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!!! W E L C O M E !!!
In INDIA, people generally relate to stock market as “EASY MONEY” or “SATTA BAZAAR”. For them it’s purely a GAME or matter of sheer LUCK and nothing more than that. But seldom do they know, by following certain PRINCIPLES and taking INFORMED decision, this same platform has the power to take them from rags to riches. No doubt, it has a certain amount of RISK attached to it. But every business or investment has it. What more, the Finance Ministry has already made the long term capital gain as TAX FREE whereas the short term capital gain is taxed at merely 10%. On the economic front, India’s GDP is growing and is expected to grow at scorching pace of more than 8%. Unfortunately, even today our market is being ruled and dominated by FIRANGI’s money. But I can see, the day is not far when our general PUBLIC will change its perception and start putting MOST of their savings in equities as an ** Investment **.
Remember, "K N O W L E D G E" and "P A T I E N C E" are the key to success.
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SAARTHI

Sensex (LIVE- Intraday)

Sensex (LIVE- Intraday)

Thursday, June 19, 2008

Small & Beautiful (Guj)

Prime Property (65.00) is a small real estate developer based in Mumbai which boasts of constructing landmark residential and commercial buildings for high end customers in Mumbai. Prime Avenue, Prime Centre, Prime Beach & Prime Plaza are few of its popular residential & commercial development at prime area like Santacruz(W) & Vile Parle(W) in Mumbai. Presently, company is focusing to complete its two ongoing projects in Mumbai namely “Prime Down Town Mall” - a 270,000 sq ft luxurious composite Mall with multiplexes and “Prime Tech Park” which is 90,000 sq ft commercial building. Besides these, company has started construction work for two more shopping malls called “Prime Square” - 70,000 sq ft mall in Goregaon Mumbai and “Prime Pune Mall” - gigantic 430,000 sq ft state-of-the-art mall with anchor shop, multiplex, food court, entertainment area and a hotel in Pune. For FY08 its topline stood at Rs 105 cr and bottomline at Rs 32.70 cr posting an EPS of Rs 16 on equity of Rs 10 cr having face value as Rs 5/- per share. It is expected to declare Rs 2.50 as dividend which gives a yield of nearly 4%. considering company’s current project in hand and that too at prime locations it may report total revenue of Rs 150 cr and net profit of Rs 40 cr for FY09 i.e. EPS of Rs 20 on current equity.

Associated Alcohols & Breweries (45.00) is one of the largest distilleries in India with presence in every aspect of the value chain from potable alcohol, country liquor, ENA, grain spirit (extra fine grade, triple distilled), rectified spirit, IMFL to bottling scotch whisky. Apart from marketing its own brands, company also manufactures and bottles IMFL and Scotch whisky for many Indian and international companies. For FY08 its sales increased by 50% to Rs 120 cr and PAT zoomed up 140% to Rs 5.60 cr posting an EPS of Rs 8 on current equity of Rs 6.80 cr. To increase its market share, company is the midst of expanding its capacity to 65 million litres from 42 million litres by setting up a multi-pressure ENA plant along with 2MW bio-gas fuelled cogeneration captive power plant. Hence it may clock a turnover of Rs 150 and profit of Rs 7 cr which translates into EPS of Rs 7 on fully diluted equity of Rs 10 cr. Despite promoter concern and risk of further equity dilution, scrip can bought be declines for reasonably return within a year.

Kolte Patil (80.00) is in the midst of developing 28 projects (24 in Pune and 4 in Bangalore), with a total saleable area of around 18 million sq. ft. consisting of 10 residential complexes, 11 commercial development, 5 IT parks, 1 integrated township & 1 service apartment. In addition, it has entered into MOU or has acquired development rights for another 22 million sq. ft. of saleable area in and around Pune and Bangalore. Although the actual land bank owned by the company is less than 15 acre but the development right is equivalent to whopping 755 acres of land. With this company has a total developable space of massive 40 million sq. ft. For FY08, its revenue jumped up 60% to Rs 369 cr and net profit shot up 55% to Rs 129 cr after paying tax to the tune of Rs 37 cr. Hence it reported an EPS of Rs 17 on equity of Rs 75.30 cr. Assuming the company to report lower operating margin of 30% for FY09 (against 43% in FY08), still it is estimated to clock a turnover of Rs 650 cr and PAT of Rs 150 cr i.e. EPS of Rs 20 cr on current equity. In short although the profit margin of company is too high to believe still scrip can give decent return in medium term.

Due to hardening of interest rate, rising CRR and recent hike in repo rate, banking sector has taken a huge beating on the bourses. Most of the banks are trading at 52W low levels and Allahabad Bank (65.00) is no exception. It is among the very few banks which are trading at huge discount against their book value. Moreover Allahabad bank is fundamentally a strong bank with Gross NPA at 2%, Net NPA at 0.80%, Capital Adequacy Ratio above 12%, Net interest margin at 2.80% and most importantly having a book value of Rs 117. For year ending March 2008, it registered 20% growth in total deposit and gross advance whereas its Net profit shot up by 30% to Rs 975 cr. This works out to an EPS of whopping Rs 22 on current equity of Rs 447 cr. Agianst this it declared 30% dividend. Hence scrip is current trading at a P/E ratio of less than 3x times and with a dividend yield of 5% at CMP. To maintain its growth momentum, bank has got the approval for opening 116 more branches and has additionally applied for authorization of 180 more branches during the current financial year. Besides bank is focusing to improve its fee based income and has made tie-ups with several organizations for marketing of mutual funds and insurance products. A safe bet.

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