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Monday, September 29, 2014

WINNING STROKES: THINK DIFFERENT
Shares of Financial Technologies Ltd (Rs.228.30) surged to Rs.235, intra-day after the company stated that it concluded renegotiation of technology supply agreement with Multi Commodity Exchange of India (MCX). There was a big crash in it's share price after the NSEL scam. The stock, should be crossing Rs.300 in the coming days. In other words, Financial Technologies should come back to focus again after a re-agreement with MCX for technology supply.
IVRCL Ltd (Rs.15.85) was recommended today as a fresh buy at Rs.15-15.50, for a target of Rs.21. The scrip surged to Rs.16.30, intra-day. The company has an order book of  more than Rs.20, 000 crore and it is implementing the CDR package. 
Pipavav Defence and Offshore Eng Ltd today closed flat at Rs.38.40. According to the media reports, the government of India is mulling various options, which include lower bank interest rates, infrastructure status to shipyards, a separate fund and also special subsidy to shipbuilders who source raw material and parts locally. It is a company whose promoter is Nikhil Prataprai Gandhi, a person having very good rapport with Senior Ambani. Moreover, Nikhil Gandhi, chairman, Pipavav Shipyard told CNBC-TV18 at the beginning of this year, that the private ship-builder is in talks with a French company for a strategic stake sale. He says this partnership is primarily aimed to bring in the technological know-how and proprietary knowledge of military hardware into the country. The promoter stake after the deal might come down to 41% from 45% initially. SAAB AB of Sweden has already a stake in Pipavav. SAAB AB and the new partner, if the stake sale goes through, will together own 15 percent in the company, says Gandhi. The company has an order book of around Rs.12, 000 crore and is trading near the 52-week low price of Rs.30.55, hence the downside is limited. Besides, Rakesh Radheshyam Jhunjhunwala and Rekha Rakesh Jhunjhunwala, respectively holds 2.11% and 1.30% stake in the company. Also,  the uncertainty over the fate of subsidy payments for shipbuilders such as Pipavav Defence and Offshore Engineering Co. Ltd, ABG Shipyard Ltd and Bharati Shipyard Ltd could lift soon, with the government looking to extend the payment timeline for a scheme which ended seven years ago.
Gitanjali Gems Ltd (Rs.65.50) which got badly hammered, was recommended today at Rs.65, just a month ahead of Diwali. This is a sure shot recommendation for  a target of Rs.79-80, in the short term. Shares of jewellery makers should rise on expectations of pick up in sales in the festive season. Meanwhile, according to the Business Standard, September 3, 2014:  Amid expectations of a turnaround in global jewellery purchases and a revival in ornament exports, Indian diamond processors participated aggressively in the De Beers’ sightholders contract registration to ensure supply of rough diamonds till 2018. “The basic raw materials remain the same. Exports cannot decline beyond a point. Therefore, raw material surety is required. De Beers processes only 40-42 per cent of the rough diamonds they mine and, hence, Indian processors should take a long-term view,” said Sabyasachi Ray, executive director, GJEPC. Mehul Choksi, managing director of Gitanjali Gems, a De Beers’ sightholder, said the current fall in exports was a seasonal trend. “Exports decline in the July-August period. But so far, this year has been good. We anticipate the economic recovery in the US will yield positive results on jewellery exports,” he said. The US accounts for 38 per cent of global jewellery consumption.
My earlier recommended Genera Agri Ltd today rose by more than 15% and closed at Rs.8.24. The intra-day high for the scrip was Rs.8.48.
The Nifty has closed with a weekly loss of 152 points in the last week. On the other hand, the level of 7850 showed buying interest on Friday, from where the Nifty reversed as was expected. Today, the small cap index was strong since the start. 

Saturday, September 27, 2014

Pipavav Defence and Offshore Eng Ltd (PDO): Seems Temporary Bottom has been Formed
Company Overview:
1. Pipavav is India‟s first world class Defence, Ship Building & Offshore Infrastructure Company.

2. Pipavav is India‟s first private company to get License and Contracts to build warships for the Indian Navy.

3. Pipavav is the first company in the country to have been approved as a partner of choice by Mazagon Docks to build frontline warships, to help them liquidate their multi billion dollar contracts.

4. Pipavav owns the country‟s first and only Modular Shipbuilding Facility with the largest Dry Dock, armored with the country‟s first fully scalable and expansion accommodating capacity.

5. Pipavav owns the country‟s only facility capable of accommodating the largest Aircraft Carriers and other strategic vessels for docking, maintenance and repair.

6. Pipavav has an undisputed upper hand in terms of Infrastructure, Team on the ground and critical Technology & Strategic tie-ups.

Caution:
(i) Margins might continue to remain under pressure due to increased raw material cost.
(ii) Commercial order book execution remains under a cloud. 
(iii) Poor shipbuilding market has resulted into deteriorating revenues and profitability over the last few quarters for PDO. Order book on paper worth around Rs.12, 000 Cr looks strong, but a large part of the order book may be vulnerable to cancellation. 
(iv) Currently the shipbuilding market is precariously placed with: a) Demand levels falling below the construction capacity, 
b) Contract cancellations and 
c) Lack of financing options for buyers. 

Profitability of PDO might therefore, be under pressure due to poor shipbuilding market, high interest cost and increasing contingent liabilities. 

However, it can be compared with big yards in Japan and Korea as it has huge infrastructure and opportunities in defense. According to Live Mint, September, 23, 2014, the government of India, is likely to extend shipping subsidy period. The said Extension is likely to benefit shipyards that are still building ships under contracts signed when the scheme was on, and even for some which have already delivered ships but awaiting subsidy 

Kotak Securities in its June 25, 2014 research report has said that the company is planning to raise around $150 million through a listing on the London Stock Exchange or a strategic stake sale. The brokerage house, holds the view that the company is expected to utilize the proceeds, to convert its second wet dock into a dry dock, by end of CY17. This is likely to double the capacity for PDO from current Rs.60 bn to Rs. 100 bn in terms of revenues. 

According to the Business Standard, September, 15, 2014:
To promote shipping industry, the government plans to come out with a ship building scheme to encourage India ship yards to bag foreign ship building orders. A Cabinet note with this regards has been prepared, minister for Road Transport and Highways Nitin Gadkari said in his conference on 100 days of his ministry. 
At the CMP of Rs.38.75, it is a sure shot BUY for the long term (18 months perspective) with a price target of Rs.90.

Friday, September 26, 2014

WINNING STROKES: THINK DIFFERENT
The Nifty as expected got support at around 7850, during intra-day--this was mentioned to the Paid Groups during the market  hours. The Nifty was trading at that time at 7870. The Nifty closed the day at 7968 up 57 points. The risk taking Nifty traders might have money in this call of mine. 
Country Club (I) Ltd (Rs.12.68), which has established 205 properties of which over 55 are owned and 175 are franchised plus a global gateway via Country Vacations and RCI affiliation of 4000 resorts for its esteemed members, has probably formed a temporary bottom, as it bounced from the 21DEMA. The candle stick chart pattern is likely to get confirmed (of Bullish formation) in the coming days. The company is (Undivided) Andhra Pradesh based, where the property prices are shooting over the roof, especially in and around Vijayawada. The next target for the scrip is Rs.15. A break out above Rs.16.25, can take the scrip to around Rs.21-22. in the medium term. Moreover, Country Club India Ltd has recently informed BSE that the Board of Directors of the Company at its meeting held on August 14, 2014, has recommended a Final dividend of 5% i.e. 10 paise on each Fully paid-up Equity Share of Rs.2 to the Non-promoters of the Company for the Financial Year 2013-14.
The following was sent to the Paid Groups during the market hours: 'Bhushan Steel Ltd has a debt of around Rs.40, 000 crores and it is planning to raise only Rs.1000 crores in consultation with lenders from sale and lease-back of critical assets. The share is still trading around Rs.106. These kinds of companies should be avoided even if they suddenly start hitting the Upper Circuits. However, speculative bets can always be taken with strict stop losses'.  The scrip closed at the Upper Circuits today (Rs.107). But as mentioned earlier, this is a pure speculative call and non-risk taking investors should not purchase such scrips. 
It seems the worst is over for PIPAVAV DEFENCE AND OFFSHORE ENG LTD. The stock covered the intra-day dips and closed flat at Rs.38.75, near the intra-day high of Rs.39.30. The company had AGM today. We could expect some positive news in the next week. Last month, the  government of India notified increase in FDI limit to 49% through approval route in the sector. The move is aimed at boosting domestic industry of the country, which imports up to 70% of its military hardware. FDI ceiling in the sensitive defence sector has been hiked from 26%, with the condition that the company seeking permission of the government for FDI up to 49% should be an Indian company owned and controlled by Indians. Further, foreign direct investment proposals above 49% will have to seek the approval of the Cabinet Committee on Security on "case to case basis, wherever it is likely to result in access to modern and state-of-the-art technology in the country," according to the press note of the Department of Industrial Policy and Promotion (DIPP). Besides, according to Live Mint, 23 September, 2014: "Uncertainty over the fate of subsidy payments for shipbuilders such as Pipavav Defence and Offshore Engineering Co. Ltd, ABG Shipyard Ltd and Bharati Shipyard Ltd could lift soon, with the government looking to extend the payment timeline for a scheme which ended seven years ago. Extension will benefit shipyards that are still building ships under contracts signed when the scheme was on, and even for some which have already delivered ships but awaiting subsidy". Moreover, chartically speaking, the stock is likely to bounce from the oversold positions, in the next few trading sessions.
Resurgere Mines and Minerals Ltd (Rs.1.59) is getting unnecessarily sold off, even as the company is contemplating to start mining in its Soapstone Mine, from the next week and is seeking government's approval for the Iron Ore Mine in Yelwan Jugai, Maharashtra and Bauxite Mine in Satarda, Maharashtra.  The Company yet to start the mining activities in  Mahalmiriya, Maharashtra . The leaseholder has failed to his commitments and company has filed litigation against the leaseholder. There is no turnover since last two years in the Company except negligible turnover from the soapstone mine of the company situated at Udaipur (Rajasthan). So, there are no movement in the Trade Payable, Creditor for Capital Goods, Capital work in progress, Inventories, Trade Receivables, Inter Corporate deposits and Mine Deposits. Company is in process for confirmation and reconciliation with the parties. Meanwhile, Chief Minister of Goa, Mr.Manohar Parrikar said that issue of granting mining leases under the state's mining policy would be placed before the cabinet on September 30.
IVRCL Ltd was asked to be averaged (or fresh positions taken) at around Rs.15, during the day. The scrip closed at Rs.15.30.
There were media reports that ABG SHIPYARD LTD will now divert the bulk of Rs.13 bln working capital loan for completing its pending orders. The benefits might also go to its subsidiary, Western India Shipyard Ltd (Rs.1.83).

Thursday, September 25, 2014

NEW SCHEME FOR TRADERS
Photo: Getting You Rich
I am thinking of coming up with a new scheme where there would be scopes for monthly returns, on a regular basis. There traders should put a minimum seed capital of Rs.2 lakhs which will be played only in FUTURES market (not options). Any amount of profit generated would be taken out of the demat account on T+3 day and shared between you and my firm, in the ratio of 50:50. 

Hence, whether the market moves up or down, the money could be generated on a consistent basis. I think in this way, 5-10% return on the capital invested could be generated, per month. Any additional return would also be shared in the same ratio. 

Moreover, intra-day trades could be done in some scrips, like today J P Associates Ltd (RS.26) fell by more than 10%. These kinds of bullet trades in ONE DAY could make up for the whole month's income. The target should be to generate a minimum of 5-10% per month. If anyone is interested to take the risk, then he/she can mail me at: suman005s@rediffmail.com.
PM Narendra Modi's 'Make in India' pitch to extend red carpet for investors
Photo: The Bricks Post
Sep 25, 2014, NEW DELHI: Prime Minister Narendra Modi will on Thursday roll out a red carpet to industrialists, both domestic and international, inviting them to make India a manufacturing hub that will help boost jobs and growth. 

Before he embarks on his high profile US visit slated from September 26-30, Modi will launch the 'Make in India' campaign at a mega event here on Thursday in the presence of leading industrialists and business leaders. 

The campaign is aimed at making India a manufacturing hub, and the government is pulling out all the stops for ensuring a smooth sailing for investors, by setting up a dedicated cell to answer queries of business entities within 72 hours. It will also closely monitor all regulatory processes to make them simple and reduce the burden of compliance. 

"The government is committed to chart out a new path, wherein business entities are extended red carpet welcome in a spirit of active cooperation. Invest India will act as the first reference point for guiding foreign investors on all aspects of regulatory and policy issues and to assist them in obtaining regulatory clearances," said an official statement.

Various prominent national and international industry leaders are likely to attend the programme to launch the campaign along with ministers, senior officials, ambassadors and opinion leaders. 

The government has identified 25 key sectors in which our country has the potential of becoming a world leader. The Prime Minister will be releasing separate brochures for these sectors along with a general brochure. 

The brochures covering sectors like automobiles, chemicals, IT, pharmaceuticals, textiles, ports, aviation, leather, tourism and hospitality, wellness, railways among others will provide details of growth drivers, investment opportunities, sector specific FDI and other policies and related agencies.

Investor facilitation cell will provide assistance to the foreign investors from the time of their arrival in the country to the time of their departure, with focus on green and advanced manufacturing and helping these companies to become an important part of the global value chain. 

The campaign will be launched at national as well as state level and in missions abroad. It will target top companies across sectors in identified countries. It also aims to identify select domestic companies having leadership in innovation and new technology for turning them into global champions. 

The initiative has its origin in the Prime Minister's Independence Day speech where he gave a clarion call to 'Make in India' and 'Zero Defect; Zero Effect' policy. 

A dedicated cell has been created through the web portal (www.makeinindia.com) to answer queries from business entities. While an exhaustive set of FAQs on this portal will help the investor find instant answers to their general queries, the back-end support team of the cell would be answering specific queries within 72 hours. 

A pro-active approach will be deployed to track visitors for their geographical location, interest and real-time user behaviour. Subsequent visits will be customised for the visitor based on the information collected. Visitors registered on the website or raising queries will be followed up with relevant information and newsletter.