SVC Resources - 512449
Acquires 2nd mining resrv of Rs 338 cr adding to earlier reserve of Rs 598 cr . Buy with a stop loss of 153. Target 6 months - 400.
Sunday, January 31, 2010
Intraday Tip for 1 -2 -2010
Free Tips Of 1 -2 -2010
S.No Company Buy Target Stoploss
1 ACC Around 870 885 863
S.No Company Buy Target Stoploss
1 ACC Around 870 885 863
GIPCL
GIPCL’s expansion is about to be completed. It will significantly add to its returns
Power company stocks have been hot for a while but we have picked a couple of stocks that still have some steam left. Given India’s need for power, this sector will enjoy long-term demand growth. Look at Gujarat Industries Power Company Ltd (GIPCL), promoted by Gujarat Electricity Board (GEB), Gujarat State Fertilizers & Chemicals (GSFC) and Gujarat Alkalies and Chemicals Limited (GACL).
The company has been in power generation since 1992. Currently, it has three power plants in Gujarat with a total generation capacity of 555 megawatts (MW). Power from the 145-MW gas-based plant, called Vadodara Station 1, is distributed to its promoters in proportion to their original equity holding. The second station in Vadodara has 160MW capacity. Its third plant, Surat Lignite Power Project (SLPP), has a capacity of 2x125MW. It sells power from Vadodara Station 2 and Surat to the state electricity board of Gujarat under a power purchase agreement (PPA). It is also setting up the second phase of SLPP (2x125MW). This is expected to go on stream in two phases. The project, which has suffered some delay mainly due to late arrival of critical equipment such as boilers and turbines, is expected to be fully commissioned by this quarter. Surat 2, as this expansion project is called, will enjoy a higher return on equity (RoE) (unlike GIPCL’s current projects which have an RoE of 13%) on account of the PPA signed with GUVNL (Gujarat Urja Vikas Nigam) under the Central Electricity Regulatory Commission (CERC) regulations. CERC has also allowed grossing up of post-tax RoE (15.5%), based on the company-level applicable tax rate.
Unlike some recent power projects, which rely on imported coal, GIPCL has captive lignite mines, with reserves adequate for power generation of up to 1,000MW for the next 30 years. This has insulated the company from the impact of increase in coal prices. It has a long-term agreement with Gas Authority of India (GAIL) for the supply of gas to its Vadodara plant, ensuring fuel availability. GIPCL is planning to set up another 500MW power plant at Surat which will increase its power generation capacity to 1,805MW by 2012. The lignite for this project will be sourced from its captive mines. Although the per capita power consumption in Gujarat is twice the national average, the state still suffers from power deficit.
GIPCL has implemented a clean development mechanism project under which it is reducing the emission of environment-polluting gas. It has applied for carbon credit benefits with the United Nations Framework for Climate Control and is expected to get 80,000 units of carbon credits per annum.
Worth buying at around Rs100.
Power company stocks have been hot for a while but we have picked a couple of stocks that still have some steam left. Given India’s need for power, this sector will enjoy long-term demand growth. Look at Gujarat Industries Power Company Ltd (GIPCL), promoted by Gujarat Electricity Board (GEB), Gujarat State Fertilizers & Chemicals (GSFC) and Gujarat Alkalies and Chemicals Limited (GACL).
The company has been in power generation since 1992. Currently, it has three power plants in Gujarat with a total generation capacity of 555 megawatts (MW). Power from the 145-MW gas-based plant, called Vadodara Station 1, is distributed to its promoters in proportion to their original equity holding. The second station in Vadodara has 160MW capacity. Its third plant, Surat Lignite Power Project (SLPP), has a capacity of 2x125MW. It sells power from Vadodara Station 2 and Surat to the state electricity board of Gujarat under a power purchase agreement (PPA). It is also setting up the second phase of SLPP (2x125MW). This is expected to go on stream in two phases. The project, which has suffered some delay mainly due to late arrival of critical equipment such as boilers and turbines, is expected to be fully commissioned by this quarter. Surat 2, as this expansion project is called, will enjoy a higher return on equity (RoE) (unlike GIPCL’s current projects which have an RoE of 13%) on account of the PPA signed with GUVNL (Gujarat Urja Vikas Nigam) under the Central Electricity Regulatory Commission (CERC) regulations. CERC has also allowed grossing up of post-tax RoE (15.5%), based on the company-level applicable tax rate.
Unlike some recent power projects, which rely on imported coal, GIPCL has captive lignite mines, with reserves adequate for power generation of up to 1,000MW for the next 30 years. This has insulated the company from the impact of increase in coal prices. It has a long-term agreement with Gas Authority of India (GAIL) for the supply of gas to its Vadodara plant, ensuring fuel availability. GIPCL is planning to set up another 500MW power plant at Surat which will increase its power generation capacity to 1,805MW by 2012. The lignite for this project will be sourced from its captive mines. Although the per capita power consumption in Gujarat is twice the national average, the state still suffers from power deficit.
GIPCL has implemented a clean development mechanism project under which it is reducing the emission of environment-polluting gas. It has applied for carbon credit benefits with the United Nations Framework for Climate Control and is expected to get 80,000 units of carbon credits per annum.
Worth buying at around Rs100.
Buy IRB Infra
Angel Broking has come out with a research report on IRB Infrastructure. The research firm has maintained a buy rating on the stock with a target price of Rs 289.
The report says, "IRB has one of the largest domestic BOT project portfolios in the Road and Highway Sector comprising 16 projects of which 10 are operational. In light of the immense opportunities that exist in the Road Sector in the near future, IRB’s vast experience and inter-dependent business model, we maintain our bullish stance on the company’s performance."
"Moreover, IRB’s Construction arm has a robust Order Book of Rs 9,238cr (8.7x FY2010E Revenues), which lends the Segment high Revenue visibility. We have valued IRB's inter-dependent business model on SOTP basis. Individual Road BOT SPVs have been valued on NPV basis (FY2012E) using the Free Cash Flow to Equity (FCFE) approach (Rs165/share); the Construction Segment has been valued at 8x FY2012E EV/ EBITDA (Rs116/share); the company's investments in land (adjoining Mumbai- Pune Expressway) and its equity stake in the Sindhudurg Airport project have been valued at 1x FY2009 Book Value (Rs 8/share). We maintain a Buy on the stock with a Target Price of Rs 289", according to report.
The report says, "IRB has one of the largest domestic BOT project portfolios in the Road and Highway Sector comprising 16 projects of which 10 are operational. In light of the immense opportunities that exist in the Road Sector in the near future, IRB’s vast experience and inter-dependent business model, we maintain our bullish stance on the company’s performance."
"Moreover, IRB’s Construction arm has a robust Order Book of Rs 9,238cr (8.7x FY2010E Revenues), which lends the Segment high Revenue visibility. We have valued IRB's inter-dependent business model on SOTP basis. Individual Road BOT SPVs have been valued on NPV basis (FY2012E) using the Free Cash Flow to Equity (FCFE) approach (Rs165/share); the Construction Segment has been valued at 8x FY2012E EV/ EBITDA (Rs116/share); the company's investments in land (adjoining Mumbai- Pune Expressway) and its equity stake in the Sindhudurg Airport project have been valued at 1x FY2009 Book Value (Rs 8/share). We maintain a Buy on the stock with a Target Price of Rs 289", according to report.
Thursday, January 28, 2010
Buy Jaiprakash Associates
Jaiprakash Associates is well set to be among the top five players in power, cement and real estate in India. Doubling of cement capacity in three years, launch of 13m sq ft residential projects in two years and expeditious award of thermal power projects to established E&C players lend credibility to the group’s ambitious expansion plans. Treasury stocks in the parent company and consolidation of all power assets under the listed subsidiary (Jaiprakash Hydropower Limited, or JHPL) provide funding flexibility. More than doubling of cement volumes over FY09-11 and peak construction at captive projects, we estimate, should yield 44% earnings CAGR over FY09-11, similar to growth rates achieved over FY05-09. We initiate with 'BUY' and an SOTP-based target price of Rs 250 per share. At our target price, the standalone entity would be valued at P/E of 8.4x FY10ii and 6.4x FY11ii.
Results of the company were above our estimates. JP Associates Limited reported sales of Rs.2,067.1 crore growth of 78.3% y-o-y mainly driven by Construction and Cement business which contributed 49% and 44% y-o-y respectively.
Results of the company were above our estimates. JP Associates Limited reported sales of Rs.2,067.1 crore growth of 78.3% y-o-y mainly driven by Construction and Cement business which contributed 49% and 44% y-o-y respectively.
Buy Jain Irrigation
SKP Securities is bullish on Jain Irrigation Systems and has recommended buy rating on the stock with a target of Rs 1228, in its December 16, 2009 research report.
"Jain Irrigation Systems Ltd (JISL) is a leading agri business company operating in diverse but integrated segments of agri value chain. It is the second largest manufacturer of micro irrigation systems (MIS) globally and largest in India. JISL is one of the largest manufacturers of the PE pipes and tissue culture banana plants in India. The company also has presence in hybrid and grafted plants, greenhouses, bio fertilizers and solar water heating systems."
"At the current market price of Rs 841, the stock is trading at a P/E of 24x, 17x and 13x of FY10E FY11E and FY12E earnings of Rs 35.6, Rs 48.5 and Rs 64.8 respectively. We recommend BUY rating on the stock with a target price of Rs 1,228/- (46% upside) in 18 months using the SOTP method of valuation," says SKP Securities research report.
2. Moneylife Research Team is bullish on Jain Irrigation Systems Ltd (JISL).
Jain Irrigation Systems Ltd (JISL) is a unique company, pioneering micro-irrigation systems (MIS) in India and has diversified into farming. It is into drip irrigation systems, sprinkler irrigation systems, valves, water filters, green houses, bio-fertilisers, onion and vegetable dehydration, PVC pipes & fittings, PVC sheets, polycarbonate sheets and solar water-heating systems. Its foods division is the largest processor of fruits and vegetables in India. It has a huge client base which includes Indian and foreign companies like Aditya Birla, Bharti, Coca-Cola, Hindustan Unilever, Reliance, Heinz, Friesland Foods, Mitsui & Co, Taiyo, etc.
In December 2008, JISL bagged a single order worth Rs27 crore from one of its reputed European customers for dehydration of onions and vegetables. In May 2009, the company bagge d an order for Balh Valley Medium Irrigation Project through global competitive bidding from the department of irrigation and public health, Himachal Pradesh. The project is a part of Bhakra Beas Management Board (BBMB), Mandi district (Himachal Pradesh). The total value of the project is Rs65.11 crore. Recently, the company bagged an order for a World Bank project worth Rs77.80 crore for supplying and installing drip and sprinkler irrigation systems in Tamil Nadu covering 22,345 hectares of land benefiting nearly 15,000 farmers. JISL also announced that it has won large orders—worth Rs158 crore—from various Coca-Cola bottlers in India and overseas for supply of mango pulp for the 2009-10 season.
In the business of irrigation as well as food processing, JISL faces global competition. It has invested $10 million to set up a new plant in Turkey to make irrigation systems and plastic pipes. It is looking to tap the Asian and Middle East markets for selling processed foods. The overseas ventures are strategic; it is the local market that is really rewarding.
In the September 2009 quarter, the company posted sales growth of 18% and operating profit growth of 70% over the corresponding period last year, due to lower raw material prices. Revenues from the PVC sheets and PVC pipes business declined 29.70% and 5.50%, respectively, while the farm and foods segment reported modest growth of 3.5%. However, the MIS division continued its strong performance by posting a 38% revenue growth. The pipes business grew 14.30% after witnessing a continuous decline in revenue for the past four quarters. The polycarbonate sheet division, which was facing headwinds in the US and EU markets, reported a growth of 11.3%, compared to a flat performance in the June 2009 quarter. Over the past five quarters, the company has maintained an average operating profit margin of 20%. Valuation looks expensive. At the current price of Rs843, its market-cap is 2.9 0 times its revenues and 13.05 times its operating profit for the September 2009 quarter. But JISL’s unique business profile and steady growth have always commanded premium valuation.
"Jain Irrigation Systems Ltd (JISL) is a leading agri business company operating in diverse but integrated segments of agri value chain. It is the second largest manufacturer of micro irrigation systems (MIS) globally and largest in India. JISL is one of the largest manufacturers of the PE pipes and tissue culture banana plants in India. The company also has presence in hybrid and grafted plants, greenhouses, bio fertilizers and solar water heating systems."
"At the current market price of Rs 841, the stock is trading at a P/E of 24x, 17x and 13x of FY10E FY11E and FY12E earnings of Rs 35.6, Rs 48.5 and Rs 64.8 respectively. We recommend BUY rating on the stock with a target price of Rs 1,228/- (46% upside) in 18 months using the SOTP method of valuation," says SKP Securities research report.
2. Moneylife Research Team is bullish on Jain Irrigation Systems Ltd (JISL).
Jain Irrigation Systems Ltd (JISL) is a unique company, pioneering micro-irrigation systems (MIS) in India and has diversified into farming. It is into drip irrigation systems, sprinkler irrigation systems, valves, water filters, green houses, bio-fertilisers, onion and vegetable dehydration, PVC pipes & fittings, PVC sheets, polycarbonate sheets and solar water-heating systems. Its foods division is the largest processor of fruits and vegetables in India. It has a huge client base which includes Indian and foreign companies like Aditya Birla, Bharti, Coca-Cola, Hindustan Unilever, Reliance, Heinz, Friesland Foods, Mitsui & Co, Taiyo, etc.
In December 2008, JISL bagged a single order worth Rs27 crore from one of its reputed European customers for dehydration of onions and vegetables. In May 2009, the company bagge d an order for Balh Valley Medium Irrigation Project through global competitive bidding from the department of irrigation and public health, Himachal Pradesh. The project is a part of Bhakra Beas Management Board (BBMB), Mandi district (Himachal Pradesh). The total value of the project is Rs65.11 crore. Recently, the company bagged an order for a World Bank project worth Rs77.80 crore for supplying and installing drip and sprinkler irrigation systems in Tamil Nadu covering 22,345 hectares of land benefiting nearly 15,000 farmers. JISL also announced that it has won large orders—worth Rs158 crore—from various Coca-Cola bottlers in India and overseas for supply of mango pulp for the 2009-10 season.
In the business of irrigation as well as food processing, JISL faces global competition. It has invested $10 million to set up a new plant in Turkey to make irrigation systems and plastic pipes. It is looking to tap the Asian and Middle East markets for selling processed foods. The overseas ventures are strategic; it is the local market that is really rewarding.
In the September 2009 quarter, the company posted sales growth of 18% and operating profit growth of 70% over the corresponding period last year, due to lower raw material prices. Revenues from the PVC sheets and PVC pipes business declined 29.70% and 5.50%, respectively, while the farm and foods segment reported modest growth of 3.5%. However, the MIS division continued its strong performance by posting a 38% revenue growth. The pipes business grew 14.30% after witnessing a continuous decline in revenue for the past four quarters. The polycarbonate sheet division, which was facing headwinds in the US and EU markets, reported a growth of 11.3%, compared to a flat performance in the June 2009 quarter. Over the past five quarters, the company has maintained an average operating profit margin of 20%. Valuation looks expensive. At the current price of Rs843, its market-cap is 2.9 0 times its revenues and 13.05 times its operating profit for the September 2009 quarter. But JISL’s unique business profile and steady growth have always commanded premium valuation.
Subscribe to:
Posts (Atom)