Three of my favourites Scrips and Some Tit-bits[Updated] :
Many investors have asked me to give at least the name of 2(two) / 3(three) stocks which is good for the next 3 to 6 months time:
I am giving the name of the first three stocks which I have recommended in the past:
1. Vishal Exports Overseas Ltd:
The company is into Wind Power, Hydro-electric Power and Exports of Wheat, Rice and Soyabean. The new addition to the kitty is trading in Carbon Credits, from which the company is expected to generate Rs.3 Cr--Rs.4 Cr every year. The wheat and soyabean prices are already firming up in the internatioinal markets which would help the company in a major way. The company is on a growth path and is expected to show better performance in the current fiscal. Hold with a target of Rs.12 in 6 to 8 months time.
2. BSEL Infrastructure Realty Ltd:
One of the best construction companies I have ever come across with such aggressive management to boot. I first recommended the stock at Rs.17 in 2004 when it was starting to morph from Infotech company to a construction major.
The share price of the company at Rs.75 is grossly undervalued considering that it has more than Rs.500 Cr worth of land( nearly equal to Vijay Shanti Builders) and order book of over Rs.200 Cr. The new domestic and overseas projects are going to add another Rs.500--Rs.600 Cr in the order book in this fiscal. The company could get another overseas order. Its Dubai Venture is giving them rich dividends as they are sure to garner around Rs.250 Cr from that project in addition to a strong overseas foothold. I would not be surprised if the stock behaves like Vijay Shanti Builders of Kamanwala Industries Ltd. India Bulls and another brokerage has already put heavy bets on the fundamentals of the company. I would not be surprised if the price shoots to Rs.500 in 12 months to 18 months time. It is now a full-fledged engineering and costruction company.
3. Premier Explosives Ltd:
The companies has factories all over India which has Huge Real Estate Values. It recently perked up after it got a Rs.7 Cr per year order from the Indian Defence sector for 20 years. Doesn't it look encouraging .... Hence in this fiscal the revenues are expected to ROBUST as compared to the last fiscal. The defence contracts has good margins and one or two more such orders could work wonders for the company. The company formed a number of Joint Vntures with overseas companies which are going to pay them handsomely in this Fiscal. Its Mushroom business also due to its better realisation it is going to get huge dividends in future. Unlike Agro Dutch Industry, it sells mushrooms in India more than it exports ( 70:30 divide)--hence less affected by the Forex fluctuations. Look for the results of December, 2006 quarter which the company is going to annouce on 31-01-07. Its new Special Products division has started to function from the last September and the December, 2006 results will include the sales from that segment also. A Rs.200 target for 12 months to 18 months time cannot be ruled out, if one or two order from defence comes to the kitty and JVs start delivering. At the current market price of Rs.50.8, it is grossly undervalued considering the governement's stress on the Infrastructure, Mining & Food Processing sectors and company affinity with Indian Defence. At the current market price of Rs.50.8, it is grossly undervalued considering the governement's stress on the Infrastructure, Mining and Food Processing sectors. [Fully Report on it shortly]
Additional Inputs:
1.G M Breweries Ltd, the demand for whose products are outstripping supply is thinking of going to Coloured Country Liquor manufacturing in future if the government gives nod. This will add another 20%--30% to its bottomline if it gets permission.
The company has got the facility to blend and bottle both Indian made foreign liquor and country liquor. However the focus has been mainly on country liquor during the past five years as the IMFL segment is highly competitive. As per the company, the contibution from the company to the total Excise duty for country liquor in the whole of Maharashtra is over 15% indicating that the company's marketshare is over 15% in Maharashtra in the organised sector.
The company has got the capacity to process 3.63 crores bulk litres of country liquor per annum. Capacity utilisation is around 60%. The company has brands called Doctor, Tango and Punch which are the fast selling. This is one company which has a brand in the country liqour segment. The company has posted extremely encouraging growth both in terms of value and volumes in country liquor specifically in the last one year. Sales in the first THREE QUARTERS of the current year have exploded. It is the single largest manufacturer of country liquor in the State of Maharashtra.
The company is on an expansion mode which would increase its product manufacturing capacity by many folds. The company is getting hugely benefited from the "Ban on Illicit liqour" in the state of Maharashtra. There is little chance that this ban will be lifted. This fiscal the company could end up with a net profit of around Rs.11.8 Cr --Rs.12 Cr.
2. Gravity(I) Ltd made new highs on the last Thursday. It is natural that after such performace the scrip could go for correction mode, but lot depends on the results of the company for the December, 2006 quarter. Buy the scrip on all declines and book some partial profits.
3. My recommended pick Ispat Industries Ltd is showing great results; but the company's management is fickle. So exit if u are making money and shift to other good companies.
4. Essar Shipping recommended at Rs.25.5 is shooting on the news that Ruias are going to bid adeau to the bourses. Some are saying at the current price the scrip is fairly valued. Essar Group has a bad name in the investor world so investors should also say bye bye to Essar group if they get good money from their investmemnts.
5. Offlate all the Steel stocks are running high due to some buyancy in the sector. But I am not fully convinced of their upward movement too much in future unless some drastic change takees place. It would be better if one shifts to hybrid companies in the steel sector.
6. Bellary Steel is rising on news of takeover. But till now no swap ratio has been declared and it seems it is being jacked up by allowing some rosy reports to be posted on MMB by the moderators there (MMB--->Money Control Message board. The moderators there are treacherous to the brim and believe me they did not allow me to post my inputs on Gravity(I) Ltd when it was trading at Rs.5.5--Rs.6). So please be careful while entering this scrip.
7. Flat Products Equipments Ltd has risen from Rs.91 to Rs.140 in less than 2 months. One should book some partial profits and hold the rest for the next move by the company post results.
8. Stovec Industries Ltd is lying low after crossing Rs.130( an appreciation of more than 30% from the recommended price in less than 2 months). Enter the counter in all dips.
9. One should not take fresh position in Chandra Prabhu International Ltd at the current price as the company is facing lot of problems in drilling in exploration venture. The company was scheduled to start the drilling and exploration last month, but now it seems from the sources, that the project could be delayed further due to some recent government directives--trim ur position in the counter.
10. A very good Cement company named Kakatiya Cement Sugar & Industries Ltd came in for heavy selling after the government fiat on duty cut. But now it seems that the duty cut will not have too much effect on the companies. But still lightern ur position in this sector as the overall sentiment in the Cement Sector has taken a hit and after all stock market is all about "Sentiments". Those who are still holding, continue with a SL of Rs.105.
11. Some of the analysts who "Proliferate on Television" these days, are jumping with joy on seeing the results of Arvind Mills Ltd. at the first glance. But I find nothing spectacular has happened as far as the results are concerned, except that extraordinary income of Rs.101.1 Cr---the operating profits in fact have dipped Q-o-Q. Even the company sent this carefully worded statement to the press/journalists/media: " Pursuant to the Composite Scheme of De-merger of Garment Business Division of Arvind Brands Ltd (a wholly owned subsidiary company) and Amalgamation of Arvind Fashion Ltd (a wholly owned subsidiary company) with respective effect form April 01, 2005, with Arvind Mills Ltd sanctioned by the H´bel High Court of Gujarat, the results of the Company for the quarter and nine months include figures of Demerged Division and amalgamated company for the same period respectively and hence not comparable with figures of previous quarter/period". Be careful to take speculative position in Arvind Mills Ltd as there are better textile counters at present. I have been saying this for a long time to those who are "Colour Blind" to Arvind Mills...... Did u forget the story of Pioneer Embroideries Ltd???!!
12. Kovilpatti Lakshmi Roller Flour Mills Ltd's shares have been acquired by Keynote Corporate Services Ltd. It might also come out with the board meeting to consider and approve Scheme of Amalgamation of Eltex Super Castings Ltd (the subsidiary Company) with the Company effective from April 01, 2006, subject to the approval of the shareholders and Madras High Court, Chennai.
13.Simmonds Marshall Ltd is a very good engineering company. Enter at any price around Rs.49-Rs.52 for some wonderful gains.
14. Some of the analysts are of the view that the next big happening sector is the NBFC, if the goverment comes up with reforms in the next budget(Fy-06-07). Keep watch on good companies in this sector( I had already recommended one, last year), they could be the dark horse of FY-06-07. Many NBFC's are now into wind power which could give them the advantage of Carbon Credits in the days to come.
More on the following postings......
Best regards,
Suman Mukherjee
India.
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