Hi Friends.
Recommended to all who have registered with us on email 2 weeks ago, about BONUS DATE ANNOUNCEMENT very soon. Yes... In matter of days you will hear from the management. Keep holding the stock.. Its all set to cross 400+. (We recommended a buy from 315 levels)
Regards
Happy Investing
Investomaniac
JAIDADIKI
Wednesday, April 16, 2008
Saturday, April 12, 2008
HEG--- A long term bet
HEG Limited
Sensex 15807
BSE Code 509631
Face Value Rs. 10/-
CMP Rs 287
52 Week Range H/L Rs. 609/ 166
Equity Rs. 43.51 Cr
Market Cap. Rs. 1257.66 Cr
Nos. of Shares 4.35 Cr
Free Float 46.77%
Company Profile
HEG Ltd is a premier company of the LNJ Bhilwara Group, and is India's leading graphite electrodes manufacturer. . Set up in 1977, in technical and financial collaboration with Societe Des Electrodes Et Refractaires Savoie (SERS), a subsidiary of Pechiney of France, HEG is now the largest integrated graphite plant in South East Asia & Middle East. Spread over an area of about 170 acres, HEG (graphite division) has facilities for production of Graphite Electrodes and Graphite Specialities. HEGL has its graphite manufacturing plant located in Mandideep (Madhya Pradesh) with a capacity of around 52,000 MT per annum. The Company also operates a sponge iron plant, a steel billets plant, and captive power generation units totaling 56.3 MW. The company exports over 80% of it’s production to more than 25 countries of the world. HEG also has a dedicated R&D Set up for Carbon & Graphite.
Industry Outlook
The worldwide graphite electrodes industry, which accounts for 80% of HEGs revenue, continued to witness strong demand and price conditions during FY2007 and this trend is expected to continue in FY2008 as well. The demand for graphite electrodes is driven by the production of steel through the electric arc furnace (EAF) route. This process of steel production is slowly gaining ground and is expected to grow further. Rough industry estimates of graphite electrode demand also suggest a positive scenario. From about 1.02 million tonnes in 2001, the global demand for graphite electrodes is estimated to increase to 1.34 million tonnes in 2010. With no significant capacities being added globally to the current capacity of about one million tonnes, established players like HEG stand to benefit the most. The demand for graphite electrodes is spread across the US, South America, Europe, Japan and China, which are the principal manufacturers of steel through the EAF route. Nonetheless, given the lower cost of production and the likely improvement in power availability, it may only be a matter of time before Indian manufacturers too take to this route completely
Trigger Points for Investment
• The company has recently invested Rs 4.5 Billion ( US$ 120 Million) to expand their capacity.
• Steel manufacturing companies with electric arc furnace are the only consumers of graphite electrodes, with the demand for graphites is only expected to rise in future, its only matter of time that the revenue and the profitability of the company will grow.
• HEGL has its captive power generation facilities with a total capacity of 51.3
MW and it plans to set up another power plant with a capacity of 30MW.
• HEG's graphite electrodes are exported to 25 countries around the world, including developed countries like USA, Canada, Germany, France, Italy ,South Korea, Australia. The company continues to build relations with these clients over last few years, which has helped the company in increasing its export turnover.
• HEG Ltd. had increased its graphite manufacturing capacity from 33,600 MTPA in FY05 to 52,000 MTPA in FY06. This will further be increased to 57,000 MTPA in the current financial year.
Key Concerns
Limited availability of needle coke:
Needle coke is a premium grade, high-value petroleum coke, used in the manufacturing of graphite electrodes in arc furnaces and it is a very important Increase in needle coke prices remains a principal risk due to demand-supply mismatch.. There are very few companies in the world which produces needle coke. Prices of needle coke are expected to remain firm, as it is a derivative of crude. However increase in prices of electrodes should offset the rise in price of raw material.
Foreign Exchange risk:
We have seen rupee appreciating by 8 to 10%. Any further appreciation will lead to a hit on the revenues of the company , as around 50% of the revenues are export generated.
Valuations
Looking at the demand for graphites in the steel industry, HEG has increased its
manufacturing capacity over the period. HEGL being the leading graphite manufacturer in India will be able to realize the benefits of the rising demand and increasing prices. HEG holds 36% stake in BEL( Bhilwara Energy Ltd).We estimate the value of the HEG’s stake in BEL at Rs98/sh of HEG based on the last private equity placement that BEL has done with 2 US based funds. BEL is planning to go for another private placement or IPO and HEG expects the valuations to be substantially higher than the previous valuations. Excluding the current value of HEG’s stake in BEL, at the current market price of 260 the stock trades at P E Multiple of 10 with our FY09 FDEPS of Rs 25.78/-
One can have this stock under its long term portfolio with a time horizon of 12months and a price target of Rs 385++ (Upside 35%+)
For more details please visit www.investomaniac-analyst.blogspot.com or contact nishantlakkar@gmail.com
Disclaimer: This is neither an offer nor a solicitation to purchase or sell securities. The information and views contained in this article are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Myself or any of the contributors to this article may be investing in, or have positions in the securities mentioned in the articles. Neither myself nor any of the contributors accepts any liability arising out of use of the above information/article. In this article the stocks are analysed using fundamental and value analysis, which is the core of Investing. Genuine attempts are made here to present correct information, however we do not guarantee 100% accuracy. The writer (myself) IS NOT RESPONSIBLE for any LOSS in the investments made, following the recommendations here. Reproduction in whole or in part without written permission is prohibited.
Sensex 15807
BSE Code 509631
Face Value Rs. 10/-
CMP Rs 287
52 Week Range H/L Rs. 609/ 166
Equity Rs. 43.51 Cr
Market Cap. Rs. 1257.66 Cr
Nos. of Shares 4.35 Cr
Free Float 46.77%
Company Profile
HEG Ltd is a premier company of the LNJ Bhilwara Group, and is India's leading graphite electrodes manufacturer. . Set up in 1977, in technical and financial collaboration with Societe Des Electrodes Et Refractaires Savoie (SERS), a subsidiary of Pechiney of France, HEG is now the largest integrated graphite plant in South East Asia & Middle East. Spread over an area of about 170 acres, HEG (graphite division) has facilities for production of Graphite Electrodes and Graphite Specialities. HEGL has its graphite manufacturing plant located in Mandideep (Madhya Pradesh) with a capacity of around 52,000 MT per annum. The Company also operates a sponge iron plant, a steel billets plant, and captive power generation units totaling 56.3 MW. The company exports over 80% of it’s production to more than 25 countries of the world. HEG also has a dedicated R&D Set up for Carbon & Graphite.
Industry Outlook
The worldwide graphite electrodes industry, which accounts for 80% of HEGs revenue, continued to witness strong demand and price conditions during FY2007 and this trend is expected to continue in FY2008 as well. The demand for graphite electrodes is driven by the production of steel through the electric arc furnace (EAF) route. This process of steel production is slowly gaining ground and is expected to grow further. Rough industry estimates of graphite electrode demand also suggest a positive scenario. From about 1.02 million tonnes in 2001, the global demand for graphite electrodes is estimated to increase to 1.34 million tonnes in 2010. With no significant capacities being added globally to the current capacity of about one million tonnes, established players like HEG stand to benefit the most. The demand for graphite electrodes is spread across the US, South America, Europe, Japan and China, which are the principal manufacturers of steel through the EAF route. Nonetheless, given the lower cost of production and the likely improvement in power availability, it may only be a matter of time before Indian manufacturers too take to this route completely
Trigger Points for Investment
• The company has recently invested Rs 4.5 Billion ( US$ 120 Million) to expand their capacity.
• Steel manufacturing companies with electric arc furnace are the only consumers of graphite electrodes, with the demand for graphites is only expected to rise in future, its only matter of time that the revenue and the profitability of the company will grow.
• HEGL has its captive power generation facilities with a total capacity of 51.3
MW and it plans to set up another power plant with a capacity of 30MW.
• HEG's graphite electrodes are exported to 25 countries around the world, including developed countries like USA, Canada, Germany, France, Italy ,South Korea, Australia. The company continues to build relations with these clients over last few years, which has helped the company in increasing its export turnover.
• HEG Ltd. had increased its graphite manufacturing capacity from 33,600 MTPA in FY05 to 52,000 MTPA in FY06. This will further be increased to 57,000 MTPA in the current financial year.
Key Concerns
Limited availability of needle coke:
Needle coke is a premium grade, high-value petroleum coke, used in the manufacturing of graphite electrodes in arc furnaces and it is a very important Increase in needle coke prices remains a principal risk due to demand-supply mismatch.. There are very few companies in the world which produces needle coke. Prices of needle coke are expected to remain firm, as it is a derivative of crude. However increase in prices of electrodes should offset the rise in price of raw material.
Foreign Exchange risk:
We have seen rupee appreciating by 8 to 10%. Any further appreciation will lead to a hit on the revenues of the company , as around 50% of the revenues are export generated.
Valuations
Looking at the demand for graphites in the steel industry, HEG has increased its
manufacturing capacity over the period. HEGL being the leading graphite manufacturer in India will be able to realize the benefits of the rising demand and increasing prices. HEG holds 36% stake in BEL( Bhilwara Energy Ltd).We estimate the value of the HEG’s stake in BEL at Rs98/sh of HEG based on the last private equity placement that BEL has done with 2 US based funds. BEL is planning to go for another private placement or IPO and HEG expects the valuations to be substantially higher than the previous valuations. Excluding the current value of HEG’s stake in BEL, at the current market price of 260 the stock trades at P E Multiple of 10 with our FY09 FDEPS of Rs 25.78/-
One can have this stock under its long term portfolio with a time horizon of 12months and a price target of Rs 385++ (Upside 35%+)
For more details please visit www.investomaniac-analyst.blogspot.com or contact nishantlakkar@gmail.com
Disclaimer: This is neither an offer nor a solicitation to purchase or sell securities. The information and views contained in this article are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Myself or any of the contributors to this article may be investing in, or have positions in the securities mentioned in the articles. Neither myself nor any of the contributors accepts any liability arising out of use of the above information/article. In this article the stocks are analysed using fundamental and value analysis, which is the core of Investing. Genuine attempts are made here to present correct information, however we do not guarantee 100% accuracy. The writer (myself) IS NOT RESPONSIBLE for any LOSS in the investments made, following the recommendations here. Reproduction in whole or in part without written permission is prohibited.
Wednesday, April 9, 2008
Tech Mahindra-- & Tantia Construction
Hi Friends
Tech Mahindra was recommended through email to our premium service members as well as free members thru email for a target of Rs 850. The stock made a high of 872 today.
Tantia Construction was recommended on 30th March 2008, 10 days back. In the last 3 days 2 UPPER CIRCUITS of 20%....... What else???????
Tgt was 150 in 90 days.... seems we will reach there in the next few days itself.........(Check the report on tantia below, which was published on 30th March, 2008)
What say guys??? :-)
Done think twice...... Go ahead and JOIN US...........
For details mail us at nishantlakkar@gmail.com
Regards
Happy Investing
Investomaniac
JAIDADIKI
Tech Mahindra was recommended through email to our premium service members as well as free members thru email for a target of Rs 850. The stock made a high of 872 today.
Tantia Construction was recommended on 30th March 2008, 10 days back. In the last 3 days 2 UPPER CIRCUITS of 20%....... What else???????
Tgt was 150 in 90 days.... seems we will reach there in the next few days itself.........(Check the report on tantia below, which was published on 30th March, 2008)
What say guys??? :-)
Done think twice...... Go ahead and JOIN US...........
For details mail us at nishantlakkar@gmail.com
Regards
Happy Investing
Investomaniac
JAIDADIKI
Monday, April 7, 2008
Sterlite Industries
Hi Friends
Sterlite Industries was recommended on friday @ 715 and also today morning @ 730, booked out 100% profits @ 745 and 753.
TANTIA CONSTRUCTION recommended last week (Check below)... HITS THE UPPER CIRCUIT TODAY>> up by 20%.....
We have started sending calls directly on email. Please contact nishantlakkar@gmail.com for registration purposes and recieving limited period free service.
Regards
Happy Investing
Investomaniac
JAIDADIKI
Sterlite Industries was recommended on friday @ 715 and also today morning @ 730, booked out 100% profits @ 745 and 753.
TANTIA CONSTRUCTION recommended last week (Check below)... HITS THE UPPER CIRCUIT TODAY>> up by 20%.....
We have started sending calls directly on email. Please contact nishantlakkar@gmail.com for registration purposes and recieving limited period free service.
Regards
Happy Investing
Investomaniac
JAIDADIKI
Sunday, March 30, 2008
Tantia Construction Ltd-- Short Term
Hi Friends
Its time to now have a relook at some of the small cap and mid cap stocks after the butchering of 3 months for these indexes. The Space is looking really hot atleast for the short term.
TANTIA CONSTRUCTION (A Full Fledged Report Card)
TCL is engaged in all types of civil construction works with major presence in sectors like roads, railways, bridges, urban infrastructure development, power
transmission, aviation infrastructure, marine infrastructure, tunnels construction and at times, construction of turnkey projects. Of late, the company has also entered into industrial construction segment. The average value of the projects handled by the company, in the recent past, has been within Rs.50 crore with highest value of the project executed, till date, being Rs.65 crore. For the last few years, the company has started getting involved into relatively high value projects in joint venture with other construction companies or otherwise. The company uses latest technologies (developed by itself), machinery and equipment. In order to benefit the huge job potential in road & railway sectors, the company has formed quite a few joint ventures to make a significant headway in those segments with receipt of higher value contracts. It has formed technical collaboration with RBM Sdn Bhd, a Malaysian company, for executing a road project. The company also has
strategic alliance with Travaux Du Sud Ouest, a French company, to get the benefit of technical know-how, engineering insights and project management skills. In most of the projects executed by TCL, the drawings are either provided by the clients or TCL outsources designing and drawing facility, in consultation with clients.
TCL has an impressive client portfolio, which includes Indian Railways, IRCON International Ltd., RITES, Delhi Development Authority, HUDCO, Airport Authority
of India, Indian Oil Corporation, Balrampur Chini Mills Limited, SAIL, NHAI, Central & State PWDs, NEEPCO, Metro Railways (Kolkata) and various state undertakings of West Bengal. TCL continues to have a healthy order book position. As on June 30, 2007, the value of orders in hand (including on-going projects) was about Rs.1232 crore.
In FY'07, TCL has bagged orders worth about Rs.600 crore mainly in the areas of roads, highways and bridges from Road Construction Department, Govt. of Bihar, Central Public Works Department, New Delhi, Eastern Central Railway, Patna and KMDA. In view of its long & established track record, TCL gets good number of repeat orders significantly.
Now some of the positive triggers...
> The Company has a combined order book of more than Rs.1200 Cr at present. Some 1000Cr orders are on the pipeline
> This is a Core Infrastructure and Construction Company hence it will benefitted due to the additional fund allocation in "Bharat Nirman". The government's thrust on infrastructure development and a favourable Railway budget are positive triggers for the company (It has work from Central and Eastern Railways as well as Metro Railways)
> The company has listed its shares in The National Stock Exchange of India Ltd. last month and this has increased the liquidity in the counter, whic could prompt Mutual Funds and FIIs to stake in the company. This is a great positive trigger for the company and could also take the scrip above Rs.170, with this trigger.
> It is currently implementing 3 construction projects from National Hydroelectric Power Corporation Ltd (NHPC) for construction and maintenance of the road for the five years at Patna in the state of Bihar amounting to Rs 12.50 cr approx.
Two construction projects from World Bank Projects (Roads) U.P.P.W.D, Lucknow for Rehabilitation Road Works under Utter Pradesh Stale Roads Projects amounting to Rs 70.83 crores approx.
A rail work from Eastern Railway for earthwork, blanketing work, construction of RCC bridges between Azimganj Jn station to proposed bridge site across the river Bhagirathi along with the restoration of Rail Link in between Jiaganj (Murshidabad) and Azimganj Ju amounting to Rs 18.77 crore. The total value of work is Rs 102.10 Cr.
Also to be noted, it has also been working for the much hyped Kolkata Tramways Project in renewing the tram tracks all across Kolkata.
> Tantia Constructions Ltd had earlier issued FCCBs to the tune of US$ 7.5 million which had the option to be Convertible at any time on or after July 17, 2007 upto and prior to the close of Business on July 05, 2012 unless previously reduced, converted or purchased and cancelled and except during a closing period.Conversion Price: Rs 140/- per share. It is also expected that the funds raised through FCCBs will ease the level of debt on the balance sheet.
All the above supports are good enough for the stock to reach 150 in short term. And now since the mid cap and small cap space are looking good and attracting buying intrest (after the heavy butchering in the last 3 months)... We are all set to see a some of these companies getting their deserved price.
CMP (97.00)
(BSE: 532738) | NSE: TANTIACONS
Target 150+
Time Frame - 90 days- 180 days (maximum)
*Investors should book profits based on their profit taking appetite.
Long Term Investment - Power Grid Corp
Hi Friends
I have started updating the site once in a week now as I have started recieving so many mails/queries that after replying them I hardly get time to update the site regularly. However what I have been doing is that I have made a list of people who wish to recieve my short term and long term advice and mail them all together once as a call arises.
For the site viewers I would request all to kindly mail me at nishantlakkar@gmail.com to register for free short/long term calls.
I had a chance to talk to the management of Power Grid Corporation and was really excited to know about the progress they are making and planning to regulate the companys telecom business plans.
PGCIL is planning to invest upto Rs 500 billion in the transmission projects in the near term out of which around 52.5 blillion has already been invested. They are expecting to invest the remaining amount by 2012-13. According to the earning estimate reports published by Edelweiss, PGCIL is expected to have a net profit of around 20300 million in FY09E and 26000 million in FY10E. (Including income from tower and consultancy business). PGCILs entry into telecom space is likely to provide boost to its bottomline to the extent of 10-12%.
PGCIL currently has an overhead optic fibre network of 20,000 km, spanning 100 cities in the country. The company has order of over Rs 3,000 mn from various telecom players for leasing the optic fibre bandwidth. It also holds license for national long distance dialing and offering services as internet service provider (ISP); the company has been generating revenues from both these segments over the past two quarters.
I personally believe that it is very good long term buy and the prospects of the company are very attractive. Very few companies are there with a mix of telecom, power, and consultancy and we can see a price of Rs 200 in a years time. It is one of the best Long term Stocks to have in ones portfolio.
If anybody wants to access a report from Edelweiss for PGCIL then please request for the same at nishantlakkar@gmail.com
Happy Investing
Investomaniac
JAIDADIKI
I have started updating the site once in a week now as I have started recieving so many mails/queries that after replying them I hardly get time to update the site regularly. However what I have been doing is that I have made a list of people who wish to recieve my short term and long term advice and mail them all together once as a call arises.
For the site viewers I would request all to kindly mail me at nishantlakkar@gmail.com to register for free short/long term calls.
I had a chance to talk to the management of Power Grid Corporation and was really excited to know about the progress they are making and planning to regulate the companys telecom business plans.
PGCIL is planning to invest upto Rs 500 billion in the transmission projects in the near term out of which around 52.5 blillion has already been invested. They are expecting to invest the remaining amount by 2012-13. According to the earning estimate reports published by Edelweiss, PGCIL is expected to have a net profit of around 20300 million in FY09E and 26000 million in FY10E. (Including income from tower and consultancy business). PGCILs entry into telecom space is likely to provide boost to its bottomline to the extent of 10-12%.
PGCIL currently has an overhead optic fibre network of 20,000 km, spanning 100 cities in the country. The company has order of over Rs 3,000 mn from various telecom players for leasing the optic fibre bandwidth. It also holds license for national long distance dialing and offering services as internet service provider (ISP); the company has been generating revenues from both these segments over the past two quarters.
I personally believe that it is very good long term buy and the prospects of the company are very attractive. Very few companies are there with a mix of telecom, power, and consultancy and we can see a price of Rs 200 in a years time. It is one of the best Long term Stocks to have in ones portfolio.
If anybody wants to access a report from Edelweiss for PGCIL then please request for the same at nishantlakkar@gmail.com
Happy Investing
Investomaniac
JAIDADIKI
Sunday, March 23, 2008
Tax Planning
Hi Friends.
First of all I would like all of you to atleast use this fall (in which most of our investments are in loss) to use it purposefully or smartly in our annual return filing.
Suppose we have invested Rs 1,00,000 in the markets and today the value of that investment is Rs 60,000. There is Rs 40,000 Notional Loss in our accounts which has no meaning untill and unless we hold it for one complete year (because then there will be 0% long term capital gain tax) but then there is no guarantee that after 1 year this 60000 will sur pas our investment value of Rs 1 lakh and give us surplus returns of more then 20-30%. That means this 60000 will now have to double in one year in order to give us 20% Net Profit in One Years time. (ie: 60000 has to become 1,20,000) Instead, I would go ahead and book this loss before 31st March 2007. What will happen in this case is that If you already have made some profits as short term gains in this year then the short term gain will be immediately set off by this loss and there wont be any tax liability at your end for whatever little profit u have made in the accounting year 2007-2008 ending 31st March 2008. Suppose u have made a profit of Rs 40000 during the year, then your tax liability is Rs 4000. But if you book the losses in your current investments which is Rs 40000 then the tax liability is NIL. There is nothing to loose in it because if u want to stick to the same stocks, u sell them today, book ur short term losses, and buy them next day again. There is no problem in that as well, also it gives u the chance to reschuffle your portfolio if u want. Atleast we would be able to save some tax liablity in this case. This is purely legal.. nothing wrong about it. Please consult ur tax planner or a CA if anybody has any doubts regarding the same.
***
As far as the markets are concerned, i think we might see some lower bottoms being formed due to various factors like inflation, global cues, political reasons and dismal industrial production and quaterly results from India Inc. We have to be very selective in stock picking. As of now L&T is looking very attractive for long term horizon, untill and unless it breaks 2350-2400 there is nothing to worry about the stock. We can Buy the stock with a stop @ 2350. Any other queries/feedback or suggestions please mail me at nishantlakkar@gmail.com
First of all I would like all of you to atleast use this fall (in which most of our investments are in loss) to use it purposefully or smartly in our annual return filing.
Suppose we have invested Rs 1,00,000 in the markets and today the value of that investment is Rs 60,000. There is Rs 40,000 Notional Loss in our accounts which has no meaning untill and unless we hold it for one complete year (because then there will be 0% long term capital gain tax) but then there is no guarantee that after 1 year this 60000 will sur pas our investment value of Rs 1 lakh and give us surplus returns of more then 20-30%. That means this 60000 will now have to double in one year in order to give us 20% Net Profit in One Years time. (ie: 60000 has to become 1,20,000) Instead, I would go ahead and book this loss before 31st March 2007. What will happen in this case is that If you already have made some profits as short term gains in this year then the short term gain will be immediately set off by this loss and there wont be any tax liability at your end for whatever little profit u have made in the accounting year 2007-2008 ending 31st March 2008. Suppose u have made a profit of Rs 40000 during the year, then your tax liability is Rs 4000. But if you book the losses in your current investments which is Rs 40000 then the tax liability is NIL. There is nothing to loose in it because if u want to stick to the same stocks, u sell them today, book ur short term losses, and buy them next day again. There is no problem in that as well, also it gives u the chance to reschuffle your portfolio if u want. Atleast we would be able to save some tax liablity in this case. This is purely legal.. nothing wrong about it. Please consult ur tax planner or a CA if anybody has any doubts regarding the same.
***
As far as the markets are concerned, i think we might see some lower bottoms being formed due to various factors like inflation, global cues, political reasons and dismal industrial production and quaterly results from India Inc. We have to be very selective in stock picking. As of now L&T is looking very attractive for long term horizon, untill and unless it breaks 2350-2400 there is nothing to worry about the stock. We can Buy the stock with a stop @ 2350. Any other queries/feedback or suggestions please mail me at nishantlakkar@gmail.com
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