Doubt Relief !!
- Thread starter karthikmarar
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Dear Karthik..
I posted this query elsewhere before I saw this thread, therfore apologies for the repetition.I would appreciate if you answer this query :
ITC and HLL are both well managed and professionally run companies. They also hold a large chunk of their market. Their shares have scaled astonishing peaks in the past but currently they are touching at abysmally low levels. What is wrong and whether these shares can be picked up at this time ??? And in how much time would they come back to their highs ??
Thanks
I posted this query elsewhere before I saw this thread, therfore apologies for the repetition.I would appreciate if you answer this query :
ITC and HLL are both well managed and professionally run companies. They also hold a large chunk of their market. Their shares have scaled astonishing peaks in the past but currently they are touching at abysmally low levels. What is wrong and whether these shares can be picked up at this time ??? And in how much time would they come back to their highs ??
Thanks
Anil, My friend this is our forum...
Here is my study and opinion on Petronet. Hope you will find it useful.
Company Background
Petronet LNG is promoted by the oil majors Oil and Natural Gas Corporation, Indian Oil, Bharat Petroleum and Gail, each of which hold equal stakes aggregating 50 per cent, French multinational gas company Gaz de France holds 10 and Asian Development Bank a 5.2 per cent stake.
Petronet has setup a 5 MMTPA regasification plant at Dahej in Gujarat. Petronet has 25-year contracts for supply of gas with RasGas as also for onward sale with its marketers, Gail, Indian Oil and Bharat Petroleum. The price for supply from Ras Gas is fixed for the first year. On sale point of view Gail will pick up 60 per cent of the capacity while IOC and BPCL will take up 30 per cent and 10 per cent respectively. GAIL markets the gas through its HBJ trunk pipeline to buyers from various industries, including power.
Petronet receives only a regasification while all other charges, including transportation, insurance and forex fluctuations, are passed through to its buyers.
Current Situation
The Regasification gas in Gujarat has attained full capacity. It has wiped out all the accumulated losses. Petronet's second quarter performance with post-tax earnings of Rs 40 crore on a turnover of Rs 945 crore is almost like its first; the next two quarters may also prove identical except for benefits flowing from cost savings. Having almost reached its full capacity of 5 million tonnes per annum, the scope for major growth in revenues and earnings is limited.
Future Outlook
The company plans to double its capacity to 10 MMTPA by 2010 and also in the process of setting up a 2.5 MMPTA regasification pant at Kochi. This plant is expected to be operational by 2011. The expnsion at Dahej is expected to be done at a considerably lower investment. By 2011 with the total capacity of 12.5 MMTPA it will be a major player in the Gas business.
The demand for gas which is about 150 MMSCMD is expected to double to 300 MMSCMD. The supply will far lag behind. Petronet will be nicely positioned to exploit this demand with its expanded capacity
With the increased capacity Petronet will have the option of marketing about 2.5 million tonnes of the gas on its own.
Petronet has signed a MOM with Engineers India Limited (EIL) associate with each other on a case-to-case basis to bid for overseas projects in the LNG. There is a good possibility of EIL and Petronet securing good business in the international projects.
Threats
A major threat would be a big find of gas in India. The cost of this gas would be cheaper because transportation cost are far less. Somebody asked me if the Reliance gas find will be threat to Petronet. But for reliance to exploit the gas finds, setup its own pipeline and distribution system would take time and effort. Petronet has already tied up with the buyers. Anyway the demand far exceeds the supply. In my opinion this would not affect Petronet.
Share price outlook
Since the Dahej Plant is operating at almost full capacity the scope of growth in revenue seems limited. The next two-quarter results are expected to be similar to the first two. Petronet is negotiating for an additional 1.25 MMTPA at spot prices. If this comes through then it would add to the revenue. But this additional gas would be available only by April 2006. Additional revenue growth can come if Petronet is successful in winning some overseas projects.
Knowing the stock market expectations from the companies and because of the flat revenue growth in the next two quarters the share price may drift down in the near future. This should provide a good accumulating opportunities as Petronet is a great long term story and could prove to be a multibagger. I feel that this is share which one can accumulate and finally it would pay for your kids education or just could be your retirement money..
I would be nice to see contrary view if any..
regards
karthik
Here is my study and opinion on Petronet. Hope you will find it useful.
Company Background
Petronet LNG is promoted by the oil majors Oil and Natural Gas Corporation, Indian Oil, Bharat Petroleum and Gail, each of which hold equal stakes aggregating 50 per cent, French multinational gas company Gaz de France holds 10 and Asian Development Bank a 5.2 per cent stake.
Petronet has setup a 5 MMTPA regasification plant at Dahej in Gujarat. Petronet has 25-year contracts for supply of gas with RasGas as also for onward sale with its marketers, Gail, Indian Oil and Bharat Petroleum. The price for supply from Ras Gas is fixed for the first year. On sale point of view Gail will pick up 60 per cent of the capacity while IOC and BPCL will take up 30 per cent and 10 per cent respectively. GAIL markets the gas through its HBJ trunk pipeline to buyers from various industries, including power.
Petronet receives only a regasification while all other charges, including transportation, insurance and forex fluctuations, are passed through to its buyers.
Current Situation
The Regasification gas in Gujarat has attained full capacity. It has wiped out all the accumulated losses. Petronet's second quarter performance with post-tax earnings of Rs 40 crore on a turnover of Rs 945 crore is almost like its first; the next two quarters may also prove identical except for benefits flowing from cost savings. Having almost reached its full capacity of 5 million tonnes per annum, the scope for major growth in revenues and earnings is limited.
Future Outlook
The company plans to double its capacity to 10 MMTPA by 2010 and also in the process of setting up a 2.5 MMPTA regasification pant at Kochi. This plant is expected to be operational by 2011. The expnsion at Dahej is expected to be done at a considerably lower investment. By 2011 with the total capacity of 12.5 MMTPA it will be a major player in the Gas business.
The demand for gas which is about 150 MMSCMD is expected to double to 300 MMSCMD. The supply will far lag behind. Petronet will be nicely positioned to exploit this demand with its expanded capacity
With the increased capacity Petronet will have the option of marketing about 2.5 million tonnes of the gas on its own.
Petronet has signed a MOM with Engineers India Limited (EIL) associate with each other on a case-to-case basis to bid for overseas projects in the LNG. There is a good possibility of EIL and Petronet securing good business in the international projects.
Threats
A major threat would be a big find of gas in India. The cost of this gas would be cheaper because transportation cost are far less. Somebody asked me if the Reliance gas find will be threat to Petronet. But for reliance to exploit the gas finds, setup its own pipeline and distribution system would take time and effort. Petronet has already tied up with the buyers. Anyway the demand far exceeds the supply. In my opinion this would not affect Petronet.
Share price outlook
Since the Dahej Plant is operating at almost full capacity the scope of growth in revenue seems limited. The next two-quarter results are expected to be similar to the first two. Petronet is negotiating for an additional 1.25 MMTPA at spot prices. If this comes through then it would add to the revenue. But this additional gas would be available only by April 2006. Additional revenue growth can come if Petronet is successful in winning some overseas projects.
Knowing the stock market expectations from the companies and because of the flat revenue growth in the next two quarters the share price may drift down in the near future. This should provide a good accumulating opportunities as Petronet is a great long term story and could prove to be a multibagger. I feel that this is share which one can accumulate and finally it would pay for your kids education or just could be your retirement money..
I would be nice to see contrary view if any..
regards
karthik
Narendra
In my opinion ICICI FPO is good if you are thinking of long term holding... at least a year. ICICI is a strong bank. second largest in india. They are focussin on the retail sector which has been quite beneficial to them. It is definitely a growth story. A definite long term play.
Considering the 5% discount for retail investors the price band would be 480-518. The cmp is 544. There are good chances the price may drop as soon the new shares are listed becasue of profit booking. If you are thinking of short term may be it is not worth it. Yes for long term the FPO is worth.
This is just my opinion.
regards
Karthik
In my opinion ICICI FPO is good if you are thinking of long term holding... at least a year. ICICI is a strong bank. second largest in india. They are focussin on the retail sector which has been quite beneficial to them. It is definitely a growth story. A definite long term play.
Considering the 5% discount for retail investors the price band would be 480-518. The cmp is 544. There are good chances the price may drop as soon the new shares are listed becasue of profit booking. If you are thinking of short term may be it is not worth it. Yes for long term the FPO is worth.
This is just my opinion.
regards
Karthik
Dear Harmads
ITC is definitely not at abysmal level. Note that the current price is the post split price. The current price is almost near the equivalent pre-spilt peak. After the split and the last correction the price came down providing excellent investment opportunity. Then the stock recovered and crossed some tough resistance at 130. Now it is poised to take out he next obstacle at 140-142 region. Once this is taken the stock can see higher level. Of late this is moving side ways. The up trend, which began smartly, is stalling now. We have to wait for it to take out the last obstacle. The stock is a very attractive long-term investment now affordable after the pre-split price. It is worth accumulating at dips with a long-term view as the company is an excellent growth oriented diversified company. In short term the price are moving sideways. The flat ADX indicates lack of trend. Any fall below 130 would negate the uptrend. For a short-term view one may wait for it to take out 142 convincingly.
The performance of HLL has been lackluster till the middle of this year. The FMCG sector performance itself was not impressive. Severe competition and price wars led to declining bottom lines of the FMCG companies. HLL started gaining some strength during later part of this year. During the last correction HLL was one of the badly hit stocks. Then the stock picked up smartly and started an uptrend. It moved smartly to 191 and currently on a pullback. On the charts it looks strong and likely to move up. Stoploss would be 170.
Before making fresh exposure small investors should consider the current market condition. The 5 day RSI and TRIX have thrown up a bearish divergence implying the necessity of some caution. Well ..we do hope that this would turn out to be a classical case of failed divergence...
. But the contrary to our expectation would prove a little painful. Better be safe than suffer.. Hence a cautious approrach would be prudent,Hope this helps
Regards
Karthik
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