Period ( 01-Jun-2011 to 03-Jun-2011 ) |
|
Date
|
Open
Price
|
High
Price
|
Low
Price
|
Close
Price
|
WAP
|
No. of
Shares
|
No. of
Trades
|
Total Turnover
(Rs.)
|
|
|
1/06/11 |
16.00
|
16.45
|
15.80
|
15.95
|
16.04
|
8,45,993
|
1,211
|
1,35,73,553
|
|
2/06/11 |
15.80
|
16.40
|
15.70
|
16.25
|
16.09
|
8,27,234
|
1,150
|
1,33,14,055
|
|
3/06/11 |
16.25
|
19.50
|
16.25
|
19.25
|
18.46
|
69,01,124
|
10,662
|
12,74,18,768
|
|
So what’s triggering yet again in Lloyds Steel….Insiders seem to know and are buying heavily….have zoomed the scrip up in a day from a low of Rs 15.70 on Thursday to a High of Rs 19.50 on Friday…that’s 24% surge
And today on Monday June 6,2011 the price is approaching Rs 20 with volumes on BSE already at 32 lakh shares by 10.30 am
Lloyds Steel had replied to a BSE Query in April 2011 on a Business Standard article that spoke of a possible takeover by Uttam Galva…. http://www.bseindia.com/stockinfo/anndet.aspx?newsid=97fb936e-2ab5-4df9-a9dd-b6f64d25fb9a ….they had denied their Wardha plant was up for sale
Lloyds Steel has also declared their FY 11 Results…small loss again of Rs 59 crs…Equity is now Rs 392 .66 crs while Reserves are negative at Rs 847.34 crs…huge accumulated loss……Debt in the Books disclosed by the company in the above clarification was Rs 741 crs at December 31,2010
http://www.bseindia.com/stockinfo/anndet.aspx?newsid=6ec5af97-a663-49c1-909f-6dbf08710ed4
Their Engineering Division is making health Profits…Rs 66 crs on Sales of Rs 326 crs (this is under 11% of Total Net Sales of Company at Rs 2978 crs) with Capital Deployed of just Rs 64 crs…methinks this will be spun off this year as planned…me also thinks an imminent sale of the steel unit is looming ahead for Institutions to recover their funds
Methinks Guptas who have jumped their holdings from 17.44 % to 53.09 % by conversion of warrants allotted to themselves earlier will not settle for sale at any price below Rs 30
So watch out for Lloyds Steel Fireworks….it’s crossed Rs 20 on BSE as I end this Blog at 10.50 am
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 read more
Been an interesting week that finished off last evening with my address on ‘ Equity Research & Portfolio Management’ for IFEN (ICFAI Univ) at Indian Merchants Chambers…well received and have already received some interesting feedback from participants…one of which is from the promoter of www.attainix.com …..he is into advising on Intellectual Capital (IC) and has created,based on algorithims, an IC tracker that signals if scrips are under or overvalued
…and now it’s a Saturday…and am taking some time out by time in at home……warmed by an interesting tussle between parrots,squirrels and sparrows for a share of the peanuts in their shell and rice grains on their feeding platform among my plants….finally agreeing to Q up and live in harmony….soothing sight
….read the past few days papers leisurely…some coverage that triggered my interest i’ve bulleted below with links….. and my comments in blue italics
-
Reliance Industries to approach SEBI for the third time to settle Insider Trading Investigation through a Consent Order….in the first two approaches,RIL had offered merely token amounts to SEBI…one paper feels this time around the figure could be a record Rs 500 crs…… want to refresh what actually happened then click below on two earlier blogs by me on this in August 2008…am wondering if I should make this a TAP GAP Equity Poser as to what you think is the way RIL should be penalised for this….they earned over Rs 1000 crs in RPL insider deals in November 2007
Tuesday, August 5th, 2008
Wednesday, August 6th, 2008
-
A Bloomberg article quoting Baosteel,China’s second largest Steel Mill,on the possibility of an Iron Ore Price Bubble developing…..may happen after a few years though and current FOB Prices of US $ 175/T may drop to US $ 80/T …so my thoughts revolved around the impact on Sesa Goa….it is already facing an Investigation from the Serious Frauds Investigation Office (SFIO) for under invoicing exports by Rs 1002 crs between 2001 and 2007 and paying higher agent commissions of Rs 50 crs when it was under Mitsui control….plus the draining out of all Cash by it’s new Owners,Anil Agarwal’s Vedanta Group for acquiring a 20% stake in Cairns India+ Higher Royalties and tax now payable to the Government….should one therefore exit Sesa Goa at Rs 290/Rs 300 ?
http://www.financialexpress.com/news/iron-ore-bubble-looms-may-lead-to-lower-prices/793669/0
-
The Oil Under recoveries and the additional subsidy burden on upstream majors ONGC,Oil India and GAIL ….when I debated in my workshops in BSE and elsewhere in 2005/6 that Oil will cross US $ 100/barrel in a few years…it was at US $ 30 -40 levels at the time,people felt I was stretching it…It crossed US $140 in 2008 !…before receding in 2009 to under US $ 50…and has again enetered three digits…..am wondering what will happen if Oil moves towards US $ 200 in the next year or two !…..India will have a refining capacity of 230 million tonnes by 2012….but domestic crude from ONGC,Oil India revolves around 30 million with Cairns adding a few million more….and our demand is at 150 Million and climbing as GDP grows at 7%-8% +….so our Oil Imports will be over 110 million tonnes annually and we can get into a very tight situation like we did in 2008….it will reflect in a higher fiscal deficit and therefore higher government borrowings to fund this deficit…..Look for Higher Indirect and Direct Tax Rates and Higher Petroleum Prices in such scenarios …..As long as High Fuel Subsidies are borne by and Oil under recoveries dominate the operations of the PSUs, is there any merit in investing in upstream PSU Oil Companies like ONGC,Oil India and Gail or even in the PSU Refining and Marketing Giants Indian Oil,BPCL or HPCL ?
http://www.business-standard.com/india/news/govt-shifts-rs-4299-cr-burden-to-oil-firms-/436329/
SUBSIDY PAIN |
|
2009-10
|
2010-11
|
2011-12*
|
Average price of crude
(Indian basket) per barrel ($) |
69.76
|
85.09
|
112.32#
|
Total underrecoveries
of OMCs (Rs crore) |
46,051
|
78,159
|
174,835
|
Government’s
contribution (Rs crore) |
26,000
|
40,912
|
89,900
|
Upstream companies’
contribution (Rs crore) |
14,430
|
30,296
|
67,766
|
Upstream firms’ share
(%) |
31.33
|
38.76
|
38.76
|
Absorbed by OMCs
(Rs crore) |
5,621
|
6,951
|
17,169
|
#for May 1-15, 2011;
*Assuming no further price hike at the retail level and current crude oil prices
Source: Ministry of Petroleum. OMCs: Oil marketing companies |
http://www.business-standard.com/india/news/rbi-difficult-to-deliver46-fiscal-deficit-target/436213/
http://www.business-standard.com/india/news/nse-changes-algorithm-approval-process/436299/
My thoughts turned to the rapid growth of High Frequency Trading (HFT) in recent years….HFT is one way of algorithmic trading…in USA,over 50% of trading is now high frequency trading….Data shows that a HFT trader on an average does not hold any position longer than 22 seconds !…..HFT Trader throws in a number of high speed trades for round trip execution in micro seconds….it has been found that over 80% of such orders return cancelled….such orders,though small in size,but through a high recurrence rate, try to capture price imbalances available for just milliseconds to generate huge profits…the trade is decided automatically by algorithimic computer models that analyse real time data to capture these price inefficiencies and imbalances…..HFT has sparked off the need for a strong regulatory and supervisory and monitoring system in place,especially after the flash crash in US markets on May 6,2010 read more
Blog Regulars and those who acted out on earlier Blogs on Lloyds Steel should be a happy lot…..especially those who picked it up below Rs 10 a year ago…..The Scrips crossed Rs 22 today…up by 14% +…The Volumes too are hitting the roof on both the NSE and BSE…Enjoy
Check out the earlier Blogs…the picture envisaged by me and and the gameplan of promoters is playing out quite to script
Tuesday, November 2nd, 2010
Thursday, January 7th, 2010
Thursday, December 24th, 2009
Cheers !
On December 24,2009 and then soon after on January 7,2010 I had blogged on Lloyds Steel and asked you to watch out for it in 2010…it was Rs 9 in December 2009 then flared up in January to Rs 13+ going all the way to Rs 20 before reacting back to Rs 12…past few days it’s been lively and gone up past Rs 15 to settle at Rs 14 today…..I had stated that a Turnaround was in the offing and the Promoters were awarding Convertible Warrants to themselves to up their stake from just below 18% to past 54% on conversion
Check out these earlier Blogs
Thursday, January 7th, 2010
Thursday, December 24th, 2009
Lloyds Steel has just allotted, on October 29,2010, 1,68,500,000 shares on conversion of the Warrants issued to the Promoters two companies,Shree Global Tradefin Ltd and Trump Investments Ltd…Thus these two companies which held 9.09% of the Equity of Rs 224.16 crs will now hold 48.23 % of the new Equity of Rs 392.66 crs,up by 39.14 %
The promoters who held 17.61% of the Equity,which included the 9.09% held by the above two promoter companies, will now hold a controlling stake of 57.75% with this conversion at par value of Rs 10
The conversion has been done within 2010 itself when it could have been done by mid 2011 too….this is a positive sign as promoters have infused the committed fresh funds into the company,albeit at par through this conversion
Now await the next step…demerging the Engineering Division into a company to unlock it’s potential…..Shareholders will get free shares of this demerged company
Looks Like 2011 will be an interesting and rewarding year for Shareholders of Lloyds Steel as it’s restructuring of debt and infusion of fresh equity to bring down the leverage and it’s return to profitability sparks of it’s revival
Cheers !
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