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Sunday, October 31, 2010

SEBI Guideline: 50% of Public holding in Demat

Market regulator the Securities and Exchange Board of India (Sebi) said that only shares of those companies would be allowed to trade in the normal segment where at least 50% of non-promoters holdings are in the dematerialised form by October 31. 

The regulator has asked stock exchanges to shift all companies that don’t comply with this requirement to the ‘trade-to-trade’ segment, commonly known as ‘T’ group. Only delivery-based trades are allowed in ‘T’ group stocks; traders can’t square off their positions intraday. This affects trading volumes as participation is lower when there is no scope for intraday buying and selling of shares, say brokers. 

According to ET data, 1,541 companies listed on the BSE have less than 50% of their public shareholding (excluding promoters) in the demat form, as on June 30, 2010. Hind Zinc, Jaybharat Textiles , Vippy Inds,Balaji Distilleries , Lanco Inds , Nissan Copper , Nissan Copper, Indian Metals, Subros and Panchmahal Steelare a few notable examples of fundamentally sound companies where more than half of non-promoters’ holding is in physical form even 14 years since demat was introduced. 

Let us look at the recommended stocks and their public shareholding in demat.. If the public holding is below 50% in demat then the shares will automatically be in Trade to Trade with 5% circuit limit and no intra-day squaring off of positions and lower volumes..
We have public shareholding in demat form for Sept 2009 and Sept 2010 for reference.

As we can see Regency and Superhouse will be in Trade to Trade with 5% trading band starting Nov 2010
Also What can we deduce from SKM Egg .. the public shareholding has increased from 44.5% to 56.88%
while stock price has fallen and promoter shareholding has fallen. SKM has made the cut..

As far as GAEL is concerned.. the public shareholding has been consistent even as promoters have been increasing stake.
- This I think is the reason why promoters are buying small lots.. 
- Promoters are working hard to get physical shares dematerialized 
- Then the promoters are buying the similar amount of shares from the market maintaining the demat % above 50%

This can also be deduced from the fact that the first 2 pages of the annual report is dedicated to de-materialization procedure.. clearly indicating the promoter interest in getting the physical shares dematerialized.

=happy investing 

Tuesday, October 26, 2010

Buy NIFTY Oct NIFTY 6000PUT at 7.20

It cost just 7.5 x 50 +150 = 525

If the market falls below 6000 we could make some serious money.. else you loose 525 bucks..

Its very risky but the amount under risk is very small..

=happy investing

Gujarat Ambuja Exports: Promoter Guidance for Year 2010-2011

Recent interview of promoter Mr Manish Kumar Gupta in CNBC TV18.
The promoters of Gujarat Ambuja Exports have provided the following guidance.

1. Guidance for Topline (Total Sales) for the year ending March 2011 1600Cr
2. EBDIT (earnings Before Depreciation Interest and Tax) ..no guidance given but generally next 2 quarters are better for GAEL .. so assuming we maintain the current margins of 9.5%
Sales Year ending March 2011: 1600Cr
EBDIT margin 9.5% = 152Cr
Net Profit Margin: 5.43% = 86.88Cr
EPS: Rs6.28
Please note these numbers mentioned above are "Estimates" and could be on the higher side.

I think what we need to keep in mind is:
1. Average Topline for GAEL for past 5 years: 1515.68Cr
2. Average Gross Profit for GAEL for past 5 years: 113.71Cr (EBDIT Margin 7.5%)
3. Average Net Profit for GAEL for past 5 years: 47.88Cr (Net Profit Margin: 3.15%)

So all the above mentined estimates are definitely within the capacity of GAEL. Infact we could see GAEL exceed the 1600Cr topline... and already the Net Profit Margin is 5.43% for GAEL for the past 3 quarters..

Please find link to the CNBC TV18 earnings call with Mr Manish Gupta

Previous Article: GAEL: Sept 2010 Result Review
Next Article: GAEL: Dalal Street Journal Management Interview

Monday, October 25, 2010

Gujarat Ambuja Exports: Sept 2010 Result Review

The results of Gujarat Ambuja Exports for the Quarter ending Sept 2010 are out.

Highlights are:
1. Top line Sales growth on a year to year basis up 21.92%
2. Bottom line Net Profit growth on year-year(Y-Y) basis up 134.48%
3. Depreciation on Y-Y basis down 22.79% (which could mean that last year numbers were suppressed by increasing depreciation or this year numbers are being pumped up by decreasing depreciation)
Personally I feel last year numbers were depressed to keep stock price down for accumulation..
4. Interest payments are down 6.17% Y-Y (generally since GAEL does not have long term debt it could indicate easy interest rate terms or lower raw material holding cost.
Personally I think its easy interest rate terms cause GAEL is still increasing stock in trade/work in progress numbers for Sept 2010.
5. This is good on a segmented basis All divisions of GAEL, Cotton yarn, Maize and Other Agro processing divisions improved margins.. Windmill division had a drop in margin but would not be concerned as Windmills is not a large business and actually depends on wind patterns (out of control of GAEL management)
6. The Agro processing division is what made all the difference in GAEL topline and bottom line as margins have improved on Y-Y and specially on Q-Q basis since June 2010 margins were just 0.60%
I would say further improvement in margins should be expected maybe 1-2% even to match 2009 Full year margins of 5.22%

Conclusion: There is very little that has gone wrong with GAEL and results are really good.. having said that I think this is not a time to sell as results will continue to do well for the next 12 months.. I would suggest already invested individual to Hold on to their cheap stocks..
To those who are late in the party it is still a great price to get GAEL below 38 levels.. cause this was the buyback price set in 2007-2008 and GAEL is still very cheap.. considering the target price of 100+ in 12 months time frame.. price of 40,60 for GAEL is closer than you think.. once the ball starts rolling..

=happy investing

Previous Article: GAEL: Sept 2010: Shareholding Report Review
Next Article: GAEL: Promoter Guidance for Year 2010-2011

Saturday, October 23, 2010

Anekantavad: True Essence Of Ahimsa

Anekantavad: True Essence Of Ahimsa

The twin doctrines of anekantavad and syadvad are an integral part of the Jain dharma's great experiment with ahimsa . Today, more than anything else, it is these uniquely Jain values that need to be examined and deeply contemplated upon.

Anekantavad - Many-ness of "Truth":

Most conflicts happen because of an inability to see the other's point of view, to acknowledge that one's version of truth is just that - one version.

There are infinite points in space from where to look at anything. Anekantavad is the Jain doctrine of the many-ness of truth, that there can never be only one point of view. It is best illustrated through the oft-quoted story of the seven blind men and the elephant.

Seven blind men came upon an elephant. Relying on their sense of touch, each one groped about and tried to make sense of the object in their path. The one who was near the elephant's trunk, felt it and was convinced he had touched a snake hanging from a tree. The one near the pachyderm's massive legs thought they were pillars, another took it to be a grove of trees.

Each one, from his place near a particular part of the elephant's anatomy, had a different theory about the huge obstacle. Soon, a quarrel ensued, since none was able to comprehend the other's point of view. "How can all of them be such fools", each blind man thought of the other. Everyone remained rooted to his spot beside the elephant. Since each one was convinced of the validity of his own explanation, the quarrel went on.

"Let us move around this object", one of them suggested. The moment they did so, they realised that although each one was correct in his place, they were all wrong, since their view had been limited by their staying in one spot. They moved around, collated their views, and finally realised that what they were trying to describe, from different positions, was in fact an elephant.

Syadvad - Maybe of "Truth"

This is what anekantavad is all about; it is the ability to recognise the multiplicity of reality, and it stems from syadvad, which is the doctrine of 'maybe', of examining an idea, object or thought from different standpoints.

This demands great dynamism, a constant movement to various positions around the elephant under examination - although the Ultimate Truth is One, there are as many ways to reach and speak of it as there are sentient beings in this world.

Aparigraha: Non-possessiveness
This willingness to give up everything for the sake of truth as enshrined in anekantavad, even refusing to be rigid about one's own point of view, is inextricably intertwined with another Jain ideal: that of aparigraha, or non-possessiveness.

Aparigraha, literally translated, means the giving up of worldly and material possessions, as evidenced in the aparigraha mahavrat of Jain Digambar munis, who abandon everything, even clothing, on the path to kaivalya.

True renunciation, however, is a state of mind, of being in the world (which we are, can we deny it?) and yet not of it.

As Sant Kabir says:
Tan ko jogi sab kare,
           man ko virla koye
Sahaj sab vidhi paiyye,
            jo man jogi hoye.

Material wealth is easily donated by everybody..
              But can we donate attachment to one's thoughts..
Effortless all paths will be..
             who renounces attachment to one's thoughts..

An important part of aparigraha (non-posessiveness)  is, therefore, anekantavad-syadvad(Many-ness, Maybe-ness of Truth) following which, one lets go of attachment to one's thoughts, ideas or standpoint, which really are the hardest to give up since they stem from one's ego. This is what makes aparigraha of attitudes the greatest way to move beyond one's ego-bound self to a greater realisation of the larger, all-encompassing Self.

Anekantavad, and attitudinal aparigraha, however, must not be misunderstood as intellectual fickleness. It is more about flexibility; an ability to bend that can come only with a real understanding of the nature of reality, which is yielding, dynamic, ever in flux.

Tao Te Ching, the book of Taoism says:

"Be humble and you will remain entire
           Be bent and you will remain straight
Be vacant and you will remain full
           Be worn and you will remain new".

The anekantavad sensibility leads to pluralism, a tolerance of diversity of thought, faith, of difference of any and all kinds. It is an acceptance of the fact that though I think my truth is right; I acknowledge that so might be yours. This is stepping back from the obduracy of "my truth, faith or religion is better than yours" and a movement towards genuine ahimsa, an embracing in love of all humanity. That is the message of the Jinas, the spiritual conquerors, whose timeless creed is Jainism.

PN: I have replaced the english translation of Sant Kabir doha..
original translation is:

It is easy to renounce the material world,
            true renunciation is where one renounces from the heart.
For such a person, everything flows effortlessly.

Original article link

Friday, October 22, 2010

Jayant Agro Half Yearly Results:

Jayant Agro Organics Sept 2010 Half Yearly Results are out.
Please note these are "Consolidated Half Yearly Results 2010 " comparison with "Consolidated Half Yearly Results Sept 2009)

- Sales: 580.85Cr (Last Year: 374.99Cr)
- Gross Profit (PBIT): 31.34Cr (Last Year: 19.83Cr)
- Interest Payment: 12.42Cr (Last Year: 5.62Cr)
- Tax Expenses: 5.82Cr (Last Year: 5.47Cr)
- Net Profit: 13.08Cr (Last Year: 8.73Cr)

Conclusion: Jayant has reported Consolidated Half yearly 54.89% increase in Top line (Sales) and 49.82% in bottom line (Net Profit) as compared to consolidated last year figures..
Gross Profit margin has increased to 5.4% (Last Year 5.29% ).. the net profit is being restricted due to increase in Interest payments 2.14% (Last Year 1.5%)
Jayant Agro has already exceeded the Consolidated Net Profit of year ending March 2010 12.46Cr in 6 months earnings.. We can expect Jayant to report better results for the next 2 Quarters. Full year March 2011 Net Profit could be close to 25Cr  (my assumption)

Thursday, October 21, 2010

Sell CALL NIFTY 6100 at 44

Sell NIFTY 6100 CALL at Rs 44 and buyback at Rs1 or less..
Market seems to be tired and looking for a correction.
The Coal India IPO has sucked out a lot of liquidity and this has also coincided with the Future and option expiry for the month ie Thursday Oct 28,2010

The market should remain below 6100 for sure and we can buyback the NIFTY 6100CALL for Rs 1 or less by Thursday Oct 28,2010. this will give us a return of  6.3% in 7 days time on an investment of Rs 30,000

PN: Option trading is a high risk activity please donot invest more than one lot (50 units)

Wednesday, October 20, 2010

Jayant Agro news in Hindu: Oct 20,2010

Article in Hindu about Jayant Agro today Oct 20,2010:

The Vadodra-based Jayant Agro Organics, an oleo chemical manufacturing company, will commence commercial production of Sebacic Acid, a complex value-added castor oil-based derivative at Ihsedu Speciality Chemicals, a joint venture with Mitsui & Co.

Ihsedu Speciality Chemicals, in which Jayant Agro holds 76 per cent equity, will have a capacity to produce 8,000 tonnes a year of sebacic acid and add a turnover of Rs 200 crore, the company said.

Sebacic acid, which is a high margin and value-added specialty chemical, finds application in special grade of nylons, engineering plastics, automobiles coolants etc.

Jayant Agro Organics' wholly-owned subsidiary Ihsedu Agrochem will start co-generation plant based on its by-product de-oiled cake resulting in substantial cost saving, it said. The company also plans to apply for carbon credit as it will be using an eco-friendly fuel. On Tuesday, Jayant Agro shares on the BSE rose one per cent to Rs 140.

Link to the original Post

Friday, October 15, 2010

Jayant Agro Organics: Sept 2010 Shareholding Report and Bonus Chance

Jayant Agro Organics has also reported the shareholding for the quarter ending Sept 30,2010
These are some of the salient points:

- Total number of shareholders:  5,242 (June 2010: 5630)
- HNI shareholding per investor: 32,451 (June: 29,569)
- Small Individual shareholders: 4,709 (June: 5,140)
- Aditya Birla Money has entered into Jayant agro (Nil holding in June 2010): 504,022

CMP: 139.25
Market Cap: 209Cr

The great part is the possibility of bonus which was mentioned in their AGM and recorded in the minutes..

Conclusion: Jayant Agro Organics is a Value buy at these levels cause the company is destined to report higher top line and bottom line growth numbers for the next few years.. This is due to the fact that Jayant Agro is going to move from being a low value added Castor commodities player into a high value added castor derivatives player.. also with peak oil eminent Castor is a replacement product for crude in chemical feed stock.. Strong buy with multibagger opportunities as the company is right now selling at less than one times Quarterly sales.. and this could easily quote at one times sales..
Bonus mention is still not digested by the market.. Next Quarterly results are on Oct 22,2010 so this is as good an opportunity to buy as ever..

Thursday, October 14, 2010

Gujarat Ambuja Exports: Sept 2010 Shareholding Report

Sept 2010 Gujarat Ambuja Exports shareholding data has been published.
Salient points are:
- Promoters shareholding:     88,454,060 (+ve 61,105)
- Institutional shareholding:    6,768,734 (+ve 42,250)
- Individual shareholding:     35,284,376 (+ve 81,642)
- HNI shareholding:                2,701,554 (+ve 366,632)

Shares are being consolidated in a few hands:
The Total number of shareholders has reduced:
No of shareholders in Sept 2010: 56,690
No of shareholders in June 2010: 57,654

Shareholding per High Networth Individual has increased:
Shareholding per HNI Sept 2010: 96,484
Shareholding per HNI June 2010: 93,396

Shareholding per individual is also increasing:
Shareholding per individual Sept 2010: 630.65
Shareholding per individual June 2010: 618.21

DII have also increased shareholding
Reliance Growth fund Sept 2010: 6,286,160
Reliance Growth fund June 2010: 6,238,660
Conclusion: There is still accumulation happening in GAEL Stock which means this is not the price to sell.. we can still accumulate more stock at these levels. Target price for GAEL is 60 and 100

Previous Article: GAEL: Sept Qtr Results report on Oct 23,2010
Next Article: GAEL: Sept 2010 Result Review

Wednesday, October 13, 2010

Gujarat Ambuja Exports: Quaterly results for Qtr ending Sept 2010 on Oct 23,2010

GAEL management has declared the dates for Quaterly results of Quater ending Sept 2010

Board Meeting Date: Oct 23,2010

Purpose: To consider and approve Unaudited (Provisional) Financial Results for the quarter ended September 30, 2010. Further, the Company has informed that the remuneration committee will consider only routine agenda items.

Hold on to your cheap stocks..

Previous Article: GAEL: Hold on To your Cheap Stocks
Next Article: GAEL: Sept 2010: Shareholding Report Review

Tuesday, October 12, 2010

Jayant Agro: Multibagger already recommended as a Best Buy

Jayant Agro was recommended as an investment in May 15,2010 at a price of 81.55.
Current Market Price of Jayant Agro is: 146.70
Jayant in a period of 5 months has given us a return of 80%.

The question in our mind is:
- Is Jayant Agro worth buying at these levels (is it cheap?)
- What is the fair value for Jayant agro Organics.

CMP: 143.70
Market Cap: 215 Cr
Reserves: 71.36Cr
Debt: 165.35Cr
Sales: 886.14Cr [Consolidated March 2010]
Profit Before Depreciation Interest and Tax: 41.04Cr (Consolidated)
Net Profit: 12.63Cr

Enterprise Value: 216.08 + 165.35 - 11.38Cr = 370.05Cr

The stock looks fairly priced.. but we must watch what the management has done.
- Reduced preferential capital worth 3Cr with 7% interest and replaced with additional equity (which basically means promoters expect equity  a.k.a stock price to outperform)
- Value added products are being manufactured in 75% subsidiary company with 25% stake by Mitsui.
- Promoters have increased their shareholding by 4.99% in 2009 and additional 2% in 2010 by buying shares from the open market
- Positive media coverage.. management interview in media with forward looking statement of 35% growth for next 2 years.. (Link)
- Positive news flow that Jayant has been awarded with Highest Exporter of Castor seed Extraction for the year 2009-2010 (sept 24,2010)

If one looks at the recent quaterly statement Jayant Agro had
Sales Q1 June 2010: 290.74Cr (Consolidated)
PBDIT: 16.05Cr
Net Profit: 6.04Cr
Year Ending March 2010 (Audited Consolidated):
Sales : 904.55Cr
PBDIT: 41.32Cr
Net Profit: 12.46Cr
In 1 Quarter Jayant has already earned 48.47% of last years earnings.
Extrapolating the earnings of Jayant for Q1 we can expect jayant to have sales over 1200Cr and Net profit of 24Cr which on an equity base of 7.5Cr works out to be

Sales: 1200Cr
Net Profit: 24Cr
EPS: Rs 16
Current Market Cap: 215Cr
Sept 2010 Quaterly results are scheduled to be announced on Oct 22,2010 (so now is the time to Buy.. before the results..)

Conclusion: Jayant is one of the "Best Buy" recommendations we can expect Jayant stock price to grow at least 100% from these levels ie CMP: 143.7 Target Price: 288 Time period: 12-18 months. Personally considering that Jayant is the largest player in India and India exports 90% of all castor in the world and is the largest producer in the world  (pls check old blogs link) I expect Jayant to get a premium and have a market cap close to 1200Cr which is 5.58 times current market capitalisation.. time period would be 24 months to 36 months.

Saturday, October 09, 2010

India to Lift ban on Foreign Retail buying of Indian Stocks

This is the heading of a recent article in Bloomberg (link)
Is this about retail participation after all as mentioned in the article?

The Foreign funds have poured in 92 Billion dollars since the doors were opened in 1993 and in the year 2010 itself India has  already received a record 22 billion USD till date.

I think its a small step in the bigger scheme of things. The bigger scheme of things is the collapse of the dollar as the reserve currency and the emerging reserve currencies such as Euro, Yuan.

The Rupee is looking to attract a slice of the pie (with backing from certain power brokers..) The yuan has everything running its way except that its not free and China is not free.

What is needed is a country where there is a rule of law ..(Not because law's will be fair to all..  The reason is "LAW" can be influenced .. the rules can be amended as desired by the business men ) Business Men sounds more interesting than "Power Brokers"

Indian Rupee is being setup as a vessel to hold the wealth as dollar enters the lost decade, today's announcement of direct Foreign retail participation (not yet declared ) is to allow the transfer of dollar assets into "Rupee Assets" as the Dollar goes through the turmoil of excesses of the past.

Foreign investment limits have also been increased for Govt and Corporate debt markets. Well some might say this is really good and India has "Arrived"

Far from it .. India has thrown its hat in the ring as a contender .. it has not been declared a winner.

Just like in any good corporate there are always a number of bright ideas with their mentors.. and a corporation would like to have all the brightest ideas on the table..  However there will be a tussle and may the best team win.

One must remember that whether its Team A, Team B, Team C or Team D.. the real winners are the Promoters who own the corporation.. yes the Rupee team might have the satisfaction of being declared the winners .. the adrenaline rush of a good fight. One must not forget.. which ever team wins since the promoters are the same the true winners are the promoters.. (a.k.a Power Brokers, Business Men)

Friday, October 08, 2010

Option Trade: Buy NIFTY 6400CE Back at Rs15 or less making 4.8% in 1 week

On October 3,2010 NIFTY 6400CE was advised for a Sell at Rs50
Right now on Oct 8,2010 the same Call (NIFTY 6400CE)  is available at Rs17. It would be advisable to Buyback the Call at Rs15 (after 3.00pm IST) making Rs 35 in one week time frame.. (we should be able to buyback after 3.00pm IST at around Rs15 or lower...)

For one lot of 50 units after expenses profit would be:
Sell Price (Rs50): 50x50-Rs150(transaction cost) = 2350
Buy back Price(Rs15): 15x50+150(Transaction cost) = 900
Profit: 1450
Investment: Rs 30,000

Return: 1450/30000 = 4.8%
Waiting for One more week will give additional Rs5 reduction in buyback price.. but it is adviseable to buyback as we have achieved more than 50% of the target 7.3% return reducing our risk..

Monday, October 04, 2010

One months: Options Trade: Sell 6400CE for 50.00

Since the market seems to have topped out we can make some calculated bet.

I am thinking that NIFTY will not cross 6400 and one can safely sell NIFTY 6400CE at Rs 51.

It will cost approximately 30,000 for 50 units and if the market closes below 6400 by Oct 28,2010 you will make 2200 on your investment ie 7.3% in one month

PN: Options are usually very dangerous because of time value action and please donot invest more than 1 lot ie 50 units.

Saturday, October 02, 2010

Book Review: The Pregnant King - Devdutt Pattanaik

An excellent work of fiction.. I just could not keep it down until read.

"I am not sure that I am a man" said Yuvanashva. "I have created life outside me as men do, but I have also created life inside me, as women do. What does that make me? Will a body such as mine fetter or free me?"

Among the many hundreds of characters who inhabit the Mahabharata perhaps the world's greatest epic and certainly one of the oldest, is Yuvanashva, a childless king, who accidentally drinks a magic potion meant to make his queens pregnant and gives birth to a son. This extraordinary novel is his story.

Is is also the story of his mother Shilavati, who cannot be king because she is a woman; of young Somvat, who surrenders his masculinity to become a wife; of Shikhandi, a daughter brought up as a son ; of Arjuna, the great warrior with many wives, who is forced to masquerade as a woman after being cursed by a nymph; of Ileshwara, a god of full-moon days and a goddess on new moon nights; and of Adi-natha, the teacher of teachers, worshipped as a hermit by some and as an enchantress by others.

Building on Hinduism's rich and complex mythology- but driven by a very contemporary sensibility - Devdutt Pattanaik creates a lush and fecund work of fiction in which the lines are continually blurred between men and women, sons and daughters, husbands and wives, fathers and mothers. Confronted with such fluidity the reader is drawn into Yuvanashva's struggle to be fair to all- those here, those there and all those in between.

Review comments by Sumita:

What intrigued me to buy this book was the name, 'The Pregnant King'. How can a king, a man, become pregnant? Is it at all possible???

This book revolves around the various emotions that surround humans; love, anger, submission to power & desire, helplessness, confusion, jealousy, hunger for power... In this book, emphasis has also been laid on following the right path or 'dharma'.

This book, a work of fiction, revolves around a king named Yuvanashava. How desperately he wants to father a son! It's only after he has a son can he rule his kingdom and ensure his lineage is carried forward. He marries thrice in the need of a son. His mother, Shilavati, till then is the acting 'king' as she wants to be known. She does everything to follow the right path to run the kingdom successfully.

Is Yuvanashava ever able to father a son? Is he able to rule the kingdom? Which of the wives bear him a son?

Readers whose engagement with ancient texts runs along orthodox lines might not be too interested in a modern myth. But in a sense, this book is meant for such readers. At its best, this story is about the imperfection of the human condition and our stubborn refusal to make room for all those in between.


The Pregnant King

Movie: Seven Pounds: Must Watch

Seven Pounds is a great movie. Not easy to forget if you have the patience to see it completely. Sometimes confusing but it all adds up at the end. From the directors of "The Pursuit of Happiness"

here is one of the comments from IMDB:

This movie is one of the best films i have ever watched by far. The direction of the film along with the acting was simply world class. It's an emotional roller-coaster. Yes it is slow, yes it gets a little boring, but whilst your watching the movie your always taking in the story line and my does the movie make up for it in the last 30 minutes when the jigsaw is put together and the full plot is revealed. I think this movie is actually better than The Pursuit Of Happiness which most will know was also a very good film. Will Smith, Rosario Dawson, Woody Harrelson, Michael Ealy and Barry Pepper all deserve awards with there 10 out of 10 performances. This movie for me is a must see, i am still actually getting over the film as it quite simply blew me away.

The Song: Have no Fear

The Song: Something Tells Me I'm into something Good!! (Must listen to the song!!)

You can see the trailer for the movie or watch it online (US only)

The movie could turn people off (unethical) but I think its about the circle of life. Life and Death are part and parcel of life.

Friday, October 01, 2010

Batliboi: Watch and Buy at lower levels.

Batliboi  http://www.batliboi.com/
Current Market Price: Rs 35
Market Capitalization: 100.39Cr
Reserves: 31.29Cr
Total Debt: 50.82Cr
Sales March 2010: 98.19Cr
Gross Profit: 3.01Cr
Net Profit: -ve 4.12Cr
Batliboi is one of the oldest engineering companies in India. Its area of operations are Machine Tools division, Textile Air Engineering, Textile Machinery, Air Conditioning, Environmental Engineering, Wind Energy, Motors, International Marketing, Logistics.

Batliboi has in recent years acquired
- Quickmill - A leading manufacturer of large area CNC Gantry and Bridge Milling and Drilling Machines is based in Peterborough, Canada http://www.quickmill.com/
- AESA Air Engineering, SA, France. - is one of the premier global companies in the business of Air Engineering for Textiles, Paper and Tobacco industries http://www.aesa-ae.com/

On first look the company seems to be on a perpetual decline and has been reporting losses for 2009 and 2010 that might just be the case but with 81.73% shareholding by the promoters is there something we are missing.

Consolidated revenues provide some data. Consolidated numbers for Year ending March 2010:
Consolidated Sales: 197.50Cr
PBDIT: 5.58Cr
Net Profit: -ve7.84Cr

Consolidated levels also we donot see the profits.. however cash flows from Operations for year ending March 2010 and March 2009 are positive 12.09Cr and 11.66Cr respectively.

Company does have 24.3Cr worth of Free hold land and 18.50Cr of buildings.

Conclusion: All said and done it is really tough to say Batliboi is a value buy .. but I am looking at the promoters (80+% shareholding) and cash flow (12Cr) of the company which gives me confidence to invest in the Batliboi stock at these levels. Once the company starts reporting profit we can expect Batliboi to quote at 1 times Consolidated Sales which will be close to 300Cr The land bank is something of a bonus ..so right now its a Cigar Butt and we can get a few puffs from this stock. It will however take a 2-3 year horizon to really get some good value from batliboi

PN: These are my personal views and opinion.. please do your own deep dive before investing.