Associated Alcohol and Breweries Ltd recommended at Rs.37, Rs39 and Rs.44 only some weeks back hit the buyer freeze: H S India Ltd, Tourism Finance Corporation Ltd (recommended at Rs.30) & Kohinoor Broadcasting Corporations Ltd as expected hit the buyer freeze: GTL Infrastructure Ltd recommended at Rs.39 made new high today and closed at Rs.84.10: H S India Ltd company has increased the room rent and also completed the renovation of the old hotel. The new hotel is expected to come up within the next 250 days. But the most scintillating thing is that it is coming up with an FPO in the next year and hence results are bound to be good: Deccan Gold Mines hits the buyer freeze: Buy Ennore Coke, Indo Borax & Chemicals Ltd, Elnet Technologies and Winsome Textiles on all declines: Sahyadri Industries Ltd has ventured into wind power like Shiva Texyarn: Winsome Textiles Ltd is a wonderful company and will do well in the days to come: BNK Capital Markets Ltd today moved up. Yesterday the scrip got locked with huge volume but fell after the markets tanked by more than 700 points. BNK Capital Markets Ltd has a high target and hence do not sell off in a hurry. Keep a SL of Rs.97 for the short term but for the long term one should not worry. Apart from retaining all the holding in the listed and unlisted companies as of 31st March, 2007, including its historical purchase of CESC Ltd's share at the price of peanut, it is expected to start trading in the Dubai Metal Exchage very soon--waiting for the RBI nod. It's subsidiary BNK Securities Ltd is doing excellently well and so is its BPO Subsidiary which has increased the number of seats to 500 now and is expected to get a large order soon: Also Keep accumulating Premier Explosives Ltd at the CMP of Rs.52 for a target of Rs.90 plus in the next 180 days. The company's two overseas subsidiaries has started commercial productions and soon the company could import form the those subsidiaries taking advantage of the Rupee Appreciation. It's Special Products Division, which started commercial production last year is now fully focussed on the lucrative defence contracts. The company after restructuring is looking excellently well:

[Updated at 12.56 a.m.] Winsome Textile Industries:

BSE Code: 514470

Face Value: Rs.10

EPS: Rs.10.02

Dividend: 7%

Introduction: It Winsome Textile Industries Ltd. (WTIL) is a part of the Winsome Group, which has its roots in a trading company in Calcutta in 1952. The company's principal activity is the manufacture and distribution of cotton blended and melange yarn for domestic consumption. It manufactures cotton yarn containing 85% or more cotton, containing less than 85% cotton, synthetic staple fibre yarn containing 85% or more of acrylic. The company's plant is located at Solan, Himachal Pradesh. This low profile Chandigarh based company has been promoted by the Bagrodias and has an installed capacity of 63,500 spindles. The company manufactures mainly 100% cotton yarn and exports it to more than 20 countries. Around 40% of its turnover comes from exports.

Shareholding Pattern: The promoters hold 58.29% in its equity while the general public holds 41.71%. Among the public, ICICI Bank holds 11.85%, IFCI Ltd holds 1.7% and Nitson Retailers holds 2.44%.

Financials: In FY07, WTIL achieved a sales turnover of Rs.139.96 cr. against Rs.133.33 cr. in FY06 and Exports, including deemed exports of Rs.74.19 cr. against Rs.63.86 cr. in FY06. The sales value of production has increased by approximately 10% from Rs.127.99 cr. to Rs.144.86 cr., profit before tax has increased substantially by 126% from Rs.4.98 cr. to Rs.11.24 cr. The company recorded substantially improved performance in FY07 as compared to FY06. For Q2FY08, its total income was Rs.40.15 cr. against Rs.37.67 cr. in the previous corresponding period. The operating profit was Rs.6.81 cr. against Rs.6.67 cr. while net profit dipped 10% at Rs.2.8 cr. (Rs.3.16 cr.) due to higher interest out and depreciation. Also, the net profit and operating profit margins remained flat.

Triggers:

• > The company’s operations are confined to only one segment - yarn and allied activities. Due to the bumper production of cotton again this year, the input cost of making yarn will be low but yarn prices are expected to rise due to high demand. The textile sector will benefit from the seasonal surge in demand from India and overseas.
• > Government of India’s decision to extend the Technology Upgradation Fund Scheme (TUFS) with better terms and the Integrated Textile Parks scheme will give the ailing textile sector the much needed cushion. > The Textile Ministry has set a target of increasing the sector’s total market size to $115 billion by the terminal year of the Eleventh Plan (2012). Of this, the domestic market is been contemplated at $60 billion and the export market at $55 billion. The task is formidable considering that the present market size of the industry is only $52 billion, with exports amounting to $12.24 billion in FY07. The government is thinking of encouraging more FDI in the sector, from the measly $575.27 million since August 1991 representing just 1.22% of the total FDI received by India. The Textile ministry is optimistic that the sector could attract FDI of $36 billion over the next 5 years.
• > The appreciation of the rupee could be used by textile companies to modernise by importing the latest machinery at cheaper exchange rates. Winsome Textiles has taken the right decision to go in for modernisation at a time when the rupee is appreciating reducing its import costs.
• > The company has started commercial production on 13,500 spindles, which were commissioned as a part of its Rs.117 cr. expansion plan. The balance expansion will be completed by March 2008. Hence the company is expected to post strong results in FY09.
• > The company will complete its 2.5 MW power project by the Q2FY09. This will result in better profits in FY09.
• > The company has a monopoly in terms of ‘Melange’ section. Its products are chosen over other Indian brands by the overseas buyers.
• > The shares are trading below its book value of Rs.64. It has a mind boggling EPS of Rs.10 and P/E of only 3.4, which is rare in the textile sector. These figures will improve further on completion of its expansion, which is in the final stages. Even if it gets a discounting of 8 times, its share price should be Rs.80 based upon FY08 and Rs.120 based of FY09E.
• > The company is increasing the dyeing capacity to 10 tonnes per day in this expansion. Also, it is replacing its existing spindles with new ones. This will enable it to produce more dyed yarn, where the profit margins are higher.
• > The market capitalization of the company is just Rs.27.06 cr. at the CMP of Rs.46.10 of its share whereas the replacement cost is more than Rs.120 cr.
• > The scrip is trading near its all time low and hence there is minimum downslide risk at the CMP.
• > It manufactures products which are cotton, acrylic, polyester, viscose, silk etc, which indicates its wide and flexible product portfolio to suit its customers.
• > It holds of ISO 14001 Environmental Management System Certificate and ISO 9001- 2000 Quality Management System Certificate issued by Bureau of Indian Standards.
• > A somewhat stable rupee since the last couple of months will help the company in terms of exports income.
• > It has been improving its financials steadily and has been investing in modernisation to increase productivity to produce value-added yarns. Last year, it incurred capex of Rs.10 cr. for modernization of some Ring Frames and replacement of some Carding Machines.
• > The management is hard working, innovative, cost effective and reliable. Its share price may not come down even if market declines sharply. An extremely safe bet which will give big returns to investors in future. Concerns:
• > The existing safeguards against China by major importing countries will be lifted by the end of next year under the WTO Agreement. This will step up the competition from China.
• > Apart from technological obsolescence, the Indian textile sector is already saddled with accumulated regulatory baggage of the past decades.
• > The apparel segment which accounts for almost 50% of the country’s textile exports has a low brand image in overseas markets.
• > Any delay in the completion of its expansion plans, will derail all calculations and might affect the upward movement of the scrip.

Conclusion: Looking from all angles, it is been found that the WTIL scrip, is highly undervalued at its CMP of Rs.46.10 and will soon be in for a re-rating. The scrip is lying low due to the low profile of the promoters and the ignorance of retail investors but is likely to catch the fancy of investors in the near future and could appreciate 200% from hereon within the next 18 months. If the Textile Ministry grants seasonal employment facility to meet the seasonal surge in demand from overseas, the scrip could appreciate much faster.

December deadline for UPA govt on N-deal: Yechury Tuesday, December 18, 2007

SHIMLA: The CPI (M) on Tuesday said it has not set any December deadline for the Manmohan Singh government on the nuclear deal issue and would await government's view on IAEA talks at the next UPA-Left Committee meeting. CPI (M) politburo member Sitaram Yechury said party general secretary Prakash Karat was "misquoted" as having served an ultimatum to UPA government on nuclear deal.

"The future course of action on Indo-US civil nuclear deal will be decided after the government, on return of its representatives from IAEA, briefs the UPA-Left Committee," he told here.

Yechury, who is a member of the Committee, admitted that the Congress and Left hold "divergent" views on the nuclear issue.

"While Congress under pressure from the US is propagating the deal as good for the interest of the nation failing which the country will be pushed backward by decades, CPI(M) and the Left opinion is that the nuclear deal is not in the interest of the country and should be stopped at all cost," he said.

Yechury said the date for the next meeting of the Committee has not yet been fixed.

"The Left is convinced on its views and stand committed on the nuclear issue," he said adding "we never talked about mid-term elections...".

"This issue (mid-term poll) has to be decided by the Congress-led UPA government," he said. [From Internet]