Union Budget 2013 ~ India is a BLESsed Economy

Felt like a stand up comedian as had the house of 400 well informed investors in splits !  when I address and interacted with them on Budget Day Feb 28 evening itself at a Budget Review Event jointly hosted by AIVF,JITO and the BSE Brokers Forum at KC College Auditorium

Gaurav Parikh on Dias before his Humorous Address to 400 in the audience On Budget Day Feb 28,2013

Covered this on our Company website as below :

SCRIP STANDPOINT ~ A View

Slide Share ~ The Presentation at the Event to support the Address & Interaction

Union Budget 2013 ~ India is a BLESSsed Economy…

Enjoyed on the Budget Day Evening itself Feb 28,2013 addressing and interacting with a well informed audience of 400 on the Union Budget 2013 ~ on how the Government plans to make Money to tackle deficits and how we can ! ~ plan to host a few thoughts of my presentation on the company website www.jsalphaa.com and on this blog ~ covered how FM has cleverly and conveniently balanced the budget ~ also covered  the Forward Trends in Equities &  Indices & Gold & Exchange Rate & how Debts & Deficits are forcing Disinvestments & how the malaise continues on our exchanges and it will be some time before the retail investor comes back,if at all ~ spoke on Liquidity,Sentiment,Momentum and Valuation

Felt more like a Stand Up Comedian as the audience were in splits on some of the budget and stock market situations I presented…

Union Budget 2013 Review Event

The Sad Reality is that Investors in Power  Generation Stocks,particularly Reliance Power and Adani Power have just been Blasted twice over

~ on one hand,a macro risk beyond their control,  they are seeing their Electricity Bills zoom without actual increase in number of Units consumed as Power Prices hit the roof 

&

~on the other hand, a micro risk they could have avoided,they are seeing their Investments in these Power Stocks going “Poof” as they have eroded dangerously in value

What Happened to India’s Power Industry that was the darling just a few years ago ! and saw the likes of Reliance Power (RPL) and Adani Power (APL) shamelessly exploit Investors with hugely  out priced and obscene Big Ticket IPOs !?~ RPL asked us for Rs 450 per share and APL for Rs 100 a share ~ and we suckers gave it to them ! while Promoters actually subscribed to nearly all their controlling stake at par Value of just Rs 10 ! ~ Today we cry for being suckered seeing RPL sink to Rs 88 and APL to Rs 42 ! 

The Power Sector Woes lie in the huge spiralling  cost of Imported  Thermal Coal  from Indonesia.In October 2011  Indonesia actually ripped the Indian Power Industry apart by changing it’s Coal pricing Method and aligning prices to international levels and  significantly imposing Coal Exports Restrictions and Increasing Royalties on Coal Mining and Taxes on Coal Exports and in fact even announcing banning Exports by 2014

Thermal Coal Feed Power Plants are simply unviable now if Power Prices continue to be regulated heavily and full costs are not passed on to the Consumer~ However despite Regulation,Inevitably Electricity is going to cost More and More

In July and August 2009 I had blogged comprehensively on the Adani Power (APL) IPO at Rs 100 after thoroughly reviewing it’s Prospectus  ~ It had entered into 15 year Coal Supply Contract at even then a low US $ 36/t with its parent Adani Enterprise (AEL) ~ AEL in turn was to import the Coal from it’s Bunyi Mines in Indonesia ~ The Price of Coal has shot up nearly  three times from this level of the contracted US $ 36 to levels of US $ 100 ~ in 2010 APL was introduced into F & O and was Rs 125 then ~ Today it has sunk to a low of  Rs 42 (FV Rs 10)

Adani Power Struggles on Listing today…saves face by closing at Issue price of Rs 100

Thought I should reproduce my brief response to Salil’s query on BHEL for wider and easier visibility reading

“Salil, BHEL was my top pick core pick eight to ten years ago ~ I had it in every clients portfolios picking it in the early Hundreds ,when FV was Rs 10,and even getting the 1:1 bonus advantage in June 2007 ~ Power Sector was taking off big time and BHEL was beautifully positioned to supply the Power Plant Equipments ~ It’s order books were overflowing ~ The last Quarter in the FY was always brilliant ~ Clients made good monies and many yet hold this scrip ~ However BHEL has belied great expectations after that brilliant run ~ BHEL was simply unable to ramp up capacities fast enough to cope with the order buoyancy ~ even our govt was frustrated and gave BHEL an ultimatum or else they would route orders to overseas competitors ~ this inability meant cap on some really exciting growth that was simply beckoning

However FY 12 has not been so bad ~ Net is Rs 7087 crs giving an EPS of Rs 29 on the Equity of Rs 489.52 crs ~ From October 2011 the Equity Share FV is now Rs 2 from the earlier Rs 10 ~ Reserves are @ Rs 25000 crs giving a Book of Rs 104 ~ Dividend is 320% (up from 311.5% in FY 11)and with the Share Price currently @ Rs 220 the Relative Earnings and Book Multiples are fairly attractive at 7.5 and 2.1 respectively ~ Market Cap is @ Rs 54000 crs ~ but a year ago was over Rs 100000 crs ~ The Share Price has slid dramatically by over 50% inside one year and at Rs 220 it is near it’s recent 52 week lows of Rs 197 ~ The Shareholder Set is strong with 67.72% held by the Government and 13+% held by FIIs ~ The Government had intended to divest 5% and BHEL had even filed a DRHP with SEBI in September 2011 which it has since withdrawn

The Power Sector is plagued with Project Implementation delays on account of delays in procuring the crucial assured Coal & Gas Feed committments,non closure of Financial Outlays and delays in deliveries of Plant Equipments ~ BHEL may just have got a breather to catch up ! ~ ~ FY 13 should see Sales crossing Rs 50000 crs and PAT moving towards Rs 10000 crs ~ BHEL is also enthusiastic on it’s diversification plans in Transportation,Oil and Gas,Solar,Nuclear and Water and now has ramped up core manufacturing capacities to over 20000 MW

BHEL looks quite interesting @ Rs 220 ~ Beta is 1.18 ~ Trading Volumes are good for this Sensex and Nifty Constituent Scrip

Cheers,”

NHPC @ Rs 18 ~ From Defensive to Default ? despite Dividend Declaration !

Fitch has just downgraded NHPC ~ The Long Term Issue Default Rating (IDR)  Outlook has been revised to Negative from Stable while Fx and Local Currency IDR rating has been reaffirmed at ‘BBB-’

Chart source : www.bseindia.com

NHPC ~ From Defensive to Default ?

I had rated NHPC as a Defensive Scrip  with a Long Term Potential to breakaway into a Higher Price Zone~ The Share Price Range has been fairly narrow over the year with 52 Week High and Low being Rs 26 and Rs 17 respectively ~ Clearly NHPC continues to struggle under Operating Restrictions and Limitations

86.36% of the Equity of Rs 1230o crs is held by the Government and in FY 12 it earned a net of Rs 2772  crs giving an EPS of Rs 2.25 ~ The Networth is Rs 26354 crs at March 31,2012 with Reserves at Rs 14054 crs giving a Book Value of over Rs 21 ~ Dividend of 7% has been declared for FY 12 ~ In FY 12 the Interest Expense was Rs 342 crs and Tax Paid was  Rs  745 crs

The Auditors have not qualified the Report but have made a reference to several issues as below

• Accounting of sales on provisional basis pending determination of tariff by CERC
• Capitalization of Corporate Office, Regional Office, Survey & Investigation and other general overhead expenses of construction projects and
• Referring the issue of capitalization of expenditure incurred for creation of assets (enabling assets) not within the control of the company, to Expert Advisory Committee of the Institute of Chartered Accountants of India (EAC of ICAI).

Electricity generation is the principal business activity of the Company. Sales have been recognized as per tariff notified by Central Electricity Regulatory Commission (CERC). Tariff for the tariff period 2009-14 has since been fixed in respect of all the 12 Power Stations. However tariff of Teesta V Power Station is provisional pending approval of revised cost of the Project.

Out of the Initial Public Offering (IPO) proceeds of Rs. 6039 crs made during FY 10, sale proceeds of Rs. 2013 crs was paid to Ministry of Power, Govt. of India and Rs. 4026 crs was retained by company. Out of this Retained Amount Rs 2215 crs  has been utilised up to March 31, 2012 for re-coupment of capital expenditure already incurred from internal accruals on the projects specified for utilisation and  Rs. 1772  crs has been invested in bank deposits as per extant investment policy of the company and Rs. 39 crs  recouped for meeting IPO expenditure.

The IPO Pricing in 2009 was high at Rs 36 and I had opined in a blog post  that NHPC would be available @ Rs 25 after Listing ~ Check the Blogs Post Links below which feature NHPC in detail or passing reference ~ In Three Years NHPC @ Rs 18 has seen a 50% Erosion from IPO Pricing ~ The Risk is that it may fall yet further given the tough dues recoverability scenario ~ especially of incremental tariff and other recoverables now allowed with retrospective effect by CERC    

Clearly Fitch has seen the Recognition of Income before Actual Billing and the Capitalisation of Expenses as Red Alerts to possible trouble ahead for NHPC ~ NHPC  has demonstrated good Corporate Governance in informing the BSE and NSE of the lower Fitch Outlook though I’m sure they would have some arguments on this !

Interesting case ~ NHPC

Will it remain a fairly listless and range bound scrip in the Rs 17 to Rs 25 range or will it move to par value of Rs 10 if States Default or simply Refuse to pay when Billed the additional Tariff and other Recoveries from beneficiary states like Water Cess and Fx Rate Variation and Regional Load Despatch Centre Fees and Charges ?

NHPC  is on SCRIP WATCH now ! For me the Longer term Play envisioned has simply got more  Longer as Rumblings sound like potential Tumblings in the short and medium term !

If You’re holding NHPC,maybe you ought to consider a switch after taking the dividend of 70 paise in an effort to recover any loss rather than holding out for the Long Term ~ as that 3 years just got longer to atleast 5 years !   

Anyone interested in Shorting NHPC in the F & O !? ~ the Market Lot is 9000 shares and you may find some difficulty in finding depth in the Option Contracts where currently the Premium is @ 55 to 60 paise for a June Expiry at Strike Price Rs 17.50  ~ The Future is at Rs 18

Or you want to go Long ! ? Now that would be Courageous !

What do you smart blog readers think will be the NHPC Price Trend in 2012 and 2013 !? 

_____________________________________________________________________________

From IPO in August 2009 to date, NHPC has figured on my horizon and therefore blog posts several times ~ in detail or in reference ~…check out the Blog Post Trail  below

Your Equity Approach & Strategy will or should depend on whether you want to make money or don’t want to lose any !…NHPC or NTPC ?…or Delta?….New Listing L & T Finance is a safe bet for both objectives

Friday, August 12th, 2011

Performance of the BSE Sector Indices in 2011/12  and to date is quite Interesting ….What provoked this post is Sameer’s counter argument in my earlier post…he is bullish in the short term,citing the favourable upmoves in the Pharma,Cement and Auto Sectors…I’m looking at the Bigger Picture and I’m not so excited really as Macros are clearly playing up and this Government is unlikely to push big ticket reforms…we need to await 2014 General Elections,which I fear may yet again through up a fractured verdict…but I hope with a more reform friendly and decisive coalition !

Have a Look at the Performance of the BSE Sector Indices in 2011/12 and to date…Quite Interesting…The Reds & Greens signal fall or rise/holding up from over a year ago  

The Alltime High & Low Columns are quite revealing

• FMCG,Healthcare and Auto Indices  have registered All time Highs this Month…with consistent Wealth Creation in the 21st century in FMCG and Healthcare while a huge surge in the last four years in the Auto Sector
• Quick and huge  wealth destruction in the IT sector in 2000/2001,the Metals and Power Sector inside Ten months in 2008 between January and October and in the Realty Sector between Jan 2008 and March 2009  

PERFORMANCE OF BSE SECTOR INDICES AS ON APRIL 26,2012

• IT  shows a Drop,but TCS has outperformed Infosys ,which has slumped and the latter holds 48% weightage in the Index ! against just 29% by TCS !…this needs to be rectified by BSE rightaway…more so as the Market Cap of TCS is Rs 233301 crs against just Rs 135415 crs of Infosys !….The Index tracks the share price of  10 Companies with 88% weightage of just three …Infosys,TCS and Wipro …Other interesting constituents are Oracle Finance and Financial Technologies 
•   Techk comprises of 30 IT,Telecom,Media and Communication Companies and has mirrored IT fall
• FMCG has been the years Darling with ITC (55% weightage) and HUL (18% weightage) outperforming to allow the Index to hit Alltime Highs…11 Companies constitute this Index…Interesting ones are the two Kingfisher Group Companies,United Spirits and United Breweries…. and Tata Global (spotted this at Rs 80 late in 2011) and the huge 2010/2011 winner Jubilant Foods (Dominoes Pizza)
•  Consumer Durables has heavyweight Titan with 51% weightage in the Index…It’s been a flat year
• Metals has seen a bad year…In fact this Index has slumped the highest @ 35% over last year…75% Index weightage is in Five scrips led by Tata Steel with 22% followed by Coal India,Jindal Steel,Sterlite and Hindalco
• Oil & Gas too has seen a bad year…Reliance with a 54% weightage and ONGC with a 22% weightage aggregate a skewed weightage of 76% in the Index
• Capital Good Giants,India Proxy Larsen and Toubro and BHEL have a weightage of  54% and 16% respectively in the Index that monitors the share price of  17 companies,that also include Siemens,Suzlon,Havells,Thermax,ABB and Punj Lloyd…it’s been a shocking year for both,Larsen and BHEL on the bourses and the steep fall has unnerved even the aggressive Investors
• Healthcare has held up well in 2011/12…19 Healthcare and Pharma Companies comprise the Index with Sun Pharma (18%),Dr Reddys (17%) and Cipla (12%) leading the weightages
• 14 Banks comprise the Bankex with the top three weightages given to HDFC Bank (26%),ICICI Bank (25%) and State Bank of India (16%)…it’s been a very challenging year for the Banks given the slowdown in the Economy and high interest rates affecting credit offtake…the rising level of NPAs remains a threat
•  PSU ~ The Index has 60 PSU Companies in it ! with Coal India and ONGC leading at 14% each in weightages followed by State Bank of India with 9% and NTPC with 8%…Interestingly these 60 Comnpanies have an aggregate  Market Cap of Rs 1561821 crs currently….and this smartly and significantly  constitute nearly 26%,that’s over one fourth of the Total Current Market Cap of BSE of Rs 6108734 crs 
• The Auto Index covers 10 Companies across the sector spectrum of leading four HMV and LMV wheelers & Two Wheelers,Battery (Exide) & Engine (Cummins) Manufacturers and Tyres (Apollo)…Aggregate 86% weightage is given to top Five Vehicle Players led by Tata Motors with a 31% weightage .Interestingly and encouragingly too,this Index has held up well,largely due to outperformance by Tata Motors…However Index aggregate Market Cap is below 5% of total market cap 
• Realty Index tracks the share price of 12 realty companies…DLF lead weightages with 33% followed by Unitech (17%),Oberoi (10%) and HDIL (10%)…Shobha,Godrej Properties,Phoenix,D B Realty are some others in this Index…it’s continued to be a sliding year for this sector that’s been saddled with huge crippling debt,huge inventories and delayed projects….but how much more lower can it go !…search for contrarion winners in this sector over the long term…had spotted Orbit at Rs 20 + late last year and early this year…Price has doubled to @ Rs 48 currently…and even Indiabulls Real Estate at Rs 45 + levels after demerger of Indiabulls Power….it surged to Rs 80 levels before reacting now to Rs 62 …But Both do not form part of this Index 
• Power Sector is battling  Source Feed Supplies of Coal and Gas that’s crippling Operations and resulting in lower output and capacity underutilisation….Implementation of both,Public and Private Mega Projects too has been delayed for a host of reasons …This Index tracks 19 companies in the Sector that cover Generators,Transmitters and Distributors as also others that supply Equipment like BHEL which has the second largest weightage of 15% …NTPC with a 20%  leads the weightages….Incidentally Private Power Players like Reliance Power  and Adani Power have a weightage of 4% and 3%  respectively….Given the Challenges faced,the Year has been quite unkind to this Sector…the Index has slumped @ 27% in the past year…anyone for a Contrarion Bull Play here !? 

Your Equity Approach & Strategy will or should depend on whether you want to make money or don’t want to lose any !

So if you are a guy who sweats at falls you ought to be taking less risk and looking at the ‘N’o or Low risk ‘N’s…NHPC @ Rs 25 and NTPC @ Rs 175 

But if you enjoy or indulge in Equities hoping for the windfalls,then perhaps you should chase Delta @ Rs 98…Rakesh Jhunjhunwala increased his stake today in this Jaidev Mody company

However what may interest both set of Investors..those not willing to risk capital or those willing to aggressively risk it…. is L & T Finance Holdings that listed today……Issued at Rs 52,it listed around this price,went up marginally and then slacked to below Rs 50…bounced back up to Rs 51 and then again dropped to close below Rs 50

This is Larsen Groups first Public Offer in nearly 25 years and that too a share with FV of Rs 10 offered at Rs 52 and available below Rs 50 on first day of listing !…..It’s and operation of scale and spreads…. and L & T Finance comes out a winner in both…my valuations for it are strong over One to Three Years….It must be in any and every Investment Portfolio    

Cheers !

IPO Disasters…Orient Green @ Rs 14 & Tirupati Inks @ Rs 8 ! …A 10 Month countdown to Blast Off!…10,9,8,7,6,5,4,3….down 70% +

Both appear to be large scale IPO Pricing Valuation Cons !….advised and probably even abetted by Lead Managers….Sad !….Thousands of Retail Allotees in these Scrips have got gyped badly…..methinks we desperately need the Controller of Capital Issues back again…atleast to set a cap on IPO Pricing ! 

Now let me set a Cat among the Pigeons !

….After such a 70% to 82% Erosion in the Share Price from the Ofer Price in just 10 Months do you think Orient Green and Tirupati Inks present an investment oportunity and are worth buying at Rs 14 and under Rs 8 respectively !…the invested IPO Monies in new projects have yet have to bear fruit..Scrips are Down but Not Out…yet ! or are you Once Bitten,Twice Shy !? ….and Orient Green was a huge IPO Issue Size…Rs 900 crs !

Got you thinking !  

Cheers !

Interesting Stats…with the Sensex at 18200 levels,let’s have a look at which from the Sensex 30 are towards 52 Week Lows and which are towards 52 week Highs…should give you some conviction in Sensex Strategies going forward

11 Scrips are towards 52 Week Lows while 5 Scrips are towards 52 Week Highs=> 16 of 30 Sensex scrips,that’s over half the scrips, are towards Lows or Highs……If Sensex crosses 20000 again later this year and moves towards 25000 mid next year as opined by some,it would be interesting to risk some Sensex Strategies going forward….for instance have a look at the eleven Lows and assess whether they will go yet much lower….then they deserve to be replaced in the Sensex perhaps…or will they bounce back late in 2011 and definitely in 2012

….all the 11 Lows look tempting to go long….NTPC is my choice of lowest risk with little downside from Rs 177.90

Cheers ! 

Blog Viewer Queries

• Birla Power at Rs 1
• Tulsyan NEC at Rs 46
• Marg at Rs 90+
• Sanghvi Movers at Rs 110+
• NIIT Tech at Rs 180+ 
• Sabero Organics at Rs 97 +
• Added later…..Deccan Gold at Rs 20+
• Added later…Garnet Constructions at Rs 12

Thought I would give my brief observations on all of the above queries from blog viewers…..am reproducing both viewers queries and my brief responses  as this seperate blog post for wider and easy viewing

BIRLA POWER SOLUTIONS AT RS 1

BSReddy Says:

May 29th, 2011 at 7:34 pm 

Dear Sir ,
What about Birla Power Solution Ltd ,which is near Rs 1 /

 Gaurav Parikh Says:
May 29th, 2011 at 9:55 pm

Hi B R Reddy…thanks for your response…this specific blog post listed ten scrips between 20 and 30 and what you think they would be in 2012 if sensex is between 20k and 30k….A few years ago I had cautioned on Birla Power Solutions….I had a quick relook at it at par Rs 1 as this is the FV too …..Volumes are currently 15 lakh shares though average six month daily volumes are 75000 shares…. 52 week high/low is Rs 2/Rs 1…but margins and profits are very low…profits are in a few crs though sales crossed Rs 230 crs last year and will have crossed Rs 250 crs for FY 2011…amusingly it declared a 1:5 Bonus last year as well as a dividend of 7.5%…it carries debt of over Rs 100 crs while funds tied up in Debtors and Inventories last year aggregated over Rs 175 crs..Sales were Rs 238 crs….currently manufacturing portable gensets and engines for gensets it now plans to enter the field of power generation through two subs Birla Energy Infra Ltd and Birla Urja Ltd…it needs funds…has constantly….has raised Authorised Capital to Rs 425 crs….With Profitability in single digit Rs crs and Equity at Rs 215 crs,don’t expect any dividend for FY 11 that just passed….if they do foolishly declare one,they will have to dive into GDR proceeds of earlier years to distribute,if any are yet available….while I feel the downside is 75 paise,any uptick from here will be more on momentum,hype,sentiment and anticipation and blind faith in a Birla Company rather than on fundamentals…Yash Birla Group companies do not command much respect or premium on the bourses or in business…another of his group companies is Birla Shloka ….it is just Rs 15…it has a 52 week high of Rs 94 and the FPO in Jan 2010 was at Rs 50 for a FV Rs 10 share….if you wish to make monies in Birla Power, don’t depend on fundamentals to support upmoves from Rs 1….more likely on collective hype and hope…Cheers !

TULSYAN NEC AT RS 46-RS 49

AMIT GUPTA Says:
May 30th, 2011 at 3:50 pm  

whats your view on tulsyan NEC

Gaurav Parikh Says:
May 31st, 2011 at 12:05 pm 

Amit……Tulsyan NEC suffered from a very high Debt…over Rs 220 crs last year from a Total Capital Employed of Rs @Rs 285 crs…recent 2:1 Rights Issue at Rs 49.50 will triple Equity to Rs 15 crs and move Networth to Rs 120 crs…this will reduce Debt Equity towards 2:1…..Consolidated Turnover is Rs 876 crs for FY 11 but bottomline is a mere Rs 9 crs because of the high Interest outflow of over Rs 32 crs…they also faced huge Power cuts…40% in FY 10…affected capacity utilisation…they also faced some price hurdle to source sponge iron….they have since bought out a 35000 MT Sponge Iron Manufacturer Chitrakoot and are setting up a 35KV Thermal Power Station…Steel sales account for near Rs 700 crs of the turnover…rest is poly packaging synthetic division sales…it is a dividend paying company…65% + equity is held by the Promoters….I see little downside from here….Trading Volumes are low….would keep it as a ScripWatch rather than ScripSelect right now…Interestingly Market Cap is only @ Rs 70 crs on enhanced capital with share price in the mid Rs 40s levels…it remains a small company in this sense…sold 1.5 lakh ton of Steel and @ 12000 t on Packaging…has over 1500 employees …..will get re-rated only when Debt levels drop significantly to Rs 100-Rs 150 crs range and therefore Debt/Equity to 1:1….Keep a watch …..Cheers

MARG AT RS 90+,SANGHVI MOVERS AT RS 110+ AND NIIT TECH AT RS 180+

Swaroop Says:
May 29th, 2011 at 11:41 am 

Gaurav Parikh Says:

May 29th, 2011 at 8:39 pm  

Swaroop…even God gives a second chance to Promoters !….so if you can assume some risk stepping out of your safe zone for some exposure can be hugely rewarding….your selections are all above Rs 30…and are available near their 52 week lows…Marg is being recommended by many leading brokers…but the volatility is high…52 week was Rs 244…it’s now 92 near.. 52 week low of 87…..there are a few concerns on project execution and debt….I know a few who are holding this from Rs 190 cost…had told them to be wary at the time but they went by glossy reporting and recommending by leading brokers….Quite a few years ago I met the Sanghvi Owners in a one to one meeting…their share price was Rs 16 then and they were growing very fast…but I waited for their results to confirm…was a bit too late by then to pick this multibagger share up…then the brothers had a falling out…..NIIT Tech has the least volatile 52 week spread…looks interesting…Cheers for your long and lovely response

SABERO ORGANICS AT RS 97+

VIKRAM GARG Says:
May 31st, 2011 at 11:24 am  

COROMANDEL INT is buying a stake in sabero organics @ 160/share…whats your outlook on sabero organics

Gaurav Parikh Says:
May 31st, 2011 at 11:48 am  

Vikram,

I had recommended Sabero very strongly more than once in earlier years from Rs 20 + but got turned off them on some disturbing news on ethical business issues..recommended exit at Rs 65 levels…it fell sharply after this…now this news of Coromandel buying it out for Rs 160 + non compete fee of Rs 38 + is going to propel Sabero very fast…the news was out to insiders a few days ago…see the pattern last week…it had reached new highs every single day virtually….Coromandel will acquire 42 % from Chuganees and also another 31% from remaining shareholders….Sabero is already on upper circuit at Res 97 + on BSE…it should move strongly past Rs 125 now with a more credible and stronger promoter…..it will get rerated strongly too…However expect SEBI to investigate insider trades last week…Cheers

Added later

DECCAN GOLD AT RS 20+

ROHIT Says:
May 31st, 2011 at 12:14 pm

Dear Mr Gaurav,

I see that you have mentioned Deccan Gold Mines in your list. I have been holding on to 1000 shares of Deccan Gold Mines for more than 5 years. It has not seen much appreciation barring few sparks in the last few years due to speculative news and grapevine. Just wanting to check when and if they find gold after they get the requisite permissions from the Government, whether DGML will be a multi bagger for the future. Can I accumulate at these levels for a decent appreciation in the next 2-3 years.

Gaurav Parikh Says:
May 31st, 2011 at 2:19 pm

Dear Rohit….please don’t read these ten scrips between Rs 20 and Rs 30 as my recommendations….there is a reason why I have termed these Scrip Teases….and Deccan Gold especially…..last October I commented on Deccan Gold while comparing another scrip with it….reproducing my comments below…..

Deccan Gold Mines

Quote on BSE
Rs 23.25

Added later

GARNET CONSTRUCTIONS AT RS 12

rajan sinha Says:
June 1st, 2011 at 2:28 pm 

sir,

though a bit late pls share your comments on 1) garnet construction ( their mumbai property alone should worth more than 350 cr) 

Gaurav Parikh Says:
June 1st, 2011 at 5:08 pm  

Hi Rajan Sinha…checked out Garnet for you…not really impressed…Rs 12 for a FV Rs 10 share….loss of over Rs 8 crs in FY 11 more than sales of Rs 7 crs ! on an Equity of Rs 13.9 crs of which only 33% held by Promoters Kedias….60 lakh warrants were converted at Rs 75 into shares in June 2009…..of the 600 acres you talk off,400 acres are Magic Hills property in Khalapur Raigad….Other Residential are Magic Heavens 28 kms from Vshi and Crystal Springs in Lonavala….all yet to be completed…moreover sales returns have been happening as the Land is declared now to be part of High Flood Zone….Reserves show Rs 39 crs….so book value is Rs 38…but don’t get excited here…the balance sheet reads funny….loans at just Rs 8 crs,while networth at Rs 60 crs ! at FY 10 end…now Rs 52 crs at FY 11 end….but No sales in FY 10 yet Debtors shown at Rs 70 crs and Inventories at 36 crs !…..market cap is mere Rs 16 crs…clearly they are window dressing the balance sheet….are not adequately capitalised to implement and complete projects on hand…… they actually are more known for the Industrial Sheds they construct…most on the Mumbai Pune Road or off it…..these are not fast selling areas and development will take 5 to 10 years….price may be low but risk is too high…as far as the property value of Rs 350 crs that you state,the books do not reflect any strong Fixed Assets or WIP or Inventories…so I am assuming ,that like they propose BOT development at a Goregaon Property,likewise they would be adopting this model to develop the properties mentioned above….in other words even if the value you state is more or less accurate,they will not be entitled to it…..Rs 12 is near 52 week low…Rs 28 was the 52 week high…..Seems they need Funds….Price may be Low but Risk appears high…Cheers