Sell Steel Authority of India (SAIL) Ltd.
Target 90 Stop Loss 102
Latest 98.80 (-1.30%)
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Showing posts with label Short term calls. Show all posts
Showing posts with label Short term calls. Show all posts
Sell Steel Authority of India (SAIL) Ltd. Target 90 Stop Loss 102 Latest 98.80 (-1.30%)
Written By Sheffin on Thursday, October 6, 2011 | 7:25 PM
Chambal Fertilisers & Chemicals Ltd. Target 98 Stop Loss 94
Written By Sheffin on Tuesday, October 4, 2011 | 1:14 AM
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JPASSO / ADANIPOWER / IFCI / BUZZING STOCKS BUY FOR GOOD PROFIT
Written By Sheffin on Thursday, September 2, 2010 | 11:11 AM
http://googlestockmarket.blogspot.com/
Jaiprakash Associates:
Shares of the company gained Rs 4.75, or 4.32%, to settle at Rs 114.70. It touched a high of Rs 114.90 and a low of Rs 111.50. Jaiprakash Associates
Jaiprakash Associates has reported a sales turnover of Rs 32.15 billion and a net profit of Rs 5.16 billion for the quarter ended Jun 2010. For the quarter ended Jun 2009 the sales turnover was Rs 21.17 billion and net profit was Rs 4.92 billion. One can expects more than Rs 60 billion from the cement division in FY11. There was a very strong demand in last two years in the northern part, especially because of Commonwealth Games. In the North, there has been some price moderation. If you compare from the peak of pricing in April and May, it is down by almost Rs 25-30 for each bag. That is more in the North and not spread in other parts of the country. We recommend to `Buy` this stock with price target of Rs 132 with medium term horizon
Jaiprakash Associates:
Shares of the company gained Rs 4.75, or 4.32%, to settle at Rs 114.70. It touched a high of Rs 114.90 and a low of Rs 111.50. Jaiprakash Associates
Jaiprakash Associates has reported a sales turnover of Rs 32.15 billion and a net profit of Rs 5.16 billion for the quarter ended Jun 2010. For the quarter ended Jun 2009 the sales turnover was Rs 21.17 billion and net profit was Rs 4.92 billion. One can expects more than Rs 60 billion from the cement division in FY11. There was a very strong demand in last two years in the northern part, especially because of Commonwealth Games. In the North, there has been some price moderation. If you compare from the peak of pricing in April and May, it is down by almost Rs 25-30 for each bag. That is more in the North and not spread in other parts of the country. We recommend to `Buy` this stock with price target of Rs 132 with medium term horizon
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Buy Dish TV India Ltd above 51.65, target 53.10 for 5 Days
Written By Sheffin on Monday, August 16, 2010 | 9:30 AM
http://googlestockmarket.blogspot.com/
Buy Dish TV India Ltd above 51.65, target 53.10 for 5 Days
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SHORT TERM Stock market CALLS FINTECH-STC-AXIS BK-TATAMOTORS- BUY THIS STOCK FOR A MONTH
Written By Sheffin on Thursday, August 12, 2010 | 3:23 AM
http://googlestockmarket.blogspot.com/
FIN TECH BUY@1264 – TGT 1300/1350/1400 SL.1250,
STC BUY ONLY ABOVE 416 TGT425/430 SL.410
AXIS BK AUG FUT BUY@1300-1295, TGT 1340 SL 1280.
TATAMOTORS FUT @1008 TGT1016-1023-1029 SL 994
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Stock Market Google tips for the Week
Written By Sheffin on Wednesday, August 11, 2010 | 10:19 AM
http://googlestockmarket.blogspot.com/
Jindal Steel and Power
Jindal Steel is looking very nice in this chart and it is ready to break its good resistance level of 633. Last few trading session it moved under the range of 615 to 632. If it breaks its resistance level we can see next level of 640 and 645 in short term. One should take long position after 733 with stop loss of 715.
Praj Industries
Praj Industries is moving under a range and made long consolidation phase. If it break the level of 80 we can see next level of 85-90 in short term . One should take long position with stop loss of 75.
Sun Pharmaceuticals
Sun Pharma will be the best bet for the week,as technically its trend is bullish and right now it is in correction mode. It is having very good resistance at 1800 level if it crosses this level then the next target will be 1850,but 1850 is 52 week high for this stock thus selling pressure may be seen over here ,along with one can put the stop loss of 1748 or 1745 ,thus Sun Pharma will be best bet for the week.
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Google Stock Market Outlook
Written By Sheffin on Thursday, August 5, 2010 | 11:03 AM
http://googlestockmarket.blogspot.com/
Hi,
Market Technicals for the next 5 Trading Days
Indian Markets Technicals
We expect Nifty & Sensex to touch 5490 & 18322 above 5426 & 18067. If the markets moves below 5426 & 18067 levels, then it will try to touch 5362 & 17811 levels.
Economy
We expect the price of Ginger to rise by 43-45% annually for next 4-5 years. We also expect the price of Peas Green to rise by 13-15% annually for next 4-5 years.
Derivatives Calls
Futures (Weekly)
Sell Nifty August’10 at current levels with a target of 55426.00 & with a stoploss above 5468.00.
Sell BankNifty August’10 at current levels with a target of 10231.00 & with a stoploss above 10462.00.
Very Long Term Delivery Calls (1-2 Years)
We strongly recommend a buy on TVS Motor Co. Ltd. at current levels with a long-term target of 350.00.
We strongly recommend a buy on UCO Bank at current levels with a long-term target of 221.00.
Long Term Delivery Calls (4-6 Months)
We strongly recommend a buy on Super Crop Safe at current levels with a long-term target of 16.00.
We strongly recommend a buy on Automotive Axles Ltd. at current levels with a long-term target of 626.00.
Medium Term Delivery Calls (3-4 Months)
We strongly recommend a buy on BASF India Ltd. at current levels with a medium-term target of 605.00 & with a stoploss below 422.00.
We strongly recommend a buy on Bata India Ltd. at current levels with a medium-term target of 390.00 & with a stoploss below 238.00.
Short Term Delivery Calls (1-2 Months)
Buy Bayer Cropscience Ltd. at current levels with a short-term target of 1062.00 & with a stoploss below 867.00.
Buy BEML Ltd. at current levels with a short-term target of 1090.00 & with a stoploss below 1017.00.
Very Short Term Delivery Calls (5-10 Days)
Buy IndusInd Bank Ltd. at current levels with a very short-term target of 222.00 & with a stoploss below 208.00.
Buy Indl. Devp. Bank of India at current levels with a very short-term target of 127.00 & with a stoploss below 120.00.
Buy Infosys Tech. Ltd. at current levels with a very short-term target of 3003.00 & with a stoploss below 2828.00.
Sell Infra. Devp. Finance Co. Ltd. at current levels with a very short-term target of 174.00 & with a stoploss above 188.00.
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Free Nifty & Google Stock Levels – 4th August 2010
Written By Sheffin on Tuesday, August 3, 2010 | 10:47 AM
http://googlestockmarket.blogspot.com/
RPOWER SELL NEAR 160-161 SL163 T157-151.
* If target is hit @ open, safe traders can avoid trading that counter, or trade with low quantity, say 25% of normal capital. Irrespective of target one can book partial profits @ 1%-1.5% gains and keep SL to cost. If any trade triggers after 1PM, trade cautiously with less quantity in it strictly.
DELIVERY JACKPOT: YESBANK BUY NEAR 305-298 SL290 T320-340.
Nifty future written immediate support now comes at 5419-5410. Just check morning low exact at 5411 and then again in the middle of the day took support exactly again at 5419 zone and zoomed up towards 5435.
Nifty future’s projected high and low for next session is 5441 and 5405 (use this projection with other indicators). Immediate resistance now comes at 5454-5459 and crossover above 5460 can initiate major short covering rally towards 52 weeks high of 5476 again. Immediate support now comes at 5419-5410 and break with volume may again crash towards 5376-5369 or even towards hourly channel support near 5355. Hourly momentum indicators looking positive, and if tomorrow opens firm we can see sharp rally upwards.
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Google Pre-Market longterm, shorterm and intraday calls
Written By Sheffin on Monday, August 2, 2010 | 11:03 AM
http://googlestockmarket.blogspot.com/
For Gap up opening Short TCS @ 841 cover 830 sl 849 cmp 838,For gap Down Buy Tata steel @ 544 trgt 554 sl 537 cmp 547
For longs Buy GAIL @ 446 trgt 457 sl 439
For Shorts sell Voltas @ 210 cover 203 sl 214
Midcap mania buy Zigma soft. @ 6.90
For short term Buy Karuturi global @ 21.40
For Medium term buy Jai corp. @ 252.70
For long term Buy IRB Infra. @ 287.80
Buy Call option of Lanco infra. of Aug. series of sp 70 @
1.75 with a stop loss of 0.75 and trgt of 4 cmp 67.50
Buy put option of India cements. of Aug. Series of sp 100 @ 2 & trgt of
4 with a stop loss of 1 cmp 105.25
Buy HDFC @ 3012 & sell call option of sp 3100 of Aug. series @ 34.70
Buy call option of Sterlite inds. of Aug. series of sp 175 @ 9.45 & sell call option
of Aug. series of sp 185 @ 4.15
Momentum positional call : Buy ONGC @ 1271 for a period of 5 days stoploss
of 1249 Trgt @ 1299
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Buy Sun Pharma above Rs.1810
Written By Sheffin on Saturday, July 31, 2010 | 12:46 PM
http://googlestockmarket.blogspot.com/
Buy Sun Pharma above Rs.1810 (CMP : Rs. 1807.40) for Target of Rs.1857 – 1864 with Stop Loss of Rs.1782
Buy Sun Pharma above Rs.1810 (CMP : Rs. 1807.40) for Target of Rs.1857 – 1864 with Stop Loss of Rs.1782
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Stock Idea: Gati Ltd
Written By Sheffin on Monday, April 26, 2010 | 5:32 AM
Well on the track of recovery, the company continued to forge ahead. For the third quarter ended 31 March 2010, the company posted its highest ever revenue for a quarter at Rs.189.19 crore, up 4% (QoQ) and 22% (YoY). Dry docking expenses are being accounted in equated installments spread over the current financial year and the amount absorbed in this quarter is Rs.1.45 crore. Net profit, sequentially was up 7% at Rs.4.11 crore compared to a net loss of Rs.17.06 crore in Q3FY09.
The most impressive part about its performance has been the improvement in the NPM – it was up at 2.17% as against 2.11% in Q2 of current fiscal.
The express distribution and supply chain division did well. For the quarter, it showed a 33.7% (YoY) rise in topline, EBIDTA margins rose over 2.8 times and net profit of this division was up by a whopping 281%. Its other division, known as the coast to coast, which contributes around 15% to the total revenue of the company and is mainly to do with shipping, continues to remain the main drag. This unit showed a 14% drop in topline, EBIDTA margins were down from 11.2% to 4.4% and net profit fell 66%. But QoQ, there has been an improvement with a 22% rise in revenue and 30% rise in EBIDTA margins. This division also seems to be getting slowly but surely out of the woods. It recently increased its fleet size by chartering vessels and also by adding new routes to the shipping network.
The company is in the final phase of its internal restructuring. It continued to further sell off its assets in shipping division. During the quarter two old vessels were sold resulting in the net loss of Rs 31 lakhs.
During the previous year, the company was constrained to discontinue the freighter business and terminated the arrangement with National Aviation Company of India Ltd (NACIL) resulting in Arbitral dispute and NACIL invoked the Bank Guarantee of Rs.30 crore. This is one case which continues to be fought and one risk which has to be factored in.
For 9MFY10, its net revenue stands at Rs.543 crore and net profit is at Rs.10.22 crore. For the current year, the company expects to post a revenue of around Rs.800 crore and net profit of Rs.15 to 18 crore.
It looks like it has left the past behind and is sailing high into the future.
Source: Internet (premiuminvestments.in by S P Tulsian)
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Short term calls : Buy NIIT Technologies Ltd
Written By Sheffin on Friday, January 8, 2010 | 2:37 AM
NIIT Technologies Ltd— BUY—178—INR
Sector — Software
Regd.Off.— NIIT House, C-125 Okhla Phase-I, New Delhi, 110020
Listed — NSE, BSE.
Company overview—
NIIT Technologies is a global IT and Business Process Management Services provider, with a presence in 14 countries across the world. NIIT Technologies is a Global IT solutions organization, with its footprint spanning North America, Europe, Asia and Australia. Ranking among India’s Top 20 IT services players, the company offers a gamut of services in the areas of Application Development Management and Enterprise Solutions, encompassing Managed Services and Business Process Outsourcing. Positioning itself as a navigator, the company has been guiding customers in their quest for state-of-the-art IT solutions. The two key values driving business practices at NIIT Technologies are Innovation and Trust, which have helped build enduring relationships with clients. NIIT Technologies focuses on well-defined industry verticals of Finance, Transport, Retail and Manufacturing for its IT solutions business. Company offers services in Custom Software Development, Legacy maintenance and modernization and Enterprise Integration. NIIT Technologies follows global standards in its software development processes that include an ISO 9001:2000 certification from KPMG and assessment at Level 5 of SEI-CMMi. Whether it is global banking and insurance major, ING, leading Asset Management solutions provider, SEI, world retail chain, Marks & Spencer, the Number Two cement manufacturer, Holcim or travel big-wigs, British Airways and Sabre, NIIT Technologies has been able to scale its interactions with these marquee clients into extremely meaningful, multi-year "collaborations."
Products & Services—
Company has specialization in providing solutions to customers in the Insurance, Banking, Transportation, Manufacturing and Retail verticals. Its major global customers include ING Group, SEI Investments, Channel 4, Ministry of Defense, Singapore, Office Depot, Singapore Airlines, Toshiba and Toyota Motors. NIIT Technologies subsidiaries, NIIT SmartServe Limited and NIIT GIS Limited, offer Business Process Management and Geographical Information Systems solutions, respectively. Company has specialization in offering solutions to the Insurance industry in areas of Insurance Management Consulting, Insurance Systems Consulting, Insurance Software Frameworks and Services, Insurance Business Process Outsourcing, and Training Solutions for the Insurance industry. It provide services in application development and management in legacy, client-server, Web and wireless technologies, integration solutions, data warehousing solutions, testing services, legacy applications re-engineering, package services and managed services.
NIIT Technologies focuses on distinct industry verticals including Finance, Transport, Retail and Manufacturing. In Finance, it offers solutions to the insurance, asset management and banking sectors. It has a suite of solution frameworks focused on the insurance sector. In transportation, it has handled diverse projects for leading airlines, land transport authorities and railways. In retail industry company focuses on providing development and maintenance services for retailing systems and offering out-of-the-box retail industry solutions. In Manufacturing, it provides SAP solutions for the SMB segment. It also executed diverse projects for clients in the manufacturing and automotive, education, government and public enterprise, media and publishing and telecom sectors.
NIIT Technologies has alliances with global IT majors including IBM, Microsoft, SAP, Siebel and Sun. As part of its inorganic growth strategy NIIT has made significant acquisitions. Osprey, USA-a specialist in SAP solutions, DEI-an Insurance industry solutions provider, AD Solutions a company with a strong presence in Germany, Austria and Switzerland.
Company has following joint ventures-
NIIT GIS Ltd. - NIIT Technologies has been partnering with global GIS leader, ESRI Inc. USA since 1985, when it began reselling and supporting its immensely popular ArcInfo software. In 1996, the collaboration evolved into a strategic relationship, with a new joint venture, NIIT GIS Ltd. getting formed to address the burgeoning GIS market in the country.
Adecco-NIIT Technologies Pvt. Ltd. - NIIT Technologies has entered into a partnership with Adecco S.A., a Fortune 500 company and world leader in Human Resource services Adecco-NIIT Technologies Pvt. Ltd. The Zurich, Switzerland headquartered Adecco is leveraging NIIT Technologies’ dual-shore delivery model — a blend of onsite and offshore services — to deliver a high Return on Investment to clients spread across the world. Committed to achieving process excellence, the joint venture has deployed NIIT Technologies’ Quality Management System (QMS).
Recent Developments—
In Nov, Company has partnered with Hitachi Information Systems, a leading provider of IT infrastructure services in Japan to offer services in cloud computing. Cloud computing is an emerging mega trend which is standardized IT capability delivered via the internet in a pay-per-use and self-service manner. NIIT Technologies pursuing its non-linear services model of business is an early entrant in this space. Through this partnership NIIT Technologies and Hitachi Information Systems will provide unmatched value based on the strengths of both companies.
Valuation—
Company wants to establish its presence among the top players in its selected segments by operating in the integrated IT Services and Business Process Management areas. At current market price, stock is trading at attractive valuation of 9.95 P/E multiple of its FY 2010 estimated EPS. We recommend investors to buy "NIIT Technologies Ltd." with medium to long-term investment horizon.
Sector — Software
Regd.Off.— NIIT House, C-125 Okhla Phase-I, New Delhi, 110020
Listed — NSE, BSE.
Company overview—
NIIT Technologies is a global IT and Business Process Management Services provider, with a presence in 14 countries across the world. NIIT Technologies is a Global IT solutions organization, with its footprint spanning North America, Europe, Asia and Australia. Ranking among India’s Top 20 IT services players, the company offers a gamut of services in the areas of Application Development Management and Enterprise Solutions, encompassing Managed Services and Business Process Outsourcing. Positioning itself as a navigator, the company has been guiding customers in their quest for state-of-the-art IT solutions. The two key values driving business practices at NIIT Technologies are Innovation and Trust, which have helped build enduring relationships with clients. NIIT Technologies focuses on well-defined industry verticals of Finance, Transport, Retail and Manufacturing for its IT solutions business. Company offers services in Custom Software Development, Legacy maintenance and modernization and Enterprise Integration. NIIT Technologies follows global standards in its software development processes that include an ISO 9001:2000 certification from KPMG and assessment at Level 5 of SEI-CMMi. Whether it is global banking and insurance major, ING, leading Asset Management solutions provider, SEI, world retail chain, Marks & Spencer, the Number Two cement manufacturer, Holcim or travel big-wigs, British Airways and Sabre, NIIT Technologies has been able to scale its interactions with these marquee clients into extremely meaningful, multi-year "collaborations."
Products & Services—
Company has specialization in providing solutions to customers in the Insurance, Banking, Transportation, Manufacturing and Retail verticals. Its major global customers include ING Group, SEI Investments, Channel 4, Ministry of Defense, Singapore, Office Depot, Singapore Airlines, Toshiba and Toyota Motors. NIIT Technologies subsidiaries, NIIT SmartServe Limited and NIIT GIS Limited, offer Business Process Management and Geographical Information Systems solutions, respectively. Company has specialization in offering solutions to the Insurance industry in areas of Insurance Management Consulting, Insurance Systems Consulting, Insurance Software Frameworks and Services, Insurance Business Process Outsourcing, and Training Solutions for the Insurance industry. It provide services in application development and management in legacy, client-server, Web and wireless technologies, integration solutions, data warehousing solutions, testing services, legacy applications re-engineering, package services and managed services.
NIIT Technologies focuses on distinct industry verticals including Finance, Transport, Retail and Manufacturing. In Finance, it offers solutions to the insurance, asset management and banking sectors. It has a suite of solution frameworks focused on the insurance sector. In transportation, it has handled diverse projects for leading airlines, land transport authorities and railways. In retail industry company focuses on providing development and maintenance services for retailing systems and offering out-of-the-box retail industry solutions. In Manufacturing, it provides SAP solutions for the SMB segment. It also executed diverse projects for clients in the manufacturing and automotive, education, government and public enterprise, media and publishing and telecom sectors.
NIIT Technologies has alliances with global IT majors including IBM, Microsoft, SAP, Siebel and Sun. As part of its inorganic growth strategy NIIT has made significant acquisitions. Osprey, USA-a specialist in SAP solutions, DEI-an Insurance industry solutions provider, AD Solutions a company with a strong presence in Germany, Austria and Switzerland.
Company has following joint ventures-
NIIT GIS Ltd. - NIIT Technologies has been partnering with global GIS leader, ESRI Inc. USA since 1985, when it began reselling and supporting its immensely popular ArcInfo software. In 1996, the collaboration evolved into a strategic relationship, with a new joint venture, NIIT GIS Ltd. getting formed to address the burgeoning GIS market in the country.
Adecco-NIIT Technologies Pvt. Ltd. - NIIT Technologies has entered into a partnership with Adecco S.A., a Fortune 500 company and world leader in Human Resource services Adecco-NIIT Technologies Pvt. Ltd. The Zurich, Switzerland headquartered Adecco is leveraging NIIT Technologies’ dual-shore delivery model — a blend of onsite and offshore services — to deliver a high Return on Investment to clients spread across the world. Committed to achieving process excellence, the joint venture has deployed NIIT Technologies’ Quality Management System (QMS).
Recent Developments—
In Nov, Company has partnered with Hitachi Information Systems, a leading provider of IT infrastructure services in Japan to offer services in cloud computing. Cloud computing is an emerging mega trend which is standardized IT capability delivered via the internet in a pay-per-use and self-service manner. NIIT Technologies pursuing its non-linear services model of business is an early entrant in this space. Through this partnership NIIT Technologies and Hitachi Information Systems will provide unmatched value based on the strengths of both companies.
Valuation—
Company wants to establish its presence among the top players in its selected segments by operating in the integrated IT Services and Business Process Management areas. At current market price, stock is trading at attractive valuation of 9.95 P/E multiple of its FY 2010 estimated EPS. We recommend investors to buy "NIIT Technologies Ltd." with medium to long-term investment horizon.
2:37 AM | 0
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Multibagger penny stock recomendation BSE Vinay Cements Limited
Written By Sheffin on Tuesday, January 5, 2010 | 11:40 AM
Multibagger penny stock recomendation BSE Vinay Cements Limited
BSE Code: 518051
This is extremely low volume stock
So its advisable for high risk high gain trades.
Since Vol is very low,it means stop losses shouldbe deep enough to eradicate triggering of stop losses by normal market noise.
CMP: Rs 43.85
Promoters hold nearly 75 percent stake .
Group / Index : B
Face value : 10.00
Industry : Cement & Cement Products
Net loss in Sep 2008 was 30 lakhs
net loss for 12 months ended march 2009 was Rs4 crores
june 2009 profit was Rs 67 lakhs!!!
in sept 2009 net profit was 44 lakhs
So this company is a turnaround story
Sl : Rs 37
Target : Rs 80
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Multibagger midacap Small cap stocks Recomendations Empee Distillers limited on Basis of Fundamental and technical analysis
Multibagger midacap Small cap stocks Recomendations Empee Distillers limited on Basis of Fundamental and technical analysis
Empee Distilleries Limited
NSE Code: EDL
BSE Code: 532920
CMP: 129.55
Fundamental analysis
EPS For last 12 months: Rs 11.04
PE : 11.73
promoters hold nearly 72 % shares
Technical analysis
Target Rs 170
Sl:Rs 115
11:37 AM | 0
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Multibagger Indian Comodity Stock NSE BAJAJHIND
Multibagger Indian Comodity Stock NSE Code BAJAJHIND
bajaj hindustan has Consolidated forlong timein rangeof 195-230
Today it closed at Rs 230.25
This stock is Ready to explode now
buy at CMP with Stop loss of Rs 218 on closing basis
Expect 255 Soon!
11:30 AM | 0
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Stock pics: Bayer CropScience Ltd
Written By Sheffin on Monday, January 4, 2010 | 9:56 AM
Company Background:
Bayer CropScience Ltd (BCS) is a cropscience company having crop protection production facilities at Himatnagar and Ankleshwar (both in Gujarat) where it manufactures a variety of agrochemical like fungicides, insecticides and herbicides. It had a plant at Thane, which has been shut down and the facilities have been moved to the Ankleshwar plant. The Himatnagar plant also caters to export related agrochemicals required by its Asia-Pacific and European group companies. Post the acquisition of Aventis Cropscience Limited worldwide in 2001, BCS has become the leader in the Crop Protection business in India. BCS is a 71% subsidiary of the Euro 35bn Bayer AG, Group, which is a world leader in Agrichemicals. BCS is a leader in the Indian crop protection Sector with a market share of 17%. Other large shareholders include LIC, Birla Sun Life Insurance Company Ltd and Bajaj Aliianz Life Insurance Company Ltd, which hold 3.67%, 2.51% and 2.48% respectively in BCS. Bayer AG acquired Aventis CropScience globally in 2001 and became a global leader in crop protection, pest control, seeds and plant biotechnology. With a sizeable existence in 122 countries and 22,000 dedicated employees, BCS remains a large
global player.
BCS is divided into 3 business groups: Crop Protection, Environmental Science and BioScience. BCS as a global innovator and market leader in its industry believes that its technological and commercial expertise entails a duty to contribute to Sustainable Development.
Business:
Crop protection:
This segment ensures a secure yield by giving protection from seed planting through to harvest. During its life cycle a crop will encounter many enemies that can even destroy an entire harvest: pests, weeds, fungi. Researchers in Crop Protection are committed to preventing this damage. BCS’s goal in this business is to secure harvests for farmers without creating a burden on the environment.
Environmental Science and Professional Pest Control: The Bayer Environmental Science (BES) is a pioneer in the field of public health, being a major contributor in this segment since several years. The business areas covered by BES, are diverse in order to address the specific needs of the customers, covering three major segments: Vector Control, Professional Pest Control and Green Industry.
Bayer CropScience Ltd (BCS) is a cropscience company having crop protection production facilities at Himatnagar and Ankleshwar (both in Gujarat) where it manufactures a variety of agrochemical like fungicides, insecticides and herbicides. It had a plant at Thane, which has been shut down and the facilities have been moved to the Ankleshwar plant. The Himatnagar plant also caters to export related agrochemicals required by its Asia-Pacific and European group companies. Post the acquisition of Aventis Cropscience Limited worldwide in 2001, BCS has become the leader in the Crop Protection business in India. BCS is a 71% subsidiary of the Euro 35bn Bayer AG, Group, which is a world leader in Agrichemicals. BCS is a leader in the Indian crop protection Sector with a market share of 17%. Other large shareholders include LIC, Birla Sun Life Insurance Company Ltd and Bajaj Aliianz Life Insurance Company Ltd, which hold 3.67%, 2.51% and 2.48% respectively in BCS. Bayer AG acquired Aventis CropScience globally in 2001 and became a global leader in crop protection, pest control, seeds and plant biotechnology. With a sizeable existence in 122 countries and 22,000 dedicated employees, BCS remains a large
global player.
BCS is divided into 3 business groups: Crop Protection, Environmental Science and BioScience. BCS as a global innovator and market leader in its industry believes that its technological and commercial expertise entails a duty to contribute to Sustainable Development.
Business:
Crop protection:
This segment ensures a secure yield by giving protection from seed planting through to harvest. During its life cycle a crop will encounter many enemies that can even destroy an entire harvest: pests, weeds, fungi. Researchers in Crop Protection are committed to preventing this damage. BCS’s goal in this business is to secure harvests for farmers without creating a burden on the environment.
Environmental Science and Professional Pest Control: The Bayer Environmental Science (BES) is a pioneer in the field of public health, being a major contributor in this segment since several years. The business areas covered by BES, are diverse in order to address the specific needs of the customers, covering three major segments: Vector Control, Professional Pest Control and Green Industry.
The commitment of BES is to consistently deliver high quality research products for the control of insect pests of public health. Such products include pesticides to manage malaria vectors, cockroaches, rodents, termites, stred grain pests, houseflies and other pests in general.
BioScience: BioScience is a part of BCS, and is a global player in research, development and marketing of high quality seeds and innovative plant-based solutions derived from modern breeding and plant biotechnology. BioScience offers an integrated portfolio of high quality seeds, trait technologies and high performance crop protection products.
BioScience: BioScience is a part of BCS, and is a global player in research, development and marketing of high quality seeds and innovative plant-based solutions derived from modern breeding and plant biotechnology. BioScience offers an integrated portfolio of high quality seeds, trait technologies and high performance crop protection products.
BioScience activities are focused on three areas: Vegetable Seeds, Agricultural Seeds and Research activities into novel plant-based solutions for agriculture, nutrition, health and biomaterials. Bayer Bioscience, headquartered in Hyderabad India has about 400 employees, and has research, production and an extensive sales network spread across the country.
Seed Production, Conditioning and Distribution Bayer BioScience has established seed production centers in four states – Andhra Pradesh, Karnataka, Tamil Nadu and Haryana and plans to develop production centers in other states as well. It has four seed conditioning plants (one at Toopran, two at Medchal and another at Tolichowki) in Hyderabad. Its warehouses are located throughout the country, including central warehouse at Toopran with 10,000 mt capacity. It has a well-established network of distributors across the country that enables timely reach of seeds to farmers in remote areas. Seeds constituted 14.4% of sales in FY09 (Rs.213.1 cr) vs. 14.1% in FY08 (Rs.175.9 cr).
Investment Rationale
Leader in Indian pesticides markets: BCS is a market leader in the Indian Agrichemical Sector with a market share of 17%. Going ahead, there exists huge opportunity for BCS to grow its domestic business considering that penetration of pesticides in the Indian market is low compared to its Asian and Global peers. India produces approximately 16% of the world's total food grain, but utilises a mere 2% of pesticides. There exists under usage of agrichemicals by the Indian farmers and untapped opportunity available to the agrochemical companies. To maintain its leadership position, BCS is continuously strengthening its capacity to provide products and combined solutions for the production of good quality food, feed, fibre and energy plants. New innovative products – major driver of growth: BCS's growth has been driven by its ability to introduce new products at minimal R&D costs on account of having access to global parent's strong product portfolio. Bayer AG has a strong R&D base. BCS has been introducing 3-5 products every year, and the management has indicated that this trend would continue going forward as well. BCS spent Rs.13.8 cr on R&D FY09 (0.99% of sales).
Striving all the time for providing innovative and effective solutions to the farmers’ pest problems, BCS has evaluated 42 new molecules and mixtures for use in various agricultural and horticultural crops and pest segments in the changing and dynamic scenario, post introduction of Genetically Modified Bt-Cotton in the country. BCS continued its initiatives in contract farming vigorously in crops like cotton, fresh fruits and vegetables and provided the required guidance and inputs to farmers for plant protection and efficient crop management towards enhancing productivity and tapping the huge export potential.
Maintaining the Bayer tradition in Research & Development, in 2008, BCS secured registrations and launched Fenamidone + Mancozeb 50 WP (Sectin 60 WP) – a broad-spectrum fungicide for use in Grape and Potato. During the year 2008, it has also obtained approvals for various herbicides exclusively for Export to other countries viz. Aclonifen Technical, Fentrazamide Technical and Fentrazamide 6.75 + Propanil 37.5 WP (Lecspro 44.25 WP). In FY10 BCS has indicated the likely launches of globally renowned speciality acaricide Oberon 240 SC, to control mites affecting tea, chilli, brinjal and apple etc., Fipronil 80 WG (Jump 80 WG), an insecticide for use in ice; Imidacloprid 350 SC (Confidor Super), an insecticide for control of sucking pests in rice; Melody Duo 66.75 WP, a fungicide for use in grape and potato.
Pursuing its philosophy of offering new and better cost-effective solutions to farmers to manage insect pests, diseases and weed menace in various crops, BCS is evaluating a number of molecules for use in a variety of key crops. Launch of some of its products in small packs to cater the needs of niche customers, promoting Health & Hygiene on ready to use formulation/packs is also being planned. Going ahead, the company is likely to include fruits and vegetables (horticulture crops) too.
Bayer AG is accelerating the extension of its biotech and seed business. Following a record year in 2008, the company is continuing its strategy of expansion, aiming systematically to expand its fast-growing business in seed and plant traits in the coming years. The intention is to more than triple sales in the BioScience segment to around EUR 1.4 billion by 2018. In this context the company is planning to invest some EUR 3.5 billion in research and infrastructure for its biotech and seed business between now and 2018. Bayer CropScience internationally is currently investing the equivalent of roughly 27 percent of sales in the development of new BioScience products – a figure that puts it among the leaders in the industry in terms of research intensity. Almost 1,000 BioScience researchers and breeders are working on over 50 projects. Innovation and R&D – key focus areas for BCS: In order to meet the challenges of food production and optimise use of agricultural resources against the background of a continuously growing world population, intensive agricultural research is needed. BCS’s strong focus on innovation and substantial investments in Research & Development enables it to contribute significantly to global food safety and resolution of the aforesaid critical challenges.
The innovation focus will also help the Company to further gain the competitive advantage in a stringent product patent regime, which is rapidly taking shape in India. Moreover, due to the R&D focus on environmentally safe products, the Company remains well prepared to stay ahead of the competition amidst the constantly strengthening safety and residue standards. BCS has launched several such products recently in the new chemistry segment and also has a strong pipeline, which goes beyond the regulatory requirements of safety and residue levels.
BCS and GVK Biosciences Private, Hyderabad, India, have entered into a research cooperation in the area of early discovery chemistry. The objective is to speed up the search for promising active ingredients for innovative crop protection products. Under the agreement, BCS will integrate GVK BIO capacities in the early part of its Discovery chemistry process. BCS wishes to further speed up the development of its successful crop protection R&D pipeline and look forward to working with GVK BIO, Asia’s leading contract research organization. GVK Biosciences has built world-class capabilities in early Discovery Chemistry.
BES division poised for growth: The Environmental Science division has been maintaining its leading position as the market leader in the segments of public health and professional pest control. BCS continues to sponsor major symposia and seminars to promote general awareness, product knowledge and international trends in vector borne diseases management. Several techno commercial training programmes on safe use and handling of products were conducted in FY09. Bayer keeps a stringet eye on Quality Assurance, elevates the level of technological competence, and assures technical service to customers through long lasting partnerships. BES regularly provides technical support and training to the customers and thus greatly contributes in providing a pest free and disease free living.
The importance given to the public health is clear from the fact that in the Union Budget for FY10, the Govt has provided for Rs.497 crore for Central Government Health Scheme, Rs.663.53 crore for allopathic hospitals and dispensaries, Rs.1176.42 crore for medical education, training and research and Rs.225.32 crore for Public Health Schemes and Indian Council of Medical Research (Rs.184 crore). Provision of Rs. 196.69 crore has been made to upgrade Primary Health Centre, Community Health Centres and Sub-Cenrtres.
In India, urban malaria has emerged as major public health problem in many small, medium and metropolitan cities. Essentially a man made problem, urban malaria is the outcome of rapid and haphazard expansion of the cities, inadequate piped water supply, storage of water in cisterns, disuse or scarce use of wells, developmental activities, aggregation of migrant labour force and over all population movement. The developmental pace often outstrips mitigating measures undertaken by the municipal and health authorities. Under this division, the growing awareness on vector borne diseases in the Public and Government Agencies is an opportunity. Resistance to synthetic pyrethroids by mosquitoes is an opportunity to BCS to launch Bendiocarb 80% WP, a carbamate insecticide, as resistance management tool. In the space spray market, BCS is planning to launch a state of art product “Aqua K-Othrine” which will provide a solution for need of a greener product in the market.
This segment is flooded with cheap generics, which eat into market share. However, BCS has tied up with Pest Control India Ltd and Godrej HiCare.
Seed Production, Conditioning and Distribution Bayer BioScience has established seed production centers in four states – Andhra Pradesh, Karnataka, Tamil Nadu and Haryana and plans to develop production centers in other states as well. It has four seed conditioning plants (one at Toopran, two at Medchal and another at Tolichowki) in Hyderabad. Its warehouses are located throughout the country, including central warehouse at Toopran with 10,000 mt capacity. It has a well-established network of distributors across the country that enables timely reach of seeds to farmers in remote areas. Seeds constituted 14.4% of sales in FY09 (Rs.213.1 cr) vs. 14.1% in FY08 (Rs.175.9 cr).
Investment Rationale
Leader in Indian pesticides markets: BCS is a market leader in the Indian Agrichemical Sector with a market share of 17%. Going ahead, there exists huge opportunity for BCS to grow its domestic business considering that penetration of pesticides in the Indian market is low compared to its Asian and Global peers. India produces approximately 16% of the world's total food grain, but utilises a mere 2% of pesticides. There exists under usage of agrichemicals by the Indian farmers and untapped opportunity available to the agrochemical companies. To maintain its leadership position, BCS is continuously strengthening its capacity to provide products and combined solutions for the production of good quality food, feed, fibre and energy plants. New innovative products – major driver of growth: BCS's growth has been driven by its ability to introduce new products at minimal R&D costs on account of having access to global parent's strong product portfolio. Bayer AG has a strong R&D base. BCS has been introducing 3-5 products every year, and the management has indicated that this trend would continue going forward as well. BCS spent Rs.13.8 cr on R&D FY09 (0.99% of sales).
Striving all the time for providing innovative and effective solutions to the farmers’ pest problems, BCS has evaluated 42 new molecules and mixtures for use in various agricultural and horticultural crops and pest segments in the changing and dynamic scenario, post introduction of Genetically Modified Bt-Cotton in the country. BCS continued its initiatives in contract farming vigorously in crops like cotton, fresh fruits and vegetables and provided the required guidance and inputs to farmers for plant protection and efficient crop management towards enhancing productivity and tapping the huge export potential.
Maintaining the Bayer tradition in Research & Development, in 2008, BCS secured registrations and launched Fenamidone + Mancozeb 50 WP (Sectin 60 WP) – a broad-spectrum fungicide for use in Grape and Potato. During the year 2008, it has also obtained approvals for various herbicides exclusively for Export to other countries viz. Aclonifen Technical, Fentrazamide Technical and Fentrazamide 6.75 + Propanil 37.5 WP (Lecspro 44.25 WP). In FY10 BCS has indicated the likely launches of globally renowned speciality acaricide Oberon 240 SC, to control mites affecting tea, chilli, brinjal and apple etc., Fipronil 80 WG (Jump 80 WG), an insecticide for use in ice; Imidacloprid 350 SC (Confidor Super), an insecticide for control of sucking pests in rice; Melody Duo 66.75 WP, a fungicide for use in grape and potato.
Pursuing its philosophy of offering new and better cost-effective solutions to farmers to manage insect pests, diseases and weed menace in various crops, BCS is evaluating a number of molecules for use in a variety of key crops. Launch of some of its products in small packs to cater the needs of niche customers, promoting Health & Hygiene on ready to use formulation/packs is also being planned. Going ahead, the company is likely to include fruits and vegetables (horticulture crops) too.
Bayer AG is accelerating the extension of its biotech and seed business. Following a record year in 2008, the company is continuing its strategy of expansion, aiming systematically to expand its fast-growing business in seed and plant traits in the coming years. The intention is to more than triple sales in the BioScience segment to around EUR 1.4 billion by 2018. In this context the company is planning to invest some EUR 3.5 billion in research and infrastructure for its biotech and seed business between now and 2018. Bayer CropScience internationally is currently investing the equivalent of roughly 27 percent of sales in the development of new BioScience products – a figure that puts it among the leaders in the industry in terms of research intensity. Almost 1,000 BioScience researchers and breeders are working on over 50 projects. Innovation and R&D – key focus areas for BCS: In order to meet the challenges of food production and optimise use of agricultural resources against the background of a continuously growing world population, intensive agricultural research is needed. BCS’s strong focus on innovation and substantial investments in Research & Development enables it to contribute significantly to global food safety and resolution of the aforesaid critical challenges.
The innovation focus will also help the Company to further gain the competitive advantage in a stringent product patent regime, which is rapidly taking shape in India. Moreover, due to the R&D focus on environmentally safe products, the Company remains well prepared to stay ahead of the competition amidst the constantly strengthening safety and residue standards. BCS has launched several such products recently in the new chemistry segment and also has a strong pipeline, which goes beyond the regulatory requirements of safety and residue levels.
BCS and GVK Biosciences Private, Hyderabad, India, have entered into a research cooperation in the area of early discovery chemistry. The objective is to speed up the search for promising active ingredients for innovative crop protection products. Under the agreement, BCS will integrate GVK BIO capacities in the early part of its Discovery chemistry process. BCS wishes to further speed up the development of its successful crop protection R&D pipeline and look forward to working with GVK BIO, Asia’s leading contract research organization. GVK Biosciences has built world-class capabilities in early Discovery Chemistry.
BES division poised for growth: The Environmental Science division has been maintaining its leading position as the market leader in the segments of public health and professional pest control. BCS continues to sponsor major symposia and seminars to promote general awareness, product knowledge and international trends in vector borne diseases management. Several techno commercial training programmes on safe use and handling of products were conducted in FY09. Bayer keeps a stringet eye on Quality Assurance, elevates the level of technological competence, and assures technical service to customers through long lasting partnerships. BES regularly provides technical support and training to the customers and thus greatly contributes in providing a pest free and disease free living.
The importance given to the public health is clear from the fact that in the Union Budget for FY10, the Govt has provided for Rs.497 crore for Central Government Health Scheme, Rs.663.53 crore for allopathic hospitals and dispensaries, Rs.1176.42 crore for medical education, training and research and Rs.225.32 crore for Public Health Schemes and Indian Council of Medical Research (Rs.184 crore). Provision of Rs. 196.69 crore has been made to upgrade Primary Health Centre, Community Health Centres and Sub-Cenrtres.
In India, urban malaria has emerged as major public health problem in many small, medium and metropolitan cities. Essentially a man made problem, urban malaria is the outcome of rapid and haphazard expansion of the cities, inadequate piped water supply, storage of water in cisterns, disuse or scarce use of wells, developmental activities, aggregation of migrant labour force and over all population movement. The developmental pace often outstrips mitigating measures undertaken by the municipal and health authorities. Under this division, the growing awareness on vector borne diseases in the Public and Government Agencies is an opportunity. Resistance to synthetic pyrethroids by mosquitoes is an opportunity to BCS to launch Bendiocarb 80% WP, a carbamate insecticide, as resistance management tool. In the space spray market, BCS is planning to launch a state of art product “Aqua K-Othrine” which will provide a solution for need of a greener product in the market.
This segment is flooded with cheap generics, which eat into market share. However, BCS has tied up with Pest Control India Ltd and Godrej HiCare.
Exports to garner higher revenues: BCS’s exports registered a CAGR of 24.4% during CY05-FY09, while its contribution to the company's total sales was in the range of 11-16%. Of the company's total export revenues, 80% of sales were to the Bayer AG group companies, indicating high outsourcing by these group companies from BCS.
Going ahead, BCS’s exports would be driven by the increase in outsourcing by the various Bayer group companies due to the cost advantage, regulatory leeway and quality offered by BCS. Globally, Bayer AG has a revenue base of Euro 4 bn from crop protection sales. BCS could benefit from outsourcing done by Bayer AG.
(Source: Company Annual Report)
Land Bank - Hidden Value:
BCS has an idle land bank at Thane, where it has closed one of its plant and extended a VRS scheme to its employees there (it has written off Rs.30.5 cr towards VRS expenses in FY08). As per reports, it has around 132 acres having a market value on conservative basis of approximately Rs.8 cr per acre, totalling a land value of around Rs.1056 cr (per share value of Rs.267.3). The management plans to sell this land at appropriate valuations. BCS and Lanxess India Private Limited (LIPL) had entered into a Memorandum of Understanding (MOU) dated November 18, 2004 wherein the economic interest in identified land and building at Thane was transferred to LIPL effective July 01, 2004 but the transfer of ownership was not effected pending approval from the Collector of Thane. Pursuant to the Exit Agreement dated February 28, 2008 between BCS and LIPL, which replaced the earlier MOU, LIPL has exited the aforesaid land and building in a phased manner by 2009 and accordingly, BCS has agreed to pay in a phased manner rupees equivalent to Euro 160 lacs, to LIPL. Out of the aforesaid amount payable, BCS has already paid Rs.2,384 lacs equivalent to Euro 40 lacs in February 2008.
Improving profitability:
BCS has posted a strong 27.3% CAGR in sales to Rs.1,394 cr over CY05-FY09 on the back of new product launches. New products in the last recent years have been contributing ~23% to the total sales. During CY06-FY08, EBITDA Margins fell from 13.1% to 7.7% due to high raw material prices and staff cost. However, with a fall in commodity prices, this trend has reversed and EBIDTA margins improved to 11.9% in FY09. With debt equity ratio improving over the years from 0.42 in CY05 to 0.08 in FY09 it is likely that BCS would soon become a debt free company. Also the RoCE has improved drastically from 22.3% in CY05 to 35.1% in FY09.
Capex plans:
BCS believes that in the medium to long term, GM rice technologies could attribute significantly to increasing rice productivity. Hence, it has taken up Rs.43 cr capex plan in FY10 and also intends to launch two to three products, including BT rice. It is also working on bio-research technology as well. BT rice is a variant that has been modified by means of biotechnology with genes from Bacillus thuringiensis (Bt) to produce toxins for resistance to insects. BCS will continue to launch a minimum of two to three products in the market every year and going forward this will also reduce their monsoon dependency as well. It will continue to concentrate on development of stress resistant products like monsoon resistant, insect resistant, etc., to reduce the effect of unforeseen factors on BCS's products range. New tie-ups and orders to drive growth: BCS has tied up with rural retail operators like Haryali Kissan Bazaar, Tata Chemicals, ITC, Freshfields, Pest Control of India and Godrej in its bid to further augment its sales. Commendably, BCS has bagged an order worth Rs.13.7 cr from these companies to cater to their rural markets. BCS also does packing and supplies active ingredients in Jammu & Kashmir for achieving tax efficiencies. It also buys finished seeds, as it does not have the production facility for seeds. These new initiatives by BCS could help its growth trajectory.
Q2FY10 Performance:
BCS’s net sales increased by 15.9% y-o-y to Rs.482.2 cr in Q2FY10. The growth in sales was despite the fact that the Indian agriculture witnessed one of the worst droughts in its history. Q2FY10 was one of the worst quarters for the agrichem industry, which suffered from a poor monsoon and the price-erosion of products. Against this backdrop, BCS’s operating profit stood at Rs.88.2 cr, a growth of 10.7% y-o-y. The OPM for the quarter stood at 18.3%, compared to 19.2% in Q2FY09. The high cost of purchased goods was the key reason behind the decline in the OPM. Other income witnessed a drop of 24.9% to Rs.5.9 cr, while the interest outgo increased by 32.3% to Rs.3.7 cr y-o-y in Q2FY10. The PAT for BCS increased by 10.8% y-o-y to
Rs.56.6 cr. However, the adjusted PAT grew by only 4.6%, as it had to provide for an exceptional item worth Rs.3.2 cr related to VRS. It earned EPS of Rs.13.5 in Q2FY10. Quarter 1 and 2 are typically the best quarters historically for BCS based on the cropping seasons in India.
Going ahead, BCS’s exports would be driven by the increase in outsourcing by the various Bayer group companies due to the cost advantage, regulatory leeway and quality offered by BCS. Globally, Bayer AG has a revenue base of Euro 4 bn from crop protection sales. BCS could benefit from outsourcing done by Bayer AG.
(Source: Company Annual Report)
Land Bank - Hidden Value:
BCS has an idle land bank at Thane, where it has closed one of its plant and extended a VRS scheme to its employees there (it has written off Rs.30.5 cr towards VRS expenses in FY08). As per reports, it has around 132 acres having a market value on conservative basis of approximately Rs.8 cr per acre, totalling a land value of around Rs.1056 cr (per share value of Rs.267.3). The management plans to sell this land at appropriate valuations. BCS and Lanxess India Private Limited (LIPL) had entered into a Memorandum of Understanding (MOU) dated November 18, 2004 wherein the economic interest in identified land and building at Thane was transferred to LIPL effective July 01, 2004 but the transfer of ownership was not effected pending approval from the Collector of Thane. Pursuant to the Exit Agreement dated February 28, 2008 between BCS and LIPL, which replaced the earlier MOU, LIPL has exited the aforesaid land and building in a phased manner by 2009 and accordingly, BCS has agreed to pay in a phased manner rupees equivalent to Euro 160 lacs, to LIPL. Out of the aforesaid amount payable, BCS has already paid Rs.2,384 lacs equivalent to Euro 40 lacs in February 2008.
Improving profitability:
BCS has posted a strong 27.3% CAGR in sales to Rs.1,394 cr over CY05-FY09 on the back of new product launches. New products in the last recent years have been contributing ~23% to the total sales. During CY06-FY08, EBITDA Margins fell from 13.1% to 7.7% due to high raw material prices and staff cost. However, with a fall in commodity prices, this trend has reversed and EBIDTA margins improved to 11.9% in FY09. With debt equity ratio improving over the years from 0.42 in CY05 to 0.08 in FY09 it is likely that BCS would soon become a debt free company. Also the RoCE has improved drastically from 22.3% in CY05 to 35.1% in FY09.
Capex plans:
BCS believes that in the medium to long term, GM rice technologies could attribute significantly to increasing rice productivity. Hence, it has taken up Rs.43 cr capex plan in FY10 and also intends to launch two to three products, including BT rice. It is also working on bio-research technology as well. BT rice is a variant that has been modified by means of biotechnology with genes from Bacillus thuringiensis (Bt) to produce toxins for resistance to insects. BCS will continue to launch a minimum of two to three products in the market every year and going forward this will also reduce their monsoon dependency as well. It will continue to concentrate on development of stress resistant products like monsoon resistant, insect resistant, etc., to reduce the effect of unforeseen factors on BCS's products range. New tie-ups and orders to drive growth: BCS has tied up with rural retail operators like Haryali Kissan Bazaar, Tata Chemicals, ITC, Freshfields, Pest Control of India and Godrej in its bid to further augment its sales. Commendably, BCS has bagged an order worth Rs.13.7 cr from these companies to cater to their rural markets. BCS also does packing and supplies active ingredients in Jammu & Kashmir for achieving tax efficiencies. It also buys finished seeds, as it does not have the production facility for seeds. These new initiatives by BCS could help its growth trajectory.
Q2FY10 Performance:
BCS’s net sales increased by 15.9% y-o-y to Rs.482.2 cr in Q2FY10. The growth in sales was despite the fact that the Indian agriculture witnessed one of the worst droughts in its history. Q2FY10 was one of the worst quarters for the agrichem industry, which suffered from a poor monsoon and the price-erosion of products. Against this backdrop, BCS’s operating profit stood at Rs.88.2 cr, a growth of 10.7% y-o-y. The OPM for the quarter stood at 18.3%, compared to 19.2% in Q2FY09. The high cost of purchased goods was the key reason behind the decline in the OPM. Other income witnessed a drop of 24.9% to Rs.5.9 cr, while the interest outgo increased by 32.3% to Rs.3.7 cr y-o-y in Q2FY10. The PAT for BCS increased by 10.8% y-o-y to
Rs.56.6 cr. However, the adjusted PAT grew by only 4.6%, as it had to provide for an exceptional item worth Rs.3.2 cr related to VRS. It earned EPS of Rs.13.5 in Q2FY10. Quarter 1 and 2 are typically the best quarters historically for BCS based on the cropping seasons in India.
Risks and concerns:
§ The entry of generics in public health segment, slowing down of global economy, availability of funds for health segment, tolerances of some pests to insecticides are some of the risks and threats seen in the Environmental Science business. § BCS has ~13-14% revenues coming from exports and any adverse forex fluctuation could affect its earnings. § Agrochemicals are the last input in any agricultural operation and protect the final output i.e. crop. In case of India, most of
the agricultural production is rain fed and hence highly dependent on monsoon. Hence, vagaries in season could affect the demand for agrochemicals and in turn impact our estimates. § BCS faces sales returns regularly. Any unusually large sales return could adversely impact sales and margins. § Market need and acceptance of new technologies by farming community is essential before commercial launch of new products. § Any inordinate delay in sale of land at Thane could result in dampening of the interest in the stock.
Conclusion
The conditions of the crop protection market have been quite favorable in the recent years. Good commodity prices, increasing demand for vegetables, labour shortage and government focus on food security have supported the market growth. Farmer’s positive mind-set to invest in profitable crops and low overall channel inventories has further added to the positive sentiments. BCS has guided for double-digit growth in FY10, provided that prices remain stable. It also expects Bt Rice to be a significant contributor to its revenue, going ahead. BCS has 42 molecules under testing for launch; the company has been launching 2-3 new products every year and expect the same trend to continue in the future. We expect new product launches to be a key driver for BCS’s domestic business. BCS has its export revenues from Bayer AG Group companies and these are set to increase given the cost advantage and quality offered by BCS. with the ushering in of WTO and implementation of patent regime, BCS is planning to introduce some excellent high technology products in crop protection and environment science divisions. BCS reported Q2FY10 results better than the street’s expectations and compared to its peers despite poor monsoon. Overall, the monsoon has been below normal in India (21% deficient). However, late rainfall (in early October) has helped the country increase its water reservoir level, and brought it at the long-term average. Due to this, the Rabi season could see good sowing, as farmers who lost their crops in the Kharif season would like to take advantage of the elongated season. Based on quick estimates, though the stock is currently not cheap (compared to smaller local peers) at 17.2x FY10(E) EPS and 14.4x FY11(E) EPS, the increased spending on agriculture, continued introductions of innovative products by BCS and possibility of land sale at Thane could keep interest alive in the stock. We feel that the stock could be bought at the current levels in a small way and added aggressively on falls in the Rs.449-490 band for a target of Rs.649-688 (17-18x FY11(E) EPS) over 1-2 quarters. We have not assigned any separate value for the land sale at this point.
§ The entry of generics in public health segment, slowing down of global economy, availability of funds for health segment, tolerances of some pests to insecticides are some of the risks and threats seen in the Environmental Science business. § BCS has ~13-14% revenues coming from exports and any adverse forex fluctuation could affect its earnings. § Agrochemicals are the last input in any agricultural operation and protect the final output i.e. crop. In case of India, most of
the agricultural production is rain fed and hence highly dependent on monsoon. Hence, vagaries in season could affect the demand for agrochemicals and in turn impact our estimates. § BCS faces sales returns regularly. Any unusually large sales return could adversely impact sales and margins. § Market need and acceptance of new technologies by farming community is essential before commercial launch of new products. § Any inordinate delay in sale of land at Thane could result in dampening of the interest in the stock.
Conclusion
The conditions of the crop protection market have been quite favorable in the recent years. Good commodity prices, increasing demand for vegetables, labour shortage and government focus on food security have supported the market growth. Farmer’s positive mind-set to invest in profitable crops and low overall channel inventories has further added to the positive sentiments. BCS has guided for double-digit growth in FY10, provided that prices remain stable. It also expects Bt Rice to be a significant contributor to its revenue, going ahead. BCS has 42 molecules under testing for launch; the company has been launching 2-3 new products every year and expect the same trend to continue in the future. We expect new product launches to be a key driver for BCS’s domestic business. BCS has its export revenues from Bayer AG Group companies and these are set to increase given the cost advantage and quality offered by BCS. with the ushering in of WTO and implementation of patent regime, BCS is planning to introduce some excellent high technology products in crop protection and environment science divisions. BCS reported Q2FY10 results better than the street’s expectations and compared to its peers despite poor monsoon. Overall, the monsoon has been below normal in India (21% deficient). However, late rainfall (in early October) has helped the country increase its water reservoir level, and brought it at the long-term average. Due to this, the Rabi season could see good sowing, as farmers who lost their crops in the Kharif season would like to take advantage of the elongated season. Based on quick estimates, though the stock is currently not cheap (compared to smaller local peers) at 17.2x FY10(E) EPS and 14.4x FY11(E) EPS, the increased spending on agriculture, continued introductions of innovative products by BCS and possibility of land sale at Thane could keep interest alive in the stock. We feel that the stock could be bought at the current levels in a small way and added aggressively on falls in the Rs.449-490 band for a target of Rs.649-688 (17-18x FY11(E) EPS) over 1-2 quarters. We have not assigned any separate value for the land sale at this point.
9:56 AM | 1
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ROCKET STOCK…. EVINIX ACCESSORIES Ltd. At 3.9/-; TARGET 5.5/- & 9/-
Written By Sheffin on Saturday, January 2, 2010 | 5:57 AM
ROCKET STOCK…. EVINIX ACCESSORIES Ltd. At 3.9/-; TARGET 5.5/- & 9/-
EVINIX ACCESSORIES Ltd Trading in NSE & BSE at 3.9/-in B Group. (BSE Code- 532818; NSE Code- EVINIX) Target 5.5/- & 9/- for short term. Safe Investment at 3.9/-. Good Dividend yielding. 1/- Face Value stock; Company having owned and managing CUT stores and 61 Global Brands like Adidas, Puma, Kappa, Lifestyle, Wrangler, Lacoste, Purple Wine, Reebok, Lee, Levi’s, Mercedes Benz etc.. and Company having good International prestigious Clients from UK, USA, Erope, Denmark, Canada, Spain, Germany, France, Italy and Holland.
The Board also took note of the “Transfer of Technology and Product License Agreement” entered into with “M/s. Playboy Enterprises International Inc.”, USA.
EVINIXHaving Good value Stores. Equity only 10 Cr. But company having good assets as Owned Stores in Big cities with good 61 Global Brands like Adidas, Puma, Kappa, Lifestyle, Wrangler, Lacoste, Purple Wine, Reebok, Lee, Levi’s, Mercedes Benz etc… as per this total value per stock is nearly 25/- above. Stock Trading at 3.9/- is very cheep Price compare to Value of Stores and Value of Global Brands and Profits. As per this Minimum Stock Price will go to 10/- +++ in future minimum. But I will tell definitely Stock Value is More than 10/-+++++++++. Last Quarter company declared Turnover 41 Cr and Net Profit of 1.5 Cr. Mumbai Bulls and Operators are accumulating at current price. Because Stock is available at very cheep price at 3.9/-; Compare to all stocks good value at present Market situation.
Share Holding Pattern:
Promoters : 29.5%; FII’s 10%; Corporate Bodies : 31%; Public only 24.5% Others 5%
EVINIX having Accessories, Apparel and Rapid Retail constitute the three independent business divisions of Evinix. Partnering with some of the top domestic and international brands, Evinix’s trendsetting business model has helped it cut niche segments in popularity across the global market.
EVINIX Vending to international brands retailers, Evinix today stands apart in the world of fashion as a brand that spells quality, design and innovation across the world. Its value chain extends across the entire spectrum of client requirement – from adapting the buyer request and translating it into samples and eventually, manufacturing and exporting the merchandise, thereby encapsulating the entire value chain from Design to Delivery (D2D).
Accessories : The Accessories on offer at Evinix include an assortment of caps, hats, sport-bags, ladies fashion bags, leather belts, scarves, stoles and shawls.
Evinix caters to the accessories requirements of men, women and children.
The company’s impressive range of quality accessories helps it continually add top brands to its client list.
Some of the new international brands on this division’s client list include American Eagle (US), Cecil (Germany), Next (UK), Fun & Basics (Spain), along with domestic brands like Puma and Gant.
Evinix has been adding new products and new buyers at a very rapid pace in the Fashion Accessories segment, these being manufactured at the company’s two factories in Faridabad with in-house facilities for fabrication, washing and embroidery. The company employs more than 700 people in the manufacturing facilities and also has a management and administrative staff of 150 people.
Apparel : The apparel category constitutes men and women’s shirts, trousers, skirts and tops, kidswear and nightwear. Organic cotton wear for expecting mothers and infants is an additional strength. The company’s fashion apparel range includes dresses, inner wear & T-shirts for kids and tops, T-shirts & skirts and sleepwear for men, women and kids.
Use of Organic cotton and its products through its brand name “Othentix”- Authentic Sustainable Textiles, lends a unique personality to each garment manufactured and supplied by Evinix.
A dedicated division that works on new design concepts, based on international colour and trend forecasts which are woven into Indian fabric, give the company the necessary competitive edge to grow in this fast-paced industry.
The pace of the division’s growth can be measured by the new brands being constantly added to its clientele.The division is supplying knitted fabrics now to El Corte Ingles (Spain), Maternity & Knitwear to George of UK, a trademark of Asda, which in turn is a subsidiary of Walmart.
Littlewoods and Littlewoods Shop Direct (UK) are buying ladies organic wear, including maternity wear, from this division. Evinix is also supplying knitwears (garments and T-shirts etc) to Geox of Italy, children’s and kids’ underwear to The Childrens Place for Kidswear (USA), and organic & non-organic cotton to Joules of Canada.
Rapid Retail: CUT – Store (A Rapid Retail Concept at Evinix)
CUT is a ‘Many Brand Store’ addressing the young audience between 16 and 35 years housing 61 global brands (Adidas, Puma, Kappa, 454, Purple Wine, Reebok, Lee, Levi’s, Mercedes Benz, to name a few). CUT is an acronym for Comfortable, Urban and Trendy. Evinix is setting up CUT stores (averaging 4000-5000 sq feet) in fast urbanizing young Indian towns.
Company-owned and company managed, the CUT stores are brand selective and sell merchandise across the entire range of Apparel, Footwear and Accessories for young men and women
The principle of Rapid Retail suggests that every merchandise has a limited shelf life at CUT stores. The Rapid Retail business concept embraces the e.t.o.a.d concept i.e. the exact time of awaited departure when the product will move out to the next best price bracket.
With this quick-moving, fast yielding concept, Evinix’s new Rapid Retail business is all about selling lifestyle, setting trends. It’s about cutting through the clutter to provide a great shopping experience to the young customers in the age group of 16 to 35.
This company has a great future. Even if we give a conservative P/E of 10 (Industry Avarage PE was 12), It should be trading at Rs. 10+ based on FY 2009-10earnings. So there is a long way to go. Investors with faith in EVINIX management and having patience will definitely earn a lot based on Value of Stores and Global Brands and Profits.
Possitive Points for this stock for Up moving:
1) EVINIX ACCESSORIES Ltd trading at 3.9/- trading in NSE and BSE Company Stocks not participated for recent Rally; Now Its good bet to Buy because of Company Value as per having good Value Stores and Good Global brands and profits. Best Time to Buy at 3.9- with Target of 5.5/- & 9/-
2) Mumbai Bulls and Operators are accumulating at current price. Because Stock is available at very cheep price at 3.9/-; Compare to all stocks good value at present Market situation. Equity 10 Cr. Good Profit making company; company having Good Global Brands and No. of Owned Stores in India. Book Value 7.5/-
3) Company having good Global Brands like Adidas, Puma, Kappa, Lifestyle, Wrangler, Lacoste, Purple Wine, Reebok, Lee, Levi’s, Mercedes Benz etc…
4) Company having Owned Stores in all over India. CUT Stores having good Value.
5) FII’s are interesting to invest because Company having good Value Brands and owned Stores. Equity is very small 10 Cr compare to value of Stores and Brands.
6) Company Projected EPS for 2009-2010 is 1.5/-
7) Recently company “Transfer of Technology and Product License Agreement” entered into with “M/s. Playboy Enterprises International Inc.”, USA.
Enter current price at 3.9/- Short term Target 5.5/- & 9/- Strong Fundamentals.
Happy Investing…
5:57 AM | 0
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Buy Jaiprakash Associates Ltd., shorterm calls, free calls
Written By Sheffin on Monday, December 28, 2009 | 8:52 PM
Target price Rs171
CM Price Rs.144.20
Strong foothold
Key takeaways from our management meet with Jaiprakash Associates (JPA) are i) strong volume growth in cement besides low-cost production and better market mix, ii) robust Rs400bn EPC orderbook, predominantly in house, iii) execution of 13.5GW power portfolio proceeding as per plans – merger of unlisted power holding company into listed subsidiary and iv) robust 11.5mn sqft sale of real estate YTDFY10 & soft launch of Jaypee Greens Sport City spread over 2,500 acres. We believe market concerns on funding can be alleviated via: i) annual operating cashflow of Rs10-12bn, ii) sale of treasury shares, currently valued at Rs27bn, iii) securitisation of its power portfolio worth Rs27.5bn and iv) fund raising initiatives of Rs40bn in both power and real estate. We expect consolidated revenue, EBITDA and PAT CAGR to be 37%, 40% and 38% in FY09- 12E. We maintain BUY with sum-of-the-parts (SOTP) target price of Rs171/share.
- Cement volumes strong. YTDFY10 cement despatches rose 32% YoY to 6.3mnte and crossed 1mnte/month in November ’09. JPA recently commissioned 1.2mnte plant in Gujarat and expects to add 3.5mnte capacity at Baga/Bagheri in North India by February-March ’10. We factor in 36% volume growth to 10.4mnte in FY10E.
- Robust EPC order pipeline. The Yamuna Expressway and Karcham Wangtoo are progressing well, likely to be completed by March ’11 & May ’11 respectively. JPA recently bagged Rs11bn contract for developing the inner ring road at Agra. Besides current EPC contracts of Rs400bn, predominantly in house, we estimate additional Rs200bn EPC contracts from in-house power portfolio and real estate construction.
- Significant option value exists in power and real estate. With 700MW operational assets and 2,820MW projects under implementation (1,000MW transmission rights), JPA is likely to have 8.8GW power portfolio by December ’15. The merger of its unlisted power holding company into its listed subsidiary would unlock value, in our view. Besides, JPA sold 12mnsqft YTDFY10, aggregating upfront collections of Rs7.5bn. Also, JPA recently soft launched Jaypee Green Sports City, spread over 2,500 acres. JPA intends to raise Rs25bn via IPO for its real estate and Rs15bn via FPO/QIP during February-March ’10, which would further unlock value.
Valuations reflect multi-year high growth
Maintain BUY with target price to Rs171
Our SOTP-based value for JPA is Rs357bn or Rs171/share. At the current market price of Rs144, the stock trades at consolidated FY12E EV/E of 12x. We believe valuations are reflective of multi-year high growth in the diversified infrastructure space. Also, significant option value exists in its power and real estate portfolios, which would get unlocked as funding issues are alleviated. We have valued only projects that have high chances of being implemented. We have not factored in any projects which are at an initial stage of development such as: i) 1,895MW of hydro power plants in Arunachal Pradesh and Meghalaya, ii) 750MW of Bina power projects – Phase II and 1,980MW thermal power plants in Uttar Pradesh, iii) real estate development rights for 5,000 acres land along the Yamuna Expressway, iv) Ganga Expressway, which has 1,047Kms tolling rights and related 3.3bn sqft real estate development rights for 30,000 acres land bank, v) F1 race tracks and associated real estate development of 650 hectares and vi) value of carbon credits.
Key triggers
Upside triggers are: i) higher-than-expected cement volumes/realisations, ii) faster execution in construction and real estate, iii) timely funding of power and other projects and iv) speedier implementation of power projects. Downside risks are: i) slower executions, ii) funding gaps/high debts iii) increased inter-group transactions and iv) political constraints.
Cement – Aggressive capacity addition lined up
JPA’s incremental capacity would be more widespread, with 4.7mtpa coming in from North, 4.8mtpa from West, 4.3mtpa from East and 3.5mtpa from South.
JPA’s market share to rise to 7% by FY12E
With aggressive capacity addition lined up by JPA, we expect the company to double its capacity to over 27mtpa by FY12E from 13.5mtpa in FY09. JPA has a share of 16% in incremental capacity addition and thus, we expect the company to increase its volume market share to 7% by FY12E from the current 4.1%.
Cement despatches YTDFY10 rose 32% YoY to 6.3mnte and have crossed 1mnte/month in November ’09. JPA recently commissioned 1.2mnte plant in Gujarat and expects to add 3.5mnte capacity at Baga/Bagheri in North India by February- March ’10.
We have factored in 6% increase in average realisation for FY10E and 3% decline for FY11E. We have accounted for 36% & 31% volume growth to 10.4mtpa and 13.6mtpa for FY10E & FY11E respectively (significantly lower than management expectations of 13-14mtpa for FY10), thus providing upside to our estimates.
Robust EPC order pipeline
The Yamuna Expressway and Karcham Wangtoo are progressing well – Expected to be completed by March ’11 and May ’11 respectively. JPA has recently bagged Rs11bn contract for developing the inner ring road at Agra. Besides current EPC contracts worth Rs400bn, predominantly in house, we estimate additional Rs200bn EPC contracts from in-house power portfolio and real estate construction.
We expect 25% standalone construction revenue CAGR over FY09-12E and estimate the EBIT margin to decline to 20.5% from 25.7% through FY12E as a significant part of revenues would come from the low-margin Yamuna Expressway project.
Real Estate – Emerging strong, offers significant option value
JPA sold 12mnsqft real estate (Jaypee Greens – Noida, Yamuna Expressway) YTDFY10, aggregating upfront collections of Rs7.5bn. JPA has 3,079 acres (of 6,250 acres as a part of Yamuna Expressway contracts) under its possession and expects to get the balance by March ’10. Also, JPA has recently soft launched Jaypee Green Sports City, spread over 2,500 acres. JPA intends to raise Rs25bn via IPO for its real estate during February-March ’10 (valuing Jaypee Infratech at Rs160bn), which would further unlock value.
Power – Well on track, offers significant option value
With 700MW operational assets and 2,820MW projects under implementation (1,000MW transmission rights), JPA is likely to have 8.8GW power portfolio by December ’15. The merger of unlisted power holding company, Jaypee Power Ventures into JPA’s listed subsidiary, Jaiprakash Hydro-Power would unlock value, in our view. JPA intends to raise Rs15bn via FPO/QIP during February-March ’’10.
Report card
| Attribute | Value | Date |
|---|---|---|
| PE ratio | 22.53 | 24/12/09 |
| EPS (Rs) | 6.40 | Mar, 09 |
| Sales (Rs crore) | 1,888.85 | Sep, 09 |
| Face Value (Rs) | 2 | |
| Net profit margin (%) | 14.55 | Mar, 09 |
| Last bonus | 1:2 | 21/10/09 |
| Last dividend (%) | 27 | 15/10/09 |
| Return on average equity | 14.5 | Mar, 09 |
8:52 PM | 0
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Short term calls
Written By Sheffin on Wednesday, November 18, 2009 | 9:42 AM
BEST BUY/SELLEverest Kanto Cylinder Limited (EKC)
Buy Around 145-151, Target: 170/180, Stop Loss: 133.
(Remember stop loss must maintain)
(Happy trading)
9:42 AM | 0
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Nahar Capital
Written By Sheffin on Tuesday, November 17, 2009 | 8:23 PM
Nahar Capital is a company belonging to the Ludhiana-based Nahar Group. This company was incorporated for the purpose of taking over the investments of Nahar Spinning pursuant to a scheme of arrangement, which happened in 2006. This company holds investments not just in the group companies but also has fairly large portfolio of other investments. If you look at the financials of the company, the equity capital of the company is about Rs 8.37 crore, book value is about Rs 250 and the market cap at the current price is close to Rs 80 crore.
If you look at the value of investments as on 31 March, 2009, this company was holding a total of Rs 218 crore of quoted investments, out of which, investments in the group companies accounted for about Rs 55 crore and balance Rs 163 crore was the portfolio of other investments.
At the current market price Rs 55 crore of investment in group companies has gone up to about Rs 130 crore. The various indices have gone up about 70% since 31 March.
If we try to be slightly conservative and assume that their portfolio of investment has only gone up by 40%, this would result in an investment portfolio of about Rs 220 crore for non-group investments.
The total equity investments or the quoted investments as on date is valued at close to Rs 350 crore and besides the quoted investment this company has got about Rs 10 crore in unquoted securities, out of which Rs 5 crore is in the equity of Delhi Stock Exchange Ltd.
Delhi Stock Exchange Ltd is also expected to start operations in the next couple of months. I believe once it starts operations, the valuation of this investment will go up. Beside this they have cash and bank balance of about Rs 44 crore.
All in all, this company has got investments and cash of close to 400 crore at the current market price. Marketcap of the company is just about Rs 80 crore, which means about 20% of the total value of investment. If you look at the holding companies, these companies generally command about 40-70% of the value of investments in the group companies.
In case of Nahar Capital the group portfolio only accounts for roughly third of the total investment, it is only about Rs 130 crore out of Rs 400 crore of total investments, which it owns. But if again we try to be conservative and assume that it will have a 40% of the total value of investment. The stock has a potential to go up by about 75-100% from these levels.
8:23 PM | 0
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