Edserv SoftSystems Ltd.

CMP : 236.50 ( -2.85 , -1.19%)
Sector : Information Technology (Computer Softwares)

MCap  :  364 Cr. EPS : 18.54   P/E : 12.76   Face Value : 10   Book Value : 34.06

Q1 Income : 22 Cr. (2010 - 53 Cr)  PAT : 7 Cr (2010 - 18 Cr)  EPS : 5.63 (2010 : 15) 

The company is works in the sector of training and education and has been delivering consistent performances.
The income,expense & PAT of the company for the past 4 years has been as follows : 

Year	Income	Expense	PAT
Mar'10	52.68 Cr	26.58 Cr	18.02 Cr
Mar'09	8.58 Cr	1.85 Cr	3.69 Cr
Mar'08	3.95 Cr	0.52 Cr	2.53 Cr
Mar'07	0.18 Cr	0.11 Cr	0.01 cr

Price Movement :  The stock has a run up to the levels of 290 and has seen a fall to around 235 levels within a gap of a week. The stock has consolidated quite a bit.


Latest News is that the company has bagged a training deal from the Gujarat govt for a period 5 years. It also expects orders worth 100 Cr this year. This makes the company a value investment. Also the current listing of 'Career Point' and the euphoric response received by it can also add to its trigger.

"In the next 4-5 years we are looking to pitch in for 10 states to set up ITIs.... We are looking at a revenue of Rs 30-40 crores (300-400 million) per state," S Giridharan, chairman and chief executive officer said.
The increased government spending on these projects is likely to more than triple the compan's revenue in the current fiscal.
Giridharan sees the company's profits around Rs 40-45 crore on revenues of Rs 150 crore in FY11.
"We are looking at a growth of over 200% this year due to the several government engagements which is giving growth a huge boost," he added.

Brokerage House Recommendations

Nomura's Pick in Midcaps :

Triveni Engg :  

Basically if you look at Triveni, they have dominant market share in the turbine business, 0 to 30 megawatt. They have more than 50% market share there. Also, they have tied up with GE now to expand their range from 0 to 100 megawatt now.

The other trigger for this stock is that this business is going to be de-merged and listed as a separate entity. So, we think that lot of value unlocking will happen, once this business gets listed.

Despite Triveni having a sugar business, if you look at the implied valuation of the turbine business right now, it is trading at less than ten times one year forward and compared to the other players in the same space, which are trading at more than 20 times one year forward. So, we think that lot of value unlocking will happen, once this good quality business gets listed separately. 

The Q1 results were not good for the company but since its in the sugar sector also..probably the 1 month long run up from the lows of 96 to current levels have been on that counter.

(CMP 122.35, +4.25,+3.60%)

MCap : 3,155 Cr  P/E: -207.29 

Sterlite Technologies : If you look at that stock, the company will be the third largest producer of optical fiber in the world after the current expansion. They are expanding to 12 million kilometer now and kind of cash that business is generating, 35% earnings before interest, taxes, depreciation and amortization (EBITDA) margin, we think that that is not captured in the valuation right now.

A technology differentiation, world class competitive advantage in optical fiber and cash generating business, low debt and trading at 10.7 times FY12 earnings, we think there is some upside for that stock going forward.

(CMP 99.35, -2.85, -2.79%) 

MCap : 3640 Cr.  P/E:  13.83

Low Price High Volume Stocks : Analysis

• Cals Refineries  :  A 214 Cr. Mkt Cap Entity from Petroleum sector.(CMP 0.27) 
• Beckons Industries :  MKT Cap : 64 Cr.  CMP 7.70 (-0.41,-5.06%) Sector : Paper

The company had a very good Q1 result. Total income jumped by 3621% to 49.7 cr from a paltry 1.34 cr in Jun 09 while QoQ growth was approx 13% in sales and 14% in PAT.Debt-Equity ratio stands at just 0.04. Certainly a very good value stock. The business in which it is invested is also pretty interesting and futuristic.
Recently it has struck deal with a German company for ramping up its bio-diesel plant. Big deals happening every day.It has AGM tomorrow after market hours. So, after today's fall there's a lot of chances for this stock to bounce back.(Vol : around 2.1 Cr shares)

• Resurgere Mines & Minerals : MKT CAP : 395 Cr.  CMP 2.15 

The company has a fairly good financial book with a good growth on every counter. Yet the stock has got an avoid recommendation from almost every analyst.The mining industry might have issues in the future as the environment ministry is getting tough on them. It is a major player in Iron Ore business and sales value are about 526 Cr.The company has recently (15th Sept) given bonus as well as has been split into 1:2 ratio and 1:10 ratio respectively. So the stock has fallen from the levels of 70 to lows of 2.3. The stock shows a lot of potential and should be tracked. (Vol : around 51 Lakh shares)

• Avon Corporation : MKT CAP : 37 Cr. CMP : 5.56 Vol : 42 Lakh Shares

An Electronic Products & Weighing Machine making company.It reported a low income for the last quarter but the PAT have improved considerably.The stock prices have been taking a beating for the past 1 month.But it has a strong support at around 5.5 levels.

Markets Today (15th Sept 2010)

The markets kept rising today too and has added about 1200 points in the last 1 week.
BSE : 19502.11  +155.15   NSE : 5860.95  +65.40

Stocks For Tomorrow :

1. Halonix Ltd. (CMP 131.4, -6.90,-4.99%) is an auto ancilliary.It has seen quite a run up from 113 odd levels to 159 in a matter of 12 trading sessions and has been loosing since then. Fell down to 131 in the last 6 sessions.It's quarterly results were healthy compared to its previous quarters.
   The company is a leader in Lamps for the Auto Sector with a sales value of 400 Cr. The company is in the path of recovery after its dismal performance in the year 2009. It has caught Investors flavour only after its Q1 result. So, the stock may see a bit more of consolidation but in the long run it should rise again.
2. Promact Plastics (CMP 4.75, -0.50,-9.52%) Dilip Surana of Moneyvidya.com has a buy call on the stock. It is a micro cap company with a MKT CAP of 3.09 Cr. EPS : 2.74.P/E : 1.99  The 4.70 levels have earlier acted as a strong support for the stock.
   The Q1 result was dismal.The company deals majorlyin sacks & fabrics.The total sales for the company is around 11.2 Cr.
3. Kamat Hotels (India) (CMP 128.90, -7.05, -5.19%) MKT CAP : 204 Cr, EPS : 5.15, P/E : 25.03. The stock has had a rally from 115 odd levels to 149 levels in the last two sessions. The financials are grim like other Hotel companies. The Q1 result was extremely poor compared to 2009Q4 results.The stock was hovering around 113-115 levels after the Q1 results before watching a rally 2 days ago. The stock may consolidate further to the levels of 120 or so before making any breakouts.
4. TV Today Network Ltd. (CMP 79.45, -4.3, -5.13%) The share was trading at around 84 levels and then fell off to 79 odd levels in the second half. The only news on this counter seems to be sale of substantial volumes by HDFC MF. The stock has been see-sawing between the levels of 80-90. It has seen fall in the last two sessions. The stock may shoot up again. The stock is trading at its 52 weeks low. So the downside is fairly limited.The major source of income is from Satelite Broadcasting with a sales of around 285 Cr.
   MKT CAP : 458 Cr  EPS : 2.63  P/E : 30  
5. MVL Ltd. (CMP 79.75, -3.65,-4.37%) The stock has been falling continuously from the levels of 111. The company seems good with nice Q1 results.The volumes are quite high (1079216). The stock fell to the levels of 75 from 84 in the intraday itself and then corrected to 79 levels.It seems there is a lot of operator activity in the stock.
6. Welspun India Ltd. (CMP 63.3, -2.75,-4.16%) Deals in Terry Towels (Textiles) .The company is a market leader in its own segment. The stock has been falling over a month from the levels of 80 to the present level.The company's PAT has been detoriating over the last few quarters.It has a sales volume of around 1700 Cr from the cotton related products. The stock might be falling because of the cotton related policies of the govt. But the stock is already trading at a very low levels so, the downside is limited while the fundamental quality of the stock is very high.
   MKT CAP : 561 Cr.  EPS : 9.95  P/E : 6.36  Book Value : 70.86 
7. BPL Ltd. (CMP 41.8, -1.15, -2.67%) The stock was up yesterday on the news of the stock moving out of some govt funded help or something. It rose up to a high of 46 before settling down to 42.95. It has further corrected to below 42 levels. I expect it to correct further tomorrow to the levels of 40.5 before moving higher again. The story seems to be one of a distressed stock. Lets see how it goes ahead.The Q1 results were no good though over its previous quarters.
   MKT CAP : 202 cr  EPS : 1.04  P/E : 40.15

MarketsTomorrow (15thSept2010)

1> JHS Svendgaard : Personal Care (CMP 94.65,+5.55,+6.22%) Very good Q1 result. Expects to do better. It has been doing bad in thelast few quarters.
MKT Cap: 137 Cr., P/E : 20.27, Q1 PAT was double 2009 PAT (2 cr v/s 1 cr)

2>  JCT Electronics fell by 8.62% (CMP 2.65,-0.25,-8.62%).
3> JP Associates has AGM tomorrow. it was also up today by about 3%. The stocks should be up in the morning on anticipation.
4> Banking Stocks were down today.May see a bounce back tomorrow.
5> Parenteral Drugs is expected to consider bonus share.Was down by about 3% today.May be up on anticipation.
6> Rama Newsprint & Paper Ltd. : Paper (CMP 20.20,+3.35,+19.88%) on the news of sale of shares???
7> GSPL was again down by 3% today. CMP :108.45, -3.45,-3.08%

"They have bid of Mehsana-Bhatinda cross country pipeline and if they win that bid that value could add another Rs 15 to the share price. Some of the clarification on the tariff authorisation could also provide additional support to the stock." -by Sanjay_chamo on MMB.

"BUY ONLY BECAUSE GSPL HAS FOUND HUGE GAS FIELD IN KHANBHAT ATEA WITH OILEX,AS PER ECONOMICS TIMES DATED:-11/09/2010." - by mvpatel_67 on MMB.

GSPL has now become attractive like Bartronics.May see a jump any day.It has been trading at around 123 a few sessions ago.
It has been trading with a very huge volume. This can be a safe yet great bet for tomorrow.
 8> Other stocks that fell in today's trade:  Chambal Fertilizers (CMP 73.55,-2.06%), REI Agro (CMP 20.85,-3.02%), Andhra Bank (CMP 161.75,-2.50%), Indian Hotels (CMP 104.55,-2.06%),ApolloTyres( 82.65,-1.96%)

The Markets Today (13th Sept 2010)

BSE : 19208.33, +408.67    NSE : 5760, +119.95
 The markets rose and rose and rose. The FII inflows keep adding up and this level is expected to get better and better for few more days. Waiting for a correction to happen. Till then investing little in the markets and selling out my assets.

Stocks For Tomorrow :

1> HSIL Ltd. : Ceramics/Tiles/Sanitaryware  (CMP 134.25, -3.25, -2.36%)

Mkt Cap : 758 Cr.  EPS : 11.55   P/E : 11.62   Book Value : 88.64

Share Holding :  Promoters : 60.49%  ForeignOcb : 14.99%  GenPub : 13.97%

Q1 Results :  Income : 218Cr.  EBIT : 28Cr.  PAT : 14Cr.  EPS : 2.46

Major Sales : Sanitary Wares ( 332.235 Cr) & Glassware/Tumblers (326.22 Cr)

2> GSPL : Petrochemicals  (CMP 111.70, -3.90, -3.37%)

Mkt Cap : 6503 Cr.  EPS : 7.79   P/E : 14.32   Book Value : 27.80

Share Holding :  Promoters : 37.74%  ForeignOcb : 12.46%  GenPub : 12.44%

Q1 Results :  Income : 257Cr.  EBIT : 175Cr.  PAT : 105Cr.  EPS : 1.87

Major Income from Transportation Services : 991.9516 Cr.

3> Idea Cellular (CMP 74.45 , -2.15, -2.81%) Expecting it to rise tomorrow as the trend for the stock is bullish. Has consolidated today,will rise tomorrow.


4> LT Foods (CMP 71.70, -7.40, -9.36%)  The stock had a rally from 61 to 85 last week. Expecting it to rise again due to the whole food processing industry's changed scenerio. 
Mkt Cap : 207 Cr.  EPS : 6.03  P/E : 11.92  Book Value : 69.50
The Q1 results have been poor for the company.

5> Kohinoor Foods (CMP 57.25, -2.20, -3.70%) Like other food processing stocks, it has also seen a run up from 50 to 62 last week. Then it has gone for a consolidation phase. The Q1 result was severely hit and the recent run up was only because of the Pakistan flood situations. May bounce back tomorrow.Today all food processing stocks were witnessing a selling pressure. 
Mkt Cap : 162 Cr  EPS : 14.71  P/E : 3.89  Book Value : 74.23
This stock looks better than LT Foods.

6> Kinetic Motor Company (CMP 23.6, -1.55, -6.16%) The stock has seen a run up from 20 odd levels to 25 in the last week. Consolidated heavily today specially in the last hour of trade. Should bounce back tomorrow. 
MKT Cap : 60 Cr EPS : -3.15, P/E : -7.15 Book Value : -20.04
The stock looks poor in the small cap Auto sector.

MVL Ltd.

MVL : Construction & Contracting Real Estate
(CMP 84,-19.85,-19.10%)

Sudevan on MoneyControl : According to Mr. Prem Adip Rishi, Chairman of co said on CNBC TV that at present 6 projects worth of 3000 crores are under progress and next qtr onwards 400 to 500 crores income expected to get out of this. In the past qrts they have shown 13 to 14 pct profit of margin. Considering that if the company realise 400 crore revenue their margin would be roughly 56 crores devided by 26.5 crores equity of 2 FV ,In fact I have taken margin percentage 10 instead of 13 or 14 eps should be 3+ per qtr and you see what would be the yearly eps of this company. Over and above mobile instrument biz income also expected to come shortly.
Have you seen today`s announcemnt of the company that board of directors are meeting on 13th sept for stock split ???

MVL has probably some news about a buyback too at a price of 126.
(Company has a very good Q1 result)
Low in the last 10 Days : 65.60
High in the last 10 Days : 111.50
Highly volatile stock.
Book value is ridiculously low at 4.13.
MKT Cap: 2243.82 Cr

As it happens... (8th Sept 2010)

Bartronics India started to rise finally...could not get the news flow though as yet.
The stock is up nearly 10% at a CMP of 112.8.

9th Sept 2010
Well it rose to the highs of 120 that day and settled at around 118.
The stock is probably witnessing a breakout but I am not sure for how long this will continue.
Today the stock reached a high of 123 and closed at around 119.5

Rallies in Recent Markets...

In the past 1 Week market have seen as much as 3 Rallies in 3 different sectors:
1> It was sugar industry which rallied at the back of talks of decontrol.
2> Next was the tyre industry as they raised their prices due to increase in the prices of rubber.
3> Yesterday was the day for the cement sector as some south based players increase their costs to avoid making losses due to increased input costs.

Today it is expected that the Tea sector players will increase their prices as the production of tea is expected to fall.
Waiting for the news...

News Making Buzz(4th Sept 2010)

1. Govt is going to lift export duty on the Cotton exports from Oct1 for upto 55 Mn Bales of cotton.The cotton production has surpassed the cotton demand in the country and needs to be exported. There is a meeting on 15th Nov.(Expecting a jump in the Cotton industry stock prices.)
2. Steel Strips Wheels has got order for 4,000 wheels worth 45,000 Euro from German Company, quoting NewsWire 18, reports CNBC-TV18. It touched a 52-week high of Rs 263.70. At 10:58 hrs the share was quoting at Rs 256.50, up Rs 13.55, or 5.58%. Brokers have upped their target on the stock to 300.
3. Sugar industries have jumped quite higher on the news of decontrol.Now the confusion regarding it will force a correction to their prices.Simply put, Govt might not be ready to decontrol the most controlled and one of the most sensitive commodities as of now.
   
4. Delhi based low-cost airline SpiceJet has been given in-principle approval by a Government committee to import 30 Boeing 737-800 aircraft. In July, the airline had signed an agreement with Boeing to purchase the 30 aircraft at an estimated value of $2.7 billion.(CMP 72.6,-0.05,-0.07%)
5. Asahi India Glass set to expand, investing 140 Cr. Expansion maily to occur in the automotive sector. (CMP 92.55,+1.45,+1.59%). But it has a very high PE (1197.30) and very low EPS(0.08). Can be traded for a 1-2 days next week.Not a long term investment.Very volatile.
6. Hindalco Industries, an Aditya Birla group company, has drawn up a capital expenditure plan of Rs 10,000 crore this fiscal, going up to Rs 11,000 crore in 2011-12.
   The company will also pump in about Rs 40,000 crore over the next four years in various greenfield and brownfield expansions.the company's greenfield projects – Utkal Alumina, Mahan Aluminium, Aditya Alumina and Jharkhand Aluminium – were on course and had made significant progress.
   Hindalco's promoters are exploring the option of increasing their holding over the present 32 per cent level which will put them ahead of foreign institutional investors who account for 29 per cent. Banks and domestic institutions have a 13 per cent stake.
   Utkal Alumina has been granted the permission to expand in orissa.After the expansion it can surpass Vedanta Aluminium.
   So Hindalco is a sure buy for Monday and for the next few days.(CMP 170.45, -1.84%)
   
    
   
   

Further Updates (2nd Sept 2010)

JCT Electronics rose further by around 17% to 2.4 and Bartronics India fell further by 0.45 to 103.2. But for bartronics, the downside seems limited. but again still do not have much clarity on their business.

Market Update 2nd Sept 2010

Today's was the day of Sugar & Steel sector and Apollo Tyres.

Renuka Sugars & Dwarikesh Sugar made super gains.All sugar stocks were in green on the decontrol news. They can still go up tomorrow.
Steel sector was up on the back of price rise.

Suzlon raced around 10% up on news of stake buys by RIL.

Stocks to watch out for :

Escorts : railway division expecting govt order. high sales of tractors.Reduced debt from 880 Cr to 400 Cr.
Buy on any dip.
IIFL has a target of 230 on it. (CMP 200.15)

Unitec : NCR margins dropping.
No clarity on demerger plans.(real estate & non core projects)
Telecomm expansion delayed.

Action Const Equipments : very good Q1 results.Cranes give 70% revenue.
Going to double their cranes numbers.(CMP 69.35)
Mkt Cap : 623 cr.  P/E : 21.53

Apollo Tyres has rose considerably today (CMP 82.35, +8.6, +11.6%) and is expected to go higher. Long term target is 100-110. My guess for tomorrow is that it should fall to the levels of 79-80 by the end of the day... also because its a friday.

Mkt Outlook 2nd Sept

Telecomm stocks to do well on 3G rollout news.

Market Update : 1st Sept 2010

Stocks Of Today


Markets ended  234.05 (on BSE, 18205.87) & 69.45 (on NSE, 5471.85) up.

• JCT Electronics (CMP 2.05,+0.35,+20.59%) - Electronics : Picture Tubes
• Kesar Enterprises (CMP 67.8,+11.30,+20.00%) - Sugar
• Bartronics India Ltd. (CMP 103.65,-3.75,-3.49%) - Computers : Hardware
• Camlin Ltd. (CMP 52.8,+3.6,+7.31%) - Stationery & Chemicals

Camlin has a market cap of 321 Cr. and deals mainly in stationary(216 Cr) & Chemicals(122 Cr).Both these sectors have got green signal from the brokers.It has given a good quarterly result with PAT increasing by 18.9% to 9.1 Cr against last year Q1.Good buy on any dip.Looks positive for medium to long term. Tomorrow, may see some profit booking.

 JCT Electronics is a 162 Cr. company with not so impressive figures.Deals in Picture tubes. Today's rise with an extraordinary volumes of over 90 lakh shares is something to look out for. The share had fallen 12.5% (0.25) yesterday. Today's move might just be a consolidation for that.

Kesar Enterprises is an integrated Sugar based company with a market capitalization of 47 Cr. Its TTM EPS is staggering 26.85 and P/E ratio of around 2.53. The quarterly results were pathetic but the 12 Month PAT was up 137% at 9.1 Cr.It's major income comes from Sugar (145 Cr. )  and Country Liquor & India Made Foreign Liquor (IMFL) (97 Cr).It fell from 71.5 on July 13 to 56 on Aug 30.Tomorrow it may fall again on profit booking.

Bartronics India has fallen from the levels of 151 (22 June 2010)  to 103 (1 Sept 2010) at the back of a very bad quarterly result of Q1.It can be accumulated in the lower levels. It has reached its 52 Week low. Positive

 news can see some movement in the stock.
Some key values (as on 1st sept)
Market Cap (Rs Cr.):352

EPS - TTM (Rs):15.84       P/E Ratio (x):6.54

Face Value (Rs):10.00        Latest Div. (%):10.00

Div. Yield (%):N.A.

Book Value / sh. (Rs) :110.99

P/B Ratio (x):93.0