Indian Stock Market

thanks,kkp g looking at entering supreme, yuken ans dr reddy. is the timing right? regards
On 9/11/07, KKP_Investor wrote: > > > Large & Safe Stocks for Growth and Income: > > Dr Reddy > > Tata Steel > > Tata Motors > > ICICI (not bottomed yet) > > Rel Capital > > Small to Mid Size Good Bets for Growth: > > RPL > > Bartronics > > Revathi > > VIP > > Godawari > > Supreme Indus > > Yuken > > RNRL > > > > High Risk + High Reward Bets (a bit risky): > > Gontermann > > Shri Bhawani > > Goldstone Tele > > Western India > > PS: I OWN MANY OF THE STOCKS ABOVE, OR HAVE MANY ON MY LIST TO BUY ON A > DIP > > KKP > > > algae ginger wrote: > > hi folks, > > > > Please suggest stocks that you would be comfortable recommending for a > > Buy today, with a Buy and Hold mentality over the Long Term (defined as > > 2-3-4-5 years): > > > > Name? > > Timeframe? > > Why? > > Buy Price Point? > > > > Thanks. > > > > My suggestion on the same: > > > > > > Neeraj Marathe wrote > > Name: Usha Martin Ltd. > > Time frame-4 years > > Buy Price point- CMP > > > > > > regards > > > > > > > > GRASIM (BUY; TP Rs3558). 3. BHUSHAN STEEL (Downgrade to Sell; TP > > > Rs914) > > > > > > > > > > > > > > > > I totally agree with L&T…..Just realized the Book to Bill > > > ratio (order > > > > backlog to current bill ratio) for FY07, 08E, 09E. Just > > > unbelievable. > > > > Buy this one on any and every dip, and forget about it. It is a > > > huge > > > > Power/Construction Sector play until 2010. SIPping for initial > > > > investment would make it worth your while. > > > > > > > > KKP > > > > > > > > > > > > accurate equipments wrote: > > > > > > > >> > > > >> > > > >> *1. L&T: Downgrade to Neutral with the target price of Rs2,557* > > > >> - We downgrade our rating on L&T (LT IN; Mkt Cap USD18b, CMP > > > Rs2,589, > > > >> Buy) to Neutral. The company’s business fundamentals continue > > > to be > > > >> robust - during our recent interaction, the management > reiterated > > > >> guidance of 25-30% growth in order intake and revenues, and > > > stable to > > > >> marginally higher E&C margins in FY08. Its subsidiaries also > > offer > > > >> significant value-unlocking opportunities. However, we > > believe that > > > >> current valuations factor in most of the positives and the > stock > > > >> offers limited upside potential from current levels. > > > >> > > > >> - Current market price is higher than our SOTP-based price > > > target: Our > > > >> SOTP-based price target for L&T is Rs2,557 (22x FY09E core > > business > > > >> earnings) as against the current market price of Rs2,589. > > > Adjusting > > > >> for the value of L&T IDPL (Rs154/share) and Ultratech Cemco > > > >> (Rs36/share), L&T quotes at 28.4x FY08E and 22.5x FY09E EPS. > Our > > > >> SOTP-based price target factors in (1) 29% net profit CAGR > during > > > >> FY07-09, and (2) continued 20%+ growth beyond FY09. This leaves > > > little > > > >> room for disappointments - possible delays in project awards, > > > >> execution, etc. > > > >> > > > >> - Even at our best-case EPS estimates, the stock upside is > > > limited: > > > >> Our best-case EPS estimates (consolidated) stand at Rs89.8 > > for FY08 > > > >> (v/s our current estimate of Rs84.4) and Rs122 for FY09 (v/s > our > > > >> current estimate of Rs106.8). Based on the best-case scenario, > we > > > >> arrive at a target price of Rs2,906 - an upside of just 12.5%. > > > Also, > > > >> L&T derives 55% of revenues from the infrastructure segment, > > where > > > >> significant valuation premium (currently 38-58%) vis-=E0-vis > other > > > >> construction companies appears difficult to justify. > > > >> > > > >> - Sizeable capex program could impact return ratios: To > > > increase the > > > >> share of manufacturing business, L&T has announced a sizeable > > > capex > > > >> program, which could impact return ratios till the new > businesses > > > >> mature. L&T has a capex plan of Rs25b during FY08 and FY09 > > for the > > > >> standalone business, and intends to invest Rs8-10b per year > > in its > > > >> subsidiaries (L&T IDPL, L&T Finance, L&T Infrastructure > > Finance and > > > >> L&T International FZE), Rs20b in the shipbuilding business, and > > > Rs6b > > > >> in the power equipment business. > > > >> > > > >> * * > > > >> > > > >> > > > >> *2. GRASIM: Core businesses witnessing strong upcycle; Buy with > > > target > > > >> price of Rs3,558 * > > > >> - Both of Grasim’s (GRASIM IN; Mkt Cap USD6.6b, CMP 2,936, Buy) > > > core > > > >> businesses (cement and VSF) are witnessing strong business > > upcycle. > > > >> The performance of its sponge iron and chemicals businesses > > is also > > > >> set to improve. We estimate EPS at Rs281.7 for FY08 and > > Rs274.7 for > > > >> FY09. Our SOTP-based valuation of Rs3,558 indicates an upside > > > of 21%. > > > >> We reiterate Buy. > > > >> > > > >> - Cement - timely capacity addition to drive growth: With > > > inflation > > > >> waning, we see signs of attenuation of state intervention in > > cement > > > >> pricing. Demand-supply remains in the industry’s favor, and > > > given the > > > >> strong demand drivers and possible delays in new capacity > > > additions, > > > >> the upturn in the cement cycle could be prolonged. Grasim’s > > timely > > > >> capacity addition would help drive volume growth, and cost > > cutting > > > >> would enhance competitiveness. > > > >> > > > >> - VSF - momentum likely to continue: Given the increasing > > > preference > > > >> for comfort (cellulosic) fabrics, the outlook for the VSF > > > industry is > > > >> positive. ICAC estimates that cotton consumption would outstrip > > > >> production, leading to strong cotton prices. This in turn would > > > mean > > > >> favorable prices for VSF as well. For Indian players, the > > > abolition of > > > >> quotas is a further positive. Being the largest producer of > > VSF in > > > >> India and the second largest in the world, Grasim is a key > > > beneficiary. > > > >> > > > >> - Other businesses - performance to improve: Grasim’s sponge > iron > > > >> business has suffered due to inadequate gas supplies while its > > > >> chemicals business was adversely impacted by a breakdown in its > > > >> captive power plant. While the commencement of the Dahej-Dabhol > > > >> pipeline in December 2007 should result in adequate gas > > > availability, > > > >> normalcy has been restored at its captive power plant. We > > > expect these > > > >> businesses to report improved performance in FY08. > > > >> > > > >> > > > >> > > > >> > > > >> *3. BHUSHAN STEEL: Upgrading the target price to Rs914, > > > Downgrading to > > > >> Sell * > > > >> - The stock price of Bhushan Steel (BHUS IN; Mkt Cap USD1b, CMP > > > Rs938, > > > >> Buy) has appreciated 43% in the last one week (up 71% since our > > > report > > > >> dated 10 May 2007). We are revising our target price from > > Rs713 to > > > >> Rs914. However, as the current market price is higher than our > > > revised > > > >> target price, we downgrade the stock to Sell. > > > >> > > > >> *Event update* > > > >> - Bhushan Steel has signed an MoU with L&T and Paulwurth for > the > > > >> supply of a 2.5mtpa blast furnace worth Rs12b. This is part > > of its > > > >> next phase of expansion in Orissa to increase capacity from > > 1.9mtpa > > > >> (in March 2009) to ~4mtpa by the end of 2011. The total cost of > > > the > > > >> expansion project is ~Rs40b and the company is yet to achieve > > > >> financial closure for the same. We believe its aggressiveness > in > > > >> placing the order for the blast furnace (which has the longest > > > lead > > > >> time) is to ensure a continuous stream of projects and growth. > > > This is > > > >> significant in view of the large capex being planned by the > steel > > > >> industry in India to double production in the next five years, > > > which > > > >> is resulting in the quality equipment suppliers getting fully > > > booked. > > > >> > > > >> - The company currently has a capacity of 1mtpa cold rolled and > > > >> galvanized products, which are produced from HRC. Increase in > HRC > > > >> prices increases the company’s raw material cost, which it is > > > >> generally able to pass on to the end users. Prices of steel > > > products > > > >> have started moving up in the last fortnight due to global > > > shortage of > > > >> metallic. Therefore, the prices of HRC have moved up ahead of > > the > > > >> movement in prices of galvanized steel. SAIL has increased the > > > prices > > > >> of HRC by Rs800 per ton w.e.f. September 1 while the prices of > > > >> galvanized sheet were left unchanged to compete with Chinese > > > suppliers > > > >> (Chinese suppliers of galvanized sheet are at an advantage due > to > > > >> differential duty on HRC exports). > > > >> > > > >> - We expect EBITDA margins to improve substantially from 16.4% > > > in FY07 > > > >> to 36.2% in FY10 (at HRC price of Rs25,000 per ton) due to > > backward > > > >> integration. We are revising our target price upward to Rs914 > > > (earlier > > > >> Rs713), based on EV/EBITDA of 3.5x FY10E, discounted backward > > > 20%. As > > > >> the current market price is higher than our revised target > > > price, we > > > >> downgrade the stock to Sell. > > > >> > > > >> > > > >> > > > >> > > > >> > > > >> > > > >> > > > >> — > > > >> > > > >> > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > > >