutter of brands and intense competition amongst them. TTL is a vertically integrated cotton textiles player and has a unique USP of being present across the whole value chain from raw cotton to garments, which provides it an added advantage on both the quality and cost fronts that other competitors do not enjoy. During FY11, it is likely to post an EPS of Rs.10 and is expected to go up to Rs.13 in FY12. At the CMP of Rs.39.95, the share is traded at a forward P/E multiple of 4 on FY11 estimated earnings and 3.1 on FY12 projected earnings. Applying a conservative P/E multiple of even 6 will take its share price to Rs.60 in the medium-term and Rs.78 in the long-term. The 52-week high/low of the share has been Rs.45/9. *******

APM Industries: Undervalued textile share

APM Industries Ltd (APMIL) (Code: 23537) (Rs.96) has produced excellent results for Q2FY11, wherein its net profit has shot up by 116% to Rs.2.8 cr. Incorporated in 1974, APM Industries, a company belonging to the Rajgarhia Group of Orient Abrasives fame, manufactures synthetic blended yarns at Bhiwadi in Alwar district of Rajasthan, under the Orient Syntex brand name. The other listed group company is Orient Abrasives. APMIL has a captive power plant of 5 MW and has developed new products for exporters of yarn, fabrics, furnishings and readymade garments in keeping with the latest trend of fabrics & readymade garments. It has also developed new varieties of yarn for exports as well as for domestic markets. For FY10, while sales rose by 7% to Rs.196 cr. the net profit skyrocketed 523% to Rs.6.6 cr. During Q1FY11, net profit zoomed 193% to Rs.3.2 cr. on 23% higher sales of Rs.54 cr. During Q2FY11, sales advanced by 18% to Rs.55 cr. In H1FY11, although sales advanced by 20% to Rs.109 cr. net profit zoomed 152% to Rs.6 cr. and the EPS works out to Rs.14. APMIL continues to modernise its plant and machinery under the Technology Upgradation Fund Scheme (TUFS). Its modernisation cum expansion programme from has resulted in higher spindlage capacity of 48,320 from 37,952 spindles earlier. Its equity capital is Rs.4.3 cr. and with reserves of Rs.40 cr., the book value of its share works out to Rs.103. The value of its gross block is a whopping Rs.119 cr. The promoters hold 63% in the equity capital, PCBs hold 6% leaving 31% with the investing public. Coming to its future prospects, the Indian textile industry estimated at Rs.2,52,909 cr. (US $57 billion) in FY10, contributes about 14% to industrial production, 4% to the country's GDP and 12% to export earnings. The Indian outsourcing market size is estimated at Rs.1,15,362-Rs.1,24,236 cr. (US $26-28 billion) in 2009 at Rs.1,33,110-Rs.1,41,984 cr. (US $30-32 billion) in 2010 and is projected to grow to Rs.1,55,295-Rs.1,64,169 cr. (US $35-37 billion) in 2011. The global textile and apparel trade, Rs.26,62,200 cr. (US $600 billion) market in 2009, is expected to touch Rs.35,49,600 cr. (US $800 billion) by 2014. According to the Ministry of Textiles, investment under the TUFS has been increasing steadily. In FY10, 1896 applications have been sanctioned at a project cost of Rs.23m206 cr. (US $5.23 billion). The cumulative progress as on 31 December 2009 includes 27,477 applications which triggered investments of Rs.20,1884 cr. (US $45.5 billion) and the amount sanctioned under TUFS is Rs.83,859 cr. (US $18.9 billion) of which Rs.72,767 cr. (US $16.4 billion) has been disbursed so far till the end of April, 2010. There is a growing demand for yarn, fabrics and readymade garments in the global market. Major textile houses in the western countries are shifting their business to Asian countries to reduce the cost of production and India is a preferred country for outsourcing their textile requirements. As APMIL is into dyed yarns, it FREE 1-DAY TRIAL FOR is likely to face less competition from the low cost mass producers, who mostly produce Live market intra-day calls grey yarns. A running commentary of intra-day trading recommendations Based on the current going, APMIL is likely to on your mobile or Yahoo Messenger every trading day of the achieve an EPS of Rs.30 in FY11. With a month for Rs.3,000 per month. strong book value of Rs.103, the stock is an For 1-day free trial call Money Times to register. ideal bonus candidate. At the CMP of Rs.96, Provide your mobile number or Yahoo Id. the share is traded at a P/E of 3.2 and can be Tel: 022-22616970, 22654805 or Email: [email protected] bought for decent appreciation in the longA Time Communications Publication An Indian Newspaper Society Member 16

term. Applying conservative P/E multiple of even 6 will take its share price to Rs.180. The 52-week high/low of the share has been Rs.110/23. *******

Southern Ispat & Energy: Buy for 100% returns!

Southern Ispat & Energy Ltd (SIEL) (Code: 531645) (Rs.13.05) has produced excellent results for Q1FY11, based which an EPS of about Rs.6.5-7 can be anticipated. It was incorporated on 27 June 1995 as Southern Ispat Ltd in Cochin and commenced business on 30 August 1995. In February 1996, it came out with a public issue of 31,50,000 equity shares of Rs.10 each for cash at par aggregating Rs.3.15 cr. to part finance the project. It has been promoted by Vivek Agrawal, Sushil Kumar Pansari, Ramesh Chandra Verma and Ansuya Devi Agrawal. In 2008, it was renamed as Southern Ispat & Energy Ltd (SIEL) and is engaged in manufacturing and trading of steel products, which include ingots of iron and steel other than high carbon, steel bars and rods, hot rolled in irregularly wound coils, and non alloy steel. It also provides contract services and acts as a commission agent. Its plant is well located in terms of logistics, raw material sourcing, demand and manpower availability. Sponge iron and Iron scrap is the main raw material for production of MS ingots. 60% of its total scrap requirement is met through imports whereas sponge iron and other consumables are available on demand in local markets. Till FY09, SIELs growth was lacklustre but changed from FY10 after an integration plan and new aggressive strategy was put in place. Kerala Sponge Iron Ltd (KSIL), a private company promoted by the Agrawals in 2005 was merged with SIEL and it was forward integration for making value added products and set up 1,95,000 TPA of round steel/TMT bars, 12,000 TPA of forged articles and 6,000 TPA of machine flanges. It also set up a 8-MW captive power plant. Its equity capital has gone up to Rs.43.7 cr. The book value of the share is Rs.12. Promotes hold 4.2% in the equity capital, foreign holding including GDR conversion is 66.5%, PCBs holds 9.5% leaving 19.8% with the investing public. During the 15 months ended 30 June 2010, SIEL earned a net profit of Rs.9.2 cr. on sales of Rs.331 cr. For Q1FY11 ended 30 September 2010, it posted 879% higher net profit of Rs.7.3 cr. on 250% higher sales of Rs.113.2 cr. and the quarterly EPS works out to Rs.1.7. SIEL is now acquiring Gujarat-based New Tech Forge and Foundry having a net worth of Rs.200 cr. to expand its presence in alloy steels and steel forgings. New Tech Forge has a 120,000 TPA integrated steel plant for producing sponge iron, billets, round steel, forging articles, machine flanges, etc. It has also initiated the process of acquiring iron ore mines in Chattarpur District of Madhya Pradesh for a consideration of Rs.50 cr. The mine is spread over 150 hectares and has reserves of 230 million metric tones (MMT). It is also buying 95% stake in an Indonesian mine and intends to increase its captive power production from 8 MW to 30 MW using the coal imports from Indonesia. SIEL has thus lined up a capex plan of about Rs.300 cr. to augment its production line and has raised funds via GDR for its capex plans. During FY11, it is likely to earn a net profit of about Rs.30 cr. on sales of Rs.490 cr. and could post an EPS of Rs.6.8. At the current market price of Rs.13, the SIEL share is traded at a P/E multiple of around 2. Investment is this share is likely to fetch a decent appreciation of over 100% in the medium-term. While there is hardly any downside risk, the chances of appreciation are extremely bright. The 52-week high/low of the share has been Rs.48/10.

TECHNO FUNDA
By Nayan Patel

KLRF Limited

BSE Code: 507598 NSE Symbol: KLRF Last Close: Rs.37.05 KLRF Ltd, formely known as Kovilpatti Lakshmi Roller Flour Mills, with its brand as Kuthuvilakku came into existence way back in 1964 with the establishment of 46,800 MT wheat flour mill at Gangaikondan in Tamil Nadu near the southern tip of the Indian subcontinent and occupies an outstanding position in the Indian flour industry. KLRF has a diversified business of wheat flour milling, textiles, sheet metal fabrication and trading. Ever since inception, the mill focused on continual improvement and customer segmentation based on specific product quality and end use applications such as bakeries, paratha makers, hoteliers, sweet stalls confectioneries and domestic end users.
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KLRF is constantly making efforts to expand the usage of flour depending on customer requirement and specific product quality. KLRF has commissioned a traditional stone mill to manufacture whole meal Atta that has more fibre, minerals, vitamins and rich in aroma. This flour is soft and ideally suited for making chappatis and puris. KLRF started with its Textiles business in 1982, a 30,000 spindles unit and 1176 rotors. KLRF Textiles expanded and soon became a leading yarn manufacturer in the country. Today, it stands synonymous with quality and a symbol of excellence. KLRF is the recipient of ISO 9002:1994 certificate from TUV Management Service GMBH for establishing a quality system for Manufacture and Marketing of Cotton Yarn. KLRF has been committed to a clean and green environment. Its wind mill divisions at Aralvoimozhi Village in Kanyakumari District, Pazhavoor Village and Dhanukkarkulam Village in Tirunelveli District, Tamil Nadu have a capacity of 6.25 MW. The first four windmills of 250 KW each were commissioned at Aralvoimozhi Village in 1995 and 1997. The fifth and sixth windmills of 750 KW each were commissioned at Pazhavoor Review Village during 2001. The seventh windmill In the issue dated 26 September 2010, we recommended Vamshi Rubber of 1250 KW was commissioned on 30 March at Rs.39.95, which zoomed to Rs.58 level in just one month and recorded 2005. The eighth and ninth windmills of a marvellous return of 45.18% for our short-term investors. 1250 KW were commissioned in March In the issue dated 4 October 2010, we recommended Veejay Lakshmi 2006. The entire power generated by the Engineering at Rs.72.80. It zoomed to Rs.81.45 level and recorded 11.88% return in a very short time. windmills is captively consumed. All the windmills are well maintained and their In the issue dated 11 October, we recommended TT Ltd at Rs.37.55, which zoomed to Rs.45.20 level and recorded 20.37% return in a very short performance is satisfactory. time. KLRF has an equity base of Rs.5.02 cr. that is In the weekly issue before last, we recommended Polyspin Exports at supported by reserves of around Rs.13.41 cr. Rs.21.55. It zoomed to Rs.25.50 level in just one week and recorded The promoters hold 39.20%, non-promoter 18.32% return in a very short time. corporate bodies hold 8.23% while the Last week, we recommended Apcotex Industries at Rs.154.35. Within just investing public holds 47.26% stake in the 3 days, it zoomed to Rs.186.90 level and returned a handsome gain of 21%! company. For Q2FY11, it recorded net sales of Rs.48.71 cr. with net profit of Rs.1.68 cr. as against net sales of Rs.38.27 cr. with net profit of Rs.29 lakh in Q2FY10. (Net profit zoomed 479% on a quarterly basis). For H1FY11, it recorded net sales of Rs.92.43 cr. with net profit of Rs.2.63 cr. as against net sales of Rs.70.55 cr. with loss of Rs.61 lakh in H1FY10. The quarterly EPS is Rs.3.34 while FY10 EPS was Rs.5.23. Currently, this stock is available at a forward P/E multiple of just 3.65. On weekly chart, it looks highly explosive while the RSI, Stochastic Oscillator and MACD indicates that the stock is ready for a new bull run. After consolidation between Rs.28-34, this stock has given very strong breakout and is entering a new zone. Investors can buy this stock with a stop loss of Rs.32. On the upper side, the stock will zoom to Rs.50 level in shortterm and to Rs.75+ level in the medium-term.

Kiri Dyes acquires profit making DyStar US

MONEY FOLIO

Ahmedabad based Kiri Dyes and Chemicals Ltd. (KDCL) has acquired the US based arm of DyStar Group - DyStar, USA, with revenues of over US $100 millions with and EBITDA of US $10 million through its Singapore subsidiary, Kiri Holding Singapore Pvt. Ltd. DyStar is the global market leader for dyes, dyes solutions, leather, performance chemicals, new technologies and customised manufacturing of special dyes/pigments with about 21% market share globally. It provides high quality products and services in sectors like apparel, hosiery, automotive, carpets, home upholstery and industrial fabrics. It has sales and technical support agencies in 50 countries and 17 production facilities in 14 countries. The acquisition was made at US $10 million, which includes a factory, warehouses in North Carolina and California. With this acquisition, the overall DyStar Group will have revenues of over US $850 million in FY11, and approx US $1 billion in CY11 (January December 2011). This will provide KDCL consolidated revenue of US $1 billion or Rs.4700 cr. in FY11.

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