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Sunday, February 25, 2007

Budget - Just Another Event


It's that time of the year, again, when the markets become jittery and retail investors are at the receiving end. Yes, it's The Budget time folks and investors are counting days with bated breath as to what will the Finance Minster do this time. With every statement of the FM, markets will swing wildly on the D-Day, so be very very cautious and avoid short term trades for the time being. Believe me its better to avoid losses than to miss opportunities.

For long term investors, there is no need to worry if they have invested in quality stocks with good management. A good management makes all the difference, because they are versatile and can adapt to the new situations if budget brings any major changes. Historically we all know that markets fall after Budget, barring a few instances, but it will always bounce back.

Budgets come and Budgets go, but if you are investing in India story then you are bound to make profit because no government is stupid enough to do something drastically wrong and stall India's progress. I am also relieved that both Prime Minister and Finance Minister are learned persons who, in true sense, started the Indian Juggernaut rolling in Global Arena.

Now, if FM takes same strict measures to curb inflation by hiking CRR or reducing petrol & diesel prices than what’s wrong in it? Rising inflation is a part of booming economy, somehow, because a good economy shows growth across all sectors alongwith growth in GDP and people have more money to spend which increases the purchasing power and demand-supply gap widens in favour of demand. As a result prices of commodities start to move upward which in turn make Wholesale Price Index to rise and ultimately Inflation figures dampen the sentiments of the markets. So, as far as FM is concerned about rising inflation, you need not worry.

Similar is the story of Bank Interest Rates. A large number of companies have already issued FCCB’s and raised loans at a very low interest rate. Even if they need money now, it is available cheap globally compared to India. Yes, it will hurt entrepreneurs, small & mid size companies and those who are seeking home loans. But don’t you think it is necessary to put a check on the prices of Real Estate and maintain the demand-supply ratio of commodities. If money is available cheap, everyone will expand their capacity in order to do more business which will result in oversupply and we will drift towards recession. Actually this is a Business Cycle of every economy, which cannot be avoided, but we can try to postpone recession as far as possible.

Moral of the story : Don’t worry about good or bad budget. Just keep an eye on demand-supply ratio across all the sectors (I know it is very difficult) and start worrying when you think we are entering into a long period of recession.

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Monday, February 19, 2007

What Money Managers Expect In 2007

Seven stock market experts, Ramesh Damani, Rakesh Jhunjhunwala, Sanjoy Bhattacharyya, Raamdeo Agarwal, Madhu Kela, Prashant Jain and Anoop Bhaskar, discuss the prospects for Indian stocks in the annual roundtable organised by Capitalideasonline.com.

Ramesh Damani: To start the discussion we turn to the king of the panel first – so I’ll start with you, Rakesh, as always. Well, what do you think of the market?

Rakesh Jhunjhunwala: The bullish market is not the index, it is the bullishness of the Indian economy. And as long as I don’t come to a conclusion that India’s growth is not going to accelerate or we are not going to maintain 8-9 per cent economic growth constantly – this bull market is always going to remain alive whether the index is 12,000 or 20,000. The bull market is in the Indian economy and not in the stock market.

Although you could have the economy growing but you could have very high interest rates which is a big factor in the valuation of the market. That could temporarily disturb the market.

As long as India’s economy is doing well and I see no reason why it shouldn’t – the bull market is very much alive and kicking for me.

Ramesh Damani: Sometime they say stock prices are slave to corporate profits over the long term. What is your outlook for corporate profits or the Sensex in 2007?

Rakesh Jhunjhunwala: Well, to be very frank, I don’t do too much mathematical research. I don’t say that India is going to have consistent profit growth of 25-30 per cent y-o-y.

But I do believe that you have the biggest market and the biggest opportunity for all companies is the economy. Look at any sector, everything is at such an early stage of growth.

Ramesh Damani: I now have a question for you. We have had four years of solid gains in the Sensex. Do you make it five years in a row for 2007?

Rakesh Jhunjhunwala: Well, seeing the apprehensions that people have, I don’t see any reason why it shouldn’t be. Because if you have 15 to 18 per cent earnings growth, unless P/Es dip or those earnings dip, I don’t see any reason why there should not be a positive year.

Read Full Story at Business Standard



Sunday, February 18, 2007

Multibagger Stock Idea


Subhash Projects & Marketing Ltd. - Initiate Coverage

Subhash Projects & Marketing Ltd has informed BSE that the Company has entered into a Memorandum of Understanding (MOU) with the Government of Gujarat, represented by the Gujarat Urban Development Company Ltd for investing in various City Development Plans of Gujarat in the following areas, namely:

- Water Supply & Sewerage Management
- Solid Waste Management
- Electricity Utility Management
- Roads
- High Capacity Bus Services
- Car Parking
- Storm Water Drainage
- Real Estate Development - Township Development / Shopping Malls / Entertainment Plaza

The proposed investment of the Company is approximately Rs 5000 crores and the Scheme is likely to commence operation by March 2010 / 2012. The Government of Gujarat will extend full support in providing basic infrastructure facilities like land, power, roads, water supply, etc and obtaining the statutory approvals for establishing and efficient running of the aforesaid projects.

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Friday, February 16, 2007

Jain Irrigation - Acquires Aquarius


Jain Irrigation Announces Acquisition Of Aquarius Brands Inc. California, USA

Jain Irrigation Systems Ltd on February 15, 2007 has announced that it has agreed to acquire 100% control in Aquarius Brands Inc. California, USA from Habasit Holding USA Inc for USD 21.5 million in all cash deal. Aquarius is a debt free Company. With this acquisition, the Company will become second largest drip irrigation Company in the world.

The Company is a diversified Company with more than 3,800 employees and market capitalization in excess of INR 25 Billion and a product portfolio encompassing Irrigation Products, Piping Products, Plastic Sheets, Dehydrated Foods, Fruit Puree and Juice concentrates. The Company has pioneered drip irrigation for small farmers in India and has the major market share in one of the fastest growing irrigation markets in the world. The Company had acquired Chapin Watermatics, a leading manufacturer of drip tape located in Watertown, New York in May 2006.

Aquarius is a leading designer and manufacturer of micro-irrigation systems for agriculture, landscape and nursery applications, Aquarius' divisions include Agricultural Products (API®), PEPCO®, and Acu-Drip®. The Company has been providing fittings, filters, air vents, tubing, emitters and accessories to the irrigation industry for over 35 years. Branded products Include Spin Clean® filters, Tape Loc®, Spin Loc® and Power Loc® fittings, Softube® and Fiatube®, Micro-Flapper®, Quadra-Bubbler® and Octa-Bubbler®, among many others. The Company has manufacturing facilities in Ontario and Fresno, California and Winter Haven, Florida. It has network of more than 1000 dealers for product distribution.

Managing Director of the Company, Anil Jain said after closing the deal in USA, "With this acquisition we have firm foothold in one of the largest markets for the irrigation business and access to latest technology for Irrigation components". He further added that "Jain Irrigation will now focus on synergies of its operations in India and USA to offer the most diverse but integrated products and services in the irrigation business to customers all over the world".

This Acquisition will be made through Jain Irrigation Inc, USA, a wholly owned subsidiary of the Company. Closing of the transaction will take place immediately.

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Wednesday, February 14, 2007

Gitanjali Gems - Star In The Making


Gitanjali Gems Purchases Majority Stake In Tri-Star Worldwide LLC

Gitanjali Gems Ltd has informed BSE that in line with the management’s perception on expansion and further acquisition, the Company has purchased a majority interest in Tri-Star Worldwide LLC.

Tri-Star Worldwide LLC is a BHP Billiton direct customer and a CANADMARK licensee. It's a manufacturer and global distributor of Canadia® brand diamonds and diamond jewelry.

Partnering with Tri-Star will provide the Company with an opportunity to be a part of the finest "Mined in Canada" branded offering available to the market today.

Tri-Star Worldwide LLC was founded by Beny Sofer & Sons, LLC in 2002. Canadia diamonds and diamond jewelry is sold by fine jewelry retailers around the world, including Australia, Canada, England, Ireland, Northern Ireland, New Zealand, Scotland, and the United States which began as a branded loose diamond from the recently discovered rich diamond resources in the Northwest Territories of Canada and was one of the first to offer country of origin certification, along with comprehensive marketing support.



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Monday, February 12, 2007

GHCL - More Acquisation


GHCL Acquires BEST MANUFACTURING GROUP Of USA

GHCL Ltd has announced that the Company has acquired BEST MANUFACTURING GROUP of USA for a consideration of US $ 35 million through its international subsidiary GHCL Inc.

Best is the Leading manufacturer and distributors of Home textiles and certain related items for the hospitality & healthcare sector in USA.

Best is headquartered in Jersey City, New Jersey with satellite operations strategically located across the, Canada, Mexico and Asia. The Company has two manufacturing plants, one each in Combodia and Mexico along with 8 warehouses across USA. Best Manufacturing has a top-line of about US$ 160 Million.

Total Acquisition cost of $35 million dollars being funded by existing lenders of Dan River and NOT through current cash flows of the Company. This demonstrates the confidence being developed by the lenders in Dan River.

Dan River before this acquisition, owns and operated warehousing network of 1.25 million sq. ft, in-house designing capability and also has an over 200 strong multi-sourcing team in place and has its own brands and branding capabilities. With the acquisition of BEST the current top line of Dan River will go from $250 million (including the earlier HW Baker acquisition) to a Top Line of $ 400 million dollars.

Mr. Sanjay Dalmia, Chairman of the Company said,

"Best Manufacturing's acquisition proves our (GHCL) growing acceptability of the strategy being put in place even in the most competitive home textiles market of the world-USA".

This further strengthens our position in the largest home textiles market of USA provides us with an ideal opportunity to leverage Best's global platform and a renowned global brand in order to make GHCL one of the dominant player in the Home textile space globally.

With the acquisition of BEST Manufacturing Group Dan River is the only Company in the world which will cater to the All the 3 Segments that is 1) Retail Chain in the US; 2) Hotel and Restaurant industry; 3) Hospital Industry. We are soon going to expand the operations for all the 3 sectors into other parts of the world also, so that we can service these industries globally, including our own."

"It would be ideal combination of low cost strong manufacturing base with a large established marketing platform to put us on the fast track growth".

Earlier in the month of December 2006, Dan River Inc. a step down subsidiary of the Company had acquired assets of H W Baker Lenin Co. having a turnover of US Dollar $70 million in the US through competitive bidding process for US Dollar 6.75 million.

H.W. Baker Linen Co. of USA, a leading supplier of textile products, amenities and guest room supplies to hotels and motels across USA.

Baker is a division of the Best Manufacturing Group supplying textile and non-textile products including Sheets, Terry Lenins, Blankets, Pillows, Pillow cases and amenities to some of the leading hotels in US.

With Current Clients of Dan River predominantly being the Retailers such as Walmart, K- Mart, JC Penny etc, it further added a direct client base of the Institutional segment such as Starwood, Hilton, Four Seasons, it will further extend its client base by an additional customer base of over 900 customers with the some prominent names like:

- United Airlines, Morgan Services, Admiral Linen, National Linen and Walt Diseney - In the Institutional Segment; &

- Hackensacks, Angelica, Image First and Unitex— in the Healthcare Segment.

Post these acquisitions, the process of Restructuring the Businesses will gather further momentum and the Company is in the process of taking the above structure to the Global Financial market for value unlocking for the Indian Shareholders.

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Friday, February 09, 2007

Usha International - Superb Third Quarter

USHA INTERNATIONAL LTD.

Usha International has posted superb set of third quarter numbers. Net Sales has increased from Rs. 104.93 Cr. to Rs. 125.47 Cr. while Net Profit jumped to Rs. 23.7 Cr. from Rs. 11.8 Cr. on yoy basis.

Click Here To See Quarterly Figures Of Usha International Ltd.

Numbers become more important when you consider that this growth has come in the winter season which is not favourable with the nature of business of Usha International, since maximum revenue comes from the sale of ceiling fans and other consumer durables. If they can so such stellar performace in winters what can they do in summers - Just Imagine.

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Thursday, February 08, 2007

Bilcare - Packing A Punch


Bilcare Net Sales Up 40% PAT Up 54%

Bilcare Ltd., India’s leading pharma major in the drug discovery to market value chain, announced their Q3 results for FY 06-07, today.

The company has recorded sales of Rs. 834.7 million, PBT of Rs. 215.5 million and PAT of Rs. 142.0 million for the quarter ended 31 December 2006. The sales of the company has recorded a growth 40% while PAT has shown an increase of 54% over the corresponding quarter in the previous year.

Announcing the company’s Q3 results, Mr. Mohan Bhandari, Chairman & Managing Director said, “Bilcare continues to focus on the research and technology aspects to provide innovative packaging solutions to the global pharmaceutical industry. We are progressively entering into technical collaborations with companies across the globe that will partner with us to provide solutions to the issues faced by the industry. Recently, Bilcare announced a regional collaboration with US-based Honeywell’s Specialty Films Business to Develop Value-based Pharma Packaging Solutions.”

Bilcare continues to revolutionize the pharma industry through innovative products. The highlight being the winning of the patent in the USA for its pharmaceutical grade thermo-formable composite films. The innovative packaging material will address multiple concerns and limitations of the pharmaceutical products in the market like anti-counterfeit and anti-pass off. The unique products under this range are Patina, Ultra and Ultra TX.

Bilcare Research will continue to focus on key areas of developments like clinical research, clinical supplies and pharma packaging and looking at global prospects for expanding in these fields.

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Monday, February 05, 2007

Multibagger Stock Ideas

Initiate coverage on following stocks :

  1. Ramkrishna Forgings Ltd.
  2. Federal-Mogul Goetze (India) Ltd. (also recommended by Sharekhan)

Happy Investing

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Micro Technologies - Going Turkey


Micro Technologies Enters The Turkish Market With Easy Fleet Solutions

Micro Technologies India Ltd has announced that the Company is entering the Turkish Market with one of its Vehicle Security, Life support and Fleet Monitoring System through its alliance with Easy Fleet Solutions.

Growing competition and maturity in the vehicle management & security across the Middle-East Market is resulting in a shift towards integrated systems and services and increased market consolidation. The Turkish market has generated a huge demand of vehicle Fleet Monitoring and tracking equipment. The use of such products can provide significant cost and timesaving techniques over traditionally scheduled, time-based maintenance to upkeep the vehicles. With the innovative product and successful track record, Micro Fleet Monitoring has emerged as the unique solution to provide the customers with new solutions that provide competitive advantage with advance technology. Even the Turkish government has emphasized on developing transport policy to improve the energy, efficiency of fleet through sophisticated fleet monitoring systems. In order to benefit from the lucrative growth opportunities in this sector, the Company has come up with a technologically advanced product, which can not only manage vehicle fleet but also can save as much as 30% in the cost incurred in fleet operations.

Micro Fleet Monitoring System is a web based monitoring system, which has been developed to manage and track vehicle fleet owned by different Fleet Owners. It is a powerful vehicle monitoring system that functions as a gateway to the information and knowledge that is unique to our Company. Features include real time vehicle tracking interfacing with GIS (Geographic Information System) on map, Report Generation (Start time, date, vehicle number), Intimation on route deviation, Fuel-Theft, Two-way communication etc. The product works on both GSM / CDMA technologies.

The Company System will certainly be a new realm of technology in terms of Easy Fleet solutions in Turkey Market in coming future.

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