Gas Utility Players have strong upside potential.........

Friends,

I came across a report on the Indian LNG, Gas Sector published on ET today...

I am pasting the exact report for my readers....

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Liquefied natural gas, or LNG, will remain an important component of Indian gas supplies and Southern India with its current lack of gas infrastructure will be a key geography for growth in demand, particularly for LNG, says a JP Morgan report on India Gas. This provides huge opportunities for Indian gas utilities, and could result in their shares being rerated in the near future, the broking firm says in its report.

“The landed cost of domestic gas in these geographies (Southern markets) will make LNG competitive,” says JP Morgan analyst Pradeep Mirchandani.

According to him, the positive view on long-term viability of LNG in India’s energy basket stems from the better economics of LNG vis-à-vis liquid fuels which currently comprise 36% of India’s primary energy consumption.

“Given the current oversupply in the LNG market and the rise of shale gas production in the US, we believe LNG economics will be favourable and India should be able to source LNG competitively in the medium term,” says Mr Mirchandani.

The report goes on to add that future demand projections are premised on a significant portion of the incremental gas volumes being used for power generation.

“We envisage a scenario wherein domestic gas will provide base load generation and LNG will be used for peaking power demand,” he adds.

Gas utility stocks have been strong performers (25% outperformance) over the past 12 months. The interest in these shares has been driven by better volume visibility pushing up earnings, growth expectations, and better regulatory clarity.

Using a three-stage discounted cash flow, or DCF, model to capture the periods of significant growth, JP Morgan sees a 23-51% upside potential for their overweight gas utility stocks — GAIL, GSPL, PLNG.

“For city gas distribution companies (DSM Infratech, Gail Gas and Bhagyanagar Gas), we believe current stock valuations adequately factor in the growth trend in volumes and earnings. We continue to see value in upstream companies GAIL, GSPL and Petronet LNG, which should be key beneficiaries of continued demand growth for LNG to plug India’s demand-supply gap,” explained Mr Mirchandani.

He is of the view that the catalysts for stock performance would be commissioning of projects (pipeline sections, LNG terminal) supporting volumes, and tariff notifications for new and existing networks. Risk emanates from project delays and delays in volume ramp-up.

“Petroluem and natural gas regulatory body’s, or PNGRB, tariff order for GAIL’s HVJ-DVPL network and expansion should provide for a healthy return on infrastructure investment (20-25% RoE), especially with a judicious use of leverage.

Also, the regulator does not cap marketing margins which increase returns for GAIL and the CGD companies. However, we note that the regulatory structure is still evolving and issues need to be sorted to enable continued investments in the sector,” says the India Gas reports.

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My Comments
I have already mentioned GSPL in my previous write-ups.... it is one such stock that can give enormous return in long run... though there may not be immediate fireworks in it....... Gas Sector is now catching up in Indian market... for me it has huge huge potential of business in years to come... may for for another 20-30-40 years... continuous business... One more Stock i would like to mention in ONGC... there are stories building up now in ONGC...

Value Picks & Some updates...

Friends.. I am writing dow some value picks names...... keep an eye on them....

SPML Infra..CMP 264
KIC Metaliks...CMP 302
Mayur Uniquoters Ltd...CMP 239

One may look at the Promoters Holding, Equity Base, latest news and comparison of results of previous years quarters and last two quarters..... All these are turnaround stories..... If you will go to bseindia site and will look SHP, results, News then everything will be clear to you...

In my next write-up i will throw light at each of above mentioned stocks....

Some more updates:
Now many brokerage houses are coming up with reports on UFlex Ltd with a target of 315, 320 etc.... I think they are following me..lol.....those who entered at very first call are lucky investors.....PSL is hitting lowest levels, it is good time to enter(those who havnt enter it yet) also great chance to average it........ I would like to reiterate again about compucom software, it can prove to be a real dark horse.... already mentioned about it previously.... Cronimet Alloys is steady in down market as well.... has a long way to go....
Suryaamba Spinning mills has posted excellent results, its a great turnaround story, EPS is already 13 for two quarters... i have predicted a full year EPS for fy2010 as 23, but i think it can go higher as well... excellent stock.. very very low equity base of only 2.2 crores... Sumeet Industries is not moving at all but that doesnt means that it a crap stock, a lot of expansion plans have went last year so wait for excellent return in coming quarters.... Keep and eye on Ganesh Polytex......

nowadays i am recieving email from many readers about stocks which i have mentioned and are not moving OR they are in huge loss... like in XL tele and Sanghvi Movers(now sancia), these are under huge debt now and will take time to recover but predicting time to regain their lost glory is almost impossible... this is market.. i rememeber that three years back Mr Mathew(now he is no more with us) gave target of Rs1800 to XL Tele... but suddently things kept on changing... XL lost its glory and is now under huge pressure of debt and execution of orders...... anything is possible... please take your own decision before investing or taking any tips from my blog.... i always find out unknown stocks.. thats my view, i may prove wrong sometimes..........

Eros International..Film Industry....

I wrote about SKS Microfinance IPO on my blog.... I dont know how many of you have sbscribed to SKS Microfinance... but it gave a good return... Touched a high of 1436 .... in any means it is fabulous return in a IPO... SKS Microfinance has still a long way to go... dont who have not sold their IPO shares i would advice not to sell it.. you may hold it for long term.....

Today i am writing on EROS International.... I would love to subscribe for it.... there are many reasons ..... Eros International is coming up with a IPO of size 350 crores.. it is a part of Eros Group , which itself is a global player within the indian media and entertainment sector....

The price band has been fixed between Rs 158 and Rs 175 per equity share. Bids can be made for a minimum of Rs 40 equity shares and in multiples of 40 thereof. The issue will result in a fresh issue of 2.00 crore to 2.22 crore equity shares that will form 21.9 per cent to 23.7 per cent of the post-issue equity base at lower and upper price band respectively.Eros is a very strong plaer in the entertainment industry.. and a strong play on the movie business.... promoters has a strong experience of more than 30 years in indian film industry which is a 95 billion market... which according to me is huge by any means.....

They have excellent experience in acquiring movie rights and distribution network across all over fragmented indian film industry..... Eros has got partnership with Eros plc which is giving them international exposure....

It has got library right of more than 1000 movies as of now.... which is growing day by day. It is also engaged in co–production/ production activity. EIML has registered a revenue and PAT CAGR of 58% and 45% over the past 4 years.....Based on price of Rs 175 (upper end of the price band) and company’s FY 2010 earnings the company will trade at a P/E multiple of 19.44x which is lower than its peers. Also, company looks attractive in terms of P/BV and EV/Sales multiple given that company is expected to grow at a rapid pace as compared to its peers. The pipeline of movies to be released by Eros over the next two years will contribute to its top line growth as well as enrich its existing content library. The company is in a strong position to maintain a sustained financial performance by leveraging its business model as well as its extensive content library and looks attractive as compared to its peers.........

I has make strategy to expand its business further into regional languages film markets like marathi, punjabi , kannada and telugu.......also exploring opportunities in DTH, digital cbale, IPTV and mobile....

Coming down to the company’s financials, during FY06-10 EIML’s topline has grown at 58 per cent CAGR whereas its bottomline has grown at a whopping 158 per cent in the same time. Looking at the valuations we find that issue is attractively priced compared to its peers. At the lower and upper ends of the issue price, the stock is offered at 18.0 times and 19.4 times FY2010 earnings compared to 42 times of UTV software communications and 93 times of Shree Ashtavinayak Cine Vision. Even if we take market cap to sales EIML is available at 2.49 times at upper price band compared to 3.4 times at which UTV Software communications is available. Looking at the growth of Indian film industry, company’s growth and attractive valuation at which issue is available....


What i think is , Media and Entertainment is one sector which can give excellent returns in time to come.... this sector has just started to come in limelight..... previously i have also recommended UTV Software Communications Many times ad it is touching new highs... There are many other stocks... like K Sera Sera, AshtVinayak... they can also give exponential returns in years to come...

Animation is also catching up in india... there are many listed companies like Compact Disc, Crest Animation, and DQ Entertainment... I dont like Compact Disc too much... But there is a interesting story building up in DQ Entertainment... Readers has to find then own... DQ Entertainment is a buy and hold stock.... perfect to fit in portfolio.....

Eros International Stocks can give excellent return in long run......

Sensex Crossed 19000.....Do Not Sell Anything.....

Friends,

Sensex has crossed mark of 19000 yesterday... What a rally from 8000 to 19000 in just 18 Months.... In any mean it is a great rally..... great returns has been fetched by many many stocks in these past 18 months..... Suppose if anybody has invested 1 Lakhs in TATA Motors in March 2009 then that money would have become 3.25 lakhs now.... there are lot of stories.....

I know that many of you are thinking of selling their holdings in this rally.... but in my view this market is very strong.... One should not sell blindly in this rally..... I will recommend to hold your portfolios... but yes if you are on more then 100% returns in any stock then you may sell 50% and take out your money back....... Make this practice always....

We have witnessed a great Monsoon this year,, IIP Numbers are encouraging and GDP is also going well.... There is absolutly no bad news as of now.....

I agree that you might be sitting on a hefty profit but still there is a lot lot lot left on the table in every stock... this story has just began... and take my words we have a very very long way to go from here itself.... any level can come , be it 30k , 40k or even 45k........ Market will not go to 30k levels straigth way,, what i sm seeing is market may take a little bit rest or even dip little before moving to next destiation of 30k levels ..... we may see 30k levels next year OR may be earlier.... Please mind that i can also be wrong here also.... i am a human being... i am not predicting any exact figure but can sense what is going to happen in market in next two years......

I have seen many peoples who lost heavily in crash of 2009.... their sentiments was broken at that time...... You know why their sentiments were broken...??? why they lost??? Why they lost their everything in that crash....??? BECAUSE they SOLD their Holdings in that crash...... Now Second Question, Why they Sold at that time??? Answer is : They might be very much afraid that market will dip more OR they might have borrowed some money to invest in market..... (isliye mein hamesha bolta hu ki kabhee bhee apne stocks jaldi mein mat becho.... and udhaari leke sauda mat kharido.... kabhee bhee udhaari leke mat kharido shares.. apne paise se kharido hamesha....)..... think if they havent sold off at that time then now they might have been sitting on a good profit... FYI Infy and TCS hit all time high today........... TATA motors is on all time high already Yes Bank(My Old favourite) is on alltime high... and many more on their all time high....

Our Banks proved themselves a very strong business houses.. truth behind this is They are properly managed.... properly managed means they are not lending money to everyone in this world.... Just try yourself... try to get a big loan from banks... First of all you have to submit a lot of documents which will be checked twice or thrice.....even if banks has a small doubt they will reject your loan... its not just story of loan disbursment, its story of their strong ethics which has saved them... saved country... saved many IPOs... SBI has ran from sub 1100 levels to 3100 levels.... Imaging 3 times.... 3 times returns in 18 months.... Their are a lot of upcoming banks now.. many of them are undervalued keeping in mind their model of business and their future growth prospects.... Lke Dhanlaxmi Bank, Lakshmi Vilas Bank, City Union Bank(Already mentioned earlier), IDFC, IDBI.. all these are my favourite...... have a look at them....

Expansion Card spree is on every company nowadays.... investor should understand that results of expansion always reflect after two-three quarters after the commencing of production from expansion plant.... So we need to wait.... be it Surya Roshni or Sumeet Industry... or GSPL, PSL..many more i have mentioned.....

DO NOT SELL ANY OF YOUR STOCK FULLY.... BE THERE.... DONT GET OUT OF ANY STOCK COMPLETLY.... THIS IS MY ADVICE

Trend Electronics.. My Old Call....

Friends,

I have mentioned Trend Electronics on 16Aug2010....... It is a pure value buy.... a great company.. great group.... available at very very cheap valuations right now.... After i mentioned it . it moved from 65 to 95 levels...

This is a Videocon Group Company... Its Old name is Videocon Communications Ltd....

Markep Cap of Trend Electronics is Only 71 Crores.... And it has very tiny equity of 7.5 Crores.... i have mentioned earlier also that i love small equity stocks..... because any big profit will reflect in a exponential way in its share price rise......

Last Quarter it has posted superb results... Sales of 462 Crores.... NP 11 Crores.. posting an EPS of 8.3.... If this same type of results performance will continue i expect this share to reach at least Rs300.......


In my view its a multibagger in making.......

Its a 10 Paid up share and 60% of shares are closely held by strong hands.......

This is a excellent Long Term Pick according to me.....

Take your own decision before buying any of stocks that i have mentioned....

For more queries write to me....

SuperMarkets. Are They Really good For Agri?

(My Personal Views about Retail Chain....)

Friends,

This article is totally different from what I usually write on my blog….. This doesn’t have any recommendation nor will I discuss any stock here in this…… It comes from my inner-self to write something on SuperMarkets, like Wal-Mart, Big Bazaar…. I agree that I may be writing only in opposition of this culture, there may be positive aspects too…. But when I look at agriculture sector it give me immense pain ….. pain about how these markets are destroying farmers and their business……

This is very tough to write against a good businessman….. I believe what Kishore Biyani is Doing is totally not good… not favourable for india’s agriculture… Mr Sunit Mittal is shaking hands with Walmart and it is planning to enter in india in retail too… Walmart is biggest retail chain store…. I know that…. But in long term it will destroy our farmers earning……

Today there are sayings that Retail Chain boom witll give immense benefit to retail chain…. But we should check history of impact that has been imposed by retain chain on farmers of different country…. This is a very new concept for Indians and it is obvious everyone will like it due to facility to get each single thing under one roof…. But one has to think twice……

This article is not fully written by me… I have copied statistics and lot of numeric data from other sources as well… but I have tried to consolidate it here well..

The fact is that it will destroy the Indian farmers… that will be the beginning of the end of farming era in india…. This has happened in America(USA)…………. Once big retail chains like Walmart, Tesco and kefror has entered in USA, the farmers disappeared…… Now Today there are only 700000( Seven Lacs) of farmers are left in United States of America…, More-ever their number is now so less that from Year 2000 US government stopped counting farmers separately…. Its ridiculous…………In Europe, after the entry of big retail chain every one minute a farmer is leaving farming as his profession… the impact is much much much bigger then our imaginations…… According to a report there is a decline of 39% in income of farmers in france in Year 2009… and in year 2008 it reported a decline of 20% in income of farmers in same nation…. In Scotland Many dairy farmers left their profession due to Low Prices of dairy proeucts in Super Market Stores…… now believing that Super Markets will save India Farmers is worthless….

Despite of Mass level decline in agriculture output due to globalization of SuperMarket, our ministers are promoting high limits of FDI in Retail Space… Mr Binayi is one main man behind all this…. He want to increase FDI limits in Retail chain… If this will happen then Tesco and Walmart will rule Indian Market retail chain business…..

We need good agriculture output to increase the level of life and level of financial stability in Indian rural areas…. Lots of economist and researchers are appreciating the supermarkets idea implementation in india… But are supermarkets will prove to be a good supporter of agriculture output???? There is no evidence of any benefit provided by these super markets to Indian agculture… in fact they have destroyed agriculture in every aspects…….

India started opening doors for retail global players in year 2006.. from that year can anybody tell me any benefit that has been provided to Poor Farmers (Gareeb Kisaan) by these so called global retail chain???? I think nobody can answer this…. Simply nobody….. Anybody can answers this???????

It has been said that Supermarkets will remove mediaters and will provide high price for agri products to direct farmers…. But this has not been done……… nothing good has been done so far… nowhere in world…. I would like my readers to lookout statistics about this

Brazil, Urugvey, Argentina…. in these Latin America Countries supermarkets has forced many farmers to leave farming as their profession………….this is real.. this is not a fake statement.... if somebody wants then i can also provide the links on the various articles...

If Super Markets has really favoured Farming and has done good for farmers then why US is giving money to its farmers…… though largest supermarket chain is from US only so it should have benefitted US farmers already…. But it isn’t?

Shopping at supermarkets is destroying British agriculture and ruining the countryside. 60-70% of all food now passes through four companies; Tesco, Sainsbury, Safeway and Asda. This control over the food chain allows supermarkets to determine the price they pay to farmers, with farmers forced to take that price due to there being no other buyer left in the market place.Big farmers are getting bigger to survive while small farmers are going bust, leading to farming monoculture and unemployment....

Shopping at supermarkets damages local communities and undermines local economies
People only buy a set quantity of food, so if they buy it in a supermarket, they won't buy it in local shops as well. That puts village shops and high street stores out of business. Every supermarket that opens results in a net loss of 200-300 jobs, as a whole network of local shops and their suppliers is destroyed...

Supermarkets are owned by people who don't live locally, or even in the same country. The money you spend there does not go back into the local economy, whereas money spent in independent shops tends to stay in the local economy. Because the supermarket HQ and bosses live elsewhere, the money goes elsewhere, into the bank accounts of distant shareholders. Even the plastic bags are made en masse at central locations, sometimes in totally different countries...

One of the most shocking forms of exploitation is that farmers are frequently paid less than the cost of production for their goods. The UK dairy industry, for example, has been heavily hit by supermarkets who have used the oversupply of milk to their own advantage. It costs a small dairy farmer anything from 18p to 22p to produce a litre of milk. Until the Milk Marketing Board was abolished in 1994, they were being paid 24p per litre. Farmers are currently being paid 19p per litre, for what sells in the supermarket for 72.2p...... WOW... Supermarkets are buying in 19p and selling in 72.2p.. isnt it amazing.... this is a pure exploitation of a farmer

The supermarkets and big processors are increasing their share of the profit margin by squeezing the whole supply chain, and the farmers at the end of the chain are in the weakest position. Agricultural subsidies essentially go straight into supermarket profits...

The major setback. .. Climate change that nobody is observing...

Supermarket refrigeration is making a worrying contribution to climate change. About one quarter of the carbon footprint of supermarkets comes from the cooling gases used in their refrigeration systems – and that’s before take account of energy for powering equipment. The main cooling gases used by supermarkets – hydrofluorocarbons (HFC) are many thousands of
times more powerful than carbon dioxide (CO2) in terms of their global warming impact. In response to world concern about the destruction of the ozone layer, legislation was introduced to phase out the use of chlorofluorocarbons (CFCs) and other ozone destroying gases that were then widely used in refrigeration and air conditioning. HFCs were accepted as replacements because they do not destroy the ozone layer. However, their impact on global warming was not taken into account...

Many Peoples think that they are paying very less money to buy products... they think supermarkets as cheap stores.... bit real fact is well far from understanding of a common man

Cheap food is a big big myth. The consumer pays three times: ONCE the shop, TWICE through direct subsidies to farmers, and FINALLY indirectly in taxes cleaning up the mess left by industrial agriculture and subsidising transport infrastructure….. It has, for example, cost the government over a billion dollars to install the equipment necessary to remove nitrates and pesticides from water worldwide…

The current pattern of supermarket consolidation will not help matters. At a recent seminar help by the Grocer, ex-CEO of Somerfield, David Simon, claimed that the proposed takeover of Safeway will be a 'killing ground' for weak brand and private-label suppliers, and hence the farmers who supply them. They will face crippling reductions in margins and the possibility of losing their entire business...

There is lot lot more to write on supermarkets……

Personally I don’t like the evolution of supermarkets... i dont like big walmart, tesco and India Ones like Big Bazaar, Pantaloon, More, Aditya Birla Stores, Big Apples, etc etc......

My Views Can differ from others in this regard.....