Hameed
MARKET BUZZ:
(May not be useful for day-traders.)
Sona Koyo Steering

CMP Rs 70. Sell. Target Achieved (Not applicable for day-traders.)
We believe Sona Koyo Steering Systems (SKSL) to be a compelling growth story in the auto component space. SKSL is all set to gain significantly from the long term upside expected within the domestic passenger car and utility vehicle (UV) market. With an expected CAGR of 34% yoy in net profits over FY04-FY07E, we expect ROCE and ROE levels to remain healthy at 22% and 26% respectively as in FY06E.
The SKSL stock trades at a one year forward rolling P/E of 13x on FY06E making the valuations look attractive from a long-term perspective. Our target price was set for Rs.72, which is nearly achieved.
Sell.
Investment rationale
Pure play on the domestic passenger car & UV segment:
SKSL makes steering systems consisting of steering gears and columns, axle components and propeller shafts. Its business prospects primarily depend on the domestic passenger car and UV segments. In passenger cars, SKSL is a dedicated vendor to Maruti Udyog catering to 100% of its requirements, for its entire product range. It is also a 100% vendor to Mahindra & Mahindra (for its Bolero and Scorpio models) with other large customers being Hyundai (for Santro and Accent), Toyota (Qualis) and Tata Motors (Indica).
SKSL is sitting on a huge export opportunity:
Till last year, exports accounted for just 2% of SKSL's revenues. However, going forward, exports are expected to be an important driver in ramping up both top line and EBIDTA in the next 2-3 years. SKSL recently bagged large export orders, including a $35mn order from Koyo USA, to be executed over the next five years. Thus, about Rs.350mn worth equipment would be exported every year to Koyo USA. This order implementation will start from H2 FY05.
Other export orders bagged include Rs.10mn p.a. order from Case New Holland USA, a Rs.10mn p.a. order from Lotus Corp USA and a Rs.70mn p.a. order for supply of manual steering for off-road vehicles to a US-based player. For FY04, the management expects exports to touch Rs.70mn and for FY05 exports are estimated to touch Rs.300mn. Eventually, SKSL is targeting exports of Rs.1bn p.a. by FY07 by which time exports as a percentage of revenues would be about 11%.
Strong earnings growth; sharply improving fundamentals:
We expect SKSL to further consolidate its position in the sector and estimate top line and net profits to grow at 24% and 34% CAGRs respectively in the next three years (FY2004-FY2007E) with both ROCE and RONW expected to be 26% and 29% respectively until FY2007E.
Risk factors
Any significant downturn in the domestic passenger car market and export markets could impact SKSL earnings negatively.
Valuation
With EPS' CAGR growth estimated at 34% over FY04-07, on the back of a 24% CAGR in the top line, and an EV/EBIDTA of 9x FY05E and 7x FY06E, we believe that the present valuations of 17x FY05E and 13x FY06E look attractive. At our target price, the stock is valued at 15x and 9x P/E and P/C FY06E respectively.
Oil & Gas - Attractive View
Higher Retail Prices would boost profits
To buy the Indian R&Ms (Refining and Marketing Companies) you need to believe in one of three events. These are: 1) Crude oil prices fall below US$47.5/bbl. 2) Government revises prices upwards or lowers its taxes. 3) Gross refining margins increase to even higher levels.
The last six retail price changes made by the Indian government have been at inflation levels higher than the current prevailing inflation rate. If petrol and diesel price hikes are allowed by the government, inflation would increase by 29 bps to 5.52%, which is still amongst its lowest level in the last year.
Maintain our Overweight call on BPCL and Equal-weight on HPCL on the back of valuations. However, we prefer BPCL to HPCL due to its higher exposure on its refining business.
We stress test our marketing assumptions based on six crude estimates:
The Indian R&Ms earn superior refining margins, in line with strong regional and
global petroleum product prices. However, they currently earn negative marketing margins, which lower their integrated margins.
Base Case: We assume WTI at US$46.7/bbl in F05/6/7 for our marketing margins. Our global team's crude oil estimates for F05/6/7 are lower at US$44.4/bbl, US$41.4/bbl and US$41.5/bbl, respectively. Our earnings also assume a one-third share of LPG and kerosene losses by the upstream players.
Our analysis reveals the Indian R&Ms would make losses when WTI = US$60/bbl
If the government does not change retail prices, we calculate Indian R&M companies would earn zero profits when WTI is US$58/bbl.
Marketing margins turn positive when WTI falls below US$47.5/bbl. We estimate BPCL makes losses at about a US$1/bbl higher crude price than HPCL due to its higher refinery throughput.
Competition is not heating up as fast as expected ... unfortunately Reliance, Essar, ONGC and Shell together have still not added 550 outlets in total.
The Indian PSU R&Ms last year added over 2,000 retail outlets. However, we believe if competition heats up the regulators would be forced to remove the uncertainty on regulations and allow market determined pricing.
We have an Attractive view on the India Oil & Gas industry.
We prefer upstream players over downstream players, due to the risk on marketing margins. Organic growth, attractive valuations, strong GRMs and an impressive pickup in demand are key triggers for the industry.
Dbhat:IT & T: (15.94) INVER HEAD & Shoulder pattern formed during heavy consolidation between 25 & 12 & stock is now inching up after taking long term support on 200dma indicates huge up move on the card.
Just buy & forget keeping stop loss of 14 on a closing basis.
All set to shoot up to 35 in very short span of time.
Stock traded both at NSE & BSE: 532395.
Abhisek Ind: (32.55) INVERSE HEAD & SHOULDER pattern formed during heavy consolidation in a FALLING WEDGE between 40 & 30 on 200dma indicates at nay moment it'll explode very heavily.
Take a risk of RS 2.50 & grab this TEXTILE sector stock keeping stop loss of 30 on a closing basis.
All set to spurt up to 58 in very short span of time.
Stock traded both at NSE & BSE : 521064.
Kamadhenu:
YOU KNOW VERY WELL THAT WE RECOMMEND FUNDAMENTAL STOCKS ONLY - 
ALLIANZ SECURITY -
BSE CODE 531400 @ 17
YES, IT IS ONE OF THE TOP 5 MERCHANT BANKERS AND FUND MOBILIZING COMPANIES.
IT`S ON A PATH TO BECOME THE BEST INFRASTRUCTURE AND RETAILING COMPANY IN MEDIUM TO LONNG RUN.
IT IS PROVIDING A FULL RANGE OF INVESTMENT, ADVISORY AND FINANCIAL SERVICES TO A SUBSTANTIAL AND DIVERSIFIED CLIENT BASE. IT IS PROVIDING ADVISORY SUPPORT FOR INFRASTRUCTURE PROJECTS LIKE NATIONAL HIGHWAY, BRIDGES ETC. THE COMPANY HAS TECHNICAL COLLABORATION WITH HOLTEC CONSULTING PVT. LTD., AN INTERNATIONAL ISO 9001 CERTIFIED MULTINATIONAL ENGINEERING AND MANAGEMENT CONSULTING COMPANY. IT WILL HELP ALLIANZ SECURITIES TO PROVIDE SERVICES LIKE FEASIBILITY STUDIES, TRAFFIC STUDIES, ENVIRONMENTAL STUDIES, TOPOGRAPHICAL SURVEYS, GEO TECHNICAL INVESTIGATION SYSTEM, ROAD CONDITION SURVEY, BRIDGE WORK, QUALITY MANAGEMENT, QUANTITY SURVEYING OF ROADS, BASIC AND DETAILED ENGINEERING.
THE COMPANY IS ALSO PLANNING TO UNDERTAKE BROKING AND TRADING ACTIVITIES SIMILAR TO BUSINESS MODELS OF INDIAINFOLINE LTD, INDIABULLS LTD AND GEOGIT SECURITIES LTD. FOR THIS PURPOSE IT HAS A SUBSIDIARY NAMED ALMONDZ CAPITAL MARKETS PVT. LTD.
EPS FOR THE CURRENT YEAR IS EXPECTED TO TOUCH Rs. 4 WHILE FOR THE NEXT YEAR IT IS EXPECTED TO TOUCH Rs. 16. LOOKING INTO IT`S FUNDAMENTALS, WE ADVISE TO BUY THIS STOCK FOR A MEDIUM TO LONG TERM TARGET OF Rs. 60-70.
TRANSGENE BIOTECH -
BSE CODE 526139 @ 113.95


THIS STOCK HAS THE STRENGTH TO CROSS 250 MARK !!
THE COMPANY HAS ONE OF IT`S COLLABORATION WITH JN-INTERNATIONAL MEDICAL CORPORATION INC. BASED AT NEBRASKA, USA TO DEVELOP AND COMMERCIALIZE VARIOUS VACCINES. COMPANY`S VACCINE MEM VAC A,C,Y & W 135 HAS BEEN APPROVED BY IEC & IBC OF USA FOR CONDUCTING PHASE III HUMAN CLINICAL TRIALS IN NIGER AND BURKINA FASO. IT HAS ALSO RECEIVED THE NECESSARY IRB APPROVALS FROM THESE TWO COUNTRIES. THE COMPANY HAS TAKEN A SPACE AT THE AGRI-BIOTECHNOLOGY CENTER IN ANDHRA PRADESH.
CHARTS INDICATE THAT CROSSOVER 115 WILL TAKE THE SHARE TO 118-119 LEVELS AND THEN IT CAN MOVE UP TO 125 ALSO.
BUY IMMEDIATELY AFTER OPENING FOR A TARGET OF BUYER FREEZE . PLEASE KEEP A STOP LOSS OF Rs. 112/-.
ONE MORE PENNY STOCK FOR YOU -
GUJARAT CARBON -
BSE CODE - 506457 @ 17
WE HAD RECOMMENDED THIS STOCK TO OUR CLIENTS AT 11-12 LEVELS.
YES, THIS IS A TURNAROUND STORY. THE RPG GROUP COMPANY HAS POSTED A NET PROFIT OF Rs. 2.41 CRORE ON A SALE OF 9.63 CRORE AS AGAINST A NET LOSS OF Rs. 1 CRORE ON A SALE OF MERE 2.60 CRORE. GOENKA GROUP IS HAVING MORE THAN 85% STAKE WHILE MORE THAN 7% ARE WITH MUTUAL FUNDS. ONLY 9 LAKH SHARES ARE WITH INDIAN PUBLIC. THE SHARE SHOULD CROSS 25 MARK VERY SOON.
Kuberdhan:GRAB THESE BLUE CHIP COMPANIES FOR MEDIUM TO LONG TERM !!!
Century Taxtile
BSE CODE 500040 @ 247.60
Century Textiles & Industries Limited, Mumbai was incorporated in the year 1897. This is a well widely diversified company. At present, the company is not only the trend setter in Cotton Textiles but has also made a remarkable presence in Yarn, Denim, Viscose Filament Rayon Yarn, Tyrecords, Caustic Soda, Sulfuric Acid, Salt, Cement and Pulp & Paper. The Company has also entered in the business of Tram Shipping and is also engaged in the activities of Properties & Land Development, Builders & Floriculture.
Century Textiles produces 100% cotton fabrics. Century's cloth covers the length and breadth of the Globe. In the highly competitive international markets, Century's cloth has carved a niche for itself. In fact, Century Fabric has charmed its way into: Austria, Australia, Bahrain, Bangladesh, Belgium, Canada, China, Cyprus, Czechoslovakia, Denmark, Dominican Republic, Egypt, Finland, France, Germany, Hong Kong, Hungary, Israel, Italy, Kenya, Kuwait, Lebanon, Lithuania, Madagascar, Malta, Malaysia, Mauritius, Nepal, Netherland, Norway, Oman, Panama, Poland, Portugal, Russia, S.Africa, S.Korea, Saudi Arabia, Singapore, Slovania, Spain, Sri Lanka, Taiwan, Thailand, Turkey, U.A.E., U.K., USA, West Indies and Zimbabwe.
This stock is must in every investor’s portfolio.
Asethi:MULTI-BAGGER for Day , Swing Traders +Short term Investors !!
Date :3rd June '05
FUNDAMENTALLY YOURS 3-in-1
TEXTILES—SOYA –AGRO
SMN Team's report on an export company ….
Yes another Adani exports---Ruchi soya--Arvind mills in the making !!!
GUJARAT AMBUJA EXPORTS
Traded @ NSE as :GAEL
JUMP JUMP JUMP !!!!
CIRCUIT AVAILABLE 20% …YES IT CAN OPEN AT RS 51…... SO WHAT TO DO …. don’t cry. (Just grab and sell on Monday)
U cant ignore this stock on fundamentals and Technically it has given a BUY signal …v don’t know where the sensex ///nifty is.. all v know is that below stock will be on fire !!
Now @ opening bell....... 47 level... if crosses will take stock nonstop to 54 , 55. 25 & there after ??
*Stop-loss :Rs. 45. 50 & forget.
*We boldly recommend , Buy 10000-25000 shares for Day Trading and earn unexpected money and then become our OLC............. !!
*Our target for this month :Rs. 80
*In coming 3 months will cross 125+
Please visit this link :http://www. gujambexports. com/divisions/index. html
It will take 5 minutes and see........ stock skyrocketing !!
| Mindboggling fundamentals : EQUITY::: 27CR BOOK VALUE ::Rs 85 MARCH' 05 …. 11. 5CR UP 40% FY 2005 ………26CR EPS 9. 6 CMP ::46. 50 P/E ==5 …ONLY !!! | Compare this with Adani exports with eps 4. 8 at rs 63 (fv re 1) p/e 14 !!! EXPECT EPS FY 2006 AT RS 14 ….. WORK OUT THE TARGET !!! SHAREHOLDING >> PROMOTERS HOLDING ……. 63% PUBLIC HOLDING……………ONLY 92 LACS SHARES !! |