Excel Crop care – A Multibagger in Making

Book Value= Rs 127, FY 09 EPS =25, PE=5, industry average PE=10

FY2010 EPS is expected to be around 40 , so if we consider avg PE of 8, then price should be 320Rs…..

Profits are going up and up and this company is playing into potential sector in which opportunity needs to be tapped in Indian market yet. Its into the business of agrochemicals comprising of insecticides, weedicides, fungicides, fumigants and rodenticides.

Nufam is holding 15% shares of this company.


It has a very tiny equity base of only 5 crore and reserves of 135 crores are eye popping. As reserves are almost 27 times of equity of this company so even if this company gives you bonus of 3 shares each it does not matter for them. Three bonus shares means 3*5 = 15 crores only.

This company is playing in niche area and this is my next Multibagger in making. This company also has land bank near Mumbai and value of which is more then its current market capitalization.


I will recommend buy on this scrip with a hold of couple of years to ripe decent profits..

A List.....

Friends

I am publishing a list of my favorite stocks which I am tracking and love to have in my portfolio for long term.

Yes Bank
Rajesh Exports
HEG
Asahi Songwon
Marg Ltd
PSL Ltd
SREI
SBTL
HCC
Sabero Organics
Usher Agro
Sharon Bio
Sanghvi Movers
Surya Pharma
Atlanta
Gayatri Projects
Jyothi Lab
paresh aluminex
KPIT Kummins
XL Telecom
Sujana Towers
SBTL
Geodesic
Lakshmi Energy & Foods
Tricom India Ltd
Ennore Coke
HEG
JP Hydro
jyoti ltd
Torrent Power
Marg Construction
JB Chemicals
Simplex Infra
IRB Infra
Gremach
Jayaswal Neco
eclerx services
Voltamp Transformers
Kanoria Chemicals
Nitco Ltd
Take Solutions
Zylog systems
Aptech
SKF India

You can take your own call and take decisions which stock you want to choose from this list. All these companies are making a step forward to be a real Multibagger (5-10 times returns in 5 years or more) in long term. To my knowledge all of the above companies are fundamentally good companies. I may prove wrong in some stocks but most of the stocks are true Multibagger to my knowledge.

Take Care

Market Mantra…..

Friends,

I am back after a long pause. I am sorry; I was not answering your queries from last few months as I was busy in some personal engagements.

We have seen a high volatility session in market in last few months. Equities all over the world have gone up significantly since 9th March 2009. There has been a lot of volatility and correction in the recent months. But still I would say that markets are not crashing like anything, they are holding up.

Question of a million is -> Have the Global Equity Markets bottomed out or is there another crash coming which will lead to re-test of lows for all major markets? The Truth is NOBODY knows it. But prediction is that a final slowdown is still remaining.

The global economy has shown some signs of recovery post March 2009 and the markets have responded accordingly.

In my opinion, under normal circumstances, stock markets behavior depends upon:
• Fundamentals of the Economy
• Fundamentals and Growth of Companies (closely linked with fundamentals of economy)
• Government and Other Political Factors
• Liquidity in the system

The global financial system has been flooded with liquidity post the Lehmann Brothers collapse. The world economies are not strong enough to absorb so much of liquidity. So all the excess liquidity is being absorbed by asset markets. In my views Gold is set to explode again. We may see a Level of INR 18500 per 10 grams in Indian market in December 2009.

I am not giving any levels OR target to achieve in this type of market. What I can tell you best is build a portfolio and then nourish it, churn it.

Suppose you want to invest Rs 10000 in a particular stock then invest Rs 4000 now and then Rs 4000 again and then Rs 2000. So invest INR 10000 in three shots. This will give a opportunity to buy at different levels based on your sentiments with market.

Hindustan Construction Company – A Sleeping Gaint

HCC is an integrated group spanning Construction, Real Estate and Infrastructure development. The HCC Group of companies comprises of HCC Construction, HCC Infrastructure, HCC Real Estate (HREL) and Lavasa Corporation. The group specializes in technically complex, new-age construction in infrastructure projects, as well as EPC, BOT, Integrated projects and townships. HCC has made an unmatched contribution to civil engineering landmarks, having executed over 321 Bridges, 43 Dams and Barrages, 15 Hydel Power Plants and 11 Nuclear Reactors, 160 kms of Tunneling and 2,227 kms of Roads and Expressways. Its Wholly Owned Real Estate Subsidiary, HREL, is developing LEED certified, state-of-the-art, 1.8 million sq ft multi-tenanted IT Park located at Vikhroli, Mumbai’s emerging IT hub. HREL is also developing free India’s largest Hill Station, Lavasa, spread across a picturesque landscape of 12,500 acres, located 45 minutes away from Pune.


HCC won the coveted Golden Peacock Award for Excellence in Corporate Governance for the year 2007

HCC has been executing some of the most exciting and challenging projectsin Indian history. The major engineering landmarks include the world’s longest barrage at Farakka in West Bengal, India’s first underground metro at Kolkata and the second one in New Delhi, the Mumbai-Pune Expressway – India’s first six-lane expressway, the unique double curvature arch dam at Idukki in Kerala and one of Asia’s largest breakwaters at Ennore Port in Tamil Nadu.

Huge Order Book
The order book of HCC has grown at a CAGR of 20 % since 2002 and currently stands at over Rs. 16000 crores in 2008-2009, which is much much higher then its previour years turn over.
HCC Order Book up 35% in Q3 2008-09

Major Orders:
January 2009
Hindustan Construction Company Ltd (HCC) has informed BSE that the Company has bagged the prestigious order for Package MC3 of 1200 MW Punatsangchhu-I Hydro Electric Project in Bhutan from Punatsangchhu-I Hydro Electric Project Authority. The value of the contract awarded is Rs 688.06 crore and the project will be completed in 66 months.
HCC - Halcrow Consortium comprising of Hindustan Construction Company Ltd (HCC) and Halcrow Group Ltd. U.K. (Halcrow) has bagged the prestigious and challenging 330 MW
HCC bags Rs 2726.49 cr Kishanganga hydel project in Jammu & Kashmir"
Kishanganga Hydro-Electric Project from the National Hydroelectric Power Corporation Ltd.
Hindustan Construction Company Ltd has a Press Release dated January 21, 2009 titled "Lavasa to host SpaceWorld, Asia's first space edutainment centre at Rs 400 crore investment"
HCC bags Rs 1415 crore BOT project of NHAI

Feb 2009
HCC awarded Rs 296.90 cr Kashang HEPP in Himachal Pradesh



Investment in Lavasa
Hindustan Construction Company Ltd has invested Rs 81.25 Crore in Lavasa Corporation Ltd (LAVASA), a subsidiary of the HCC (Hindustan Construction Company Ltd) in the form of convertible warrants. Based on the above investment, the equity valuation of LAVASA gets reconfirmed at Rs 10,000 Crore. (Axis Bank Ltd, Bank of India and Allahabad Bank had also invested Rs 250 Crore, Rs 150 Crore and Rs 50 Crore respectively) at the same valuation.

My Rational
Friends, I am putting a buy call on HCC,… The company has strong overall fundamentals,,,Just Accumulate this Sleeping Gaint…HCC currently has a large order book which provides next few years earnings visibility. The infrastructure sector companies in India are expected to suffer because of the slowdown in the near term and HCC is no exception. But this might be one of the best times to accumulate in small quantities shares like HCC, which are sure to be multibaggers in the long run…
The Other factor we should not ignore is the Indo-US nuclear deal. It is also expected to benefit HCC in the long run. The company is already into Nuclear projects and this deal will help it bag more projects in the future.

The Mystry of OIL...Continues...

As oil dropded below $50, the sense of relief is palpable for most consumers as they see sub $4 gas at the pump. Media headlines have also done an abrupt about turn, with headlines changing from "When will crude hit $200..." to "How fast can prices come down...”. Due to the fall in previous months many people have came out and said that the worst is behind us and that we are out the high gas/oil spiral. Some are even taking the rapid drop as a sign that high prices were caused by speculators and a much undervalued US dollar (which has also rallied more than 10% recently).

Oil's certainly not cheap by historical standards, but the $145 and change record of early July begins to resemble an anomaly as it recedes in the rear-view mirror. After all, it has been a quick, jarring ride.

The current fall in prices is due to various short term factors. Consumers are drained amid credit and housing woes, and crushing gasoline prices have compelled them to conserve. India, one of the Asian tiger economies and a big consumer of oil, seems to be slowing much faster than expected. A rapidly strengthening dollar is dulling commodities' allure for traders and speculators.

However, we are not out of the woods by any stretch and my view is that high gas prices will return. Why you may ask?

Factors that will contribute to the higher long term energy prices:
- The planet remains in a state of energy stress. Asian countries are adding an estimated 50,000 new cars per day to their roads. Adding this growth plus that from other oil based consumables, will provide a huge demand side effect. With supply limited and growing very slowly, this will lead to a steep rise in prices.

- If China's oil demand growth rate continues at its current pace of 6% to 7% per year, China will use 20 million barrels a day by 2020 - about the same as what the U.S. uses today. And by 2030, China would be up to 40 million barrels per day - twice what America uses now.

- Tensions between Iran and the U.S. and other Middle east countries don't look like abating in the longer term despite recent diplomatic efforts and a lull in tensions.

- We'll drive more, fly more and waste more. As prices fall, the alliance of environmentalists and consumers, brought together by pain at the pump, is already coming apart. When has is below $4, people will think of it as a relief and unfortunately most will go back to their old habits.
Holidays that were put off in the summer due to high gas prices, will now be back on the Agenda.

- Renewable energy is still a long way from being a viable alternative to oil in terms of widespread usage.
The world economy cannot and will not quickly convert from an oil-based consumer to a blend of other energy options such as natural gas, solar, wind and so on," said Neal Ryan, a manager at Ryan Oil & Gas Partners. "Until we do, I certainly expect oil prices to remain at these elevated levels over $100 a barrel and eventually challenge their all-time highs again -- and then surpass them in the coming year."

- The recent pull back is an expected market correction. The price can go back up as fast as it fell, particularly if the US dollar (in which the global oil trade is conducted) weakens again on bad credit or economic news. Speculators will come back during any periods of uncertainty or weakness and once again become a factor in high oil prices.

I don't think oil prices will go anywhere near $200 by year end or that gas prices will get to $5. My view is that oil and gas prices will finish the year around $130 and about $4 respectively. However, unlike the 70s energy crisis that went away after a few years, I think the current factors behind high oil prices are more permanent which means we will see $200 oil by the end of this decade. The best way to deal with this is for people to continue gas conservation techniques and habits when $5 gas was expected, rather than forget the lessons learned. The government especially should learn from the recent experience and focus on developing a long term sustainable energy policy that will reduce India's dependence on oil, and hopefully one day eliminate it. That is the only way we will be rid of high energy prices and its adverse impacts.

In Summary in want to emphasis the use of alternative fuels......