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Sunday, October 26, 2008

WINNING STROKES: THINK DIFFERENT:
I have earlier talked of a level of 6500 on the Sensex as the worst case scenario, considering a P/E of around 6 (six) while comparing it to the Great Depression in early 20th Century.
My recent reasoning is also based on the fact that many banks today have a shockingly large exposure to leveraged derivatives such as futures, options and even more exotic instruments.
The most dangerous part is that underlying value of assets represented by such financial derivatives at quite a few big banks is greater than the total value of all their deposits. The estimated representative value of all derivatives in the world today is around $90 trillion, over half of which is held by U.S. banks...speculating in leveraged derivatives poses one of the greatest risks to banks that have succumbed to the lure. Leverage almost always causes massive losses eventually because of the psychological stress that owning them induces.
THE QUESTION REMAINS WHETHER ALL THESE FACTORS ARE ALREADY BUILT IN THE CURRENT VALUE OF SENSEX OR NOT!!!
It is because the Stock Markets world-wide discount such happenings well in advance. Those who are investing since a decade should have noted that in the last bear phase of 2000--2003, the Sensex started to move up, the day US attacked the Iraq. Moreover, the Indian Banking industry is pretty safe due to Strict Regulations. Hence India is more or less miles apart from any such catastrophe.
Therefore, the moot question is: Is it so easy to reach that level of 6500 in the Present Circumstances, even though the chances/possibilities, look a little remote (80:20)?? These are to be discussed with the Paid Groups in the Sunday Report.
So what should an average investor do with his/her portfolio at present.....Sell out all the stocks for better valuations ahead or keep holding the scrip in the Portfolio or Average out select counters or go for bottom fishing or.............???
Another thing which has come to my notice, that the media is ripe with rumours that I have turned a bear from a "raging bull" and is up to make a killing by shorting.
Actually even the clients of my PMS do not know what I do with my Individual Portfolio for the Short Term. Like Rakesh Bhai I maintain utmost secrecy in all my account. To make things a bit complex I also do not trade with a Single Brokerage House. Hence at a given point of time no one (including my assistants and family members) never know what scrips I am holding or what is the correct size of my portfolio. Hence I would urge you not to give ears to what the general speculation is there in the markets about my portfolio. Just one thing which I want to point out is that: I have made a killing within a couple of years of any major Crash of the markets. I had earlier mentioned in this blog a number of times that I purchased Alphageo Ltd at Rs.5 (five) in 2003-04, only to sell some of the shares at Rs.350 in 2006 and the remaining in 2007. Similarly, I purchased Aban Llloyd Ltd at Rs.145 during the Iraq--US was and made a killing when the share price of oil companies shot up post war. Same is the case of Selan Exploration Technologies Ltd (bought at Rs.72 in 2006 and sold at Rs.280 in 2008) and many such scrips including my historic buying of Hazoor Media at Rs.7 and Radhe Developers Ltd at Rs.7.5 during the bear phase or when no one was looking at them.
Only remember that stocks generally have a tendency to move up in the future and hence I have seen very few people in my life who have better in good companies like State Bank of India, Infosys Technologies Ltd or Wipro during the lean phase and lost their deposits.
Making money in the stock market does not require too much brain as is made out to be by some Vested Interest Groups---much easier than the Graduate Programmes of any Engineering Branch. As mentioned by the noted analysts, Mr. Siddhartha Chatterjee (of Kolkata) in a number of his programmes on Television [It seems neither NDTV Profit or CNBC TV18 or Zee Business have ever heard his name---it is unfortunate. It shows how the New Delhi or Bombay based News Channels give coverage to the Eastern Part of India. I was also thinking on the same lines when yesterday, I watching a Nonsense talk show on Raj Thakrey, by CNBC TV18, hoisted by Karan Thapar. I think Mr.Tapar has run out of steam as far as his choice of topics are concencerned, when he thought to chose a Cheap Subject on a non-entity named Raj Thakrey. I would only say that, the way some political parties are trying to rake up "Bhoopi Putra issue", is DANGEROUS AND IS A SURE SHOT DOSE TO BREAK OUR COUNTRY INTO PARTS.....My experience in North East attests to my views---India is one and there should not be fanning of any such Dangerous issues which could hit the integrity of India.....What will happen if the same issue is raked up in West Bengal, Hyderabad, Chennai, Bangalore, or Jaipur or...........I liked the comments by the eminent lawyer Kapil Sibal on this issue................]
According to Mr.Chatterjee (CA and CS): Buy when you think the price of a share is less (or consolidates at a price) and sell when the price is above your buy price. Simple isn't it..??!!
The things picked up during distress selling are generally considered to be best bargains. Hence my suggestions would be not to go by any blanket rule but applying ones brain and reasoning for any buying or selling.......
Hence if you believe in the media/market speculation and sell ur holdings at the price of water, you will be responsible for your actions and should never blame me.
Defence is the best form of offence
Defence is the best form of offence. Yes, you are reading it right! With the Indian equity markets on a downhill, investors are left with no other option but to be on the defensive. And why not?
Defensive sector stocks are the safest place to park your funds in these volatile times. The growth prospects appear bright and the consumer discretionary sector has been least impacted by the current slowdown. History is also on its side.
Consumer stocks have always performed better when the times have been uncertain and journey tough. Here’s an insight into why it makes sense to invest in consumer stocks, and how they can help you sail through the rough waters ahead.
RECESSION-PROOF: For the uninitiated, defensive stocks are essentially companies that tend to perform steady under complex economic conditions. The stocks are usually from sectors such as FMCG and healthcare that are considered to be less risky than sectors such as capital goods, banking and automobile.
Elaborates Mukesh Gupta, director of Wealthcare Securities: “These stocks generally belong to diverse sectors and are difficult to define. They can be divided on the basis of products into personal care, processed food and household products. Inherently, these stocks are less volatile, don’t get influenced considerably by short-term market trends and their prices fall less in the event of a downturn.”
Take for instance, the performance of consumer stocks such as Hindustan Unilever, Colgate-Palmolive (India), Nestle India and Sun Pharmaceutical Industries in the last three months. These stocks have all delivered single or double digit three-month returns on the BSE, even as stocks from other sectors are offering negative or little returns during the said period.
Analysts advise that investors should typically increase their exposure to consumer stocks during bear attack, since these stocks tend to underperform during a bull run. Currently, most of the consumer stocks are quoting at one-year lows.
PROMISING PROSPECTS: The numbers are pretty encouraging. The FMCG market has been growing more than 10% growth since 2005 and is expected to grow at a compounded annual growth rate of 10-12 % over the next few years. The penetration of many product categories in the segment is still low, and thus, the growth potential of the FMCG industry looks promising.
“Growth of agricultural income year-on-year ensures bright prospects for penetration into the rural areas as that segment has been by far the least penetrated. With a constant increase in the per capita income over the last five years, the Indian consumer is headed for a better life-style. Since the per capita income in India is much lower than the other developed world, the potential for growth is very high,” feels Gupta.
INVESTMENT HORIZON: According to financial planners, investors should ideally allocate around 20% of their core portfolio in consumer discretionary stocks in current times. The portfolio allocation, however, is subject to change depending on the market dynamics. “Considering the bloodbath has punished sectors across the board, consumer stocks have provided a safe haven for investors in the last few months,” says Anil Advani, head of research, SBICAP Securities.
This is one sector, feel analysts, which will not disappoint in major turbulence. “CNX FMCG index has given an average return of around 18% in the last five years. You can expect a return of 15-18% in this sector.
However, keeping in mind the current scenario, when investing in equity, you should have a minimum investment horizon of three to five years,” says Gupta. The writing is on the wall now — the best offence is a good defence right now.
Posted by SumanSpeaks at 9:59 AM

ICSA India Ltd (BSE Code-->531524)

Buy ICSA India Ltd at the CMP of Rs.90--Rs.92 for a target of Rs.150, in the next 45 days time frame. The company is into making of innovative products suitable for Power Utilities, in the field of Energy Management, Energy Audit, and Control Applications and provides versatile Data Acquisition System using several communication media such as GSM, CDMA, Satellite, Optical Fibre and RF.

Company has allotted 105000 Equity Shares on conversion of 35% of Stock Options granted under ESOP Scheme 2005 and 26,50,000 Equity Shares on conversion of Fully Convertible Warrants. Out of USD 46mn FCCB raised by the company, USD 25mn FCCBs were converted in the last financial year and an amount of USD 21mn are outstanding as on December 31, 2008.

Company has taken up the commissioning of Wind Forms aggregating to 9.6 MW.The company came out with superb set of numbers for the December, 2008 quarter, inspite of the downturn.

More coming..............

Oil rises towards $38 on surprise crude stocks drop

PERTH: Oil climbed towards $38 a barrel on Wednesday, paring some of overnight's 5 percent losses, after the industry group American Petroleum Institute's weekly inventory data showed crude stockpiles had fallen unexpectedly.

But a downward revision by the U.S. government on its oil demand forecasts and doubts over the effectiveness of the U.S. government's bank rescue plan capped oil's gains.

U.S. crude for March delivery rose 38 cents to $37.93 a barrel by 0225 GMT, after settling down $2.01, or 5 percent, at $37.55 a barrel on Tuesday.

London Brent crude rose 50 cents to $45.11, stretching its unusual premium over U.S. oil prices to more than $7 a barrel, nearing the record above $9 hit last month as storage tanks in the Cushing delivery point neared their peaks.

"The API data is helping prices to rebound after last night's sell-off. Oil prices were perhaps a little oversold amid the panic across the equities and commodities markets," said Toby Hassall, chief analyst at Commodities Warrants Australia.

"The macroeconomic data from the U.S. is not painting a picture of swift recovery but the API numbers could be an indication that supply and demand in the spot market is beginning to get a little more balanced."

U.S. crude oil stockpiles unexpectedly fell 1.996 million barrels last week despite an increase in import levels and a decline from refineries, data from the American Petroleum Institute on Tuesday, bucking expectations that crude stocks would increase by 3.1 million barrels.

Analysts said investors were cautiously optimistic as the API report comes one day ahead of the U.S. Energy Information Administration's (EIA) weekly report on petroleum supply and demand, which is considered to be accurate.

U.S. crude oil inventories rose for the seventh consecutive time last week, analysts forecast in a Reuters poll on Tuesday, citing a drop in refinery utilisation and higher imports.

In yet another sign that OPEC would cut production targets at its next meeting in March, Saudi Arabia's oil minister said low oil prices were as unjustified and unsustainable as the record peak above $147 a barrel last summer.

But expectations that the International Energy Agency will cut its forecasts for 2009 world energy demand yet again this week due to a worsening economic outlook continued to weigh on oil markets.

Oil's sharp losses on Tuesday, which dragged it back below the psychologically important $40 mark, came after the U.S. government revised its oil demand forecasts lower and on concerns the American banks bailout plan unveiled by the Obama administration will do little to revive the ailing economy.

The EIA revised down its 2009 global oil demand forecast by 400,000 barrels per day from the previous outlook, predicting demand will fall by 1.17 million bpd this year from 2008 levels.

Analysts said investors would be closely eyeing Chinese import and export data as well as U.S. international trade figures to gauge the health of the economy

 
 

Some Positives about Pyramid Saimira Theatres Ltd

  • PSTIL is taking strong measures to improve both its top and bottolines according to Mr.Swaminathan, the CMD of the company. There is also strong source based news, that the company could come up with a "Buy Back" of the shares at a higher price or at a Premium to the market price.

  •  It is to be understood that Pyramid Saimira (PSTL) , a holistic Indian multinational entertainment company, operating in 6 countries is one of the World's fastest growing entertainment group. Its diversified businesses include Exhibition (Theatre), Film and Television Content Production, Distribution, Hospitality, Food & Beverage, Animation and Gaming, Cine Advertising, etc., which has propelled it to take the entertainment industry to the next level.

  • Due to downturn the company has reduced the number of screen at present to 250 since the company observed that average capitalization of screens were falling across the industry and average spend per person is not increasing proportionately.

  • Now the company has started to take special measures to increase the profitability of the venture and some of these measures have already started to show  positive effect on the company's fundamentals.

For example: 

Serial No.

Particulars

Q3FY09

Q2FY09

% Change

  1.  

No. of screens

252

745

 

  1.  

Sq.ft under control

10.04 lakhs

31.91 lakhs

 

  1.  

Average Capacity Utilization

38%

36%

5.5%

  1.  

Average revenue per footfall

Rs.41.93

40.11

4.5%

  1.  

Average Revenue per Screen for the quarter

34.24 lakhs

32.63 Lakhs

4.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Some more positives about PSTL:

1. The company realigned the screens and also re-negotiated and revised the terms. In addition, withdrew from the Northern and Western India completely where the company was making losses. Towards the same the company has treated those losses as operational loss.

2. Due to realignment of terms and transfer of control of certain screens to the distribution verticals, the company is expected to receive substantial amounts of Security Deposits from the theatre owners for fully de-hired theatres and some of the advances has been transferred in favour of subsidiary company, handling, distribution. The recovery of advances from theatre owners is on---this is great news for the shareholders. Since the deposits are recoverable and hence it has not placed any provision for bad debts.

3. The company is adding another 150 screens the funding of which will be done by the amounts received from de-hired theatre owners. This is expected to optimize operational efficiency.

4. This will also enable better tax compliance and planning. This method will avoid unnecessary transfer pricing complications.

5. In the Q3FY09, the amount of Rs.76.32 Cr has been provided for as an external loss towards foreign exchange. It is to be understood that the Net Loss for Q3FY09 is Rs.74.74 Crs. Hence if we remove that virtual loss of Rs.76.32 Cr, do we not get a BETTER picture of the company's results?? In fact the company came out with a net profit of Rs.1.6 Cr in Q3FY09.

6. Taking cues from the above it is found that company's EPS for the year ending 31st March, 2008 on a standalone basis is Rs.2.47.

For Q1FY09, EPS-->Rs.4.77,

For Q2FY09, EPS-->Rs.3.08, and

For Q3FY09, EPS--->Re.0.56.

So Annualised EPS for the current year is expected to be a whooping Rs.9.53. This is exclusive of the EPS of the group/subsidiary companies.

 

This massive EPS is against the current price of the scrip at Rs.20.55; which looks absurd and hence the scrip shoud go for an immediate re-rating. All these has been done on a conservative basis; however if there is a further improvement in the fundamentals due to steps taken by the management of Pyramid Saimira Theatres Ltd, the EPS for FY09, could exceed Rs.10.

 

Hence the scrip of Pyramid Saimira (PSTL) is dirt cheap, considering the potential of the company.


Moreover, any film launch in next week or at the end of this month or news of any buy back of shares will have positive effects on the share price and could rocket the scrip of the company up---a characteristic of the PSTL.

 

I think you remember how most of the shareholders got benefited from my similar move in case of Garnet Construction Ltd in 2007, when the stock was moving down from Rs.53, hitting continuous lower circuits. Moreover, those who have purchased Satyam Computer Services Ltd along with me from Rs.18.5 must have  been benefited by now---this is called reading between the lines, which is an essential part of the stock market. The art of making money in the stock markets is to see or visualise what others are not able to do, normally.

 

THE ABOVE INPUTS WERE SENT TO THE PAID GROUPS, LAST WEEK...

WINNING STROKES: THINK DIFFERENT

Pyramid Saimira Theatres Ltd hit the buyer freeze, as the company is working hard to improve its fundamentals. Already the steps taken are showing positive effect. This might be a repeat of the Satyam Computer Services Ltd episode, where most of the investors who bought with me from Rs.18.5,onwards, made huge money, when the share price suddenly spurted to more than Rs.60 in less than 2 months time frame. Please stop hearing all those experts on television channels if you want to make genuine money from the markets!! Those who have heard the great voice of Shankar Sharma and shorted the market must have lost their shirts in the last few days. Moreover, it is good to see Dr.Pranab Mukherjee, endorsing my thoughts of massive tax cuts instead of going for mindless infusion of capital in the system (What Mr.Barrack Obama is doing in the US), increasing the chance of HYPER INFLATION AND REDUCING THE VALUE OF INDIAN RUPEE OR FURTHER DEPRECIATING INDIAN RUPEE; going forward. The government should come out wtih massive tax cuts and other proposals which would boost the spending and in turn increase growth. In my list Dr.Pranab Mukherjee still holds number one position in the UPA Government followed by Mr.P Chidambaram, Mr.A K Antony and Mr.Murli Deora. Mr.Chidambaram as India's Home Minister, should be a little more strict in his approach while dealing with the "Rogue Government" in Pakistan. At the bottom of my list is the "Humongous Drama Queen", Ms.Renuka Choudhury, [When Dr.Jaipal Reddy known for his penchant for using, unusual English words in his speeches, suddenly used this word "humongous" in one of utterances in the Parliament, most of the media persons and fellow politicians present in that august hall were surprised. Ms.Renuka Choudhury at that time is reported to have said to the bewildered masses, "Look at me to understand the meaning of Humongous"], the "Garbage of Indian Politics".

My "Quickie Call" Opto Circuits India Ltd given to the Paid Group Members (Quickie Group only) on last Sunday, moved up by  more than 4%. The stock is still looking excellent on the daily charts. Even in this downturn the company came out with superb set of numbers for the Q3FY09. The company last month announced that Maxcor Lifesience, Inc, the newly incorporated subsidiary of the Company (OCI), entered into a strategic cooperation agreement with Micell Technologies, Inc., based in Raleigh, North Carolina, U.S.A. Maxcor and Micell will co-operate in developing and commercializing leading edge Rapamycin (Sirolimus) - based Drug Eluting Stents (DES) and Drug Eluting Balloons (DEB) which will complement OCI's present range of successful paclitaxel-based drug-device combination products. Offering products with both compounds will enable OCI to maximize its market by addressing additional clinical scenarios. The jointly-developed offerings will have cardio-vascular applications that will advance the treatment of many clinical conditions while also minimizing their potential risks or side-effects. Moreover, it also informed that, 5,40,000 convertible share warrants were allotted to Mr. Vinod Ramnani Promoter Director in 2007 at Rs.360 per warrant. The Company has converted these warrants in to 5,40,000 equity shares and allotted the same to Mr. Vinod Ramnani on January 12, 2009.

Kohinoor Broadcasting Corporation Ltd which which was asked to be accumulated by the Paid Groups since last 20 days hit the buyer freeze yesterday, with almost 1 million (10 lakhs) pending shares---but why??!!

My Sunday Report recommended scrip to the Paid Groups, Deccan Chronicle Holdings Ltd at Rs.37.85 moved to Rs.39.45 in yesterday's early trade. A research report on the company is placed at: www.sumanspeaksplus.blogspot.com (SumanSpeaksPlus).

Kalindee Rail Nirman Engineers Ltd and Kernex Mircro Systems Ltd which were recommended to the Paid Groups last week, already gave more than 25% return in less than 10 days. Now what to do with these scrips??

VBC Ferro Alloys Ltd hit 8th consecutive buyer freeze after it was recommended around Rs.121--Rs.122 ranges. But why is it rising??

Vikash Metal & Power Ltd moved up by 4.11% yesterday, after it was recommended to the Free Groups for aggressive buy on last Sunday. The Commercial production of Ferro Silico Managenese & Ferro Managanese by the company's new venture, has started from October 18, 2008.

The company it seems presented a sham balance sheet in order to show less profit (and to get  huge Tax benefits in return). "Bah Ustad Bah", your employees cost increased by more than 30% in one year---who will  believe this story?? The company though came out with a robust topline, but the scheming management thought of showing every expenditure on the  higher side, due to obvious reasons. Eg. Consumption of raw materials surprisingly came at Rs.31.34 Cr in Q3FY09 (Rs.19.01 Cr), which almost surprisingly doubled (and which looked somewhat absurd considering Q-o-Q, when the price of most of the commodities fell). The company showed almost double depreciation in Q3FY09 at Rs.2.05 Cr, as compared to the corresponding figures in Q3FY08, without any apparent reasons. Other expenditure suddenly jumped to  Rs.8.9 Cr in Q3FY09, as against Rs.6.2 Cr, when most of the companies were going for cutting down on expenditure. Therefore we can safely conclude that the company will show huge net profit as soon as the market condition improves to give a momentum to its share price. Inference: Buy in BULK BEFORE THE PROMOTERS FINISHES BUYING FROM THE OPEN MARKET AND DECLARES SUPERB (read actual) RESULTS TO JACK UP THE SHARE PRICE. Please learn to read between the lines, in order to make killings in the market.

My recommended Punj Lloyd Ltd moved up by more than 7% before cooling down a bit. Accumulate as much as  you can keeping a SL of Rs.82. Moreover, the fact that it is above Rs.89, is a great solace for the bulls. It is one of the finest companies in the construction space, along with IVRCL Infrastructure Ltd, Nagarjuna Construction Ltd, etc. In this space Pratibha Industries Ltd recommended very recently hit the buyer freeze yesterday.

My recommended XL Telecom & Energy Ltd hit the buyer freezed. Recently when the scrip was hitting the lower circuits, a worried paid member, Nitin Galia asked what to do.....I said simply keep holding and buy when the price stabilises, as one is getting milk at the price of water, at the CMP. During the December, 2008, quarter, Saptashva Solar SL, a wholly owned subsidiary of the Company, has commenced commercial production and earned, initial revenue of Rs.30.53 lacs through generation of solar power in Spain. This is wonderful news for the shareholders.

My earlier recommended Educomp Solutions Ltd moved up by a whooping 13.96%. What were paid groups asked to do with the Scrip??

My Intra-day calls on Chambal Fertiliser and Chemicals Ltd and Noida Toll Bridge Ltd gave good returns to the Paid Groups.
My recently recommened Indowind Energy Ltd and Marg Ltd gave good returns to the members of the Paid Groups. Moreover, most of the steel counters did well yesterday---but why?? What was mentioned in the Sunday Report on the general outlook of the Steel Sector??

My earlier recommended Sarda Energy and Power Ltd, Vijay Shanti Builders Ltd, Phoenix International Ltd, etc. did well yesterday.

Keep accumulating Reliance Industrial Infrastructure Ltd, BGR Energy Systems Ltd, KEC International Ltd, CESC Ltd, Phoenix International Ltd, Selan Exploration Technology Ltd, English India Clays Ltd, etc, for some superb gains in the days to come.

Now how will the markets behave tomorrow and for the week ahead or which stocks to invest in the short term.....Is there a story brewing in one of my earlier recommended counters?? What the name of that scrip......All these are for the Paid Groups only.

Govt to provide more stimulus to push demand: Kamal Nath

Already two stimulus packages have been rolled out by the Centre to neutralize the impact of the global financial meltdown on the country

New Delhi: Worried over the slowdown in industrial production and declining exports, the government on Monday said it will continue to provide stimulus to the domestic industry.
“The government will continue to inject adequate funds into the economy and will continuously provide stimulus to the domestic demand-driven economy,” Commerce Minister Kamal Nath told reporters on the sidelines of CII’s India-Africa Partnership Summit here.
The government, he added, is “putting in money in long-term developmental projects to ensure that the global economic crisis does not impact India in any serious manner.”
Already two stimulus packages have been rolled out by the Centre to neutralise the impact of the global financial meltdown on the country and the Reserve Bank of India, through a series of monetary steps, released about Rs3,20,000 crore in the system.
Nath said that India is likely to receive Foreign Direct Investment (FDI) of about $30 billion during 2008-09. The government had set a FDI target of $35 billion for the fiscal.
“I hope we will exceed $30 billion. I do believe that momentum will continue. This year there will be growth...but may not be huge,” he said.
Total FDI during April-December 2008 worked out to be $18.7 billion, he said, adding it was double compared with the same period last year.
When asked about his expectations from the RBI in its quarterly review of the credit policy scheduled later this month, Nath said, “There is room for greater liquidity. RBI will certainly consider this and devise commensurate policy for injection of liquidity into the economy”.
Asked whether declining inflation will have an impact on interest rate, he said “falling inflation obviously leads to that.”
Noting that the RBI policy in the past few months had led to greater injection of liquidity, he said “it is now being reflected in greater comfort level of industry...some of the sectors have started showing upturn.”
Inflation has come down to 5.24% in January from the peak of 12.91% in August last, raising hopes for further cut in the key policy ratios and rates in the forthcoming review of the credit policy.

Dish TV eyeing 9 mn subscribers by 2010

Chennai: Direct-To-Home service provider and part of the Essel Group, Dish TV on Monday, said it was aiming at nearly doubling its subscriber base to nine million by next year.

"Currently we have around 4.8 million subscribers (in the country) and in the last three months alone we have added one million subscribers... by this financial year we are expecting to add another two million subscribers and achieve a target of nine million subscribers by 2010," Dish TV chief operating officer VK Gupta told reporters here.

He said the company would also be able to achieve a target revenue of Rs 800 crore. However, he declined to divulge details of last year's revenue.

The revenue generated from Value Added Services was only less than two per cent of the total revenue and Dish TV had set a target of increasing it to five per cent in this fiscal.

"As for as VAS is concerned it has got a slower penetration (in country) and once the DTH services pickup, it would also increase," he said.

The company has also planned to introduce a new VAS in tourism category shortly, Gupta said declining to elaborate.

Currently under VAS, the company offers Movie-on-Demand (MOD), Bhakti services, matrimony, banking and games, he said.

Replying to a question, Gupta said Dish TV currently had a market share of 48 per cent and the South zone contributed around 30 per cent of this.

As part of its expansion plans, the company had planned to increase its dealership network from the present 45,000 to two lakh by 2010. "I want to reach two lakh dealerships network by next year" he said.

In a bid to woo subscribers in Tamil Nadu, the company would introduce new Tamil channels. "We are holding discussions on this and very soon new channels will be added to the Tamil bouquet," he said.

The company currently offers 220 channels for its subscribers and hoped to increase it to 400 in near future.

Gupta was here to officially launch the Free Recharge coupon which enables a subscriber to get "Free A-La-Carte" packs and Movie-on-Demand (MOD) worth the same amount of recharge value.

If a subscriber buys a Rs 200 denomination recharge pack, he would be able to get free value worth of same amount where 20 per cent of the value would go for A-La-Carte packs and the remaining 80 per cent to MOD category, he said.

He said for all the denominations which range between Rs 200 to Rs 1800, the recharge free benefits apply and 100 per cent value would be returned back to the subscriber.

Rolta India Ltd
Industry : Software - Medium / Small BSE Code : 500366
House     : Indian Private NSE Code : ROLTA

Quarterly Results

Quarters:      
Particulars Dec 2008 Sep 2008 Jun 2008 Mar 2008 Dec 2007 Sep 2007
Gross Sales 224.77 251.52 219.45 225.83 212.29 193.35
Other Income 10.13 14.52 -19.93 10.20 9.93 10.29
Total Income 234.90 266.04 199.52 236.03 222.22 203.64
Total Expenditure 123.76 174.42 91.23 113.82 111.98 103.09
PBIDT 111.14 91.62 108.29 122.21 110.24 100.55
Interest 1.14 0.00 0.00 0.00 0.00 0.00
PBDT 110.00 91.62 108.29 122.21 110.24 100.55
Depreciation 40.13 36.98 37.55 33.46 33.22 31.16
Tax 9.80 10.00 15.96 10.00 9.00 8.00
Deferred Tax 0.00 0.00 0.00 0.00 0.00 0.00
Reported Profit After Tax 60.07 44.64 54.78 78.75 68.02 61.39

Net profit of Rolta India Ltd declined 11.69% to Rs.60.07 Cr in the quarter ended December 2008 as against Rs.68.02 Cr during the previous quarter ended December 2007; which is better than the market expectation. Sales however rose 5.88% to Rs.224.77 Cr in the quarter ended December 2008 as against Rs.212.29 Cr during the previous quarter ended December 2007. The Infact, the consolidated results are much better than the standalone and which are given below: The consolidated results for the Quarter ended December 31, 2008: The Group has posted a Net Profit after tax, minority interest & exceptional items of Rs 60.56 Cr for the quarter ended December 31, 2008 as compared to Rs 60.22 Cr for the quarter ended December 31, 2007. Total Income has increased from Rs 251.94 Cr for the quarter ended December 31, 2007 to Rs 371.45 Cr for the quarter ended December 31, 2008 It is to be noted that Rolta Ltd derives 60% of its revenues from the domestic market and hence is better placed than most of the peer group companies like Infosys Technologies Ltd, Wipro Ltd, etc. which derives majority of its revenues from the overseas. The Indian Economy is doing much better than the US or the European economies and hence this gives additional advantage to Rolta Ltd. Moreover, Indo-US Civil and Nuclear Co-operation is favorable to the company.

The results of Rolta Ltd are above expectations, as can be seen from above. Good point is that PBIDT of the Company for Q3FY09 is higher at Rs.111.14 Cr as compared to the same quarter previous year. This means even in this downturn the company came out with higher profit.

The Profit after Tax or Net Profit is almost flat in Q3FY09 as compared to the same period previous year--Remember this is when the software sector is under turmoil and when the company had higher tax, higher depreciation, higher expenditure and higher interest outgo.

The company announced the acquisition of Piocon Technologies Inc, a specialist information technology (IT) firm and a solution provider for oil and gas refineries; after trading hours on Monday, 29 December 2008. The company provides IT-based solutions and services to the geospatial and engineering segments. Unlike most Indian IT firms, Rolta derives 60% of its revenues from the domestic market. This enables it to mitigate currency risks.

Rolta Ltd's acquisition of the Piocon Technologies, Inc. of Chicago II, USA could be a turning point. Through this strategic move, Rolta has acquired the unique template-based solution that addresses critical operational needs of refineries in the Oil & Gas sector. This solution is field proven, and has been deployed successfully in multiple refining facilities of one of the world's largest oil companies. The solution was recognized by Oracle with the Titan award for Piocon's innovative approach to integrating business intelligence tools with enterprise-level engineering databases and applications to provide operational excellence, reliability metrics and reporting for more than 100,000 pieces of equipment and hundreds of operations throughout the large refinery.

The Piocon acquisition is a part of Rolta's systematic growth plans to provide configurable solutions that address the real challenges faced by industry today. With Piocon, Rolta has acquired its impressive track record of over 15 years, a significant customer base including Fortune 100 companies, highly experienced consultants, unique methodologies and technologies ongoing customer contracts and profitable revenue stream in a fast growing market.

The stock of Rolta Ltd after such results is expected move above Rs.100 in the next few days. Software companies generally have good fourth quarter, as most of the revenues come in this period. The market was expecting a much worst results which caused a heavy unwinding in the scrip some days back.

Today my latest Sunday Report (18th January, 2008) recommended Nava Bharat Ventures Ltd (BSE Code->513023) moved up by more than 3%. The research report on the company would soon be placed here in this blog.

Moreover, today, my earlier recommended English Indian Clays Ltd, Accurate Transformers Ltd, Deccan Chronicle Ltd, Mid-day Multimedia Ltd, TV Today Ltd, SAIL, Electrotherm Ltd, etc. did well....