Assam Company… CMP: 22 … a Multibagger in Making

Dear Friends,

I have been tracking this company since long…. I have also mentioned this stock on my blog a couple of times….. recent development in this company couldn’t stop me to write here…. This is not a buy call… I am writing because I love this company, the way it is shifting its core business silently is appreciable…. This company can prove to be a true Multibagger in due course of time… I could not give any specific number but returns could be much more then your expectations……

70% of holdings is in strong hands.. Assam oil company holds a major chunk of 38%..... though this is not a undiscovered stock but everyone is waiting for it to move now………….

Company has done FCCB buy back in year 2009 that shows its confidence of its management in their company…

Company is taking the steps to minimize the cost of production of orthodox tea.... main trigger is its business shift towards oil and gas sector.... It is going to get involved in GAS COmpression Project and Oil&gas projects with respect to NELP VII with ONGC and OIL India Ltd as partners..... …. Mind boggling fundamentals + massive & ambitious expansion plans + major positive announcement are going to happen anytime in this year…. It has also acquired new tea gardens where by the profitability will go up sharply.

MCAP of company is 681croses wherein equity is just only 30 crores…..this is a big positive

Also going in developing an SEZ Project of Gujarat Hydrocarbons and Power SEZ ltd in over 1,000 acres in Vilayat, Near Dahej, in the state of Gujarat. Company has already possessed 700 acres of Land Bank. Rest of the land is under acquisition and same will be completed soon.

Oil and gas segment will be a major breakthrough for Assam Company, due to production ramp-up at Amguri fields the bottom line can increase many folds in coming next 3-4 years…. In my views it has just started to run…

Assam company is installing gas re-injection plant to improve oil and gas performance, Installation of the gas re-injection plant would ramp up production to 2,000-2,400 BOE by the end of 2QCY10 with 2/3rd oil share thus optimizing the field produce….

We can expect tea business to grow at a CAGR of 9-10% during next three years. As I told earlier they are trying to build up methods to reduce plantation cost and method of re-plantation, infilling of high quality bushes, strategic acquisition of Tea estates and improve quality through pursuing proven processes. Due to widely predicted global shortage, tea is expected to experience higher realization in CY2010 and ahead,

In my views, Assam Company is a great stock to buy and hold for long term(5-6 years)… there is a lot of value to be unlocked for investors… but here patience will win over hurry and greed….. Though the stock hasn’t ran in last 3-4 years but it doesn’t prove that it will not run in coming years also…. Recent development plans if executed well can fetch golden eggs in days to come…… take your own decision and do proper research before buying……

Small Updates..............

UB Engineering suggested at Rs110 and now at 170… it has touched a high of Rs 204 recently…. Long way to go from here itself also….

Peoples who haven’t bought this stock at 110 levels might be feeling left out now that’s why I always emphasis on taking a token entry in a stock if you like that one… later on that can added gradually….

Kalpena Industries.. suggested at Rs123….it is not moving, but it has come out with excellent results for FY2009-10… it is highly undervalued still…

Take your own decision before buying any stock… own research is a must….

Telecom Towers Business

Friends,

I am pasting the exact published on moneycontrol. Just to understand the readers what is it…..

Reliance Infratel and GTL are in talks for possible deal, sources told CNBC-TV18's Siddharth Zarabi. The deal may be announced shortly. The valuations are higher after the recent spectrum auctions.

When contacted, Reliance Communications and GTL refused to comment.

R-Comm has approved a move to restructure ownership of Reliance Infratel, its tower arm. The company said the move is to create the world’s largest independent tower firm. "The new company will not be owned or controlled by any telecom company. The consideration will be via stock and cash."

Sources said GTL and Reliance Infratel combine would have nearly 100,000 towers. GTL has 32,000 towers and is a widely held company. Reliance Infratel has 54,000 towers and plans to scale it up to 64,000 by year-end.

GTL acquired nearly 17,500 towers from Aircel earlier this year. At that time, the enterprise valuation Aircel’s tower business was around Rs 8,400 crore.

Add the 33,000-34,000 towers of GTL with Reliance Infratel and you are looking at close to 100,000 towers. This is close to what Indus Towers, which is a three-way joint venture between established GSM cellphone companies, has. That’s the kind of size we are looking at.

In terms of the valuation, sources said valuations have actually improved post the GTL-Aircel deal. This is on account of the fact that BWA and has 3G spectrum have been farmed out. All that will need more towers, especially the broadband wireless side.

Earlier today, CNBC-TV reported that Reliance Communications plans to demerge its tower business -- Reliance Infratel. The demerger, via a combination of cash and stock, will facilitate consolidation in the telecom space, enhance Reliance Communications' financial flexibility, and aid fast, low cost network rollout. The independence, neutrality of Reliance Infratel will aid 3G players and broadband wireless access companies.

My Comments

Number of towers GTL has 34000; this figure comes out as 16800 crores of telecom assets. Reliance Infratel is not a listed company but planning to scale its tower numbers to 64000. After a deal with GTL, reliance Infratel will have close to 1 Lakh towers and that is equivalent to number of towers possessed by all GSM operators in country.

So in telecom tower business as well, reliance Infratel wants to stand at par with all its peers. There might be demerger with RCOM later this year….. I am not confirming this news…. This will add value to TOP and BOTTOM line of RCOM…. Post merger GTL will gain heavily….

As MOU between ambani brothers has been dissolved and now they can come in business in any area… recently mukesh has bought infotel PAN India licenses at cost of 12500 crores Rs… Infotel is a company in Wired & wireless broadband… so Mukesh will be needing helping hand from someone who can provide him telecom infra…. Might be Anil is doing what exactly Mukesh wants…. Beneficiery companies will be reliance communication, GTL (a Dark Horse)…. Sujana Towers(my all time favourite)…. Now everyone should dig and find out other companies as well in tower business…. There is lot more to find out after reading this article.. readers can post their comments….

I am Back... Sweet & Sour All memories

Dear Friends,

Its been a long time since i posted any new article and recommendation on my blog.... since january 27 we have seen different colors of world market,,, rise and then dip then again rise..... retail investors are still confused about the direction of market.... but i have told several times that one should take exposure in his favourite stock.... then he/she can keep on adding as the stock moves.... if somebody is not buying a stock and that stock rises then he can felt left out.. thats why i always emphasis on taking entry in stock... whichever you like, dont wait


I will continue to use very very simple language in my blog.... i have written on several sectors and stocks in last two years... just have a look


GOLD recommended at 12000 now at 19500 (62 % whopping return)


Yes Bank, recommened at 60 now at 290 (383% returns)


JK Lakshmi Cement recommended at 90, now at 63(after split of FV10 into FV5) (return of 30%)


Wrote a full article on Water Business on 4-July-2008 (now everybody is recommending stocks which are un water treatment business)


Hind Dorr Oliver, suggested at Rs42, Now at 120 (Many analysts are giving calls to buy hin dorr oliver now)


Apcotex, up from Rs30 to Rs 130..... What else one wants???? (it is still undervalued)

Himalaya International touched a high of Rs47.. recommended at Rs22

Ennore coke,,, comes out a true multibagger.... Still a long way to go from here also

Jyoti Ltd.. comes out as a niche player in electrical technology... eyeing revenue of Rs650cr in nxt 3 years...

Sujana Towers... going good... excellent buy at this point of time also....

Micro Technologies.....


There are many many more which i dont want to write it again and again.....


I was re-iterating again and again to buy fgold from year 2008.... i dont know how many of my readers have bought this precious metal.... i am still bullish on this metal for long term......

RJ, WB.. both are extremely bulllish on india growth story for next 10-20-30 years.. both hae foreseen what is going to happen in india in next three decades... if to be believed equities will surpass any asset class in terms in returns in a big way....

Mahindra & Mahindra.. Entering into Solar Energy...

Friends….. I am pasting the exact verbatim script of interview of Mr Anand Mahindra given to CNBC at WEF (world economic forum)…… M&M has a very clear, hard working, investor friendly management…… They are a very reputed group of business house in India.. very well known for innovations…. M&M is growing at rapid pace and NOW planning to enter the Solar Energy Area… To me this solar energy area has huge huge potential to be churned out…. I am very bullish on solar energy space… I will give my comments at the last of this article……

Q: This theme resonate with you as well in some sense because last year’s meeting, the meeting that you do at the beginning of every year to set the tone for Mahindra & Mahindra (M&M), also was three ‘R’ dominating meeting. What does it mean to be able to rethink, redesign, rebuild in your context at M&M for the next decade? I am not talking about this year or the next two years, but this decade is going to be characterized by very different global economy as oppose to the last. What kind of work does that setout for you?

A: I am glad that my three R's came one year before. If you remember what I had said was reboot, reinvent and reignite and in a sense it could be paraphrasing the same thing. So we are prepared for this new decade that will emerge and for which the WEF is preparing.

We think it means that a whole number of old models of economic policies of financial regulation of the way in which businessmen monitor themselves all that has got to be rechanged or rethought. In other ways, they are saying think about your fundamental underlying propositions to everything you do and once you do that, once you create a Tabula Rasa, so to speak in your mind then you have to redesign. You have to redesign in order to build for that new world or to put on to that new clean slate. I hope that this conference does get down to that level and we do not spend time only arguing about how to rethink things and get into ideological battle. If we get beyond that and start talking about the actual redesigning of mechanism, the redesigning of regulations, that would be very useful.

‘Rebuild’ is a question of execution. I do not believe that’s the job of Davos or the WEF. What WEF wants is dialogue, conversation, rethinking and redesigning and then going out and executing. So I believe rebuild is more an instruction and a clarion call rather than something you are going to see accomplished at the WEF.

What does it mean for Mahindra? As I said we have a one year head start on this game plan so to speak. It means that we have to relook at every value proposition we have — what are people going to want, do we focus on peoples needs as oppose to their wants, which what we were thinking of doing earlier; do we have to go back to frugal engineering and frugal innovation is that going to be the mantra, how do we deploy it in a more judicious manner. Implementation is a common thread always, there is nothing different about rebuilding; one is always building, you are always destroying the old building the new. So I think the third ‘R’ is not really something we will agonize about. It’s the first two that Mahindra will be focusing on.

Q: Right now your business is obviously dominated by auto, over the next ten years; do you see businesses like IT become an equal part in terms of their contribution to revenue? What is the shape and the set of the contribution of the group likely to be five to eight years down the line, how are you planning that?

A: I am asked this question very often, questions about ‘What size group do you want to have? Ten years from now, what is the share of revenues is going to be?’ I believe that half the fun in my job is not trying to pin things down to that level or metrics. What you want is a template; you want to have a federation, a diversified federation that embodies a certain common set of values that embodies entrepreneurship that grows on India’s growth and so on. Then let the best person win.

Last year, the IT sector had way surpassed the automotive and farm business in terms of both revenue and profits. This quarter it is the automotive and farm equipment sector that is back to being more than 60% of the pie and there were literally whoops in the air by those sectors. So I love that race, I love that competitiveness. Why should we presume that IT will be larger? I would love people to go in there and prove everyone wrong. The question is have you unleashed entrepreneurialism and growth and then let the chips fall where they may.

Q: You have also spoken about previously of one of your new interest and that is solar energy. How are you going to go about doing any of that? Why I am asking you this question is not to pin you down on which specific new businesses are you looking at over the course of the next ten years, but to better understand whether at the end of this decade is M&M going to be very different collection of businesses as oppose to how we see it today or will auto always dominate everything you do?

A: It could be any of the above. It could be auto continuing to dominate; it could be whole new slew of businesses that are coming out and have stolen the limelight, it might be a judicious mix. Solar energy, renewable for e.g. this is being done under the new internal private equity department, it is called Mahindra Partners and they have been doing work in fact for a good 18 months now in research into how we come out with a plan for solar energy. About a year ago I wrote an editorial in the ‘Times of India’ about my belief in what they call concentrated solar power and how that could be a mother load for India. We could be a Saudi Arabia of solar energy for e.g. that was a very tentative look at it and since then they have been working on this template. We have some plans which are underway, nothing that I could reveal or excite with you right now, but certainly we have great intent.

Q: When you say great intent can you tell us how it is going to work? Are you at M&M going to start up another company or business that is actually going to go about the business of putting up solar power plant or are you going to seed fund ventures that you think are exciting in the renewable space? Is this going to become in revenue line for M&M or an interest space?

A: I hope there is nothing I am doing that won’t become a revenue line for M&M otherwise I should probably have my salary reduced. So I certainly think that if we spend that kind of time there should be a revenue line and very positively a profit line as well. Which one could it be? That’s exactly what we are looking into right now. Should we be integrators, should we be developers, should we put out the plans which technology should we bet on, should we bet on a slew of technology? The one thing we are finding out is that there is no hard and fast roadmap today, there is no even within concentrating solar power (CSP) there is no specified technology. TV which looked like it would be falling behind suddenly is catching up again with thin film technology.

So it’s a very interesting field and what we are looking at is how do we play in this field, how do we become initiate as a projects and exploit the natural advantage that India has. There is no algorithm we have come up with yet, we will share at the moment we will have one.

Q: What else interests you that could potentially become a whole new business for M&M in the course of these next ten years?

A: The reason we have set up Mahindra Partners is so that we can explore all these new avenues. The thing that I found is that with relative success comes deal flow, when you demonstrate that you can create a viable model of new businesses that when you can maintain your value system and your reliability while doing that, then you get a number of technologists, companies overseas companies coming to you to look at how you can do business. So everyday there is new deal flow, which one of these will become something that M&M will bet on and will become a big business, I don't know. That is the fun of going to work everyday.

Q: Give me at least the spaces that you are interested in?

A: Everything comes in. What we look at is whether it is going to be something that we can scale up that could be material that has a place either in India or globally for us to create some traction through comparative advantage, use the eco system of M&M. We have a whole slew of things or template that you overlay and then you say, this one looks more promising and this is what we will pursue. That is how Mahindra Partners is working. So it is a very exciting area right now.

My Comments are here……………..

Some estimate that the sun can produce 10,000 times as much energy as the Earth uses at the turn of the 21st century. The future of solar energy depends mostly on how it is applied, rather than whether it would be enough energy to be a viable world power source. The geographical location of India provides long days of sunny weather for the majority of the year. This allows solar energy in India to be a viable option for a means of generating electricity for a large proportion of the population. It is believed that the geographical location of India allows the country to receive well over 4500 trillion kWh of pure solar energy each year, which is far beyond the annual power consumption of India, and even that of the United States who in 2004 used less than 4 trillion kWh of energy. The main con of solar energy which lies at the heart of the debate of proposed solar installations for many countries such as India is the cost, but as time goes by, manufacturing methods can become more cost effective, therefore making the end product cheaper for consumers.

XL Telecom, Webel Energy, Moser Baer, Suryachakra, PAE are some stocks which are playing in solar energy area….. You need to watch them out…… All of them have great future.. though the management of XL telecom is fighting with poor results and high debt..