DCW LTD. : BSE CODE 500117

DCW IS A DIVERSIFIED manufacturer of basic chemicals, such as:
Caustic Soda, Liquid Chlorine and Chlorine based products such as Trichloroethylene and HCL : Upgraded Ilmenite or Synthetic Rutile
Yellow Iron Oxide , PVC Resin, Soda Ash, Ammonium bi-carbonate
Liquid Bromine and Bromide.

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The company is in existence from 1925 and was earlier known as Dhrangadhra Chemical Works, with plant in Dhrangadhra, Gujarat. The company has come a long way since. The name of the company has been changed to DCW Ltd. and now the company has plants in Gujarat and Tamil Nadu.

The company has a share capital of 39 Crores made up of equity shares of FV of Rs.2.00 each. The company has reserves of over 269 Crores, thus making it a bonus candidate in another 2-3 years.

Promoter’s group is holding 40% shares. Institutions including FIIs are holding about 17% shares and balance is held with the public.

The company has during the year 2007, issued equity shares to FIIs and Promoter Group Companies, at Rs.10.00 premium, viz. Rs.2.00 + Rs.10.00 = Rs.12.00.

The company is consistently in profits and is also paying dividends. The share price of the company touched 52 week low on 16.09.2008.

In my lessons on fundamental analysis, I had stated the following factors to be considered for picking up shares.

1. The company should have regular profits and cash flows.
2. Placement of shares to promoter groups or FIIs at premium is good.
3. At some point of time, a well performing company may touch year’s low.

DCW has qualified on all these fronts. Considering the factors, one can consider picking up DCW shares for a reasonable expectation of 20-25 percent capital appreciation in 12 months.

Disclaimer: This report has been prepared solely for information purposes and the investment is the sole decision of the investor. Such information is impersonal and is not an inducement to invest. The information contained herein has been obtained from sources believed to be reliable and author accepts no responsibility for the accuracy of its contents. Investors are advised to satisfy themselves fully before making any investments or committing themselves and should consult their own financial consultants whether and how to use such information in making any investment decision. The author accepts no liability arising out of use of the above information/ article.

Kindly note :

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.



KASHIWALA

FOLLOW UP ARTICLE : MUTUAL FUNDS

MUTUAL FUNDS :

Several months back I had posted an article How to create wealth using Mutual Fund Route. Many people e-mailed that they had already started SIPs in schemes like Magnum Contra, Franklin Bluechip etc. Few persons who had started investing in Magnum Contra stated that they are seeing falling NAVs and are apparently worried. No one needs to worry for the following reasons.

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a. Our own near and dear ones are investing in Magnum Contra SIP @Rs.3000.00 per month and our highest NAV purchase price was Rs.39.00 and lowest was Rs.23.50. In the meantime, we have received a dividend of Rs.4.00 per unit.

b. My advice to people is to invest at least for seven years in Dividend reinvestment option (more if you can) and wait for 3-4 years more.

c. Try to aim at a corpus of at least 15000 units or 20000 units within this time. Do not count your investment in Rupee value, rather count in in terms of number of units.

d. When the NAV is low, you get more units. When the NAV is high, you will get more dividend which will be ploughed back as further investments.

e. After a period of say, 8-10 years, if you have achieved your goal of 20000 units (suppose), convert it into dividend pay out option. Even if the fund pays a dividend of Rs.6.00 per unit, you will get Rs.10000.00 per month (Rs.120000.00 per annum). Presently when the NAV was around 29 during the years 2006 and 2007, the fund paid a dividend of Rs.4.00 per unit.

f. Finally, do not be perturbed by the falling NAV. This will help you indirectly by bringing more units into your kitty. Continue your SIP. Those readers who have not started any SIP, may start now with at least 3000 to 4000/- per month with a clear cut aim of at least 20000 units in another 7-8 years time.

g. The positive factor in the overall mutual fund industry is that they are sitting on a pile of cash and are making selective investments. So, their own investments will get averaged and we can expect better times ahead.

h. Last but not the least, have a positive view of the market and your investments. In the long run, nothing will go wrong.

IF YOU READING THIS IN KASHIWALA'S SITE, IT IS ORIGINAL. IN OTHER SITES, IT IS PIRATED.

Good luck.

Kashiwala

REGULAR POSTS

DEAR READERS,

I have not been making any posts for the last several weeks, due to professional and family pre-occupations. There were some bereavements in the family circles as also some health related problems.

I will be starting regular posts in the near future. I thank readers who have been sending me e-mails regularly.

Kashiwala

REPLIES TO QUERIES

1. Delivery Percentage :

There is no calculation for delivery percentage. This can be obtained from BSE Site or NSE Site at the end of the day. In case of shares placed in T Group, all transactions should be delivery based. Therefore, the delivery percentage is obviously 100%. In other cases, this percentage may vary depending on the type of share, share capital, volumes traded etc. In shares which are in F&O segment, there are no circuit limits. Here the delivery percentage tends to be on a lower side with more fluctuations. This is a haven for day traders.

In companies like SBI or other big companies, a delivery percentage of above 30% on any day may indicate accumulation and there are days when the percentage remains less than 15%. Here Day trading is a factor. In small companies a delivery percentage of over 60% may show accumulation and a smaller percentage of 25% or so or even less, may show day trading.

The moot point I was trying to convey is that, when the M factor increases sharply and the delivery percentage remains on a lower side, this indicates increased operator activity (day trading) and it is advisable to book partial profits on any such steep rise. Of course, this comes in practice and keeping a keen watch on the markets.

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PE RATIO
PE ratio is the share price prevalent in the market divided by the eps. EPS is the net profit divided by number of equity shares. While EPS is a simple arithmatic calculation, PE ratio is a bit complicated as there are no hard and fast yardsticks. EPS is more of a fundamental based study, but PE may have to do more with technicals.
Now Cement Companies are not faring very well due to various factors so the markets are not paying much attention to the shares. A recent example in PE ratio anomaly is Ranbaxy. It is stated that it is being traded at over 40 PE and the increase in price is mostly news driven, due to acquisition of a stake by a Japanese Firm. Other Pharma firms may not be commanding the same PE.

Rather than PE ratios (which are mostly driven by market mechanics and technicals), it is worthwhile to look at the book value and price to book value ratio. If the ratio is much lesser than one (price is less than book value) and there is consistent profitability, it is safer to enter the scrip.

Comments will be welcome.

Kashiwala

NAVNEET PUBLICATIONS

NAVNEET PUBLICATIONS LTD: BSE CODE 508989
NAVNEET was floated by the NAVNEET Group of Companies managed by Gala Family Members who have an enviable reputation of over 46 years in the field of Educational Books Publishing.
Since 1959, Navneet has been a major force in the dissemination of knowledge. NAVNEET is a dominant player in the field of educational books publishing, publishing more than 4000 titles every year in English, Hindi, Marathi and Gujarati.
In 1987, to further strengthen and consolidate the business of book publishing, NAVNEET installed ultramodern printing press at Dantali, District Gandhinagar, Gujarat. By 1991, sophisticated printing and binding machineries had been imported to complete the modernisation-cum-expansion plans of the company.
In 1993, NAVNEET installed machinery to manufacture paper stationery products at Vasai near Mumbai. The company also installed State-of-the-Art 'Note Book on-line' machine in 1995 at Daman. The operations at Daman have since been shifted to more specious factory at Silvassa.
Over the decades, NAVNEET has emerged as an educational products and services company in India. The company's products are sold under the 'Navneet', 'Vikas' and 'Gala' brand names.
NAVNEET's portfolio of syllabus based Books includes high quality books, supplementary books like Guides and 21 Question Sets among others in four languages, English, Hindi, Marathi and Gujarati. The company has a dominant market share in Gujarat and Maharashtra.
NAVNEET also produces various titles in the children and general books category, which are not based on syllabus, such as activity books for children, health series books, cookeries, mehendi,feng-shui etc.
The company enjoys leading position in premiere stationery markets in India, the Middle East, parts of Africa, U.S.A. and Europe. (Source Company Website)

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The share capital is 19 Crores, divided into 9.5 Crore shares of Rs.2.00 each. The promoters of the Company hold 62% stake in the Company. About 15% stake is held by Financial Institutions/FIIs etc. The remaining about 23% shares are held by public. The company has substantial reserves of Rs.186 Crores as at March 2007. It is expected to be more by the time FY 2008 results are announced.

Since the company deals in text books etc. used mostly in schools, for obvious reasons, the profitability for Ist quarter, viz. April – June in any year is generally higher than any other quarter. Therefore, YOY results show a better comparison.

The share price was hovering between 70 – 80 for quite some time in Sept. 2007 to November 2007 and started climbing to reach a high of about 160 in January 2008. It is now hovering around 85 levels.

Conservative investors can add Navneet Publications to their portfolio at the current price of around 85 or so, with a clear expectation of 25-30% increase from the current levels in one year. On a longer term basis, with the book value over 10 times the face value of the shares, this could be a potential bonus candidate.

Disclaimer: This report has been prepared solely for information purposes and the investment is the sole decision of the investor. Such information is impersonal and is not an inducement to invest. The information contained herein has been obtained from sources believed to be reliable and author accepts no responsibility for the accuracy of its contents. Investors are advised to satisfy themselves fully before making any investments or committing themselves and should consult their own financial consultants whether and how to use such information in making any investment decision. The author accepts no liability arising out of use of the above information/ article.

Kindly note :

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.


(AJAY SINGH RATHORE)

KASHIWALA

TUBE INVESTMENTS

TUBE INVESTMENTS OF INDIA : BSE CODE 504973

Tube Investments of India Ltd. (TI) belongs to the nearly 8500 crore p.a. turnover Murugappa Group of Tamil Nadu. The other group companies are Parry Agro, Carborandum Universal etc.

TI has got many areas of operations with works/factories in various places.

1. TI CYCLES :
TI Cycles of India, one of the leading bicycle manufacturers in India, started in 1949, has been at the forefront of innovations and is a pioneer in the market of cycles. TI cycles are the makers of country’s most famous brands like Hercules, BSA and Philips cycles

Brands:
HERCULES - the flag ship brand of TI cycles portfolio, this brand of ours is still as young as ever. Hercules stands for a unique pride of possession - anchored in the time-tested values of heroism and integrity, to which the brand’s customers subscribe in their own lives.

BSA - Another Flagship Brand of TI cycles, BSA stands for Birmingham Small Arms. It signifies the joy of cycling; fun and comfort go hand in hand with BSA. BSA today is an intrinsic part of the Indian family with cycles for everyone - kids, teens and adults.

Certificates: Certified with ISO 9002 and ISO 14001.
Exports: TI Cycles is an exporter to many regions across the global - Europe, South East Asia and Africa; being some of them.
Locations: Chennai (Corporate HO), Nashik, Noida, Durgapur, Bangalore, Kolkatta, Patna and Ludhiana.
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2. TUBE PRODUCTS OF INDIA
Tube Products of India is an undisputed leader in the Indian market for precision Welded ERW and CDW steel Tubes with the widest variety and also manufactures wide range of CRCA (Cold Rolled Closed Annealed) Strips catering to international standards
Products
Precision Tubes
Market leader in Telescopic Front Fork Inner tubes and Cylinder bore tubes for shock absorber and gas spring applications.

Propeller shaft tubes for Automotive segment.
Other Speciality products include Rear Axle Tubes, Side Impact Beams, Tie Rods, Drag links. Heavy thick steering shafts and Hydraulic Cylinder tubes

CRCA Strips
A wide range of CRCA strips including special extra deep drawing, high tensile, medium carbon, high carbon finding application in industries such as Bearings, Automobile, Auto Ancillaries and General Engineering.

Locations
Plants : Chennai (South India), Shirwal (Western India) & Mohali (Northern India)

3. TIDC
TIDC is one of India’s leading manufacturer of power transmission chains for the industrial, automotive and agricultural segment and is part of the $ 1.6 Billion Murugappa group. TIDC India was established in 1960 in collaboration with Diamond Chain Co USA and today is the undisputed market leader in both the industrial and automotive chains. The company made a foray into Fine Blanking in line with its vision of becoming a prominent global player in power transmission components and is now a major supplier of FB components to the automotive industry. Currently about 45% of our turnover is from exports and this is an indication about our growing global presence.

I) Product Range
Industrial
· Power Transmission Chains - ANSI & British standards
· Engineering Class Chains
· Agricultural Chains
Automotive
· Drive and Cam chains for Motorcycles
· Timing Chains
· Sprockets
Fine Blanking
Transmission & engine parts for 4 wheeler & 2 wheelers
II) Plant Locations
· Chennai - Industrial chains & Fine Blanking
· Hyderabad- Automotive Chains

4. METAL FORMING
Market position: Pioneers in cold roll forming. Leading manufacturer of roll formed car doorframes with 65% market share in India.

Products: Car doorframes, window channels, SS Rail, impact beams, chassis channels, frames for starter motor (deep drawn) and other roll formed sections for railway wagons and coaches.

Customers: Hyundai Motors India, Maruti Udyog Limited (Suzuki affiliate), General Motors India, Visteon India.
Locations: Chennai (South India), Bawal (North India), Halol (Western India).

SHARE CAPITAL
The company has got a share capital of 36.95 crores made up of 18.47 crore equity shares of Rs.2.00 each. The company has got substantial reserves of Rs.681 Crores, thus commanding a book value of almost Rs.39.00 per share on a face value of Rs.2.00.

Almost 42 percent of the shares are held by the promoter group and about 12 % are held by institutions like Mutual Funds, LIC etc.

The company is showing increased sales turnover (over Rs.1700 Crores in 2007-08). A good portion of its income is derived from export operations. With the appreciation of dollar, the income for the coming year is expected to be good.

The company issued bonus shares of 1:1 in 2004 and subsequently split its shares from Rs.10.00 FV to Rs.2.00 FV. In 2006. Even now it is a good bonus candidate.

Considering the good parentage, strong reserves/book value and expected increased incremental cash flows, conservative investors can consider buying shares of Tube Investments of India Ltd. at the current price of around 47 (which is almost at 52 weeks low). The share price showed a 52 week high of about Rs.97.00. It is quite reasonable to expect a return of 25 to 30 percent in one year in this share.

Disclaimer: This report has been prepared solely for information purposes and the investment is the sole decision of the investor. Such information is impersonal and is not an inducement to invest. The information contained herein has been obtained from sources believed to be reliable and author , accepts no responsibility for the accuracy of its contents. Investors are advised to satisfy themselves fully before making any investments or committing themselves and should consult their own financial consultants whether and how to use such information in making any investment decision. The author accepts no liability arising out of use of the above information/ article.

Kindly note :

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.


(AJAY SINGH RATHORE)
KASHIWALA

FUNDAMENTAL ANALYSIS (CONTINUED)

ANALYSIS : LESSON 5

WHEN TO ENTER AND WHEN TO EXIT

Friends, by following the guidelines given in my fundamental analysis lessons or other recommendations given by experts, it is easy to zero in on some shares and purchase them.

WHEN TO ENTER

i) When there is overall pessimism in the industry or the market, people tend to get panicky and get out by selling the shares. Investors should watch out for such occasions and pick up shares in small lots. A classic example was Noida Toll, which fell to a low of about Rs.30.00 during Feb-March 2008.

ii) Based on your own studies of increasing future cash flows, you may pick up the shares and go on adding in dips.

iii) When there is definite news about any company proposing (a) to issue shares to FIIs or other bodies (b) increase their own stake or (c) buy back the shares, you may safely enter such stocks. Eg. DCW followed the above route and the share price went up from Rs.12.00 to more than 40.00.

iv) Keep a track of performing and profit making with respect to their closing prices. At some point of time, the price may be hovering around the 52 week low. It is safe to enter at such times.

WHEN TO BOOK PARTIAL PROFITS (PARTIAL OR FULL)

i) From your entry level, if the share price has increased by 50 – 60 percent, it is advisable to sell about 80 percent of your holdings. Suppose you have 1000 shares of a company and the price has appreciated by 50%, 800 shares may be sold. Subsequently, if the price comes down by 20 or 30 percent, you may re-enter.

ii) Whenever any famous analyst gives a buy call in any share you are holding, there may be an initial run up but subsequently there may be a fall. Book profits after the initial run up. The crux of the matter is to keep track of the Analysts’ recommendations and price movement.

iii) If you are holding any stock and there is any adverse news regarding the company and industry as a whole, the share price may tend to fall. It is advisable to exit and re-enter at lower levels.

iv) Always keep a profit margin with which you are happy. Conservative investors should have a profit margin of 30-40% and exit when this level is achieved.

SHORT TERM TRADING STRATEGIES

i) All readers are definitely having computers in their homes and should be having some knowledge of MS Excel or any other spread sheet. After purchasing some shares of any company, open a file in spread sheet and have the following columns A1 – Date, B1 – Closing price of the share, C1 – Volumes traded, D-1 – “M” factor which is C1 X B1 and finally E1 which is the delivery percentage. When the price and volumes increase, the D Column figure increases.

Now is the important point: Observe the trend for 5 days, 10 days etc. and plot a graph. When there is a steep climb in D Column, book partial profits and wait.

ii) Observe the delivery percentage and the circuit limits of any share. If the percentages are quite high (over 70%) this shows that accumulation is going on. Further, when the share starts hitting upper circuit and delivery percentage is not very high, this means there is increased operator activity. You can exit partially.

iii) After a steep increase, in all probability the share price will come down due to market technicals. So, if you re-enter, you would have made a short term trading profits.

If you follow the above principles, you can not go wrong.

NIRMA

NIRMA LTD. BSE CODE 500308

Nirma Ltd. does not need an introduction to any investor. At a time when Hindustan Lever was ruling the roost in detergent brand (Surf), Nirma launched the low cost variety “Nirma” detergent which was a super hit. Since then, the company has come a long way.

The company’s share capital is about Rs.79.55 Crores made up of 15.9 Crore shares of Rs.5.00 each. Promoter group holds about 77.17 shares and Institutions and bodies corporate hold about 9.90 per cent shares, making a total of about 90 per cent shares. Floating stock is very less.

The company is showing decent profitability and consistent sales performance. The company has a wide sales network and is the most preferred brand of low income households.
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The company (Nirma) proposes to acquire an U.S. based company and has established a Subsidiary in U.S. for that purpose. Besides, the company proposes to increase the FIIs holding limit in the shares of the Nirma. Nirma also plans to place shares to QIB at a price to be determined. (Source BSE Site). All these factors augur well for the company.

The company has substantial reserves and net worth. Thus, the book value is tremendous and in due course, may be a bonus candidate.

The share price saw a low of about 145 in November 2007 and rose to a high of over 250.00. Due to overall meltdown, the price has fallen to about 152.00 now, which is almost near the low levels.

Conservative investors can consider investing in shares of Nirma which has a potential of showing at least 30 percent gain within one year.

Disclaimer: This report has been prepared solely for information purposes and the investment is the sole decision of the investor. Such information is impersonal and is not an inducement to invest. The information contained herein has been obtained from sources believed to be reliable and author , accepts no responsibility for the accuracy of its contents. Investors are advised to satisfy themselves fully before making any investments or committing themselves and should consult their own financial consultants whether and how to use such information in making any investment decision. The author accepts no liability arising out of use of the above information/ article.

Kindly note :

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.


(AJAY SINGH RATHORE)
KASHIWALA

BHARAT SEATS LTD.

BHARAT SEATS : BSE CODE 523229

M/S Bharat Seats Ltd. was floated to manufacture of automobile seats. The promoters include Relan Family, Maruti Suzuki India Ltd., Suzuki Motor Corporation and the total promoters holding is over 74 percent. The floating public stock is less than 20 percent.

The company has a share capital of about 6.28 crores made up of 3.14 crore shares of Rs.2.00 each. The company issued bonus shares of 1:1 and split the shares into face value of Rs.2.00 each during 2007-08. Even after the bonus and split, the share commands a good book value.
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The company is showing decent sales numbers and can be regarded as a small auto ancillary company and with good parentage.

The share price (ex-split etc.) saw a high of around 30 during November – December 2007 but due to market melt down after January 2008, the share reached a bottom of around Rs.12.00 or so. Now interest has again surfaced in this share.

Considering the strong parentage and decent sales/profits, we expect the share to show some positive movement and show an increase of about 40% in one year. Conservative investors can consider investing in this share.

Disclaimer: This report has been prepared solely for information purposes and the investment is the sole decision of the investor. Such information is impersonal and is not an inducement to invest. The information contained herein has been obtained from sources believed to be reliable and author accepts no responsibility for the accuracy of its contents. Investors are advised to satisfy themselves fully before making any investments or committing themselves and should consult their own financial consultants whether and how to use such information in making any investment decision. The author accepts no liability arising out of use of the above information/ article.

Kindly note :

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.

(AJAY SINGH RATHORE)

KASHIWALA

VALUES OF LONG TERM INVESTING

I have been getting innumerable queries from anxious investors stating that they have entered such and such stock at so and so price and the prices have now declined. What to do now? Most of their queries pertain to strong companies like Noida Toll, SPEL, JP Associates, Adlab Films, West Coast Paper Mills, Parsvnath, Omaxe Ltd. etc. etc. The list is endless.
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I may state as under :

i) Most of the investors have apparently joined the bandwagon when the market started rising from Sept. 2003 onwards. It has been practically a bull market.

ii) They have not seen an extended bear market. The present fall in the market has eroded the value of most investments by over 60% (Omaxe from Rs.600 to Rs.200, JP from 500 to 200, Noida from 80 to 30 etc.). I personally do not categorise the present position as an extended Bear Market, per-se. There are various international cues operating over which the investors are getting panicky.

iii) I have seen astronomical bull markets followed by extended bear markets in 1991-1992-93-94, 1996-97, Oct. 2001 to Sept. 2003 (Post 9/11 attack on U.S.). I would quote a few examples.

iv) During Harshad Mehta boom almost every share was rising astronomically without any valuation or reasoning. During 1999-2000 I.T. shares commanded very huge valuations, again without any reasoning. During this period, I know people who had purchased Pentamedia Graphics (then called Pentafour Software) at 2500.00 levels and they held on for whatever reasons known to them. In the bear market that followed, the stock went into hibernation, never to get up.

However, fundamentally strong companies may show extremely low valuations but over a longer time frame they tend to pick up. I am quoting below a few examples :

In the extended bear market post Oct. 2001 to say Aug. 2003 at some point of time the following stocks were quoting almost at their lows :

Tata Steel : Around 70.00, Bharti Airtel : around 33, SBI around 150, Reliance around 240-250 to name a few. But die hard fans of long term investing who believe in fundamental prospects held on. Look at the results.

v) In my fundamental analysis, lesson No. 4, I had stated that one should learn to accept bear markets or accept to book losses. I know many good portfolio managers who do this and even fund houses churn portfolios, at times booking losses. However, if you holding on to a fundamentally strong stock which has fallen down like anything, we can consider averaging out at the bottom. Noida Toll is a good case under consideration. Many persons known to me have started picking up Noida Toll at 35-38 levels for holding of at least one year.

Therefore, Friends, have patience. The temporary blip may pass on and we can look for better times ahead.

Always have a positive view on the market.

Kashiwala

p.s. : I shall be shortly posting Lesson No. 5 of Fundamental Analysis, how and why the stock prices move and what are the symptoms to watch out for.

STATE BANK OF INDIA

STATE BANK OF INDIA

State Bank of India, as a company, does not need any introduction to all of you but I may say a few words. Initially 3 presidency Banks were set up by Britishers, Bank of Bengal, Bank of Bombay and Bank of Madras. At certain point of time, these were merged to be known as Imperial Bank of India.

After independence, it was felt that there should be a strong Government sponsored and Government partnered Bank to take care of various Banking needs of Government as well as public. Accordingly State Bank of India was set up under SBI Act in 1955 and Imperial Bank got transformed into State Bank of India. Subsequently, 7 Associate Banks which were earlier set up by Princely states were taken over as Subsidiaries of SBI, viz. State Bank of Hyderabad, State Bank of Indore etc.

The Bank has a share capital of 526 crores made up of 52.6 crore equity shares of Rs.10.00 each. Of the above, Central Government holds 59.73% shares, Institutions like LIC, FIIs etc. hold 24.22 % shares and Custodians of depository receipts hold 7.42 % shares. Public share holding is only 8.63%. The Bank has offered shares on rights basis @ 1 share for every 5 shares held at 1590.00. The rights issue is expected to be subscribed fully.
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INTRINSIC WORTH OF SBI SHARES

i) The Bank has got substantial real estate properties all over India and in the balance sheet of SBI, several buildings are shown to be having a value of Rs.1.00 or Rs.100.00 (For eg. Bombay Main branch). These buildings command considerable value and the Bank is in the process of revaluing the assets to shore up tier-II capital.

ii) The Bank has got equity capital of 526 crores and free reserves of Rs.41691 Crores (Sourse BSE Site), thus commanding a huge book value.

iii) The Bank has got several associates and subsidiaries which are doing quite well.

iv) All the Associate Banks are not listed. Of the listed Associate Banks, as and when their share value rises, the intrinsic value of SBI’s share also rises.

v) There may be a possibility that SBI may list the shares of its Asset Management Company and SBI Life (both subsidiaries). It this happens, this will unlock share value of SBI. Some regulatory processes are involved in this direction.


FUTURE PROGRAMME OF THE BANK

i) The Bank was in news recently when it opened its 10000th branch in Puduvayal under the constituency of the Hon’ble Finance Minister.

ii) Most of the branches of the Bank have been brought under Core Banking solution and this has resulted in excellent customer service. Besides, the Bank has changed the premises of its various branches and created excellent working atmosphere/ambience, with ultimate customer satisfaction in mind.

iii) Shri O.P. Bhatt, Chairman of SBI was chosen as the best entrepreneur recently amidst several other contestants. Shri Bhatt is a strong visionary and the industry circles believe that he will take SBI to new highs.

iv) The Bank is offering EZ trade (online trading) with Motilal Oswal and this business is picking up fast. In due course, it will give its competitors a tough time.

The share price saw a high of 2500 very recently and has come down since then. Now it is around Rs.1700.00.

Conservative and safe investors can safely purchase the shares of SBI at the current rates and hold it for a long long time. They will certainly see their capital appreciation in due course of time.

Disclaimer: This report has been prepared solely for information purposes and the investment is the sole decision of the investor. Such information is impersonal and is not an inducement to invest. The information contained herein has been obtained from sources believed to be reliable and author , accepts no responsibility for the accuracy of its contents. Investors are advised to satisfy themselves fully before making any investments or committing themselves and should consult their own financial consultants whether and how to use such information in making any investment decision. The author accepts no liability arising out of use of the above information/ article.

Kindly note :

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.


(AJAY SINGH RATHORE)
KASHIWALA

FINANCIAL PLANNING : FINANCIAL SECURITY

Dear friends,

I have been getting innumerable number of queries from young investors in the age group of 30-35 requesting an overall advice in financial planning. Most of them have an income level of 35000 to 40000 per month, some of them have even lesser income at 25000 per month.

There are many different financial planners who may advice on different issues but I have designed an overall plan meant for a typical young person in the young age of less than 35 with monthly income level of Rs.25000 to Rs.30000. Other persons may work out their strategy accordingly. In my assumption, the typical person is married with two kids.

1. Financial Security :

Assuming there is a mis-hap (God Forbid), your family should have at least Rs.30 Lakhs coverage/ compensation. For this purpose, I suggest the following :

a. Go for Term Assurance plan, eg. SBI LIFE Shied Policy wherein the premium covers only life risk and the premium amount is not repaid. At a young age with a longer term, the premium will work out to less than Rs.6000.00 per annum for a cover of Rs.10,00,000.00. There may be other such pure risk term assurances which you can enquire. The premium outgo works out to Rs.500.00 per month (but paid annually.)

b. The General Insurance companies offer one Janata Personal Accident Policy with coverage of Rs.1,00,000/- and the premium is Rs.264.00 or so and this one time lasts for 5 years.

c. The above General Insurance Companies also offer Personal Accident policies wherein a coverage of Rs.10 Lakhs may cost something less than 3000.00 per annum (please check exact amount). The coverage is only for accidental death. It can be safely assumed, with the medical advancement, death in young age is mostly due to accidents. The monthly outgo may be around 300.00 approx.

d. Go in for a ULIP (LIC Market plus, UTI Ulip, SBI Life Unit Plus/Horizon etc.) with a coverage of Rs.3,00,000.00. Try to get the best possible alternatives and go in for the Equity or Growth or Maximiser options. Different companies have different names.

e. Invest about Rs.5,000.00 per month in a well diversified equity fund under Systematic Investment Plan, Dividend Reinvestment option.

f. Purchase some shares which have a long life (multibaggers). There may be several of such stocks, but stocks with adequate and sustained cash flows like Noida Toll are the best.

g. If you are not covered under PF scheme, invest 10 percent of your monthly income in any mutual fund scheme – Tax Saving scheme in SIP.

h. If you are not covered by any medical benefits in your employment, take a Health Insurance (Mediclaim) from any of the Government Insurance Companies viz. General Insurance etc. with TPA (cashless claims)

If you follow the principles, your coverage is initially Rs.23 Lakhs as above and with the increasing savings over a period of time, your financial security will cross the targeted amount of Rs.30 Lakhs shortly.

Friends, your family is of utmost importance to you. ALWAYS INVEST FOR A LONG TERM.

KASHIWALA

PIRACY : SECRETS UNEARTHED

All readers of my Blogsite Kashiwala(dot)blogspot(dot)com:

I had earlier mentioned in this site, as also e-mailed to my esteemed friends that my posts are being reproduced in the site Blog.watchshare.in.

I have further found out that the person operating the above site has made a link to my site. If you open the watchshare site, on the extreme right hand side you will find JK Lakshmi Cement and if you click on it, my site will open.

I have no hard feelings against the person running the site Blog.watchshare.in. Since I am doing a free service, if he is in any way helping investors, I feel grateful to him.
KASHIWALA

JK LAKSHMY CEMENT

JK LAKSHMI CEMENT : BSE CODE 500380

JK Lakshmi Cement belongs to the Singhania (JK) Group wherein the promoter group holds about 41 percent shares. About 26 percent shares are held by financial institutions like LIC, IL&FS, FIIs etc. and remaining shares are held with the public.

The company has a share capital of 57 crores made up of 5.7 Crore equity shares of Rs.10.00 each and as at the end of March 2007, the company had a reserves of 330 crores, commanding a good book value.

If you are reading this in the site kashiwala dot blogspot dot com, then it is original post. If you are reading it in blog dot watchshare.in/finance-stocks, then it is pirated from Kashiwala's site.

The company ended up FY 2006-07 with a net profit of Rs.178 crores commanding an eps of about 31. For first three quarters of FY 2007-08 the company has shown net profit and eps as under :

Net Profit Eps (quarterly)
JUNE 07 68.46 11.99
SEPT. 07 73.50 12.87
DEC. 07 61.10 10.70

Even if the company maintains the same profitability in March 2008 (around 60), the company may end up the year with a total net profit of about 263 crores, commanding an eps of about 46 which is considered very good. Considering the present price, the share is available at a very very reasonable pe of about 3 and is an excellent buy. Sooner or later, the share will get a re-rating and will see a PE of at least 7-8 thereby double the present price.

I am reproducing a message given by the company which is very relevant and positive.

JK Lakshmi Cement Ltd has informed BSE that the Company has come out of the Corporate Debt Restructuring (CDR) purview. The Company has achieved excellent performance consistently for more than two years.In this regard the Company has issued the following Press Release:The Company has replaced high cost debts by cheaper funds to the extant of Rs 325 crores, which will reduce interest costs. It has come out of the Corporate Debt Restructuring (CDR) purview.The Company's 36 MW Captive Power Plant which was commissioned recently, will contribute significantly to reduce power costs. Company's project for further enhancing the capacity from 3.4 million MT to 5 million MT per annum is progressing as per schedule and is expected to be commissioned by end of 1st half of year 2008-09. The Company is aggressively expanding its manufacturing facility of Ready Mix Concrete (RMC), a value added product."

The share, in our opinion, is an excellent buy at the current prices with minimum downside risk. One can buy in small lots and if there is a dip of over 15-20 percent, more shares can be acquired.

Please Note : This share has been recommended by various other analysts also but our studies are quite independent.

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.

(AJAY SINGH RATHORE)

KASHIWALA

PIRACY

To all the respected viewers of this Blog Site,

I have come to know that one person is copying my entire post and posting the same in his Blog Site. My posts : Fundamental Analysis - Lesson 4, Zee News, Tourism Finance etc.

It does not harm me much because my services are quite free. In fact the PIRATE is doing a good service by popularising my studies. I have also come to know that such thing is happening with Mr. Joetom who is a leading Boarder under Moneycontrol, whose posts are being copied and posted elsewhere.

The funny part of it is : the PIRATE / COPIER has even used my nickname Kashiwala in the post. May God forgive him and give him good brains to do some good deeds instead of finding some short cuts.

KASHIWALA

PARSVNATH DEVELOPERS LTD.

PARSVNATH DEVELOPERS LTD. BSE CODE 532780

Parsvnath Developers is a Real Estate Company having major presence in many cities.

Promoter group share holding is about 80 percent. Institutions and Bodies Corporate hold about 12 percent shares. Therefore, floating stock is very low.

The company has several integrated township and commercial complexes & 28 residential complexes in various cities in India.

The company’s share capital is 184 Crores and Net profit clocked for December Quarter 2007 was Rs.112 Crores giving an eps of Rs.6.09. Considering the trend for the past three quarters, the company is expected to clock in a Net profit of well over 440 Crores for FY 2007-08, giving an eps of about 22-24.

The Company has huge land bank, is practically debt free and the land value is its hidden wealth. The company’s recent projects are as under :

PARSVNATH ELGANZA
Parsvnath Developers Ltd has announced that the Company has launched the first of its kind mega mall cum multiplex, Parsvnath Eleganza in Dehradun. The Company will invest Rs 40 crore in developing the complex.Parsvnath Eleganza is the first such mall-cum-multiplex being developed in the city. Located at prime location of Rajpur Road, the mall comes with an added advantage of a 4-screen multiplex within the complex, which gives another reason to visit the complex. Having a saleable area of 1.5 lacs square feet, the mall is spread over four floors, will be fully air-conditioned and will have 100% power back-up at all times.Glass fronted lifts, aesthetic architecture and modern design will provide for complete comfort and a pleasurable shopping experience for its customers. The mall is designed for optimum space utilization for its shop owners. Latest fire alarm, fire fighting systems and round-the-clock security systems will ensure complete safety. The mall also provides a reserved area to accommodate parking needs of visitors.The mall will boast of premium national and international brands, departmental stores, retail chains and Fashion stores and will be a one stop for branded lifestyle products. Food courts in the mall will provide a comfortable venue for the window shoppers and also those who are looking at outlets for meetings and get to-gathers.The entire complex for which the construction has commenced is expected to be completed and operational with in one years.

HOTEL VENTURE
Parsvnath Developers Ltd on February 20, 2008 announced a joint venture between its subsidiary, Parsvnath Hotels Ltd (PHL) and Royal Orchid Hotels Ltd (ROHL), one of India's fastest growing hospitality Companies, to develop and manage hotels across country.PHL and ROHL have signed an agreement to form a joint venture where PHL will hold the majority stake of 70% with ROHL 30%. Royal Orchid Hotels will manage the hotels and the Joint Venture Company will own and develop these projects. The Joint Venture Company will operate under the name of "Parsvnath Royal Orchid Hotels".Under the agreement, Parsvnath Royal Orchid Hotels proposes to develop 10 hotel projects in next five years across India, categorized into four 5-star, four 4-star and two 3-star hotels, resorts and serviced apartments. The construction on these hotels would involve an investment of over Rs 500 crores spread over the period of three to five years.There would be at least 1000 rooms would be built under this Joint Venture.

The company had raised Rs.997 crores through IPO, FV of Rs.10.00 at Rs.300 per share. The share price saw a high of around 600 recently and due to market melt down, it has come down to Rs.270.00.

The share, in our opinion, is an excellent buy at the current prices with minimum downside risk. One can buy in small lots and if there is a dip of over 15-20 percent, more shares can be acquired.

Please Note : This share has been recommended by various other analysts also but our studies are quite independent.

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.


(AJAY SINGH RATHORE)
KASHIWALA

RELIANCE POWER : BONUS ISSUE

Dear friends,I have been getting numerous e-mails/queries regarding R-Power, bonus issue etc.

I may say as under :

i) If the company is proposing to issue bonus shares to all existing share holders, then the promoters will also stand to gain. This is not so.

ii) It is widely heard from electronic and print media that so called bonus shares would be issued only to non promoter share holders so that their confidence in ADAG may be maintained.

iii) If (ii) is the case, the company will have to amend the articles of association, for which after the board meeting on 24.2.08, the company would have to call for an EGM with adequate notice. This will entail a time lag of at least 40 days from now on.

iv) Whether the price of 450 was justified or not is another question. Suppose the share had listed at around 800 or so (as was expected), the same people who are now abusing ADAG would have sung praises about him. If you remember, Edelweiss Capital raised money (Rs.10.00 FV shares at about Rs.800). The shares got listed at around 1450 levels and went upto 1680 levels.

v) Even if the share price was ruling at around 550 or 600, the question of so-called bonus would not have arisen. If the so-called bonus question is not raked up by the promoters, the entire investing community would lose faith, not only in this company/ADAG group, but also in many IPOs in general.

vi) At the time of opening of subscription, grey market listing price was expected to be at about 900 and there were reportedly some dealing in places at Ahmedabad, Jaipur etc. around this price. This is unconfirmed. But it is a fact that even now there are several off market operations taking place in many cases.

vii) It is also heard that many people mortgaged their house property, took loans, sold off their gold ornaments etc. to subscribe to this IPO. If greed was not the overriding factor, what was the factor?Therefore friends: there is no point in abusing or blaming any one for any fiasco. We have to blame ourselves. I may disclose that I did not subscribe to this IPO. This is my opinion. My close friends and relatives who sought my advice also refrained from investing. However, quite a few of them made some money after the listing by buying and selling in the secondary market.

Just because one IPO from a leading house bombed on listing, it does not mean that other IPOs are bad. Investors may use their judgement.

KASHIWALA

LOK HOUSING

LOK HOUSING is a company engaged in construction of Apartments, buildings etc. and is making substantial growth. The company is doing fairly well in their performance and profitability front.

With the interest rates softening, demand in realty sector is expected to pick up. The company has executed various ambitious projects in Mumbai, Thane etc. and further good projects are in the offing.

I request investors to recall a portion from my Lesson No. 3.

QUOTE

In many cases, there may be an impending news of promoters or persons associatewith the promoters or directors who may acquire shares of the company and increase their holdings. The company may be in the process of allotting shares or convertible warrants to above persons. In such cases, it is very very safe and advisable to purchase shares of such companies because, such shares will get re-rated very soon.

UNQUOTE

The company has become newsworthy and is attracting attention to the following facts :

a) The company had issued equity shares to Bennet & Coleman at Rs196.80 per share (Rs.10.00 + 186.80 premium). The share capital of the company has increased in Dec. Qtr. 2007 as compared to Sept. Qtr. 2007. There must have been some other issue also.

b) The company has raised the FII limit to 49%.

c) The company is going to issue convertibe warrants/shares to promoter group companies at about Rs.350.00 (Rs. 10.00 + premium).

Therefore, in my opinion the share is a good buy at the current levels near Rs.210.00or so.

I am just providing inputs to investors. Investing or not is your decision.

Kindly note :

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.

b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.

c) We expect investors to have a time horizon of at least one year and more.

d) We do not advise for short term investing, which is risky.

e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.

(AJAY SINGH RATHORE)
KASHIWALA

TOURISM FINANCE CORPORATION

TOURISM FINANCE CORPORATION OF INDIA LTD.

TFCI is owned by various institutions like SBI, LIC, IFCI etc. The company is showing decent profitability. The company is engaged in financing various tourism projects.

The company proposes to raise the FII investment limit to 49 percent of its capital. Besides, TFCI proposes to raise money by issuing shores to Qualified Institutional Buyers.

The company also proposes to allot to the promoters of the Company under the preferential issue equity shares of Rs.10.00 at 48.00 (including premium 38.00). Considering the above proposals, the share is very attractive at the present levels of Rs.35-37.

Conservative investors with a holding period of more than one year can safely invest in this company. The stock saw a high of 55.50 recently.

Investors may kindly recall my lesson No. 3.

QUOTE

In many cases, there may be an impending news of promoters or persons associated with the promoters or directors who may acquire shares of the company and increase their holdings. The company may be in the process of allotting shares or convertible warrants to above persons. In such cases, it is very very safe and advisable to purchase shares of such companies because, such shares will get re-rated very soon.

UNQUOTE

Kindly note:

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.



(AJAY SINGH RATHORE)
KASHIWALA

FUNDAMENTAL ANALYSIS : LESSON 4

Dear Investors,

Many new members have started reading this blog. I have already sent lesson No. 1, 2 & 3. I am, however, giving below summary of lessons 1, 2 & 3, followed by lesson 4.

SUMMARY OF LESSON NO. 1

i) The company should have regular income/profits from their core competence.

ii) It is preferable to select companies which have near monopolies rather than companies facing stiff competition.

iii) Look at the Promoters group or Management. Companies belonging to promoters like TATAs etc. are safe. Nowadays companies belonging to Reliance Group are hot cakes.

iv) The company’s products should be of regular use/disposable so that the demand always remains.

v) In case of export oriented companies various internal and external factors which may affect the company should be considered.

vi) The raw materials for the company should be available easily without any hindrances, so that the production cycle is not hampered.

vii) The demand for the product should be ever lasting.

SUMMARY OF LESSON NO. 2

1. If a company is capital intensive, prefer them for longer term investing (at least 3-4 years).

2. If the company has come out of red into black and sustains the profitability, you have to look at the following few ratios : equations etc.

Earning per share (eps) : It is net profit divided by number of equity shares of a company.

P.E. Ratio : It is share price in the market divided by eps

Sales to Net profit ratio : It is the percentage of net profit in relation to Sales. If it is very less, it implies that the company is incurring huge expenses. On a safe side, if this ratio is above 25% on a sustained basis, we can safely enter.

3. Book Value. This is made up of Share capital plus reserves divided by number of shares. Higher the book value, stronger is the fundamental health of a company.

4. Price to book value ratio. If the share price is less than book value, and the company is consistently making profits/paying dividends, one can safely accumulate the scrip.

5. Market capitalization : It is price of the shares traded multiplied by the outstanding shares (other than promoters’ stake).


SUMMARY OF LESSON NO. 3

i) Debt Equity Ratio. If the ratio is less than one, it means that the company’s borrowings are less than the Equity.

ii) Analysis of share holding pattern :

a) Companies with reasonably high promoters’ holding are safe bets.

b) Some companies may be part of a group of companies where cross holdings will be seen. Such companies are reasonably safe for investment.

c) In companies where Government or some Statutory Body is also a share holder, we can safely consider investing in the shares of such companies.

iii) For comparing the performance of a company, it is always advisable to compare the Year on Year growth rather than Quarter on Quarter growth.

iv) In many cases, there may be an impending news of promoters or persons associated with the promoters who may acquire shares of the company and increase their holdings. This is good news and the company’s shares can be acquired.

vi) If a holding company floats a subsidiary company and the latter’s shares are issued at a premium in the market and fully subscribed, the holding company’s shares will also get an automatic re-rating.

FUNDAMENTAL ANALYSIS AND GUIDELINES FOR INVESTING
LESSON NO. 4

Here are some basic rules you should adhere to in order become a successful investor in this market:

NEVER INVEST MORE THAN YOU CAN AFFORD TO LOSE. Since equities as a whole are somewhat risky and small and micro cap stocks are highly risky, only a small percentage of your assets should be committed to such stocks. Most of your investments should be in fundamentally strong companies. Some small cap/micro cap (penny stocks) had a dream run recently but you may be caught unawares when they start hitting lower circuits, because in such a situation there will be no buyers.

BE PREPARED TO INVEST WITH AT LEAST A ONE TO TWO-YEAR TIME HORIZON.

The heading speaks for itself. There are so many examples. Tata Tele was hovering around 17-19 in October 2006. Just one year before (2005), people had invested at 25-28 and were getting impatient. Had they held it for one more year (2007) they could have seen a level of 55. Therefore, the funda is, the market takes a full cycle in 1 year and patience is the name of the game. There are so many other examples.

BE PREPARED TO ACCEPT LOSSES.

Many investors are happy in booking profits but they should learn to accept losses also. If the company is profit making and the operations are good, it will take a full cycle. But if there is any wrong signals, be prepared to book losses in such shares.

BOOKING PARTIAL PROFITS IS GOOD.

If you buy 1000 shares of a company at 25.00 and the value rises to 50.00, there is nothing wrong in disposing of 500 shares. This is partial booking of profits. In this way, after selling part of the shares, if the share price falls down, you may pick them up again from the market, thus making a short term trading profit. However, in a performing company, you should never sell all the shares.

LEARN TO TOLERATE BEAR MARKETS.

If there is a bull market, bear market will also be there. We should learn to accept this fact. Therefore, if you have about Rs.1,00,000.00 to invest, investment should be done in small lots only. If the market falls, you can add on dips that too in fundamentally strong and profit making companies.

SOME MORE BASIC RULES :

STRONG CASH FLOW STATEMENTS

Invest in companies with consistent strong cash flows. Companies with strong cash flows, after it has paid for its expenses and reinvested into the company, can determine the financial health of a company. Consistent, positive cash flow statements can mean real cash for its owners / shareholders.

LOOK FOR LOW DEBT AND CONSEQUENT LOW DEBT EQUITY RATIO

Companies that have low debt will have the capability of investing more cash into the company for either growth, research and development, expansion, etc.

HIGH RETURN ON EQUITY

The most common measure of a company's profitability is the return on equity or ROE. This is net income divided by shareholder’s equity. This is almost like eps. Higher the ROE, better the performance. ROE reveals how much a company generates profits with the money that shareholders have invested in it.

EVEN AFTER CONSIDERING ALL THE ABOVE, IT IS ADVISABLE TO DO YOUR STUDIES PROPERLY AND TAKE INVESTMENT DECISIONS. DO NOT ACT ON MERE TIPS OR ASTRONOMICAL VALUATIONS GIVEN BY RUMOURS ETC.

KASHIWALA

BHAGYANAGAR INDIA

Bhagyanagar India (BSE: 512296 NSE: BHAGYNAGAR ISIN: INE458B01028)

BHAGYANAGAR INDIA LIMITED, a part of Surana Group was incorporated in 1985 with the main object of carrying on business in Ferrous and Non-ferrous metals. It commenced its business by acquiring a Copper Rod Unit (India Extrusion) in 1985. In 1990 it took over Gangappa Cables Limited for expansion of business activities. In 1994-95 it started manufacturing Jelly Filled Telephone Cable. In 1998-99, it acquired Harinam Wires engaged in manufacturing of Copper Allied Products.

The company has multifarious activities in various divisions.

The company has a share capital of 14.90 Crores made up of 7.45 crore equity shares of Rs.2.00 each. Promoter group hold about 55 percent shares and institutions, FIIs & Bodies corporate together hold about 20 percent shares. Remaining about 25 percent are the floating stock. The company has free reserves of 171 Crores, thus commanding a very good book value.

The company split the face value of its stock from Rs.10.00 to Rs.2.00 in Feb. 2005 and issued bonus shares in 2006. The company is showing decent profitability and may end up the FY 2007-08 with an eps of around 5.

The company’s shares are attracting lot of attention of late, for the following reasons :

Bhagyanagar India Ltd is planning to go ahead with the preliminary activities regarding setting up of Solar PhotoVoltaic Cell Project in Joint Venture with M/s. Surana Telecom and Power Ltd.

Bhagyanagar India Ltd held Extra Ordinary General Meeting (EGM) of the Company held on January 31, 2008, wherein, inter alia, the following decisions have been taken : For the issue of Equity Share warrants on preferential basis to M/s. Consolidated Securities Ltd, M/s. C S K Realtors Ltd, M/s. Trimurthi Drugs & Pharmaceuticals Ltd and Mr. Sunil D Parakh not exceeding Rs 55,00,000 warrants of a face value of Rs 2/- each at a price of Rs 90/- per warrant, each warrant convertible into one equity share of the Company at the option of Warrant holder for cash.

The Company has formed a SPV called Bhagyanagar Entertainment Infra & Development Co Pvt Ltd along with IL&FS Infrastructure Development Corpn for undertaking, various infrastructure and entertainment projects. The Special Purpose Vehicle will conceptualise various infrastructure projects such as Theme Parks, Special Economic Zone, Industrial Parks etc. on a large scale basis.

The company is diversifying into infrastructure related projects and has successfully raised money by issuing convertible warrants of Rs.2.00 at a price of 90.00 per share. M/s IL&FS infrastructure, needs no introduction to investors.

The share price touched a high of about 79 and low of 33 in the last 12 months. It is now being traded at around 51.00. Delivery percentage is quite high for the last few trading sessions and was over 95 on 01.02.08.

This share can be considered by long term investors with a clear holding of 2 years. We see a target of Rs.100.00 in two years. (View this in the back drop of various entities purchasing convertible warrants of Rs.2.00 at Rs.90.00).

The share has also been recommended by various analysts with short term targets etc. but I stick to my above long term target.

Kindly note :

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.

b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.

c) We expect investors to have a time horizon of at least one year and more.

d) We do not advise for short term investing, which is risky.

e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.


(AJAY SINGH RATHORE)
KASHIWALA

ZEE NEWS LTD. BSE SCRIP CODE 532794

ZEE NEWS : BSE SCRIP CODE 532794

Zee News Limited (ZNL) was de-merged from Zee Telefilms Limited on March 31st 2006 in pursuance of scheme of arrangement approved by the Hon. Bombay High Court on 17th Nov.2006.

People think Zee News is owner of one channel viz. Zee News. They are not aware that Zee News Ltd. has under its belt the following channels : Zee News, Zee Business, Zee Marathi, Zee Bangla, Zee Punjabi, Zee Gujarati, Zee Telugu, Zee Kannada and Zee 24 Taas, the first 24-hour Marathi news channel. 24 Ghanta, a 24 hour Bangla news channel is operated by a subsidiary company known as Zee Akaash News Private Limited.

The company’s share capital is 23.97 Crores made up of 23.97 crore equity shares of Rs. 1.00 each. Promoters group hold about 54 % shares. Institutions and Bodies corporate hold 35 % shares and remaining only 10 percent is with the public. Various Mutual Funds including Reliance Mutual Fund hold substantial shares of Zee News Ltd.

For the full year 2006-07 the company made a profit of about 10 crores and the profit for Half year ended September 2008 has already crossed 11 crores. For qtr. Ending Sep. 07, all the channels had declared profit except Zee Kannada which was in loss. The channel was expected break even shortly.

On a conservative estimate the full year 2007-08 profit may be around 22 crores and going forward the company is expected to utilize all the facilities at its command to report YOY growth of at least 60 percent. Zee channels are having very good penetration levels at all strata of the Society.

Considering the potentialities of Media Sector, we are very bullish on this stock. The stock touched a high of 92 very recently and has fallen drastically. At the present level the stock can be very safely accumulated for a longer term horizon. We expect a price level of 90 in one year and 130 in two years.

People with a longer term horizon can safely consider investing in Zee News Shares.

Kindly note:

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.


(AJAY SINGH RATHORE)
KASHIWALA

SUDDEN PANIC : CONTINUED

Respected Investors,

The panic in the market is continuing. The matter became so severe that the Hon'ble Finance Minister of India had to come out with a positive message. There were also people shouting abuses at the Finance Minister in Bombay.

Since all the persons associated with me are very careful investors, the following important points should be taken into consideration :

1. Recourse to stock markets/equities should be taken as an investment vehicle and not as a speculative instrument.

2. Investment in shares which are open to F&O should be avoided at all costs and if at all investment has to be done, it should be done on a case to case basis. Shares which are in F&O do not have circuit limits. (Tata Tele has come down from 60 levels to 40 levels. Some shares have lost 50 percent in two days).

3. Hold a longer term horizon. The cycle will take a full round and come up.

4. Do not believe in rumours or baseless tips.

5. The following positive points have emerged :

(a) FM of India has come out with a positive statement.

(b) Americal President George Bush has come out with a positive statement.

(c) U.S. Fed has cut the interest rate by 0.75 percentage point which should go well.

(d) The budget is expected to be good.

Therefore, investors : Have patience. Do not run after the shares which have already run away.

Kashiwala

SUDDEN PANIC IN THE MARKET

Investors are seeing sudden panic in the market and the Sensex has come down from a level of over 21000 to less than 19000. So many analysts are giving a strong support at such and such levels and if the market falls below that they come out with a strong support at downward levels.

Various reasons are being attributed to this fall :

1. Supposedly weak international/global cues.

2. Pressing sales by FIIs.

3. Some analysts believe that people are selling off their shares to invest in Reliance Power IPO.

Each of the above may have contributed to the fall. I never comment on anyone's assessment of a particular event. But I have observed one thing, some intelligent investors/operators have amassed wealth by going short on various big shares. Reliance Energy has fallen from a high of 2600 to about 2050 levels and the list is endless. The big operators must have sold at high levels and entered at low levels. In many big shares, this phenomenon is reflected by a lower delivery percentage (26% to 30%) which coupled with huge volumes indicates intra day trading.

But many small investors who have entered in some shares at a fairly high level are a bit worried. We cannot deal with any individual on a case to case basis, but I would like to give a broader future picture :

i) The belief that FIIs can totally dictate the market is not entirely true. Indian Mutual Funds, ULIPs and institutional investment is almost standing equally tall as FIIs and the Indian entities should be able to withstand the onslaught.

ii) Provident Funds have been allowed to invest some part in the equity markets.

iii) The Government's new pension policy will come about any time (it is on the anvil) and this may bring in more funds.

iv) I understand even Post Offices have been allowed to invest some portion in equity markets.

All the above factors put together will keep the equity market up and running. Small investors need not panic at the present fall. I expect the market to stabilise by last week of January or first week of February.

I again appeal to small investors to follow the following guidelines :

i) Invest in fundamentally strong companies.

ii) Do not get carried away by some one else's short term success.

iii)Have a clear time horizon of at least 1-2 years for your investments to fructify.

iv) Last, but not the least, it is your money that you are investing. If you make profit, you and your family will enjoy. If you make losses, you will suffer.

v) Long term investing will always be positive for you.

MISCELLANEOUS QUERIES

TO ALL INVESTORS :

I have been posting my fundamental analysis of various companies and advising people time and again to have a longer term horizon of at least 1 year or even more. However, I am getting some queries as under :

i) Persons have bought Pearl Polymers based on my recos at 37-38. Now what to do, the price has fallen.

Ans i) Pearl Polymers was recommended after fundamental study at 25 levels with a target of 33 by April 2008 and 45 by April 2009. We still stick to the above targets. Since our recos, the share ran up sharply on the basis of some rumour that some large industrial house is picking up a controlling stake in Pearl's group Company. I do not believe in rumours. Since then Pearl has come to the levels which we had recommended and now it has started inching up. Some persons known to me, who have entered at a high level have averaged, but with a clear understanding that they will hold it for at least one year.

ii) People have entered Noida Toll at 78-80 levels, now what to do.

Ans ii) I request every one to have a waiting period of 1 year in case of fundamentally strong companies. For very short term profit or fast gains, Kashiwala may not be right person to advise you. There are so many paid sites who advise on shares for short gains. I never advise for short term investing.

FUNDAMENTAL ANALYSIS : LESSON 3

FUNDAMENTAL ANALYSIS

LESSON NO. 3


I have been getting good number of e-mails from people who are expecting further lessons in Fundamental Analysis of companies. I am therefore, sending the lesson No. 3 as under :

i) One important ratio is the Debt Equity Ratio. If the ratio is less than one, it means that the company’s borrowings are less than the Equity and if it is more than 1, it means that the borrowings are more than the Equity. Here also there is no proper yardstick laid down, but any Debt Equity Ratio more than 2 is not very healthy.

ii) Analysis of share holding pattern :

a) If the promoters are holding at least 30 percent, and there is substantial institutional holdings (like Banks, Mutual Funds etc.) and also FII holdings (subject to Government regulations), the company is safe bet. In some closely held companies, the promoters holding may be as high as 80 percent. Companies with high promoters’ holding are safe bets.

b) Some companies may be part of a group of companies where cross holdings will be seen. For eg. TVS Group companies, TATA Group companies. In such companies, apart from the income from operations, there will an “Other Income Component” (mostly dividend on shares of group companies held by them). Such companies are reasonably safe for investment.

c) In companies where Government or some Statutory Body is also a share holder, we can safely consider investing in the shares of such companies.

iii) For comparing the performance of a company, it is always advisable to compare the Year on Year growth rather than Quarter on Quarter growth. As mentioned in para (b) above, in group companies when the dividend etc. is declared it may accrue in one particular quarter and in the next quarter the overall income may be less or stagnant for the above reason. Therefore YOY study is a better barometer.

iv) In many cases, there may be an impending news of promoters or persons associated with the promoters or directors who may acquire shares of the company and increase their holdings. The company may be in the process of allotting shares or convertible warrants to above persons. In such cases, it is very very safe and advisable to purchase shares of such companies because, such shares will get re-rated very soon.

For information of all investors, if a promoter or CEO or director or any such person purchases the shares of the company that he is interested in, it is mandatory on his part to disclose such acquisition to the exchange. Similarly, when the company is in the process of allotting such shares, they are expected to inform the exchanges. So, if the investors keep a close watch on such companies, they can find out the details.

For eg. In June/July 2007 M/s DCW were in the process of allotting shares to promoter group and FIIs at Rs.12.00 per share (Rs.2.00 + 10.00 premium). At that time, the share price was moving at around 11.50 to 12.00 and we had sent e-mails to over 40 persons and stated a price target of 20 by March 2008. DCW recently touched a high of about 44.

v) In case of some ancillary companies, if the main companies or the sector is in bad shape, it is better to avoid such ancillary companies. For Eg. Auto ancillary sector was neglected for some time but now analysts are expecting the sector to look up as the auto demand is expected to perk up.

vi) If a holding company floats a subsidiary company and the latter’s shares are issued at a premium in the market and fully subscribed, the holding company’s shares will also get an automatic re-rating. Therefore, it is advisable to enter into the shares of the holding company much before the shares of the subsidiary company are listed. (For eg. Shares of Mahindra & Mahindra got re-rated after successful issue of Tech Mahindra shares). Recently ICICI Bank has decided to list its subsidiaries (Insurance Co. and Mutual Fund). Accordingly shares of ICICI Bank have started inching upwards.

Investors should keep their eyes and ears open for any such news/announcements.

(KASHIWALA)

IDEA CELLULAR LTD.

Dear investors,

IDEA CELLULAR LTD. : BSE SCRIP CODE 532822

M/s Idea Cellular belongs to the Aditya Birla Group and offers GSM based Mobile services in several circles. The company has been granted licence to operate in all circles and will soon have a pan India presence.
The company is slowly and steadily increasing its subscriber base and the promoters do not need any introduction. Most investors who have an idea about wireless telephony business, will appreciate that in the initial years of establishment, the costs are very heavy. But now the cash registers of Idea Cellular have started ringing.

The business and profits come not only from voice calls but also various other sources. Of late SMS is generating lot of income for Cell Companies. Idea Cellular is sponsoring one programme IDEA STAR SINGER CONTEST in Asianet TV (Malayalam) which commands a huge TRP rating wherein TV viewers send SMS to select the winner. Very people know that SMS costs the company hardly anything but the profit is almost 100 percent.

The following very strong points speak in favour of Idea :

i) The company alongwith Bharti and Vodafone has formed a separate Company called Indus Towers, which will handle the tower related business. This is more or less like demerger.

ii) With introduction of 3G, the customers of Cell companies stand to benefit a lot from Internet based services etc. Like all companies, IDEA will also have a share in the pie.

iii) While TTML with a presence in only two circles is commanding a valuation of about 60 per share, IDEA’s share price at 138 or so is very reasonable.

FINANCIALS

The company has an equity capital of Rs.2635 Crores made up of 263 Crore shares of Rs.10.00 each. Promoter group holds 57.69 percent of shares, Mutual Funds, Insurance Companies, Banks and FIIs etc. hold 8.47 percent and Bodies corporate hold about 0.72 percent.

PERFORMANCE

The company’s performance is growing fairly steadily. The company clocked the FY 07 with a net profit of Rs.502 Crores. In the June quarter 2007, the company reported a profit of 193 Crores and in September Qtr. 220 Crores. In a conservative estimate, the company may end up the full year 2008 with a net profit of about 920 Crores which will be 80 percent growth over previous year.

Indian Telecome Sector is the fastest growing in the world. By 2011, the mobile subscriber base is expected to be almost double the present levels. IDEA is fully poised to take advantage of the growth story.

The major plus point seen is the value unlocking in the Tower business, which will add to the bottom line of the company. Further, in new areas the Company can start providing service without too much CAPEX.

Therefore, IDEA is an excellent buy at the current prices for conservative and safe investment. We expect a one year price target of 180 and two year price target of 220.

Accordingly, people with a conservative frame of mind and wanting to invest in sound companies can consider investing in Idea Cellular at the present levels of around 138.

Kindly note:

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.



(AJAY SINGH RATHORE)
KASHIWALA

REPLIES TO QUERIES

Dear investors,

E-mail ids have been added. Some general queries have been asked which I am responding as under :

DECCAN GOLD MINES :

There is nothing fundamentally great about the company. Their operations for September Quarter was practically zero. It is not clear why the share price is rising. There may be some hidden news like possible take over etc. which has not been leaked out.


STEEL COMPANIES :

Steel sector started looking up recently and every second company joined the bandwagon and started rising. Out of the companies mentioned in the Board, Ispat has climbed for certain reasons. There is considerable institutional holding. Promoters are increasing their stake through issue of warrants and the company is apparently diversifying into construction activity which will result in income from “Other Income Head”.

DENA BANK

Banking stocks have shot up recently. There are two main reasons. With the economy looking up, the Banks act as a barometer. NPAs have been coming down with stringent IRAC and provisioning norms. With lower Net Interest Margins, various banks have sought to increase their income through “Other Income” methods like cross selling of mutual funds and insurance products. From April 2009 onwards, Indian Banking Sector is expected to be opened to Foreign Banks. Therefore, some talks of merger among banks are floating around. This is also one of the reasons for rerating in the share prices of Banks.

SANGHI POLYESTER

Sanghi Polyester is a loss making company. The losses are continuing and it is not known when the company will turn around. The trading volumes are very low in the exchange. Therefore, there is nothing fundamentally strong about the company to comment about.

RAJ RAYON

Raj Rayon appears to be a profit making company. The stock has seen a low of about 17 and is apparently looking up. If there is a rerating of Textile stocks, the share may move up. Investors may make enquiries and take a decision.


ADVANTAGES OF INVESTING IN FUNDAMENTALLY STRONG COMPANIES :

If you invest in fundamentally strong companies, the returns may be less and may accrue after some waiting period but it is worth the wait. Sooner or later, the share price will bounce back. It is not advisable to invest merely on hearsay or Hot Tips or Market Whispers. Some stocks rise very sharply and when they start falling, we will be caught unawares and in a continuous lower circuit fall, we may not be able to sell.

However, the decision to invest or not to invest lies with the investors.

FREQUENTLY ASKED QUESTIONS (FAQs)

THERE ARE SOME FREQUENTLY ASKED QUESTIONS :

QUESTION NO. 1

PEOPLE ASK ABOUT SOME SHARES AND THEIR PROSPECTS.

ANSWER :
IT IS ADVISABLE FOR READERS TO LEAVE THEIR E-MAIL I.D. ALONGWITH THEIR QUESTIONS IN THIS SITE. THEY WILL GET INDIVIDUAL REPLIES, BECAUSE SOME READERS BELIEVE IN CONFIDENTIALITY.

QUESTION NO. 2.
PEOPLE STATE THAT THEY ENTERED A SHARE AT A PARTICULAR LEVEL AND IT HAS STARTED FALLING.

ANSWER :
MY ANALYSIS IS ALWAYS FOR A LONGER TIME FRAME WITH A WAITING CAPACITY OF AT LEAST ONE YEAR. ONE GENTLEMAN PURCHASED NANDAN EXIM AT 4.10 AND WHEN THE SHARE PRICE FELL TO 3.75 HE STARTED FRANTICALLY E-MAILING ME. I ADVISED HIM PATIENCE AND THE STOCK SINCE THEN WENT TO A LEVEL OF 8 OR SO.

QUESTION NO. 3
I AM RECEIVIG E-MAILS ASKING ME THE CHARGES ETC.

ANSWER :
I HAVE REPEATED TIME AND AGAIN : THE SERVICE IS TOTALLY FREE AS I BELIEVE IN THE DICTUM "SERVICE TO HUMANITY IS SERVICE TO GOD".

QUESTION NO. 4 :
WHETHER TO INVEST SOLELY BASED ON OUR RECOMMENDATIONS.

ANSWER :
OUR JOB IS TO ANALYSE COMPANIES ON A FUNDAMENTAL BASIS FOR A LONGER TIME HORIZON. INVESTORS SHOUD USE THEIR JUDGEMENT, USE THE BROAD GUIDELINES PROVIDED BY US, MAKE THEIR OWN CROSS CHECKING, VERIFICATION ETC. AND ONLY THEN INVEST. WE DO NOT BELIEVE IN SHORT TERM TRADING WHICH GIVES JITTERS.

QUESTION NO. 5
SOME BRAVE HEARTED INVESTORS WANT US TO SEND RECOMMENDATIONS ON RISKY STOCKS ALSO.

ANSWER
WE ARE SORRY. THERE MAY BE SO MANY SMALL STOCKS OR PENNY STOCKS WHICH MAY GROW FAST. BUT WE ADVISE ON FUNDAMENTALLY STRONG/SOUND COMPANIES ONLY. MOST OF OUR GROUP MEMBER BELONG TO MIDDLE CLASS WHO ARE INVESTING THEIR HARD EARNED MONEY AND WE CANNOT TAKE RISKS.

I HOPE I HAVE MADE MYSELF VERY CLEAR.

WISH YOU ALL A VERY HAPPY NEW YEAR 2008 AND HAPPY INVESTING.

SUNDARAM CLAYTON LTD. (TVS GROUP)

SUNDARAM CLAYTON LTD. (BSE: 520056 NSE: SUNDRMCLAY)

Sundaram-Clayton Limited (SCL) is part of the US $3 billion TVS group of companies, the largest automotive component manufacturing and distributing group in India. SCL began its operations in Chennai in 1962, in collaboration with Clayton Dewandre Holdings Plc, UK, part of the US $ 2 billion WABCO Holdings Inc., SCL has pioneered the manufacture of air-assisted and air brake systems for commercial vehicles in India. With a commitment of total satisfaction to customers, the company has achieved a share of business in the OE (Original Equipment) segment greater than 85% and a market share in the after-market greater than 75%. The two ventures promoted by SCL viz. TVS Motor Company Ltd. for the manufacture of two-wheelers and TVS Electronics Ltd. for the manufacture of computer peripherals, have already made a mark in their respective segments.

SCL established its Die casting division for quality and high precision aluminium castings. The division's two plants, one at Chennai and the other at Hosur are equipped with the latest technology in Pressure Die Casting, Gravity Die Casting and Low Pressure Die Casting. SCL established its state-of-the-art Software design centre in 2005, an export oriented unit for the Design and development of Embedded and Application software for WABCO.

The company has also got substantial export market of its products.

FINANCIALS

The company has a share capital of Rs.18.97 Crores made up of 1.89 Crore equity shares of Rs.10.00 each. Promoter group (TVS group) and Clayton Gropu hold 80% shares, Mutual funds and insurance companies hold 8%, and other bodies corporate hold 1.6% shares. Thus the balance floating share with public is only 10% viz about 18 Lakhs. Therefore, the trading volume is very low. The company has reserves of 270 Crores which is considered extremely good.

For the FY ending 2006-07, the company made a net profit of 92.7 crores, commanding eps of 48.89 Crores. For the two quarters June 07 and Sept. 07 the company clocked net profit of 18 Crores and 23 Crores. On a conservative basis, the company may end up the full year with almost the same amount of net profit or slightly more. The eps may also be around the same figure, say around 50. However, if the profitability in the Dec. 07 and Mar. 08 quarters increase, the company may even end up with higher eps.

Auto and Auto ancillary sector are expected to get a rerating this year. Further, SCL is going to demerge its Brake business into another company which has already been established, namely WABCO-TVS. Some restructuring in the share capital is also in offing. Matter is pending in Chennai High Court and decision is expected soon. As per scheme of things, the share capital of SCL will get restructured and all share holders of SCL will get one share of WABCO-TVS for every one share of SCL held by them. Record date will be announced by the Board shortly. However, it is expected that demerger process will be expected to be completed within 2-3 months.

During the last 12 months, the stock saw a high of Rs.1400.00 and low of Rs. 650. Presently the share is quoting near to Rs.850.00 which is closer to the low level. Therefore, the down side is fairly limited.

Considering the business potential long term investors can safely invest.

Kindly note:

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.

b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.

c) We expect investors to have a time horizon of at least one year and more.

d) We do not advise for short term investing, which is risky.

e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.

REVISITS OF EARLIER POSTS : TWO

Dear All Investors,

POSTS REVISITED


We are getting overwhelming response, because people have found the advantage of investing based on good fundamental analysis, rather than depending in so called Hot Tips and Market Whispers.

With your kind permission, I am revisiting some of our earlier posts :

ALPS INDUSTRIES

Alps Industries was recommended when it was ruling around 51 levels with a target of around 90 by April 2008. The share has already touched 84 on 4.1.2008. Two positive factors have emerged for the company (a) the company has set up an ultra modern manufacturing facility at Uttaranchal (with all the attendant tax benefits) and the full benefits will start accruing from the next quarter. (b) The Company management has declared having set up a subsidiary which will enter into Power business. Both these factors augment well for the company and our targets will be easily met and surpassed..

Therefore, Alps is a clear hold.


AUTOLINE INDUSTRIES

The share was recommended when it was ruling at around 156-160 levels with a target of 240 by April 2008. The target has already been achieved. The following positive news items have surfaced : (a) Autoline has acquired one company overseas which will result in increased top line and bottom line. (b) The company has allotted shares to some entities at a substantial premium. This shows the strength. The target of 240 set for April 2008 has already been touched in December 2007 and at this pace, the share may reach higher levels.

Therefore, Autoline is also a clear hold.

UNICHEM LABS

Unichem is moving on the expected lines. It was recommended at around 190 and we had set an aggressive target of 300 for April 2008. We understand that Reliance capital has picked up substantial shares of the company. Pharma Sector is expected to get rerated this year. The share had already touched an high of 242 during recent times and 300 is not very far off. Unichem is a safe investment and should be available in everybody’s portfolio. The share is now ruling at around 220-230 levels and a couple of circuits may take it to more than 300 levels.

Therefore, Unichem is also a clear hold for the time being.

WEST COAST PAPER

This share was recommended when it was ruling at around 91 levels with a target of 150 in one year (by December 2008). The share has since then inched up to 113 levels (in one month). In one of the leading financial papers, this share has been very positively commented upon and is slated to be a multibagger by 2010. For investors with a long term horizon, it can be accumulated even at this stage.

Therefore, West Coast Paper is a hold.

PEARL POLYMERS LTD.

The stock was recommended at 25 with a target of 33 by April 2008. The stock already touched 37 on 4.1.2008 and is moving in the right direction. People who entered at 25 levels are sitting on almost 50 percent profits within one month. Some people are e-mailing me whether to book profits. As I have stated earlier, booking profits is the sole discretion of the investors. I leave it to you.

Kindly note :

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.


(AJAY SINGH RATHORE)
KASHIWALA