Friday, July 9, 2010

2010 FORECAST - IMF upgrades India growth to 9.4%..........

The International Monetary Fund (IMF) has raised India's economic growth forecast for 2010 to 9.4%, continuing to surprise the government and other economists with its optimism.

This is IMF's third consecu- tive quarterly upward revision since October 2009. The growth projection for calendar year 2010 has been revised up- wards by three percentage points since then. One basis point is one-hundredth of a percentage point.
“I notice that the IMF has re- cently challenged our predic- tion,“ finance minister Pranab Mukherjee had said on 22 June, referring to the April 8.8% growth forecast. “For once, however, I am not going to argue with the IMF.“
The government's own eco- nomic growth projection for the year to March 2011 is 8.5%.
According to IMF, India's growth is likely to be driven by corporate investment on ac- count of strong profitability and the easier availability of credit. The international body didn't give further details on the reasons for its optimism in the report, part of the World Economic Outlook. IMF's India economist could not be reached for comment.
The finance minister's senti- ments were echoed by another government official after the latest number was announced.
“It comes as a bit of sur- prise,“ Pronab Sen, principal adviser to the Planning Com- mission, told Mint. “To me, it looks as a bit of overestima- tion,“ added Sen, who was the government's chief statistician till last month.
India's Central Statistical Organisation had said in May said that growth in the January-March quarter was 8.6%.
According to Sen, the sec- ond and third quarters of cal- endar year 2010 will register higher growth partly on ac- count of lacklustre perfor- mance in the corresponding periods of the previous year.
Subsequently, the growth rate could decelerate as the advan- tage of a low base would disap- pear.
Another economist associat- ed with the government, who did not want to be named, said a possible reason for IMF's current optimism was because the agency had begun to “back-pedal“ from an earlier assumption.
IMF had estimated previous- ly that the credit squeeze in Western finan- cial markets would have a far greater im- pact on the In- dian industry, the economist said. Once it became appar- ent that the agency's initial assumption was incorrect, there have been sharp upward revisions, he added.
Between April and July, IMF has raised its forecast for In- dia's economic growth by 60 basis points.
Along with India's growth forecast, IMF has also revised China's estimate upwards, helping nudge up the global estimate.
It has forecast that the global economy will expand at 4.6% in 2010, against the 4.2% estimat- ed in April. While advanced economies are expected to reg- ister a growth rate of 2.6%, emerging and developing economies are projected to grow at 6.8%. China's economy is expected to grow at 10.5%, an estimate that has been raised by 50 basis points since April.
IMF, which retained India's 2011 growth forecast at 8.4%, has hedged its current esti- mates by pointing out that there remain sharp downside risks on account of weaknesses in developed economies.
It cautioned that further spikes in global risk aversion, especially in the euro zone, could precipi- tate capital outflows from the Asian re- gion and weaken equity valuations.
That could, in turn, under- mine favoura- ble financing conditions and domestic de- mand.
A delay in the European re- covery may also impact Asia through both trade and finan- cial channels, it said.
Still, the impact of euro zone volatility would be muted, IMF said.
“Asia has only limited direct financial linkages to the most vulnerable euro area econo- mies, but a stall in the Europe- an recovery that spilled over to global growth would affect Asia through both trade and fi- nancial channels,“ it said.
My Comments:
Now IMF is putting higher growth for India and that too above 9%.........
India is going to be a GAS surplus country and due to that the import bill of Oil is going to come down drastically which is going to help India in a huge huge way..........
And hence I feel even at current market price(cmp)Gail Ltd ,BPCL, HPCL are extremly excellent for LT holding......
Other stocks having stake in Gas field and gas sector also will have good days ahead,Viz:IOC, IOL,Ril Ind,Gujarat Gas, Cairns India etc and Gas compressor stock like Deep Ind , my old call, will also have its time.
Stocks like DHP India Ltd , Gas cylinder and gas kit making Cos like Minda Ind, again my old call around 130 will be star performer in future......
Keep or buy these above stocks for LT.......Except Cairns India I have time and again recomended all the above stocks....way way ahead of market can identify........or understand what is coming up....
I again repeat, don't get afraid if prices goes down after you buy.That happens with everyone including me......Hold them with conviction and you will get excellent return.
These are my views and I can prove my analysis.....take your own call.....

One of the reader pointed me out I missed Essar Oil and yes, that comes in same category......I missed to write Essar Oil Ltd.....
I can add here  GSPL  as well ......and ofcourse HOEC, the RJ counter....


  1. Dear Rajiv,

    Is DHP India a value buy even now for say for an year?


  2. Dear Rajeev,

    Hats off to your analysis

    God Bless You

  3. Rajeev I already talked you about bribery in power sector now there is recent case in american court in which that firm admitted to pay bribe to NTPC , Bhel officials. Former CID chief says that they take it for granted as this is there right.

    New Delhi: While the Central Bureau of Investigation (CBI) is yet to complete a probe into the alleged pay-offs made by Russia’s Technoprom Exports for getting a contract to supply boilers to NTPC Ltd’s Barh power project in Bihar, Interpol has told the federal investigation agency that an offshore transaction did take place that involved transfer of Rs90 crore to Raveena Associates, Technoprom’s agent in India.

    “While the inquiry is still on and the report is expected to be submitted in a few days, CBI has been informed by the Interpol that an offshore transaction did take place that involved a transfer of Rs90 crore to Raveena Associates, its agent in India,” said a top government official, who asked not to be named.

    Interpol, or International Criminal Police Organization, facilitates cross-border police cooperation and has 186 member countries.

    After Technoprom Exports was awarded the contract in February 2005, CBI had raided the house of C.P. Jain, the then chairman and managing director of NTPC. It was also found out that Technoprom had not disclosed the existence of its Indian agent—Raveena Associates—at the time of placing the bid.

    It has been alleged that Raveena Associates used the money to make pay-offs to Jain and others.

    “The 1,980MW project has been controversial from the start—when CBI raided the home of C.P. Jain over the issue of alleged pay-offs made by Technoprom,” said a senior power ministry official, who didn’t want to be identified.

    The development was independently confirmed by two government officials.

    Raveena Associates could not be contacted. Both Jain and R.S. Sharma, NTPC’s current chairman and managing director, refused to comment. In an email, Interpol said Mint should contact CBI, but a CBI spokesperson declined to comment on the development, saying that he was on leave and his office should be contacted. Repeated phone calls to his office went unanswered.

    When questioned about its relationship with Raveena Associates and asked to comment on Interpol’s confirmation, Technoprom, in a garbled email response to Mint, wrote: “We to given any relation have no transaction. I ask you not to lift this theme more.”

    The Rs8,700 crore Barh power project, which is already behind schedule by two years, has virtually come to a standstill following contractual disputes between the state-owned power producer and Technoprom as reported by Mint on 2 May.

    The project’s foundation stone was laid by former prime minister Atal Bihari Vajpayee in 1999.

    The 1,980MW project requires 40,000 tonnes of construction material of which only 30%, or 12,000 tonnes, has been sourced. NTPC is India’s largest power generation company with a capacity of 29,144MW. The delay in the project will affect its plans to raise the total capacity to 50,000MW by 2012

  4. kiran,
    DHP still looks good to me...

  5. Dear rajeev,

    I want your suggession about Sel manufacturing ltd. It is posting good results every year.and has a BV of Rs.130. Mcap of 167Cr,reserves of 298cr. P/E of 2.67(only).Sales of 272cr for the last Qtr.and is trading at Rs.55/-today.

    What you think Rajeev. Please have a look at this company and convey your suggestion.
    I am tracking this company for a long time.

    One thing i came to know that promotor holding came down drastically in the last quarter.

    Vishnu R Nair

  6. Rajeevbhai, i am not sure you missed essar oil & gas mentioning here or its not comparable in this category? I know essar is very long term story

  7. Vishnu,

    Could you please explain how to get the reliable Book Value ?

    Do you refer to some site or calculate based on the previous Balance sheet?


  8. Dear prasanth,

    I quote it from rediff for is given 102 for last financial year. But inMoneycontrol it is given RS 183 for the same period.

    I have no other information.


    Vishnu R Nair

  9. Dear Rajeev,

    You have said Keep or buy these above stocks for LT.......Except Cairns India. Is cairn india good for short term

  10. vishnu,
    Sel Mef is a very speculative counter.I have seen the movement when it got listed.
    Promoters stake has come down which shows in the price as well.
    If Co is making good profit why promoters needs to sell?
    The price is still below 5 p/e then instead of buying from the market and increasing his stake why he sold?
    That is one of the reason why price is going down...or not going up.....I don't like this counter...but one can buy couple of hundreds to see where it goes....

  11. TT,
    That is what is happening.Readers don't read it properly.Try to reread again my post......
    I wrote, Cairns India I had not recomended here...except other...! is a LT call....there can never be a ST call my blog...

  12. Dear Rajeev,

    Sorry to bother you, I asked it because I am holding it from its IPO.
    Your call on BPCL & HPCL is good by another way is under ownership in these stock.

  13. Latest on board

    Kpit Cummins Infosystems Ltd has informed BSE that the Board of Directors of the Company at its meeting held on July 13, 2010, have approved the following proposal :
    1. Acquisition of a Germany based Automotive product Company, subject to regulatory approval(s) as required in Germany.

    2. The consideration approved for the said acquisition is upto Euro 3 Million to be paid over a period of three years.

    Spanco Ltd has informed BSE that the Company has won the IT contract to create IT infrastructure and deploy advanced Library Management Systems at the prestigious "Anna Centenary Library (ACL) of Chennai". The project aims to implement the most modem technology in Library Management available globally.

  14. Dear Rajeev,

    Good.......Great........Excellent News in PSL

    Good News - Price of PSL has gone up from a low of Rs 120 to Rs 140 in a short period

    Great News - ET now is flashing exclusive news that PSL will win orders worth 500cr in the US in the next month or two and order worth Rs 400 cr from UAE. Also pipeline cacacity in UAE will be expanded by 1 Lakh TPA

    Excellent News - more tenders are under negotiation and will get finalised soon.

    I personally expect an order of 500cr to 1000 cr from Gail in the very near future and a total order book upwards of 4000 cr (excluding the currect 2100 cr order book )by the year end


  15. Dear Rajeev,

    Came across a very interesting article on Gas outlook in India. Posting the link for your reference and views.

  16. Hai Rajeevji

    Where R u? You are silent nowadays.
    I hope you are Ok.
    Take care!

    Vishnu R Nair

  17. hi rajeev

    have you reached india. enjoy your visit back home.we will wait for you to come back on the board.


  18. More about Essar Oil -