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