Over-hyped Modi-rally Falls From Grace

Photo: Moneycontrol.com

The bloodbath continued in the Dalal Street even today as the BULLS were taken by the horns, and Nifty closed at 8,057.30 down 39.70 points.  The Nifty today though went down to 7997.15 points, on the intra-day basis; but at last the  support came in the 7500-8000 ranges. 

Though the Nifty might move towards 8150 on the intr-day basis tomorrow, but the Nifty is sell on every bounce. The trend remains down in the short, medium and long term. This will perhaps continue unless and until we have an intelligent Prime Minister and a professional Finance Minister. The passing of GST in the Lok Sabha does not carry much meaning, unless and until it gets similar approval in the Upper House of the Parliament. But the GST has it own merits and demerits; and only time will tell how much it will be able to boost the GDP of the Indian economy. 

Meanwhile, though the inflation is below the RBI's own target region, but it is unlikely the Dr.Rajan would lower the interest too soon, because of unstable rupee and slowing of demand. There is already a chorus from India Inc to lower the Repo rate, but at this hour when the equity market is in ICU, it would be too risky to cut interest rate further. The INR is now at 64.240 Vs the USD and is threatening to cross the $70 mark. The bottomline is that Narendra Modi led government has brought India to the brink of disaster and we are in a classic DEFLATION TRAP. 

I had mentioned 100 times earlier, that elbowing top BJP leaders like Dr.M M Murli Monohor Joshi, might have serious consequences on the Indian economy. The point is that those things which requires experience and intelligence, cannot be solved by hard work or labour. 

WINNING STROKES: THINK DIFFERENT

Rolta India Ltd moved and moved today as it touched Rs.125.30 intra-day while closing near the day's high at Rs.122.85 in the BSE and Rs.123.40 in the NSE, up more than 6% in both the exchanges. The scrip will again be moving towards Rs.170-180 ranges and hence stay invested. It is not only because Bharat Electronics Ltd-Rolta India consortium bagged the Ministry of Defence’s (MoD) development agency order for the Battlefield Management System (BMS) project, worth over Rs.50,000 crore, but due to inherent strength of the company. The BMS project, categorised as a "Make in India" programme under the DPP, will be one of the largest solutions to be indigenously manufactured for the Indian Army.

Rasoya Proteins Ltd closed at Re.0.50 up more than 11.11% in the NSE. It hit the upper circuits in both the exchanges. The as I mentioned umpteen number of times, this stock will give superb returns going forward. This is an A-group company and hence the investors should accumulate it in all declines. 

My recommended Hindustan Oil Exploration Ltd today moved to Rs.39.75, before closing at Rs.39.30 up 3.59%. There were earlier media reports that Sun Pharma Ltd's promoter may pick up major stake in the company. The scrip should cross Rs.50 in the next few days, as the Crude Oil prices heads north. 

Gitanjali Gems Ltd moved to Rs.43.55, before closing at Rs.42.90. It is a common perception among the analyst fraternity that USD might rise if the US Fed hikes interest rates and hence outlook for the gold could remain subdued in the next 9-10 months. However, the geo-political situation is fast changing and might help a rise in the gold prices. The rise in the dollar may also provide a cushion to domestic gold prices. Even if the price of gold declines in dollar terms, the weakening of the rupee will keep prices high in rupee terms. Hence, buy the stock is Gitanjali Gems Ltd in all declines and keep holding. 

Veer Energy and Infrastructure Ltd today moved to Rs.3.37 before closing at Rs.3.28. The stock will invariably move towards Rs.5, in the coming days, as the government talks of providing more focus to the renewable energy sector. India’s wind power target of 60 GW by 2022 is easily attainable but solar target of 100 MW requires cost-effective support to be met, says a study report. 
In case of Nifty, today, it was expected that the market could rally, as the market was not only looking oversold but also, FIIs selling looked synthetic, due to rallies in the primary market. Today, the Sensex rallied 479 points while the Nifty posted the biggest daily gain in 2 months. The investors snapped up beaten down blue-chips after the Lower House of Parliament approved the 2015/16 Finance Bill on Thursday. Foreign institutional investors (FIIs) were net buyers in the equity segment worth Rs.605.3 million on both BSE, NSE and MCX-SX on May 04, as per provisional data available at the BSE. They bought equities worth Rs.51.05 billion and sold equities worth Rs.50.45 billion. While domestic institutional investors (DIIs), which include banks, DFIs, insurance and MFs, were net buyers in the equity segment worth Rs.1.46 billion. They bought equities worth Rs.12.53 billion and sold equities worth Rs.11.07 billion.

Ruchi Soya to invest Rs 300 crore in Maharashtra

[Editor: I think you remember that Rasoya Proteins Limited (Re.0.48) which is engaged in the business of Soya extraction and Power Generation, is also a Maharashtra-based company. Rasoya Proteins Ltd is primarily engaged in the business of soya processing through soya solvent extraction plant and oil refinery along with lecithin plant. It is also engaged in the business of generation of power having production capacity of 10 megawatt per hour. The primary products of the Company are De-oiled cake, crude oil, refined edible soya oil and other consumer products. Its soya products consist of Soya Namkin (Ready to Eat Snack Food), Wheat Atta, Jawar Atta, Besan, Soya Wadi, Nuggets, and Oil. It sells its Soya Refined Oil under the brand name Rasoya. It also has a wheat processing plant, soya nugget manufacturing unit and also manufacturers various kinds of soya flours. The scrip is likely to give superb returns in the next 4-5 months period]

Saturday, 25 April 2015: Edible oils manufacturer Ruchi Soya has signed a memorandum of understanding with the Maharashtra government to invest Rs 300 crore in the value chains of soybean and tomato in the state.

Almost 1.25 lakh tomato growers and 1.5 lakh soybean grower farmers in the state would have direct market for their produce.

United Phosphorous has also signed a MoU with the state government to upgrade its crop care centres to 100 to ensure minimum post harvesting losses for the farmers, an official release said.

Chief minister Devendra Fadnavis on Friday held a round table meeting with 28 industry representatives engaged in agri-products and processing.

Fadnavis told the industry captains that state government has decided to scrap cess being levied on purchases made outside the APMC (Agriculture Produce Marketing Committee) and has lifted ban on stocking oil seeds.

The round table was aimed at increasing public private partnership for integrated agricultural development (PPP-IAD) which was started in 2012-13. In 2012-13 it was with 20 private companies and with participation of one million farmers, 10 value chains were envisaged and now after today's meeting, a total of 30 value chains are targeted with participation of five million farmers with 60 private companies in the PPP-IAD. Crops like maize, rice, soybean, pulses, cotton, sugarcane, fruits and vegetables would be incorporated in these value chains.

For providing crop insurance the government has roped in Swiss Re, the re-insurance company, for a pilot project for surveying the villages via satellite. Fadnavis said that the satellite imageries would enable us to provide individual field level information so that information would be accurate.

Courtesy: DNA India

Wind energy target of 60 GW by 2022 is easily achievable: CPI-ISB report

While wind power is already cheaper than the total cost of power from a new build imported coal plant, solar power will become competitive with power from imported coal by 2019, adds the report

Photo: Simply Decoded

Mumbai  April 18, 2015: With the appropriate policies, the Budget 2015 target of 60 GW of wind power by 2022 can easily be met with minimal government financial support, thus providing a cost-effective path for meeting India’s renewable energy targets, according to a new report from Climate Policy Initiative (CPI) and the Indian School of Business (ISB) – titled ‘Reaching India’s renewable energy targets cost-effectively’.

In the report, CPI found that, in absence of any subsidies, wind power is already cheaper than the total cost of power from a new build imported coal plant, at Rs 5.87/kWh for electricity from wind power and Rs 6.81/kWh for electricity from imported coal. The comparison with imported coal is key because this is the fuel that additional renewable energy will likely replace, rather than domestic coal or natural gas, which are limited in supply. The analysis also finds that wind power will continue to remain competitive beyond 2022.

Because the government has a constrained budget, a cost-effective policy path to achieving its renewable energy targets is crucial. These findings suggest that wind power can provide a cost-effective path to meeting targets, and that the government should encourage rapid deployment of wind power through policy measures that address non-cost related barriers to wind power, for example challenges in land acquisition and delays in environmental clearances.

CPI also found that, as the costs of installing solar power continue to decrease; solar power will become competitive with power from imported coal by 2019, and will require some government support from 2015 to 2019. In order to achieve the target of 20 GW of solar power by 2022, the total cost of government support would be Rs 46.97 billion, or Rs 2.71/W, under the current federal policy of accelerated depreciation.

However, this government support could be significantly reduced - by 96% - by replacing the current federal policy with reduced cost, extended tenor debt. Under reduced cost, extended tenor debt, the cost of support would fall to Rs 1.81 billion, or Rs 0.1/W. To accelerate solar power sooner to meet the Budget 2015 goal of 100 GW of solar, revised upwards from 20 GW, it would need to provide more financial support.

Gireesh Shrimali, fellow at Climate Policy Initiative and lead author of the study, said, “India has ambitious targets for renewable energy, however, with a limited budget, it’s important that the Government of India take the most cost-effective policy path. Wind presents a clear win-win. Adjusting current policy to more effectively deploy solar would also help lower costs.”

Courtesy: Business Standard

Shanghvi to invest Rs.400 Cr more in new wind energy

[Editor: According to the media reports, India’s wind power capacity increased in 2014-15 by 2,297 MW, marginally higher than its achievement of 2,146 MW in the previous year. However, many analysts are of the view that the current year’s installation would cross the 3,000 MW-mark; numbers not seen since 2011-12]

April 30, 2015: Sun Pharmaceuticals founder Dilip Shanghvi will invest Rs.400 crore in a 50:50 joint venture with Suzlon for setting up wind projects across India, and will also provide working capital for 1,200 MW over the next two years.

This investment, from the Shangvi family, is over and above the ₹1,800 crore shelled out earlier this year to buy a 23 per cent stake in Suzlon Energy.

The new JV, in which Suzlon will also invest Rs.400 crore by way of equity, will be set up this fiscal and will develop multiple wind power projects totalling 450-500 MW in four States over the next two years, said Kirti Vagadia, Group Head-Finance, Suzlon.

Shangvi will also give an additional working capital facility for 1,200 MW over a two-year period, Vagadia added, but refused to convert this into rupee terms.

Senvion sale

On Thursday, the Pune-based wind energy company announced the completion of the sale of its wholly owned subsidiary, Senvion SE, to US-based Centerbridge Partners.

The transaction closure, which follows an agreement signed with Centerbridge in January 2015, has brought in around Rs.7,000 crore of cash into Suzlon’s kitty.

“Around Rs.5,000 crore of this will be used for debt reduction, while the balance will be used for volume growth of the business,” Vagadia said.

After this, Suzlon’s (reduced) outstanding debt will stand at Rs.10,000 crore, including Rs.2,000 crore of foreign currency convertible bonds due to mature in 2020, he added.

Elaborating on utilisation of the funds, Vagadia said in addition to investing inland and building of a development pipeline, Suzlon will undertake capital expenditure to set up three to four new manufacturing facilities across India for longer rotor blades.

On plans for further sale of more non-core assets, Vagadia said: “We will be selling three kinds of non critical assets – component manufacturing businesses, old manufacturing units and office buildings. But only to the right buyer at the right price.”

Courtesy: The Hindu Business Line

DO YOU KNOW?

According to a well known financial weekly, more than 300 companies are planning to come up with IPO, which include Indigo Airlines, DM Healthcare and Narayan Netralay. The SEBI has given approval to 10 IPOs to raise Rs.4625 crore, while 14 companies are waiting for go ahead to raise Rs.4842 crore. This is believed to be the best chance for the P/E investors to offload their stake.

Recently VRL Logistics IPO got 74 times subscription, while INOX Wind got 14 times subscription. REC and Coal India also got bid worth Rs.2000 crore and Rs.1200 crore respectively. Thus the secondary market is witnessing correction, while primary market is witnessing bull run.

Does this mean that the FIIs are withdrawing money from the secondary market only to invest in these IPOs; slated later this year (FY16) ? This might also mean that, all the correction in the 2ndary market is probably not due to MAT related issues. Isn't it? 

Therefore, the moot point: is the correction in the Indian markets, triggered by the FIIs, somewhat synthetic in nature?

Gitanjali Gems gets fresh Rs 4,300-cr recast

[Editor: When any equity market turns bearish (or too volatile), then traders generally look for safe Heavens like Gold. Therefore, a rally in the scrip of Gitajali Gems Ltd (Rs.42.25) is likely to start soon. 
However, the sector still suffers from some nagging problems, which are still to be sorted out in favour of the Gems and Jewelry Companies. Also, though Narendra Modi did lot of "Tall-Talking" before the Lok Sabha elections last year, his government did very little till now to alleviate the problems of this sector]

Mumbai | April 30, 2015: Working capital loans of R4,300 crore given to Gitanjali Gems have been restructured under the joint lenders’ forum (JLF) mechanism, as per documents examined by FE and bankers privy to the discussions. Credit to the branded jewellery maker has also been enhanced by R1,000 crore.

A senior banker familiar with the development said the government had written to the consortium of lenders earlier this month, asking why some of them had delayed the disbursement of loans that had been sanctioned. The Gitanjali

exposure was classified as a special mention account-2 (SMA-2) last year after the company failed to fulfil its payment obligations for more than 60 days, triggering the formation of a JLF. The consortium comprises 21 lenders.

For the nine months ended December 31, 2014, the company’s net sales fell 17% to R7,994 crore, over the corresponding period in 2013, while finance costs rose 30% to R700 crore. Net profit for the period was flat at R125 crore.

Gitanjali’s consolidated sales fell 24% year-on-year (y-o-y) to R12,436 crore in FY14, driving down the Ebitda (earnings before interest tax, depreciation and amortisation) by 22% to R812 crore. Higher finance costs, which jumped 79% to R705 crore , saw net profit nearly halve to R34 crore. The net debt at the end of March 2014 rose 62% to R8,361 crore.

The company announced on April 21 that it is consolidating the business at group level to improve cash flows and reduce costs in various activities such as sourcing, manufacturing, distribution, exporting and retailing. It proposed the merger of three of its subsidiaries Asmi Jewellery India and Spectrum Jewellery with Nakshatra Brands and also the merger of Gitanjali Jewellery Retail and Gitanjali Lifestyle with GILI India.

In its Q3FY15 results posted in February 2015, the company’s auditors drew attention to five issues identified in Gitanjali’s books. They pointed to the “overdrawing and non-payment of interest and charges on bank facilities for nine month period ending December 31, 2014”.

The company’s response was that “the business of the group continues to be impacted due to regulatory restrictions on import of gold and unfavourable INR vs USD currency fluctuation. The consortium of bankers have assessed enhanced working capital requirements and the sanctions are awaited with modified terms.

The group’s overdrawn position in the working capital account as on December 31, 2014 amounted to around Rs 146.69 crore which is mainly on account of non-servicing of interest and charges.”

Auditors also noted that 13 of the company’s subsidiaries have a negative net worth, and Gitanjali replied saying that the subsidiaries are “strategic investments” and that the “holding company along with the management of respective subsidiaries are considering various options of reviving and making them viable”.

The company has not paid self-assessment tax for AY 2013-14 of around R58.23 crore and indirect taxes of about R9.57 crore at the end of Q3FY15. Gitanjali has also sought rescheduling its repayment of ECB loans with IDBI, with the RBI providing in-principle approval for the rescheduling, the company said.

The gems and jewellery sector has been under stress owing to a rise in customs duty, RBI-imposed restrictions on gold imports and a volatile rupee.

“Gitanjali being one of the largest players in the Indian jewellery space was also impacted by these regulations,” Gitanjali’s CMD Mehul Choksi said in the company’s FY14 annual report. “During (FY14), the company witnessed a decline in turnover due to the reduced gold jewellery sales. These regulatory changes also impacted margins of the company. 

Further, the company had to significantly rationalise its operational costs primarily the manpower and administration costs.” 

When approached for a response, the company said it was not in a position to respond immediately.

Courtesy: The Financial Express

Rolta inches up on launching Rolta OneView 6.0

[Editor: The scrip of Rolta India Ltd, a multinational organization headquartered in India and a leading provider of innovative IT solutions for many vertical segments, including federal and state governments, defence and homeland security has also been recommended as a BUY, by a well know investment weekly from Gujarat, in their recent publications. The scrip fell after Glaucus Research Group California LLC, came out with a report, which the (Rolta India Ltd's) management termed as "baseless", pointing out that it "has factual errors and inconsistencies"]
Apr 30 2015: Rolta is currently trading at Rs. 116.00, up by 0.05 points or 0.04% from its previous closing of Rs. 115.95 on the BSE.

The scrip opened at Rs. 115.70 and has touched a high and low of Rs. 116.75 and Rs. 113.75 respectively. So far 1,98,000 shares were traded on the counter.

The BSE group 'B ' stock of face value Rs. 10 has touched a 52 week high of Rs. 196.80 on 28-Feb-2015 and a 52 week low of Rs. 72.40 on 09-May-2014.

Last one week high and low of the scrip stood at Rs. 135.05 and Rs. 105.35 respectively. The current market cap of the company is Rs. 1,869.00 crore.

The promoters holding in the company stood at 51.09% while Institutions and Non-Institutions held 15.51% and 32.75% respectively.

Rolta has launched Rolta OneView 6.0 with greatly enhanced features and functionality to provide unprecedented business value to asset-intensive enterprises. It has 3000+ pre-built performance metrics and business-value scenarios tailored to specific needs of individual verticals, including Oil & Gas, Chemicals, Power & Water Utilities, and Transportation.

Rolta OneView 6.0 is unique in providing an out-of-the box enterprise-level solution that is Cloud-ready and addresses the needs of enterprises to rapidly exploit the business value of Big Data and OT-IT integration through diagnostic, predictive and prescriptive analytics, to achieve faster ROI. It provides seamless integration and tracking of enterprise Balance Score Card and operational strategy maps with role-based KPIs.

Rolta OneView effectively leverages platforms like SAP HANA for in-memory analytics to deliver key performance indicators, a critical need of businesses to achieve operational excellence. By leveraging Rolta's patented technologies that facilitate real time integration of data from disparate Operations and Business systems, Rolta OneView offers cross-functional visibility of Operations, Assets, Maintenance, Reliability, Supply Chain, Health Safety/Environment, Projects and Business insights across multiple sites of an enterprise.

Rolta India conducts business in India, and internationally through subsidiaries in various countries. Rolta is a leading provider of innovative IT solutions built around its intellectual property for many vertical segments, including Federal and State Governments, Defence, Homeland Security, Utilities, Process, Power, Financial Services, Manufacturing, Retail, and Healthcare.

Courtesy: Live Mint

Veer Energy and Infrastructure Ltd: Bullish upmove on the cards

If you go through the latest shareholding pattern of Veer Energy and Infrastructure Ltd, you would find that the promoters' holding has slightly increased to 35.66% in the March, 2015 quarter as against 33.35% in the December, 2014 quarter. Also, the Shares pledged or otherwise encumbered is now only 8.28%. 

DO YOU KNOW?

Buying was witnessed across the board, yesterday and despite a negative close, advance/decline ratio remained Positive at 4:3  with Small-cap index and Bank Index closing in the green.

Also, Crude oil closed at $58.58 with a gain of $1.52 yesterday. It made a new 4 month high of $59.33 after trading sideways for 7 trading sessions. Crude had crossed the supply level of $55 few days back. The next supply level is $65--thus the Bulls have good room for appreciation. 

This gives the Bulls enough ammunition to invest in the small cap space. Accumulate Veer Energy and Infrastructure Ltd (Rs.3.19) and Hindustan Oil Exploration Ltd (Rs.38.50) in view of the positive development in the crude oil front.

Veer Energy and Infrastructure Ltd: The wind beneath its wings

The subsidiary of Veer Energy & Infrastructure Ltd (Rs.3.17), Shruti Power Projects was sanctioned a loan of Rs.52.56 crore by the Indian Renewable Energy Development Agency last year (in parts), for setting up a 12 MW wind farm with project size of Rs.75.60 crore at Vinjalpur Village, District Khambhalia in the State of Gujarat. 

According to the sources, the company is expected to complete the project by August-September, 2015. This is expected to generate an additional revenue of Rs.12 Cr per annum by way of power generation.

Also, from the June, 2015 quarter, there could be a slight increase in both the top and bottomlines of the company, as few ongoing projects could get completed in this quarter. 

Veer Energy & Infrastructure will also take the benefits, of generation based incentive (GBI) as per the policy declared by the central government in the last budget. 

Currently, the company is active in providing infrastructure services for Wind Energy & Other infrastructures as well, and also company has set up Engineering unit at Ahmedabad and started production in the current year. In FY16, it is expecting better results.

Meanwhile, according to a report published in The Economic Times on 14 April, 2015: 

Big wind energy companies in India such as Gamesa, Mytrah and Suzlon are all diversifying into solar space this year with plans to invest several hundred million dollars in the next five years in installing thousands of solar megawatts, given the government's (of India's) impetus to the sector. 

The Union Government is looking at increasing new and renewable energy installation in the country to 175 GW, with the wind energy capacity going up to 65 GW.

Moreover, the company is likely to complete a large number of on-going projects by FY16, which means within the next 9-12 months period, the scrip of Veer Energy and Infrastructure Ltd (Rs..17) could give superb returns. 

Market Mantra

Yesterday the Nifty rallied and closed with a gain of 72 points. Buying interest below 8200 level pulled it to 8308 and it finally settled at 8285. Bank index was the best performer which was lead by ICICI Bank. 

After correcting 660 points, market has witnessed buying interest at 200 DEMA support. Yesterday, the traders purchased shares across the board. Today, the Premium Members were given Buy call on Nifty  at around 8,224.45 (corresponding spot price) when it was down 61.15 points or 0.74% points; for a target of 8260. Now the Nifty is trading at 8,285.15 down only 0.45 points or 0.01%. I feel most of the Paid Members made money in my Nifty call today. Meanwhile, the Hourly Trend in case of Nifty has again turned positive. 

Today's call: 

(i) Buy Veer Energy Ltd at Rs.3.30-3.40 for a target of Rs.4.9. Since the crude oil prices have started to move up, the renewal energy sector is expected to do well.

(ii) Buy Hindustan Oil Exploration Ltd at around Rs.38.50--39 for a target of Rs.46.  Yesterday there werew media reports that Barclays has raises crude oil price forecasts citing geopolitical tensions, unplanned outages and lower natural gas prices in the US. Bank of America Merrill Lynch and Societe Generale are the other two major banks that have made upward revisions to oil forecasts amid a rally in US oil prices.

Rolta India Ltd (Rs.116) should be moving towards Rs.140-144 in the next few week. Kindly add on all declines. 

Rolta India Ltd release detailed rebuttal to Glaucus Report rebuttal of April 23, 2015

This is a 40,000 SF Build-to-Suit office building for Rolta International. Rolta occupied the top floor and the 1st and 2nd floor were designed as "For Lease" space.
Photo: M J Lant Developments, Inc

MUMBAI, April 27, 2015-- Rolta India Limited (Company) is a multinational organization headquartered in India and a leading provider of innovative IT solutions for many vertical segments, including federal and state governments, defence and homeland security. The Company's equity shares have been listed on the Indian stock exchanges for 25 years; its GDRs are listed on the London Stock Exchange; and the senior notes issued by its subsidiaries in 2013 and 2014 are listed on the Singapore Stock Exchange. 

On April 16, 2015, Glaucus Research Group California LLC, (Glaucus), released an undated research report in relation to Bonds of the company on its website (Glaucus Report). The Company had issued a preliminary response to the Glaucus Report on April 16, 2015 mentioning that the said report is completely baseless and has factual errors and inconsistencies. On April 20, 2015 the Company issued a detailed response (Response 1) to the Glaucus Report and categorically denied the contents of the Glaucus Report in its entirety and also drew attention to Glaucus' own admission of its motive in issuing the report is to make financial gains by shorting the Bonds.

In reaction to Response 1, on April 23, 2015 Glaucus released another publication on its website titled 'Glaucus Research issues a Rebuttal to Rolta Response - Reiterates Strong Sell rating on Delaware-Issued 2018 and 2019 Corporate Bonds' (Glaucus Rebuttal).

The Company hereby reiterates its categorical denial of the contents of the Glaucus Report in entirety and consequently the contents of the Glaucus Rebuttal (which is essentially recycled portions of the Glaucus Report).

The allegations in the Glaucus Report and the Glaucus Rebuttal are baseless and have factual errors and inconsistencies. By Glaucus' own admission, its motive in issuing the report and rebuttal is to make financial gains by shorting the Bonds. Glaucus has not clarified the facts with any Company officials and/or visited any sites before releasing the Glaucus Report or the Glaucus Rebuttal.

The Company has in response to the Glaucus Rebuttal, now filed a detailed point by point rebuttal with the relevant stock exchanges in India, London and Singapore and has posted it on its website http://www.rolta.com.

About the Company

The company is a leading provider of innovative IT solutions for many vertical segments, including federal and state governments, defence/HLS, utilities, process, power, financial services, manufacturing, retail, and healthcare. The company is recognized for its extensive portfolio of indigenous solutions based on field-proven Rolta IP tailored for Indian defence / HLS. By uniquely combining its expertise in the IT, engineering and geospatial domains, the company develops exceptional IP-based cloud-ready solutions to enable its customers globally to readily exploit the power of BI, big data analytics, and IT-OT fusion. The company is a multinational organization headquartered in India. The company operates from over 40 locations worldwide and has executed projects in more than 45 countries. The company's equity shares are listed on BSE and NSE in India, its GDRs are listed on the Main Board of London Stock Exchange and its 'Senior Notes' are listed on Singapore Stock Exchange.

For additional information or clarifications, please visit http://www.rolta.com. 

Moreover to view this news release in HTML formatting, please CLICK HERE.

Courtesy: Marketwatch.com

DO YOU KNOW?

A report by US-based Glaucus Research  said: "Rolta buys computer systems only to depreciate and dispose of them shortly thereafter for an almost total loss. Rolta claims that its 2-6 year depreciation schedule is reasonable, but fails to address evidence that Rolta appears to have fully depreciated disposed systems on an even quicker timeline (1 year in some cases)".

I do not know what the management's response to this juggernaut would be; but depending on their own preferences, companies are free to choose a method to calculate the depreciation expense from among many. Or in other words, this is purely based on the motive of the company and Rolta India Ltd (Rs.121.65) might be having thier own arguments behind this move. 

We all know that in "Accelerated Methods", depreciation costs are written-off more quickly than the "Straight-line method". Generally, the purpose behind the former, is to "Minimize Taxable Income". It is the company's sword, so how it uses this weapon, is its discretion. So, where is the dichotomy?

Now what is EBIDTA? 

It is Earnings Before Interest, Taxes, Depreciation and Amortization-an approximate measure of a company's operating cash flow based on data from the company's income statement. 

Thus, the choice of depreciation method affects an income statement and balance sheet in the short term. 

Now, it is a general rule that most companies depreciate IT-hardware (Computer Systems) over a shorter period, say, 5-8 years. If Rolta India Ltd chose 2-6 year cycle (in most cases), then they are just following the general convention. Where is the problem? 

Then, should we conclude that the US-based firm wants to say that NO computer system can go wrong in one year? This is practically NONSENSE. 

Moreover a  lower depreciation would have raised reported earnings and boosted book value.

So, what does the US-based Glaucus Research has to say regarding the current book value of Rolta India Ltd? 

Or in other words it is foolish to take a call on any company based on the past numbers or a DEAD BALANCE SHEET!! We invest in a company based on its future numbers and its business prospects, isn't it? Moreover, in future Rolta India Ltd might change its accounting method, isn't it? Baaat Khallas!! 

Besides, in the current scenario, when the government of India is putting more stress in defense, with "Make in India" campaign, it would be STUPID to assume that the companies like Rolta India Ltd (Rs.121.65) would not do well in future; especially when BEL-Rolta consortium bagged the defense contract worth Rs.50,000 Cr. 

I am also surprised to see Fitch Ratings suddenly revising the outlook on Rolta India Limited's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) to Negative from Stable, and affirming the IDRs and senior unsecured rating at 'BB-' changing its view on the company’s bonds based on that report. 

Should a rating agency be so handicapped that it has to take cues from an external agency to change their original standing? This  looks like "Hocus-pocus".   

Oscar Wilde once said: "A cynic is a man who knows the price of everything and the value of nothing".

According to my research, the shares of Rolta India Ltd (Rs.121.65) came in for a sharp sell off on last Friday, i.e. on 24th April, 2015, because it has high FII holdings (12.94%). And you know how the NDA government spooked the FIIs with MAT.

RBI Should Look Into Interest Rates: Jayant Sinha

[Editor: With INR depreciating Vs the US, it could be disastrous if the RBI goes for further Repo rate cut, unless the former stabilizes. Narendra Modi government has brought India to the brink of deflation. Now, it would be very tough to revive demand once again, unless the Finmin, works very hard. Moreover, inspite of all the hypes regarding Mr.Sinha being "...an ardent student of fund management, investments and contemporary economics" his gestures seems to be "Starkly Mediocre". In fact Narendra Modi's government is a "Parade of Mediocrity", only]

Kolkata, April 25, 2015:  Maintaining that higher borrowings by individuals will lead to purchase-led growth, Minister of State for Finance Jayant Sinha on Saturday said interest rates should fall and hopefully the Reserve Bank of India (RBI) will look into that.

"Interest rates should fall so that higher borrowings will lead to more purchases of articles and RBI should look into that aspect," Mr Sinha said at an interaction organised by the Bharat Chamber of Commerce here.

"RBI is a very professional data-driven organisation and they would obviously look at the facts before taking any decision," the minister told reporters when asked specifically whether the central bank should cut rates.

"So, let us see how the data play out," he said with a cautious tone, clarifying that a rate cut was not imperative for restarting stalled projects.

Referring to branching out public debt management from the ambit of the RBI, Mr Sinha said there had been a lot of resistance from the central bank's officers and employees.

"Worldwide, public debt was being managed by an outside entity and not the central bank. But RBI was doing a very fine job... When you are reforming, you can expect opposition. Even the RBI Governor feels strongly about creation of a separate public debt management body," Mr Sinha added.

On public sector banks, he said the Finance Bill of 2015 has provided for opening up the posts of chairman and managing director of public sector banks to experienced professionals from private banks who would be given market-linked salaries.

The government will also create a banking investment company which will hold government shares, he said.

The department of financial services of the Finance Ministry will also be stripped of the power by creation of a banking bureau, which will carry out the function of appointment, strategy and capitalisation of public sector banks, Mr Sinha said.

Courtesy: NDTV Profit

Women directors: Over 2K cos yet to comply with Sebi norm

Photo: www.erewise.com

[Editor: It is surprising to see, why SEBI wants to have an women director by hook and crook and why is the honourable Supreme Court of India is so silent on the matter; which is highly "Gender Biased"??!! It seems that the SEBI has forgotten to take note of "The Directive Principles of State Policy", contained in Part IV of the Constitution of India. The Forty-second Amendment, which came into force in January 1977, attempted to raise the status of the Directive Principles by stating that no law implementing any of the Directive Principles could be declared unconstitutional on the grounds that it violated any of the Fundamental Rights. This is happening  due to, excessively freewheeling style of Indian democracy]

Apr 24, 2015: As many as 2,015 companies listed on the BSE and 263 on the NSE are yet to comply with market regulator Sebi's directive to appoint at least one woman director on the board, Lok Sabha was informed on Friday. 

Of the 1,624 companies listed on the NSE, 1,361 companies have complied, while 263 companies or 16 percent have not complied with Sebi's women director norm, Minister of State for Finance Jayant Sinha said during Question Hour. 

Of the 5,305 companies listed on BSE, 3,290 companies have complied with and 2,015 companies or 38 percent have not complied with the norm as on April 16, he added. 

The capital markets watchdog Sebi had issued guidelines in February 2014 asking companies to appoint at least one woman director on their boards by October 1, 2014 which was later relaxed to April 1, 2015. 

"The government has been vigilant on the matter of appointment of women director... It is in companies' interest to diversify so that there functioning can improve. There are a large number of companies which are yet to comply. 

The corporate sector is charged with the issue," Sinha said. When asked about the process government will undertake for PSUs to comply with this norm, he said "this is methodical process and we need to ensure that capable people are on the board. We are going through that vetting process. Impeccable vetting process will take some time". 

For private sector companies, Sinha said since it is a market-driven economy, it is up to them to comply. "We can only guide and frame rules. After that it is up to the companies to implement."

Courtesy: Moneycontrol.com

DO YOU KNOW?

Regarding Rolta India Ltd, the financial website: www.moneycontrol.com which is a part of the CNBC TV18 Group, said on February 24, 2015: 

"The company's trailing 12-month (TTM) EPS was at Rs.50.68 per share. (Dec, 2014). The stock's price-to-earnings (P/E) ratio was 2.96. The latest book value of the company is Rs.187.83 per share. At current value, the price-to-book value of the company was 0.8. The dividend yield of the company was 1.5 percent".

But the same website now puts the book value as Rs.122.95 on standalone basis, while on consolidated basis it is Rs.72.55. therefore, the question is: how can the book value of a reputed company (Rolta India Ltd is older than Infosys Ltd) change so much in matter of couple of months?

If you remember, in an earlier  occasion too, this website put a misleading book value of an A-group company Rasoya Proteins Ltd. When I pointed out the same here in this blog, they corrected the same. 

Moreover, this website, has a dubious and manipulative platform called Money Control Message board, where even the moderators takes part in the discussion, in the guise of boarders. These administrators of MMB, are often highly biased and delete messages, which goes against their thought processes. Not only that, they may even use slangs and highly objectionable words, when they appear in the MMB, in disguise (with A,B,C name) to take part in discussions; forcing you to react. 

It is an irony that some investors and traders base their trading decisions, pivoted on the inputs placed here---not to mention, though many burn their fingers in the process; but still they do not learn. 

Signs of steel prices bottoming out a ray of hope for steel players

Photo: Live Mint

Ujjval Jauhari  |  New Delhi  April 23, 2015: Metal sector has shown some promise in the recent past despite concerns on broader indices that continue to trade weak.

The CNX Metal index that had fallen to one-year lows of close to 2,293 in mid-March is now trading at 2,460 levels, a gain of almost 100 points or 7%.

Amongst the constituents, the ferrous players have seen some upside. Tata Steel that saw 52 week lows of Rs 311.30 on 27 March was trading at Rs 346 levels on Wednesday.

JSW Steel, too, saw 52-week lows of Rs 880 on 26th March and now trades at Rs 948, while SAIL after seeing closing lows of Rs 65.75 on 9th of March has recovered to Rs 73.

There are some signs of the steel stocks having bottomed out. Even though the global and domestic steel prices remain soft, there has been positive signals emanating from European demand and pricing.

Goutam Chakraborty at Emkay Global says that the steel prices seem to be near the bottom and significant downside from here seems unlikely.

For Indian non-integrated players, the domestic iron-ore prices declining provide further comfort. Recently, NMDC cut prices of iron-ore fines by 20% and lumps by 6.1% to Rs 1,960 a tonne and Rs 3,050 a tonne, respectively in a surprise mid-month review.

This is likely to benefit players as JSW Steel who do not have captive iron ore supplies. For players as Tata Steel and SAIL, the restarting of mining in Orissa bodes well. Also, the concerns on mining royalty seem to be factored in for these players having captive resources.

It is in this backdrop the stock prices have recovered. In fact, on Thursday, Bank of America Merrill Lynch upgraded Tata Steel stock with a target price of Rs 500, which saw the stock rise over 4% to Rs 366 levels.

However, don't expect any significant boost to the fortunes of steel companies in the near-term given the weakness in demand and prices. But, investors with a medium term outlook can accumulate select stocks on decline.

Amongst the metals companies, JSW Steel and Tata Steel are top picks of majority of analysts.

While JSW Steel's majority sales are in the domestic market, Tata Steel also has exposure to Europe. Analysts, looking at declining raw material prices and royalty as well as the Mining Bill, believe that the non-integrated business model of JSW Steel is proving to be a boon in difficult times.

Its margins are also to expand with lower raw material prices, including that of coal. While the demand recovery in the country is some time away and may cause pressure on steel companies, the curbs on imports should help.

For JSW, volume gains and efficiency improvements at its Dolvi unit led by brownfield expansion should benefit the company. Thus, while analysts at Centrum Broking have a target price of Rs 1,400, analysts at Motilal Oswal Securities have target price of Rs 1,126 a share.

Tata Steel also will benefit from lower raw material cost, as the high cost imported iron ore inventory is gradually phased out, say analysts at Motilal Oswal Securities. Moreover, commissioning of Kalinganagar (3MT) will add to margins through higher operating efficiency.

They expect Tata Steel India business EBITDA/tonne to improve to Rs 13,000 by FY17 from an estimated Rs 8,470 in March 2015 quarter. They value Tata Steel stock at Rs 505.

Courtesy: Business Standard

Rolta India Ltd

CMP: Rs.138.90

The Company is a leading provider of innovative IT solutions for many vertical segments, including federal and state governments, defence/HLS, utilities, process, power, financial services, manufacturing, retail, and healthcare. 

The Company is recognized for its extensive portfolio of indigenous solutions based on field-proven Rolta IP tailored for Indian defence / HLS. 

By uniquely combining its expertise in the IT, engineering and geospatial domains, the Company develops exceptional IP-based cloud-ready solutions to enable its customers globally to readily exploit the power of BI, big data analytics, and IT-OT fusion. 

Rolta India Ltd is a multinational organization headquartered in India. It operates from over 40 locations worldwide and has executed projects in more than 45 countries. 

Rolta India Ltd recently announced that its eGovernance solution implementation has received the prestigious eGovernment Excellence Award 2015 from the Government of Bahrain. Winners of the eGovernment Excellence Award 2015 were honored by Deputy Prime Minister and the Chairman of the Supreme Committee for Information and Communication Technology, Shaikh Mohammed bin Mubarak Al Khalifa.

Meanwhile, the Rosen Law Firm announced that it is investigating potential securities claims on behalf of investors of Rolta India Limited's Delaware-issued 2018 and 2019 corporate bonds resulting from the recent report revealing that Rolta may have fabricated reports to conceal that it had overstated its EBITDA.

Moreover, the P/E of Rolta India Ltd is only 2.69 against the Industry P/E of 22.39. A decent P/E re-rating of 15 can take the scrip above Rs.500 (five hundred), after suitable discounting. Hence, at Rs.136-139, it remains a STRONG BUY.

WINNING STROKES: THINK DIFFERENT

ADAG Company Reliance Capital Ltd today closed in the green today, at Rs.425.15, which is near its day's high of Rs.428.75. The scrip was recommended today at Rs.423-424, for a target of Rs.460.If you look at the candle stick chart, you would get the signals of trend reversal.  The passage of the long-pending Insurance Bill — which has increased the cap on foreign direct investment in the insurance sector from 26% to 49% — has come as a shot in the arm for Indian insurance companies. Reliance Capital, a part of the ADAG, that has interests in insurance (life and general), asset management, consumer loans and broking businesses, stands to gain as it can now unlock value in its insurance subsidiaries by listing or transferring shares to its foreign partner. The company is among the few listed players that has significant exposure to the insurance businesses. Also, the company’s asset management business offers a good value unlocking opportunity. Japan-based Sumitomo Mitsui Trust Bank recently acquired 2.7% stake in Reliance Capital for Rs.371 crore — valuing the company at Rs.530 per share--thus this gives a huge upside from the CMP of Rs.425.15. The tie-up could help Reliance Capital in its endeavour to set up a bank in India, if permitted by the RBI.

Today was the day for my recommended Gitanjali Gems Ltd as the scrip touched Rs.48.78 intra-day, before closing at Rs.47.65 up 9.41%. The stock is expected to cross Rs.100 before the Q4FY15 results and hence accumulate the counter, on all declines. 

The Nifty as widely expected got support around 8400-8370 ranges and the 1st target of 8424 was achieved as it went upto to 8447.25 intra-day before ending the day at 8,429.70 up 51.95 (+0.62%). The next target for Nifty is 8454, which is likely to be achieved in the morning trade. 
Now there is a stock of a company which has the potential to give 2-3 times return in less than 2-years. Anyone willing to invest around Rs.25 lakhs in the scrip do send me a mail at: suman2005s@rediffmail.com. The profit will be shared in the ratio of 60:40, between you and me. This is a sure shot scrip and hence, it like your fixed deposit.