A Lion’s eye on the Bulls and Bears

“In India, companies may fall sick, but promoters rarely do!”

Gaurav's Blog



Blog Viewer Queries and my responses…..Birla Power Solutions 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 +……Deccan Gold at Rs 20+…Garnet Constructions at Rs 12

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


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 !


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

Indiaaaaaaa ! India !…Indiaaaaaaaa ! India !….No Excuses for No Work tomorrow !

“Indiaaaaaaa ! India !…Indiaaaaaaaa ! India !”….No Excuses for No Work tomorrow !

“Sachin ! Sachin !….Sachin ! Sachin !”

Ofcourse I want India to win…..but I don’t want a Close match…we should thram Pakistan at Mohali tomorrow….coz I don’t want my heart to go too much ‘dhak dhak’ nor do I want to pull my hair in frustration !

….strong memories emerge of my cricketing life in Bahrain while I was with a leading Global Audit Firm….Cricket is my passion and I have captained school and played for my colleges ….so when I got an opportunity to play for the leading Indian Club in Bahrain in the 1980s,I was thrilled…every Friday we had matches and  believe me they were extremely competitive..we had Clubs and Teams that were predominantly  either Sri Lankan,Indian,Pakistani or English….and a few players had represented even their country or states……and so we all played to win on matting wickets…. and whenever we clashed with the top Pakistani Team there were fireworks…even violent behaviour at times…it was War out there !…and I vividly remember how we beat them in one Final and I was instrumental in the win….the first time in 17 years that we had beaten them in the Sadiq Cup,a tournament that they themselves conducted !….. our Club was kept open all night  for celebrations !….later we were rewarded with trophies and cups and gifts and even gold coins by leading Indian businessmen and even felicitated by the Indian Ambassador…and once when we were winning in some other Final,the Pakistani supporters simply could not accept this situation and so hundreds of them simply converged onto the field while the match was being played !….the Cricketing Council,dominated by Pakistanis,adjudged both teams as joint winners !….I remember I was the bowler when the crowds invaded the field and  Murtaza Ali Baig, the brother of ex India Cricketer,Abbas Ali Baig leading me aside when fights with stumps and bats  broke out and telling me to merely be a spectator…a lot of our Club Team constituted members of the ‘Thattai Bhatia’ community……. they fought back when provoked…..was aghast at this unsporting and unruly and violent outbursts from Players and spectators…on top of the blatant umpiring bias we had to contend with !….too many negative emotions pent up cross border…sad !…should not be so….    read more

ICC CRICKET ODI WORLD CUP 2011 SCHEDULE from Feb 19 to April 2,2011

The ICC CRICKET ODI WORLD CUP 2011 is being hosted by India,Bangla Desh and Sri Lanka from February 17-April 2,2011…The Opening Ceremony is in Dacca on February 17,2011,which will also host the first match of the World Cup between India and Bangla Desh on February 19,2011 with the Finals in Mumbai on April 2,2011 

Here is the Schedule of the 49 Matches with the India Matches highlighted in Green Bold…all their matches are Day & Night Fixtures

Bangla Desh will host Eight Matches at Dacca and Chittagong which includes Two QuarterFinals  too in Dacca

Sri Lanka  will host 12 Matches at Colombo,Hambantota and at the Pallekelle Stadium in Kandy which includes one Quarter Final and one Semi Final in Colombo

India will host the maximum matches…29 in all across eight venues in India,including One Quarter Final in Ahmedabad,One Semi Final at Mohali  and the Finals in Mumbai at the completely rebuild,renovated and refurbished Wankhede Stadium in South Mumbai  

Top Four Teams from each Group will enter the Super 8 Knock out Quarterfinal Stage…with A1 v/s B4,A2 v/s B3,A3 v/s B2 and A4 v/s B1….1 to 4 indicating the positions of the Teams in their Groups after the League Stage where each country plays six matches,one against each country in their Group…..If a host nation reaches the Quarterfinals or Semi Finals it will play this match in their own country at the designated venue…if two host nations are to face each other in a Quarterfinal or Semi Final then the match will be played in the country which has a higher ICC ranking at the designated venue

You can check out Ticket availability at


14 participating Nations equally divided over Two Groups with each Nation playing six league matches and one and another once in their group to decide the top four nations in that group that will proceed to the Super Eight Knock Out Quarter Finals Stage

Group A: Group B
Australia, Pakistan, New Zealand, Sri Lanka, Zimbabwe, Canada, Kenya. India, South Africa, England, West Indies, Bangladesh, Ireland, Netherlands.


Match no.   Date Teams Venue
1   19 Feb India vs Bangladesh Dhaka
2   20 Feb New Zealand vs Kenya Chennai
3   20 Feb Sri Lanka vs Canada Hambantota
4   21 Feb Australia vs Zimbabwe Ahmedabad
5   22 Feb England vs Netherlands Nagpur
6   23 Feb Pakistan vs Kenya Hambantota
7   24 Feb South Africa vs West Indies New Delhi
8   25 Feb Australia vs New Zealand Nagpur
9   25 Feb Bangladesh vs Ireland Dhaka
10   26 Feb Sri Lanka vs Pakistan Colombo
11   27 Feb India vs England Kolkata
12   28 Feb West Indies vs Netherlands New Delhi
13   28 Feb Zimbabwe vs Canada Nagpur
14   1 Mar Sri Lanka vs Kenya Colombo
15   2 Mar England vs Ireland Bangalore
16   3 Mar South Africa vs Netherlands Mohali
17   3 Mar Pakistan vs Canada Colombo
18   4 Mar New Zealand vs Zimbabwe Ahmedabad
19   4 Mar Bangladesh vs West Indies Dhaka
20   5 Mar Sri Lanka vs Australia Colombo
21   6 Mar India vs Ireland Bangalore
22   6 Mar England vs South Africa Chennai
23   7 Mar Kenya vs Canada New Delhi
24   8 Mar Pakistan vs New Zealand Pallekelle
25   9 Mar India vs Netherlands New Delhi
26   10 Mar Sri Lanka vs Zimbabwe Pallekelle
27   11 Mar West Indies vs Ireland Mohali
28   11 Mar Bangladesh vs England Chittagong
29   12 Mar India vs South Africa Nagpur
30   13 Mar New Zealand vs Canada Mumbai
31   13 Mar Australia vs Kenya Bangalore
32   14 Mar Pakistan vs Zimbabwe Pallekelle
33   14 Mar Bangladesh vs Netherlands Chittagong
34   15 Mar South Africa vs Ireland Kolkata
35   16 Mar Australia vs Canada Bangalore
36   17 Mar England vs West Indies Chennai
37   18 Mar Sri Lanka vs New Zealand Mumbai
38   18 Mar Ireland vs Netherlands Kolkata
39   19 Mar Australia vs Pakistan Colombo
40   19 Mar Bangladesh vs South Africa Dhaka
41   20 Mar Zimbabwe vs Kenya Kolkata
42   20 Mar India vs West Indies Chennai
43   23 Mar First Quarterfinal Dhaka
44   24 Mar Second Quarterfinal Colombo
45   25 Mar Third Quarterfinal Dhaka
46   26 Mar Fourth Quarterfinal Ahmedabad
47   29 Mar First Semifinal Colombo
48   30 Mar Second Semifinal Mohali
49   02 Apr FINAL Mumbai




Temptation Foods at Rs 22….Just don’t get Tempted….has all the Ingredients for a superhit Bollywood Potboiler recipe !….item song included !

Shahzad…this one’s for you…you had asked for it a few days ago……Temptation Foods (TFL)


TFL and it’s arrested Promoter Vinit Kumar was yet again the News yesterday morning in the Mumbai Mirror …. the Mumbai Morninger from the Times of India Group was following up from it’s story of November 30,2010 that exposed the link between Kumar and the Home Ministry Mole Ravi Inder Singh

Yesterday press coverage breaks an Intelligence Bureau Report that links the barred scamster Ketan Parekh and his cronies and front companies to Vinit Kumar and Temptation Foods and the intended modus operandi to rig the share price of the Company….

…..and that Vinit Kumar was the middleman in the Telecom Scam !

And  Mumbai Mirror states that the  IB Report ,a copy of which they have in their possesion, states that 12000 conversations of Singh have been recorded over three mobile phones….those between Kumar and Singh reveal that Kumar was the middle man supplying Money and Call Girls to Singh in exchange for Sensitive Government Information…further, both colluded so that TFL could get to co promote the Rs 100 crs Food Park in Jangipur,West Bengal ……in this context it is amusing to read TFL’s clarification signed by  Mr Nimish Thakore,President of Corporate Affairs and Company Secretary….he denies that any benefit was received from Singh even though Singh was the Director of Horticulture,West Bengal and therefore also on the Board of the Food Park before he was deputed to the Home Affair Ministry  http://www.bseindia.com/xml-data/corpfiling/AttachHis/Temptation_Foods_Ltd_021210.pdfaes 





TFL  closed at Rs 22 yesterday…a FV of Rs 10….If you look at the Valuation metrics,you’ll be excited

EPS : Rs 25….P/E : 0.88…..Market Cap : Rs 89 crs….Sales : Rs 1277 crs…..Mkt Cap/Sales : 0.07 !…Book Value : Kissing Rs 100…P/BV : 0.22 !



I was intrigued….I usually am where Item Girls and Songs are involved !….so I took a bite of Annual Report of TFL to begin with !…. I actually laughed !….here’s why….

…..What a lovely designer Annual Report 2009/10…was completely seduced by it…have a look…you’ll be stunned too….the concept,content and design is by Atherstone who are Professional Consultants and Specialists in Investor Communications….title says 2007-08 but the Annual Report is for 2009/10 so go ahead and click  


Atherstone surely must be trying to bury their heads in the sand!…their Annual Report Theme was ‘A TASTE FOR TRUTH’ !

Here are some marvellous gems from the Annual Report…even in the Report they are in Capital Letters and stated in big bold colours with each phrase hogging the whole Page ! 



Quotes Attributed to : read more

MOIL…Issued at Rs 375….High of Rs 591 on Listing…Dropping to Rs 462 in just a day…..What now…Buy…Hold..Sell ?

Tony, Shambu & Swaroop….this blog on MOIL is in response to your requests….but will serve the interests of all readers

As expected MOIL IPO received overwhelming subscription….Issued at Rs 375 with a 5% retail investors discount……and as expected it listed quite marvelously on December 15….reaching a High of Rs 591 on BSE…reacting sharply to close at Rs 466….then yesterday seeking another Low of Rs 451 before closing at Rs 462

What Now ?….Does it represent a Buying Opportunity at Rs 462 or will it drop yet further closer to it’s IPO Price of Rs 375 ?….Should Allottees who have yet not sold and new buyers continue to hold MOIL ?

My clear sense is that at Rs 462,MOIL appears fairly valued….at 12 Earnings Multiples for FY 2011 Projected EPS of Rs 39…..I am more concerned with some serious risks that MOIL is facing    

  • The Proposed Mines & Minerals (Development & Regulation) Bill 2010 that seeks to replace the 1957 Act stipulates that the mine lease holder will have to set aside 26% of the Net Profit from the Mine as an annuity to the State Government towards compensation,assistance and employment for the rehabilitation and settlement of the tribals and people who stay around the Mines
  • Technological Advances has reduced the consumption of Manganese Ore in the Production of Steel…From 46 kgs of ferro manganese consumed to produce a tonne of steel,the figure now stands at 30 kgs and in some industralised countries has dropped to even 10 kgs…this will impact the demand for Manganese Ore
  • The Fortunes of the Manganese Ore Miners is inextricably linked to the Fortunes of and Demands from the Steel Companies…Manganese is the fourth most used Metal after Iron,Aluminium and Copper….Over 90% of the World’s production of Manganese is utilised for the desulphurisation and strengthening of Steel…The Recession of 2008/9 saw the Steel and Managanese Ore Prices drop 60% from their peak …Have a Look at this table for MOIL

MOIL’s Manganese Ore Statistics


FY 2008

FY 2009

FY 2010

Production (tpa)




Sales (tpa)




Sales in Rs Crs




Average Sales price/tonne in Rs




PAT in Rs Crs












FY 06 and FY 07 PAT was way below at Rs 113 crs and Rs 131 crs respectively

  •  In FY 2011 the Fortunes have revived and Average Sales Prices per tonne have again crossed Rs 11000 for Manganese Ore….however the volatility over the past five years is a matter of concern
  • The last estimates show that World Reserves are 5200 Million Tonnes of Manganese Ore…South Africa holds 76.9% of these,followed by Ukraine at 10% and Australia a shade over 3% and India a shade under 3%….India has become a net importer of high grade Manganese Ore in the last three years from being a net exporter….yet South Africa’s  dominance in Reserves can impact World Prices as they can increase exports significantly once their sea,road and rail infrastructure strengthens…China is the world’s largest producer of Steel but holds just about 2% of the World’s reserves of Manganese Ore…so China Demand and Supply Situation will dictate World Prices

So what is MOIL doing to tackle these Risks ?

  •  MOIL has entered into 50:50 JV in Chattisgarh with SAIL in 2008 to set up projects at a  cost of Rs 392 crs to produce 31000 tpa of Ferro Manganese and 75000 tpa of Silico Manganese…this high value addition products will add to profitability and margins
  • MOIL has also set up a similar 50:50 JV  in Andhra Pradesh with RINL in 2009 to set up projects at a cost of Rs 206 crs to produce 20000 tpa of Ferro Manganese and 37500 tpa of Silico Manganese
  • At a cost of Rs 300 crs it plans to deepen the mining depth from current 360 meters to 660 meters at it’s largest Mine at Balaghat in Madhya Pradesh…currently MOIL operates Ten Mines,six at Nagpur and Bhandara in Maharashtra and Four in Balaghat in Madhya Pradesh….all ten are over 100 years old….only three are opencast mines…Dongri Buzurg Mine in Bhandara produces Manganese Dioxide used in the dry cell industry…Rs 180 crs is being spend on this mine to expand production…In October 2009 the Mines Ministry has also reserved @815 hectares in Maharashtra for MOIL…MOIL has applied for prospecting licenses for this area…..all these efforts will help MOIL in achieving its target to scale up production from the current 1.15 mtpa to 1.5 mtpa by  2015/16  
  • MOIL is already one of the lowest cost producer of Manganese in the World…it has set up a wind farm to generate power of 4MW for captive use…in FY 10 it generated 3.3 MW
  • World Steel Capacities till 2009 end were 1750 million tonnes with Production at 1223 Million tonnes….India is expected to produce 65 Million tonnes this year and is expected to move from the fifth largest producer in the World to the second largest by 2015/16…As at October 1,2010,MOIL had 21.7 million tonnes of proven and probable reserves (55% of which have an average manganese content of 40% and above and 27% has manganese content of 36% to 39.9%) and 69.5 million of measured,indicated or inferred reserves…Being debt free and holding Cash at Rs 1763 crs at September 2010 (Rs 104/share) MOIL is expected to leverage on growing domestic demand for Steel as the Government plays out the Rs 1.73 trillion outlay on Infratructure as stated in the last budget…In fact Steel Capacity from 73 millions tonnes is expected to cross 120 million tonnes by 2012    

MOIL’s Financials & Basic Price Multiples on Earnings and Networth


FY 2009

FY 2010

HY FY 2011

Sales in Rs Crs




Total Income




PAT in Rs Crs




Equity in Rs Crs


(FV 100)


(Post 5:1 Bonus and Sub-division to FV Rs 10)


(Post 5:1 Bonus and Sub-division to FV Rs 10)

Reserves in Rs Crs




Networth in Rs Crs




Book Value in Rs




Annualised EPS in Rs












P/E Multiple

P/BV Multiple


At CMP Rs 462 and Market Cap at Rs 7760 crs









FY 06 and FY 07 PAT was way below at Rs 113 crs and Rs 131 crs respectively







Projected PAT FY 11

(Rs Crs)



( Rs Crs)

Projected FY 2011 EPS

( Rs)


P/E Multiple





FV Rs 10



Sandur Manganese




FV Rs 10







FV Rs 1



Sesa Goa




FV Rs 1



My sense is that MOIL applied some make up to it’s current year financials to look a little more attractive as it came out with it’s IPO ….Going Forward the Volatility in Prices of Manganese Ore based on the swings in Fortunes of the Steel Industry will guide Earnings….so keep an eye on the Price per tonne of Manganese Ore….last three years the cycles have shown average extremes of Rs 6500 to Rs 11600…MOIL’s scale of Operations is just a percentage of that of Giant NMDC….and thus MOIL’s Share Price  will reflect lower relative Multiples….at 12 times Forward FY 11 EPS,my sense is that MOIL is at present fairly priced….Any significant deviation from projected PAT of Rs 650 crs this year will impact MOIL’s Share Price….An Earnings Multiple Range of of 10-15 is being established….Share Price will move past Rs 550 only if there is a sense of higher earnings than Rs 650 crs this year and markets will then sustain higher PE Multiple of 14 and 15…On the downside the IPO Price of Rs 375 can be touched if actual PAT drops into the Rs 500-Rs 550 crs range for FY 11,offering an EPS of Rs 30…likely if it has to expense 26% of profits for rehabilitation as per the new Bill Proposed  read more

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