Cairn
CMP: Rs 134.40
Cairn as our top pick in the sector on the back of impending commencement of production from its oil blocks at Rajasthan and significant free cashflow generation going forward. At present, Cairn’s stock price implies long-term crude price of $43/bl vis-à-vis $59/bl for ONGC,” the outfit said in a report.
Explaining the logic behind trimming Cairn fair value estimates, ICICI Securities said: “In line with our revisiting crude price and exchange rate estimates, we are revising our long-term INR-US$ exchange rate estimates to 40 (from 39) and increasing the cost of equity for Cairn to 15.2% from 14%.
Friday, December 5, 2008
Stock Idea: Titan Industries
The watch company from the stables of Tata, which has changed the way in which we look at watches now – from being just a device to tell time to a fashion accessory, the company seems to be having a good time even in these bad times.
For the second quarter ended 30th September 2008, net sales of the company rose 50% at Rs.1088.76 crore. Despite a 49% rise in operating expense, 58% rise in interest outgo, the company has managed to keep its bottomlines intact. It ended the second quarter with a 88% jump in PAT at Rs.87.14 crore.
The margins also indicate the same thing – at the OPM level the increase is flat – from 11.04% in Q2FY08 to 11.69% in Q2FY09. But the rise in NPM was from 6.39% to 8%.
Watch sales grew by 18.8%, jewellery income grew by 71.4% and its other business grew by 93.7%, all on a YoY basis. The company's network has expanded to 243 World of Titan and 12 Sonata watch showrooms, 114 Tanishq boutiques, 28 Gold plus stores and 34 Titan Eye+ outlets, a total of 431 exclusive stores making it one of the largest specialty retailers in India.
The stock price is holding strong at Rs.860 levels after having touched new low at Rs.710. Stay invested as the company is expected to grow by around 35% at the topline and around 40% at the bottomline.
Wednesday, December 3, 2008
Stocks to watch - Dhampur Sugar Mills Ltd - stock investment
Dhampur Sugar Mills Ltd
An integrated sugar mill based in UP has a crushing capacity of 39,500 TCD and its products include power, ethanol, chemicals, refined and plantation white sugar. The consolidated performance for the year ended 30th September 2008 has been good. It has been good because it has managed to turnaround. Its net sales rose 12% and it managed to reduce its operating expenses by 10%, though interest outgo rose 74%. It managed to post a PAT of Rs.3.63 crore as against a whopping loss of Rs.60.66 crore in Sep 07’.
Sugar trading proved to be its biggest earner, reporting a 110% rise while manufacturing revenue rose 13%. Substantial addition to the revenue came from its co-generation plant, which added on Rs.128.74 crore. Ethanol income rose 16%. The company has computed results for the accounting year considering the cane price at Rs 110/- per quintal for season 2007-08, which was paid based on the interim order of the Hon´ble Supreme Court pending final decision in the matter.
U.P. Govt. has announced SAP of sugarcane, for season 08 – 09 at Rs.1,400 per MT, which is being challenged by U. P. Mills and hearing in Allahabad High Court is due today. Due to this, the crushing in U. P., which generally starts by middle of October, every year has not yet commenced. This year’s crushing in U. P. is not likely to be more than 140 days against 175 days on an average. As U. P. produces one-third of the sugar in India, the total sugar production of India in this season is likely to be about 19 million tonnes against estimates of 21 million tonnes and 26.5 million tonnes of 07 – 08. Post crushing season, getting over in April 09, as also general elections getting completed by then, sugar prices will rise by about Rs.3 per kg. This will sharply improve the profitability of all sugar mills, as major quantity of sugar produced would get sold post April 09.
The sugar sector is likely to have good future ahead in view of lower sugar production in India at about 19 million tonnes in season 08 – 09 against 26.5 million tonnes of 07 – 08. Due to this, sugar prices are likely to rise by about Rs.3 to Rs.4 per kg. from April 09 onwards. The stock touched a new low yesterday at Rs.19.50 and it hovering around the same levels. At the current rate it qualifies a good buy.
An integrated sugar mill based in UP has a crushing capacity of 39,500 TCD and its products include power, ethanol, chemicals, refined and plantation white sugar. The consolidated performance for the year ended 30th September 2008 has been good. It has been good because it has managed to turnaround. Its net sales rose 12% and it managed to reduce its operating expenses by 10%, though interest outgo rose 74%. It managed to post a PAT of Rs.3.63 crore as against a whopping loss of Rs.60.66 crore in Sep 07’.
Sugar trading proved to be its biggest earner, reporting a 110% rise while manufacturing revenue rose 13%. Substantial addition to the revenue came from its co-generation plant, which added on Rs.128.74 crore. Ethanol income rose 16%. The company has computed results for the accounting year considering the cane price at Rs 110/- per quintal for season 2007-08, which was paid based on the interim order of the Hon´ble Supreme Court pending final decision in the matter.
U.P. Govt. has announced SAP of sugarcane, for season 08 – 09 at Rs.1,400 per MT, which is being challenged by U. P. Mills and hearing in Allahabad High Court is due today. Due to this, the crushing in U. P., which generally starts by middle of October, every year has not yet commenced. This year’s crushing in U. P. is not likely to be more than 140 days against 175 days on an average. As U. P. produces one-third of the sugar in India, the total sugar production of India in this season is likely to be about 19 million tonnes against estimates of 21 million tonnes and 26.5 million tonnes of 07 – 08. Post crushing season, getting over in April 09, as also general elections getting completed by then, sugar prices will rise by about Rs.3 per kg. This will sharply improve the profitability of all sugar mills, as major quantity of sugar produced would get sold post April 09.
The sugar sector is likely to have good future ahead in view of lower sugar production in India at about 19 million tonnes in season 08 – 09 against 26.5 million tonnes of 07 – 08. Due to this, sugar prices are likely to rise by about Rs.3 to Rs.4 per kg. from April 09 onwards. The stock touched a new low yesterday at Rs.19.50 and it hovering around the same levels. At the current rate it qualifies a good buy.
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