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Wednesday, January 25, 2012

RBI: Recommend's Diesel price deregulation

Mumbai, Jan 24 (IANS) The Reserve Bank of India (RBI) Tuesday suggested that the government deregulate the price of diesel fully to help contain aggregate demand and the trade deficit that has widened to $133.3 billion in the first nine month of the current financial year.
"Particularly as the food subsidy bill is expected to rise, it will be prudent to fully deregulate diesel prices to contain both aggregate demand and trade deficit," the central bank said in the third quarter review of its monetary policy for 2011-12.
Diesel is heavily subsidized by the government. Oil marketing companies incurred under-recovery of Rs.12.95 on sale of each liter of diesel in the first fortnight of January, according to data provided by the ministry of petroleum and natural gas.
Oil marketing companies suffered under-recovery of Rs.37,719 cr. on sale of diesel in the first half of the current financial year, which is more than half of the total Rs.64,900 cr. of under-recovery on all the petroleum products.
The RBI said heavy subsidies on petroleum products have led to widening in fiscal deficit.

"Revision in domestic administered prices will add to inflationary pressures, although such revisions are necessary to maintain the balance between supply and demand," the RBI said.
The RBI pointed out that the fiscal deficit of the government has remained at an elevated level since 2008-09.
"If the increase in government borrowing already announced is an indication, the gross fiscal deficit for 2011-12 will overshoot the budget estimate substantially," it said.
As per the budgetary estimates, the government targets to bring down fiscal deficit to 4.6 percent of the gross domestic product for the fiscal ending Mar 31, 2012.
"At the current juncture when there is a need to boost private investment, the increase in fiscal deficit could potentially crowd out credit to the private sector. Moreover, slippage in the fiscal deficit has been adding to inflationary pressures and it continues to be a risk for inflation," the RBI said. 

Next in line is LPG.(only 4 cylinders at discounted prices rest at 700-800 per cylinder) Watch out for your energy consumption pattern.. Buy Jayant and Tata Communications if you have not yet entered.

Monday, January 23, 2012

Jayant Agro Organics: Dec 2011 Results

Jayant Agro Organics has reported its Q3 December 2011 results.. Jayant has 4 subsidiary companies..
- Ihsedu Agrochem Pvt. Ltd.
- Ihsedu Speciality Chemicals Pvt. Ltd.
- Ihsedu Coreagri Services Pvt. Ltd.
- Ihsedu Itoh Green Chemicals Marketing Pvt. Ltd.

Ihsedu Agrochem Pvt Ltd is a non listed materially significant subsidiary of Jayant Agro Organics. Ihsedu networth and sales make up more than 20% of Jayant Agro Organics consolidated networth and net sales..

Similarly Ihsedu Speciality Chemicals Pvt Ltd is a non listed materially significant subsidiary of Jayant Agro Organics as Ihsedu Speciality Chemicals Pvt limited "networth" is more than 20% of consolidated networth of Jayant Agro Organics.

For year ending March 2011.
Standalone profits for Jayant Agro was: 17.21Cr
Consoldiated profits for Jayant agro was: 24.57Cr

Considering the facts that Jayant has 2 subsidiaries which are materially significant its always adviseable to look at the consoldiated numbers.. So lets look at the latest consoldiated numbers..

1. On a Year-on-Year basis the numbers are great..

Sales up: +62.85%
PBDIT up: 34.15%
Taxes up: 38.54%
Net Profit up: 23.60%

- Volume driven performance..
- Costs have increased decreasing margins
- Taxes paid at 32% of PBT is good.

These numbers are great ..specially if you consider the fact that March 2011 (24.57cr) net profits were 97.14% higher than March 2010 (12.46cr) net profits.So this increase is over a higher base..

Jayant Agro Organics with a profit of 25.11cr has exceeded last year's profits within 9 months of this financial year.

Sales are doing great lets look at the margins..

1. Margins on a Year-on-Year basis is down  108 basis points (ie. 1.08%) from 6.13% to 5.05%
most likely we might see margins drop to 2010 levels of 4.56% (unless the new derivatives business really increases the profit margins)
 2. Depreciation as a percentage of sales is down.. while on absolute numbers it is still increasing..
3. Interest payments at 2% of sales is right on the dot to take advantage of the 2% interest subsidy scheme of govt of india for exporters. (so expect higher debt levels ..)

Strong topline growth .. is an indication of Jayant's growing position within the castor oil and derivatives business. Margins are stable at 5-6% PBDIT.. with the castor derivatives plant in place .. we should see higher margins..(Watch out for that)

Segmented results is not for the consolidated entity.. hence does not make sense to compare them.

Conclusion: Jayant Agro Organics is growing consistently.. profits are still very low with 2% net profit margins.. Derivatives plant's first full quarter of operations is going to be Jan-March 2012 and something to watch out for  improvement in margins.. Pls note as per management derivatives will add around 200-250cr (annually) to the topline so donot expect sharp increase in topline based on new castor derivatives business. I would continue to hold Jayant stock for now due to improving business climate (peak oil, bio-renewables demand)


Tuesday, January 17, 2012

Buy NIFTY-4600-PUT-JAN @ 4.55 and Sell NIFTY-5200-CALL-FEB @ 46.85

Buy back NIFTY-4600-PUT-JAN @ 4.10 
Sell NIFTY-5200-CALL-FEB @ 48.40

So if NIFTY Remain below 5200 till Feb End (Feb 23,2012) we will pocket 48.4*50-300 = 2120 on investment of 25,000 a return of 8.48% in 37 days..

=happy investing

Sunday, January 15, 2012

Advanced Cell Technology: Stem Cells and ACTC.OB

Advanced Cell Technology is now the only company in US to have an active FDA human clinical trial with Stem Cells...

If you see "Organ transplant" (heart, kidney, lungs..) the biggest problem is "Histocompatability" Histocompatability is nothing but .. when a new entity enters into the human body..(like a transplanted kidney)  the human body has a defence mechanism which can detect the kidney as foreign body and attack it.

When an organ transplant is done ..the new organ introduced into the body is identified by the "defence mechanism" as a foreign body.. and attacks it.. causing the destruction of the new organ and leads to failure of the transplant and can be life threatening to the patient..  Histocompatability issues cause organ transplant process to include an additional step of "Donor Compatibility"

Now unlike heart, kidney transplant.. which all face "Histocompatability" issues .. there are "immunologically privileged" sites within our body where the body defence mechanism does not attack a foreign body.. "Eye, Brain and testes" ..

Stem Cells science had advanced to a level where complete body parts can be "manufactured" but stem cells technology still has to overcome histocompatability issues except for "Eye, Brain and testes"  which are "immunologically privileged"

ACTC.OB (Advanced Cell Technology) is at present conducting FDA approved Clinical testing for Stargardt’s macular dystrophy and dry age-related macular degeneration (dry AMD) using retinal pigment epithelial (RPE) cells derived from human embryonic stem cells (hESCs).

ACTC is targetting the eye for stem cell related cure.. where there are no histocompatibility isues.. latest update state that additional patients are being enrolled (which means positive development for first few patients..) 

So ACTC.OB is something where you need to have an investment.. because it has taken an immunologically priviledged area of the human body where histocompatability issues are not present..

Everybody has heard about "Eye Donation" but have you heard about eye transplant being done between related entities ( ie blood relations ..) In other organ transplants like kidney, heart, lungs etc.. transplants are done only after "Donor Compatability" (Related entities) due to histocompatibility.

Now I invested in ACTC at 9 cents per share..when market cap was 56.48 million  right now ACTC has a stock price of 0.15 Dollars ie 15 cents with a market cap of 245 million. So even though the market cap of ACTC has increased 433% since the time I have invested in ACTC my actual gains are just 66.66%
Stock dilution is very high and a cause of concern..  My personal advice is to buy at a price below 10 cents..

There are questions about dilution of equity.. right now ACTC is looking to increase the number of equity shares that ACTC can issue from 1.8 billion shares to 2.8 Billion shares. ( 1Billion additional shares) It seems all 90% of convertible notes and warrant holders have "AGREED" to convert their notes and warrants into equity and hence the company will have to issue 380 million shares and additional 240 million shares.. so total we could see a dilution of about 620 million additional shares..

Insiders like Dr Robert Lanza have inbuilt clause that additional shares will be issued when their holding drops below x% ..

The good part is all notes and warrant holders (90% ) have agreed to convert .. (which is an indication that they prefer stocks over bonds (interest bearing) and could indicate that soon ACTC will not need any more funding (as its going to report good news/data .. my take)  hence this conversion by all notes and bond holders..
PN: ACTC is a 0 or 100 stock.. so invest keeping in mind this could be Zero tomorrow. (Though I doubt that will happen)

Advanced Cell Technologies (website)
ACTC Chairman's Blog
ACTC Company Blog
ACTC Presentation
Link to my old blog about ACTC

Sunday, January 01, 2012

Joan Baez: Forever Young

Beautiful ..must listen to Joan Baez

Forever Young

Diamonds & Rust:

Blowing in the Wind:

Sweeter For Me:

Love Song To A Stranger:
Never Dreamed You Leave In Summer:

Concert 1965 (full)

I'm A Rambler, I'm A Gambler 0:00:00 
There But For Fortune 0:02:25 
Copper Kettle0:06:00 
Mary Hamilton 0:09:17 
Don't Think Twice, It's Alright 0:15:15 
I'm Troubled And I Don't Know Why 0:18:35 
We Shall Overcome 0:21:00 
With God On Our Side 0:25:58
Plaisir D'Amour 0:34:00 
Silver Dagger 0:36:50 
Oh Freedom 0:39:20 
She's A Troublemaker0:43:07 
The Unquiet Grave 0:45:32 
It Ain't Me Babe 0:50:02 
Isn't It Grant 0:53:54 
500 Miles 0:57:23 
Te Ador/ Ate Amanha 1:00:23 
Plaisir D'Amour (encore) 1:05:10

Joan Baez: Portrait 

Song Book: 
2 1/2 hrs of songs by Joan Baez!! Wonderful !!

This is Janis Joplin: Me and Bobby McGee: