Call from Analysts
- Thread starter Sarveshk
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Power Your Trade charges 1800 per year, which comes to 9 bucks a trading day. I subscribe not for the tips but for various other reasons. I know a lot of members on this forum vilify CNBC-TV18 and label them unethical, but my personal view has always been that one should take inputs from wherever one gets and then filter the data to take one's investment decision. So I also use the recommendations of A.Gujral, E.Mathew, R.Bose, and D.Mohoni as a screener of sorts ... putting these through my selection criteria. If they meet, I then take a decision on the trade.
I find R.Bose's recommendations pan out more often. E.Mathew has lost his credibility after his last fiasco and indictment by SEBI while A.Gujral, too, names the stock way after its move is already close to the top. D.Mohoni is really laughable ... his intraday recommendations work if you do the opposite of what he says.
The other useful aspect of Power Your Trade is the news & rumours that it reports. Some of these find their way into my Streetsmart thread. These are fairly reliable & good.
So, all in all, friends for 9 bucks a day ...
I find R.Bose's recommendations pan out more often. E.Mathew has lost his credibility after his last fiasco and indictment by SEBI while A.Gujral, too, names the stock way after its move is already close to the top. D.Mohoni is really laughable ... his intraday recommendations work if you do the opposite of what he says.
The other useful aspect of Power Your Trade is the news & rumours that it reports. Some of these find their way into my Streetsmart thread. These are fairly reliable & good.
So, all in all, friends for 9 bucks a day ...
Hindustan Motors has huge tangible assets having good demand for all type of its assets. Sum of part method, gives a valuation per share of over Rs 100.
Opportunities and Potential
The company has three car making plants in West Bengal, Tamil Nadu and Madhya Pradesh, Chennai Car Plant (CCP) is making Lancer Car and Pajero SUV in technical collaboration with Mitsubishi Motors of Japan. Pithampur Plant is making Road Trusted Vehicles (RTV) and multi utility vehicles in technical collaboration with OKA Motor Company of Australia. Uttarpara Plant in West Bengal is making Ambassador and Contessa Cars. Hence all the three plants are latest confirming to international standards.
Uttarpara Plant located in suburbs of Kolkata has 743 Acres of land (about 3 crore sq. ft) of which about 600 acres land is surplus which shall be developed by the company. Recently, there has been media reports that the company is developing about 310 acre into I.T. Development Park for which HDFC is advising the company. This surplus land is estimated to have valuation of over Rs.600 crores. If developed, the company is likely to make profit of over Rs.1000 Crores, including land and development.
In view of interest by global auto major, to make India as a sourcing hub, the company may go in for financial tie up for its CCP and RTV plants which can unlock good value of anywhere around Rs.400 to Rs.500 crores.
The company has at its Uttarpara Plant facilities, especially in the Forge Shop, Foundry and the Press Shop, to develop component business on a large scale and hence the company has taken initiatives to supply auto components to OEMs and to the export market. This shall make it pre-dominantly an auto ancillary unit which shall contribute significantly to its overall revenue in the next two or three years.
In Feb 05, the company had divested its PUP / PPD units at Pithampur and Hosur on which a gain of about Rs.190 crores was made. Apart from this gain, the company also has 49% stake in AVTEC Ltd., a company to whom this stake was divested. This 49% is presently valued at around Rs.300 Crores. In due course, the company may think of divesting this stake to mobilise funds for its reality development and auto component business.
The company has a debt of about Rs.120 crores as at 31st March, 06, which can get paid from the liquidation of investments / joint ventures and/or reality development. With this, the company can become debt free with strong asset base.
The present working, on quarter on quarter basis, may not reflect the true worth of the company. The tangible assets held by the company in the form of surplus land at Uttarpara, (Rs.600 crores) Car Plants (Rs.400 crores) and investment (AVTEC Ltd Rs.300 crores) and Auto Component Business (Rs.300 crores) are valued at about Rs.1500 - Rs.1600 Crores. Once company shift its focus on auto components, it can turn its bottom line in black with estimated net profit of about Rs.40-50 crores.
Property development business at Uttarpara can give good rental annuity to the company.
The financials for reality development at Uttarpara shall be as under :
PHASE I : 310 Acres equivalent to 15 million sq. feet.
Cost of construction and development at Rs.1,000 per sq. ft = Rs. 1,500 crores.
Selling 7.5 million Sq. ft on ownership basis at Rs.2000 per sq. ft = Rs.1,500 crores.
Fully developed area of 7.50 million sq. ft available to lease out at Rs.200 per sq. ft per year- Rs.150 Crores rental income / annually.
Estimated time - about 3 years.
PHASE II : 310 acres equivalent to 15 million sq.ft Broadly the same financial parameters with starting time after 3 years and completion time of three years thereafter.
Kolkata is preferred as a hot destination for organised retailing, I.T. Development Centres, I.T. Enable Services, BPO, KPO and commercial centres due to low reality price and lower manpower costs. Since, the company's properly is huge and in suburbs of Kolkata, it could attract industry giants.
Threats and weakness
Any delay in change of user, permissions/clearances from West Bengal government could delay reality development business.
Any delay on part of the management of the company for car plants J/V and realising investments could hamper the cash flow of the company.
Conclusion
The company has huge tangible assets having good demand for all type of its assets. Due to very low debt burden of about Rs.120 Crores, interest burden would be least on the company. Future revenue models of the company would be more dependable and revenue generating. Also, due to low market cap of about Rs.565 crores, floating stock of the company has largely been cornered by the informed circle. Sum of part method, gives a valuation per share of over Rs.100. This valuation seems reasonable and certain with potential of its realisibility in the next three years. Hence share has potential to give over 100 per cent return in the next 24 to 36 months from its present levels.
Opportunities and Potential
The company has three car making plants in West Bengal, Tamil Nadu and Madhya Pradesh, Chennai Car Plant (CCP) is making Lancer Car and Pajero SUV in technical collaboration with Mitsubishi Motors of Japan. Pithampur Plant is making Road Trusted Vehicles (RTV) and multi utility vehicles in technical collaboration with OKA Motor Company of Australia. Uttarpara Plant in West Bengal is making Ambassador and Contessa Cars. Hence all the three plants are latest confirming to international standards.
Uttarpara Plant located in suburbs of Kolkata has 743 Acres of land (about 3 crore sq. ft) of which about 600 acres land is surplus which shall be developed by the company. Recently, there has been media reports that the company is developing about 310 acre into I.T. Development Park for which HDFC is advising the company. This surplus land is estimated to have valuation of over Rs.600 crores. If developed, the company is likely to make profit of over Rs.1000 Crores, including land and development.
In view of interest by global auto major, to make India as a sourcing hub, the company may go in for financial tie up for its CCP and RTV plants which can unlock good value of anywhere around Rs.400 to Rs.500 crores.
The company has at its Uttarpara Plant facilities, especially in the Forge Shop, Foundry and the Press Shop, to develop component business on a large scale and hence the company has taken initiatives to supply auto components to OEMs and to the export market. This shall make it pre-dominantly an auto ancillary unit which shall contribute significantly to its overall revenue in the next two or three years.
In Feb 05, the company had divested its PUP / PPD units at Pithampur and Hosur on which a gain of about Rs.190 crores was made. Apart from this gain, the company also has 49% stake in AVTEC Ltd., a company to whom this stake was divested. This 49% is presently valued at around Rs.300 Crores. In due course, the company may think of divesting this stake to mobilise funds for its reality development and auto component business.
The company has a debt of about Rs.120 crores as at 31st March, 06, which can get paid from the liquidation of investments / joint ventures and/or reality development. With this, the company can become debt free with strong asset base.
The present working, on quarter on quarter basis, may not reflect the true worth of the company. The tangible assets held by the company in the form of surplus land at Uttarpara, (Rs.600 crores) Car Plants (Rs.400 crores) and investment (AVTEC Ltd Rs.300 crores) and Auto Component Business (Rs.300 crores) are valued at about Rs.1500 - Rs.1600 Crores. Once company shift its focus on auto components, it can turn its bottom line in black with estimated net profit of about Rs.40-50 crores.
Property development business at Uttarpara can give good rental annuity to the company.
The financials for reality development at Uttarpara shall be as under :
PHASE I : 310 Acres equivalent to 15 million sq. feet.
Cost of construction and development at Rs.1,000 per sq. ft = Rs. 1,500 crores.
Selling 7.5 million Sq. ft on ownership basis at Rs.2000 per sq. ft = Rs.1,500 crores.
Fully developed area of 7.50 million sq. ft available to lease out at Rs.200 per sq. ft per year- Rs.150 Crores rental income / annually.
Estimated time - about 3 years.
PHASE II : 310 acres equivalent to 15 million sq.ft Broadly the same financial parameters with starting time after 3 years and completion time of three years thereafter.
Kolkata is preferred as a hot destination for organised retailing, I.T. Development Centres, I.T. Enable Services, BPO, KPO and commercial centres due to low reality price and lower manpower costs. Since, the company's properly is huge and in suburbs of Kolkata, it could attract industry giants.
Threats and weakness
Any delay in change of user, permissions/clearances from West Bengal government could delay reality development business.
Any delay on part of the management of the company for car plants J/V and realising investments could hamper the cash flow of the company.
Conclusion
The company has huge tangible assets having good demand for all type of its assets. Due to very low debt burden of about Rs.120 Crores, interest burden would be least on the company. Future revenue models of the company would be more dependable and revenue generating. Also, due to low market cap of about Rs.565 crores, floating stock of the company has largely been cornered by the informed circle. Sum of part method, gives a valuation per share of over Rs.100. This valuation seems reasonable and certain with potential of its realisibility in the next three years. Hence share has potential to give over 100 per cent return in the next 24 to 36 months from its present levels.
Deepak Mohoni
Buy Union Bank below Rs 121.50 with stop loss of Rs 119.50; This is a day-trading recommendation
Buy Sterlite Opticals below Rs 179.50 with stop loss of Rs 176.50; This is a day-trading recommendation
Rajat K Bose
Buy IDBI with stop loss below Rs 64.40 for a target of Rs 72
Buy LIC Housing Finance with stop loss below Rs 156 for a target of Rs 166
E Mathew
Buy ITC with a stop loss of Rs 178 for short-term target of Rs 204
Buy Amtek India with stop loss of Rs 113, for short-term target of Rs 150
Ashwani Gujral
Sell Tata Steel with a stoploss of Rs 520, for a target of Rs 460
Sell Hind Zinc with a stoploss of Rs 600, for a target of Rs 500
Buy Union Bank below Rs 121.50 with stop loss of Rs 119.50; This is a day-trading recommendation
Buy Sterlite Opticals below Rs 179.50 with stop loss of Rs 176.50; This is a day-trading recommendation
Rajat K Bose
Buy IDBI with stop loss below Rs 64.40 for a target of Rs 72
Buy LIC Housing Finance with stop loss below Rs 156 for a target of Rs 166
E Mathew
Buy ITC with a stop loss of Rs 178 for short-term target of Rs 204
Buy Amtek India with stop loss of Rs 113, for short-term target of Rs 150
Ashwani Gujral
Sell Tata Steel with a stoploss of Rs 520, for a target of Rs 460
Sell Hind Zinc with a stoploss of Rs 600, for a target of Rs 500
Indo Asian Fusegears
Indo Asian Fusegears is expanding capacities in its product segments and developing new product segments. Buy with a target of Rs 240.Current Market Price is Rs 140.
Though the current quarter for Indo Asian Fusegears Limited (IAFL) was not very impressive, we believe that with current initiatives like consolidation of the businesses and on-going expansion program, IAFL will be reckoned amongst the world's largest and state-of-the-art producers of Circuit Protection Equipments and Energy Saving Lamps. IAFL has a very good track record and has managed excellent timing by aggressively expanding at the time when the Indian electrical equipments segment is on the fast track growth path
The company is expanding capacities in the existing product segments and developing new product segments to take full advantage of the Indian Electrification drive. In the domestic market the company is taking prudent steps to increase its presence with its big network of dealers and distributors. In the export market, it has tied up with some of the most reputed names abroad. It has JV partnerships with companies like Heinrich Kopp (Germany),Nordex (Italy), National Glass Company (Saudi Arabia), etc.
As its expansions get operational, we expect IAFL's top line to grow by 74.5% & 57.8% and APAT to grow by 47.7% & 57.9% respectively in FY07E & FY08E. We expect IAFL's fully diluted EPS to increase at a 30.2% CAGR from Rs.10.9 in FY05 to Rs.24.1 in FY08E. At the current market price of Rs.130, the stock is available at 5.4x FY08E earnings of Rs.24.1, on the diluted equity of Rs.153.1 mn, which we believe is very attractive. We are retaining BUY rating on the stock with a target price of Rs.240 (10x FY08E P/E).
Source: SP Tulsian
Indo Asian Fusegears is expanding capacities in its product segments and developing new product segments. Buy with a target of Rs 240.Current Market Price is Rs 140.
Though the current quarter for Indo Asian Fusegears Limited (IAFL) was not very impressive, we believe that with current initiatives like consolidation of the businesses and on-going expansion program, IAFL will be reckoned amongst the world's largest and state-of-the-art producers of Circuit Protection Equipments and Energy Saving Lamps. IAFL has a very good track record and has managed excellent timing by aggressively expanding at the time when the Indian electrical equipments segment is on the fast track growth path
The company is expanding capacities in the existing product segments and developing new product segments to take full advantage of the Indian Electrification drive. In the domestic market the company is taking prudent steps to increase its presence with its big network of dealers and distributors. In the export market, it has tied up with some of the most reputed names abroad. It has JV partnerships with companies like Heinrich Kopp (Germany),Nordex (Italy), National Glass Company (Saudi Arabia), etc.
As its expansions get operational, we expect IAFL's top line to grow by 74.5% & 57.8% and APAT to grow by 47.7% & 57.9% respectively in FY07E & FY08E. We expect IAFL's fully diluted EPS to increase at a 30.2% CAGR from Rs.10.9 in FY05 to Rs.24.1 in FY08E. At the current market price of Rs.130, the stock is available at 5.4x FY08E earnings of Rs.24.1, on the diluted equity of Rs.153.1 mn, which we believe is very attractive. We are retaining BUY rating on the stock with a target price of Rs.240 (10x FY08E P/E).
Source: SP Tulsian
Hi Sarvesh,
Just had a look at these calls. According to me, most, except Gujral's calls do not hold any water. I may be wrong, but if you look at the charts, most scrips have run up quite a bit and now are in the overbought area. Entering these at this stage will be a risky proposition.
So, beware of these calls and do your own analysis and be convinced about the scrip yourself, before jumping in.
BTW, this thread gives you good food for thought. Do keep this going.
Cheers,
Pranay
Just had a look at these calls. According to me, most, except Gujral's calls do not hold any water. I may be wrong, but if you look at the charts, most scrips have run up quite a bit and now are in the overbought area. Entering these at this stage will be a risky proposition.
So, beware of these calls and do your own analysis and be convinced about the scrip yourself, before jumping in.
BTW, this thread gives you good food for thought. Do keep this going.
Cheers,
Pranay
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