Thursday, June 10, 2010

KPIT Cummins my stock of the on "Heard on Steert".......

Trading in KPIT frozen as stock hits upper circuit

TRADING in shares of KPIT Infosystems was frozen at the upper end of the 20% intra-day circuit filter, after there were only buyers in the stock. Last week, the company had formed an equal joint venture with Bharat Forge for a hybrid technology designed to improve fuel efficiency of vehicles. According to a note by domestic broking firm Paid Leave (PL), the joint venture is targeting revenues of Rs 300-500 in FY12, with an operating margin of 15-18%. But PL thinks this is a very conservative estimate. Strangely, PL has assigned an ‘accumulate’ rating to the stock, instead of a full-fledged ‘buy’ rating. Leading domestic broking house Info Lion is said to have been a big buyer in the stock, though it couldn’t be ascertained if it was making the purchases on behalf of its institutional or non-institutional clients. KPIT shares closed at Rs 129.50 on the NSE, with nearly 77 lakh shares being traded. Less than a fifth of that volume resulted in delivery.

My Comments:
The growth has started coming while forming a Co with Bharat Forge and expecting a turnover of 300-500 cr with an conservative estimate of 18% NP margin which can go higher .....
One Update-- Vakrangee Software :
My old call, which I have been writing time and again ,Vakrangee Software is making new 52 week highs on our made a 52 week high of Rs 182.05....which if I recall it properly then my call was around 50 or even lower......I know many analyst are sceptic on Vakrangee Soft and never put faith in this Co....but at the end of the day it is showing its worth.....


  1. Sir,

    If a company proposes 1 bonus shares for every 2 shares held, then how much share should I get if I hold 9 shares of that company?

    Anindya Banerjee

  2. Hi Rajeev,

    Just found this about Sabero...

    Sabero's growth prospects appear attractive:

    The crop protection major, Sabero Organics Gujarat (SOGL), has done exceedingly well on the bourses following its improved financial performance.
    Its stock has more than doubled in a span of one year, way ahead of the benchmark Sensex performance.

    SOGL’s profit for the fourth quarter more than tripled to Rs 7.1 crore, despite a 3% dip in the net sales at Rs 96.5 crore. Operating margin saw a 300-bps improvement to 15% as costs of raw material consumed fell 28%.

    The performance of its domestic business improved in FY10. Domestic sales for the whole year grew 40% to Rs 180 crore representing 42% of the total sales of the company as against just 34% last year. In the case of its exports division, the sales also grew in the Americas region while Asia, Europe and Africa reported a drastic fall in sales.

    The proportion of debt in SOGL’s capital structure also got reduced during the year on account of a 15% equity dilution over the year and an 88% growth in net profit. Its debt-equity ratio dropped from 1.03 a year ago to 0.71.

    With more than 240 product registrations, Sabero operates on a wide network of distributors and agents in 50 countries. The company has its subsidiaries in Argentina, Europe, Australia and Brazil, with Europe and Brazil being the main focus areas to obtain registrations. The company is further expanding its international presence in the geographies of Costa Rica, Venezuela, the Philippines, Guatemala, Cameroon and Argentina.

    The company is currently in the process of setting up an export-oriented plant of technical active ingredients at Dahej in Gujarat with an estimated capacity of 2650 tonnes per annum by December 2010. The capital cost of Rs 55 crore will be financed by a combination of $9-million external commercial borrowings and internal accruals.

    Also, the company plans to increase the capacity of its Chloropyriphos plant by 50% until September 2010. Moreover, it is set to launch two new fungicides and two herbicides in the first half of FY11.

    It has announced a final dividend at the rate of Rs 1.20 per share for the year, which works out to a dividend yield of 1.6% at the current market price of Rs 73. This is 5.5 times its trailing 12-month earnings per share. Given the company’s expansion plans, its growth prospects appear attractive for the future.


  3. Sumit,
    I also read it in ET.
    Sabero has been my pick when it was in 30's and even less if you will look my call in 2008 .....excellent pick even now.....

  4. Hi Anindya,
    You shoudl get 4.5 shares on 9 shares u hold .But there is no .5 shares, so the Co will send you a cheeck of .5 shares under you will have 4 shares plus some amt for 0.5 shares.....

  5. Good news on the Venus Remedies bond default:

    Venus Remedies settles with FCCB holders

    Venus Remedies Ltd has announced that the Company and the bondholders had arrived at a Settlement Agreement dated March 03, 2010 with the FCCB holders for settlement of FCCBs of USD 12m. The Settlement was arrived at USD 14m (including interest component) against a cash payment of USD 9m and rollover of USD 5m of FCCBs for a period of 5 years, until February 15, 2015. In accordance with the said Agreement, the Company has made full and final payment of USD 9m and also received approval of Reserve Bank of India for rollover of FCCBS of USD 5m. With this, the entire issue of FCCB has been fully and finally settled with the FCCB holders.

  6. JC, That is not surprising for me.It has to happen.An excellent Pharma Co,Venus , can't get closed due to default.The solution was always there in the offing......that is what one needs to read between the lines....the management is trying to sortout the problem amicably will never come out in public untill it is done.But takes a simple common sense to understand that when Co is doing excellent on earning front the resolve was going to happen....

  7. Dear Rajeev
    Just 2 days back you had given a call on MSP Steel & Power. Today it was locked on upper circuit. Thats the POWER of your calls!

  8. Yup anjum and MSP was locked in UC at 20%...up by 20%.....I also wrote about MSP some couple of months back to someone else as well in reply....

  9. Rajeevji,

    My sincere thanks to you for explaining the subject clearly. Thank you very much. I am new and need to learn a lot, so please don't mind if my question become silly.

    with regards

  10. Dear Rajeev,

    We are always be winner when we listen to you. As you know about HFCL infotel , you advised me the fair value is 10 . I am holding it , now the news is that RIL may take stake in this. Do you think it still worth holding

  11. update ....

    sks logistic has double within one month..

    I think nobody hold windsor machine due to which we had so much trouble. It has been making new highs everyday and by all standards it has given good returns. I bought it @ 45 and now it is on 70 more than 50% return.....
    I would like to acknowledge the ones who critised this call, Please let me know if the share you hold in bulk quantities like apar etc has given such return in such time frame.

    i would like to know if dmc int is still a buy as i bought at 15 and now it is advise

  12. Dear Rajeev,

    One more of ur stock goes zooming. Excel crop care recommended around 105 today at 230 plus.

  13. Guys..... have a look at this.....

    Media baron Kalanithi Maran of Sun TV Network Ltd is close to signing an agreement to purchase a nearly 40% stake in India’s second largest low-fare carrier SpiceJet Ltd from its promoter Bhupendra (Bhulo) Kansagra and distressed-assets buyout specialist Wilbur L. Ross for around Rs800 crore, two investment bankers familiar with the development said.

    This values the company at Rs2,000 crore against a market value of Rs1,400 crore going by Thursday’s closing price of SpiceJet shares.

    Maran, who runs 20 television channels and two general newspapers in south India, will also make an open offer to SpiceJet’s minority shareholders to acquire an additional 20% stake. Under Indian takeover rules, any acquisition of 15% or more triggers an open offer and the acquirer needs to make an offer for at least another 20% of the target company. Edelweiss Capital Ltd is exclusive adviser to the deal.

    Maran, elder brother of Union textiles minister Dayanidhi Maran, has been keen to enter the aviation industry and had even obtained a no-objection certificate from the ministry of civil aviation to run a non-scheduled air passenger service. Sun Network’s board had given a go-ahead for its future plans to enter civil aviation and import aeroplanes.

    “As a first step, Ross will convert his foreign currency convertible bonds (FCCBs) into equity shares and will own 27.11% stake in the low-cost airline. At the second stage, both Ross and Kansagra will sell their 40% stake to Maran,” one of the bankers said. Ross had bought convertible bonds of SpiceJet in July 2008, which will be converted into equity at Rs25 a share, a price that ensures that his exit in favour of Maran will be a profitable one.

    “Maran had held a series of discussions with SpiceJet promoters for months,” the second banker said.
    The airline’s other foreign shareholders—Istithmar PJSC, the investment arm of Dubai World, and Goldman Sachs—can take part in the open offer, the banker said, adding that Maran is ready to shell out around Rs1,200 crore to own up to 60% stake.

    Both Istithmar and Goldman Sachs own FCCBs that can be converted into equities.

    “A deal is in the works and could be concluded in a few days,” said the same banker who had worked with SpiceJet to raise $80 million (Rs376 crore today) from Ross through his eponymous private equity fund in July 2008, and persuaded investment bank Goldman Sachs to invest $20 million.

    “For SpiceJet, what is good is a well entrenched group of investors or a promoter who can further the strategic interests of the company. W.L. Ross is a turnaround specialist and, therefore, cannot be construed as a promoter. They are financial investors and will seek their exit when the turnaround is complete,” said Mahantesh Sabarad, senior vice-president (equity research) at domestic brokerage Fortune Equity Brokers (India) Ltd, who has been tracking the stock.

  14. Excel crop care and SNL...oops! catch me if you can...superb recos:), Rajeev do you think SNL is still a buy..coz i never seen it going down since you have shown the way.


  15. Rajeev,
    I am a silent follower of our blog. I would like to know is there any bad news about Transgene .It reaches the level of 73-75 and goes back to 60 levels.It would be helpful if you could give your view on Nakoda as well.

  16. OM, It makes no sense buying SNL now.It is already 5 times and more from my first call......which I gave to buy at just Rs.11...

  17. Mitz,
    The trigger that making Excel Crop move up is yesterday India Open Fund bought a substaintial stake at 232.....which again says that my calls are way ahead before market identifies its true value.....

  18. Hi Y Reddy,
    Transgene Bio will take time to move untill it starts getting payments for its MOU with Dr Reddys.
    After that also the patents it has filed will bear frults but that will take time.
    Nakoda Tex is a good play.

  19. TT,It looks like HFCL Infotel is a hold and add with a High Risk High return gains...

  20. Dear Rajeev,

    Yes you are right .Your calls are way ahead of market recognition of the true value of the stock and we have seen that on innumerable occasions.

    Today in Business Standard i read an article which i believe will boost PSL ltd stock price shortly.
    As you are aware that a case was going on between Indraprastha gas and PNGRB regarding the authority to establish Pipelines and CGD (city gas distribution) networks. Due to this the allotment of pipelines and CGD networks had come to a standstill.

    According to the article this problem now going to come to an end as the govt is going to notify Section 16.


    Govt to empower gas regulator
    Ajay Modi / New Delhi June 12, 2010, 0:22 IST

    Putting its estranged relationship with the Petroleum and Natural Gas Regulatory Board (PNGRB) behind, the government is likely to notify Section 16 of the PNGRB Act, which empowers the regulator to authorise gas pipelines and the city gas distribution (CGD) network in the country.

    The Union law ministry has cleared a proposal by the petroleum ministry to notify the section. “We had sought an opinion from the law ministry if we should go ahead with the notification after the legal dispute related to non-notification of Section 16,” said a petroleum ministry official.A notification is expected soon

  21. Dear Rajeev,

    Here is the link to the entire article on PNGRB ruling