Friday, April 24, 2015

Women directors: Over 2K cos yet to comply with Sebi norm
Photo: www.erewise.com
[Editor: It is surprising to see, why SEBI wants to have an women director by hook and crook and why is the honourable Supreme Court of India is so silent on the matter; which is highly "Gender Biased"??!! It seems that the SEBI has forgotten to take note of "The Directive Principles of State Policy", contained in Part IV of the Constitution of India. The Forty-second Amendment, which came into force in January 1977, attempted to raise the status of the Directive Principles by stating that no law implementing any of the Directive Principles could be declared unconstitutional on the grounds that it violated any of the Fundamental Rights. This is happening  due to, excessively freewheeling style of Indian democracy]
Apr 24, 2015: As many as 2,015 companies listed on the BSE and 263 on the NSE are yet to comply with market regulator Sebi's directive to appoint at least one woman director on the board, Lok Sabha was informed on Friday. 

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

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

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

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

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

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

Courtesy: Moneycontrol.com

DO YOU KNOW?
Regarding Rolta India Ltd, the financial website: www.moneycontrol.com which is a part of the CNBC TV18 Group, said on February 24, 2015: 
"The company's trailing 12-month (TTM) EPS was at Rs.50.68 per share. (Dec, 2014). The stock's price-to-earnings (P/E) ratio was 2.96. The latest book value of the company is Rs.187.83 per share. At current value, the price-to-book value of the company was 0.8. The dividend yield of the company was 1.5 percent".
But the same website now puts the book value as Rs.122.95 on standalone basis, while on consolidated basis it is Rs.72.55. therefore, the question is: how can the book value of a reputed company (Rolta India Ltd is older than Infosys Ltd) change so much in matter of couple of months?

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

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

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

Thursday, April 23, 2015

Signs of steel prices bottoming out a ray of hope for steel players
Photo: Live Mint
Ujjval Jauhari  |  New Delhi  April 23, 2015: Metal sector has shown some promise in the recent past despite concerns on broader indices that continue to trade weak.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Courtesy: Business Standard
Rolta India Ltd
CMP: Rs.138.90
The Company is a leading provider of innovative IT solutions for many vertical segments, including federal and state governments, defence/HLS, utilities, process, power, financial services, manufacturing, retail, and healthcare. 

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

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

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

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

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

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

Wednesday, April 22, 2015

WINNING STROKES: THINK DIFFERENT
ADAG Company Reliance Capital Ltd today closed in the green today, at Rs.425.15, which is near its day's high of Rs.428.75. The scrip was recommended today at Rs.423-424, for a target of Rs.460.If you look at the candle stick chart, you would get the signals of trend reversal.  The passage of the long-pending Insurance Bill — which has increased the cap on foreign direct investment in the insurance sector from 26% to 49% — has come as a shot in the arm for Indian insurance companies. Reliance Capital, a part of the ADAG, that has interests in insurance (life and general), asset management, consumer loans and broking businesses, stands to gain as it can now unlock value in its insurance subsidiaries by listing or transferring shares to its foreign partner. The company is among the few listed players that has significant exposure to the insurance businesses. Also, the company’s asset management business offers a good value unlocking opportunity. Japan-based Sumitomo Mitsui Trust Bank recently acquired 2.7% stake in Reliance Capital for Rs.371 crore — valuing the company at Rs.530 per share--thus this gives a huge upside from the CMP of Rs.425.15. The tie-up could help Reliance Capital in its endeavour to set up a bank in India, if permitted by the RBI.
Today was the day for my recommended Gitanjali Gems Ltd as the scrip touched Rs.48.78 intra-day, before closing at Rs.47.65 up 9.41%. The stock is expected to cross Rs.100 before the Q4FY15 results and hence accumulate the counter, on all declines. 
The Nifty as widely expected got support around 8400-8370 ranges and the 1st target of 8424 was achieved as it went upto to 8447.25 intra-day before ending the day at 8,429.70 up 51.95 (+0.62%). The next target for Nifty is 8454, which is likely to be achieved in the morning trade. 
Now there is a stock of a company which has the potential to give 2-3 times return in less than 2-years. Anyone willing to invest around Rs.25 lakhs in the scrip do send me a mail at: suman2005s@rediffmail.com. The profit will be shared in the ratio of 60:40, between you and me. This is a sure shot scrip and hence, it like your fixed deposit. 
Market Mantra
Please Click on the Photo to Expand
The Nifty which was falling continuously after a rally of 575 points since the last few days have at last found a support around 8400--8370 ranges. Yesterday, it was mentioned to the Premium Group, that if the Nifty is able to hold 8370, we could look for higher targets in the coming days. Nifty as expected bounced back from the oversold levels, today, during the intra-day trade and is now trading at 8,375.60 marginally down by 2.15  points. The Nifty had fallen 248 points last week and till yesterday the bears had an upper-hand, in absence of any fresh policy push from the GOI. In such circumstances the traders are suggested to buy Nifty futures around the support range mentioned above (corresponding to the spot levels), for a short term target of 8424-8454; where the supply is likely to come.
Today's call: Buy the shares of Reliance Capital Ltd at Rs.423.60-424, for a target of Rs.460, in the short term. The scrip seems to have got a support around Rs.420--424 ranges. The passage of the long-pending Insurance Bill — which has increased the cap on foreign direct investment in the insurance sector from 26% to 49%— has come as a shot in the arm for Indian insurance companies. Reliance Capital Ltd, a part of the ADAG, that has interests in insurance (life and general), asset management, consumer loans and broking businesses, stands to gain as it can nowunlock value in its insurance subsidiaries by listing or transferring shares to its foreign partner. The company is among the few listed players that has significant exposure to the insurance businesses. Also, the company’s asset management business offers a good value unlocking opportunity. Japan-based Sumitomo Mitsui Trust Bank recently acquired 2.% in Reliance Capital for Rs.371 crore — valuing the company at Rs.530 per share. The tie-up could help Reliance Capital in its endeavour to set up a bank in India, if permitted by the RBI. Now according to an analysis presented in a pink daily vlued on a sum-of-parts (SOTP) basis, the fair value of Reliance Capital works out to Rs.581 per share. This means there is ample space for appreciation from the CMP of Rs.423.60.
My recommended Gitanjali Gems Ltd today moved to Rs.48.70, intra-day and is  now trading around Rs.47.10. We can look for much higher targets in the coming days. 
India to register highest steel consumption growth: WSA
New Delhi | April 21, 2015: India’s steel consumption growth is likely to be the highest both in current year and the next at 6.2% and 7.3%, respectively, while all other major consuming countries such as China, the US, Japan and Korea are expected to witness a sharp decline, World Steel Association (WSA) says in its first short range outlook for 2015.

The short range outlook, prepared by the largest industry body’s Economic Studies Committee consisting of chief economists of over 40 member companies twice in a year, also forecast continued negative growth in  consumption in China in 2015 and in 2016 due to its government’s re-balancing efforts, which has a huge bearing on the real estate market.

China posted negative steel growth in 2014 for the first time since 1995. The use of steel in China shrunk by 3.3% to 710.8 MT in 2014.

WSA, whose members contribute 85% of the global steel production, sees “increased optimism” about India and forecasts India’s steel use to go up to 80 MT in 2015 and further to 85.8 MT in 2016 from 75.3 MT in 2014, up 2.2% from the previous year.

“In the developing and emerging world, we see increased optimism about India and growth in steel use in some MENA and ASEAN countries.

While these developments will not be enough to counterbalance the deceleration of China, we expect to see gradually improving growth prospects beyond 2016,” said Committee chairman Jurgen Kerkhoff.

The committee sees slower growth in steel demand internationally which is likely to average at 0.5% in the current year, down from 0.6% in 2014, to stand at 1,544 MT. However, the global average will be higher at 1.4% in 2016 to touch at 1,565 MT, it said.

The developed world, which recorded a 6.2% growth in steel demand in 2014 on the back of strong fundamentals and a firming recovery, is going to see a moderate growth in 2015 due to high base effect by 0.2% in 2015 and by 1.8% in 2016.

Meanwhile, overtaking the US, India became the world’s third largest steel producer during January-March of the current year. WSA data showed India produced 22.78 MT steel during the period compared to 19.99 MT by the US.

What is the criterion of putting the shares of some companies in the T-group for weeks?
I had earlier written many times about the "Brinkmanship" of the BSE and NSE officials when throwing stocks in the  T-group is concerned. Hence, this writing will be no different except, that I have put the same question at the end of this write up. 

You must be aware that the BSE and the NSE have a unique-group called T-group, where the stocks of some companies are kept for "Correction" not for days, but sometimes for months, so that their share price probably come to the level, which has been desired by the stock exchanges. The game is governed by some hidden protocols or no one except the stock exchanges officials or their "Friends"know, when a share of a company will come out of this Jail.

What is more interesting is that a particular stock starts to move up or fall down, much before the stock exchanges actually goes in for a formal declaration of putting in or bringing out of the T-group. Now, the question is who benefits from this exercise: obviously those who have insider information or those traders/investors who are in hand and glove, with some of the officials of the surveillance department. Isn't it? 

Look at the volume of some of the shares traded in the T-group: 
(i) Genera Agri Crop Ltd (Rs.4.62)--6843 shares
(ii) Rasoya Proteins (Face Value: Re.1; CMP:Re.0.56)--12.41 lakh shares
(iii) ABL Biotech (Rs.4.75)--0.25 lakh shares
(iii) Alka Diamond (Rs.19)--2 shares
(iv) AI Champdany (Rs.17)--100 shares
(v)  Alpha Hi-Tech (Re.0.76)--700 sahres
(vi) Birla Capital (Face Value: Rs.2; CMP: Re.0.56)--4500 shares
(vii) BKV Industries (Face Value: Re.1; CMP: Rs.3.09)--346 shares
(viii) Bhagwati Oxygen (Rs.48.60)---260
(ix) Bihar Sponge (Rs.3.02)--0.18 lakh shares
(x) Bhagwandas Metal (Rs.8.95)--200 shares and so on.....

I really do not understand the logic of keeping all these shares in the T-group (and many others whose  name do not figure in the above list), for such a long time. This move punctures the shareholders' wealth and should be treated as an economic offence (strictly speaking). 

Anyway, really, pathetic is the management of the Indian Stock Exchanges and therefore, many of the small and mid caps are still trading near their 52-week lows, even when the Nifty and Sensex is near their all-time high.

Will the stock exchanges clarify on what basis a stock is pushed in the T-group and then taken out....?

Tuesday, April 21, 2015

Rolta India Ltd: Beginning of Upmove
In February, the defence ministry selected a consortium of Bharat Electronics Ltd (BEL) and IT firm Rolta India as one of the two development agencies for the army’s Battlefield Management System (BMS), a project worth over Rs.50,000 crore. 

That was a big win for the low-profile public sector firm; the big ticket programme to provide a real-time command and control capability to fighting units is part of the defence procurement procedure’s `make’ category and will be one of the largest defence solutions to be manufactured locally.

Revenue from the much-talked-about Rs.50,000 crore battlefield management system (BMS) project, is estimated to materialize from 2017-18 (FY18).

Therefore, this order will be a game changer for the company. Besides, the scrip is one of the cheapest available out there — with FY16 price-earning multiple of mere seven. According to several analyst, with whom I spoke during the last few days, most are of the view that the stock of Rolta India Ltd, can easily cross Rs.200 mark in the coming six months, on the back of this news alone.

Besides, the company earlier announced that it has entered into an agreement with Hitachi India Pvt. Ltd. to address significant market opportunities in high growth business segments in India. The company in a release said that both companies will explore strategic business collaborations for infrastructure systems in large verticals, to offer comprehensive and seamlessly integrated solutions. 

Though the major trigger for this stock is the defense order however, Rolta Power Pvt. Ltd, a unit of Rolta Group has entered into the solar power sector. It has set up a 60 megawatt (MW) production line in Mumbai for solar photovoltaic (PV) modules and the plant has started production from September, 2014. The production line has been set up with an investment of around Rs.100 crore from the company’s internal accruals. Rolta Power expects revenue of about Rs.300 crore over the next 6-9 months from its solar PV operations. The company is testing the waters with the Mumbai unit and will expand capacity to almost 300MW in the next two to three years. The company might also consider getting into solar power production once it achieves that scale. Rolta Group is also banking on the Centre’s plan to increase investment in the clean energy industry. 

As part of this year’s budget, the government announced an investment of Rs.1,000 crore in so-called ultra mega solar power projects across the country. 

Meanwhile, K K Singh, CMD of Rolta India Ltd is confident of maintaining margin growth of around 35-36% backed by good traction seen in most of its products.


For the third quarter ended December 2014, the total income for the company was up 9% at Rs.966.8 Cr versus Rs.885.3 Cr quarter on quarter (Q-o-Q).  EBIDTA was up  6% at Rs.344.8 Cr versus Rs.325.1 Cr Q-o-Q. The EBIDTA margin came in at 35.7% versus 36.7% last quarter but net profit was  up 8% at Rs.76.56 Cr versus Rs.70.8 Cr quarter on quarter.
Axis Bank Ltd: "Instrument of Torture"
The harassment by public/private sector banks and "Gundagardi" (hooliganism) adopted by ICICI Bank to recover bad loans is known to all. But what about Axis Bank Ltd, the bank, which many say is well managed? Bloomberg once reported: 
"Axis Bank Ltd. is Asia’s best-performing bank stock in the past year as it extends loans at twice the pace of Indian rivals wary of the highest stressed assets in more than a decade". 
But wait, the data is yet to come. Axis Bank’s restructured advances amounted to 2.37%t of net customer assets as of December 31, 2014 according to data on the company’s website. Now you can calculate the amount and I am sure it will turn out to be few thousand crore. I feel I do not have to explain what, restructuring of loan means in real terms and how money is thrown under the table to get the unsecured loans passed. 

Also, restructured loans in India’s banking system represented 5.94% of total lending, data provided by the finance ministry in New Delhi shows. Now do one thing: Just find out whose loans the bank have restructured or in that group, how many individual accounts are there and how many accounts belong to corporates. 

Moreover, we know that the third largest private sector lender Axis Bank. has an exposure of Rs.50 crore to the Kingfisher Airlines Ltd that has not flown since October 2012. Did the bank get the loan back?

Now when the banks lose thousands of crore in the  name of restructuring then it seems to be normal. However, when it comes to the individual investors, private sector banks like Axis Bank Ltd looks to have all rules in place, so that maximum problem causes for the consumers and they can hold back the funds without paying any interest rates for years. 

For example, I am a nominee of the account of my mom, which has some balance (not much, only few lakhs) in my hometown in Assam. When my brother approached the bank branch there, the Axis Bank officials very reluctantly said that there has to be an in-person verification to get the money transferred to my account. I thought it is fine, as there is  nothing to hide. 

Meanwhile, I lost my PAN CARD and some other documents, so I asked my lawyer to prepare an affadavit so that I can prove my identity. 

Accordingly, I reached one of the Axis Bank branches in Mumbai (MMR). The bank officials there first said, that such claim has to be settled only by the local branch. But when I said, that it will take at least 4-5 days to reach my destination by train (I generally do not travel by air, as I have breathing problem) in Assam, they said insensitively: "You have to go there and settle the issue". 

When I further argued that the local branch has asked me to visit any branch and get the problem solved. The said officials said: "Ok, then show me ur original documents, so that we can send a scanned copy of the same for process to start". 

When I said, that I do not have the identification proof, as is prescribed by the bank and have the court affidavit, they said they cannot help; as "Affidavit is not a valid document" according to RBI rules, as it is only a "declaration". When I said, "Do, you want to say, that I bluffed (told lies) infront of the court". They said, they cannot consider only the documents mentioned by the RBI to be used as ID proof or wait for sometime, till new PAN card comes. I even asked if it is possible that a person identifies me in Mumbai.....but alas everything fell on their deaf ears. Such is the nature of their high-handedness, these banks show when you give your money to them.....Huh!! 

Then I again approached the local branch from Mumbai (I called a guy there), and requested him to see if it is possible that my brother would go to his AXIS Bank branch with my Voter ID card and I would present the duplicate here in Mumbai--they are at liberty to cross check, both the original and duplicate at both the ends and start the procedure. He said why I do not want to place the original in Mumbai. I said, "It will take some time to reach the ID card from Assam to here in Mumbai and also there is a chance of the card getting lost on the way". 

But then again nothing could melt the ice--the bank official surprisingly said, "No this is not possible, you need to be present in front of the Bank officials with ID PROOF". When I said, why are you harassing me, when the money is mine, he said "We have to go by the rules". 

Now my question is: if such is the attitude of any bank, when a person of my stature is concerned, then you can understand how they deal with innocent (and illiterate) bank account holders. 

I do not think, after this kind of incident, it can be said that AXIS BANK is the best performing bank in India. It is one those banks, who will hold your money for their own interest, by showing all sorts of rules. Remember, they have not been paying any interest on my matured Fixed Deposit, since 2012. Nor they have sent me repeated reminders that my money is lying with them. But I am sure they have used my money for lending.  

Also, I will now have to wait till my New PAN Card, Driving License, etc comes or my brother sends my Voter ID Card from Assam, to my home address here; with a caveat, that there is ample chance of getting that lost on the way. 

Anyway, I have asked my lawyer to find out if any legal action can be taken against the bank, apart from filing a law suit for adequate compensation (for the loss of time and energy).

Hence, I oppose any move by the government to have a bank account, compulsorily. It is my wish, whether I should have a bank account or not--why should the government force me for the same...? I feel someone should file a PIL in any higher court, against any such move to make bank account, a fundamental criterion to open a demat account.

Therefore, when you deal with private or public sector bank, be blunt to deal with them firmly; so that they understands that they are playing with  your money and cannot show too much "Dada-giri". Or in other words, they are doing business with our money and hence they need to be dealt accordingly. 

Most of these banks are "The Instruments of Torture" and therefore, the government should make rules so that the rules are framed in a way, so that there is minimum trouble for the account holderes. 
DO YOU KNOW
Deutsche Bank has raised its investment recommendation on software firm Rolta India Ltd bonds to BUY from hold. The stock started to fall from around Rs.177, after a research report alleged irregularities in its financials; even as the company termed it as "malicious" attempt to pull down its stock price.

Deutsche Bank raised its investment recommendation on the software firm Rolta India Ltd bonds to buy from hold a day after the company denied allegations made by short-seller Glaucus Research about fabricated capital expenditures. Deutsche said it agreed with the company's response that Glaucus had made factual errors in its report and the report had very little new information.

The risk taking investors can therefore buy the scrip of the company at Rs.134-135, for a short term target of Rs.142.

Friday, April 17, 2015

India’s steel demand seen growing as Modi seeks faster investment
Steel demand is expected to rise at the fastest pace in four years, benefiting top producers including Tata Steel, SAIL and JSW Steel
Photo: Commodity Online
Mumbai/New Delhi, April 16, 2915: India’s demand for steel, an economic growth indicator in Asia’s third-largest economy, is expected to rise at the fastest pace in four years, benefiting top producers including Tata Steel Ltd, Steel Authority of India Ltd (SAIL) and JSW Steel Ltd.

Demand may expand by about 5% this year to March, according to the average of eight estimates from industry executives, government officials and analysts surveyed by Bloomberg, from 3% in the previous year. Sales will be boosted by a possible revival in stalled projects and home and vehicle purchases after India’s central bank cut interest rates.

Higher demand for the alloy will help producers cope with a glut created by record imports, and the lowest prices in four years. India’s economic growth will surpass China’s for the first time since 1999 in the year to March, according to the International Monetary Fund (IMF).

“Lowering of interest rates will cut capital costs and push up investments,” T.V. Narendran, managing director at India’s biggest producer Tata Steel, said at a conference in Mumbai on Thursday. “It should also drive consumption of homes and cars.”

Reserve Bank of India (RBI) governor Raghuram Rajan lowered rates by 25 basis points each in two separate unscheduled cuts in January and March, prompting lenders to pass on benefits to consumers. The move is expected to boost demand for cars, homes and consumer durables. A wider-than-expected drop in the nation’s wholesale prices reported on Wednesday further boosted the odds of a third interest rate cut from the central bank this year.

Bank debts

About $392 billion of infrastructure projects, more than the size of Thailand’s economy, were stalled as of early March, government data show. That has left in its wake stressed bank debts that can jump to almost 13% of the total loan advances, the highest level since 2001, India Ratings forecasts.
“There are issues that need to be addressed for a sustainable rise in steel demand and tackling the debt issue at steel factories is one of them,” said Rita Singh, chairperson at Mideast Integrated Steel Ltd. “We should also look at what the country’s needs are going to be and not just go on building capacities.”

Prime Minister Narendra Modi is seeking the opposition’s support to enact a law that speeds up land acquisition, one of the biggest hurdles facing industrial projects.
Signs of an economic revival led Moody’s Investors Service last week to raise India’s credit outlook to positive from stable.

India is planning to triple its steel production capacity to 300 million tonnes in 10 years, steel minister Narendra Singh Tomar said.

“All the levers for a surge in steel demand are there and very soon consumption will take off, especially in building infrastructure like ports, roads and power plants,” said S.K. Dey, deputy general manager at state-owned engineering consultant Mecon Ltd. “This will help in the utilization of new steel making capacities coming up.” Bloomberg

Courtesy: Live Mint

Thursday, April 16, 2015

Canada to Supply Uranium to India for 5 Years Under Landmark Deal
[EditorAfter an absence of 40 years, Canada is once again selling uranium to India. The sanctions were a response to India’s unauthorized use of Canadian uranium to produce weapons-grade plutonium in the 1970s. The deal is a good one for Saskatoon-based Cameco Corp, which has won a lucrative five-year contract to supply more than seven million pounds of uranium concentrate to one of the few major countries intent on expanding its nuclear generating capacity. On May 18, 1974, India exploded an atomic bomb, leading Ottawa and Washington to impose the trade curbs and spawning the creation of the Nuclear Suppliers Group, which joined in the embargo and now numbers 48 countries.

The restrictions were eased in 2008, after New Delhi reached a deal with Washington to continue a moratorium on tests and to accept conditions set by the International Atomic Energy Agency to ensure imports would not be diverted to its weapons program. India PM, Narendra Modi, might take the single-handed credit without even mentioning the role of the previous UPA government. 

Now, tell me how much foreign exchange, will be lost due to this mindless deal? Moreover, since the material will be imported in huge quantities, this will create further pressure on the INR. Moreover, development of more and nuclear reactors for generation of power, will help a specific group of foreign companies. This deal will help the Canadians more than the Indians. India needs to develop, its renewable energy capabilities, instead of running after hazardous, nuclear power...]
OTTAWA, April 16, 2015:  Canada on Wednesday agreed to supply 3,000 metric tonnes of uranium to energy-hungry India from this year under a $254 million five-year deal to power Indian atomic reactors, four decades after bilateral cooperation in this sector was frozen over India's nuclear programme.

The agreement for uranium supply, which came two years after protracted negotiations following the 2013 civil nuclear deal between India and Canada, was signed after comprehensive talks Prime Minister Narendra Modi had with his Canadian counterpart Stephen Harper.

Cameco Corporation will supply 3,000 metric tonnes of uranium over five years to India at an estimated cost of $254 million and the supply will start from this year, a top official said.

Canada is the third country to supply uranium to India after Russia and Kazakhstan. The supplies will be under the International Atomic Energy Agency (IAEA) safeguards.

Canada banned exports of uranium and nuclear hardware to India in the 1970s after it was alleged that New Delhi used Canadian technology to develop a nuclear bomb.

The two countries put this behind them with the Canada- India Nuclear Cooperation Agreement that took effect in 2013.

At a joint press conference with PM Harper, Prime Minister Modi said, "The agreement on procurement of uranium from Canada for our civilian nuclear power plants launches a new era of bilateral cooperation and a new level of mutual trust and confidence."

"The supply of uranium is important as India is keen to have clean energy. The world is worried about global warming and climate change. We want to give something to humanity through clean energy. It is costly but we are doing this for humanity. For us, uranium is not just a mineral but an article of faith and an effort to save the world from climate change," he said in response to a question.

PM Harper said, "There have been unnecessary frosty relations for too long (between the two countries) and it is time to move ahead."

Mr Modi, the first Indian Prime Minister to visit Canada in 42 years, said, "The deal will enable India to power its growth using clean energy."

Canada is the second-largest producer of uranium globally, with exports valued at over $1 billion per year.

PM Modi said the resource-rich country has the potential to be a key partner in India's national development priority.

"This is a growing relationship. Trade potential between our countries is enormous. Prime Minister Harper and I are committed to establish a new framework for economic partnership," the Prime Minister said, adding, "Ours is a natural partnership of shared values."

"Our relationship had drifted in the past. In recent years, Prime Minister Harper's vision and leadership changed the course of our relations," PM Modi said.

Courtesy:  NDTV Ltd

Wednesday, April 15, 2015

Rasoya Proteins Ltd: Update
Rasoya Proteins Ltd is likely to have Low Levels of Operations in Solvent Extraction, due to inadequate supply of Soya Seeds till September, 2015, when the new crop will come up. 

Due to this adverse situation, the company has decided to minimize its operations of its solvent division and oil refinery division, to cut down on the operating costs. This will though reduce the turnover, but the company is expected to show some profit in the following quarters. 

Moreover, in absence of the full-scale operation in the main Solvent Extraction Plant and Oil Refinery Division, the company has started to focus more on the export market. Last year the export turnover, was around 30% of the sales and in FY15 too, the management hopes, to at  least maintain the same, if not increase it. 

However, the silver lining is that: inadequate supply of seeds has not affected the manufacturing activities of the Fish Feed Division and Power Lecithin Division--both will be EBIDTA accretive in the coming days. The company has already started to revamp its operations in its Aqua Feed Division. 

Moreover, the company has started to widen its marketing network from Andhra Pradesh to other states such as West Bengal and Orissa. 

In such a situation, the investors are suggested to buy this sure shot hot pick at the CMP of Re.0.55 (NSE) and Re.0.57 (BSE) and keep holding till September, 2015 for some superb gains. I am expecting a target of Rs.5 (which means more than 8 times the CMP of Re.0.55/0.57) by the end of September, 2015. 
DO YOU KNOW?
Coal is one of the essential fuels for any cement plant. Jaiprakash Associates Ltd (Rs.26.20) had been procuring the coal to meet its requirements through various sources including import and was also developing Mandla North Coal Block in the State of Madhya Pradesh as an additional source.

However, in an unfortunate event, the Hon’ble Supreme Court of India cancelled various coal blocks including the aforesaid Mandla North Coal Block and ordered auction of the same. 

But, in the recently held e-auctions, Mandla North  was won by Jaiprakash Associates Ltd, at Rs. 2,505. This will give an additional leverage to the Jaiprakash Associates Ltd. 

Moreover, with the CPI coming down, the chances of another round of Repo rate cut is on the cards; this gives positive vibes for the shares in the construction/real estate and power sector, apart from other like Automobile. My old recommendation in the real estate space, Anant Raj Ltd (Rs.46) is already up more than 5% in today's morning trade. 
India's retail inflation hits three-month low, scope for rate cut
Mon Apr 13, 2015: India's consumer price inflation unexpectedly slowed to a three-month low in March, which could encourage the Reserve Bank to deliver another off-cycle interest rate cut to boost economic recovery.

Retail prices rose 5.17 percent year-on-year last month, slower than a 5.5 percent annual rise predicted by analysts in a Reuters poll and a 5.37 percent gain in February.

Food prices were up 6.14 percent year-on-year in March compared with a revised 6.88 percent rise a month earlier.

With inflation below the 6.0 percent upper end of the central bank's target range, some analysts expect Reserve Bank of India (RBI) chief Raghuram Rajan to surprise investors with another rate cut.

The central bank has cut interest rates twice this year at unscheduled meetings, but kept its key repo rate on hold at 7.50 percent last week, waiting to assess inflation pressures and give commercial banks more time to cut lending rates.

"This has raised the possibility of an interest rate cut outside the scheduled review cycle for the third time this year," said Shilan Shah at Capital Economics, who expects a 25 basis point cut before a scheduled policy review on June 2.

Before the data, many economists were expecting the RBI to keep rates unchanged for now, but cut once more in late June.

During the last few weeks, unseasonably heavy rains in north and central India have damaged crops, leading to a rise in vegetable and foodgrain prices.

The RBI said last week that it expects consumer inflation to stay at current levels in the April-June quarter, helped by weak oil and food prices, but rise to 5.8 percent by the end of the year.

Globally, central banks are fighting to contain concerns over deflation, as prices continue to fall in most eurozone countries, Japan and China.

India, however, is one of the brighter spots, with the economy picking up after two years of sub-par growth, reflecting in part a recovery in business confidence since Prime Minister Narendra Modi swept to power with a landslide election victory last May. 

(Reporting by Rajesh Kumar Singh; Editing by Douglas Busvine and Tom Heneghan)

Courtesy: Reuters
Jaiprakash Associates Ltd: Buy in Bulk
CMP: Rs.26.10
You must have seen the recent media news that Jaypee Group is in talks with Heidelberg Cement, and Sajjan Jindal-led JSW Cement, to form a joint venture which will control the majority of its cement plants as part of an ongoing exercise to reduce debt. Jaypee is open to becoming a junior partner in the proposed venture with a 49% shareholding but may even go down to 40% thereby ceding management control and a majority stake, added the report.

As per the report, the rationale behind the exercise, is to significantly bring down Jaypee's consolidated group net debt in one shot.

Moreover, JSW Energy Ltd (JSW) Ltd and Jaiprakash Power Ventures Ltd (JPVL), announced the signing of binding memorandum of understanding (MoU), for the 100% acquisition by JSW of two (1,091 MW Karcham Wangtoo project and the 300 MW Baspa II project from) operational plants of JPVL. 

The sale of the two hydropower plants was part of the Jaypee group’s strategy to reduce debt by selling assets. In the last two years, the group has sold assets worth Rs.21,000 crore.

The Competition Commission of India (CCI) has already approved the sale of two of Jaiprakash Power Venture Ltd.’s hydropower assets to JSW Energy Ltd. JSW Energy had approached anti-trust regulator seeking clearance to complete the Rs.9,700 crore deal with Jaiprakash Power Ventures.

This is expected to have a rub-off effect on the shares of Jaiprakash Associates Ltd, especially when the NSE mid-cap index is near all-time high. 

Meanwhile, the government of India ha approved two electronic chip manufacturing plants in February 2014 at a total cost of Rs.63,410 crore. One plant will be set up by Jaiprakash Associates Ltd, with IBM and Tower Semiconductor of Israel as partners. According government sources, both the consortium are still working on their financial arrangements.

Besides, easing food prices pulled down retail inflation in March to a 3-month low of 5.17% despite unseasonal rains, renewing industry clamour for further cut in RBI policy rate to boost growth.

The World Bank has predicted a GDP growth rate of 8 per cent for India by 2017 and said that a strong expansion in the country, coupled with favourable oil prices, would accelerate the economic growth in South Asia.


In India, GDP growth is expected to accelerate to 7.5 per cent in fiscal year 2015/16. It could reach 8 per cent in FY 2017/18, on the back of significant acceleration of investment growth to 12 per cent during FY 2016-FY 2018, the bank said in its semi-annual report.

Now, with the interest rate on a downward trajectory, power tariffs remaining attractive in power-starved Northern and Southern India until FY17 and the coal costs being benign, the shares of Jaiprakash Associates Ltd (Rs.26.10) and Jaiprakash Power Ventures Ltd (Rs.10.82) are expected to move upwards, steadily. The investors are therefore, suggested to buy the stocks of the company at the CMP of Rs.26.10 and keep holding. 

Monday, April 13, 2015

MARKET MANTRA
Genera Agri starts farming operations in Tanzania
Nifty  has started moving up after making a low of 8269, almost a week back. It has bounced back 518 points after witnessing a huge downward move of 850 points in the month of March, 2015. Mid-cap and Small-cap indices have outperformed broad market during the current rally and are trading at new high. The traders are suggested to play Nifty_Futures according to the demand and supply zones. However, the short, medium and long terms trends are all up and hence this market is BUY-on-DIPS. 
Today's Call: Buy Jaiprakash Associates Ltd at Rs.26.25-26.30 for a short term target of Rs.31. Both Jaiprakash Associates Ltd and Jaiprakash Power Ventures Ltd (Rs.10.86) are expected to do well as the Jaypee Group has brought down the debts to some manageable levels. Both of them therefore, becomes a "Screaming Buy" at the CMPs. Jaiprakash Associates (JAL) would be a key beneficiary of a stable government being in place on the back of progress on asset monetisation and anticipated infrastructure and economic recovery.
Meanwhile, the Supreme Court has granted J P Associates Ltd a week to pay the last installment of Rs.250 mln out of a fine of Rs.1 bln that was slapped on the company for fraudulently obtaining environmental clearance for its cement unit.
Accumulate Rasoya Proteins Ltd at Re.0.58, for a short term target of Rs.2-3. Since both the mid and small cap indices are outperforming the broader market, these kinds of stocks are likely to give one of the best returns in the short term. 
With the gold prices showing buoyancy, the Gems and Jewelry stocks are expected to do well in the coming days. Gitanjali Gems Ltd has already given a break-out above Rs.46.30. The next logical target seems to be Rs.49, which might be achieved within a couple of days. Stay invested. Another share in the same space, Renaissance Jewelery Ltd today touched Rs.110 and is now trading at Rs.106.35 up 7.20%.
Meanwhile, Genera Agri Ltd hit the buyer freeze in the BSE at Rs.4.91. The scrip will be moving towards Rs.10-11 in the coming days. 
Karuturi Global Ltd today touched Rs.1.82 and is now trading at Rs.1.79 up 4.07%. I am bullish on this counter due to some recent positive developments.