SBEI Infrastructure Finance Ltd: Buy For Immediate Gains

Please Click on the Chart to Expand

SREI Infrastructure Finance Ltd is a Holistic Infrastructure Institution, constantly and consistently ideating to deliver innovative solutions in infrastructure space, thus playing a significant role in nation-building for over two decades, both in urban and rural India. SREI's businesses include Infrastructure Project Finance, Advisory and Development, Infrastructure Equipment Finance, Venture Capital, Capital Market and Insurance Broking. Srei has a pan India presence with a network of 85 offices and has also replicated its business model overseas with two offices in Russia and one in Germany.
SREI Infrastructure Finance Limited, India’s one of the leading infrastructure financial institutions, recorded a 27% growth in its Consolidated Total Income at Rs.3,109.92 crore during the year ended March 31, 2013 as compared to Rs.2,446.33 crore during the corresponding period last year. The Consolidated Profit After Tax (PAT) increased by 136% at Rs.263.18 crore during the year ended March 31, 2013 as against Rs.111.81 crore in the corresponding period last year. The Consolidated Profit before Tax was  Rs.362.78 crore as against Rs.236.77 crore in the previous year, registering a growth of 53 %. SREI Infrastructure Ltd's consolidated assets under management stood at whooping Rs.33, 330 crore as on March 31, 2013 from Rs.30, 881 crore from the previous year, registering an increase of 8%. The consolidated disbursement during the year ended, 2013 was recorded at Rs.15,667 crore.
The Board of Directors of the Company at its meeting recommended a dividend of 5 % to the shareholders

SREI Infrastructure Ltd's Businesses:

(i) SREI Project Finance Business maintained a positive business momentum despite a challenging macro-economic environment, during the financial year 2012-13 leading to a portfolio growth of 11% to Rs.10,060 as on March 31, 2013 from Rs.9,111 crore as on March 31, 2012 last fiscal. The team continued to offer tailor-made innovative financing solution to its clients in infrastructure sectors like conventional power, renewable energy, road, port, urban infrastructure and SEZ & industrial park to diversify the portfolio across various infrastructure sub-sectors. During the financial year FY13, higher emphasis was laid on strengthening the systems & processes and a new Information - technology based Loan Origination and Management System was implemented to ensure that the Business is geared to take full advantage of the opportunities existing in the Indian infrastructure domain.
 

(ii) SREI Equipment Finance Business, the industry leader in infrastructure and construction equipment financing, continuing on its growth trajectory, recorded a total Asset Under Management of  Rs.19,315 crore as on March 31, 2013 as compared to Rs.17,476 crore last fiscal, an increase of 11 %. The Profit Before Tax stood at Rs.403.48 crore as on March 31, 2013 as compared to Rs.304.62 crore during the last fiscal while the Profit After Tax stood at Rs.269.92 crore for the year ended March, 2013 as against Rs.197.23 crore during the same period last fiscal,  recording a growth of 27%.

(iii) SREI Infrastructure Project Development Business with its progress has made an indelible impression as a leading sponsor of PPP Business in Road sector in our country which has an appreciable and robust portfolio of close to 5,500 Lane Kms of Road Assets with a total capital cost of Rs.11,631 crore, which is already commissioned or under implementation in consortium with reputed domestic and acclaimed international partners under PPP framework. These projects are a diversified mix of annuity and toll-based projects and have been awarded by the National Highway Authority of India (NHAI) under National Highways Development Programme (NHDP), Ministry of Road Transport & Highways and various State Governments.

(iv) SREI Project Advisory Business is taking lead and pioneering itself in all major thrust area of Infrastructure. It has been empanelled with the Prime Minister’s Office (PPP Cell) of the Government of Bangladesh as Transaction Advisor for PPP Projects in Civil Accommodation Infrastructure sector (economic zones, city infra development, public building). It has also been empanelled by DMICDC as Transaction Advisors for a large stream of PPP projects in offering. With its proven credential in Road, Bridge and Transportation sector, it has bagged a mandate from West Bengal State Rural Development Agency for Preparation of Detailed Project Reports on Rural Roads and Major Bridges on un-bridged gaps under PMGSY in West Bengal. In addition, it is now the Transaction Advisor for PPP Projects in Bihar for Infrastructure Development in Patna.
SREI Advisory has also secured a major assignment in State of Maharashtra from Directorate of Medical Education and Research which envisages providing Transaction Advisory and Project Management Consultancy services for setting up of 14 Nursing Care Units on PPP. 

WINNING STROKES: THINK DIFFERENT

Yesterdays' call, Kalindee Rail Nirman Ltd at Rs.50, touched Rs.56.75, giving more than 10% return in just 24 hours. The scrip clocked a massive volume today. Do, keep an eye on my blog and my Facebook postings, if you are not a Paid Member or do not trade through my recommended brokerage house.

Buy SREI Infrastructure Finance Ltd (BSE Code: 523756) at Rs.27.90--28.20, T--Rs.33, SL < Rs.26.  The company has reported Jan-Mar consolidated net profit of Rs.69.3 Cr as against Rs.13.2 Cr  a year ago and consolidated total income moved up by around 20% to of Rs.7.8 bln (1 billion = 100 Cr), on Y-o-Y basis. CLICK HERE.

The market witnessed profit booking today.  The  Nifty_Spot is now just above the very important support  level of 6111. If tomorrow Nifty_Spot, closes below 6111, then the immediate trend could turn to negative or the bulls could get a severe beating. However, trend is still BULLISH, as FII pour in funds in the Indian bourses. The Nifty made a net gain of 80 points last week and with this it has appreciated by  around 637 points from the low of 5477 within 5 weeks time, inspite of profit bookings. This clearly shows the inherent strength of Bulls. The week also witnessed a sharp correction and even a sharper recovery. The decisive rise above 6100, now sets a target to 6300-6350 for the Nifty_Spot. The longs can be held with a SL of Nifty_Spot < 6100 / 6080. Every dip is therefore a buying opportunity, till the trend deciding level is not broken.
Note: I fell down in the room (in my apartment) and sustained multiple injuries on the hand (right hand palm), elbow, back, waist, etc. I am basically typing with one hand, hence, I believe large inputs cannot be effected in this blog, at the moment. Therefore, I might not be able to update the blog as usual. However, I think the God will soon make me fit, for your services.  Happy Investing!!

SREI Infra PAT soars 136%

SREI Infrastructure Finance Limited, one of the largest infrastructure financial institutions in the country, on Monday registered a 136 per cent growth in its consolidated profit after tax (PAT). The company’s consolidated total income grew by 27 per cent during the last fiscal year. This, despite FY13 being one of the most challenging years for the infrastructure sector in the country.

The consolidated PAT increased to Rs 263.18 crore in the year ended March 31, 2013, up from Rs 111.81 crore in the previous year. The consolidated total income moved up to Rs 3,109.92 crore during the year, up from Rs 2,446.33 crore during the previous year. “This year saw infrastructure development slow down dramatically due to government being in consternation regarding the path ahead, thanks to massive private sector investments in the sector,” said Hemant Kanoria, CMD, Srei Infrastructure Finance.

Courtesy: Financial Chronicle

Central Bank In Cash Chase
~~PINAK GHOSH

Tanksale: Funds pursuit

Calcutta, May 19: The Central Bank of India plans to raise Rs 2,000 crore in fiscal 2013-14.

“We are planning to raise about Rs 2,000 crore in the current year. This can ideally be either through qualified institutional placements or we can ask for funds from the government,” M.V. Tanksale, chairman and managing director of the Central Bank, told The Telegraph.

The state-owned lender had raised Rs 2,406 crore in the fiscal ended March 31, 2013 through the preferential allotment of 30.8 crore equity shares to the government. This raised the government’s holding in the bank to 85.31 per cent from 79.15 per cent. The bank had further raised Rs 500 crore through bonds last year.

The capital adequacy ratio of the bank, according to Basel II norms, stood at 11.49 per cent for fiscal 2012-13, down from 12.40 per cent a year ago.

The funds could be utilised to further strengthen the bank’s capital base in line with the Basel III requirements set by the Reserve Bank of India and for network expansion.

The RBI had issued the final guidelines for implementation of Basel III norms which are expected to be implemented in a phased manner by March 31, 2018.

According to Deepak Mohanty, executive director of the RBI, although many Indian banks are adequately capitalised in the near term, “going forward capital would become an issue”.

The RBI official said the capital requirement of banks would increase along with the growing demand for credit.

The Central Bank is planning to lower its share of bulk deposits in accordance with the finance ministry directive to 15 per cent. Bulk deposits are rupee term deposits of Rs 1 crore and above.

“We are aggressively looking to lower bulk deposits. We have reduced it from 31 per cent (at the end of March 2012) to 24 per cent (at the end of March 2013). I expect that by March 2014, we will be able to lower them to 15 per cent,” Tanksale said.

The CMD of the Mumbai-based lender said he was eyeing a 17 per cent growth in total business to Rs 4 lakh crore in the current year.
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 Courtesy: The Telegraph

Central Bank of India: The Chart Turns Bullish

Established in 1911, Central Bank of India was the first Indian commercial bank which was wholly owned and managed by Indians. The establishment of the Bank was the ultimate realisation of the dream of Sir Sorabji Pochkhanawala, founder of the Bank. Sir Pherozesha Mehta was the first Chairman of a truly 'Swadeshi Bank'. In fact, such was the extent of pride felt by Sir Sorabji Pochkhanawala that he proclaimed Central Bank of India as the 'property of the nation and the country's asset'. He also added that 'Central Bank of India lives on people's faith and regards itself as the people's own bank'. During the past 99 years of history the Bank has weathered many storms and faced many challenges. The Bank could successfully transform every threat into business opportunity and excelled over its peers in the Banking industry.
Shareholding Pattern: The promoters hold 85.31% while the general public holds 14.69%. Among th general public FIIs hold 1.73%, while DIIs hold 7.65%.

Financials: (i) The Audited results for the Quarter ended March 31, 2013: The Bank has posted a net profit of Rs.1691.50 million for the quarter ended March 31, 2013 as compared to net loss of Rs.(1052.30) million for the quarter ended March 31, 2012. Total Income has increased from Rs.53717.50 million for the quarter ended March 31, 2012 to Rs.64035.70 million for the quarter ended March 31, 2013.
(ii) The Audited results for the Year ended March 31, 2013: The Bank has posted a net profit of Rs.10149.60 million for the year ended March 31, 2013 as compared to Rs.5330.40 million for the year ended March 31, 2012. Total Income has increased from Rs.205448.00 million for the year ended March 31, 2012 to Rs.235279.80 million for the year ended March 31, 2013.

For FY13, Central Bank of India Ltd posted an EPS of Rs.11.24 as against Rs.5.95 in the same period previous year. This gives a natural target of Rs.95, for the scrip in the short term after giving suitable discounting. CMP: Rs.70.25.

Kalindiee Rail Nirman (Engineer): Will Surely Engineer A Better Portfolio

Kalindee Rail Nirman (Engineers) Limited, today stand as Premier and Trusted agency in execution of Railway Track, Signaling & Telecommunication projects on turn key basis. It has rich and varied experience of more than three decades.

The scrip has a book value of Rs.113.97, 9MEPS of Rs.7.59 and P/E of 6.57 (Industry P/E: 10.40), showing that the scrip is highly undervalued at the current conditions when the construction stocks are getting re-rated, in view of a cut in the CRR by the Central Bank.

Made by Kalindee Rail Nirman (Engineers)

For Q3FY13, the company came out with decent set of numbers. The net profit of the company for Q2FY13 came out to be Rs.3.26 as against Rs.3.06 in Q3FY12. Moreover, both the OPM and NPM showed improvement in Q3FY13, speaking Q-o-Q basis. 

Work of Kalindee Rail Nirnam (Engineers)

Recently the company announced that it was able to garner three large value projects each of around Rs.200.00 crores from Railways in the second half of the last year. The Company could also bag a high value order of Rs.166 crores from Kolkata Metro. The Company's operations are presently undergoing in various metro rails in the country viz. Jaipur Metro, Bangalore Metro, Kolkata Metro etc. plus Delhi Metro over and above in Indian Railways throughout the country. Further, the Company’s bid for Rs.246.00 crores with Rail Vikas Nigam Ltd, New Delhi under Ministry of Railways, New Delhi has been successful due to being lowest bidder. Presently order position in the Company is highly comfortable.

Therefore, investors should buy the scrip at the CMP of Rs.50.05-50.10, for a target of Rs.59-60, in the next few trading sessions; please keep a SL < Rs.47.

Market Mantra

The Nifty continued with its uptrend and closed with a gain of 17 points on Friday. Market traded within a range of 25 points between 6150 and 6175 almost for entire day. However, last hour buying took it to a high of 6200 and finally it settled at 6187, making a gain of 80 points in the last week and 723 points from the low of 5477 within 5 weeks time. This clearly shows massive strength of Bulls, as FIIs pour in funds. A clear rise above 6100 now sets a target to 6300-6350. The longs should be held, for the spot Nifty targets mentioned above. The Nifty_Spot is now at 6206, just below the immediate resistance at 6220.

Resistance: 6220 / 6280

Support: 6170 / 6150
Asian indices rose as positive economic data from the US led to confidence in global economic recovery.
The US equities touched record highs on Friday on better-than-expected economic data.
Fundamentally speaking, the Share indices which opened a gap up tracking positive overseas markets and on bullish sentiments after indices closed at 28-month highs on Friday, should maintain their momentum in the view of an expected CRR cut by the RBI.  
 Positives:

• Power:  Govt says 10 states opt for recast of power distribution companies' loans. Power ministry seeks reduction in import duty on all forms of coal used for power generation to 1% from 4% at present.  Good for Sarda Energy and Minerals Ltd (Rs.11.50) , Reliance Power Ltd (Rs.82.45), etc. 
• MONSOON: Southwest monsoon set over some parts of south Bay of Bengal and Andaman Sea. May advance to some more parts of the regions during next 2-3 days.  

Today's call: Buy Kalindee Rail Nirman Ltd at Rs.50, T--Rs.59, SL--Rs.47. With new Railway minister coming and the government deciding to plug the loopholes, the railway related beaten down shares are expected to do well.  
Globus Spirits Ltd (BSE Code: 53104, CMP: Rs.102), is coming up with results today.  I have take some for some of my clients, just on speculation, with a Shot term target of Rs.111-112. This is a pure speculation call and hence non--risk taking investors could avoid the counter.
A Mumbai based Financial Weekly writes: " Sensex may hit an all time high in some days from now. But look at the mid cap index, which is 50% of the 2008 high and the small cap which is 45% of the 2008 high.“Wah re teji, tera jawaab nahin". Though this is presented in a satirical sense, but it indirectly means there is lot of room to play in the small and mid cap space and make tons of money. 
Have you all forgotten the name of Eros International Media Ltd (BSE Code: 53261), which is still available at Rs.164.30; buy it for the medium to long term (6-9 months), for a target above Rs.200. 
Those who love to do a bit of speculation can try Globus Spirits Ltd (BSE Code: 533104) at Rs.102, T>Rs.111-112, SL<Rs.99. The company is coming up with Q4FY13 results today (20th May, 2013). 
Today, IRB Infrastructure Ltd reached its first target of Rs.132, after it touched Rs.135 intra-day. Sarda Energy and Minerals Ltd crossed Rs.112, today. 
Buy Central bank at Rs.70, for a target of Rs.91-92, in the next few trading sessions. The company came out with scintillating numbers for the Q4FY13. CLICK HERE.

Central Bank to shed Rs 16k-crore high-cost deposits in Q1
Bank has already brought-down share of high cost funds in total deposits though FY13

Public sector lender Central Bank of India plans to re-price high cost bulk deposits worth Rs.16,000 crore in the first quarter to bring down cost of funds.

“The bank has already brought-down the share of high cost funds in total deposits though FY13. The interest rates for bulk money, including certificate of deposits (CDs) have declined in the last few weeks. This should help to reduce the cost of funds,” Chairman and Managing Director M V Tanksale said.

The interest rates on short-term money have eased since the beginning of the new financial year.

They were ruling in the band of 8.8-10.1 per cent in March and are in the 7.7-8.1 per cent band now (middle of May).

The share of high cost deposits was about 31.8 per cent (Rs 62,447 crore) at the end of March 2012.

It came down to Rs 24.37 per cent (Rs 55,085 crore) in March 2013. Tanksale said the bank was working to keep high cost deposits below Rs 55,000 crore.

The finance ministry has directed public sector banks to sharply cut the share of high cost bulk deposits to 15 per cent of total deposits.

While contracting bulk deposits at lower rates would reduce the cost of funds, its benefits will accrue only over quarters. The cost of funds was 7.52 per cent at the end of Q3 (December 2012) and declined to 7.50 per cent by March. The overall cost of funds for FY13 actually rose to 7.53 per cent from 7.28 per cent for 2011-12.

Meanwhile, rating agency Icra has assigned a CGR3+ rating to the bank’s corporate governance practices.

The rating implies the bank’s practices, conventions and codes provide an adequate level of assurance on the quality of corporate governance. This rating is on a scale of CGR1 to CGR6, where CGR1 denotes the highest.

Icra said the bank has improved on its public disclosures, especially on segmental asset quality indicators, as compared with peer banks in the recent past.

While the bank has set up a separate board level committee for monitoring recovery, the weak asset quality indicators and relatively lower capitalisation levels weigh down the bank’s financials, the rating agency added.

Courtesy: Business Standard

Divergence In Steel Multiples And Share Prices Spell Positive Shipping Outlook
~~By Xun Yao Chen, Industrials Analyst

Valuations can often tell investors the outlook of equities in the near future. Although value investors often look for valuations that are low, high valuations can often signal better times ahead. This is especially true for cyclical companies, such as steel producers and shipping companies, as has been mentioned by Peter Lynch in his famous book Beating the Streets.

Steel producers’ valuation rose since April 19th

On May 10th, the EV/EBITDA1 valuation multiple for steel producers in developed Asia2 rose to 9.52 from 8.93 times in April 19th 2013, rising 6.6% based on 2014 EBITDA estimates made by analysts in Asia. The multiple rose over the past few weeks as several central banks initiated interest rate cuts that will generally help support a weak global economy. Talks of the end to austerity in Europe has also fueled the broad market higher. The price index, which represents all steel companies in developed Asia, also rose higher, from 80.97 to 87.13.

High valuation multiples often point to higher earnings in the future. Additionally, analysts as a whole are often extremists with earnings (either extremely bullish or extremely bearish) when fundamentals are starting to deteriorate. For example, EV/EBITDA kept falling from 2007 to 2008, signaling either extreme optimism among equity analysts, which inflates EBITDA, or an increase in the required rate of return demanded by the market, which reduces the amount investors are willing to pay for one dollar of EBITDA — both of which lead to lower valuation multiples. This also happened in 2009 when EV/EBITDA started to rise ahead of an industry turnaround. As long as EV/EBITDA does not begin to fall drastically and the divergence we have seen since mid 2012 holds, it suggests that the market is seeing better earnings than analysts’ estimates.

Courtesy: Market Realist

Sarda Energy and Minerals Ltd: Breaks Out

CMP: Rs.107.60

Sarda Energy & Minerals Limited (SEML) is one of the lowest cost producers of steel (sponge iron, billets, ingots, TMT bars) and one of the largest manufacturers and exporters of ferro alloys in India. Headquartered in Raipur, Chhattisgarh, the company merged with Chhattisgarh Electricity Company Limited (CECL) in 2007 with a vision to becoming a leading energy and minerals company. 

The company has acquired iron ore, coal and manganese mines in India and is aggressively looking for mineral resources across the globe. 
Sarda Energy & Minerals Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 25, 2013, inter alia, to :
1. approve the annual audited accounts for the financial year 2012-13; and
2. declare dividend on equity shares, if any. 
Financials: For the 1st 9 months of FY13, the EPS of the company is whooping Rs.20.84. This gives a target of around Rs.175-180, after suitable discounts. Buy at the CMP of Rs.107.60 for a short term target of Rs.125-130. 

Market Mantra

My recommended A2Z Maintenance and Engineering Services Ltd moved to Rs.19.40. This is the scrip where the big bull Rakesh Jhunjhunwala holds around Rs.18.03 % stake.

The morning speculative call Glodyne Tech Ltd at Rs.12.50 hit the upper freeze in the mid afternoon trade and is now locked at Rs.12.78. 
Buy SAIL (Steel Authority of India Ltd) at Rs.63 for a target of Rs.69-70, in the next few trading sessions. The Cabinet may today take up a proposal to allow the company and Rashtriya Ispat Nigam to directly charter ships to import coal and other raw material.  
Morning Intra-day call HDIL at Rs.58, gave good returns to the Paid Members as the scrip touched Rs.60.20. 
My earlier recommended Adani Port Ltd at Rs.151 today, touched Rs.161, after a spectacular Q4FY13 results. 
My recommended Eros International Media Ltd touched Rs.168.65. The scrip should give decent returns over a period of time.
SKS Microfinance Ltd has fallen to Rs.121.60 may be due to some operator action, as there is no reason for the fall after such a scintillating Q4FY13 results and equally good guidance for the FY14. You should accumulate the scrip in all declines for a target of Rs.141-142. 

Iron Ore Seen Strong Into 2014 on China Steel Demand, Supply
~~By Phoebe Sedgman

Iron ore prices will remain strong into 2014 on sustained demand in China, the largest producer of steel, and as an increase in global supply takes longer than expected, according to Morgan Stanley.

While the price has averaged $135 a ton this quarter from $148 in the first three months, that’s more than the bank’s estimate of $130 for the April to June period, analysts Joel Crane and Peter Richardson wrote in a report dated yesterday. The bank maintained its forecasts of $120 in the first quarter of 2014 and $118 in the second.

Iron ore dropped 12 percent this year, nearing a bear market, on signs that economic growth in China is slowing and on expectations of increasing global supply led by Australia, the world’s biggest exporter. Morgan Stanley said April 23 that the global seaborne market will shift into surplus from 2015, after a run of deficits stretching back to at least 2005. Iron ore will be well-supported at more than $100 a ton this year on sustained demand from China, CLSA Ltd. said May 9.

“It is increasingly clear that steel consumption in China remains strong,” Morgan Stanley’s Melbourne-based analysts wrote. “Our assessment of the global seaborne iron ore market is that price strength could continue well into next year.”

Ore with 62 percent iron content delivered to the Chinese port of Tianjin lost 1 percent to $128.10 a dry ton yesterday, according to The Steel Index Ltd. Prices dropped 19 percent from $158.90 on Feb. 20, nearing the definition of a bear market.
 
Excess Supply

“Market concerns over the sustainability of strong iron ore prices are focused on the prospect of an excess of supply coming to market in 2013 and 2014,” they said, referring to expansions such as Rio Tinto Group’s Pilbara operations. “While an increase in mine capacity is well understood in the market, the timetable of ramp-up into that capacity is not.”

Inventory of steel reinforcement-bar, or rebar, in China tracked by Shanghai Steelhome Information Technology Co. fell to 8.95 million tons on May 10, the lowest since Feb. 8. China’s iron ore imports rose 4 percent to 67.15 million tons in April after climbing 14 percent in March, according to customs data.

Another major cycle of stockpiles drawdown is unlikely in the second half of 2013 because inventory levels across the value chain are too low, Goldman Sachs Group Inc. said in a report dated yesterday. The bank estimated stockpiles of iron ore at Chinese ports at 69 million tons, down 29 percent from a year earlier.

“Availability of material has remained tight amid low iron ore stocks at the ports, traders and steel mills,” the Morgan Stanley report said. “On the demand side, we believe the combination of a recent sharp drop from record-high steel inventories and a high level of steel output in China suggest strong iron ore consumption in the country.”

India’s role as major supplier in the seaborne market is in “terminal decline” after mining was suspended in the states of Karnataka and Goa and exports were capped, the report said.

Iron ore is measured in dry tons, or metric tons less moisture. At Tianjin, the iron ore moisture can account for 8 percent to 10 percent of the weight.
To contact the reporter on this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net 

Courtesy: Bloomberg

Gold slips below $1,400; buying in India comes to a halt

A Great News for Indian Equity Market Participants!!

NEW YORK/LONDON: Gold slid below $1,400 an ounce on Wednesday, losing two percent and hitting its lowest in nearly a month as a record rally in US equities and economic optimism undermined bullion's safe-haven appeal.

The metal fell for a fifth straight session for its longest daily losing streak since January 2011 as the S&P 500 hit a new all-time high and Wall Street has risen for four consecutive sessions.

"There is no reason to own gold as long as people keep on putting money into the stock market. You can see it everywhere that the economy is turning around," said Comex gold options floor trader Jonathan Jossen.

A pause in strong physical demand after news India restricted imports to cut trading deficit also weighed on gold. Spot gold dropped as much as 2.5 percent to $1,390.24, its lowest since April 19. It was down 2 percent at $1,396.94 an ounce by 2:09 p.m. EDT (1809 GMT).

Analysts expect the fall below the psychologically significant $1,400 level could be a trigger for further heavy selling and might retest two-year lows of $1,321.35 an ounce hit on April 16.

Wednesday's fifth consecutive daily fall would be its longest run of losses since January 2011. It has fallen around 15 percent so far in 2013 after gaining in each of the past 12 years.

US Comex gold futures for June delivery settled down $28.30 at $1,396.20 an ounce, with trading volume on track to finish near its 30-day average, preliminary Reuters data showed. A stronger dollar and initial heavy losses in crude oil also weighed on gold.

As a gauge of investor sentiment, holdings at SPDR Gold Trust, the largest gold-backed ETF, were unchanged at 33.8 million ounces on Tuesday, but still within sight of their lowest since March 2009 hit earlier.

Later on Wednesday, investors will find out gold investments held by prominent hedge fund managers led by John Paulson at the end of the first quarter. Funds and institutional investors are required to file with the Securities and Exchange Commission 45 days after the end of each quarter.

INDIA RESTRICTS GOLD IMPORTS

Gold buying in India came to a halt as the country's central bank restricted imports after a surge in buying in April sent the trade deficit to $17.8 billion for the month, up more than 72 percent from March.

India's gold and silver imports surged 138 percent on the year in April as customers took advantage of lower prices, increasing pressure on the current account balance and limiting the space for monetary easing.

"With India doing its best through taxation to limit gold buying, the demand from there is not as big as it was the last time we were at these levels," Marex Spectron head of precious metals David Govett said.

In other precious metals, silver fell 2.7 percent to $22.72 an ounce, platinum was down 0.5 percent to $1,489.24 an ounce and palladium dropped 0.1 percent to $725.72 an ounce.

Courtesy: The Economic Times

SKS Microfinance Ltd: A Turnaround Story About to Unfurl

Please Click on the Chart to Expand

The scrip of SKS Microfinance Ltd fell from its all time high of Rs.1452 to the current price of Rs.124, indicating that there is huge potential for the investors to get good appreciation on their investments; if they have faith in the company' management. Meanwhile, the company has staged in a turnaround with a new business model. In between, the FIIs' holding has increased to 35.94% as of 31st March, 2013. Moreover, non--institutional holding has also come down both on sequential basis and on Q-o-Q basis, increasing the premium of the shares of the company.

Also, if we do a bit of further analysis we would find that its 50 DEMA is higher than 200 DEMA and its 100 DEMA is higher than both 150 DEMA and 200 DEMA. In the same way, its 100 DSMA is higher than both the 150 DSMA and 200 DSMA.  All, this points that the scrip is readying to move up in the short term.
Recently, there were media reports that, SKS Microfinance, the biggest micro-lender in the country, is set to post its first full-year profit this fiscal (FY14) after regulatory changes hit its business in 2010. Based on the performance for the quarter ended March and the reduction in the full-year losses for fiscal 2013, the company is expecting to post a profit of Rs.55-60 crore in this fiscal.
“We are targeting a disbursement of about Rs.4,500-4,800 crore in the current fiscal as against Rs.3,200 crore in the last. This would result in a total portfolio of about Rs.2,800-3,000 crore as against Rs.2,000 crore in fiscal 2013. All this would result in a profit of Rs.55-60 crore for the full year in fiscal 2014,” S Dilli Raj, SKS’ chief financial officer, told  a financial daily in this month.
For the quarter ended March 2013, SKS posted a 11% year-on-year rise in income at Rs.95.09 crore as against Rs.85.05 crore in the December quarter. Net profit doubled to Rs.2.70 crore as against Rs.1.15 crore posted in the sequential quarter. For the full year ended March 2013, the company’s income fell to Rs.332.2 crore from Rs.435.7 crore in the previous year. It, however, booked a lower loss of about Rs.297.14 crore as against Rs.1,360.59 crore in the previous year, which is thing to be appreciated.
“We are confident of booking profits for the full year this fiscal. The cost of funds too has significantly come down to about 12% from the earlier 13.2%. There is further headroom for us to bring the costs down though the reduction in the rates is linked to the anchor rates,” Raj said. The company is currently operating in 19 states, excluding Andhra Pradesh. 
It is pertinent to mention here that, the company slipped into significant losses after Andhra Pradesh, a key market for microfinance institutions (MFIs), promulgated a law to discipline the micro-lenders that were indulging in coercive recovery practices. SKS’s operations in the state, which accounted for about a third of the total portfolio, had come to a grinding halt, forcing the company to look for other markets.  “Now, the impact of the Andhra Pradesh MFI Act is behind us. We are gearing up for growth and our strategy to turn around the operations has worked,” Raj said.
Conclusion: Looking at the above factors and considering the turnaround of the company's business, the investors can take a bet on the scrip at the CMP of Rs.124 for a target of Rs.141-142, with the next 3-4 weeks.  

Eros International Media Ltd: Looking to Cross Rs.200

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It is a part of the Eros International Group. Eros International Media Ltd is a leading global company in the Indian film entertainment industry. It co-produces, acquires and distributes Indian language films in multiple formats worldwide including; theatrical, television syndication & digital platforms. .
Its success is built on the relationships that it has cultivated over the past 30 years with leading talent, production companies, exhibitors and other key participants in the industry. Leveraging these relationships, it has aggregated rights to over 1,900 films in its massive library, plus an additional 700-plus films for which it holds digital rights only.
The group has a distribution network that spans over 50 countries, with offices in India, UK, USA, Dubai, Australia, Fiji, Isle of Man and Singapore. In 2006, Eros International Plc, the holding company of the Eros Group, became the first Indian media company to list on the Alternative Investment Market (AIM) of the London Stock Exchange.
Shareholding Pattern: The Promoters hold 74.88% of the shares of the company, while the general public holds only 25.12%. Among the general public, 12.25% of the shares are held by institutions (FIIs--9.39% and DIIs--2.88%), so we have very little free shares available in the market for trade and this  adds to the premium of the shares. Moreover, the FIIs have increased their holdings both on Q-o-Q and Sequential basis. According to a market statistician, on April 11, 2013 Morgan Stanley Asia Singapore PTE bought 500,000 shares of Eros International Media Ltd at Rs.171 on the BSE and bought 500,000 shares at Rs.171 on the NSE. CLICK HERE.
Brokerage Firm, GE Capital Ltd's Views:   
(i) Deal with Endemol to open new content avenues for Eros: Eros and Endemol India (Endemol) have entered into an alliance to produce three feature films and co-produce original content programming for Television. An amount of  Rs.1bn has been earmarked for producing the three films. The deal with Endemol would allow Eros to access Intellectual Property belonging to the former. Endemol has a great track record of versatile content across various genres on television such as Bigg Boss, Fear Factor and so on. Hence, the brokerage firm believes that the deal is a step in the right direction to penetrate into the fast expanding Rs.500bn television industry.
(ii) Impressive releases during the quarter: During the quarter Q3FY13, Eros released 21 films in all; 18 in Hindi and 3 in Non-Hindi (Regional). Some of the films worth mention are English Vinglish, Son of Sardaar, Thupakki, Maatraan and Khiladi768. These films are also among the best performing films released in India during the quarter.
Huge slate of releases in FY14 with potential to garner sizeable revenues For this year (FY14), Eros has an impressive line-up of movies involving big names such as Amitabh Bachchan, Rajnikanth, Hrithik Roshan and so on. The release of Kochadaiyaan which was scheduled for Q4FY13 has been postponed to Q1FY14 along with several other movies, hence we expect sales growth for FY13 to slow down to 13% versus 20% estimated earlier. For FY14, Sales is expected to grow at 23% versus 19% estimated earlier.
(ii) Valuation & Viewpoint: At CMP of  Rs.165.85 Eros is trading at 7.61x its FY14E EPS of Rs.21.77. The brokerage house expects that FY14 would be a high growth year as revenues from the HBO deal will begin to trickle in. The enthusiastic response to Offer For Sale by promoter (4.4x over-subscription) showed considerable investor interest in the company’s growth story. The company paid its maiden dividend of Rs.1.50 per share during the quarter. The Brokerage house has valued the stock at its long term P/E multiple of 11x to arrive at the target price of Rs.238 with a BUY rating.
Conclusion: Apart from what is mentioned above, it is important to note: Eros International Plc & HBO Asia's joint announcement to launch two new premium advertising-free movie channels, HBO DEFINED and HBO HITS in India, which are expected to be money spinners in the coming days. Also, EIML has recently signed a licensing agreement with colors’ Viacom18 Media Pvt. Ltd. Besides this the analysts are expecting Net Sales and PAT of the company to grow at a CAGR of 20--22% in the coming years. 
The investors can therefore buy the scrip at the CMP of Rs.165.85, for a medium term target of Rs.230 and a short term target of Rs.192.  

Inflation back in the RBI's comfort zone after 3 years

 "Go Full Hog", after Bank/NBFC stocks as now a CRR cut is a reality unless our "Ustad" becomes fully insane.....

NEW DELHI: Country's headline inflation fell below 5 per cent in April, dropping within the RBI's comfort zone for the first time in more than three years and fuelling market hopes for more monetary easing to revive flagging economic growth.

The wholesale price index rose 4.89 per cent from a year earlier and was the lowest inflation rate since November 2009 and well below the 5.50 per cent forecast by analysts in a Reuters poll. It was more than a full per centage point lower than the 5.96 per cent rise in March.

Inflation has been a persistent headache for policymakers struggling to breathe life into Asia's third largest economy, and has been a major factor in the declining popularity of the government of Prime Minister Manmohan Singh.

The low number quickly sparked gains in the bond and share markets, while the rupee was little changed.

"It is a frenzy. The market is pricing in a rate cut," said Ashish Vaidya, head of treasury at UBS in Mumbai.

Earlier this month, the RBI cut interest rates by a quarter point for the third time since January, to reduce the policy repo rate to 7.25 per cent.

The bond market rallied to a three-year high, with the benchmark 10-year bond yield dropping 4 basis points, while stocks were up and the rupee strengthened slightly to 54.61/62 per dollar versus Monday's close of 54.73/74.

Global commodity cooling

Inflation was mainly cooled by a moderation in food and fuel costs helped along by lower global commodities prices.

Food inflation slumped to 6.1 per cent from 8.7 per cent a month ago on lower wheat, meat and egg prices. Fuel rose 8.8 per cent on the year after a rise of 10.2 per cent in March.

Non-food manufacturing inflation, which the central bank monitors to gauge demand-driven price pressures, slowed to 2.8 per cent in April from 3.5 per cent a month ago, after the international price of iron ore and steel dropped.

"With food prices expected to remain stable, manufacturing prices weak due to slow growth, and commodity prices stable, inflation in expected to be on a broad downtrend for the next six months and this, we believe, opens up room for more rate cuts," said Rahul Bajoria, Regional Economist at Barclays Capital in Singapore.

Government data showed on Monday that annual retail inflation slowed by a full per centage point to a 14-month low of 9.39 per cent in April.

"We think there is a possibility of as much as 75 basis points more rate cuts in the next six months, including 25 basis points at the next policy (review) in June," Bajoria said.

Gold takes off sheen

Not everyone was so upbeat. Indranil Pan, chief economist at Kotak Mahindra BankBSE 0.33 %, expects caution from the RBI until inflationary risks abate and the current account deficit improves.

"Since RBI expects inflation to rise post September, I don't think the governor will risk cutting rates aggressively," Pan said.

The current account gap widened to a record high 6.7 per cent of GDP in the December quarter, driven by heavy oil and gold imports and lower exports.

After cutting rates this month, the RBI said the external deficit as the biggest risk "by far" to the economy and a factor limiting room for more easing.

Those worries were highlighted by data on Monday that showed a massive gold buying spree lay behind a jump of more than 72 per cent in the April trade deficit.

Slowing inflation is a relief for the Congress-led ruling coalition, which needs an economic revival to help it in state elections this year and a national election due by May 2014.

But there could also be a downside -- while persistent cooling in non-food manufacturing prices bodes well for the inflation outlook, it also points to weak consumer demand that could further dent any hope of a fast economic rebound.

Country's growth in 2012/13 was likely the lowest in a decade, and is not expected to much surpass 6 per cent in 2013/14

Courtesy: The Economic Times

Central Bank: Ready To Move Up

Established in 1911, Central Bank of India was the first Indian commercial bank which was wholly owned and managed by Indians. The establishment of the Bank was the ultimate realisation of the dream of Sir Sorabji Pochkhanawala, founder of the Bank. Sir Pherozesha Mehta was the first Chairman of a truly 'Swadeshi Bank'. In fact, such was the extent of pride felt by Sir Sorabji Pochkhanawala that he proclaimed Central Bank of India as the 'property of the nation and the country's asset'. He also added that 'Central Bank of India lives on people's faith and regards itself as the people's own bank'. During the past 99 years of history the Bank has weathered many storms and faced many challenges. The Bank could successfully transform every threat into business opportunity and excelled over its peers in the Banking industry.
Shareholding Pattern: The promoters hold 85.31% while the general public holds 14.69%. Among th general public FIIs hold 1.73%, while DIIs hold 7.65%.

Financials: (i) The Audited results for the Quarter ended March 31, 2013: The Bank has posted a net profit of Rs.1691.50 million for the quarter ended March 31, 2013 as compared to net loss of Rs.(1052.30) million for the quarter ended March 31, 2012. Total Income has increased from Rs.53717.50 million for the quarter ended March 31, 2012 to Rs.64035.70 million for the quarter ended March 31, 2013.
(ii) The Audited results for the Year ended March 31, 2013: The Bank has posted a net profit of Rs.10149.60 million for the year ended March 31, 2013 as compared to Rs.5330.40 million for the year ended March 31, 2012. Total Income has increased from Rs.205448.00 million for the year ended March 31, 2012 to Rs.235279.80 million for the year ended March 31, 2013.

For FY13, Central Bank of India Ltd posted an EPS of Rs.11.24 as against Rs.5.95 in the same period previous year. This gives a natural target of Rs.95, for the scrip in the short term after giving suitable discounting.

Market Mantra

Tulip Telecom Ltd hits the buyer freeze in the mid-afternoon trade. The company has an enviable business model and it is pity that the scrips are available at such dirt cheap price. CMP: Rs.16.70. I would like to reiterate again that it would be difficult for you to make money only following this blog, as there are lot of things which needs to be taken into consideration, during the market hours, which is not possible to upload in this blog at this moment. Therefore, join either the Paid Service or you can Join my recommended brokerage house/s or allow me to trade on your behalf in your account to get maximum gains. If you are looking forward to minimizing your losses then you can think of joining my service at the earliest. The markets are moving up and this is the time to make maximum money.

Buy United Bank of India Ltd at Rs.57--57.50, T--Rs.65-66, SL--Rs.55. The Q4FY13 of the company is though not too good, but this kind of results were anticipated and is factored in the current price. The net profit got a hit due to higher provisioning, which is more than double on Q-o-Q basis. However, this is expected to come down in the coming days. Having said, that I would like to say, that non--risk taking investors can try Central Bank Ltd at Rs.69-70, T--Rs.76-77, instead of United Bank of India. Also, with April inflation hitting a 41-month low of 4.89% vs 5.96% in March, the stocks in the banking and construction sectors (basically EPC companies, Eg. A2Z Maintenance and Engineering Services Ltd) are expected to do well in the coming days. The inflation targeting is more or less now over, and we can now look forward for a more expansionary economic goals.

Yesterday's trade was very much in line with expectation. The markets got a jolt at the resistance of 6100  resulting into straight fall of Nifty_Spot to 5973. Finally it settled at 5980 with a net loss of 127 points. However, uptrend being intact, Nifty may find support at sundry levels among which 5950--6000 and 5920 are important. Today, since the morning trade the Nifty_Spot is trading firm, though it dipped slightly in between due to strengthening of the USD against the major currencies. As long as the Nifty_Spot trades above the levels mentioned earlier, it will be a great relief for the bulls. The traders can take long positions, with  a SL in 5920--5900 ranges. The correction was healthy and was needed after such a fierce upmove. Buy the stocks in the Banking, Construction, and Auto Sectors. The RBI is expected to for a CRR cut in the next policy meet and this would be positive for all the sectors mentioned above. Every dip should be used as a buying opportunity.  Nifty_Spot is now trading at 5994, but it is expected to close above 6000.