Scripscan:Surya Chakra Power Corporation Ltd
Code:532874
cmp:3
Story:The company is a power producer basically a biomass based power generation company.Now,Revenue and earnings potential from biomass-based power generation in our country is not very attractive and the company has no experience in this business.The company knows it too and thus at present it is in the process of establishing solar power plants in several States, including Madhya Pradesh and Orissa, and a coal-based plant in Orissa.The main fuel for the biomass plants is agricultural waste such as rice husk and cotton stalks.The biggest disadvantage is that this is the maiden foray of the company into this business.The company or its subsidary has power trading license,Though there is good scope in the power trading business, it may be difficult for a small player to break into the industry, which has such major players as PTC India and NTPC Vidyut Vyapar Nigam.The only way to make money will be to increase trading volumes.It is doubtful if SPCL will be able to do that.Now as far myself is concerned,a visionary entreprenur backed by a solid pedigree team is everything for me.I would buy a company with huge losses,huge liabilities,bankrupt one bought by an influential man rather than buying a company with modest financials,good background but run by dull minded and lethargic owner.The promoters of SPCL were earlier in the aquaculture business and two of their listed companies — Suryachakra Sea Foods and Kalyan Sea Foods — fell into difficult times when the aquaculture projects were banned by the Supreme Court in 1996. These companies were subsequently delisted by the BSE, and the Securities and Exchange Board of India slapped penalties on them for non-compliance. Some cases are also pending in different courts against the promoters and some of the group companies for not repaying loans, including one filed by the Marine Products Export Development Authority (MPEDA).Maybe the promoters would do something great ths time,maybe all the projects of the company would fructify and reap huge benefits for the stakeholders,maybe surya chakra would be a household name among the small retail investor fraternity.Considering all these,I rate a hold rating on the counter.
Tuesday, December 27, 2011
Vikash Metal & Power Ltd:Buy/sell/hold,growth prospects and recomendation,news and results,target price and analysis
Scripscan:Vikash Metal & Power Ltd
Code:532677
cmp:20
Story:The company manufactures and trades sponge iron and ferro alloys. Over the past few years, VMP's performance has remained subdued. Low capacity utilisation and thin margins appear to have affected the business.A number of other companies in the Impex group (run by the promoters), mainly into trading ferro alloys, have also shut operations after running up losses for several years.The pricing environment does not offer a great degree of comfort. Sponge iron prices, after shooting though the roof last year, have cooled off.Shortage of coal and iron ore (the principal raw materials for producing sponge iron) in the medium term is likely to provide a stable outlook for sponge iron prices.The pricing effect is likely to be more pronounced in the stainless steel market where the demand has been sluggish in the last few months and may take a while before it picks up. Considering this, the company's ferro alloy plant, is expected to contribute to volume growth.Owing to its small size and scale of operations, limited geographical presence and absence in downstream operations, VMP may find it difficult to withstand any cyclical downturn.Consolidation in the domestic steel sector, which is likely to change the industry dynamics in the long term, also remains a threat.Growth in terms of value, is however, likely to be flat because of lower realisations. Given the stiff valuation, a lacklustre performance, tightening pricing environment and a high level of gearing, VMP may not provide an attractive investment oppurtunity.Exit and move on to better bets.
Code:532677
cmp:20
Story:The company manufactures and trades sponge iron and ferro alloys. Over the past few years, VMP's performance has remained subdued. Low capacity utilisation and thin margins appear to have affected the business.A number of other companies in the Impex group (run by the promoters), mainly into trading ferro alloys, have also shut operations after running up losses for several years.The pricing environment does not offer a great degree of comfort. Sponge iron prices, after shooting though the roof last year, have cooled off.Shortage of coal and iron ore (the principal raw materials for producing sponge iron) in the medium term is likely to provide a stable outlook for sponge iron prices.The pricing effect is likely to be more pronounced in the stainless steel market where the demand has been sluggish in the last few months and may take a while before it picks up. Considering this, the company's ferro alloy plant, is expected to contribute to volume growth.Owing to its small size and scale of operations, limited geographical presence and absence in downstream operations, VMP may find it difficult to withstand any cyclical downturn.Consolidation in the domestic steel sector, which is likely to change the industry dynamics in the long term, also remains a threat.Growth in terms of value, is however, likely to be flat because of lower realisations. Given the stiff valuation, a lacklustre performance, tightening pricing environment and a high level of gearing, VMP may not provide an attractive investment oppurtunity.Exit and move on to better bets.
CESC Ltd:Buy/hold/sell.analysis/outlook and recomendation
Scripscan:CESC Ltd
cmp:195
Code:500084
Story:CESC is a fully integrated power utility engaged in the generation and distribution of electricity across 567 square kms of licensed area in Kolkata and Howrah in West Bengal. CESC is also operating a retail chain of 208 stores through its subsidiary Spencer`s Retail (SRL). SRL has been incurring losses for the past five years and has dented CESC`s core profitability by 42% in FY11. However, the retail business has already started earning at store level and I expect it to breakeven at corporate level by FY14E.CESC is one of the cheapest utility stocks available in the Indian equity market. One of the key reasons for the lower valuation is the concern related to loss in its retail business. CESC`s core regulated business is fully secured in the terms of fixed ROE, secured fuel availability and power off taking agreements.I believe future growth would come from capacity expansion through SPVs, expected turnaround in retail business and commissioning of premium mall within a year. The company is expected to deliver CAGR of 14% and 31% in consolidated revenues and profitability over FY11-FY13E.I recommend BUY on CESC with a target price of Rs 346 on a duration of two years, based on SOTP Valuation approach. At CMP the stock is trading at P/E of 5.1x FY13E EPS and P/BV of 0.44x its FY13E book value on consolidated basis.
cmp:195
Code:500084
Story:CESC is a fully integrated power utility engaged in the generation and distribution of electricity across 567 square kms of licensed area in Kolkata and Howrah in West Bengal. CESC is also operating a retail chain of 208 stores through its subsidiary Spencer`s Retail (SRL). SRL has been incurring losses for the past five years and has dented CESC`s core profitability by 42% in FY11. However, the retail business has already started earning at store level and I expect it to breakeven at corporate level by FY14E.CESC is one of the cheapest utility stocks available in the Indian equity market. One of the key reasons for the lower valuation is the concern related to loss in its retail business. CESC`s core regulated business is fully secured in the terms of fixed ROE, secured fuel availability and power off taking agreements.I believe future growth would come from capacity expansion through SPVs, expected turnaround in retail business and commissioning of premium mall within a year. The company is expected to deliver CAGR of 14% and 31% in consolidated revenues and profitability over FY11-FY13E.I recommend BUY on CESC with a target price of Rs 346 on a duration of two years, based on SOTP Valuation approach. At CMP the stock is trading at P/E of 5.1x FY13E EPS and P/BV of 0.44x its FY13E book value on consolidated basis.
Indiabulls Power Ltd:Future growth prospects and outlook,buy/sell/hold,recomendation and analysis
Scripscan:Indiabulls Power Ltd
cmp:8
Code:533122
Story:Indiabulls Power has a very high-risk profile for the average retail investor. The company is to start generating cash flows only after 2012. It is planning to set up 6,615-MW of thermal power generation capacity at a cost of Rs 31,052 crore in the next four years.Also, “the company is yet to arrange fuel linkages for all its projects, except for the Amravati Phase 1 project which is to come up by June-September 2012. Further, the company lacks operating history and experience in power generation which increases the doubt over its ability to execute projects of such mammoth scale.It is better, therefore, to avoid this stock at the moment, and instead watch the company’s performance for some time before taking a call.
cmp:8
Code:533122
Story:Indiabulls Power has a very high-risk profile for the average retail investor. The company is to start generating cash flows only after 2012. It is planning to set up 6,615-MW of thermal power generation capacity at a cost of Rs 31,052 crore in the next four years.Also, “the company is yet to arrange fuel linkages for all its projects, except for the Amravati Phase 1 project which is to come up by June-September 2012. Further, the company lacks operating history and experience in power generation which increases the doubt over its ability to execute projects of such mammoth scale.It is better, therefore, to avoid this stock at the moment, and instead watch the company’s performance for some time before taking a call.
Saturday, December 24, 2011
Orient Green Power Company Ltd:-Buy/sell/,growth prospects and recommendation,news and results,target price and analysis,views and outlook,multibagger
Scripscan:Orient Green Power Company Ltd
Code:533263
Cmp:8
Story:Orient green power is one of India's leading renewable energy producers with 213 mw of installed capacity running. It currently operates four wind farms with aggregate installed capacity of 172.5 mw - 85% of which is in Tamil Nadu and the rest in Andhra Pradesh.It also operates five biomass plants and one biogas plant with aggregate installed capacity of 40.5 mw in Tamil Nadu, Maharashtra and Rajasthan.It has a diverse customer base with a mixture of off-take arrangements.Its customers include SEBs, distribution companies, private commercial and industrial consumers and a power trading company. It benefits from the support and commitment of Shriram EPC Limited ("SEPC"), one of the promoters, through access to SEPC's operational expertise, experienced technical staff and an increased ability toaccess a network of suppliers and customers based on the strength of SEPC's brand. It has also engaged SEPC as the turn-key contractor for most of the biomass projects.The company provides a unique green power exposure in India. Government policy appears supportive, setting the renewable generation target at 15% of the total power generation mix in 2020.While the target may be bullish, it supports positive pricing policy over the medium term.Fundamentals of the sector are very strong given the fast growing energy demands of an economy growing at a rate of 8-9%.OGPL doesn’t have any direct comparable.Its returns are heavily dependent on government policy and regulations, thus, the company is more comparable to regulated power utilities. The cmp is at a discount to its bookvalue which is nearly unheard of in the sector.Its peer regulated power utilities are priced at 1.4-2 times of book value.Aggressive capacity expansion will fuel the topline growth for the company.Orient green power at 400crs marketcap or at 8rs is a buy for me.One should have a horizon of 3-5 years though to reap best benefits
Code:533263
Cmp:8
Story:Orient green power is one of India's leading renewable energy producers with 213 mw of installed capacity running. It currently operates four wind farms with aggregate installed capacity of 172.5 mw - 85% of which is in Tamil Nadu and the rest in Andhra Pradesh.It also operates five biomass plants and one biogas plant with aggregate installed capacity of 40.5 mw in Tamil Nadu, Maharashtra and Rajasthan.It has a diverse customer base with a mixture of off-take arrangements.Its customers include SEBs, distribution companies, private commercial and industrial consumers and a power trading company. It benefits from the support and commitment of Shriram EPC Limited ("SEPC"), one of the promoters, through access to SEPC's operational expertise, experienced technical staff and an increased ability toaccess a network of suppliers and customers based on the strength of SEPC's brand. It has also engaged SEPC as the turn-key contractor for most of the biomass projects.The company provides a unique green power exposure in India. Government policy appears supportive, setting the renewable generation target at 15% of the total power generation mix in 2020.While the target may be bullish, it supports positive pricing policy over the medium term.Fundamentals of the sector are very strong given the fast growing energy demands of an economy growing at a rate of 8-9%.OGPL doesn’t have any direct comparable.Its returns are heavily dependent on government policy and regulations, thus, the company is more comparable to regulated power utilities. The cmp is at a discount to its bookvalue which is nearly unheard of in the sector.Its peer regulated power utilities are priced at 1.4-2 times of book value.Aggressive capacity expansion will fuel the topline growth for the company.Orient green power at 400crs marketcap or at 8rs is a buy for me.One should have a horizon of 3-5 years though to reap best benefits
Indosolar Ltd:-Buy/sell/,growth prospects and recommendation,news and results,target and analysis,view and outlook,multibagger
Scripscan:Indosolar Ltd
cmp:5
Code:533257
Story:Indosolar manufactures poly-crystalline solar photovoltaic (‘SPV') cells from silicon wafers. SPV cells are used in SPV modules for converting sunlight directly into electricity through a process known as the photovoltaic effect. The company sells SPV cells primarily to module manufacturers who in turn supply to the system integrator who install the systems for grid or off grid applications in domestic or overseas markets.Currently the company has an aggregate SPV cells manufacturing capacity of 160 MW per annum with the first manufacturing line having a capacity of 80 MW and the second line have another 80 MW.The first line commenced commercial production in July 2009 and the second one on March 2010.The company is expanding the aggregate capacity to 260 MW by feb 2012 by setting up a 3rd line with a capacity of 100 MW.It is one of the few companies selected by the Government of India for grant of financial incentives under the "Special Incentive Package Scheme" of 2007 notified by the Government of India. The Special Incentive Package Scheme provides for 25% of the eligible cost as capital subsidy on achieving a threshold of capital investment of Rs 10 billion, which the company will achieve with investment in 3rd line. It has been granted an in-principle approval on June 1, 2009 by Ministry of Communication and Information Technology, Government of India and has applied for formal approval on March 31, 2010. The manufacturing facility of the company at Greater Noida has been granted the status of ‘Export Oriented Unit' under the Foreign Trade Policy 2009-2014 of the Government of India.Thus the company is entitled to avail of certain direct and indirect tax exemptions including free imports.But Cost of generation of solar power is very high due to prohibitive capital cost of solar power plant either solar PV or solar thermal at about 14-16 crore per MW compared to Rs 4-6 crore per MW in case of other conventional/ renewable sources of power.Since the electricity power generation largely depends on the number of arrays used with more arrays translate to more power, the land requirement is also high in case of non roof-top based grid connected plants. Higher captive cost makes this source of energy uncompetitive compared to coal/hydel/nuclear based power plants as well as that of other renewable sources such as wind power and biomass etc. Thus a solar PV plant is viable only with government support across the globe.Generally Governments in major markets of Germany, Spain, US as well as that of India offers financial incentives as well as policy support in the form of renewable obligations, feed in tariffs etc. Any change in either policy support or incentives will affect the investment for solar power generation through PV which in-turn affect the demand for PVC cells.The company does not have long-term supply contracts for poly-silicon wafer which might impact its profitability if there is any sharp rise in poly silicon prices. Typically material cost accounts for about 88.9% of the total manufacturing cost. Other raw materials in manufacture of SPV cells apart from silicon wafers are chemicals, silver and aluminium pastes.Hence its profitability largely hinges on its ability to procure poly-silicon wafers at low cost and ability to enhance capacity utilisation and SPV cell efficiency and pricing.Currently the company manufactures SPV cells using crystalline silicon technology, a first generation technology with efficiency ranging between 15.4% and 16.6% as against typical industry conversion efficiency of 15-17%. The SPV technology is still in the evolution stage, with lot of research going on in both first generation and second generation technology such as thin film technology etc.Currently the crystalline SPV cells are more popular on account of its higher conversion efficiency compared to 6-7% of the thin film cell technology despite the latter being significantly cheaper. Moreover the company is a single product manufacturer with little backward and forward integration. The chances of technology obsolescence is very high, if the company does not keep pace with advancements in technology.The company and its promoters have less operational experience in SPV industry compared to long standing presence of its competitors across the globe.Further the market is highly competitive globally with more than 100 cell producers excluding around 80 thin film cell producers supplying to 300 odd solar panel producers.On the financial front there's nothing much to talk about as its still in deep losses.Its hard to value these companies but prospect looks bright.Hold on to it and await for for the future numbers to decide about it.
cmp:5
Code:533257
Story:Indosolar manufactures poly-crystalline solar photovoltaic (‘SPV') cells from silicon wafers. SPV cells are used in SPV modules for converting sunlight directly into electricity through a process known as the photovoltaic effect. The company sells SPV cells primarily to module manufacturers who in turn supply to the system integrator who install the systems for grid or off grid applications in domestic or overseas markets.Currently the company has an aggregate SPV cells manufacturing capacity of 160 MW per annum with the first manufacturing line having a capacity of 80 MW and the second line have another 80 MW.The first line commenced commercial production in July 2009 and the second one on March 2010.The company is expanding the aggregate capacity to 260 MW by feb 2012 by setting up a 3rd line with a capacity of 100 MW.It is one of the few companies selected by the Government of India for grant of financial incentives under the "Special Incentive Package Scheme" of 2007 notified by the Government of India. The Special Incentive Package Scheme provides for 25% of the eligible cost as capital subsidy on achieving a threshold of capital investment of Rs 10 billion, which the company will achieve with investment in 3rd line. It has been granted an in-principle approval on June 1, 2009 by Ministry of Communication and Information Technology, Government of India and has applied for formal approval on March 31, 2010. The manufacturing facility of the company at Greater Noida has been granted the status of ‘Export Oriented Unit' under the Foreign Trade Policy 2009-2014 of the Government of India.Thus the company is entitled to avail of certain direct and indirect tax exemptions including free imports.But Cost of generation of solar power is very high due to prohibitive capital cost of solar power plant either solar PV or solar thermal at about 14-16 crore per MW compared to Rs 4-6 crore per MW in case of other conventional/ renewable sources of power.Since the electricity power generation largely depends on the number of arrays used with more arrays translate to more power, the land requirement is also high in case of non roof-top based grid connected plants. Higher captive cost makes this source of energy uncompetitive compared to coal/hydel/nuclear based power plants as well as that of other renewable sources such as wind power and biomass etc. Thus a solar PV plant is viable only with government support across the globe.Generally Governments in major markets of Germany, Spain, US as well as that of India offers financial incentives as well as policy support in the form of renewable obligations, feed in tariffs etc. Any change in either policy support or incentives will affect the investment for solar power generation through PV which in-turn affect the demand for PVC cells.The company does not have long-term supply contracts for poly-silicon wafer which might impact its profitability if there is any sharp rise in poly silicon prices. Typically material cost accounts for about 88.9% of the total manufacturing cost. Other raw materials in manufacture of SPV cells apart from silicon wafers are chemicals, silver and aluminium pastes.Hence its profitability largely hinges on its ability to procure poly-silicon wafers at low cost and ability to enhance capacity utilisation and SPV cell efficiency and pricing.Currently the company manufactures SPV cells using crystalline silicon technology, a first generation technology with efficiency ranging between 15.4% and 16.6% as against typical industry conversion efficiency of 15-17%. The SPV technology is still in the evolution stage, with lot of research going on in both first generation and second generation technology such as thin film technology etc.Currently the crystalline SPV cells are more popular on account of its higher conversion efficiency compared to 6-7% of the thin film cell technology despite the latter being significantly cheaper. Moreover the company is a single product manufacturer with little backward and forward integration. The chances of technology obsolescence is very high, if the company does not keep pace with advancements in technology.The company and its promoters have less operational experience in SPV industry compared to long standing presence of its competitors across the globe.Further the market is highly competitive globally with more than 100 cell producers excluding around 80 thin film cell producers supplying to 300 odd solar panel producers.On the financial front there's nothing much to talk about as its still in deep losses.Its hard to value these companies but prospect looks bright.Hold on to it and await for for the future numbers to decide about it.
Friday, December 23, 2011
SJVN Ltd:-Buy/sell/,growth prospects and recommendation,news and results,target price and analysis,view and outlook,multibagger
Scripscan:SJVN Ltd
BSE code:533206
cmp:19
Story:This is an undervalued company when you compare it with the peer group. This is a company which operates the Naphtha Jhakri project with a capacity of 1,500 megawatts. Besides this, the company has about 4,000 megawatt, which is coming up, in various places and at various stages.The first one to go on stream would be the Rampur project which is about 400 megawatt project. This company also has a 900 megawatt project in Nepal and 1,400 megawatt project in Bhutan. So, all this projects will start operations in the next six-seven years.I think in 2013 Rampur will start operations and they have projects lined up to 2020. The gestation period for these projects is high, but the beauty of hydro power is that once you have put the project there are hardly any recurring costs in the projects and your operating profit margin maybe as high as 90%.The reason I am saying that this company is undervalued is because if you compare this company with NHPC, NHPC did revenues of roughly Rs 4,225 crore in FY11 and made a profit of about Rs 2,166 crore, SJVN did revenues of about Rs 1,800 crore and profit after tax of about Rs 912 crore.If you see on the operational front, this company maybe about 40% in terms of revenues when compared with the NHPC.However, the market cap of SJVN is just about Rs 8700 crore as against Rs 29000 crore for NHPC. When I talk to people in the market, they tell me that NHPC is undervalued. So, if NHPC is undervalued, I think SJVN at the current price of about Rs 18-20 gives you a good margin of safety.I think the short-term trigger for the stock could be that in the Northern part of the country the rainfall has been very good and good rainfalls augurs well for companies which are involved in hydro projects because they get more water to product electricity. That could be the point which can trigger a re-rating in almost all hydro power projects be it a NHPC, or SJVN or Jaiprakash Hydro because these companies have been consolidating for a very long time. So, I think SJVN looks to be on fundamentals the cheapest amongst the lot. I don't think people will lose too much from a level of about Rs 18-20 at the current levels.
Source:A.C
BSE code:533206
cmp:19
Story:This is an undervalued company when you compare it with the peer group. This is a company which operates the Naphtha Jhakri project with a capacity of 1,500 megawatts. Besides this, the company has about 4,000 megawatt, which is coming up, in various places and at various stages.The first one to go on stream would be the Rampur project which is about 400 megawatt project. This company also has a 900 megawatt project in Nepal and 1,400 megawatt project in Bhutan. So, all this projects will start operations in the next six-seven years.I think in 2013 Rampur will start operations and they have projects lined up to 2020. The gestation period for these projects is high, but the beauty of hydro power is that once you have put the project there are hardly any recurring costs in the projects and your operating profit margin maybe as high as 90%.The reason I am saying that this company is undervalued is because if you compare this company with NHPC, NHPC did revenues of roughly Rs 4,225 crore in FY11 and made a profit of about Rs 2,166 crore, SJVN did revenues of about Rs 1,800 crore and profit after tax of about Rs 912 crore.If you see on the operational front, this company maybe about 40% in terms of revenues when compared with the NHPC.However, the market cap of SJVN is just about Rs 8700 crore as against Rs 29000 crore for NHPC. When I talk to people in the market, they tell me that NHPC is undervalued. So, if NHPC is undervalued, I think SJVN at the current price of about Rs 18-20 gives you a good margin of safety.I think the short-term trigger for the stock could be that in the Northern part of the country the rainfall has been very good and good rainfalls augurs well for companies which are involved in hydro projects because they get more water to product electricity. That could be the point which can trigger a re-rating in almost all hydro power projects be it a NHPC, or SJVN or Jaiprakash Hydro because these companies have been consolidating for a very long time. So, I think SJVN looks to be on fundamentals the cheapest amongst the lot. I don't think people will lose too much from a level of about Rs 18-20 at the current levels.
Source:A.C
Adani Power Ltd:-Buy/sell/growth prospects and recommendation,news and results,target and analysis,view and outlook,multibagger
Scripscan:Adani Power Ltd
cmp:60
Code:533096
Story:Adani Power Limited engages in the generation of power and setting up of power projects in India. The company owns 8 thermal power projects under various stages of development, with a combined installed capacity of 13,200 MW. It also operates a 400 KV D/C Mundra – Dehgam power transmission line of 430 Kms. The company was incorporated in 1996 and is based in Ahmedabad, India.Adani Enterprises presentation indicates 6.4mn tons of linkage coal from MCL against 10mn tons envisaged earlier. Hence I make the requisite change in my model and assume the gap of ~2.5mn tons (70% of 3.6mn tons) to be bridged by e-auction or spot coal.As a result, I estimate an increase in cost of generation.I reduce my target price to Rs101/share from Rs115 earlier primarily on account of changes in fuel source mix (as mentioned above). I also lower our generation estimate to account for shutdowns taken in Q2, but maintain my FY12 capacity of 5.9GW, merchant tariff at Rs4.25/unit for FY12 and FY13 and landed cost of Indonesian coal (do not build in an increase due to the change in Indonesian regulation). Maintain HOLD, but with a reduced target of Rs 101 per share to be achieved in the next 2 years.
cmp:60
Code:533096
Story:Adani Power Limited engages in the generation of power and setting up of power projects in India. The company owns 8 thermal power projects under various stages of development, with a combined installed capacity of 13,200 MW. It also operates a 400 KV D/C Mundra – Dehgam power transmission line of 430 Kms. The company was incorporated in 1996 and is based in Ahmedabad, India.Adani Enterprises presentation indicates 6.4mn tons of linkage coal from MCL against 10mn tons envisaged earlier. Hence I make the requisite change in my model and assume the gap of ~2.5mn tons (70% of 3.6mn tons) to be bridged by e-auction or spot coal.As a result, I estimate an increase in cost of generation.I reduce my target price to Rs101/share from Rs115 earlier primarily on account of changes in fuel source mix (as mentioned above). I also lower our generation estimate to account for shutdowns taken in Q2, but maintain my FY12 capacity of 5.9GW, merchant tariff at Rs4.25/unit for FY12 and FY13 and landed cost of Indonesian coal (do not build in an increase due to the change in Indonesian regulation). Maintain HOLD, but with a reduced target of Rs 101 per share to be achieved in the next 2 years.
Jindal Steel & Power Ltd:-Buy/sell/growth prospects and recommendation,news and results,target and analysis,view and outlook,multibagger
Scripscan:Jindal Steel & Power Ltd
cmp:480
Code:532286
Story:The OP Jindal group metal firm Jindal Steel & Power (JSPL) has shot up 900% to Rs 480 in the past five years. Investors fancy for the counter was due to the company’s ability to post high profit on small equity base, boosting return on capital employed and return on net worth. The stock underwent profit booking in the past year after four years of unabated surge, which propelled it to a record high of Rs 778 on 21 October 2009.Booming financial performance on rapidly expanding capacity resulted in a highly liberal 5:1 bonus in September 2009. Post-bonus, equity swelled to Rs 93.45 crore, with promoters owning 58.4% end June 2011. Foreign and institutions held 23.03% and 6.53%. Thus, public holding is a low of 12.04%.Though JSPL’s dividend payout has increased steadily over the years, the soaring stock has weighed on the dividend yield. In January 2008, it resorted to a 5-for-1 stock-split to boost liquidity.JSPL is India’s largest sponge iron steel producer with a significant presence in sectors like mining, power generation and infrastructure. The current market price of Rs 480 discounts the TTM consolidated EPS of Rs 40.30 by a P/E multiple of 12. Consolidated net profit rose at CAGR of 45.14% and net sales 38.27% in the past five years to FY 2011. Profitability growth and expansion plans along with global product demand and prices will determine the share price direction going ahead. JSPL, too, has been named as a beneficiary of illegal mining of iron ore at Bellary by the Karnataka Lokayukta.
cmp:480
Code:532286
Story:The OP Jindal group metal firm Jindal Steel & Power (JSPL) has shot up 900% to Rs 480 in the past five years. Investors fancy for the counter was due to the company’s ability to post high profit on small equity base, boosting return on capital employed and return on net worth. The stock underwent profit booking in the past year after four years of unabated surge, which propelled it to a record high of Rs 778 on 21 October 2009.Booming financial performance on rapidly expanding capacity resulted in a highly liberal 5:1 bonus in September 2009. Post-bonus, equity swelled to Rs 93.45 crore, with promoters owning 58.4% end June 2011. Foreign and institutions held 23.03% and 6.53%. Thus, public holding is a low of 12.04%.Though JSPL’s dividend payout has increased steadily over the years, the soaring stock has weighed on the dividend yield. In January 2008, it resorted to a 5-for-1 stock-split to boost liquidity.JSPL is India’s largest sponge iron steel producer with a significant presence in sectors like mining, power generation and infrastructure. The current market price of Rs 480 discounts the TTM consolidated EPS of Rs 40.30 by a P/E multiple of 12. Consolidated net profit rose at CAGR of 45.14% and net sales 38.27% in the past five years to FY 2011. Profitability growth and expansion plans along with global product demand and prices will determine the share price direction going ahead. JSPL, too, has been named as a beneficiary of illegal mining of iron ore at Bellary by the Karnataka Lokayukta.
Suzlon Energy Ltd:-Buy/sell/growth prospects and recommendation,news and results,target and analysis,view and outlook,multibagger
Scripscan:Suzlon Energy Ltd
cmp:18
Code:532667
Story:Apart from the sale of shares by promoters, the markets are also concerned about Suzlon’s high debt and repayment of its FCCB (foreign currency convertible bonds), due in the next year.For the September quarter, Suzlon’s consolidated volumes were up 21 per cent year-on-year at 715 Mw, helping revenue rise 34 per cent to Rs 5,131 crore. Operating profit margins improved over 500 basis points to 9.3 per cent. And, even as interest costs jumped 34 per cent, the company reported a turnaround, with a profit of Rs 48 crore against a loss of Rs 369 crore in the year-ago quarter.More important, order inflows at REpower grew a strong 57 per cent year-on-year in the September quarter. Suzlon’s consolidated order book grew 35.3 per cent to Rs 32,456 crore, almost two times its 2010-11 revenue and provides good visibility. In the past two days itself, REpower (152 Mw) and Suzlon (23 Mw) have bagged equipment orders worth 175 Mw.Meanwhile, am expecting decent growth in revenue in the current and next financial years, with profit growth likely to be stronger, led by improvement in margins. A Bank of America-Merrill Lynch report says Suzlon is likely to report a net profit of Rs 528 crore in the current year and Rs 763 crore in 2012-13. At the cmp of 18 it translates to a price-to-earnings multiple of just four times,reasonable in the given risk-reward equation. Unless the demand side plays havoc, the prospects appear to be improving.
cmp:18
Code:532667
Story:Apart from the sale of shares by promoters, the markets are also concerned about Suzlon’s high debt and repayment of its FCCB (foreign currency convertible bonds), due in the next year.For the September quarter, Suzlon’s consolidated volumes were up 21 per cent year-on-year at 715 Mw, helping revenue rise 34 per cent to Rs 5,131 crore. Operating profit margins improved over 500 basis points to 9.3 per cent. And, even as interest costs jumped 34 per cent, the company reported a turnaround, with a profit of Rs 48 crore against a loss of Rs 369 crore in the year-ago quarter.More important, order inflows at REpower grew a strong 57 per cent year-on-year in the September quarter. Suzlon’s consolidated order book grew 35.3 per cent to Rs 32,456 crore, almost two times its 2010-11 revenue and provides good visibility. In the past two days itself, REpower (152 Mw) and Suzlon (23 Mw) have bagged equipment orders worth 175 Mw.Meanwhile, am expecting decent growth in revenue in the current and next financial years, with profit growth likely to be stronger, led by improvement in margins. A Bank of America-Merrill Lynch report says Suzlon is likely to report a net profit of Rs 528 crore in the current year and Rs 763 crore in 2012-13. At the cmp of 18 it translates to a price-to-earnings multiple of just four times,reasonable in the given risk-reward equation. Unless the demand side plays havoc, the prospects appear to be improving.
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