SumanSpeaks: The Information Super Highway

IVRCL Ltd: Buy IVRCL Ltd got its debt of Rs 7,350 crore restructured in June last year, but its journey since then has been full of thorns. In the quarter ended September, its net loss shot up to Rs.305 crore, while revenue remained stagnant at Rs.641 crore. To add to its woes, its accumulated losses for the first time exceeded its net worth at Rs.941 crore. The company is currently facing a tough situation as lenders are reluctant to give new loans, even though it was sanctioned a fresh non-fund credit of Rs.1,800 crore in bank guarantees and letter of credit, in addition to a cash credit limit of Rs.200 crore as part of the CDR deal. As part of the corporate debt restructuring, the company has a moratorium on interest payments on term loans till September 2015. The repayments are expected to start only from March next year. This means it has less than four months to fix things to enable IVRCL to improve its cash flows. However, there seems to be some silver lining on th...

First Source Solutions Ltd This scrip of First Source Solutions Ltd, was recommended repeatedly around Rs.27-28 during the last few months, the scrip made a 52-week high yesterday at Rs.43.80 and closed at Rs.42.55. Congratulations to all those who are still holding the scrip. 

Vedanta not to shut down refinery [ Editor : Vedanta Ltd (Rs.90.30) is the largest copper producer, while Hindalco Industries Ltd (Rs.73.75) is the biggest aluminum maker in India. Last month,  Mehraboon Irani of Nirmal Bang Securities told a business channel that he had turned positive on metals; as he believed that global economy might recover over the next two years. I also somewhat feel that non-ferrous pack might have  bottomed out.  Hence, I would suggest the investors, to have at least one of the scrips in your portfolio ] Bhubaneshwar, Nov 25, 2015: Vedanta Ltd on Tuesday said it would not close down its one million tonne per annum (mtpa) refinery at Lanjigarh since the state government has assured to sort out its raw material crisis. "We will not shut down the plant as we are hopeful that the state government will help us meet our requirement of raw materials to run the plant," said chief executive officer (CEO) of Vedanta (Aluminium) Abhiji...

DO YOU KNOW? Lanco Infratech Ltd was recommended at around Rs.3.25 some months back to the Paid Members. The scrip closed at Rs.6.40 in the BSE, at a kissing distance from the 2nd target of Rs.7. The power producer has reported a consolidated net profit of Rs.98.98 crore for September quarter against loss of Rs.527.5 crore in year-ago period, driven by strong operational performance and favourable power tariff order. Today, another scrip in the construction space was recommended to the Paid Group members. What is its name? And what to do with Lanco Infrastructure Ltd now? Meanwhile. Gammon India Ltd hit 19.98% buyer freeze in the BSE and 19.92% buyer freeze in the NSE to close at Rs.15.49 and 15.65 today, in the respective exchanges. This looks a little queer when the lenders to the company led by ICICI Bank proposes to invoke the rules for strategic debt restructuring as a step to recover Rs.100 bln (1 billion= 100 Cr) of dues, from the company. 

Government spending key for revival of Indian steel sector: Fitch  Photo : Live Mint New Delhi, 23 Nov, 2015:  Spending on infra projects such as housing for all and smart cities is the key for the revival of the Indian steel industry, which faces headwinds like cheap imports, global agency Fitch said.  "Spending by the Indian government on infrastructure will be the catalyst for any meaningful improvement in domestic steel demand. The agency expects India's steel consumption to improve modestly by 7-8 per cent in 2016," the agency said in a report titled '2016 Outlook: Indian Steel Sector'.  The agency projected that high imports and soft steel prices globally in 2016 are likely to result in continuing profitability pressures for the Indian steel producers.  "Their margins are likely to be lower in 2015 and improve marginally in 2016, supported by improving domestic demand and the imposition of safeguard duty on imports on certain steel p...

Rohit Ferro Tech Ltd: Buy CMP: Rs.5.50 Rohit Ferro-Tech, which is into ferro alloy manufacturing (and Mining & Minerals sector)  has been facing several problems like non-availability of   adequate quantities of raw materials, lower capacity utilisation and low absorption of overheads.  Earlier this year it sold its Jajput unit to Balasore Alloys Ltd (formerly Ispat Alloys Limited), which is part of the Ispat Group, due to severe  financial stress owing to its high debt exposure.  In other words, t he company decided to dispose off the Jajpur unit so as to ease its financial burden and improve its cash flow requirement. It also has units located at Bishnupur and Haldia in West Bengal.  The current market capitalization stands at Rs.62.58 crore. The current book value of the shares of the company is Rs.19.74. Buy the shares of the company with a six-month perspective for a target of Rs.7.30--9.50.

Vedanta Ltd: Buy CMP: Rs.91.70 The much talked about merger of Vedanta Ltd with Cairn India Ltd may happen in the next couple of months.  Vedanta already has a 59.88 per cent stake in Cairn India. State-owned insurer Life Insurance Corp (LIC), Cairn India's second-largest minority shareholder, and which together with Cairn Energy controls about 19 per cent of the Indian company, too had earlier expressed reservations about the deal. Vedanta has already pushed back the deadline for the merger to June quarter of 2016 as against the first quarter stated previously.  Buy the shares of the company, for short term targets of Rs.97-104 and medium term target of Rs.125. 

DO YOU KNOW? 32% of Chinese zinc smelters surveyed by SMM are optimistic toward zinc prices and expect prices to rise to 14,000-15,000 yuan per tonne in the near future.  Meanwhile, Vedanta Resources Plc said it would maintain its low-cost production of the metal, as well as continue with its plans for a $630 million zinc development in South Africa.  Earlier Glencore Plc,  the world’s largest commodities trading company— announced, in October that it plans to cut zinc output by a third  rather than sell it cheaply;   suggesting that more producers may curb supply.  JPMorgan Chase & Co. said October 16, 2015: " More capacity shut-downs are probably needed to tighten the market". However,  according to ICBC Standard Bank Plc: " Refined zinc production will exceed demand this year and in 2016". 

Commodity Demand: Past, present, future Photo : Wikipedia November 8, 2015: Over the past 15 years, China’s impact on global raw material demand has been nothing short of phenomenal. The spectacular growth in COMMODITY demand between 2005 and 2010 led to the term “commodity supercycle”. But this was no ordinary commodity cycle, as the nation with a population of more than 1 billion people rapidly urbanised. Today, despite the slowdown in COMMODITY demand since 2011, there are still many analysts who have the firm conviction that the world remains in a commodity supercycle and that the globe is currently experiencing a pause before the acceleration in the demand for commodities resumes. Bearing these views in mind, as well as the current impact on global MARKETS being caused by China’s growth slowdown, it is worth taking a moment to review the impact of China’s industrialisation and the rapid increase in commodity demand in the past. Equally important is taki...

DO YOU KNOW? Though Vedanta Ltd (Rs.93.65) posted a 40% drop in consolidated net profit, due to lower COMMODITY prices during the September, 2015 quarter (Y-o-Y basis); the earnings were higher than analysts’ expectations.. The company, straddling mining, OIL and gas sectors, reported a net profit of Rs.973.97 crore for the quarter ended September, 2015 as against Rs.1,639.93 crore in the same period a year ago. Revenue for the quarter fell 15% to Rs.16,561 crore, compared to Rs.19,549 crore in the same quarter last year. It showed record production from our Tier I zinc mines, resulting in strong free cash flow during the quarter. The company is continuing to drive efficiency improvements and is optimizing opex (operational expenditure) and capex (capital expenditure) across the business, taking measured steps to reduce net debt and maximize free cash flow. One significant thing, which needs to be mentioned here is that: during the September, 2015 quarter, the company man...

Veddanta Ltd: Buy CMP: Rs.92.20 A bunch of reforms in the power sector accompanied by smart city projects of the government of India, is likely to increase the demand for the building materials including steel, cement and aluminium. It is to be remembered that Vedanta Ltd is India’s biggest zinc miner. Meanwhile, there are media reports that local governments and power suppliers, smelter executives in China are saying a bleak outlook for aluminium prices will leave them with no choice but to cut or halt production of the metal if power prices there are not reduced. Power tariffs account for about 40% of production costs of aluminium smelters in China, the world's top producer and consumer of the metal. Any output reduction in China will help support weak prices of the metal. Buy the scrip at the CMP of Rs.92.20 (NSE)5, for short term targets of Rs.106-109-112 and medium term targets of Rs.120-125.

Reliance Communications to buy Sistema's India wireless business  [ Editor : Today both Reliance Communications Ltd (Anil Ambani Group, CMP: Rs.79.90) and Reliance Industries Ltd (Mukesh Ambani Group) are up. If you remember Reliance Industries Ltd was recommended in this blog at around Rs.943; today it touched Rs.960. I feel the other Reliance Group companies are soon to follow the trend. Meanwhile, there are recent media reports that t he Mukesh Ambani-promoted Reliance Jio Infocomm, will lead the 4G subscriber market share despite the 4G network launch by Vodafone, Idea Cellular and Bharti Airtel ] Photo : Ibnlive MUMBAI: Reliance Communications Ltd on Monday announced plans to acquire Sistema Shyam's wireless service business for a 10% equity in the combined firm to Russia's Sistema.  The company which runs the only all-CDMA technology based network under the brand MTS will come without any debt, as its promoters will repay all loans prior to the merger, a...