Saturday, December 12, 2009

Bombay Dyeing @408 and Bombay Burmah..@ 292......

Bombay Dyeing is having lands at Worli and Dadar area which are very precious area where the price can be enormous.

Bombay Dyeing Realty launches two projects in Mumbai. The opted locations are Worli and Dadar. CNBC-TV18’s Varinder Bansal reports.

Below is a verbatim transcript of Varinder Bansal’s comments on CNBC-TV18. Also watch the accompanying video.

Bombay Dyeing is all set to develop residential and commercial projects. It has a landbank of nearly 90 acre in Dadar and Worli. If we translate this to per lakh square feet, it comes upto 60 lakh square feet taking FSI of nearly 1.33. The average land rate in Dadar and Worli is 10,000 per square feet. The land value is seen around Rs 6,000 crore...

Company background:

The company’s current market capital is Rs 1,600 crore. In FY09 the company made a hug loss. On textile segment, it reported a huge loss of Rs 66 crore whereas in the polyester segment the company reported a loss of Rs 73 crore. The reality arm of the company is doing very well. In FY09, the company made a profit in the realty segment worth Rs 160 crore.

Analysis says that in the coming four-five years, the realty arm could be demerged and be listed separately. Investors are enthusiastic about this particular company. Foreign brokerage has come up with a small note to some of the clients that the net asset value of this company could be valued between Rs 1,000-1,200 per share.

So has Bombay Burmah....where they have land banks and interest in Aviation Ind ,TEA Plantataion, Coffe Plantation and Rubber Plantation which is their old business .....along with that they have Laminate Flooing division which is very famous brand....Formica..

These twins of Nusli Wadia can give great returns if hold pateintly for LT......the land bank they possess in a very cream area of Mumbai, viz.Dadar and Worli( known for it's Sea face) need to keep in mind that Bombay Burmah also have land bank.......


  1. Rajeevji, one observation, Bombay Burmah have an equity of around 13cr where as the debt is for 350 cr, does that not matter for valuations? even there annual sales is way less than the debt amount.. same with Bombay dyeing equity of 38cr with debts for 1700cr.

  2. Dear Rajeev
    how about Microtech this company makes security softwares n products for home security, car security, visit at dot microtechnologies dot net, lost laptop and mobile tracer, one of the three or for best under a billion indian companies in FORBES asian companies list. consolidated eps in 2009 was 65.66 cmp is 150 FV 10 bk value 243

  3. Good point Dhiraj,
    but then why market is giving a big discounting to both?
    When the debt is so big and sales is so poor then they should be available cheap isn't it?
    But it is not.Both looks overvalued.Overvalued even at 17k and not even at the top of the market.
    It means that market knows that both of them what they are holding(read landbanks)is big enough to take care of debts and still come out with huge profit.....
    Just see what is the P/E of both of them....u will be amazed to is atronomical...have a look at BF Utilities..same case..

  4. nirash,
    Micro Techno is looking good and I recomended at mmb in last bull run.But market is not giving discounting much on eps as the management take the stake at very low price in last bull run and hence market didn't like that and so it didn't run in last bull run.
    But the perception can get changed this time ....anything can happen...

  5. Thanks Rajeevji, need your help, request you if you don't mind to educate me on the P/E, i have seen lot of fellow members providing P/Es of the shares, just want to understand what does it means, how to correlate it with the valuation/price of the share and how exactly it should be interpreted, is a higher or a lower PE desirable for the share etc, pls, request your helping hand.

  6. Dhiraj,
    Buy a Capital Market magazine and read the first page where the scoreboard starts.You will find it there.

  7. Rajeevji, yes, I understand how the PE ratio is calculated but I am not able to interpret it, I checked PE for TCS is around 28 and for Infosys it is around 23, BF Utilities is 478 and JP Hydro is 31.53 just want to know how it should be interpreted, also since the PE is dependant on the market price, it should change daily as the price of the shares go up or down on daily basis..

  8. Dear Rajeev

    I have gone thru the details of
    2 cements stocks heidleberg cement,
    prism cement recommended by you, prism cement looks attractive to me promters holding around 60%,zero debt company.

  9. ET Article on prism cement 2 Dec 2009
    Prism Cement has been one of the top performers among mid-cap cement companies this year. The stock has nearly tripled over the past 12 months
    against the 95% appreciation in the benchmark Sensex during the period. Shareholders can expect more action in the counter as the company has announced a major restructuring of its operations. The company recently received shareholder approval to merge two group companies — H&R Johnson and RMC Readymix (India) with itself.

    The all-stock deal will transform the Madhya Pradesh-based company into an integrated building material supplier with a major presence in tiles and sanitary ware and readymix concrete. H&R Johnson is one of India’s leading manufacturers of tiles and sanitary ware, while RMC has a major presence in the ready-mix concrete business.

    The merger will bring synergies to Prism Cement, as the array of products offered by the combined entity will be targeted at the same customers and can be sold through the existing sales and distribution channel. The only catch for Prism Cement, however, is the poor profitability of the tiles and RMC businesses in India. This could significantly pull down the operating margin of the combined entity. Prism Cement ended FY08-09 (nine months) with EBITDA margins of 28.5%.

    In contrast, H&R Johnson reported consolidated net sales of Rs 1,122 crore for FY09, with EBITDA margins of just 13%. In the case of RMC Readymix, on sales of Rs 675 crore for the previous financial year, its EBITDA margins were merely 5.2%.

    As a result, the Prism Stock has declined by nearly 18.5% over the past two months, compared to a 0.8 % rise in the Nifty during this period. Meanwhile, during the September 2009 quarter, Prism Cement’s operating profit margin improved by 1,010 basis points year-on-year to 26.6%, helped by realisations that grew an estimated 22.4% to Rs 3,542 per tonne.

    Prism Cement currently sells over three million tonnes of cement and clinker, and is aggressively expanding its capacity over the next two to three years. It is currently implementing a project to set up a plant with a capacity of 3.6 million tonnes, close to its existing facility in Satna, Madhya Pradesh. This plant is expected to be operational over the next 12 months.

    Prism Cement was debt-free at the end of March 2009, and while it had invested Rs 412.6 crore between the year ended June 2007 and March 2009, its operating cash flow during this period was Rs 637 crore.

    Prism Cement is also working on setting up a 4.8 million-tonne plant in Andhra Pradesh, and is expected to be brought on stream over the next two to three years. The cash flows from expanded capacities will help the company finance this project.

    Prism Cement trades at 6.8 times its trailing 12-month earnings, and we are neutral on this stock. A similar-sized player like JK Cement trades at 4.3 times its trailing earnings.

  10. Dhiraj,
    Yes, the P/E will go up with price going up of the stock.
    Less P/E shows there is value but is always not correct way to find Value....there are other parametres as well to look at....but ofcourse it is one of it...

  11. All your stocks have given superb returns. Madhucon has given 593%
    and TRF has given 402% gain to name a few. I am not able to post that list here in a proper format so i have uploaded it in the following site.

    great going rajeev bhai.Thanks for your hard work.

  12. Hi dhiraj and anyone who wish to share capital maket cost please email me at . this way we can subscribe to more informative magazines.

    taken from reliance money update today

    On BSE, 1.72 lakh shares were traded in the counter as against an average daily volume of 1.31 lakh shares in the past one quarter.

    The stock hit a high of Rs 164.70 and a low of Rs 160.70 so far during the day. The stock had hit a 52-week high of Rs 188 on 18 September 2009 and a 52-week low of Rs 59.50 on 9 March 2009.

    The stock had outperformed the market over the past one month till 11 December 2009, rising 10.54% as compared to the Sensex`s 1.60% rise. However it underperformed the market in the past one quarter, falling 7.48% as compared to the Sensex`s return of 5.26%.

    The small-cap steel pipe maker has an equity capital of Rs 53.46 crore. Face value per share is Rs 10.

    The current price of Rs 163.65 discounts the company`s Q2 September 2009 annualised EPS of Rs 16.48, by a PE multiple of 9.93

    As per reports, the funds were raised at nearly 500 basis points over Libor (London Interbank Offered Rate) from the state-owned banks through their overseas branches. External commercial borrowings (ECB) refers to overseas borrowings in foreign currencies by Indian companies. PSL plans to use the funds raised from the ECB to expand its capacity in terms of its capital expenditure and for modernization programme.

    PSL is the largest producer of helical submerged arc welded (HSAW) pipes in India. The company`s net profit fell 0.10% to Rs 21.58 crore on a 7.80% decline in net sales to Rs 593.64 crore in Q2 September 2009 over Q2 September 2008.

  14. PSL has raised $50 million through external commercial borrowings to fund expansion

  15. Dear Rajeevji ,

    I am great follower of your call( from 2006) , you has guide lot of time in diffcult time of market. every time you choose excellent stock in each bull run. this time i remeber you have reco Kwality dairy . it has how so much times xxx in this rally also . Now Comeing to Point since my job profile is change i don"t able to track my investment , so i want invest in only 5-7 scrip for next 3-4 years , can u suggest me top 5-7 sector to watch from 2010-2012-13 or top 5-7 scrip to be invested in this period. . it is simple question wat wil be your top 5-7 scrip u will invest for next few years . waiting for you reply sir

  16. Dear Rajeev,
    I think in JSW energy IPO game is now changed
    LIC has invested Rs 1,884 crore by bidding nearly 1.36 times of total QIB issue size. Excluding anchor investors, LIC has bid 2.11 times QIB portion.
    Basically Lic goes for long term & most of the allotment goes to LIC so it is win situation for those who have applied for IPO.
    Rajeev ji thanks for your advice regarding the IPO.

  17. Nimi,
    The sectors I feel looking good are Infrastructure, Power,Capital Goods,Oil and Gas,Co having coals mines or having interest in it,IT co having niche products etc....
    I have given many stocks here in past and recently too....have a look at it...

  18. TT,
    I donno why managers and broking community says JSW Enewrgy is expensive?Is it that they wants to buy?
    10 paidup share and profit making co, great gr then why analys say it is expensive?They wants to buy hence saying that?I have seen FII's brokerage downgrading sector or stocks and have seen buying into the same sector or

  19. Hi Rajiv ,
    Bombay Dyeing is going down since reco date.. I agree this is great buy as always.. would need your views on is the stock feeling resistance/consolidation at current level ? in that case what range would be the correct entry level ?
    should i do - invest and forget .. or accumulate on staggered way.. with average out on dips .. pls suggest.. thank you.

  20. Snehal,
    It should be accumalated in a staggered manner.It will go down and will also consolidate.It will test ur patience....only if u are not going to look on daily basis then only buy.....need to have a sound sleep....that is the bottomline...

  21. thanks v much Rajiv for insights.
    I think I missed your call on PAE ltd.
    Can you please suggest if some more steam left in that counter ?

  22. Snehal,
    With 2 UC one need to wait for entry.
    I saw that u r in good position in USA in Investing Banking Group.
    I am also in USA and am in search of a decent job in USA where I can exploit my knowledge in Indian Stock Market....which can become a win win situation for both..
    I put myself open for a Job at your institute or anywhere u find fit....See if you can do something for me.....Thanks

  23. Sure Rajiv ji.
    I am based out of Mumbai currently.
    I will email you some links.

    Best Regards

  24. Dear Rajeev

    I have purchased PAL 300 @31 after
    seeing your advice , it is around
    Rs 55 , Thank a lot, Can i sell 150
    after reaching 60, to make my
    invement free or i can hold on
    for further more upside for your
    valuable suggestion please.

    Among Venus Remdiies and surya pharmatical i want to invest one
    among which one is the value buy
    your kind suggestion pls

  25. nirash,
    Need to sell PAE at 60, 50% to take out the money invested.
    But if you feel like not selling that is your decision.
    Surya Pharma and Venus both are good.

  26. This comment has been removed by the author.