Doubt Relief !!

[harmads]

Harmads

The construction stocks have moved up nicely yesterday with all the talk of the SPV for ryral Infrastructure. But the amount being talked about seems quite small. Anyway things will be clear today evening. Let us continue with our study our construction stocksAs said before our first look is at Nagarjuna constructions.

First let us look at Nagarjuna Construction. The main highlights for this company is listed below. These points themselves are enough to justify investment in this stock

The stock is currently quoting about 24 times the PE multiples of estimated FY-06 EPS of 12.7 and about 17 times the estimated FY-07 EPS of 18.
The current Backlog of orders is around 6000Cr. which will about three times the FY06 sales.

Sales and OPM growth has been more than 50% for the last three years.
Nagarjuna Construction has been ranked third amon.gst the fastest growing construction companies in India by Construction World-NICMAR study, and the fourth most admired company according to the Construction World reader survey. The awards are based on a mathematical model covering financial figures for the last five years across the construction Industry and vetted by a panel of industry experts.

Nagarjuna Construction had been included in the Forbes Asia's 'best under a billion' list of two hundred companies in the Asia Pacific region. The 'best under a billion' is an annual listing of Forbes Asia and features 200 of Asia's best enterprises with revenue under $1 billion a year and five year returns on capital of at least 5 per cent.
The current quarter has seen health order booking.

520 Cr. from NHAI for two section at NH.25 and NH.2
54.4 Cr. from SBI for construction of residential buildings
109.58 Cr. from NTPC Ltd for Barh Super Thermal Power Project
88.6 Cr from Chennai Metropolitan Water Supply & Sewerage Board
Rs 45 Cr. AD Hydro Power Ltd

Very recently the company has bagged a deal along with ICICI venture and bought a 6 acre plot at posh Banjara Hills locality at a cost of 335 crores.

Best regards

karthik

Thanks a ton Karthik for your very valuable input on Nagarjuna Constructions.It will surely help me in picking up some shares in Construction sector.
Another sector I have been eyeing is FMCG. Could you also give your opinion on Gillette India Ltd.
Thanks once again.

 

[karthikmarar]

Hi Harmads

Here are my views on Gillette India.

It can be defensive investment for a term of 6 months to a year. The stock was moving side ways for a large part of last year. By December the stock showed upward rise. But after the results were announce the stock has faltered The company announced that it will take up some restructuring which would cost about 90 Cr. which will have impact on the first two quarters of the next fiscal. Also the company has reiterated that there will be no merger with the parent P&G. May these have damped the rise.

The compay ended the financial year 2005 with a net profit of Rs68.72 crore, or Rs21.09 per share, for the financial year ended December 2005 as compared to Rs61.22 crore, or Rs18.79 per share, for 2004, an increase of 12.25 per cent. Total revenues for the year increased to Rs470.96 crore as against Rs425.19 crore, a growth of 10.76 per cent.

The share is presently quoting at a PE multiple of 28 times the estimates FY07 multiple.

So it is a defensive stock with moderate appreciation in the long term. No Fireworks can be expected. Also a lot would depend the overall FMCG sector performance.

For he short term the momentum seems to be tapering off. Right now it is a wait and watch. No buy signals seen.

Best regards

Karthik

 

[ramtrade]

Karthik,

Can give your inputs/suggestions on OBC,Polyplex & Suryalakshmi cotton.

I am planning to enter the stocks and wanted to know your inputs before i enter them.

Thanks
Ramesh

 

[ragh_ash]

hi karthik,
can u throw some light on ENIL (Radio mirchi fame)
got it at IPO(160)
regards

 

[harmads]

Hi Harmads

Here are my views on Gillette India.

It can be defensive investment for a term of 6 months to a year. The stock was moving side ways for a large part of last year. By December the stock showed upward rise. But after the results were announce the stock has faltered The company announced that it will take up some restructuring which would cost about 90 Cr. which will have impact on the first two quarters of the next fiscal. Also the company has reiterated that there will be no merger with the parent P&G. May these have damped the rise.

The compay ended the financial year 2005 with a net profit of Rs68.72 crore, or Rs21.09 per share, for the financial year ended December 2005 as compared to Rs61.22 crore, or Rs18.79 per share, for 2004, an increase of 12.25 per cent. Total revenues for the year increased to Rs470.96 crore as against Rs425.19 crore, a growth of 10.76 per cent.

The share is presently quoting at a PE multiple of 28 times the estimates FY07 multiple.

So it is a defensive stock with moderate appreciation in the long term. No Fireworks can be expected. Also a lot would depend the overall FMCG sector performance.

For he short term the momentum seems to be tapering off. Right now it is a wait and watch. No buy signals seen.

Best regards

Karthik

Thankyou Karthik for your opinion...
Best regards

 

[karthikmarar]

Karthik,

Can give your inputs/suggestions on OBC,Polyplex & Suryalakshmi cotton.

I am planning to enter the stocks and wanted to know your inputs before i enter them.

Thanks
Ramesh

Hi Ramesh

Here is my view the stocks mentioned by you. Looks like it is not the right time to enter all these stocks. Of these only Suryalakshmi looks worth watching. Here are the details.

Suryalakshmi Cotton

This stock reached a high of 260 last September. Since then this has been moving sideways. After reaching another high of 246 has been slowly drifting down to 200 now. The chart is slowing bullish divergence in both Trix and RSI. However the chart is bearish and we have to wait for some conformity of bullishness. Also the ADX is lying low below the DI+ and DI- line showing consolidation. Normally in such cases the stock is gearing for a substantial move. Longer it stays like this the more violent the move. It can move in either direction. However considering the bullish divergence the chance of an upward move is good. But the time is not ripe to enter the stock now. It will be worth watching this one closely. I will track this one for you.

Polyplex

This one is under the control of the bears now. From a high of 283 in last September has dropped to a low of 141. Forget this one. Your money is safer under your pillow than in this stock.

OBC

The stock after reach a high 350 last march has been moving sides ways and drifting down and is quoting at 238. Has been moving in a range of from 230 to 290 for the last 11 months. Of late there was bullish divergence in the Trix in the daily and weekly. Now the stock has made a higher pivot low. Even if moves up there is too much density overhead. Also looking at the movement of the stock for the last 11 months, how much it will move up is very unclear. The stock has to first move above 285-290. Till then only some range play can be considered. Considering all these it is better to stay away from this one. There are many better counters available.

Hope this is useful.

Regards

Karthik

 

[ragh_ash]

hi karthik,
can u throw some light on ENIL (Radio mirchi fame)
got it at IPO(160)
regards

 

[ramtrade]

Hi Ramesh

Here is my view the stocks mentioned by you. Looks like it is not the right time to enter all these stocks. Of these only Suryalakshmi looks worth watching. Here are the details.

Suryalakshmi Cotton

This stock reached a high of 260 last September. Since then this has been moving sideways. After reaching another high of 246 has been slowly drifting down to 200 now. The chart is slowing bullish divergence in both Trix and RSI. However the chart is bearish and we have to wait for some conformity of bullishness. Also the ADX is lying low below the DI+ and DI- line showing consolidation. Normally in such cases the stock is gearing for a substantial move. Longer it stays like this the more violent the move. It can move in either direction. However considering the bullish divergence the chance of an upward move is good. But the time is not ripe to enter the stock now. It will be worth watching this one closely. I will track this one for you.

Polyplex

This one is under the control of the bears now. From a high of 283 in last September has dropped to a low of 141. Forget this one. Your money is safer under your pillow than in this stock.

OBC

The stock after reach a high 350 last march has been moving sides ways and drifting down and is quoting at 238. Has been moving in a range of from 230 to 290 for the last 11 months. Of late there was bullish divergence in the Trix in the daily and weekly. Now the stock has made a higher pivot low. Even if moves up there is too much density overhead. Also looking at the movement of the stock for the last 11 months, how much it will move up is very unclear. The stock has to first move above 285-290. Till then only some range play can be considered. Considering all these it is better to stay away from this one. There are many better counters available.

Hope this is useful.

Regards

Karthik

Thanks very much for the reply Karthik. Can i enter OBC for short term and trail the stoploss so that in case there is weakness at 285-290 i can get stopped? Also can you suggest other good bank stocks? Now i hear that Bank sector is due for the uptrend as it has been subdued for quite some time. So called investment gurus !!, money suckers think that bank sector should get its due respect and dignity.......!!!!

 

[ramtrade]

Hi Karthik,

Got any idea about Allsec technologies. Currently trading at P/E of 14.7 with an estimated EPS of Rs 16/-. The stock has been rising from Rs 229 to the CMP of Rs 245/-.

Thanks
Ramesh

 

[karthikmarar]

Hi Karthik,

Got any idea about Allsec technologies. Currently trading at P/E of 14.7 with an estimated EPS of Rs 16/-. The stock has been rising from Rs 229 to the CMP of Rs 245/-.

Thanks
Ramesh

Hi Ramesh

All sec has dropped from a high of 293 to a low 226 in the last three months. The drop was after the Q3 net profit dipped on a QoQ basis. From this low this has risen to the CMP 245. It seemed that bullishness was returning. However the stock has failed to take out the previous high of 249. Now it is in overbought territory and the daily momentum is waning. So we can expect a pullback. We will wait to see if this makes a higher low. Then once it takes out 250 we will be in bullish territory. The weekly momentum is at it low point and will turn positive soon. Till then this once belongs to the watchlist. Also note for software-medium sector the sectoral PE multiple is around 17.7.

In last December Allsec acquired a Bangalore based company B2K Crp. In February the company enter into a partnership with an Australian company Sales Force to provide call quality monitoring services. The company seems setting itself on a growth path. But the risk are that it is pure BPO Company. Also it is localized with its operation in chennai and Bangalore. It will face stiff competition from companys, which are broad based. Also it is heavily depended on few clients. It is a company worth watching on a fundamental perspective and it depends on how this company diversifies and the overall future of outsourcing market.

warm regards

Karthik