PerknLife

Future Group Arbitrage Investment Matrix

2020-09-02T04:31:00.005-07:00

Future Group Companies going restructuring before getting bought over by Reliance Retail.

Existing companies are merging with Future Enterprise Limited.

This presents excellent opportunity to but some of Group companies and this matrix will help you decide which is best bet.

Ex Record date will take around 3months based on past experience.

Risk Elements:

Poor Performance of FEL Limited Post Deal.

Poor Conversion Ratio from FEL to Reliance Retail in Future.

FMCG Houses in India... ITC v/s Rest

2020-05-09T05:48:00.001-07:00

In this post, I'm covering companies such as
FMCG Companies: ITC Ltd, Dabur Ltd, P&G Hygiene, HUL Ltd, Nestle Ltd, Britannia, Godrej Consumer, Marico Ltd, Emami Ltd, Jyothy Labs.
Cigarette Companies: Godfrey Philips & VST Industries.

Color RED indicates weak Indicator,
Color Yellow Neutral or Just Average and
Color BLUE stands for Positive Indicator.

My favorite bet is ITC ltd for year 2020 and next 4 years.

Year 2020 is full of Opportunities

2020-03-27T01:45:00.001-07:00

Hi Friends,
Year 2020 at current levels of Nifty 8700 odd is excellent opportunity for India and Retails Investors of India.

This is also once in life time opportunity to capture Quality Stocks of the decade .
As Fear from Corona Virus settles post vaccine development sometime in Mid-April.
Life will return to normal and So will be rebound in Stock Market.

Stage 1: First 6months.

Stretched balance sheet of Banks will be further stretched due to Airlines, Luxury, Entertainment Sector and Real Estate.
What needs to done on Day to Day basis will continue to rise and shine.
So Capturing First wave should be more of companies from Tech, Pharma and FMCG sector.
Common man continues to pay Electric Bills so aim to capture some Ultility provider.
Falling Crude prices auger well for these companies.
Road Development and Toll collection would have slowed down but will be first to rebound and Logistics provider will be clear beneficiaries of this up move.
Tech Companies catering to services Industries and will be quick to rebound.
There would be disruptions in terms of new deal signage but existing projects can be executed using work from home and web conference infrastructure.
Agri Products also should be considered in this list

# Piramal Enterprise # TCS, #Infosys # Wipro, # Zensar Tech # Marico ltd # Future Consumer #Cipla # Strides # Glenmark Pharma # Kaveri seeds #Larsen & Turbo # L& T Tech # L&T Infotech, # Solar Industries # Gujarat Ambuja Exports # Godrej Consumer # Tata Consumer # MCX

Excluded Hospitals as GoI is Expert in passing Cost burden on these companies.
Stage 2:
Coming Soon..... Ports, Engineering Segments

Stage 3:

Crude, Precious Metals, Banks, Hotels & Real Estate.

Swelect Energy ltd

2018-06-17T03:49:00.003-07:00

Swelect Energy Ltd:

Mkt Cap : 328cr

CMP: 325

FV:10

Book Value: Rs703--> Tangible Book Value excluding Intangible Assets Rs 560/-

Altman Z Score: 2.5-- Debt per share is Rs 40/- & Interest Coverage is around 4times.

Graham Number: Rs590/-

Consolidated	2018 in cr	2017 in cr
Solar Product n EPC Revenue	313	282
Amex Alloys (Foundry) Revenue	86	71
Solar Product n EPC Net Profit	10.29	6.89
Amex Alloys (Foundry) Net Profit	.53	-1.81

	Assets	Liabilities	Working Cap
Solar	450cr	236cr	214cr
Foundry	93.5cr	11.25cr	50.98cr
Assets not deployed	450cr

Swelect Energy ltd--> Key Milestones:

Year 2012-> Numeric Power System Sold it's UPS business to Legrand France for Rs 837cr/-

HHV Solar integrated with Swelect Energy ltd

Year 2013, The 49 per cent equity in HHV Solar has been bought for a consideration of Rs 22 crore.

Year 2014, The remaining 51% Equity in HHV Solar was bought for consideration of Rs 27 crore.

Year 2014-2017:

HHV Solar Technologies Ltd expanded PV modules mfg capacity to 100MV.

Ministry of New & Renewable Energy Channel Partner with SP1A Rating An ESCO empanelled company by BEE.

Successfully executed 4 MW Solar Power Generating plant EPC for Kovai Medical Centre and Hospital (KMCH) Limited.

In Trichy District, 10MW Solar Power Generating plant for SECI with a 25 years PPA.

Expanded Product base to 2 way Invertors, Solar Motor Pump, Solar Power Street Lights.

HHV's Certifications:

IMS certified-ISO 9001:2008 ,ISO 14001:2004 + Cor.1:2009, BS OHSAS 18001:2007.

IEC 61215/61730, 61701, UL 1703, CEC, MCS-BRE UK, MNRE.

Detailed Profile of the company's Solar division is as follows: http://www.hhvsolar.com/sites/default/files/HHV-Profile.pdf

Expansion in U.S:

http://www.wnct.com/news/mccrory-swelect-energy-systems-to-bring-155-jobs-to-halifax-county/1091559044

What I like is all Subsidiaries are 100% ownership of co.

Co would be in key advantage to export Solar panels to US after Chinese Trade war with U.S.

Snapshot from Co's Annual Report 2017.

Financials of Co:

Snapshots from Financial Reports of Co:

MF Investment

Key Advantages:

1. Company has been emerging has strategic EPC partner for Govt Projects with PSU such as NTPC.Where land is expensive and water bodies controlled by Govt Agencies. Swelect can emerge as strong contender with it's expertise.

https://economictimes.indiatimes.com/industry/energy/power/ntpc-installs-indias-largest-floating-solar-pv-plant-in-kerala/articleshow/57577004.cms

2. Company has strong fundamentals and enough cash to fuel growth in this sector where GOI's focus has been upmost to focus on renewable energy with World bank loans at 1-2% Interest rates.

3. India is aiming for 100GWs in Solar by 2020 which =100,000 MWs. Twice the current installed capacity.

https://www.hindustantimes.com/india-news/ray-of-hope-india-s-solar-dreams-are-big-and-bright-are-they-realistic/story-isWYOyx46jGxCRgMrIs8bO.html

4. Usage of solar panels has expanded beyond simple water heater on roof top. Solar pumps, Solar power ventilation, Solar for Outdoor lightning etc. Swelect has ventured into solar street lights and Solar Water pumps.

5. Smart Micro Grid system which 2 way connectivity will be driving force for Homes to Install Solar power. In countries like US, power charges are different at different times. Usually Homes sell their solar generated power generated during the day time to and buy it back from grid at night time and thereby earning on their solar roof top installtion.

https://www.livemint.com/Technology/zL0gQgEdnrQ0PmI1I6NloO/Making-a-smart-energy-grid-work-for-India.html

6. Company has been steadily expanding it's presence throughout the country via exhibitions and dealer networks.

https://www.facebook.com/exhibit8ventures/posts/1356921847745663

7. Quality management and less inter promoter dealings is one of fundamental plus point to invest in this company.

Key Drawbacks:

1. Flip Flop in GOI policy or change in Govt.

2. Slow expansion of company in U.S. and Singapore.

3. Significant chinese competition in solar panels products in India.

Disclaimer: This is not a BUY of SELL call. This just few facts and opinion based for small Investors.

Balmer Lawrie Investments ltd has lot to catch up.

2014-07-20T01:16:00.000-07:00

Balmer Lawrie Ltd has Market capitalisation of 1640 crores as closing date 20- Jul-2014 with CMP of 578 with Face value of 10.

Balmer lawrie Investment Ltd has Market Capitalisation of 557 crore as on closing date of 20- Jul 2104 with CMP of 250 with Face value of 10.

Balmer Lawrie Investment ltd like any holding company trades at discount but offlate the discount is quite steep and represents opportunity to be considered in one's long term portfolio.

Balmer Lawrie Investment represents a good Investment opportunity for conservative Investor.

I see this as Corporate Bond which not only increases the Book value every year but also increases the Dividend payout since last 5 years.

It has soon great consistency in last 5 years & it's major verticals are directly pegged to Country's GDP.

Balmer Lawrie Investment Ratios for last 9 years.

Balmer Lawrie Investments Ltd has been solely formed with the intention of divesting its holdings in Balmer Lawrie Company Ltd.

Although i'm interested in writing about Balmer Lawrie Investment we need to first understand bit of Balmer Lawrie Company ltd's History which is as follows.

Company was started by 2 Scotsmen Stephen George Balmer & Alexander lawrie as Tea trading, Tea Blending, Shipping & Forwarding business

In Year 1937, it had setup it's first grease plant at Kolkatta.

In 1969, Balmer Lawrie lost the managing rights over 40 Tea gardens as the Managing Agency was abolished.

In 1972, Management divested their stake to Indo-Burma Petroleum Company.

Due to Nationalisation of Oil Companies in India, Company which was subsidary of IBP was transferred to Indian Oil in 2002. Balmer Lawrie Stake was transferred to Balmer Lawrie Investment Ltd .

Balmer Lawrie Investments Ltd has been solely formed with the intention of divesting its holdings in BLCL.

CSR activities under taken by Balmer Lawrie.

http://www.csr.tiss.edu/research/BalmerLawrieEvaluationreport201213.pdf

Short summary of all the JV's & subsidaries headed by Balmer Lawrie & Co. Ltd.

Balmer Lawrie (UK) Ltd. 100%

Balmer Lawrie (UAE) Llc. 49%

Balmer Lawrie - Van Leer Ltd. 48%

Transafe Services Ltd. 50%

Avi Oil India Private Ltd. 25%

Balmer Lawrie Hind Terminal Pvt. Ltd. 50%

Balmer Lawrie – Transafe Services ltd history:

In FY10, BLVL had acquired a 50% stake in Transafe Services Limited (TSL) for a consideration of Rs.

18.18 crore. With TSL filing for CDR, this investment is likely to be written off."

Balmer Lawrie - Van Leer limited history:

BLVL is a joint venture between Balmer Lawrie & Company Limited and Greif Inc, manufacturing steel drum closures and plastic drum/containers. The company was incorporated on 12th February 1960 and was originally known as Indian Flange & Manufacturing Company Pvt. Ltd.

In 1993 the name was changed to Balmer Lawrie - Van Leer Limited (BNVL), Balmer Lawrie and Royal Packaging Industries Van Leer NV emerged as major shareholders.

The company went in for a public issue on 26th April 1994.

In 2007, the company decided to de-list from the stock exchange and the shares were bought back by the parent company Greif International Holding (previously Royal Packaging Industries Van Leer NV).

Key Points of Balmer Lawrie Travel:

In Feb 2014- Balmer lawrie acquired vacation exocita for 20 crores.

Vacation exotica has started it's operation in 2007 & had staff strength of 110 members at time of acquisition.

Vacation exotica gives Balmer Lawrie access to 41 000 - Indian client base & tap network of 100 plus preferred overseas partners. This acquisition complements the nationwide Tour & travel offices setup b Balmer & withstand the competition from Online portals.

Vacations Exotica average sales growth of 25 per cent for 3years and its tours and travel business has revenues of around Rs 120 crore in year 2013.

Vacation Exoctic earns 40% of it's revenue from Ticketing which can be a very good compliment to Balmer Lawrie's existing infrastructure on Tours & Travels.

Vacation Exoctica has rating of 3.7 in Justdial & Glassdoor3.

Indian Govt employees roughly 19 million people (3.4 Central Govt, 7.2 State Govt, 6.4 Quasi Govt 9 (Reference: https://kgovindan.wordpress.com/2009/08/)

Online Portal http://balmerlawrietravel.com.

Online Portal http://www.vacationsexotica.com.

Tours and Travel segment of Business breakup:

Balmer Lawrie has done sales of 1161 cr (after exclusion of Inter segment revenue) in FY 2014 & PBT of 24cr for FY14.

Balmer Lawrie has done sales of 1120 cr (after exclusion of Inter segment revenue) in FY 2014 & PBT of 32cr for FY13.

YoY Sales growth rate has been 4% . Capex is 122 crores in FY14, generating ROCE of 14% for the company.

Key Points of Balmer Lawrie Lubricants

Balmer Lawrie sells grease under the Brand name Balmerol.

It has 3% of the Market share & underwent some re-branding exercise in the year 2012.

It has 4 blending plants in Kolkatta, Chennai , Mumbai (Sewri) & Silvassa.

Govt of India can consolidate all lubricant business under one roof and compete with MNC's such as Shell & Castrol.

Servo is brand from HPCL, Tide Water Oil ltd sells under Bran Vedol is another company from PSU sector competing with each other.

Balmer Lawrie sells grease mainly to Industrial sectors such as Steel, Mining , Railway , Automobile & Defence which accounts for 70% of it's Lubricant Sales.

Company added 20000 tpa in it's Silvassa plant in Year 2013 at cost of 35crores.

Company's Sewri (Mumbai) plant of 6000 tpa will be shut down due to Environmental issues.

G&L operates mainly in two wings - Automotive grades, which constitute about 60% of the market and Industrial & Marine Grades, which represent the balance

Balmer Lawrie has only captured 2% of market share in Lubricant & 24% in Grease segment.

Balmer lawrie lacks the marketing skills and Distributor network has to be improvised.

Reference:

http://www.slideshare.net/saturnchallenger/balmer-lawrie-lubricants-and-greases-distributorship-review?qid=9ea89b4a-8a23-4497-aed2-8a00dbdab840&v=default&b=&from_search=2

The Lubricant industry in India has been pegged around Rs. 15,000 crore annually with consumption estimated at around 1.50 million tonnes in 2012-13. (Balmer's Lawrie's management Insights for 2012-2013)

Financials of Balmer Lawrie Ltd by Segment for year 2013 & 2014

Net profit TO Market Cap: 9.53%

TAX %: 26.85%

Operating Cash flow for Year 2013: Rs 70.59

DEBT PER SHARE: Rs 79.82

Net Current Asset PER SHARE: Rs 259.63

Net Block PER SHARE: Rs 201.57

Working Captial PER SHARE: Rs 259.63

SALES PERSHARE: 1347.45

CONTINGENT LIABILITY PERSHARE: 92.11

CMPTODEBTPERSHARE: 7.25

CMPTOCONTILIABPERSHARE: 6.28

CMPTONETBLOCKPERSHARE: 2.87

CMPTONCAPERSHARE: 2.23

CMPTOWCAPPERSHARE: 2.23

Working Capital Days: 20.52

Net profit: 166.07Cr.

EVEBITDA: 4.89

Altman Z Score: 4 plus

5 Year Growth rate in Business is what I observe for Industrial companies.

Key Risk for Investments in Balmer Lawrie Investment:

Upward revision in Dividend Distribution Tax.

Any Reduction in dividend payments by the subsidiary will impact the Price of the Company.

Dividends paid by a domestic company are subject to the dividend distribution tax (DDT) at an effective rate of 16.995%.

Comparision of Valution for peers in the Industry

Conclusion:

I don't want to leave a Target Price or BUY recommendation.

One has to read and decide what he intends to do with this beautiful company.

FDC ltd & Strides Arcolab ltd some good sipping candidates.

2013-09-07T03:42:00.000-07:00

I have put some comparison n strengths of FDC ltd.

Wockhardt clear AVOID for next 1 year.

However companies such as Strides Arcolabs n FDC ltd is worth a good SIP candidates.

INDIAN BANKING RECENT QTR PERFORMANCE INDICATORS STUDY PART 2

2013-08-17T08:44:00.002-07:00

This part contains

1. Income Earning,

2. Operating Expense inclusive Provision ,

3. Net Profit,

4. Net NPA

I'm presenting you actual dataset n best n worst performance in Banking Industry.

Also trying to capture figures in Per share to standardise dataset & further for easy comparison among peers i'm trying to measure each of them with their Current Market Price.

INDIAN BANKING RECENT QTR PERFORMANCE INDICATORS STUDY PART1

2013-08-17T08:32:00.002-07:00

INDIAN BANKING RECENT QTR PERFORMANCE INDICATORS STUDY PART 1 .

TO KEEP LIFE SIMPLE I HAVE USED COLOR AS INDICATOR.
GREEN OR BLUE MEANS BEST IN INDUSTRY N RED MEANS WORST.
ORDER SHOULD BE .

1. PBIDTM% -
2. PBDTM%
3. PATM%
4. Gross Non Performing Assets %
5. Net Non Performing Assets %. (Most critical Indicator of deteriorating Credit Quality)

This table below contains the actual numbers for the above 5 Fundamental indicators and change over period of time such as Previous Qtr, Previous Qtr last year & Last to last Year.

Delisting has fizzed off in Indian Capital market hope to see more realistic P/E, P/S & P/B multiples for this companies.

2013-06-11T08:08:00.001-07:00

It was very evident then during Sept2012 that Market had overvalued some of the scripts in Indian market were promoter holdings was greater than 75%

Promoters also let the suspense built up as it helped them in fetching a better price via Offer for sale .

It’s common man who ended up burning his fingers and may take some time may next 5years to get his cost price back .

In Sept'12 I had taken this companies past five years of Balance sheet, Income statement cash flows & tried to compute how much Promoters will have to shell out from their pockets to buy back.

Do they have sufficient capital to do so.

Are their earnings strong enough to support such an buyback.

If you guys need detailed working do email me I shall share maths behind each field.

Oracle Financial Services:

Oracle went for dilution of Stake in open market

http://www.bseindia.com/xml-data/corpfiling/AttachHis/Oracle_Financial_Services_Software_Ltd_210513.pdf

Novartis India Ltd:

Novartis India went for dilution of Stake in open market

http://www.bseindia.com/xml-data/corpfiling/AttachHis/Novartis_India_Ltd_290513.pdf

Timken India

Company also diluted stake by issuing shares.

http://www.bseindia.com/xml-data/corpfiling/AttachHis/Timken_India_Ltd_090413.pdf

Honeywell Automation:

Company also diluted stake

http://www.bseindia.com/xml-Data/corpfiling/AttachHis/Honeywell_Automation_India_Ltd1_131212.pdf

GMM Pfaudler:

http://www.thehindubusinessline.com/markets/stock-markets/national-oilwell-makes-open-offer-for-gmm-pfaudler/article4442206.ece

http://www.bseindia.com/xml-data/corpfiling/AttachHis/GMM_Pfaudler_Ltd2_250413.pdf

Here is the Offer price was Rs. 88.55 per share.

Fresenius Kabi

Company sincerely made an Delisting offer to general public,

Outcome of Board Meeting (Delisting Offer)18 Apr 2013

With reference to earlier announcement dated April 17, 2013, the Fresenius Kabi Oncology Ltd had informed BSE that the Company has received a letter dated April 16, 2013 ("Letter") from Fresenius Kabi (Singapore) Pte Ltd, the promoter shareholder of the Company ("FKSL") notifying the Company of its intention to make a voluntary delisting offer to the public shareholders of the Company ("Delisting Offer") to acquire the entire public shareholding of the Company (i.e. 3,00,63,255 equity shares of Re. 1 each, representing 19% of the share capital of the Company) and delist the equity shares of the Company from the stock exchanges on which the equity shares of the Company are presently listed, i.e., BSE Limited and the National Stock Exchange of India Limited in accordance with the SEBI (Delisting of Equity Shares) Regulations, 2009 ("Delisting Regulations"). FKSL has expressed its intention to pay an indicative price of up to Rs. 130 per share to acquire the shares offered to it in the Delisting Offer, subject to FKSL's right under the Delisting Regulations to accept or reject any price discovered under the reverse book building process set forth therein.

ANDREW YULE Ltd:

No news on delisting from the Govt for this company.

http://www.indianexpress.com/news/govt-plans-to-divest-in-andrew-yule-hmt-after-their-revival/1123034/

Styrolution ABS:

Company decided to dilute the promoters stake n not to go for open offer.

http://www.bseindia.com/xml-data/corpfiling/AttachHis/Styrolution_ABS_(India)_Ltd_200513.pdf

Kennametal India:

Company decide to dilute the promoters stake and not to go for open offer.

Share price has dropped from 1140 June 2012 to CMP of 487/-.

Fairfield Atlas:

Fairfield Atlas has Post offer price of Rs245/ for public based on price discovery.

http://www.bseindia.com/xml-data/corpfiling/AttachHis/Fairfield_Atlas_Ltd_050613.pdf

BOC india (Linde India)

Company also decided to dilute it’s stake via Offer for sale.

http://www.bseindia.com/xml-data/corpfiling/AttachHis/Linde_India_Ltd_150513.pdf

This analysis is based on Last Sep'12 when I posted the findings.

CMP here refers to price as on 3^rd Sept'12.

Here is my full analysis which I didn’t share last time based on which I wrote last time.

I also feel that some of this stocks would further correct when NIFTY corrects to more realistic P/E & P/B & P/S multiples.

Cheers…..

CASE study3, were Indian Housing sector will correct by atleast 30% in next 1year and gradually rise only by 20% in next 20 years.

2013-04-27T20:38:00.003-07:00

Hi Friends,
Indian housing market is in Bubble phase for sure when measured based on Affordability Index , Price to Income basis, Mortgage as percentage of Income, House to Income Ratio & Price to Rent ratio basis.
It's also for sure lot of Black money is been parked into this sector & Govt itself is in least interested to cool of sector by taking relative measures.
Real Estate Sector is not targeting poor common man in streets as it's beyond their reach, it's targeting the NRI's residing abroad.
NRI's hardly know what would be best use of their money, they don't want to bet in Equities market and yet what something steady in their portfolio.
NRI's have been happy with the Rupee depreciation in last 6 years of close to 35%.
They fail to realise that Real Estate investments are not very liquid and would take time to sell when they step into the market.
Indian Real Estate comes up with property show in major cities across the world where rosy picture of new Township is sold to NRI pockets.
When they sign up the agreement they fail to realise that the agreement is totally one sided favouring builders and nothing is in their favour.
Builders are delaying projects by 3 to 4 years this is Indication of oversupply and cash trapped builders.
One should be cautious of big township projects if water table of that region is depleting and weak.
NRI's are over leveraging in some cases by making following Assumptions.

They can repay loan in 30 years.
They will always have steady & Rising pay structure.
They can quickly sell back the property if in need of cash.
Like Gold property prices will always go up.

Reasons why Property prices would come down in next 5 years:
As the GDP derails jobs derail.
Politicans need to fund elections which will see pull back from Real Estates.
Pvt Equities are exiting this sector (smart Individuals are money there money out)
Banks will refuse to restructure loans further to Builders which will lead to defaults or lowering of Rates.
Slow phase of job creation in India (especially service sector)
Failure to cut down the rising influence of Chinese mfg will slow to Indian mfg industry which will again slow down jobs in country.
Cost of Cement & Steel would correct as China slows down.
Interest Rates in Banks will moderate and this will lead to lower cost of borrowing n lending .
If Govt is really people oriented emerging 2 tier & 3 tier cities which are well planned can see rising jobs and and shift of population based on availability of Basic amenities.

References from the web for your reading and inference.

Rising Unsold Inventory in Real Estate:

http://articles.economictimes.indiatimes.com/2013-02-13/news/37079528_1_unsold-inventory-knight-frank-research-market

http://www.firstpost.com/economy/why-bangalore-property-is-more-real-than-mumbais-352467.html

Also some good readings & images from the web for you.
http://en.wikipedia.org/wiki/Indian_property_bubble
http://www.zerohedge.com/news/2013-03-07/guest-post-unpopped-housing-bubbles-abound

http://www.numbeo.com/property-investment/gmaps_rankings.jsp?indexToShow=getMortgageAsPercentageOfIncome&year=2013

http://www.numbeo.com/property-investment/gmaps_rankings.jsp?indexToShow=getHousePriceToIncomeRatio&year=2013

http://www.numbeo.com/property-investment/gmaps_rankings.jsp?indexToShow=getPriceToRentRatioCityCentre&year=2013

http://www.numbeo.com/property-investment/gmaps_rankings.jsp?indexToShow=getAffordabilityIndex&year=2013

Indian Housing Simulator and why first timers should invest in atleast one house for living.

2013-03-29T07:37:00.000-07:00

Hi Friends,
This is Case study is for people in age group of 25-30 years.
There goes a saying "cut one's suit according to one's cloth"
Mean is simple don't over leverage our stretch to much beyond your budget.
These banks gives loan for everything and when it's disbursed you are made to feel like King.
It's only when EMI starts making dent one realises the reality.
EMI for your first house is an Assset and at any cost shouldn't be delayed.
Buying house also should be within reasonable means. One needs to save for rainy days.
Let's say one should have atleast 5 lakhs as emergency fund.
This is keeping in mind your average salary is 10 lakhs plus per annum.
Don't invest in new townships unless you plan to stay there in person. India too has ghost townships were people are finding it hard to move in.
Study the Location of your Investments.
EMI should be not more than 40% of your monthly salary.
If both partners are working still better to keep buffer as these days there is no Job surety.
As stated earlier there is loan for everything but Loan Installment shouldn't exceed 50% of your monthly income.
Credit cards gives us feeling that we haven't spend much especially if auto payment is linked with your credit card it's even worst as you lose track of your Investments.
Life Insurance coverage should be just sufficient to cover your mortgages payment if any.

Let's see how House Investment creates value for Individual
Case Study 1 is positive scenario.
We can get Tax benefit on HRA, We can save on Rental Income.
We can keep up with pace of rising Inflation.
We need not worry about promoters n their cunning and innovative Interventions.

If we need just 20% steady return Housing can be one of smart investments if carefully betted.
Housing will be cheaper in next 2 years once Indian housing bubble bursts (corrects by 25%) do invest and keep your fingers crossed that it does happen so Housing market comes to some sanity.
As we see a Positive NPV for all our Cash outflows we can invest with margin of safety.
Here i'm consider what if ur Intial Investment was kept in FD,
What if Rentals after paying maintaince is kept in FD
What if Rental deposits are kept in FD
What if you Repay home loan by 20 years & sell of your House by 20years at 265% higher than purchase price.
First timers can see Rental yield as savings if they Invest and they neednot pay rent as they would do if they don't own a house.
Investors can see Rental Yield as returns on their Investment

Case Study 2 is worst scenario.
Assume house is sold after 20 years. Keeping Inflation of 3.5%.
Due to depreciation assume we can only get 100% return on Arithmetic mean basis.
Assuming Fixed Deposit Yield after tax is 6% will slow down & Rental yields will be hard to come by.
If it's your first home and NPV is positive given below anticipated scenario it's worth a buy.
In India there is nothing free and not much social security.
Even if Banks fail we can say House is our Asset ( Ignoring nature and man made calamities)

FCCB can be fixed if Indian FM acts prudently

2013-03-24T03:31:00.001-07:00

Let's see how Debt can destroy any company or company.
From Debt Equity Ratio of less than 1 it can simply spike to more than 2 & can derail the entire company.
Today in India we have many companies like Sintex, Venus Remedies, Tulip Telecom, Geodesic Ltd , Educomp Solutions, Jindal Stainless steel.. and many more for whose management FCCB has been nightmare.
FCCB= Foreign Convertible Bonds has raised lot of eye borrows over past 1year , the same was used to be fancy item for all CFO’s n related Indian Companies as cheap source of financing in year 2005-2007.
Many of them are Zero coupon Bonds
These Bonds carried an yield of 5 to 7% without the Foreign Exchange Impact.
In case of bullet Bonds where Coupons are paid annually, this keeps check on financial health of company as Bond Issuers need to pay Annual /Semi Annual Coupon Payments.
Nearly 250 plus Indian listed /unlisted companies raised more than USD 16 billion during year range of 2006-2009.
Most of the Fully convertible Bonds had Tenor of 4 to 6 years. Refer to RBI clause on External Commerical Borrowings.
Rupee was in an uptrend against the USD & Average Rupee was at 39-41 Range during this period.
It's challenging environment for this companies as the liquidity has dried up in Indian Domestic markets. And due to Forex Impact in their Balance Sheet doesn't reflect an Healthy picture to score better Credit ratings which directly impact the borrowing cost for this companies.
The INR has since lost more than 32 percentile against the US dollar.
Quantum of this Downward trend has resulted in excess amount of approx US$4bn to the value of FCCB maturities in 2011-2013. (15billion multiplied by 36%percent).
Tough Economic Environment especially after Lehman Brother Crisis has impacted performance of many of this companies.
There has been significant stretch in Working capital requirements due to stretched Cash Conversion Cycle.
Now that the MTM difference is accounted in the Financial Books due to Forex Exchange loss in this loan, Share prices have taken hit due to lower EPS n thereby lower P/E.
In some cases Promoters even pledged stake to support the stretched working capital requirements and some had to issue warrants to support the falling stock prices.
Due to falling stock prices and unable to meet margin calls lenders with whom stock was pledged further flooded the market with companies shares.
*** Some smart Hedge funds did buy the rock bottom FCCB's from foreign exchanges and made money upon successful redemption.
Some companies with strong business lines have extended the fccb conversion date to future at new conversion price which has lead to further dilution in Equity prices.

This Domino impact has resulted in Bondholders opting for Option 1 is Redemption of Bond for Cash and not conversion to Equity.
In cases where the current price is trading at a significant discount to the conversion price then companies will need to adopt other alternatives to pay back their investors.
With Rupee at 53/- for 5 year Term companies need to generate an return from their Invested project(Capex) a an excess IRR of 7% on Annualised basis.
One off Impact would have been 33% project for such projects.

Macro Economic Factors than needs to be changed to fix the economy in long run.

If Indian Govt increases taxes on Gold Import to more than 10% which will not be exported back can reduce India's Current Account Deficit from 5% to less than 1%.

Chances of India defaulting is less and it's upto to Indian Govt to act smartly by imposing tax on NRI on their Investments in Real Estates some where in range of 5% to 10% as upfornt load which will cool of Indian Real Estate market and make it affordable for ordinary citizens.

We are developing Nation therefore their should be small percentile of taxes on NRI's towards nation building or Alternatively Indian Govt should launch Tax free bond provided the funds are locked for 5years and carries low yield of less than 5%. Such fund should not be allowed to be pumped in Capital Market. It should be handled by Institutions like IDBI , L&T , HDFC towards connecting ports, Uplifting Rail Infrastructure, Building of National highways & Hospitals along with Medical Institutes for poor to start with.

Ethanol blending should be made compulsory to reduce the Oil Imports.

If these Oil & Gold Import are controlled India can command better credit rating,may be better than UK in coming years. Indians have consumed more than 300 billion in Gold just in last 20 years.

Rupee will strength steadily and will have positive impact on Companies with External Borrowings.

Any ways let's see the impact of Currency on FCCB

Company has so shell out more than 35% due to FCCB impact.

I'm curious to see what Geodesic will be doing for FCCB redemption.

We also need to note that their are RBI guidelines which needs to be followed for Buy Back, Redemption, Repricing of FCCB.

Until substainally usuage is not determined FCCB money cannot be brought back to India.

Geodesic had parked it's money abroad and therefore less likely to have been impacted with Forex Exchange impact.

Similarly FCCBs buyback and re-issuance has some guidelines which will be shared in coming days.

Geodesic has been holding FCCB in holding company to adhere to RBI guidelines.

Also Holding in some of countries helps in Tax benefits for this holding companies

Keep watch on Geodesic if FCCB gets paid off one can positively consider it as Investment option and can see reasonable returns of more than 50% once stock stabilises at levels of 20/- plus.

Tulip telecom is interesting case once CDR plan gets clear and stake sale in Data center will result in some value unlocking similar to Wockhardt.

Geodesic ltd FCCB bet

2013-02-15T20:34:00.001-08:00

BEYOND NAKED EYES -GEODESIC LTD

2012-11-23T23:12:00.003-08:00

Hi Friends,

If you have done some filter for value buying companies in Indian Market you would have bumped into Geodesic for sure.

Now it's a company in Interesting Space of Information boom via touch of screen so I thought of digging further into this firm.

I have been tracking this company since last 1 year but couldn't decide on why I should enter this company where Auditors changed more than once.

KEY POINTS:

1. In Year 2010(May 26, 2010), Company announced Buy Back & cancelled the same on the particular date 30/11/2010. Same story is repeated even now if you see management approved the buy back and now again has reschedule a meeting on Buy back of shares 27-11-2012. Why is that they take one step forward and again 1 step back.

2. Promoter's stake is pledged for what? when they have sufficient cash in books.

Cash in Bank comprises of 38% in Consolidated Balance sheet. Dividend Payout ratio is extremely low.
Now if it's growing company I don't expect dividend more than 40%, But I won't be comfortable promoter pledging & such low payout ratios.

All of the company management status don't tally with facts in front of naked eyes.

In India most of us using iphone/ipad /smart phones heard of skype , what'sup.

Have you heard of Mundu and Spokn.

Check the stats from xyologic, check the feedback column and ratings section before you can download Mundu or Spokn from ipad/iphone.

This shows management figure is not tallying by miles for Spokn, Mundu or any apps.

users can download free stats from this website on Apps

www. xyologic.com

Example: Chandamama , Managment states subsrciption is 150000 however total download is only 4000 as per App store across Ipad/Iphone category & xyologic reports are very close to reality.

Management statement in website.
Mundu TV: The average revenue for user is about Rs. 70 at this point of time, and the company has clocked close to 4.5 million downloads in about six-and-a-half months. According to Geodesic, Mundu TV has been the Number 1 app on the OviStore and on Apple’s iTunes App Store under the Entertainment category.

Conversion on Mundu TV: Geodesic informs that it witnessed a conversion of 4% out of that 4.5 million and the average price roughly comes out to be in the range of Rs. 60 to Rs. 70, because the package cost initially is Rs. 49 for five channels and Rs. 99 for ten channels. It has also signed up with almost 30 channels and has got some music content; education content; some sports content;in addition to all live news channels.

Point 3: FCCB was issued in January 2008, 125 million USD, these bonds carry an yield of 6.60%. T

The conversion price of the Bonds, subject to certain conditions, will initially be ` 302.27 per share with a

fixed rate of exchange on conversion of ` 39.13 = US$ 1.00.

Now that rupee is at 55 against USD & CMP at 39.

As on 31st March, 2011 Bonds with the nominal value of US$ 113.50 million are outstanding.

Dilution of equity if Bonds are not repayed will be huge. Imagine if you need to pay back 113.5 USD million back to bond holders. That maybe the reason why Cash in hand represents 38% in Balance sheet 1282.63 crores. Roughly will have to shell out 830-850 crores for repayment of Principal & Cash when comes to payment of FCCB bonds or Dilution in Equity to that extent . Bond conversion date is 18th January, 2013.

During the year ending March 2010, the Company has repurchased FCCB of the face value of US$ 8.50 Million.

This amount could only be ultilised outside India for acquisitions & therefore cannot be remitted back to India.

Point4: Recent Conference Call scripts note:

Kiran Kulkarni Yes, we sell them our Mundu apps, for example Alcatel bundles in about 10 million handsets with Mundu Radio.

the product for about 120 days for free and post that the user decides whether to buy the product.

MARCH 2012 CONFERENCE CALL SCRIPT

Raunak Nagra Okay then, how much do we charge if the user wants to use..?

Kiran Kulkarni It depends upon the service from $0.99 to US$ 6.99, depending upon what services he adopts.

We have about 40 telecom operators at this point of time,

and about 4.95 million users, on an average we get about $0.35 a year and then we do customized services

In terms of Chandamama, the subscription remains at about 150,000

Point 4: Subsidiaries are majorly in Tax heaven countries. All taken from Annual Report of company available to common Investors on their website.

Check some points from Annual Report decoded carefully after 3 readings.

Most of below points of the management are hard to reconcile with above facts.

- Key revenue source – Enterprise CRM: Many people have, in the past, asked us to find out about Geodesic’s primary source of revenue. In its earnings call, Geodesic said that its Unified Communication and collaboration platform which incorporates CRM, and covers four mediums – e-mail, instant messaging, SMS and voice. This business contributed around 42 percent of its revenues. This is an enterprise product, and they get clients through system aggregators (which service Fortune 500 companies) on a license fee model, and also through direct sales, with a per-month and usage fee. Geodesic MD Kiran Kulkarni said on the call that the platform offers a communication cost reduction by 40%.

- Telcos, Handset and Retail: Over 37 Telecom Operators and 11 Handset Vendors together contribute about 23% of Geodesic’s revenues. The Handset Vendors pre-bundle its applications- Mundu IM, Mundu TV, Mundu Radio and others.

How does it make money from this? Geodesic says that it charges a small fee to the Handset Vendor as a pre-bundling fee allowing its customers to use the app for a period of 120 days, post that the consumer has a choice of either using the product or simply stop using the product. The conversion is considered retail sales – which contributes just 8% of Geodesic’s revenues.

Geodesic added two Telecom Operators and three Handset Vendors, including a tablet maker, during the 1st Quarter. Micromax in India has started bundling Mundu TV with all their Android phones starting Bling 2. Some notes on this segment:

Disclaimer

This document does not constitute an offer or solicitation
for the purchase or sale of any financial instrument or as an official confirmation of any transaction. The information contained herein is from publicly available data or other sources believed to be
reliable, but we do not represent that it is accurate or complete and it should not be relied on as such.This document is provided for assistance only and is not intended to be and must
not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this document should make such investigation as it
deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult his
own advisors to determine the merits and risks of such investment. The investment discussed or views expressed may not be suitable for all investors.

Tulip management has left investors blindfolded so were are u heading

2012-10-05T21:55:00.002-07:00

Key Points of Tulip Telecom new Data center:

Tulips new data center is spread over 900,000 sq ft. The server built-up area is close to 45,000 sq ft. Every floor plate has a capacity of around 20,000 sq ft or up to 600 racks in 6 kV per rack.

Tulip Telecom is expecting to generate around 1,000 crore of annual revenue in 3 years and has already bagged 3 deals worth '600 crore on annual basis from HP, NTT, and IBM.

Tulip already has 5 data centers in the country located in Mumbai (2), Delhi (1), Bengaluru (1), and Kolkata (1).

Company has partnered with EMC to offer storage as a service .

Company could also provide disaster recovery and managed services in near future.

Data center is based on TIA 942 standards.(TIA 942 is the first standard to address data center infrastructure. It covers the various aspects like space/layout, cabling infrastructure, redundancy, environment conditions, energy, etc.)

Co has meticulously designed this center on 3 major criteria-power, cooling, and space.

Data center has received government sanction for receiving up to 40 MW power, and it has up to 7.5 MW power available, while the usage is around 4 MW only.

TDC implemented closed containment cooling system, here the entire rack space is in a glass enclosure that maintains the temperature of the confinement.

There are very early separate ad (VESDA) pipelines to detect any change in chemical composition in air and alert beforehand, and second line of pipelines carrying inert gas that can automatically decompose into natural gas.

It has 4 towers, with NOC in the first floor, warehouse and staging area available on the ground floor. It has 1,500 seated space available as DR center for the client

Key points on FCCB mess:

In August2012 company wnated to issue a five-year CB to fund a redemption later osf the same month. Investors were baffled by including potentially misleading terms and by revising its offering to give a rare conversion discount. Even with the prospect of an instant gain for investors, the deal was still not covered after a week of bookbuilding.

When it launched on August 7, with a base deal size of US$75m and an option to increase to US$100m, the conversion price was indicated at Rs110 (US$1.98), a 9.1% premium to the shares’ August 6 closing price on the NSE. This was, however, only a 4.7% premium to the closing share price on August 7, after the stock rallied while lead manager Elara Capital was building the book. There are annual resets to the conversion price available, with the floor price for conversion set at Rs101.8.

the term sheet said that the 5.875% CB had investor puts on the third and fourth anniversaries of issuance. Indian regulations do not allow puts before the fifth year, but the term sheet said the company planned to apply for an exemption from the Reserve Bank of India.

The credit spread assumption was given as 1,000bp, implied vol was 30% and stock borrow cost was 3% – although given that stock borrow was almost impossible to obtain, most investors were using 5% as the theoretical cost. No asset swaps were available. After failure to attract investors on first attempt.

On August 8, the deal was relaunched , PUTs were dropped from the new term sheet. This time the conversion price was given at Rs101.08, 3.8% below the new reference price of Rs105.1, the August 7 close, leaving the bonds already in the money at the time of launch.

The CB was still not covered at the base size at the end of last week of August, but a source close to the deal was hopeful it would close early same week. Existing holders of Tulip’s outstanding CB were said to be the main bidders, which led some to question why the deal had not been structured as an exchange offer in the first place, rather than risking alienating bondholders.

Tulip Telecom completed its new five-year convertible bond after bookbuilding for more than a week on 20th Aug 2012, but the deal closed smaller than originally expected. Tulip had targeted a US$75m fundraising with an option to increase to US$100m, but, in the end, it settled for a US$50m print.

On other hand due to consistent drop in Stock price it's fallen badly to near to it's IPO levels. It gives good buy opportunity who would like to take risky bets.

My Thoughts:
Company has lost it's market value due to poor management of Capex expenditure.
Also FCCB issued 5years before when it came to conversion Rupee had lost 15% in just one year.
Now such simulation would have not been done by Investment bankers who have guided the management of Tulip during Capex funding.
However Infrastructure that company has build will have significant demand in next 5years and therefore it's worth a investment bet.

I personally invested at average price of Rs 50/-... with hope that if all turns well after the dark clouds pass over we can see a returns similar to Hawkins Cooker in next 5years. It's perfect lottery ticket.
Management stake will be around 23% due to constant pledging and lidquidation by the Financers.
STCI has been converting into it's stake than offloading in market.

Delisting Candidates under my microscope

2012-09-13T07:49:00.000-07:00

In 2010, SEBI had come out with norms
1. government firms should have a minimum public shareholding of 10%
2. For private companies it is 25%.
These guidelines were to be complied within three years.
The private companies have to meet norms by June 2013 & for public sector undertakings the deadline is August 2013.
We shall look at some of Pvt Companies.
Which Option will Pvt Sector promoter choose
a) Go for volunteer Delisting.
b) Dilute his stake to 74%.

Not All Promoters are going delisting way as it's not wise choice for them.
So take look at this section and make careful decision.
Especially 3M INDIA, Oracle Financial services are riskier bets...

KRBL Ltd India Gate basmati rice on your plates

2012-07-20T23:21:00.000-07:00

BSE Code	530813	Current market Price	21.95
NSE Code	KRBL	Face Value	1
Industry	Packaged foods	Mkt Cap	511 crore.
CMP	Rs. 22/-	Date	19-Jul-12
ISIN Demat:	INE001B01026	Potential target	Rs. 32/-

Company snap shot:

KRBL was founded in 1889 in Faisalabad, Pakistan and incorporated in 1993.
Company is engaged in seed development and multiplication, contact farming, production and marketing of Basmati rice
Company is well integrated & generates value-added by-products like bran oil, de-oiled cakes and uses rice husks for captive power plants
Company has set up a seed farm and a 4 MT per hour seed grading plant for its R&D activities and new products testing
Company has rice warehousing capacity of 5,00,000 tonnes and paddy storage capacity of 1 million tonnes
Company has collaboration with Buhler, world’s leading rice milling machine manufacturer, for process/machine improvement
It emerged as Top Green company in ranking of 25 most popular food companies in India by Greenpeace.

Key points for consideration of KRBL:

Strong Presence in Middle East market especially Saudi Arabia.
Domestic Market Share of 30% in Basmati Rice segment.
KRBL’s Acreage under contact farming stands at 240000 acres in FY'2011.
Due to Contract farming farmers get better access to Technology & Company gets good value of paddy without involving intermediaries
The rupee depreciated by 19 per cent between October 2011 and May 2012, against the MSP's rise of 16 per cent.
The South-West monsoon, the lifeline of the country’s agriculture, arrived late by five days and its subsequent progress has been sluggish, resulting in a deficit of 23 per cent so far.
State reserves of rice and wheat jumped 20 percent to 71.12 million tons as of May 1, said the Food Corp. of India.
Indian rice is about $100 cheaper than supplies from Thailand.
The Chinese premier agreed India has a large trade deficit with China and in that context he said rice exports from India would be allowed.

Company Brands.

Company Plants & Capacity:

Core Business:

Plant Location	Function	Capacity (MT/hr)	Grading & Packing (MT/Hour)
Ghaziabad	Rice Processing	45	50
Dhuri	Rice Processing	150	50
Delhi	Grading		30
Total		195	130

Non Core Business:

Plant Location	Function	Capacity (MW)
Dhuri	Biomass	12.3
Ghaziabad	Biomass	3.5
Sub-Total	Biomass	15.8
Maharashtra	Wind	12.5
Rajasthan	Wind	8.1
Tamil Nadu	Wind	8.1
Karnataka	Wind	11.1
Sub-Total	Wind	39.8
Total	Biomass / Wind	55.6

Collaboration with Retails chains in India

Collaboration with Retails chains across World

Rice overview:

There are primarily three distinct varieties of rice:
Japonica rice that accounts for around 12 percent of global rice trade
Basmati rice accounts for around 10 percent of global trade
Glutinous rice accounts for most of the remainder.
Japonica rice is mainly cultivated (and consumed) in temperate and tropical-upland climatic zones, in Australia, China (in the three northern Provinces of Heilongjiang, Jilin and Liaoning and the eastern central provinces of Anhui, Jiangsu and Zhejiang), the Chinese province of Taiwan, the Democratic Republic of Korea, the European Union (EU), Japan, the Republic of Korea, Russia, Turkey and the Unites States (California State). Overall, some 80 million tonnes of Japonica rice were estimated to have been gathered in 2000-2005, about 13 percent of world output.
Indica rice varieties, which are especially well adapted to tropical climates but also thrive in temperate climatic conditions, account for the bulk of world rice production. Many of the rice hybrids available to producers derive from the basic Indica varieties, including the semi-dwarf rice varieties, the introduction of which led to record yield increases throughout Asia in the 1960s and 1970s. Although also belonging to the Indica long grain rice family, fragrant rice is often considered separately, because of their distinctive perfume that commands a price premium.
The principal varieties defined as aromatic are the fragrant “Hom Mali” rice produced by Thailand and the various types of Basmati exclusively grown on the Himalayan foothills by India (in the states of Haryana and Punjab) and Pakistan (in the state of Punjab).

Major Rice Exporters/Importers of the world.

Exporters		Importers
COUNTRY*	1000 metric Tons	COUNTRY	1000 metric Tons
Thailand	8500	Philippines	2600
Vietnam	6500	Nigeria	1700
Pakistan	3800	Iran	1150
India	2200	Saudi Arabia	1100
Cambodia	850	Iraq	1100
Uruguay	700	Malaysia	1020
China	600	Cote d'Ivoire	860
Egypt	600	South Africa	800
Argentina	500	Indonesia	800
Brazil	400
* January/December year 2010
Source: USDA

Indian Govt efforts in Agriculture:

Many measures such as adoption of new cultivation techniques, development of various varieties etc have been initiated to increase cropping intensity of India, because of these measures the production figures have exceeded over 100 million tonnes annually, since 1988.
India has been regularly exporting high quality basmati rice (aromatic) and non basmati rice exports, for over (US) $800 million per annum.
Over 80% of Basmati rice grown in India is produced for export.
Significant increase in minimum support prices (MSP) of several agricultural commodities.

The Commission for Agricultural Costs and Prices (CACP) has typically followed a cost plus pricing formula for determining the MSP, and in an environment of rising wages and increasing input costs, rising MSPs have accentuated inflation pressures.

Annual Average Percentage Increase in MSP
	2002-07	2007-12
Rice	1.8	13.6
Wheat	4.0	11.9

Given the cost plus formula for the determination of MSPs, the increase in MSPs as above is consistent with the rising input costs as evidenced by figures below.

Percentage Increase in Agricultural Input Prices
	2008/09	2009/10	2010/11
Inputs	3%- 19%	18% - 28%	3% -19%
Wages	9%- 36%	5% - 30%	18%-43%
Inputs: Fodder, diesel oil, lubricants, fertilizer and pesticides

Key Indian developments for sector in last 6months:

India produced a record 103 million tonnes of rice in 2011/12 crop year that ended in June, a jump of about 8 percent from the previous year, including 5.0 million tonnes of basmati.
India's annual basmati exports may rise as much as 15 percent in 2012/13, touching a record 3 million tones.
Indian Govt scrapped the $700 base price for overseas sales of basmati rice in month of July’2012.
Basmati export expected to rise by 10 to 15 percent in 2012/13.
The price of basmati has improved in international markets after the minimum export price imposed on it by a government order was removed.
Prices for some premium basmati varieties are now $1,100-1,150 a tonne, as against $800-900 a tonne earlier.
India's premium basmati rice is quoted at $1,055-$1,065 per tonne FoB.
Indian farmers rely on a favorable monsoon for the so-called kharif crop, which is sown in the rainy season from June and accounts for more than 80 percent of annual output. Due to rain defict in India the prices will remain firm & Farmers in north are likely to switch to Basmati as it consumes less water.

Key concerns in Global & Domestic region:

Poor monsoon with draught conditions can impact Rice production.
Out of the 80 million tonnes of grains stored by Government of India as of June 1, 2012, more than 30 million tonnes are lying in open or unhygienic storage.
The compulsion to offload higher percentage of BPL and APL rice at Rs 3-6 per kg will intensify. Low cost rice will circulate in the bazaar, creating greater surpluses and value mitigation.
The country has shipped 4.25 million tonnes of non-basmati rice since the export ban on the commodity was lifted in September 2011.
India exported around 2.5 million tones in 2011-12, a growth of about 15% over the previous year's 2.18 million tonnes.
Major importers like the Philippines and Iraq have no preference for India.
Iraq buys Thai and South American origins at $600 c&f plus, while the Philippines has a fondness for Vietnamese rice, despite Indian shipments being the cheapest in the world. China has shown a significant inclination for Pakistani rice.
The Thai government has accumulated 14 million tonnes of paddy at $480/tonne against vs $280/tonne last year, making their exports at $780 FoB unviable. With the pressure from excessive stocks building up and new crop of 24 million tonnes expected, any knee-jerk reaction by Thai policy makers may compel them to suddenly offload their paddy at heavily discounted prices, destabilising the rice trade.
Planting of rice, the key kharif cereal, has not only been delayed by scanty rains, but has also been affected by poor water storage levels and erratic power supply in the irrigated tracts of northern India.
India’s rice exporters have warned against extending credit to Iranian customers after its buyers defaulted on payments for up to 200,000 tonnes of the grain.
India is Iran’s top rice supplier, accounting for 45 per cent of its annual imports of 1.2m tonnes. The defaults have affected rice shipments via Dubai over the past three months

Company’s Achievements: Source Company presentation

Key Global developments for sector in last 1year:

The recovery of Latin America’s production, particularly in the Mercosur block, gave the world harvest a significant boost during 2010.
The world rice production reached a new record in 2010, at 464 MnT (696 MnT paddy), up 1.8% from the previous season.
Farmers will harvest 466.4 million metric tons in the 2012-2013 season, boosting stockpiles by 0.7 percent to 104.9 million tons, the largest since 2001-2002, says the U.S. Department of Agriculture.
Thailand’s stockpiling program runs until mid-September and there is no limit on the amount that can be bought. The government wants export prices at $800 a ton and will stop buying when they reach that level.
Vietnamese rice production will expand for a 12th straight year, reaching an all-time high of 26.5 million tons, the USDA predicts.

KRBL Price Chart covering Key Technical.

KRBL Fundamentals Annual basis (Consolidated):

EPS for FY’11 was 4.95 on consolidated basis; EPS for FY’12 is 2.95.
Sales for FY12 is Rs 1631 crore, Sales per share has been Rs 66/-
Book value per share for FY’11 stands at Rs 26.5 & for FY’12 is estimated to be Rs.29/.
Promoter holding is 56% and there is no stake pledged based on Mar’12.
Current market cap is 525 crore.
EV/EBITDA for FY’11 stands at 5.73 & for FY’12 stands at 8.28.
Debt/Equity ratio is 1.39
Net profit declined 38.40% to Rs 71.15 crore in the year ended Mar’12 compared to Rs 115.51 crore during the previous year ended Mar’11.
Sales rose 5.63% to Rs 1631.00 crore in the year ended Mar’12 as against Rs 1544.01 crore during the previous year ended Mar’11.
Company has been paying Tax @ average rate of 20.74% in past 5years.

KRBL Fundamentals Qtr basis (Consolidated):

Revenue rose 5.48% to Rs 472.57 crore in the quarter ended March 2012 compared to Rs 448.02 crore during the previous quarter ended March 2011.
Net profit rose 71.97% to Rs 49.87 crore in the quarter ended March 2012 compared to Rs 29.00 crore during the previous quarter ended March 2011.

Reference:

Company Annual Reports, RBI, KRBL Investor presentations, licensed charting software, Self build Var models & fundamental models & Google has been extensively used for this report.

Disclaimer:

This report is based on the freely available content resources across web.
Atmost care is taken while drafting the report however Investors need to cross check with company data for accuracy.
I personally have invested in the script at levels of Rs 18-21/-.
There is no guarantee that targets will be achieved in given timeframe, as changing world dynamics & company fundamentals guide the valuations.
The user stands responsible for the entire risk of any use made of this report.
This report doesn’t constitute investment or legal advice or any solicitation, whatsoever.

Glodyne Technoserve can be exited completely

2012-01-15T22:26:00.000-08:00

Glodyne Technoserve can be exited completely in the upcoming Tech relief rally.

Although the company has done well in Standalone basis.

It's Consolidated books reflect a poor image especially on Trade recieveable 394.86 cr in Mar'2011 in consolidated books.

It will be High risk game & therefore chose to exit at current levels...

Andhra Petrochemicals presents a good buying opportunity.

2011-08-29T21:17:00.000-07:00

BSE Company Code 500012
Company Name ANDHRA PETRO
Industry PETROCHEMICALS...
CMP 27.9

FV 10
P/E 5.39
EPS 5.179475
Target P/E 10
Target Price 51
Ret 84.27%
Mkt Cap 237.0663
EV/EBITDA 3.52
TTMEV/EBITDA 3.187635
Prom Hold Net 40.98
Tax 5yr 33.42%
CAGR Sales 5YR 10.42%
CAGR NP 5YR -0.35%
CAGR Eqty 0.00%
CAGR Cop 10.78%
RONW 5y 12.916
RONW 2Y 3.205
Annual Sales Gwth 261.44%
Qtr S Gwth 115.49%
Q-n Q preceeding Sales 0.30%
Ann EPS Gwth -639.68%
Qtr EPS Gwth 192.16%
Qtr NP Mgn 8.07%
Qtr OPM 18.16%
Ann NPM 7.02%
Ann OPM 18.01%
TTM Tax to Profit 47.08%
Debt/Eqty 0.78
Working Cap Turnover 5.479737
ROE 20.39%
Trailing ROE 23.46%
ROCE 20.26%
t ROCE 24.11%
MKt CAP/FCF -1.25175
CF/MCAP 4.146691
CMP / Op profit per share 2.242186
CMP/Net Operating Income Per Share 5.386646
CMP/Book Value 1.263478
CMP to TTM Sales 0.438322
QTR Jun-11 ANN Mar ' 11
BAL Mar 2011
Tax Burden 0.689176
Interest Burden 0.565768
EBIT Mgn 0.180115
AST TURN 1.592174
FIN leverage 1.82804
Dupont ROE 20.44%
Dupont ROE Lst Yr -3.18%
Cap Gear Ratio 1 2/7
Cap Gear Rat LSt Yr 1 1/8
Conti Liab per Share 0.382488
Div per share 1
Sales per Share 59.86
FCFF per share -20.5348
FCFE per share -21.5939
TTM Sales per share 63.65
L Debt per share 17.16841
Book Val Per Share 22.08191
TTM Ent Value per share 38.34
Operating Profit per Share 12.44322
FCFE -183.5 ********
FCFF -174.5 *********
Days in COC 26.3
Days in COC
Lst year 87.3
Price at the end of growth phase 5 years based on last 10year trend 327.8.

Disclaimer:
I do hold position in this script and have added some during the downturn at price of Rs27/.
Market will be Volatile but I like to sail rough weather and add more in this phase.
This Investment is made with viewpoint of 6months to 12months minimum & worst downside risk is Rs 21/-- where stock trades more close to it's book value..
Other factors like crude oil, world events, country's stability needs to be factored on time to time basis..

TO KNOW MORE ON COMPARISON WITH IT's competitors n past 5years performance in Pdf format email me perknlife@hotmail.com

Andhra Petroleum

2011-07-18T00:32:00.000-07:00

Industry PETRO
Company Name Andhra Petroleum
Analysis based on
Quater Mar-11

Annual Results Mar ' 11

Balance Sheet Mar-10

CMP 30
FV 10
P/E 7.15
EPS 4.194421561
Target P/E 7
Target Price 27
Ret -8.66%
Mkt Cap 254.91
EV/EBITDA 79.75975359
TTMEV/EBITDA 4.379636938
Prom Hold Net 40.98
Tax 5yr 34.58%

5year progress
Last year due to expansion plant was shut down leading to downward tred in Sales ,Net Profit & Cash from Operations
CAGR Sales 5YR -8.02%
CAGR NP 5YR -218.38%
CAGR Eqty 0.00%
CAGR Cash from operations -37.09%
RONW 5y 12.916
RONW 2Y 3.205
Annual Sales Gwth -94.30%
Qtr S Gwth 9696.88%
Q-n Q Sales 37.20%
Ann EPS Gwth 301.59%

Qtr NP Mgn 8.69%
Qtr OPM 19.12%
Ann NPM -3.52%
Ann OPM 3.28%
TTM Tax to Profit 45.40%

Key Ratios
Debt/Eqty 0.89
Working Cap Turnover 9.157440834

Cap Gear Ratio 1 1/8

Cap Gear Rat LSt Yr 12

Days in Cash Operations Cycle 87.5

Days in COC Lst year 57.2

Profitability Indicators
ROE 21.66%
Trailing ROE 22.02%
ROCE 1.73%
t ROCE 32.52%

FCFE 212.4

FCFF 94.0

Cash Indicators
MKt CAP/FCF 3.255840285
CF/MCAP 25.491
CMP / Op profit per share 2.783164101
CMP/Net Operating Income Per Share 7.152356902
CMP/Book Value 1.574782233
CMP to TTM Sales 0.558290808

Tax Burden 0.614571093
Interest Burden -1.747433265
EBIT Mgn 0.032752707
AST TURN 0.611025499
FIN leverage 1.478761546
Dupont ROE -3.18%
Dupont ROE Lst Yr 10.18%

Per Share Indicators
Conti Liab per Share 1.959515123
Div per share 1
Sales per Share 17.50
FCFF per share 11.05733636
FCFE per share 24.99411179
TTM Sales per share 53.74
L Debt per share 16.89066729
Book Val Per Share 19.05025303
TTM Ent Value per share 45.71
Operating Profit per Share 10.77909851

Note: Invest with caution & I have invested in this at levels such as 14,20,23&28 over last 1.5 years.

TNPL is seems to be a good Investment for 1year timeframe for price Target Rs. 210-240

2011-03-20T02:46:00.000-07:00

Tamil Nadu Newsprint Paper Ltd has completed his 1000 crore expansion project & has enhanced the capacity to produced 400000 tonnes of paper at 100% capacity.
It's second largest producer of paper in country & plans to increase it's exports to around 350 crores.
It is one of the the largest bagasse-based paper mill in world and saves around 3000 acres of plantation annually.

Income Statement comparison

Industry Comparison: Industry Paper
Gross Margin 22.30%
Core Operating Margin 8.50%
EBIT Margin 11.50%
Net Profit Margin 4.80%
Adj Net Profit Margin 3.20%
Return on Assets 3.40%
Return on Capital Employed 9.60%
Return on Equity 7.70%
Asset Turnover 0.69
Adj Price-to-Earnings 20.72
Price-to-Book 1.05
Price-to-FCF 7.51
EV / EBITDA 8.12
Price-to-Sales 0.66
Financial Leverage 2.27
Interest Coverage 2.33
Debt to MarketCap 1.21
1y Dividend Yield 1.90%
1y Dividend Payout 39.00%
3y Sales Growth CAGR 2.80%
3y Earnings Growth CAGR -10.30%

Tamil Nadu Newsprint TNPL

2011-02-27T07:55:00.000-08:00

Consider Investing in TNPL with View of 6months.
Book Value of Rs.115 .
CMP of 124.
Target of 175 in 1year time frame.

Mar ' 10
Adjusted E P S [in Rs.] 17.1
Adjusted Cash EPS [in Rs.] 33.8
Dividend Per Share 4.5
Book Value [Incl Rev Res] Per Share [in Rs.] 115.96
Operating Margin [%] 25.7
Net Profit Margin [%] 11.74
Adjusted Return On Net Worth [%] 14.7
Return On long Term Funds [%] 9.0

Long Term Debt / Equity 1.69
Fixed Assets Turnover Ratio 0.44
Current Ratio 1.11
Dividend payout Ratio [Net Profit] 28.8
Financial Charges Coverage Ratio 6.75
Long term assets / Total Assets 0.77
Industry Paper products

Company Name TAMIL.NEWSPR
CMP 124.8
FV 10
P/E 5.082562286
EPS 24.55454414
Target P/E 8
Target Price 175
Return 40%
CAGR Sales 6.62%
CAGR NP 10.13%
CAGR Cop 9.18%
RONW 5y 15.87
RONW 2Y 15.46
Annual Sales Gwth -2.57%
Qtr S Gwth 6.27%
Debt/Eqty 1.69
Ann EPS Gwth 17.33%
Qtr EPS Gwth 17.63%
Qtr NP Mgn 13.24
Prom Hold 39.38
Qtr OPM 26.16
Div per share 4.5
ROE 17.16%
Trailing ROE 21.12%
Mkt Cap 863.7408
Prc Bok 1.076233184
OpPft 3.275590551
NIMkt 0.842105263
ROCE 17.13%
t ROCE 16.20%
Q-n Q 0.835756264
Tax Burden 0.841072858
Interest Burden 0.480970413
EBIT Mgn 0.291598825
AST TURN 0.587469559
FIN lev 2.476940673
Dupont ROE 0.17164799
MKt CAP/FCEq 5.955190292

Disclaimer: As usual

Good times are here again

2011-02-12T01:22:00.000-08:00

Hi friends,
I will start sharing some useful tips on Investments as Market looks sane to me now.
Correction of 16500 is still possible however there is no bad day to accumulate good scripts.

Also anyone keen on service can send me an email perknlife@ hotmaiil.com.

INVEST IN MOIL LTD

2010-11-26T20:31:00.000-08:00

MOIL Ltd looks good investment opportunity. Given size of issue don't expect 100% returns in first few months.
India's largest producer of high quality managanese ore.

Retail limit has been increased to 2 lakhs. Qty to be invested is in multiples of 17.
This table will help you to decide how much qty to Invest based on the your Investment capacity.
I have decided to invested just 1lakh as Indian political turmoil can fuel to current falling markets & give investors much needed space for investing.

KRBL LTD

2010-10-21T01:43:00.000-07:00

My friends I hope your are enjoying the rally...
Be PRUDENT and do set aside some cash from the markets.
Atleast I could defeat Inflation as my Average BUY price was Rs 19.7/- ex split
My friends were agruing with me that KRBL doesn't have a website & therefore may be fake.

Industy Food: Packaging & Exports
Company Name KRBL LTD.
CMP 46
FV 1
P/E 9
EPS 4
Target P/E 14
Target Price 56
Ret 51%
CAGR 5YR Sales 17%
CAGR 5YR NP 27%
CAGR Eqty 3%
CAGR Cop 4%
RONW 5y 15
RONW 2Y 17
Annual Sales Gwth 27%
Qtr S Gwth -22%
Debt/Eqty 1.21
Ann EPS Gwth 132%
Qtr EPS Gwth -23%
Qtr NP Mgn 7
Prom Hold 57
Ann NPM 7
Ann OPM 13
Qtr OPM 15
Company Name KRBL LTD.
Div per share 0.2
ROE 24%
Trailing ROE 20%
Mkt Cap 907
ROCE 19%
t ROCE 17%
Tax Burden 0.81
Interest Burden 0.66
EBIT Mgn 0.13
AST TURN 1.50
FIN lev 2.34
Dupont ROE 23.8%