WINNINGS STROKES:

[Updated at 04.10 p.m]

IT (Information Technology) Services Companies are expected to do well in the days to come. One of the my favourite scrips in this space, Tech Mahindra Ltd (BSE Code-->532755) has already been recommended yesterday to the Paid Groups at Rs.752--Rs.753. Today, I recommended a high growth Software Company (IT Services Company) to the Paid Members, where Kajol Devgan holds substantial stake (223,400 shares or 1.99% stake in the Company since last few quarters). Moreover Karvy Stock Broking Ltd also holds good stake in the company. The name of the company is Ram Informatics Ltd (BSE Code-->530951, Scrip ID-->RAMINFO).....The CMP is mouth watering, considering that the 52-week high for the Scrip is Rs.30.75, which was made only some months back on, 4th January, 2008. The good point is that even in this downturn, its came out with good set of numbers for the June, 2008 quarters. The company has good order book position and is moving at a rapid pace. Moreover, very recently it received an order from IT&C Department (eGovernance), Government of Andhra Pradesh for Support of Social Benefit Management System (SBMS) Application Software for a period of Three years. Ram Informatics Ltd ealier received an order from Chief Electoral Officer, Government of Andhra Pradesh for Election Photo Identity Cards for thedistrict of Srikakulam. This project is a new vertical for the Company and this will bring greater strengths and revenues to the Company.

The board meeting of H S India will be held on 25 August 2008 to consider the audited financial accounts for the year ended 31 March 2008 and to consider issue of preferential allotment of convertible warrants to promoter and non promoter group.

UB Engineering Ltd, the Vijay Mallya Group company is expected to cross Rs.120 today and move higher. The company's fundamentals have improved substantially in the last few quarters, as is evident from the June, 2008 quarter results: Kamanwala Housing Construction Ltd is already Freezed at the CMP of Rs.103.8 as the bonus shares at 1:1 ratio is very attractive, which effectively means on is buying the shares of this company at Rs.52, which is very tempting for any investor:

The markets are expected to remain range bound today, as it will be difficult for the Nifty to break 4320 and 4300 on the downside. In fact the markets are eyeing 4500 in the next few days due to Chartical Formations:

Need it or not, take that home loan

Sandeep Shanbhag

Tax breaks offered to borrowers make it a winning proposition

If you want to buy a house, you have two options. Either take a loan or use your own funds. Most of us obviously would not be able to afford an outright purchase (without availing of any loan whatsoever). However, even those fortunate few who have the wherewithal to buy a house off the shelf should avail themselves of a loan. Let us see why. Well, for starters, the interest outgo on a home loan up to Rs 1,50,000 is tax deductible. Moreover, the principal repayments are eligible for Sec 80C deduction up to Rs. 1,00,000. Now, if one were to use one’s own funds, these benefits are forgone. There are absolutely no tax benefits available for someone who wants to buy his property outright without taking a loan. This does seem a bit unfair, but that’s the way the law is. Now, how much loan should you opt for? To answer this, you have to weigh the benefit of the tax advantage of taking a loan against the loss due to higher interest outflow. Obviously, there is a breakeven point, which can help you in arriving at the optimal mix. Let us try and find out what it is with an example. Assume that one Arnav Mehta has taken a housing loan of Rs 15 lakh @11% p.a., whereas his owned funds earn just 5.24% p.a. (after tax). The reason I have chosen this curious figure of 5.24% will become clear in a while. Assume that Mehta is in the 30% tax bracket. (These figures are for ease of understanding and computations, in reality, the numbers would differ depending upon the prevailing interest rates. However, the principle would remain the same.) The premise is one’s own funds are freed up to the extent of the loan taken. In other words, if Mehta were to take a loan of Rs 15 lakh, it basically means that his personal funds to that extent are available to be invested elsewhere, which otherwise would not have been. The comparison is done based on these figures.