Dr Reddys Laboratories has a good potential

Dr Reddys Laboratories has a good potential even to show 30-40% appreciation maybe in the next 12-15 months, says Dilip Bhat, Prabhudas Lilladher.
Bhat told CNBC-TV18, “I think in the heavy weights the pharma look very good. Dr Reddys Laboratories probably has a good potential even to show 30-40% appreciation maybe in the next 12-15 months. I think the stock can really show good growth in the performance and has a good amount of steam left for it to move up.”

He further added, “Construction and engineering are the other space which has still not gone anywhere, which is really the face of India’s story all the FIIs and foreigners abroad. I think that particular sector has been lying low largely because they are in negative cash flow territories plus with a low ROEs. So I think everybody is ignoring them but that is one space where the visibility has been very high and though the executions have been very poor. So I think this is a one space which one definitely has to have a look at that. I would also bet on the textile sector that is a sector where one can make a good amount of money over the next 2-3 years.”

Note To Suresh Kalmadi : This Is A Public Service Announcement Offering Your Ass A Free Attitude Adjustment

Dear Suresh Kalmadi,

If India were anything apart from a democracy your fate as of this moment would have been far different. A dictatorship for instance would have drilled a hole in you, fastened a marauding steel chain through your ribs and hauled your body into a dungeon where you would have been beaten, battered, finely diced, smashed and pulverized into tiny fragments till all that’s left of you would be well refined bone powder. At this stage this powder would be deposited into an urn which would then be displayed in a museum under the exhibit titled ‘COUNTRY’S GREATEST ASSHOLES’.

Of course with India being a democracy the worse that will happen to you is a court case which will take the rest of your life to finish allowing you enough time to Apply,Re-Apply And Re-Re-Re Apply for bail thereby making sure that you never even see the inside of a jail cell. Accountability and responsibility being totally lost on you, you will roam around India being freer and more exposed than Rakhi Sawant’s cleavage after a fresh refilling of silicon.

After your adventures at organizing the Commonwealth Games I can only honor you by throwing a pair of shoes at you that have been first dolloped with generous heaps of Dog Shit,Plastered with the muckiest amounts of Horse Shit ,Embalmed with the grainiest helpings of Monkey Crap,slathered in Bacterial Rat Slime mixed in with finely powdered DVD Fragments of films starring Uday Chopra and Tusshar Kapoor while exposed to radiation beams emitted from charging up Rahul Mahajan’s brain and then sent through an all expenses paid trip across the entire length and breadth of India’s acclaimed sewer system.

After this the shoes would then have to be launched from ISRO’s rocket launch centre at Sriharikota at the exact coordinates that when they’re launched they clock you straight in the jaw.

But throwing the shoes at you would be highly insulting to not only the shoes but also the Dog Shit, Horse Shit, Monkey Crap, Uday Chopra & Tusshar Kapoor Film DVD’s, Rat Slime, Rahul Mahajan’s Radiated Brain and India’s entire sewer system.

You are a special type of Asshole. An extremely rare breed of SHITHEAD, endowed with a staggering talent for creating bullshit. A distinguished idiot wrapped in a moron topped off with generous amounts of DICKHEADEDNESS all of which have led you to your immortal achievements at the CWG.

Therefore throwing the shoes at you would not only insult the shoes, they would also be highly inadequate to celebrate the magnificent achievements of a celebrated and gargantuan asshole such as yourself.

So if something has to be thrown at you the only thing that can do justice would be YOU, therefore we would have to throw YOU at YOU! This is the only way your Assholic brilliance can be fully recognized.

Hence we would need to first extract massive amounts of DNA from you .Then cryogenically freeze you and keep you safe in a hyperbaric chamber.

Your extracted DNA would then be used to create an exact clone of yourself. The DNA would be fertilized into an empty human egg and placed into the uterus of a surrogate who would then incubate the embryo till it is born 9 months later as a fully developed baby!

This cloned Kalmadi baby would then be raised till it reaches a suitable age where it socially develops the same brand of incompetence, corruption, mismanagement, lying, cheating and scamming that you currently possess. After the clone attains a suitable appearance very much like yours it would then be taken and prepared to be thrown at you.

You would then be unfrozen from your cryogenic status and placed upon a tall pedestal. Now the clone would be taken, placed in a cannon and shot at you at full speed till it impacts you straight and with as much force as a hi-tech ballistic missile.

Now that’s the way to properly honor you!

Simply throwing shoes at you would hardly celebrate your achievements. You can only be honored by throwing yourself @ yourself or in this case a highly developed clone of yourself at yourself!!

Watching you organize these CWG Games over the past 2 years has been an even less pleasurable experience than perhaps jamming a metal spike up my nose right into my brain and turning it around till I hemorrhage.

All this country wanted to do was to host a successful games for 2 weeks and try to show some semblance that a population of a billion can make a half decent effort to organize a sporting event for a fortnight.

It’s bad enough every Terrorist Jihadi Asshole and his donkey from across the border wants to bomb the shit out of the Games to show the ‘infidels’ that India is a conspirator in the imperialistic designs of the Americans and every other possible excuse in between.

WHATEVER.

No athlete is anyway going to feel safe when the security arrangements are being handled by these guys: The Delhi Police .That’s Right – I Said The Delhi Police.

This country has enough problems in every nook and corner of its being. There are stone throwers in Kashmir, Naxals in Bihar, Chhattisgarh, West Bengal, Andhra Pradesh and Jharkhand, farmers killing themselves in Vidarbha, hostile neighbors on either side, mass poverty and unemployment throughout the country, rising prices, rotting grains, the list is endless. Most of all this is a society in which Ravindra Jadeja repeatedly gets selected into the Indian cricket team!

But you have easily overpowered all of the above and become the centre of attention for Organizing The Most Enormously Disorganized Commonwealth Games in History.

At every step you and your entourage have successfully sucked money out of these games. You have sucked so much from these games that you should be a case study for Industrial Strength High Power Vacuum Cleaners.

Your CWG adventures have led the country to shell out more than 70,000 Crores for something that could be accomplished and accomplished excellently at tenth of that price. So while you were spinning your fairytales about India being a sporting superpower our tax money was busy lining them Swiss Bank accounts.

Of course how you landed this job in the first place is one big mystery something the combined tenacity of Sherlock Holmes, Hercule Poirot and the entire CID team of ACP Pradyuman cannot figure out though we should be less surprised when we realize India’s Sports Minister is MS Gill.

A Sports Minister who wouldn’t know the difference between the Sport of Javelin from the Port Of Mumbai. This is the same man who asked P.Gopichand ; only the second Indian ever to win the All England Badminton Championship and the mentor of India’s greatest ever Women’s Badminton Player Saina Nehwal,– “Who Are You?”

The same MS Gill who shooed away the coach of World Champion Wrestler Sushil Kumar as if he were a street dog.

Finding all the cash you and your buddies have made from this CWG story will be impossible to find. It would infact be easier to search for and find Osama Bin Laden in the mountains of Afghanistan and the borders of Pakistan than all the convoluted hawala trails this CWG money has been through.

So Congrats, you made your grease. Hiring a jackass to run our Games has cost us 70,000 Crores. At Least In Return You Could Have Done What Was Expected Of You – Your Job

Instead we witnessed along with the rest of the world what your efforts have led to with just 8 days left for the games .These spectacles:

The athletes who are to stay in these rooms would much rather opt to stay in the untreated underside of a gutter under a pig sty instead of these so called ‘accommodations’.

Were these rooms meant for human beings or visiting cockroaches with no disrespect meant towards any cockroaches?

And while Delhi races against time to prep these games waging a war against the rains, dengue and your collapsing architecture your right hand man, the Hon-Her-Able Lalit Bhanot is busy saying things like this:

This after the same guy authorizes toilet paper to be bought at 4000 bucks a pop.

I will pray these games succeed not for your sake but for all those who have worked hard to make these games a success.

1.] The Laborers Clearing the Debris,

2.] The Umpteen Volunteers Showing Up With a Smile on Their Faces to Make Delhi a Hospitable Place

3.] The Civil Servants in the Government Who Are Entrusted the Task of Cleaning the Mess You Created

4.] Those Athletes Who Are Still Considerate Enough To Participate In This Otherwise Pot Boiled CLUSTERFU*K

And for the rest of us WHO ACTUALLY GIVE A DAMN.

You on the other hand deserve a special salute for your efforts. It’s called THE MIDDLE FINGER SALUTE and it looks a little something like this:

There Are A Whole Bunch Of Creatures Giving You The Middle Finger Salute Dear Kalmadi.

MIDDLE FINGER SALUTE FROM A PISSED OF SMILEY:

MIDDLE FINGER SALUTE FROM THE BACHCHANS:

MIDDLE FINGER SALUTE FROM THIS TREE:

MIDDLE FINGER SALUTE FROM THIS GUY! :

MIDDLE FINGER SALUTE FROM THE MONKEY:

AND A VERY SPECIAL MIDDLE FINGER SALUTE FROM YOUR FRIEND SHERA!

Even I salute you Kalmadi!

Now Go To Hell And Take That Shitbag Lalit Bhanot With You.

STOCK SPLIT

Bhushan Steel Limited                 BHUSANSTL - RS.10/- to RS.2/-

The South Indian Bank Limited     SOUTHBANK - RS.10/- to RE.1/-

Mundra Port and Special
Economic Zone Limited               MUNDRAPORT - RS.10/- to RS.2/-

for this week

Hope investors continue holding NMDC. Also would like to recommend a Hold in the remaining 2 stocks Birla and SELMCL. Still maintain my bullish view on both the counters for near term to long term. Traders can keep close watch on Fortis healthcare for 30rs upside from here.

Rakesh Jhunjhunwala’s tips on how to find multibagger stocks

Rakesh Jhunjhunwala is the Mother Theresa of the investment world because not only is this Living Legend eager to share his investment techniques with us, he is also happy to let us in on the most well guarded investment secret on how he made his billions .

But, Rakesh Jhunjhunwala, the wise sage that he is, is a man of few words. Rakesh Jhunjhunwala is reticent. When Rakesh Jhunjhunwala speaks, it is because he has something to say and not because he has to say something! So we scoured through hundreds of transcripts to decode Rakesh Jhunjhunwala‘s investment secrets. Now, we are proud to present our own version of Rakesh Jhunjhunwala‘s tips on how to find multibaggers.


Rakesh Jhunjhunwala‘s Tip No. 1: Don’t Look For Multi-baggers

Rakesh Jhunjhunwala‘s first investment mantra on how to find multibaggers is surprisingly different from what you would expect. Rakesh Jhunjhunwala says: "Don’t look for multibaggers. Don’t seek them at all. Let the multibaggers come to you!"

What is Rakesh Jhunjhunwala saying?

What Rakesh Jhunjhunwala is saying is: Don’t go out into the investment world saying "I only want to invest in potential multibaggers". Instead, Rakesh Jhunjhunwala, the Investment Guru, says "Go back to the old-fashioned way of making investments designed by investment maestros Benjamin Graham, Peter Lynch and Warren Buffet". "If your homework is right and you have invested in fundamentally sound companies with good growth prospects, your investments will by themselves become multibaggers with the passage of time".

Sounds simple but Rakesh Jhunjhunwala is not content with giving abstract or theoretical advice because this great investment legend already knows that his disciples are a bunch of doubting Thomas and even his words of undeniable gospel will be met with stoic skepticism.

So, Rakesh Jhunjhunwala gives examples of what he means.

Rakesh Jhunjhunwala gives the example of BEML which several years ago was quoting at a pittance because it was regarded as a slothful government enterprise. No investor in his right mind wanted the shares of BEML at that time. But while other investors saw a sluggish government corporation, Rakesh Jhunjhunwala saw efficient management, a great product line-up and effeicient cash-flows. The result: Rakesh Jhunjhunwala got a bountiful; he got his multibagger.

One example is not enough to convince the cynical masses. So, Rakesh Jhunjhunwala gives another example – that of Bharat Electronics – which also was regarded as a Babu-wala company by other investors who couldn’t see what Rakesh Jhunjhunwala‘s discerning eye could. Another humble company turned into a multibagger by sheer passage of time!

Now you are convinced. But Rakesh Jhunjhunwala does not rest. He goes for the jugular. Now, Rakesh Jhunjhunwala gives a counter example.

What would an investor "looking" for a multibagger have bought in the heady days of 2000? The naive investor would have looked around and seen "spectacular" companies like Himachal Futuristic, Global Tele, Pentasoft soaring on the stock exchange, making new highs every day. So, the foolish investor would have tanked up on these shares thinking that these shares were his best bet to net a multi-bagger.

The result: You don’t need the great Rakesh Jhunjhunwala to spell that out for you.

So, now you know why Rakesh Jhunjhunwala says: "Don’t look for multibaggers!"

Yes, the point sinks in and you have understood but then you rub your eyes incredulously and ask "But what do I look for in a share?"

Rakesh Jhunjhunwala is not regarded as the greatest investor in India for nothing. He has a well-considered answer for that as well. And if you think about it, Rakesh Jhunjhuwala’s answer is made up of pure common sense.
Rakesh Jhunjhunwala‘s Tip No. 2: Don’t Look for Profits; Look For Sources Of Profits

Rakesh Jhunjhunwala cautions that most investors obsess about the current sales and profits. They look at each quarter and focus obsessively on short-term profits. "That’s missing the wood for the trees" says Rakesh Jhunjhunwala.

Instead Rakesh Jhunjhunwala says "Look at the sources of Profits. What are the reasons that will give rise to Profits in the medium and long-term term".

Rakesh Jhunjhunwala drives home the point. "Look at the factors and circumstances that will create an opportunity for business in the sector".

Rakesh Jhunjhunwala gives the classic example of Infosys and Wipro. While the average Joe would have sat with his calculator analyzing Infosys’s & Wipro’s PE, ROE and nonsense like that, an astute investor in the 1990s would have realized that an internet revolution was coming in the next couple of years. He would have also realized that the off-shore business segment was booming and he would have tanked up on those shares.

Rakesh Jhunjhunwala gives another spectacular example: That of Praj Industries, a company engaged in manufacture of bio-ethanol fuel. When Praj Industries started out, nobody realized the massive demand that would arise for alternate fuels like ethanol. An investor would could have foreseen that would have had his multibagger.
Rakesh Jhunjhunwala‘s Tip No. 3: Forget ‘Large Cap, Small Cap’ Nonsense – Look For Scalability Of Operations:

Rakesh Jhunjhunwala makes two very important points. First, the investing maestro expresses his contempt for the obsession that many analysts and investors have for the debate on whether large cap, mid cap or small cap stocks are better. "Forget all that and Look for Value" he thunders. "If there is value in Large Cap, buy it. If there is value in Small Cap, buy it. But don’t obsess on irrelevant matters", says Rakesh Jhunjhunwala, the one with infinite wisdom.

But Rakesh Jhunjhunwala makes his preference quite clear. He says that given a choice and all things remaining equal, a mid-cap or a small-cap is a preferred bet because the valuations will be low and they can scale it up quite quickly.
Rakesh Jhunjhunwala‘s Tip No. 4: Give it Time, Be Patient:

Rakesh Jhunjhunwala reiterates what the maha investment gurus like Benjamin Graham and Warren Buffet have been advising over the past several decades. Warren Buffet was plain in his advice "Our favourite holding period is Forever". Rakesh Jhunjhunwala gives the same advice: "Give your investments time to mature. Be Patient for the World to discover your gems". Rakesh Jhunjhunwala cites the examples of Crisil, Titan and Pantaloon Retail which he has held on for several years now and has absolutely no intention of divesting them any time soon.

When Rakesh Jhunjhunwala bought Lupin it was just another mid-cap pharma company starting out into the world of generic drugs. What Rakesh Jhunjhunwala saw was a good efficient management which knew its job, a debt-free status, a good product line up and a growing market. That’s all. Rakesh Jhunjhunwala bought and played the waiting game. When the market matured, Rakesh Jhunjhunwala raked in his billions.

Rakesh Jhunjhunwala also fondly talks about his investment in Karur Vysya Bank which he has held onto even after about 20 years since he bought them. He says that his paltry investment of Rs 2,000 is worth several crores today thanks to the patience and conviction that he showed.

Rakesh Jhunjhunwala is never tired of emphasizing that first you must always remember that you are buying a business and not just a little thing that bounces 2% around every now and then. When you buy that business, it must be of a very high quality, one that is capable of growing over time. Having done your hard work, you must wait for the market to do its work and reward you, says Rakesh Jhunjhunwala.

Rakesh Jhunjhunwala‘s Tip No. 5: Don’t get carried away by short-term aberrations:

Rakesh Jhunjhunwala cannot stop criticizing investors who are obsessed with short-term trends. Rakesh Jhunjhunwala emphasizes that he does not worry about quarterly results. If the results are bad in one quarter, he does not get perturbed. What Rakesh Jhunjhunwala is looking for is: Is there a trend? Are the quarterly results showing a trend and suggesting something or are they a mere aberration?

Rakesh Jhunjhunwala also cautions that one should not get carried away by short-term trends. He cites the oft-repeated example of 1999 when investors bought truck loads of Himachal Futuristic, Global Tele, Pentasoft while he used to buy Shipping Corporation and Bharat Electronics because he saw long-term value in them. The Oracle of Mumbai says “Never get carried away by aberrations, recognize and respect them but do remember that the market corrects its aberration though it takes time.”

Rakesh Jhunjhunwala then adds that if the market behaves irrational and punishes a stock for short-term aberration, that’s the time for you to jump in. Rakesh Jhunjhunwala cites the classic example of Titan Watches to buttress his theory. Rakesh Jhunjhunwala says that Titan suffered in a moment of crisis when it went into Europe and lost a lot of money. Rakesh Jhunjhunwala says he wasn’t perturbed because he knew that what is most important for Titan is India’s prosperity. Rakesh Jhunjhunwala envisaged the future and knew sub-consciously that Indians were going to buy far many watches and that the underlying business should be great. So, says Rakesh Jhunjhunwala, in a moment of crisis you can get great valuations and if you can envisage the future where the product could have great demand and great growth, you should use the opportunity to buy.

Rakesh Jhunjhunwala‘s Tip No. 6: Invest in a business that you can understand:

If you look at it hard enough, you will realize that Rakesh Jhunjhunwala‘s reluctance to buy Himachal Futuristic, Global Tele and Pentasoft even in their heydays and his preference to stick to Shipping Corporation, Bharat Electronics and the other tried and tested names reveals another great investment tip from the Prince of Dalal Street: Buy what you know. Do you understand the business enough to be able to know what will happen 10 or 20 years from today. With Shipping Corporation, you can because shipping of goods will continue to happen for our foreseeable future. But you can’t tell that with technology companies which may have a great product today but which may become obsolete in 5 years.
Rakesh Jhunjhunwala‘s Tip No. 7: Don’t worry about the macro stuff like fiscal deficit, inflation etc which are unknowable. Focus on what is knowable:

Another immensely practical tip from Rakesh Jhunjhunwala, India’s greatest investor, for us folk who keep obsessing about currency fluctuation rates, inflation, fiscal deficit, political turmoil is: “Don’t worry about things that you neither know about nor can do anything about. It’s not important. Instead focus your energies on what you can and should know well enough – the business of the company you are investing in“.

Rakesh Jhunjhunwala‘s Tip No. 8 : Don’t Try To Time The Market:

Rakesh Jhunjhunwala endorses the validity of investment advice that has been propounded time and again by the wizards of investment time and again. Never try to time the market because you can never find the bottom of the market. Instead if you are getting the stock cheap in terms of its intrinsic value and future prospects, buy it.

Here, one cannot resist referring to similar advice that Warren Buffet, the Emperor of Wall Street, gives. Warren Buffet points out that Coca-Cola made an IPO in 1919 when it issued shares at $ 40 each. A year later, the share was quoting at $19. You might think that’s a disaster because the share had lost 50% of its value in just one year. After that there was sugar rationing and the farmers were rebellious. Years later, the Great Depression and World War II happened, there were thermonuclear weapons and what not. He says you could always find a reason on why that was not the right to buy shares of Coca Cola. But if you had gone ahead and bought that one share for $40 and reinvested the dividends, your investment in Coca-Cola would be worth $5 Million today.

Rakesh Jhunjhunwala echoes the words of the Oracle of Omaha when he says that you must get right is the business. If you get that right, everything else falls into place.

Rakesh Jhunjhunwala‘s Tip No. 9 : If it’s cheap, buy it- Don’t pass up something cheap today in the hope that it will get cheaper tomorrow:

Rakesh Jhunjhunwala says: If you see the opportunity today, GRAB IT! Many wonderful opportunities are lost to procrastination and then you rue your missed opportunities. Rakesh Jhunjhunwala says that it is not only important to identify the opportunity but then to be decisive and to act on it. Rakesh Jhunjhunwala cautions against getting stuck in a trap where you are perpetually seeking extra information to validate your idea.

In this, Rakesh Jhunjhunwala echoes the wisdom of Warren Buffet, the Oracle of Obama, who in the depths of the great stock-market depression of 2008 inspired investors by his clarion call "If you wait for robins, summer will be gone".

Rakesh Jhunjhunwala‘s Tip No. 10 : Don’t buy stocks that have a fixed return:

Rakesh Jhunjhunwala‘s next tip seems to be a no-brainer but it is surprising how many investors overlook it. What is the point of buying shares in a company such as an electricity company where the return on investment cannot by law exceed a certain amount, asks Rakesh Jhunjhunwala. But, Rakesh Jhunjhunwala, emphasizes that this logic does not mean that electricity and utility companies should not form part of your portfolio because they offer an excellent defense mechanism to the vagaries of the stock market with the undemanding demand for their product and their predictable cash flows.

Rakesh Jhunjhunwala‘s Tip No. 11: Ride your winners!!

The one question on everybody’s mind is "When do I sell my multibagger?" Rakesh Jhunjhunwala answers with aplomb "Never".

One must be careful to understand what Rakesh Jhunjhunwala is saying here. What the Greatest Investor in India is saying is: "Don’t sell for the sake of selling because you can never say that the 10-bagger today will not become a 20-bagger tomorrow".

But, Rakesh Jhunjhunwala hastens to clarify that this does not mean that one will never sell a multibagger. He gives two situations when even he may sell his beloved multibagger. The first is when he is short of funds and he needs capital to invest in a stock that will give even better returns than what the existing one will give. And second, when the stock market has become so irrational that the perception of earnings and the P/E is unsustainable. Rakesh Jhunjhunwala gives the example of what happend in 2000 when euphoric investors laid bets that Infosys’ earnings would double every year for the next 10 years. Infosys’ P/E at the then current earnings was 100-150 times. So, says Rakesh Jhunjhunwala, when the expectation of earnings peaks and the P/E is unsustainable, that is the time to sell.

Rakesh Jhunjhunwala‘s Tip No. 12: Concentrate, concentrate & concentrate!!

There is a perpetual battle amongst investors on whether a diversified portfolio approach is better or a concentrated portfolio is better. (See Benefits of a concentrated portfolio).

Rakesh Jhunjhunwala is an unabashed proponent of the concentrated portfolio theory. But Rakesh Jhunjhunwala‘s theory must be carefully understood before being implemented in practice as it can otherwise lead to disaster.

Rakesh Jhunjhunwala emphasizes that one must venture into a concentrated portfolio only after one is sure that he has identified a share that will deliver superior returns to all the other chosen shares. The conviction must be extremely strong, says Rakesh Jhunjhunwala.

Rakesh Jhunjhunwala is not one to take risks lightly so must also be wary of the risks of a concentrated portfolio. In the recent past, we have seen so many excellent companies lose large portions of their market cap almost overnight. Some examples can be BP which was touted as the best buy in the oil space but which owing to the oil spill in the Gulf of Mexico is today regarded as a pariah. Other examples are RNRL which not only lost the battle in the Supreme Court with Reliance but then announced a disastrous merger with RPower which short-changes RNRL’s investors. Aban Offshore is another example which lost its’ Oil Rig Aban-Prince in the high seas and saw its market price plummet 25%. Yet another example is that of Satyam whose founder Ramalingam Raju was felicitated as the "Most Promising Businessman" by Earnst & Young. He later confessed that all profits shown in Satyam were bogus and that he and Maytas Infra had played a big fraud on the hapless investors.

So, while there are benefits to a concentrated portfolio, one must not be oblivious to its risks, cautions Rakesh Jhunjhunwala.

Top Mid Cap Stock Picks for September 2010

Angel Broking has recommended following top picks for the month of September from universe of mid caps. The investment rationale and target price for each stock has been mentioned.

Anant Raj Industries

* Current Market Price: Rs 138/ Target Price: Rs 178/ Upside: 29%
* Rationale: Almost all of ARIL`s land bank (872 acres) is exclusively located in the NCR within 50km of Delhi, with approximately 525 acres in Delhi. This land bank has been acquired at an historical average cost of Rs300/sq ft. It expects ARIL`s residential projects to drive its near-term operational visibility and help register Rs 6 billion profit over the next three years. ARIL recently launched tworesidential projects in NCR; Kapashera (0.28mn sq. ft.) and Manesar (1mn sq. ft.) for Rs 5,000/sq. ft. and Rs 2,500/sq. ft., respectively. Management has indicated that it has entirely sold Kapashera project and ~50% of Manesar project. Further, it expects ARIL`s Manesar and Kirti Nagar properties to reach their peak occupancy levels in 6��”9 months as leasing activity improves coupled with five hotels getting operational by FY2011E. Consequently, we expect ARIL to report rental income of Rs201cr in FY2012E as compared to Rs 490 million reported in FY2010. ARIL is trading at a 34% discount to its NAV. The stock is trading at 10.0x FY2012E EPS and 1.0x FY2012E P/BV and hence it maintains a `Buy` on stock with a target price of Rs178 (15% discount to its one-year forward NAV).

Dishman Pharma

* CMP: Rs 198/ TP: Rs 279/ Upside: 41%
* Rationale: Dishman has incurred organic capex of Rs 3 billion in the last three years towards expansion of existing facilities at its Bavla unit and building the China and HPAPI facilities. Post all these facilities coming on-stream FY2011E onwards, Dishman would strengthen its ties with the global innovators leading to stable revenue flow over the long run. Further, revenues from the Abbott-Solvay contract, which constituted 13% of FY2010 Sales, have also started normalizing. Also, the Carbogen Amics (41% of FY2010 sales) is expected to witness an uptrend in FY2011. Overall, the company has guided towards 20% growth in Top-line for FY2011E. Dishman is currently trading at attractivevaluations of 9.2x FY2012E earnings. It has valued the company at 13x FY2012E earnings resulting into a target price of Rs 279.

IVRCL Infra

* CMP: Rs.158/ TP: Rs.216/ Upside: 37%
* Rationale: IVRCL has a robust order book of Rs 232.75 billion (4.3x FY2010 revenues) which lends revenue visibility. Robust order booking over last few quarters has ensured that its dependence on AP orders have come down significantly (from 28% to current 17%). IVRCL had issues on the execution front due to its high AP exposure and now with decline in that we are expecting the company to back on the growth trajectory. IVRC Asset has started tolling Jalandhar-Amritsar road in May`10 and Chennai water project has also started. In FY2011, all its old BOT projects would start generating revenues to fund its future investments. Management has given guidance of increase in revenues from these BOT projects once fully operational to Rs 14million day. IVRC Assets would be requiring equity infusion of Rs 13- 14 billion over the next 3 years and is also planning to raise money. It believes that value unlocking at the subsidiary level will act as a near term catalyst. It has valued IVRCL on SOTP basis. Its core Construction business is valued at a P/E of 14x FY2012E EPS of Rs11.6 (Rs162/share), whereas its stake in subsidiaries IVR Prime (Rs37/share) and Hindustan Dorr-Oliver (Rs17/share) has been valued on a Mcap basis, post assigning a 30% holding company discount. At the CMP of Rs 158, the stock is trading at a P/E of 13.7x FY2012E EPS and 1.8x FY2012E P/BV on standalone basis and adjusting for its subsidiaries at P/E of 9.0x FY2012E EPS and 1.2x FY2012E P/BV which it believes is at reasonable valuations. Therefore, on the back of the company`s excellent execution track record, robust order book to Sales ratio and comfortable valuations, it maintains a `Buy` on the stock with a target price of Rs 216.

Jagran Prakashan

* CMP: Rs 133/ TP: Rs 154/ Upside: 16%
* Rationale: Jagran continues to post steady growth in revenues, primarily aided by advertisement revenues (management reiterates its guidance of ~18% growth in FY2011), owing to its strong foothold in the Hindi-belt (Dainik Jagran, India’s no.1 daily), rising color ad-inventory (management has indicated a color ad inventory of ~50%), and absorption of ad-rate hikes (~8-9%). For FY2011E, we expect operating margins to marginally dip on the back of the 8-10% rise in newsprint costs and increasing competitive intensity with the entry of DB Corp in Jharkhand (cover prices cut in Jharkhand from Rs 4 to Rs 2). However, strong ad-revenue growth, cost curtailment measures and improving profitability in the nascent businesses of i-Next/City Plus and OOH/event management are likely to protect any sharp decline in margins. Hence, it estimates the company`s operating margins to remain stable at 30% levels in FY2012E. JPL acquired the print business from Mid-Day Multimedia and it believes that JPL`s combined offerings are likely to boost its advertising revenues due to the bundling effect. While it has not factored in the deal in JPL`s numbers, it believes the deal is likely to be earnings accretive by ~2��”3% in FY2011E. Moreover, with Blackstone`s recent investment of Rs 2.25 billion and a wider portfolio, it believes that JPL is well poised to benefit from the steady growth in print media. Meanwhile, the underperformance of the stock and attractive valuations (at current levels, the stock trades at 17x FY2012E EPS) provides good entry point for investors. It values JPL at 20x FY2012E EPS of 7.7.

Nagarjuna Construction Company (NCC)

* CMP: Rs.160/ TP: Rs.201/ Upside: 26%
* Rationale: NCC, with its diversified presence, is well placed for benefit from the current construction boom in the country, especially in the transportation segment. Angel believes that diversification was one of the prime reasons for NCC`s performance on the earnings front (29% earnings growth) vis-Ã -vis its peers during FY2010. This has also led to strong order booking - clocked ~40% growth in FY2010. Over the last few years, NCC has invested in BOT assets and it believes the time has come for reaping the benefits of the same. NCC has a portfolio of 5 BOT road projects with one BOT project already operational with the remaining expected to be operational in FY2011. NCC has not won any BOT projects in recent times and stayed away from fierce competition. Therefore, it believes that NCC is better placed than its peers to win projects from NHAI, as it benefits more from financial closure regulations than its peers do. It has valued NCC on SOTP basis. Its core construction business is valued at a P/E of 14x FY2012E EPS of Rs9.8 (Rs138/share), whereas its international subsidiaries at P/E of 10x (Rs24/share) and other ventures (road, real estate and power) has been valued on 1.5x P/BV basis (Rs39/share). At the CMP of Rs 160, the stock is trading at a P/E of 16.3x FY2012E EPS and 1.6x FY2012E P/BV on standalone basis and adjusting for its subsidiaries at P/E of 9.9x FY2012E EPS and 1.0x FY2012E P/BV which it believes is at reasonable valuations. Given attractive valuations following the recent correction in the stock price owing to short-term concerns and robust order book, it believes it provides an opportunity to Buy the stock., it maintains a Buy on the stock with a target price of Rs 201.

Top Small Cap Stock Picks for September 2010

Angel Broking has recommended following top picks for the month of September from universe of small caps. The investment rationale and target price for each stock has been mentioned.

Electrosteel Castings (ECL)

* CMP: Rs 55/ TP: Rs 72/ Upside: 32%
* Rationale: ECL is venturing into steel-making through its subsidiary Electrosteel Integrated (EIL), which is setting up a 2.2 million ton steel plant expected to be commissioned by FY2012E. Further, ECL plans to list EIL to raise ~Rs 3 billion, which is likely to unlock value for ECL. EIL has already filed the DRHP and IPO is expected over the next one month. ECL`s backward integration initiatives through allocation of coking coal mines are expected to result in expansion of EBITDA Margin by 1,304bp over FY2009-12E. The company is also awaiting final environmental clearance for its iron ore mine, which will further lower costs, but has not been factored in its estimates. It recommends `Buy` on the stock, valuing the core business at 8x FY2012E FDEPS and its investments in the steel business at 1x Book Value.

Finolex Cables

* CMP: Rs.59/ TP: Rs.85/ Upside: 44%
* Rationale: Finolex Cables is poised for a strong growth over the next few years, owing to entry in the verticals of high tension (HT) and extra high voltage (EHV) cables and market share expansion in the existing low tension (LT) cables segment. The rapid ramp up of production at the Roorkee plant has already started delivering results. The company has further increased the capacity at this plant by 50%. The proximity to the growing North Indian markets and tax benefits from this plant are expected to boost the turnaround of the company. Company`s derivatives losses are expected to decline going ahead. By FY2012, these losses are estimated to decline to Rs 240 million from Rs 760 million in FY2010. Angel believes attractive valuations of 6.2x FY2012E EPS and 1.1x FY2012E BV provides a good entry point for investors. It has valued the stock at 9x FY2012E EPS which result into target price of Rs 85.

JK Tyre & Industries

* CMP: Rs.185/ TP: Rs.237/ Upside: 28%
* Rationale: Given the shortage of radial tyres in the Trucks & Buses Segment, the company is set to fully utilize its enhanced capacity, and that too at higher realizations (70% of India`s total truck/bus radial tyre production), driving strong earnings growth and improving RoEs. Further, the Tornel acquisition turned profitable in FY2010, aided by the restructuring exercise implemented by the company. The stock is available at attractive valuations of 3.9x FY2012E EPS and hence it recommends Buy. At its target price of Rs 237, the stock would trade at 5x, 3.3x and 0.8x FY12E EPS, EV/EBITDA and P/BV, respectively.

Taj GVK Hotels

* CMP: Rs 163/ TP: Rs 240/ Upside: 47%
* Rationale: Robust growth in foreign tourist arrivals (9.8% growth during January to July 2010 v/s -7.6% in the corresponding period last year) and increased domestic tourist activity is enabling hoteliers to foresee promising outlook going ahead. Signs of improving demand are visible with occupancy rates improving substantially to ~64-65% in 1QFY2011 and Average Room Rates (ARR) expected to rise by 10-15% since October 2010. Considering the revival in demand happening in business destinations like Hyderabad and Chennai, where TAJGVK has presence, we expect the company to be a significant beneficiary in the coming quarters. Moreover, in comparison to its peers, the stock trades at attractive valuations of Rs 10 million FY2012E EV/Room and 13.4x FY2012E EPS. Assigning a target PE multiple of 20x, it recommends a Buy on the stock with a target price of Rs 240.

Investing in stocks

Historically, Equity markets have been giving highest annual returns than all others asset classes for disciplined long term investors. Equities are even more rewarding and can create serious wealth for you, if you can identify right stocks at right price and stay invested in those for long term. So how do you decide on which stock should you invest in and at what price and what other factors should you look for and monitor over the course of you investment period? In this article we will discuss about those.

Macroeconomic and industry outlook:

* Irrespective of the strength of the stock, it will get impacted by the overall macroeconomic scenario in the country like inflation, interest rates, liquidity, political stability, foreign flows and so on.
* Global macroeconomic outlook also has a bearing on equity returns due to capital flows into equity markets.
* The stock’s performance also depends on the latest developments and industry outlook in terms of growth, demand-supply, regulatory changes amongst others.
* One should know if a company is in a growing or saturated industry. Even weak stocks in a strong sector may give better returns than a good stock in a sector with weak fundamentals.
* Lastly, market leaders always command premium.

Promoter, management background and quality:

* Once you are convinced about the positive economic and industry outlook, you need to analyse stocks in that sector.
* It is important to check the background of the people at the helm of affairs in a firm - the promoters and top management.
* Being in the driver’s seat, their ideology, vision, integrity and execution capabilities will impact the business.
* It will also have long-term bearing on the shareholders’ interests and stock returns.
* This is especially important for start-up or mid- and small-cap firms as right leadership is very essential for their growth.

Dividend payout policy:

* Knowing that equity is a high-risk-high-return asset class, it is prudent to safeguard a portion of your investments and get it back periodically as dividend.
* Dividend yield shows the return you can expect as a percentage of the stock’s current market price.
* The higher the dividend yield, the better. One must keep in mind that companies in a growth phase may choose to redeploy the earnings in the business itself instead of paying dividend.
* This should not undermine the attractiveness of these companies.

Leverage - debt to equity ratio:

* This ratio indicates what proportion of equity and debt the company is using as finance.
* If the ratio is greater than one, assets are mainly financed with debt and less than one means equity provides a majority of financing.
* It displays the financial strength of a firm and assumes greater importance during market downturn as huge borrowings will have fixed obligation in the form of interest payment.


Annual report, director’s report, auditor’s report & management discussion:

* The best place to get information about a company is in its annual report.
* There is a wealth of information in all annual reports. The management discussion and analysis will tell you about the company’s future plans.
* The directors’ report will tell you how the company performed in the preceding year.
* The auditor’s report also assumes great importance as it is an expert’s certification stating if the company management is telling the truth or not.

Corporate profitability and valuations:

* One important measure to gauge the profitability of a company is its returns-on-equity (ROE). Higher the ROE, more profitable is the company.
* Once you are convinced about the fundamentals, look at the valuations.
* The most common valuation ratio is the price-to-earning (PE) ratio. It is the ratio of the current market price and the expected earnings per share (EPS).
* Typically, stocks with expectations of higher earnings growth will have higher PE and vice versa.

After having invested in the stock, it is important to keep a track of the developments on the above parameters. Active trading is not recommended. One should always invest with a long-term view.

However, if there is a structural shift in the underlying fundamentals and it is important to reassess the stock.

With some research on the above mentioned variables, an investor can reduce the risks inherent in equity investments.

Relying on advice from friends is not a good idea. It is necessary to do some groundwork yourself. Wealth creation is not just luck. A continuous learner can create great wealth by following a disciplined investment approach.

BUY AND SELL FOR THIS WEEK

Buy

Axis Bank

Buy signals in bull grip. For the day go long near and at a strict SL of 1367 for a target to breach 1392

DLF

Fresh buy trend just initiated. For the day go long near and at a strict SL of 318 for a target to breach 323

HCL Tech

Fresh buy signals. For the day go long near and at a strict SL of 403 for a target to breach 411. Likely to breach 422 over next few trading sessions and achieve 429

Hindalco

Buy signals still continue. For the day go long near and at a strict SL of 177 for a target to breach 184. Likely to achieve 189 during next few trading sessions and achieve 195

Hindustan Lever

Fresh buy trend just started. For the day go long near and at a strict SL of 275 for a target to breach 284

Sell

Cairn

Sell signals still continue. For the day go short near and at a strict SL of 332 for a target to breach 325. And likely to achieve 323. But 317 is an excellent support level to go long

Reliance Infra

Signs of reversal to a bullsih trend. For the day go short near and at a strict SL of 1035 for a target to breach 1007


|

Nifty

Still in bullgrip. No sign of correction yet. For the day go long near and at a strict SL of 5608 for a target to breach 5647

Infosys

Buy trend still continues. But today can be a day of correction. For the day go short only near and at a very very strict SL of 2900 for a target to breach 2858, But if somehow manages to breach 2909, next achievable target stands at 2968

Patni

Sell signals to a bearish trend still continue. For the day go short near and at a strict SL of 456 for a target to breach 444

Sterlite

Trend bullish But today can be a day of correction. For the day go short near and at a strict SL of 168.5 for a target to breach 163.75

Dr.Reddy

Trend bullish. But reversal has emerged. For the day go short near and at a strict SL of 1421 for a target to breach 1397

HDFC Bank

Buy trend just initiated. For the day go long near and at a strict SL of 2183 for a target to breach 2250. if breaches 2249 with volumes , next achievable target stands at 2266

Tata Communications

Sell trend in bull grip. 335 is an excellent support level

ICICI Bank

Excellent buy signals in bull grip. For the day go long near and at a strict SL of 1032 for a target to breach 1054

FOUR STOCKS

FOUR STOCKS TO IMPROVE YOUR PRINCIPAL AMOUNT FOR SURE

1 MICRO TECH 532494 @ 213.5

2 SIMPLEX CASTING 513472 @ 117.65

3 RATHI ISPAT 504903 @ 25

4 WELSUN SYNTEX 508933 @ 18.65

Pharma – ‘Big Opportunity’

Pharma – ‘Big Opportunity’



Pharma industry presents a wonderful opportunity to the Indian players in generics and CRAMS space. With 119 USFDA approved manufacturing facilities in India, domestic drug makers are well poised to tap US$96bn opportunity presented as blockbuster molecules are going off patent in US during the next 2-3 years. In addition to this, US$55bn outsourcing opportunity is knocking Indian pharma companies. Research on New Chemical Entities (NCEs) and Novel Drug Delivery Systems (NDDS) is now becoming an integral part of the strategy of many Indian pharma companies to achieve sustainable long term advantage. We expect to see Indian vendors expanding their geographical presence and service – offering portfolio through acquisitions. Partnering strategies like licensing arrangements, collaborative research will be increasingly undertaken. We have outlined the following companies which are well equipped to tap this opportunity.



Dr. Reddy’s – BUY

CMP Rs1,405, Target Rs1,750, Upside 24.6%



± US markets to drive growth

± Russian business adding momentum

± Strongly placed in Indian formulations business

± Strong Balance Sheet, strong earnings growth



Biocon – Market Performer

CMP Rs347, Target Rs375, Upside 8.0%



± Domestic formulations business to witness strong growth

± Shift in business mix; Insulin to drive growth

± Acquisition of Axicorp, Germany –benefits flowing in

± Strong earnings growth and expected key triggers



IPCA Labs – BUY

CMP Rs286, Target Rs340, Upside 19.0%



± Strongly placed in formulations business

± Indore SEZ to add momentum

± Exports to drive growth

± Recovery in anti-malarial segment

± Earnings to grow at a CAGR of 31%; compelling valuations



Please find attached our detailed report on the same.





Warm Regards,

Swami Vivekananda.

The world is ready to give up its secrets if we only know how to knock, how to give it the necessary blow. The strength and force of the blow come through concentration.

Swami Vivekananda.