Market Ends flat on the F & O Settlement day: Mid Caps rise 21.50 points Small caps end flat at 6836.41: The markets should sustain the current rise with occassional profit booking as Nifty Gets 92 % rolloover: RIL gets 91% of rollover: I am extremely bullish on the overall market:

Harrisons Malayalam Ltd and Williamson Magor & Company Ltd mentioned in one my recent mails, Rose on the good prospects of Tea Industry in the coming quarters:

Play in select Mid, Small and Micro-Cap Counters:

Textile stocks look attractive in the short to medium term as winter demand migh pick:

In the US Dow Ends Down 9 points, Nasdaq Drops 6points after a battery of reports indicated the economy is stronger than expected and raised concerns that the Federal Reserve might be more aggressive about interest rates next year:[Updated]:

Buy:Hanil Era Textiles Ltd (BSE Code: 500177)

CMP: Rs.18.1. Book Value: Rs.36.71 EPS: Rs.2.36 Face Value: Rs.10

Target: Rs.90--Rs.120 in 12--18 months time frame Performance: Market Outperformer in the Short and Medium term.

Hanil Era Textiles Ltd ( HETL) is one of India’s top profit making textile companies. Established in 1992, Hanil Era Textiles Ltd. is a 100% EOU that was floated as a JV between New Era Fabrics Ltd. of Matunga (Mumbai) and Hanil Synthetics Fibre Company Ltd. of South Korea. The company went public with a NCD issue in 1993. Hanil Era has a yarn manufacturing capacity at Patalganga in Maharashtra, where it makes worsted, cotton and blended yarn with a total spindelage of 80,000. It has its own power generation unit with a capacity of 16.5 MW and it supplies excess power to neighbouring corporates via the MSEB grid. It has recently set up an ethanol dehydrator with a capacity of 200 KL/day to supply pure ethanol to chemical units and oil companies. The modernisation-cum-expansion programme costing Rs 50 crore for adding 108 looms to make grey fabrics, bedsheets, curtains and terry towels will add substantial benefits to both the top and bottomline. Earlier it has signed an agreement with GAIL (India) Ltd. wherein the latter would supply of natural gas to the former. This supply will enable it to bring down its fuel costs by roughly 33%. Besides this agreement with GAIL, Hanil Era has also signed a wage agreement with its workforce for a period of three years. This wage agreement will ensure that the workforce is more committed towards production and capacity utilisation which will increase in the efficiency of its operations in return for the 5-6% rise in wage bills that it will incur. This will have a long-term positive impact on the performance of Hanil Era. Financials: For FY-06-07 the company made a Net profit of Rs.11.8 Cr on an equity capital of Rs.40.97 Cr. The reserves of the company has increased from Rs.97.6 to Rs.109.4 in the same period previous year. For Q2FY-06-07, the net profit of the company was Rs.3.17 Cr on an equity of Rs.40.97 Cr. The fact that the company has a huge reserves, makes it an ideal candidate for any Bonus Issue.

Shareholding Pattern: The promoters' holding in the company has increased marginally from 56.8 % in 30th September, 2005 to 58.53% in 30th September, 2006. This proves that the company is expected to do well in the coming quarters. Current Business Activities: Textiles and Ethanol (Commenced production & sales in 2004-05).

Textiles Division: 100% Cotton Yarn, Acrylic Yarn; Worsted Yarn; Polyester Yarn; Blended Yarn; Wool & Silk Yarn & Dyed Yarns. It has already ventured into higly lucrative home furnishing space. The weaving capacity has been increased to 108 looms from the earlier planned 72 looms. It has also added a processing and dyeing capacity to the original project, giving it tremendous integration. The project was planned to happen in three phases – phase I for grey fabrics and home furnishings, phase II for processing and dyeing and phase III for terry towels . The modernisation of its existing spindelage capacity will give it better efficiency in its operations and reduce costs further. Markets for Textiles: Exports: 75% (Rs. 60 crores) (i)EU- Turkey, Spain (ii)Morocco (ii)Bangladesh (iii)Africa (iv) China It was awarded as the largest exporter of Acrylic yarn for the last 5 years consecutively. Domestic Market: 25% (Rs 25 crores) (i)Mumbai (ii)Ludhiana Competitive Advantages: (i)Integrated Plant (ii)Economies of Scale (iii)Captive Power Plant – (16MW) (iv)Proximity of Manufacturing Facility to Port (JNPT) (v)Agreement with GAIL for gas supply. Since the cotton and Crude (as well gas prices) are going down it will help the company to increase both its top and bottomline. The company's raw material incluse crude derivatives as it is also into synthetic yarn production. Ethanol Division: It had launched a new fully-automated chemical division that focuses on the manufacturing of ETHANOL, a fuel additive---Set-up in 2004 with a Rs 100 million investment financed through internal accrual with an Installed Capacity of 200KLPD. It is the largest Ethanol unit in India- is the most contemporary one of its kind, with a cutting-end USA based DELTA T Molecular Sieves Dehydration Technology. The plant was designed & erected by PRAJ industries Ltd, one of the top Alcohol & Distillery constructors. To ensure quality, process parameters are adjusted by the latest PLC controls. Acute inspection is carried at every step- from raw materials to finished goods. The plant works in full capacity and is geared to take large orders for quicker execution. Meeting global competition and guaranteeing consistency in the quality of raw materials is its next goal. It is also laying down plans to build down-stream projects, i.e. Sugar / Starch based distilleries in India & overseas markets. The company is also venturing into setting up of Renewable Energy Resource Units such as Bio Diesel plants. These would be from multi feed raw materials including jatropha, vegetable wastes, bio degradable items, non edible oils, waste industrial oils, agro waste etc. . Customers: (i)Oil Companies (ii)Small Base Chemical Manufacturers Competitive advantage: (i) Economies of Scale- (The Largest Ethanol Dehydration Plant) (ii) Proximity to the port (JNPT) & high consumption pockets (Mumbai) (iii)Lowest Production Cost. Due to governments continued support for renewal energy it is expected to get substantial benefits both in the topline and the bottomline. The government is likely to fix the ethanol rate soon. Also proposed 5% blending accross the country with give it much needd fill-up. Already there is a government notification on this in some states. Post MFTA (Multi-Fibre Trade Agreement) regime, Hanil Era is trying to exploit the best possible from its existing facilities to become self-dependent in providing higher value added products. Also Ethanol producers are now reassured that the government is committed long term to the much-touted gasohol-blending programme. The Indian Sugar Mills Association has been identified as the nodal institution for formulating the action plan for promoting ethanol as a mixed fuel. I do not think there is any justification by the company to list on the NSE considering that daily trading volumes are not too high. Also it would drain away some of the cash from its kitty in terms of listing fees of the exchange which is unnecessary considering that it is already listed on the BSE. Hence its decision to delist from NSE according to me is the correct one. The company at present has no plans to delist from the BSE. Also it has come out of the T-group and is now trading in the B1 group along with noted names like Alok Textiles, Arvee Denim, Nahar Exports Ltd, Malwa Cotton etc. Considering all these I consider a buy at the current price of Rs.18.1 ( at the throwaway price) for a price target of Rs.90--Rs.120 in 12 months to 15 months time frame. It is the currently one of the best stocks in the textile space.

Also note that I had mentioned about Willamson Magor Ltd. in one of my recent mails (when I replied to buy recommendation on Beeyu Overseas Ltd) yesterday hit the buyer freeze.

The Pivotal end flat:

As expected the market witnessed a bout of volatility towards the close of the trading session yesterday on account of expiry of December 2006 derivatives contracts. The 30-shares BSE Sensex settled 13.35 points lower at 13,846.34. It had opened on a firm note at 13893.29 and surged to a high of 13,960.39 by minutes of commencement of trade. It touched an intra-day low of 13819.77 in late afternoon session. The S&P CNX Nifty lost 3.70 points to 3970.55. It had surged to a high of 3997.35 in early trades. It also touched a low of 3961.95. Prior to yesterday's trading session, market had surged in the past two trading sessions. In the past four sessions, Sensex advanced 519.48 points from 13,340.21 on 20 December 2006. The market breadth was negative with 1234 shares advancing on BSE as compared to 1375 shares that declined. 73 shares were unchanged. The BSE Mid-Cap index rose 10.84 points to 5754 while the Small-Cap index lost 3 points to settle at 6836. The total turnover on BSE amounted to Rs 3966 crore as compared to Rs 3664 crore on Wednesday (27 December) Among the Sensex pack, 16 declined while the rest advanced. Drug maker Cipla was the top loser, down 2.77% to Rs 252.35 on 1.43 lakh shares. It has slipped from high of Rs 260.45. SBI (down 1.27% to Rs 1235), Dr Reddy's (down 1.13% to Rs 798.40) and Tata Steel (down 1.05% to Rs 476.25) followed. Reliance Communications was down 0.41% to Rs 473 on high volume of 27.48 lakh shares. It had touched a high of Rs 485. The company is reported to be interested in bidding for Hutchison Essar. Index heavyweight Reliance Industries (RIL) was down 0.78% to Rs 1282.80 on 13.19 lakh shares. The company is reportedly planning to invest Rs 5,000 crore for gasification of lignite in south Gujarat. The project will be a joint venture between (RIL) and Gujarat Mineral Development Corporation (GMDC). The private sector oil refiner is said to be negotiating with GMDC and scouting for lignite reserves in south Gujarat. HDFC Bank was the top gainer, up 2% to Rs 1078 after its ADR gained 3% to $73.89 on Wednesday on the NYSE. Hero Honda (up 1.83% to Rs 758), TCS (up 1.73% to Rs 1216) and ITC (up 1.47% to Rs 179) were the other gainers. Tech Mahindra was the top traded counter on BSE with total turnover of Rs 317.61 crore followed by Indiabulls Financial Services (Rs 217.64 crore) and Reliance Industries (Rs 169.64 crore). Ess Dee Aluminium settled at premium at Rs 238.75, as compared to its IPO price of Rs 225 per share. The stock debuted on BSE at Rs 260. It hit a high of Rs 261.90 and a low of Rs 235.25. 61.71 lakh shares changed hands in the counter on BSE. XL Telecom settled at discount at Rs 136 compared to issue price of Rs 150 per share. The stock listed on BSE with 18.06% premium at Rs 177.10 (also its day's high). Its low for the day was Rs 134.10. The counter saw volumes of 34.52 lakh shares on BSE. HCL Technologies gained 2.21% to Rs 633.90 on total volume of 21.17 lakh shares after a block deal of 5 lakh shares was struck on the counter on BSE at Rs 619 per share. Hinduja TMT jumped 12.8% to Rs 740.35 ahead of its entry into NSE's futures & options segment from 29 December. Indiabulls Financial Services advanced 5.18% to Rs 673.95 on high volumes of 32.72 lakh shares as buying continued, a day ahead of the last trading date for shareholder eligibility to get the shares of the real estate firm. The stock had spurted 9.4% to Rs 590.30 on 21 December on high volume of 56.9 lakh shares on BSE after the company announced 9 January 2007 as record date for its demerged real estate business, now brought under Indiabulls Real Estate (IREL). The stock enters no-delivery period on BSE from 2 January 2007 to 8 January 2007, for the purpose of the demerger of the real estate business. LML jumped 20% to Rs 13.18, on its plans to re-start production. Drug maker FDC surged 8% to Rs 39.65 after it received Japanese government accreditation as foreign manufacturer for active pharmaceutical ingredients. Ramco Systems rose nearly 7% to Rs 202.85 on renewed buying on expectations of strong Q3 results. Shares of these three FM radio operators were in demand yesterday following reports in a section of the media that the government is likely to increase the foreign investment cap in private FM radio to 49% from 20% now. Entertainment Network India (up 4.14% to Rs 266.50), Adlabs Films (up 3.75% to Rs 433) and Sun TV (up 2.36% to Rs 1470) rose. Hindustan Construction Company gained 2.46% to Rs 148.10 after the company secured a national highways BOT road project worth Rs 275 crore in Andhra Pradesh. Bank of India surged 5% to Rs 205.35 on expectations of improving profitability after several raised lending rates. J L Morison India jumped 10.20% to Rs 284.25 after the company said it has been appointed as exclusive distributor by Merisant India for the promotion and sale of its tabletop sweetener products under the brand name "Equal" in India for five years. Indoco Remedies gained 5.67% to Rs 340 after the company said it is contemplating the amalgamation of its 100% subsidiary La Nova Chem (India) with the company. Simultaneously, the company is also contemplating the acquisition of the pharmaceutical business of its associate company, SPA Pharmaceutical through the legal demerger process. Packaging goods firm Flex Industries rose 5% to Rs 139.30, after its board approved raising up to $250 million. Dabur India rose 0.41% to Rs 146 after it fixed 29 January 2007 as the record date for issuing bonus shares. Apar Industries jumped 6% to Rs 239 after the company set 12 January 2007 as record date for bonus issue. Kpit Cummins Infosystems rose 2.89% to Rs 655.95 after it set 11 January 2007 as the record date for sub-division of equity shares and the issue of bonus shares. [Edited version from the net]. More in the following postings..... Best regards, Suman Mukherjee India. http://finance.groups.yahoo.com/group/SumanSpeaks/ www.pkblogs.com/sumanspeaks