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....