The shareholders of those four companies have received their proportion of summit securities in their demat a/c in august but the merged entity (Summit securities) is still not listed and hence shareholders are not able to sell their holdings. Shareholders are stuck and frustrated and have been looking for several exit options. Many brokers are trying to take advantage of this situatuion asking investors to tender their share of summit securities lying in their demat a/c at Rs. 10/- through off market transaction, misleading them that their investments are of no worth now and they should exit at whatever value they are getting.
The shareholders should stay away from such brokers or people and stay calm for some more time. This is about to get solved very soon. As per the recent conversation with an RPG management representative we came to know that all the approvals have been obtained except SEBI. The approval from SEBI should also come soon as the pressure is equally high on the RPG group as well. RPG group being a 17,000 crore enterprise is not expected to cheat shareholders of such small companies.
As per the latest annual report of summit securities the top 5 quoted investments held by the company are as follows
|Company Name||No of shares after Merger||CMP as on |
|Value in crores|
So the top 5 holding iteself are worth approximately 400 crores. On an equity capital of 10.90 crores, the per share value of the above investments comes out to Rs 365/-.
Other quoted and unquoted investments including cash held by the company are worth at least 100 crores.
Considering the above facts it is advisable not to sell any holdings in Summit securities until it is listed and has been traded for 6 months, because it might happen that because of delay in listing some shareholders sell on the listing day itself.
The book value of the company at cost as on 31st March 2010 is Rs. 362/-. Even if we discount the BV by 20%, the shares of summit securities should stabilize above Rs. 300/- within 6 months of listing.
Firstcall research has comeout with a buy rating on Federal bank. The research report can be downloaded from this link.
These are not just the quotes, but the experiences shared by some of the most successful investors in the history of stock markets. We can benefit from them if we understand them and remember them while taking investment decisions.
Profit in stocks goes to those who buy stocks on sale. There’s no such thing as risk free investment.
The four most dangerous words in investing are 'This time it's different'.
The time of maximum pessimism is the best time to buy and the time of maximum optimism is the best time to sell.
Every day I get up and look through the Forbes list of the richest people in America. If I'm not there, I go to work.
I hate weekends because there is no stock market.
Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.
It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong.
Warren Buffet, Peter Lynch, George Soros & Sir John Templeton
Goldman Sachs has upgraded Bharti Airtel to buy from neutral and raised its target price on the stock of India's top mobile phone operator to Rs. 430
We expect the price target is conservative. The recent 2G scams are more likely to hit newer and unlisted player in the telecom space like UNINOR, Videocon, LOOP etc. This will rationalize the competition and would be favourable for the listed telecom player like Bharti Airtel. The tariff war seems to have bottomed out and the uncertainity in terms of its african operation is alomost over. Bharti is confident of it African operation turnaround in next 1 year. Most of the indian mutual funds have increase their stake in Bharti in last 6 months.
If Bharti reaches its target of 100 Million users in Africa by FY-12 then we exepect Bharti to report a Consolidated revenue of approximately Rs. 75,000 crores and PAT of around Rs. 12,000 crores in FY-13. Considering a PE multiple of 18, which is the forward multiple at which SENSEX broadly is trading at, then the market capitalization of Bharti is expected to be approx. Rs. 2,16,000 crores and hence the target price for Bharti is expected to be at Rs 560 in next 1.5 year. A near 70% appreciation from current levels of 335.
Update as on 16th August 2015: Zensar Technologies has become a huge multibagger and is up 6 times since the recommended prices of Rs. 160.
Indian stock markets have started showing some weaknesses on the back drop of FII outflow. Both SENSEX and NIFTY are down close to 2% in early trades today. The reason seems to be obvious. The rupee has depriciated by 2% in last 3 days and the SENSEX and NIFTY are down almost 4 % from the recent peak. So all in all there is a loss of 6% for FIIs in dollar terms. Since in short to medium term the direction of rupee seems to be downward, they might be worrying about further losses on currency side and that is why taking some money of the table before the majority of the gains get wiped out.
But this correction is healty as Mutual funds and Retail Investors have been out from the market and were waiting for corrections to get in. One should not panic by the volatile movement of the SENSEX and NIFTY and stay calm. A 5% correction from the current levels of 20000 SENSEX should provide good entry point for investors. However one should still follow bottom up approach of stock selection and buy where the business outlook is good and valuation is reasonable.
In the article titled "Cooling will make it hot soon" dated 24th Oct 2010 (http://investorzclub.blogspot.com/2010/10/cooling-will-make-it-hot-soon.html) I explained how undervalued is Lloyd electric and Engineering. Don't know about other investors but promoters seems to have read the article and started buying shares from the open market. On 10th and 11th Nov the promoters Mrs Renu Punj and M/S Lloyd electric and Engineering Pvt. Ltd have acquired 1.41% (around 4,38,000 shares at the rate of Rs.90/-). The stock has already moved 12% since I recommended it at Rs.78/-. Promoters have been steadily increasing their stake since last 6 months. If that is any indication the stock seems to be moving much higher from current levels in next 6 to 12 months.
Rakesh Jhunjhunwala has picked stake in Federal bank recently. He disclosed this in an interview. The reason seems to be very obvious, its undervaluation relative to the other private sector lenders like ICICI bank, HDFC, AXIS Bank, ING Vysya Bank etc.
On FY-12 basis it is quoting at around 1.2 times book value. Even public sector lenders are available at somewhere in the range of 1.5 to 2.5 times book. Private sector lender are anyway available in the range of 2.5 to 4 times book.
The reason for its undervaluation in past 2 years has been its low retun on Net worth because of its right issue in 2007. But with loan book growing at 25% annually it is expected to report better RONW in coming years and hence should start commanding better valuation.
At expected PBV of 2.0 for the Financial year FY-12, the stock is expected to generate around 60 to 70% return from current levels in 12 to 18 months time frame.
Today investors especially the retail investors who got subscription at 5% discount to the issue price of 245 must be very happy today as COAL India lists at 300 and touched an intraday high of 340. At 340 retail investors are earning close to Rs. 21,500 /- on each application. This is going to be an eventful day in the history of Indian stock market. The retail investors who had the leftout feeling in the recent rally of SENSEX from 8000 to 20000 have finally been able to make some money. This is crucial, for our markets because it is the retail investors who will bail out people who have been betting on midcap and small cap stocks, based on valuations, since very long but have hardly reaped any benefit. Because of FII money, the large cap stocks have been independently rising without the participation of mid and small cap and hence a huge valuation gap has been created between them.
After this episode of COAL India IPO, retail investors would now have some confidence of investing in the market again.
There is lot of skepticism and fear among the people on the street. The crash of 2008 has left an impression on investors which is horrific and tough to forget. But where would people invest if not equities. People who remain hibernated till today have the leftover feeling now and trying to renter the market, but market this time is not obliging them. Most of the falls that are happenning are very shallow and tough to time it. This time the market is diametrically opposite to what it was in 2008.
The biggest difference is that the valuation that the sensex was trading at 20000 in 2008 was close to 25 times, whereas this time when sensex is at 20000 it is trading at a comfortable valuation of less than 20 times its estimated earnings.
The other noticable difference is the fear and skepticism prevailing in the market today. In 2008 there were wide spread optimism and everyone who was in the market was making money without any effort. I myself know many people who left their job as they were making much more money in the markets then their job, and they were new investors. I was myself making lot of money and started thinking that all the investing principles I have learnt are so easy to apply and forgot the basic principle that success without effort & experience is a house build of cards and would collapse even with a slight headwind. And that is what exactly happened. Subprime crisis came in just when we were at bubble kind of valuation and when no body was expecting such blowout news. People panicked and pressed the exit button. Then the situation was similar to the situation of a stampede in a temple full of crowd. There was blood bath every where. But things are different this time around. People are well prepared for any catastrophic news, hedged and under invested.
99% of the people have not been able to participate in the rally from 8000 to 20000. they are now waiting for a chance to get in and that is why every dip is being bought immediately.
Third is the the small & midc cap stocks valuation. In 2007 there were hardly any good quality midcaps available at less than 10 times PE multiples. But today even when SENSEX is at 20000 there are many good quality midcaps available at less than 10 times PE multiple. This also signifies that retail participation is not there which is usually responsible for creating panic like situation in 10-20% fall.
All these factors would prevent a major correction in the markets and every dip would be bought by the new investors. 10 to 20% fall is possible in any kind of market but a crash seems to be not happening in near future. It seems from the market movement that it will spend sometime near 20000 and would slowly move up. The mid caps and small caps would eventually catch up and would outperform the large caps over the next 1 year.
So the best approach now would be to selectively look for quality stock available at cheap valuations and avoid investing in hot stocks available at rediculous valuations.
Lloyd electric and engineering an Airconditioner coil manufacturer is the largest producer of coils used in all types of ariconditioners, domestic or industrial. It also manufatures complete air conditioner units on contract basis. Almost all the leading players in India such as Voltas, Blue Star, Hitachi, samsung etc are its clients.
Demand for air conditioners are rising at exponential pace, and are expected to continue for next few years thanks to global warming and rising income of Indian people. The company is diversifying into Metro rail airconditioning which is likely to give boost to order book thanks to Metro rail expansion in various cities in India.
The current market price of the company is Rs. 78/- which translates into the market cap of approx Rs 242 crores. The company is expected to do around 850 crores on standalone basis while on consolidated basis it is expected to clock a revenue of 1050 crores. As its last years european acquisition not expected to yield any profits due to overall slowdown in European region, the expected PAT for this year on standalone and consolidated basis is expected to be around 48 crores which translates into an EPS of approx Rs 16/-
At the CMP of 78 the stock is available at less than 5 times its current year earnings which is extraordinarily cheap with respect to other air conditioner players in the market such as Hitachi, voltas, blue star etc as these companies are trading at somewhere close to 15-25 times its current year earnings.
The company's FY-09 book value was approx Rs 132/-. For the current year i.e FY-10 the BV is expected to be around 147. so at CMP the stock is available at 0.53 times or 47% discount to its book value.
Considering the industry it is part of and the kind of low valuation it is trading at, the stock is expected to generate around 80% return from these levels in 6 to 12 months time.
So this cooling business is expected to make Lloyd Electric & Engineering a hot stock on dalal street soon.