Tuesday, August 31, 2010

HBL Power System Ltd...cmp Rs.26.15...excellent pick....

I am writing today on HBL Power System Ltd.

On HBL Power System Ltd:

HBL Power Systems Ltd., has more than 30 years of experience in the field of specialized Batteries and DC Power Systems. The company is the result of a merger between Hyderabad Batteries Limited (1977) and SABNIFE Power Systems Ltd (1986). The company has its Head Quarters in Hyderabad, India with factories and Sales Offices in various parts of the country. HBL also has Offices / Distributors / Agents all over the Globe to cater to its ever-growing Export Business.

HBL is committed to improving global competitiveness by sharing knowledge, drive for innovation & growth, and investments in internationally benchmarked technology & niche products.
HBL & HBL Rail

HBL Power Systems Limited is the established market leader in India for batteries & standby power solutions in Railways, Defence, Industry & Telecom market segments.

HBL has diversified into electronics with an objective of providing end to end solutions in niche market segments. To meet the mass production demands and high levels of quality, HBL has set up a state-of-the-art electronics manufacturing unit for assembly of all types of components and is equipped with automated, semi-automated assembly and test facilities. To ensure quick and high quality service, HBL has set up a service network spanning the entire country.

HBL Rail is a division of HBL that develops products & solutions for the Railways, with focus on Interlocking and Collision Prevention applications. Having gathered adequate domain knowledge and product / service skills, HBL Rail has established internally necessary processes to be a long term player in the Railway segment.

Now I am pasting contents from one of my friends site which he gave a call in Feb 2009 at Rs 110 and 10 paidup.........

A. Batteries: This is the core business of company deriving more than 90% of total revenue. HBL is a technology focused manufacturer of several ranges of specialized application batteries i.e. nickel cadmium (pocket, fibre, and sintered plate), lead acid (VRLA, Tubular, LMLA), silver oxide zinc, lithium, thermal, etc. Infact it is the market leader in VRLA (valve regulated lead acid) and NCPP (nickel cadium pocket plate) batteries and enjoys 50% market share of domestic telecom market. Ironically, HBL is the world’s second largest player in nickel cadium alkaline batteries and stands 3rd for Nicad Passenger aircraft batteries. Moreover it is among the very few companies in the world making ultra high specialties batteries for military use like thermal, reserve and torpedo batteries. It also produces passenger and military aircraft batteries which are mainly for export.

Meanwhile, company has completed the development and test marketing of pure lead tin (PLT) Batteries for diesel engine starting (gensets, trucks etc) and has even entered into agreements with a reputed company for sale under their label. This marks the entry of HBL into the gigantic automotive industry. It is also working with makers of EKO battery operated electrical vehicles to design & manufacture advanced technology batteries for these future products. To encourage use of green, non-polluting power fast growth is expected in the solar power and as each equipment based on solar power needs batteries to store and supply the power, the potential in this area is very substantial.

B. Railway Electronics: Traditionally HBL has been supplying various batteries for train lighting, air conditioned coaches, locomotives, signaling and communications. But off late, company has designed and developed wide range of microprocessor based signaling products and power systems to cater to the needs of Indian Railways. It now offers integrated power supplies for railway stations and does turnkey signaling works contracts including design, installation and commissioning. It even has a dedicated division to execute end-to-end turnkey railway signaling works, starting from yard design, estimation, procurement, installation and commissioning. Company is now also working closely with IRISET, RDSO and other agencies to showcase and implement its other innovative electronics products like data loggers, automatic train charting systems, high frequency track circuits, solid state interlocks, digital axle counters, etc. In short this segment is expected to be the major growth driver in coming years, since the railways have embarked upon the modernization programmes of signaling systems all over the country in a phased manner.

C. Defence Electronics: Although HBL derives hardly 5% revenue from this division but it boasts of supplying several specialized, tailor made batteries to the Army, Navy and the Air Force. Last year it supplied battle tank batteries to three NATO countries. Infact it is most dependable supplier to defence for critical application areas like torpedoes, missiles, aircraft starting, ground power units etc. where no other manufacturers can cater. Besides, company also deals in several electronic products which are used in defense sector like electronic warfare, radar, field telephone exchanges, electronic proximity, time fuzes, radio relays, laser weapon sights, night vision devices, opto electronics, thermal imagers, simulators, mine and grenade electronics etc. Unlike batteries and railway products where almost all development was done in house, HBL has collaborated with IAI - ELTA of Israel for most of the defence electronics products. Their joint venture has already bid for two defense contracts for electronics worth Rs 500 cr. The tender is expected to be opened and finalized during the current fiscal.

My Comments:
I like this stock even though it is 1 paid up becuase at Rs 26 , if we take it as 10 paidup, it is still 260 and I feel that HBL needs to have better discounting then rs 26 as the last year eps is 4 and even if we put an 10 p/e ratio it should be 40....but the demand I am seeing from Railways , Defence and Aviation sector I feel HBLPower System Ltd is grossly undervalued.
Citi gr took the stake in this excellent Co at Rs 340 when it was still 10 paidup, means at rs 34 , 1 paidup.....
Looking at the future growth I would recomend to buy this stock for LT .......
The Mcap is 701 and sales is 1109 so, here the Mcap and sales ratio also favours this Co.
What more I like about this Co is Promoters holds 70% and 15% is held by FII's and DII's....

DD is a must before taking a plunge in it.

Monday, August 30, 2010

Some great names in India and Global Biz

Top of the list is
1) Dhirubhai Ambani
2)Anil Agarwal
3)Bill Gates
4)Azim Premji(has to leave the college in London and take reins of Wipro)
5)Kishore Biyani
I think the list is long..........
readers can complete this list by giving some more names.......
But if we see here, Dhirubhai is a simple matriculate,Anil Agarwal of Sterlite fame is also matriculate, Bill Gates is a college drop out.........and they have accumalated huge wealth for their Cos and themselves......
Why these is happening?I was viewing on HT  Anil Agarwal 's story from rags to riches.....
The point here needs to be noted is why persons who has never gone to IIT or IIM and never learned
1)business tactics how to run a company,
2) how to expand the business,
3)how to turn a loss making Co into profit making Co.,
4)how to compete with the world,
5) how to speed ahead of competitors..
I donno when these people never went to college to learn this how they got to know these?
How they become a successful business man.
The whole thought process came out of my mind again because I saw in HT channel today the journey of Anil Agarwal , of Vedanta and Sterlite CEO.Very simple family a lower middle class  and Anil left the school after completing his 11th (now 12th).
Dhirubhai left for Eden after completing 11th.
The today story again made me revisit my mind why person who never went to college have been successful?
Even the creator of FaceBook, which is now a wellknown international name,and many have got addicted to it ,is a college dropout or was studing in college.
The conclusion that I come in is these people has a burning desire under their belly to succeed.They want to be rich.They chartered their own territory.They took risk.They stick to their goal.
Now these qualities cannot be cultivated.These comes with birth.They had these qualities from childhood and in childhood who has that awareness to become BIG.If we say, we all have dreams but how many succeeds?
Without any knowledge of how to run a Co they did that very successfully .They never learnt how turnaround a loss making Co into profit making Co and they did that very successfully .
If scholars are to be the successful then everyone should have been a billionar but that is not happening.Many Engineers in India still have no jobs and works for Rs 5000 or even less /month.
I would like to mention here one more name......from film Industry.....a very very wellknown and very successful producer and director....it is a very old name of the film maker.....who died in 1966 after Jawaharlal Nehru died.He was so shocked to hear that he died of that....He was a great fan of Late PM.Mr Jawarharlal Nehru.
His name is Mehboob Khan, the maker of Mother India in which Late Nargis, Late Sunil Dutt and late Raj Kumar acted and he made an excellent picture.
He has many silver jubilee under his belts like Andaz (old) where Raj Kapoor , Nargis and Dilip Kumar acted which was a super hit movie at that time....and many more like Anmol Ghadi...etc...he was an illeterate.He didn't know how to write his name.He was from Billimora a very very small city from Gujarat State.How he went to Mumbai, how he learned to direct, and how he become a director is a surprising thing to believe......
Can anyone imagine , a person like Mehboob Khan can direct starlwarts like Dilip Kumar, Raj Kapoor and Nargis?
The above facts of Mehboob Khan is correct as far as I know.If someone knows better then they are always invited to rectify my mistake......when he was a boy he use to work at blacksmith shop( luhar)...and from there he became a very respected and well known director and producer !
But that is it.......nothing succeeds like success........
If you are successful everyone will run after you and as soon as you past your prime , you are gone.....in the wind......and as soon as you die....you leave everything here and do not take anything with you....."Sajan re joth mat bolo, khuda ke pas jana hai, na hathi hai na ghoda hai, wahan paidal hi jana hai."....excellently written by Shailendra from Film"Teesri Kasam"......
Well, coming back to the previous talk, well what I should say?
There is no school as good as yourself.What needs to be important ,your mind should be clear ,what you want in your life.What you wants to do........

Sunday, August 29, 2010

Again some A gr stocks..........and Venus Remedies.....

I still emphasize that stocks like..
1) BPCL ,HPCL,OIL( I have been recomending since Mar 2009)
2)Indian Oil Corp(going damn cheap , 10 paidup! )
4) Engineers India(cheap after it get 5 paidup)
5)NMDC( after splitted to 1 paid up)
6)Dredging Corp
7) Siemans
8)L&T( after I read CMD Anil Naik said that he is going to list 3 Co viz:L&T Fin, Then L&T techno and I forget the last, value willunlock here and L&T shareholders may get these Cos share FREE of cost)
10)Sesa Goa
11) Bharat Forge
12)GSPL( This already recomended at I think around 45!....huge multibagger in making)

I like BPCL very much just like Ramesh Damani likes it as he use to recomend it in his chat because they have interest in Oil field overseas.....and that is why also it is quoted more then HPCL....any dip in BPCL  should come as an opportunity to buy ......as such all the above stocks looks excellent now and at every dips....
I would like have a special mention on Venus Remedies which made a new high on Friday of Rs 326.Remember this stock I recomended at 220 and it went up after that but due to the news of defaulting on FCCB , the stock get hampered.But one need to observe that it never went below 200 or 220 the price I recomended .Even though those news of shutting down the Co came through it never budge below 220! That was the strenght the counter showed.I have no doubt that Venus Remedies will give multiple returns in years to come.....I have seen offlate Surya Pharma which I recomended around 150 is also making new highs......
Among the land bank stocks , I have once recomended Bombay Dyeing and Bombay Burmah very early and I also mentioned Century Tex ass well.I like all these 3 stocks in A gr as they have land bank in a very prime area like Worli and Parel etc........
Now coming on market, I am again seeing that as soon as market goes down by 300-400 points bears starts coming up with theory that we are in for some torrid times.
There is a big bear report that has come out internationally known as Hidenberg report and that showed some concern in USA market but on Friday again USA market bounced back.
But I have seen that as soon as market is down by some 2-3% the support and resistance starts coming up.....
We are investors and we don't need to be scared by such views.If you are ST trader and day trader then only we have to worry .........

Tuesday, August 24, 2010

APM Pipapav ....IPO...........go for it........

I rarely write on IPO....barring Jindal Energy ,DQ Entertainment IPO and maybe couple of more.......
I feel that APM  Terminals Pipavav  looks an excellent IPO to go for it........
It is 10 paidup and placed at Rs .42 looks an excellent growth stock...............This is my view and I may be wrong...DD is a must before applying or investing in it on listing.......

With the Rs 500-crore IPO of Gujarat Pipavav Port (GPPL) hitting Indian capital market today, discerning investors are getting another marine infrastructure opportunity to participate after Mundra Port and SEZ (Mundra) IPO, which evoked a strong response from investors, way back in November 2007.

GPPL, the developer and operator of APM Terminals Pipavav, is India's first private sector port having established multi-cargo and multi-user operations.

Owned by Danish conglomerate, the AP Moller-Maersk Group, APM Terminals Pipavav has four berths with a total length of 1,075 metres to handle bulk and containerised cargo. In addition, there is an LPG berth with a service deck of 65 metres. The 4,550-metre channel length at the port allows day and night marine operations through the year.

Besides road connectivity, the port has ensured dedicated rail connectivity by forming a unique rail subsidiary in collaboration with Indian Railways and Gujarat Maritime Board in 2003. GPPL holds 38% stake in the rail joint venture.

The offer involves issue of equity shares of Rs 10 each for cash at a price band fixed from Rs 42 to Rs 48 per share aggregating to Rs 5,000 million and an offer for sale of up to 11,707, 369 shares by the Infrastructure Fund of India and the India Infrastructure Fund, together with the fresh issue. It also includes a reservation of shares of Rs 10 each aggregating to Rs 100 million for the eligible employees.

The bid/issue period will close on August 25 for qualified institutional bidders other than anchor investors and on August 26 for non-institutional bidders, retail individuals and employees.

Of the Rs 500 crore that the company plans to raise from the IPO, it will invest about Rs 120 crore in developing infrastructure and Rs 300 crore to repay loans raised to complete the first phase of the Rs 1,200-crore expansion which is complete, according to company sources.

"The IPO will mark the next stage in the evolution of the port, which has completed its gestation period," said an analyst from a financial consultancy on condition of anonymity.

He said that it is the first instance where a subsidiary of APM Terminals, other than the listed parent organization, is getting listed on a stock exchange in the country where it operates. The global operator has a network of 50 terminals in 34 countries across five continents,

The issue has been graded by Crisil as 4/5 indicating that the fundamentals are above average compared to other listed equity securities.

“Going forward, with the operational efficiency, startup of LPG cargo services and lower debt burden we expect the company’s margin to improve substantially. Looking at the long term growth prospects of the company and scope to expand the margin we recommend to subscribe to this IPO," it said.

My Commnets:
The reason I like this IPO is because it is owned by "Danish conglomerate, the AP Moller-Maersk Group" and this is a giant gr ...if one use to travel  by train and standing on Platform and if a Goods Train passes by one can see the boggies passing by , one can see the name of "Maersk" on the Wagon....and after I started taking interest in stock market,I use to think that on almost all wagons I see the name of "Maersk " and by chance we get chance to  invest in it, it will be  a big thing and this IPO is giving a chance to invest in an international and well renowened Co Maersk........This chance came after a very long time , say after years of waiting.....It is worth buying on listing as well......
When CRISIL has given 4/5 points for this IPO , I think it is a GO for it....maybe Rakesh will also apply and may also buy lateron after listing.........as we all know Rakesh holds shares of CRISIL as well, as he has faith in the Co(CRISIL) rating......I will give 10 out of 10 points for this IPO....Remember it is 10 paid up that attracts me very very much.....that is a trigger as well for me...It is amazing that APM Pipvav is 10 paidup when all promoters are trying to place shares at 2 paidup or 1 paidup and that too over Rs.100 or Rs.200............Life time opportunity.....

Monday, August 23, 2010

Some new picks.............

I am listing here some new picks I am tracking and looks good if the story turns out good...So buy only after DD....
1) Varun Ind
2) Beckons Ind
3) Strudy Ind
4)Dharmsi Morarji Chem Ltd(dark horse,land bank)

There is one more dark horse named Paramount Cosmetic India Ltd cmp is Rs 9.81 , maker of Shilpa Bindi and Shringar Bindi etc...a well known brand in Female category.....promoters hold 75% and Mcap is just 4 cr with Sales at 28 cr last year and last year eps was 2... going cheap............one can buy it if one find it attractive......

And among my old picks,Indsil Hydro is still looking good, making 52 week high .....Hitech Gear is also good made a 52 week high of 214 today....
Garg Furnace still looks good, so is Rathi Steel and National Steel and Agro.....along with Poddar Pigments....Atul Ltd, Standard Ind, Ennore Coke.....
There are couple of stocks in Micro Finance sector...which I am tracking and looks good are Capital Trust Ltd and Arman Financial Ltd....with SKS Micro Fin Ltd  listing at over Rs.1000, the value should unlock here in the above two.....

Sunday, August 22, 2010

Thinking out of BOX?.....Ahmedabad rapid bus system catches fancy of several countries ........

VINAY UMARJI Ahmedabad, 21 August Despite a four-wheeler and a couple of twowheelers parked at his residence, Manubhai Dhruva prefers to take the public transport. Ask him the reason and the 78-year-old retired English lecturer answers with asmile, “It takes me a good 10-15 minutes less to travel by bus than my own vehicle.” The public transport in question is the Ahmedabad Bus Rapid Transit System (BRTS).
IP Gautam, municipal commissioner, Ahmedabad Municipal Corporation (AMC) and chairman, Ahmedabad Janmarg Limited (AJL), a special purpose vehicle set up for BRTS, said, “To tap the success of the project after almost 10 months, we recently interviewed a group of doctors at Civil Hospital who used to commute by cars. The results were quite encouraging. Ever since they began commuting on BRTS and the feeder buses, they have been able to save 70 per cent time and 50 per cent conveyance cost.” “We gradually intend to move from the lesser congested areas in Ahmedabad where we have been highly successful to highly congested areas in some of the eastern parts of the city. Moreover, the aim behind the project is to reduce the use of private vehicles, reduce congestion and increase use of public transport.” Such has been the success of the Ahmedabad BRTS that the project has caught the fancy of not just the local commuters but of several nations. Representatives of countries, including Tanzania, Lagos, Vietnam, Malaysia, Indonesia, and Dar es Salaam, have visited the city to study and adopt the system.
Today, Ahmedabad BRTS, officially known as ‘Janmarg’, offers commuters an average speed of 27 km per hour —one of the highest among public road transport in the country. Its dedicated corridor and bus stations running through the middle of the road offers commuters easy access to both sides of the road.
“Not just did we win some global awards like the Best Sustainable Transport Award and Best Mass Rapid Transit System but also caught the attention of other countries who now want to study and adopt the success of Janmarg. The projects success has put Ahmedabad and Gujarat on the global map,” said Shivanand Swamy, associate professor, CEPT University and team leader of the BRTS project.
The Ahmedabad BRTS has also been successful in tapping private vehicles owners and users. When its services were launched in October 2009, Janmarg saw about 22 per cent, 21 per cent and zero per cent of two wheeler, three wheeler and four wheeler users respectively move from these private vehicles to the new public transport. After almost 10 months, this shift has risen to 24.5 per cent, 23.5 per cent and two per cent, respectively. Also, of the total 18,000odd passengers per day on Janmarg, 57 per cent were previously using AMTS which has come down to 50 per cent for awhopping 65,000 passengers per day.
"We have already provided parking facilities at major BRTS bus stations and traffic junctions to encourage people to park their two wheelers and four wheelers and opt for BRTS for faster commuting," adds Gautam. Whats more. AJL is planning to build at least four major parking zones at areas including Bopal and Narol to the project was commercially launched only in October 14, 2009. Backed by a detailed project report (DPR) prepared by CEPT University, the Ahmedabad Municipal Corporation (AMC), led by municipal commissioner IP Gautam, took the initiative to follow the Jawaharlal Nehru National Urban Renewal Mission (JnNURM) guidelines on urban mobility and announced the BRTS project in 2005-06. With the project being approved in November 2006 at an investment of `981.45 crore, the work on BRTS commenced in 2007 for the first phase of 12.5 km from RTO to Pirana, wherein around
`492.39 crore has been spent, through a special purpose vehicle (SPV) called Ahmedabad Janmarg Limited (AJL).
To boost its popularity, authorities offered free rides to commuters for the first three months. Moreover, special rides for prominent businessmen, doctors, students, politician, religious leaders, and senior citizens were organised.
But with other cities like New Delhi and Pune building dedicated corridor for such BRT, what makes the Ahmedabad BRTS stand apart? "The launch of such systems in other countries as well as other cities in India allowed us not to repeat some of their mistakes. The project also saw a leadership in the state and local government that was more professional and eager to implement sans the bureaucracy hurdles. Add to that, people involved in the project saw it as their own initiative rather than the governments. Not just other countries but also other BRT projects like Pune and Indore intend to now adopt the Ahmedabad Janmarg model since the 900 mm high floor diesel buses from Tata and bus stations in the middle of the corridor offer a walk-inwalk-out experience.," opines Swamy.
Meanwhile, ing on the corridor, AJL has ordered for another 680 buses from Tata Motors as well as Ashok Leyland. Of these, about 20 air-conditioned buses costing `30 lakh and 35 non air-conditioned buses costing
`24 lakh will be handed over to CSPL for BRTS, rest costing `23 lakh will be handed over to AMTS to be operated as feeder buses for connecting other routes to BRTS corridor.
In next couple of months, AJL intends to add another 12-13 km to take BRTS from RTO to Naroda, thereby completing the second phase of the project. By then, Janmarg is expected to generate a daily revenue of `6-6.5 lakh from about 120,000-130,000 passengers per day. By March 2012, AJL hopes to take the total length of BRTS corridor to 88 km, covering areas like SG Highway, Sola, Gomptipur, Odhav, and Danapith, apart from an elevated route to Kalupur Railway Station.
Malaysia, Indonesia, Tanzania among others study the city’s bus rapid transport system
At an average ticket of `5, the project currently earns a daily revenue of
`3.5 lakh on a 30 km-odd stretch comprising 43 bus stations THINKSTOCK

My Comments:
I read this again in today's BS and pasted it here.
When I went to Ahmedabad , I saw these.I was surprised to see what BRTS was doing and whether that is good enough but after I read it here seems it has clicked in big way.....
Well,friends that is called thinking out of the BOX.....a new idea by the commisioner , Mr IP Guatam.....I congratulate him for his novel idea which has been so successful that other small and poor countires has started to think on it.....Excellent.....

FUNDAMENTALS ...........Ebitda and related ratio give a better picture of a company’s profitability...


Don’t judge a firm’s health by its profits

When you visit a doctor, whether for an ailment or a general check, inevitably the doctor will check your pulse. That is exactly what the Ebitda margin is, to someone who looks at the financial statements of a company, for measuring its health.
Ebitda stands for earnings before interest, tax, depreciation and amortisation. We first take into account the companys net income. This is the sales, less any levy such as excise duty. Many analysts calculate adjusted Ebitda, in which case you will subtract any non-operating income from the net income. Nonoperating income is any income that is not recurring in nature or does not accrue from regular operations of the company, for example income from the sale of an asset.
The next step is to calculate the COGS, or the cost of goods sold. The COGS is simply what it cost the company to make the goods it sold. So, we start with the cost of raw materials we consumed in production for the year. The next step is to add any other direct costs the company incurred in production. This could be the cost of power, labour, plant maintenance or any cost incurred for production of goods.
Finally, we need to remove the impact of increase or decrease in inventory, as we are calculating the cost of goods sold and not the cost of goods produced. This includes calculating the inventory of both finished goods and raw materials.
Assume a company has 100 cars as inventory and produces another 150. In the entire year, it sells 200 cars. This means the inventory has reduced to 50 cars. What is the cost of the goods sold? The cost of producing 150 cars (add the raw material and other prod costs for the year plus the cost of producing 50 cars last year (the change in inventory). So, any reduction in inventory means you used the previous years production and you need to add its cost to your COGS, else you will show extraordinary operating margins.
Thus, we will take the cost of producing goods and add the inventory costs if the company used last years inventory or reduce the inventory costs if it produced more than it sold in this year. We can find gross profit now, by subtracting the COGS from the net income. Next, we need to calculate all other operating expenses (like employees’ cost) and deduct these from gross profit. This will give us the Ebitda. To calculate Ebitda margin, simply divide this figure by sales. It is always expressed as a percentage.
By now, you might be wondering what all the fuss is about. Cant we simply look at the net profit margin of the company to know how profitable the company is? No, we cannot.
If you look at a company that is expanding aggressively, you can see a more pronounced impact on the net profits. This is because; the depreciation will be high. Leverage is another reason why companies often show lower profit after tax, though they are still doing well on an operating basis. The interest payments tend to be higher and that can reduce net profits. Pantaloons performance from financial year 2007 to 2010 is an example of the impact of aggressive expansion on the net profit.
Adjusted Ebitda is an even better indicator of operating health, as it includes only operating income. For example, in fourth quarter of financial year 2008, Tech Mahindra recorded a loss of Rs 221 crore due to an exclusivity payment made to a customer. If you compare the net profit margin of third and fourth quarter, you would find it declining drastically. However, the adjusted Ebitda margin was up marginally.
For all the above cases, to judge a company one should look at the Ebitda margin of the company and compare it against its peers or even its results across the years. An Ebitda margin that contrasts other indicators is not necessarily a reason for comfort or panic. It is an indicator that calls for a drill-down into the operations of the company.
The writer works for www.learnwithflip.com
Ebitda and related ratio give a better picture of a company’s profitability
Ebitda is earnings before interest, taxes, depreciation and amortisation. It is used to compare profitability of the company with peers.

My Comments:
Those who wants to learn more and more on Fundamental.....I read this today in BS and has pasted it here.....Looks good to understand these parametres......though I am all at sea here but hope readers gets benifitted....

Planning and Execution....STERLITE ENERGY’S FIRST UNIT OF 2,400-MW PLANT GOES ON STREAM .......


DILLIP SATAPATHY Bhubaneswar, 21 August

Sterlite Energy (SEL), apart of Vedanta Resources plc, today commissioned its first unit of 4 X 600mega watt (Mw) Jharsuguda thermal power plant in Orissa.
The other three units of the
`10,500-crore power project are likely to be commissioned over the next one year, at an interval of three months each. State Chief Minister Naveen Patnaik today dedicated the first unit of the plant to the nation.
“Add this to the 1,215 (9 X 135 Mw) captive power plant (CPP) set up by Vedanta Aluminium, also at the same location, to feed energy to the company’s smelter plant, the Jharsuguda complex will be largest single location power station in the country with a combined capacity of 3,600 Mw,” said Pramod Suri, chief executive officer of SEL.
“We are also the first IPP (independent power producer) among the 27 IPPs, who have signed MoUs (memoranda of understanding) with the Orissa government for power plants, with a combined envisaged capacity of 32,000 Mw at an investment of `1,60,000 crore, to go on stream in record time.” According to SEL’s agreement with the Orissa government, the generation from the first unit of its Jharsuguda plant will be supplied to the state grid. The company, however, is free to sell power from the rest units in open market.
As on today, Orissa had a peak hour deficit of 400 Mw and the SEL project would go along way in meeting this deficit, said state energy minister Atanu Sabyasachi Nayak.
After meeting the state’s need, SEL intends to sell power from its Jharsuguda IPP through open access system. “We intend to sell power on merchant basis and have not entered into any PPA (power purchase agreement) with any state utility,” Suri said. For evacuation of power, the company has entered into a bulk power transmission agreement (BPTA) with Power Grid Corporation of India (PGCIL). BS REPORTER New Delhi, 21 August
Environment Minister Jairam Ramesh will announce the ministry’s decision on Orissa Mining Corporation’s application for bauxite mining in Niyamgiri early next week. The minister was expected to announce the decision on Sunday but the announcement has been postponed because Ramesh is visiting Hardwar. “The members of the Bhagirathi Bachao Sankalp were compelling him to visit the place and he maybe going to Loharinag Pala too,” said an environment ministry official.
The Forest Advisory Committee (FAC) met yesterday to discuss the recommendations of the N C Saxena panel report that sought a ban on the mining projects of UK-based Vedanta Resources in Orissa. the report is believed to have been accepted by the government.
“The decision on Vedanta will happen soon,” said Ramesh.
However, another official said though the decision had been taken, a formality remains, as a representative of the Orissa government is coming to the capital while the decision is taken. “The decision will happen on Tuesday and it should not look as if it was a unilateral stance,” said the official.
The other three units may be commissioned over the next year.

My Comments:
That is what I have been emphasizing for so long........Strelite Energy has already commisioned 2400 MW plant and has gone onstream.....
India needs more such Power Plnats executed in time..which helps running overcost.......Kudos to Anil Agarwal....It is not only Mukesh Ambani who can do it....we have Anil Agarwal coming in the same category....and see, that is the reason why he is so successful...........
I still will write, India needs Industrialist who completes their plan well in time.......and if that happens there can be no looking back for India......

Anil Agrawal of Vedanta, Sterlite fame becomes aggresive.......

Going For Black Gold

In May, a few bankers walked into the headquarters of Anil Agarwal-owned Vedanta Resources in London with a blind suggestion to take over Cairn India, the 62 per cent subsidiary of London-headquartered Cairn Energy. Agarwal gave them the go-ahead to begin talks. But who would approach Bill Gammell, the overpowering CEO of Cairn Energy? After all, they were going to ask him to sell his most lucrative asset — Cairn India. Agarwal decided to bell the cat himself and, in his own words, “it clicked”.

In his meeting with Gammell, Agarwal found that Cairn was more keen to focus on its core competency — exploration. In fact, before Cairn India went public in 2007, Cairn Energy had approached partner ONGC to sell the Rajasthan field where oil had just been discovered. However, ONGC wasn’t keen on buying at that point. Agarwal says he had been thinking of entering oil and gas for two years. “I had many discussions with bankers. The name of Cairn came up about three months ago.”
Cairn India made sense for several reasons. Vedanta has cash reserves of $8 billion; the acquisition would enable debutant Vedanta to participate in the next round of bidding under the New Exploration Licensing Policy (Nelp); and, finally, Cairn is the second-largest private oil company in India with one of the largest onshore oil bodies in the world.
Analysts, however, are apprehensive about the mineral and metals group’s capabilities in the oil business. Prasad Baji, senior vice-president at Edelweiss Securities, says, “Vedanta is following the BHP Billiton model to become a diversified resource management company. It is not an easy task. They will have to deal with a different product and market.” Agarwal, however, allays this concern saying Cairn India has a strong management and he intends to retain it.
Says Anindya Mohinta, an analyst at Citi, “The bigger question for Vedanta shareholders is the post-deal balance sheet ($10 billion debt) and leverage (2.4 times forecast 2011 Ebitda), which make it the most leveraged large-cap mining stock in our UK coverage.”

Deal Matrix
If completed, the Vedanta-Cairn deal would be the third largest by an Indian company, behind Tata Steel’s $12-billion buyout of Corus and Bharti Airtel’s $10-billion takeover of Zain’s African telecom assets. While some analysts call it “gambling”, Agarwal calls it “opportunity”.
Vedanta will spend $8.5-9.6 billion for 51-60 per cent stake in Cairn India. While parent Vedanta Resources will raise a debt of $6.5 billion, group firm Sesa Goa will front $3 billion ($1.8 billion cash reserves, $1 billion internal accruals and $200 million from loans, say banking sources) to make an open offer for 20 per cent (wholly owned subsidiary THL Aluminium will first buy 31-40 per cent from Cairn Energy). London-based Standard Chartered Bank, Vedanta’s main lender, is arranging a syndicated loan of $5 billion. The mandatory open offer worth Rs 13,631 crore will begin on 11 October.

Check Points
Agarwal is no stranger to acquisitions. Starting off as a scrap dealer in Mumbai in 1976, the 56-year-old has built his empire buying sick assets cheap and turning them around. In creating the $8-billion mining and metals giant, he has acquired 11 companies (including Balco, Hindustan Zinc, Sesa Goa and Dempo’s iron ore mines).
But the Cairn deal is a challenge. First, Cairn India’s minority shareholders are up in arms over the lower open offer price of Rs 355 a share. Cairn Energy will get Rs 405 per share (Rs 50 as non-compete fee). LIC of India (2.5 per cent stake in Cairn) may stay away from the open offer due to the price difference. Petronas, the largest institutional shareholder (14.94 per cent), has not indicated its preference yet.

Another bone of contention is ONGC’s 30 per cent stake in Cairn’s prolific blocks in Rajasthan, including the oil-rich Mangala field. ONGC gives royalty to the state government and pays cess on the profit. Sources in ONGC say the firm could lose $2-3 billion in revenues from the blocks because of these payments.
ONGC is studying its right of first refusal (RoFR). But Harshad Katkar, research analyst at Deutsche Bank, says, “We believe ONGC has a limited role to play.”
There are other hurdles as well. CPI-M leader Tapan Kumar Sen on Thursday said the government should not allow the transfer of the Mangala oilfield to Vedanta. Petroleum secretary S. Sundareshan also reportedly said that the “production-sharing contract provides for concurrence of the government when any assignment of interest in a block takes place”.
Vedanta needs to address the ministry’s concerns because acquiring Cairn’s assets in India will get it access to the blocks awarded under Nelp. The tax department, too, is waiting: a similar deal between Vodafone and Hutchison for Indian telecom assets of Hutchison Essar is still mired in dispute with the taxmen asking for Rs 12,000 crore for ‘sale and purchase of an Indian asset on foreign shores’.
Besides, the deal requires mandatory approvals from the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi). Analysts at HSBC Global Research say, while Vedanta will be able to secure such approvals, there will be a lead time of 2-3 months.

What Next?
At present, Vedanta is consolidating its businesses under five verticals — copper, zinc, aluminium, iron ore and power. Oil and gas will be the sixth vertical for it. Vedanta Resources will continue as a holding company.
Financially the acquisition will add $2.5-3 billion Ebitda (earnings before interest, taxes, depreciation and amortisation), says Tarun Jain, director (finance), and an Agarwal confidant. With this acquisition and other greenfield projects under construction, in two years, Vedanta aims to be a $13 billion-Ebitda company. This will give Vedanta the heft to compete with larger rivals such as Reliance Industries (in oil and gas), Hindalco Industries (in non-ferrous metal) and Anil Ambani group firm Reliance Power and Tata Power (in power generation).
The company posted $2 billion Ebitda in FY 2010, while its net profit was $1.5 billion. Cairn India, which posted $222 million net profit last fiscal, raised its production in Rajasthan to 0.12 million BPD (barrels per day) from about 17,500 BPD in the March 2010 quarter. With 10 blocks in India, it had $0.55 billion cash and $0.74 billion unutilised loan facility at the end of June 2010. Meanwhile, since Vedanta is pursuing a capex plan of $17-18 billion, it will use a part of its existing cash reserves for it.

Even as he works out the details of acquiring Cairn India, Agarwal may be reminded of investor billionaire Warren Buffett’s words: It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Anil Agrawal's Interview:
‘We Need A Large Asset’
Caught unawares by Vedanta Resources’ $9.6-billion offer to buy a majority stake in Cairn India, the Indian government is brandishing its veto clause. Parent Cairn Energy’s CEO Bill Gammell rushed to New Delhi to apprise the government about the deal and to soothe tempers. The only concession the government has apparently been able to extract is for the other shareholders — Vedanta may make an open offer of Rs 405 per share. Its current offer is Rs 355 per share versus Rs 405 it will pay Cairn Energy (Rs 50 being the non-compete fee). Minority shareholders are not happy with the difference. In the midst of the dust kicked up by the agreement, Vedanta Resources chairman Anil Agarwal spoke to BW’s Nevin John from his London headquarters. Excerpts:

Cairn’s acquisition move was rather unexpected. What was the trigger?

I see it as an opportunity. How often do you get opportunities like this? We are lucky — Vedanta is sitting on a cash reserve of about $8 billion, and we need to invest in a large asset to move forward in the growth trajectory. For the Sesa Goa cash reserve, we are getting an interest of just 5 per cent. Apparently, when we invest in Cairn, the return on the same money will be 15 per cent. Also, we own an asset.

Do you think the deal is expensive?

We are paying 20 per cent premium over the market price. Normally, it is around 30-35 per cent. Our offer for Cairn stake is reasonable considering the size and potential of the asset.
Running an oil company will be a new challenge — a different market, a different regulatory environment…
Cairn is run by one of the best manage-ments in the country. There is a CEO, a CFO and the board members, and also 2,000 highly qualified professionals. Only the shareholder is changing. We will not change the structure; not even the name. Vedanta will support Cairn in its expansion plans.
There are reports that ONGC could oppose the deal.
Cairn has a perpetual agreement with the government. ONGC is our 30 per cent partner in the (Rajasthan) block. Whatever approvals are needed, whatever needs to be done for such a deal, we’ll do it.
The minority shareholders are unhappy with the open offer price of Rs 355 a share, compared to Rs 405 for the promoters.
First of all, everybody should understand that we are paying a non-compete fee, which is just a fee as per the Sebi takeover code. The fee can be up to 25 per cent of the deal size; we are paying just 10 per cent. Second, the clause means the Cairn promoters will be missing out on potential markets such as India, Pakistan, Bhutan and Sri Lanka.

How do you plan to raise the $6.5 billion of debt?

It will be syndicated loans from foreign banks, with maturity of 2-5 years. The debt will be on the books of Vedanta Resour-ces, which has a net debt of just $947 million now. With the acquisition, the debt will go up to $9-10 billion, after discounting cash and equivalents of $6 billion. Sesa Goa may not raise any debt for its $3 billion investment.
My View:
I have already given my verdict when I read that Sesa Goa will also bid for 20% stake in Cairns India.It is bound to be positive.Let whatever analyst wants to speak , it is going to be positive on Vedanta as well and for Anil Agrawal as well.
As we have read in the above text, Anil Agrawal has come a long way from a crap, turning around loss making unit and taking over.
This is a man of substance and buying Oil Co makes sense in atleast for next 3-4 decades but not less as the demand will keep rising.
Essential commodities like Coal,Iron Ore, Copper, Manganese, Sugar, all types of grains, Oil and Gas are going to have field day in next 3-4 decades to come....not least to mention Gold, Silver, Platinum an Uramium.Uranium because it can happen that as coal gets dearer and dearer,Atomic plant power can become more viable ....and many countries can try to go for that....
Hence I feel that if the deal goes through , with all leverages burden of Cairns India , I still feel that it will do good for Sesa Goa......
These same analyst will come out and will say that this was a great decision taken by Mr.Anil Agrawal.If we talk of what experiance Anil Agrawal has got , let me write that what Mukesh Ambani was having as experieance when he ventured in Oil and Gas?It all starts from a crap....and to me Anil Agrawal is a seasoned player now as he has established himself as a great busiman who hass got graet business sense.......
I hail the decision of Vedanta and Sesa for bidding for Cairns India.....

Friday, August 20, 2010

Again Luck or Destiny....coming to the fore......

What a catch! Humble British fisherman lands billionaire Canadian boss's daughter and returns on bride's £100m superyacht :

But after marrying the daughter of one of Canada’s richest men he has returned to the Devon port at the helm of something a little grander – a £100 million super yacht.

The 35-year-old left Dartmouth eight years ago to work for John Risley, the billionaire owner of a food empire and the largest fishing fleet in North America and Canada.
He managed to land a job as a deck hand on one of Mr Risley’s yachts, where he was introduced to his daughter and heiress Sarah, 35.

The pair fell in love and after marrying in Nova Scotia last week, they sailed to Dartmouth aboard the 240 foot Northern Star on which they hosted a lavish wedding reception for all his old friends, family and former colleagues.
Mr Barnett, who began his seafaring career running fishing trips off the Devon coast in a weather beaten boat known as a Cornish drifter, said he had enjoyed having his old friends aboard the super yacht, which has six decks and its own helipad.
He said: “We came back for a wedding reception on the yacht so that our friends here could attend.

“It was a great party and we had about 80 guests in the evening, including some of my childhood friends.
“We are very grateful to the father of the bride for letting us use his yacht for the reception. It is fantastic and very homely inside.
“I met Sarah when I was working on a yacht as deck crew and she was a guest. We married in Canada and came back for the reception on the Northern Star. It was great fun.”
Mr Barnett’s rags to riches tale began when he left Britain in 2001 to work for Mr Risley as a crew member aboard one of his yachts.
The 62-year-old self-made fishing magnate built up a billion pound fortune after starting off with one small lobster shop in Canada in 1976.
He later founded Clearwater Seafoods one of the world’s leading fishing industries which has a fleet of vessels and a large number of processing plants throughout Canada.

My view:
I donno, but I always get facinated when such news comes up.When I read this news , my mind always try to wonder, is there anything like LUCK or Destiny in anyone's life or as spoken by people who never believes in LUCK is TRUE?

What hard wrok that person did that he landed with a multibillioner girl?Why his life is going to get excellent from nowonwards?Even if we think he must have tried to have an affair and have tried all tricks to get invovled with that multimillionar girl, Sarah, how many can succed?That again ends up with same answer, LUCK......tera jadoo chal gaya......that is what we will say.....

There are people who always try to twist things in their way and will try to win whatever way they can but still there are some people who always remain ahead of them and that too without doing any thing wrong .Why that happens?

Let us take an example.....An Indian Girl who is not so good in academic qualification and also not so good in look and still she gets married to a guy who lives in USA, I have given USA as example as loads of people in India wants to go to USA  and ready to dole out 30-40 lacs for that.
Now there are many other smart girls and good looking too, still they do not get that guy ..and that girl who is average get chance to marry an USA guy and goes there...what should we call it?
What is the qualification of that girl?Had that girl made a special effort?Hamare yahan ek kahavat hai.......khuda meherban to gadha pehelvan......we have seen a millioner lady left millions for her DOG,so what DOG has done?

Gujarati ma kavat che"Koi hath mathi lai jai, pan naseb mathi kuan lai javanu,Naseb ma hashe to pachu malse"

When I read such things in news, I always feel that there is definately something like LUCK, which plays very very important role in ones life.We try to give excuses while justifying giving reasons , that it was my decision and I played the cards very brilliantly etc etc....and will not give any praise to anyone....but it is a known fact that someone has helped someone on coming up...someone has helped you in your wayup...inspired you to take that decision, one has talked with someone, discussed with him/her whether be it mother , father,brother, friends anyone ....helped you in someway...how can someone be so ungrateful ?

But those who are successful always try to belittle those who are not successful saying that you are not doing enough to be successful.You should have done that and this way was wrong.....these are all arguements to make that person more embarassed.

One can also tell to that successful person that where you are , you would have been much much bigger then that if you have done this or done that......huh!......

When I went to India and in my city, I was surprised to see the prices of lands.....they have increased 11 folds in 2 and a half year.They went up from 200/ft to 2200/feet....that was rediculous...but that was a lady luck shining on those people who has lands in our city......people  who hold that lands for years never got that return in such a short time....and those who atall never invested money in that land, what should we tell them.?that even you  has money you didn't invest here so you are not a good business man or wrong decision?

Sometimes,some makes a single mistake in life he has to repent for whole life and other keeps on making mistake after mistakes and still he keeps on getting chances.......what should we call that?

As the time passes, I am getting the feeling that nothing is in our hand......we becomes absolutely nonentity when certian things happens in our life.....sab jante hue bhi ham kuch nahi kar sakte....ye jab situation a jata hai....then it is time for us to be HUMBLE......sab bana banaya khel hai......upper wale ka....

That's all I will say......my readers may have totally diametrically opposite view....and I respect the same of them......This was just my thinking.....

Thursday, August 19, 2010

Surya Roshni.....My old pick......cmp...101..

I gave a call on Surya Roshni at 40 on 26 th June 2009.It is a year since I gave the call and revisting it now for a reason.
The first reason is that it made a high of Rs 106.40 on 13th Aug 2010 , in an year.That means Surya Roshni almost tripled from my call and now resting at Rs 101..
I remember I gave a simple statistic why I like Surya Roshni Ltd at that time.The Mcap was very less then sales,they invested some Rs 550 cr for expansion and were in excellent sector of lighting and steel pipes.
These parametres were enough for me to give a call on Surya Roshni Ltd and how good it come true.
Friends,the real challenge in stock market is how much you get correct and how many times you prove correct.That is what I like it.You bet on certain stocks visualizing future  growth and try to see whether there is value and then decides to invest in it.That is what I like....projecting and coming out true on it......These increases your confidence many folds.
So far I am doing good.....both on market course and individual stock.....
The sad part here is I am no big man to invest on whatever I give  a call.I am not able to invest in everything that I write here though I would love to do it because it is all hard work I have done on it and I am convinced on it.....but alas, I have no enough money to invest in all my calls.
But I am seeing some financial site coming out with a call on Surya Roshni Ltd now .....
When I recomended at only Rs 40, I had all faith in my call but I was not able to buy Surya Roshni Ltd but I am atleast glad to see that my call is vindicated.
I donno how many followers bought it after reading it and even if they bought , whether they held on uptill now?But if someone has bought it and sold it all, then it says that they were ST gainers and if at all not bought then they never had confidence on my call.........
I have been repeatedly writing that holding stock is the best way to maximise the gains, but who listens?
All are after ST money.Get 20-30% and sell it.The analyst also use to speak that way.Book profit!
Even after I am writing stock time and again , readers still keeps on asking me same questions again and again.Give us some good stocks.I don't understand why they keep on asking me this.
It is all on my blog.Why don't they read it here and invest.....why they ask personally?
I am never going to give a personal call to anyone.Read here and invest.
I have no doubt that same will happen in Rathi Steel, Poddar Pigments etc....but no one will look at it now....but after it will go up, they will start asking me , whether it is a buy now or not?
I can't help these people who never puts faith on my call and after it starts running comes out and ask me whether it is still a buy or not......
Rathi Steel and Poddar Pigments are two excellent stocks going abegging at cmp but no one is interested in it now and after it will start making new highs, people will run after it......
My rationale for a call on Gayatri Project at around 150 was also same.Mcap was so low that it was a steal at that price ....and it went on to make a high of over 500 ....now at 400 and some brokerages are now intiating a call on it....Wow!.....so just imagine what will be the price of Gayatri Porject in next one year....it should touch easily 1000 and so from  150 to 1000 ,if it touches, will be a great great return.......isn't it?It will be just like a Rs 15 stock touching Rs 100! who do not wants these type of return?

Market as said by our Lord of the Ring, is going to make a new high......
and last but not the least,
Would like to mention here 2 stocks....
1) Aptech Ltd...RJ's stock
2) Atul Ltd......due to dyes sector looking up and a huge landbank in  Ahmedabad and other parts in Gujarat....
Both the stocks looks excellent to me at this price.....rest your decision.....

Monday, August 16, 2010

Seven Surprising Facts about W.Buffet...............

Taken from somewhere else:

Here are seven interesting things I learned about Warren Buffett from The Snowball, and some ideas on how they can help your investing:

1. Buffett set goals young. (He really started, really young)
Buffet began obsessing over numbers as a child. He raced marbles with a stopwatch and calculated the lifespan of hymn composers when six-years old. He sold chewing gum at seven and Coca Cola when he was eight: the same year he began wearing a money-changer on his belt.
His dad was a stockbroker. This gave him an early view of the markets
At ten he was chalking stock prices at a local brokers office
The same year he visited the New York Stock Exchange, and was asked for a tip by senior Goldman Sachs partner Sidney Weinberg an experience he never forgot
His favourite childhood book was One Thousand Ways to Make $1,000
At 11 he announced he was going to be a millionaire at 35, a seemingly crazy goal in 1941 (when a million really was a million)
He filed his first tax return aged 14, having already made $1,000 (equivalent to around $12,500 in todays money)
The takeaway: The power of compound interest takes years to work its magic. None of us has a time machine, so the main lesson is not to delay a day when investing for the future.
2. Buffett bought his first stock when he was 12-years old
Warren put everything his schemes had earned him into a stock, Cities Service Preferred, when he was 12. He also enrolled his sister, Doris.
Buffet was already learning how to hold shares through a slump
He paid $114.75 dollars for three shares, and watched the stock price fall from $38.25 to $27 a share. His sister Doris was not happy. When Cities Service went back up to $40, he sold. He made $5 a share profit, and got Doris off his back. After he sold, the stock rose to $202 a share.
Takeaway: We all learn the same lessons. Buffetts business partner Charlie Munger says that because Warren started thinking about odds, stocks, and goals before he was a teenager, hes years ahead of the rest of us.
I used to watch share prices rise and fall on the Teletext TV service when I was 11 or 12. At the same age Buffett was learning real-world lessons on holding shares through a slump and selling too soon.
Youll only discover whether you have the stomach to invest through a bear market or whether youll be sucked up by the next property bubble by being an active investor. Start with small sums, sure, but dont delay that start.
3. Buffet lied, shoplifted, and played truant as a kid
This one was a real surprise. As a teenager Buffett revealed a wild streak. He says:
Wed steal stuff for which we had no use. Wed steal golf bags and golf clubs. I walked out of the lower level where the sporting goods were, up the stairway to the street, carrying a golf bag and golf clubs, and the club was stolen and so were the bags. I stole hundreds of golf balls.
I made up this crazy story for my parents I told them I had this friend, and his father had died. He kept finding more of these golf balls that his father had bought. Who knows what my parents talked about at night.
Takeaway: Even Buffett had to learn to be Buffett. I dont know about you, but I found this heartening to read. Together with discovering that Buffett was a shy child who enrolled himself in Dale Carnegies public speaking course, it made him seem more human.
Its easy to feel you havent got what it takes to make money. Some are born special, you might conclude. But Buffetts history shows that even the worlds richest and most admired investor had to iron out his kinks.
Buffetts history also makes me proud to be an outsider. Many of my college classmates entered the city or became management consultants, and have earned six-figure salaries for a decade. When property prices were booming, Id sometimes wonder if Id made the wrong decision by deciding to go it alone even though I know that working a nine-to-five in an office and answering to some buffoon of a manager would kill me.
Discovering Buffett made being his own boss a top priority puts me in good company. I also suspect the unusual structure of Berkshire Hathaway grew out of Buffetts non-confirming mentality.
4. Buffett is a businessman first, investor second
Youll often read that Buffett evaluates stocks as if hes buying the whole business. What I realised after reading The Snowball was Buffett doesnt do this because hes an investor who thinks like a businessman. Buffett is a businessman who is also an investor.
Buffett ran multiple businesses while still a student: He sold refurbished golf balls, peddled stamps to collectors, ran a network of pinball machines when he was 17, owned a tenanted farm, and managed a 50-strong paperboy route
He dealt hands-on with strikes and turf wars at newspapers from The Washington Post to the Omaha Sun
Buffett didnt just buy, hold and drink Coca-Cola he engineered the replacement of its CEO
With all the new businesses, from Sees Candies to GEICO, he added everything from their stock level reports to weekly sales projections to his endless daily reading
Berkshire Hathaway is far from a simple holding pen for Buffetts investments. Hes used his business acumen to produce an intricate money-making machine which takes cash from its subsidiaries and the float from its insurance businesses and reinvests it at higher rates of return, multiplying his returns
Takeway: Buffetts success will never boil down to filters or ratios. Investors who try to ape him simply by reducing his methods to dubious cashflow projections or buying any old listed household name when its stock price falls 20 per cent will never replicate Buffetts success. (Okay, rounding down roughly nobody is ever going to replicate Buffetts success, but you know what I mean).
Buffetts record suggests investors should spend as much time reading about business and management as they do calculating P/E ratios. The trouble is, all manner of financial ratios are available at a touch of a button. Buffetts sense of business value is far harder to emulate.
5. Buffet makes mistakes
He really does! I was even more heartened by Buffetts stinkers than by his golf ball robbery.
Some classic Buffett cock-ups include:
Him and his friends spending $25,000 in 1957 on four-cent Blue Eagle stamps that the US government was about to take out of circulation. By securing and controlling the supply, they destroyed any chance of the stamps becoming valuable. His partners in the caper were still mailing him with postage paid for by sheets of the stamps decades later.
He bought The Buffalo Evening News in 1977 and had lost $10 million within three years by becoming embroiled in a price war and a fight with the unions (though it later became very profitable)
Buffetts firm Berkshire Hathaway is living testament to his biggest mistake spending millions to gain control of a doomed textile manufacturer
Buying into Salomon Brothers in 1987 for $700 million eventually plunged him neck-deep into the Wall Street culture he so despised, when its rogue traders and poor management threatened his reputation and fortune
Takeaway: Mistakes happen even to the best of us. Sadly, having read The Snowball cover-to-cover I havent found a Buffett blunder to rank with my own worst investment (an iffy company called Homebuy that went bust overnight). But I saw plenty of examples where Buffett dusted himself down after an investment misfired and tried to learn from what went wrong.
Virtually all Buffetts purchases of major insurance companies seem to have gone awry in the early years, for instance, and yet its by reinvesting all the cash thrown off by these companies that Buffett has maintained Berkshire Hathaways incredible growth rate.
The moral is to not despair when an investment turns out badly, but try to figure out what you can takeaway from it, as well as what you can salvage the situation.
6. Buffett considered quitting investing in his early 30s
In 1969 Buffett wrote to his investors that he was going to close their partnerships:
I know I dont want to be totally occupied with outpacing an investment rabbit all my life. The only way to slow down is to stop. I am not attuned to this market environment, and I dont want to spoil a decent record by trying to play a game I dont understand just so I can go out a hero.
I do know that when I am sixty, I should be attempting to achieve different personals goals than those which had priority at twenty.
Takeaway: What can anyone learn from this but humility? I already knew before reading The Snowball that Buffett wound down his partnerships in 1970 because he thought the market too over-valued to deliver an adequate return for his investors. That move alone would seal Buffetts place in history among value investors, even if he had retired.
Of course, Buffett didnt retire. He is still compounding his investments at an average rate of over 20% a year, nearly four decades later.
7. Buffett treats becoming the worlds richest man as a game
I couldnt even begin to quote examples from The Snowball showing how Warren Buffett is in it for the scorecard, not for the payday: the entire biography is a testament to it.
No sports cars or private islands for Warren Buffett even when he eventually bought a corporate jet he called it The Indefensible . For decades he bought suits from the everyman outfitter nearest his office, and his biography frequently mentions (and has photographic evidence of) his favourite threadbare jumper. And famously, his main residence is the first house he bought in 1961.
From setting that goal aged 11 of becoming a millionaire by 35, Buffett seems to treat investing as an intellectual challenge. He probably learned this from his great mentor Benjaman Graham, who seemed more bothered by being right than being rich, and for whom investing was just one of several high-end hobbies.
Buffetts inner scorecard helped him save and reinvest his money early on
Unlike Graham, however, Buffett really cares about every penny. From Buffetting a few cents off the price he paid for stocks to demanding his friends sell him shares theyd bought in companies he was interested in, right up to his close personal friendship with his rival for the title of worlds richest man, Bill Gates, Buffett really wants to have the biggest snowball.
If you were to say theres something rather peculiar about chasing money as a means to an end, I could certainly see your point. But when the recipient chooses to leave virtually all $62 billion of his winnings to charity, its hard to complain. Id rather have Buffett as the worlds richest man than the Salomon traders who almost destroyed his reputation.
Takeaway: Spend less than you earn and reinvest the difference in the stock market. Buffett may have lived a remarkable life, but that central practice is something we can all aspire to.

Sunday, August 15, 2010

Gloom begins to lift in US auto sector ...............Clutch Auto...cmp..68.65& Bharat Gears cmp..Rs 70.65

BILL VLASIC Detroit, 14 August After a dismal period of huge losses and deep cuts that culminated in the Obama administrations bailout of General Motors and Chrysler, the gloom over the American auto industry is starting to lift.
Jobs are growing. Factory workers are anticipating their first healthy profit-sharing cheques in years. Sales are rebounding, with the commerce department reporting Friday that automobiles were a bright spot in Julys mostly disappointing retail sales.
The nascent comeback is far from a finished product. Foreign competitors are leaner and stronger, accounting for more than half of all car sales in this country. The sputtering economic rebound is spooking investors and consumers alike, threatening to derail some of Detroits gains. And talks next year on anew contract with the United Automobile Workers could revive old hostilities.
Still, the improving mood here reflects real changes in how Detroit is doing business —and a growing sense that the changes are turning the Big Three around, according to industry executives and analysts tracking the recovery.
Ford made more money in the first six months of this year than in the previous five years combined. GM is profitable and preparing for one of the biggest public stock offerings in American history. Even Chrysler, the automaker thought least likely to survive the recession, is hiring new workers.
Many of the excesses of the past — overproduction, bloated vehicle lineups, expensive rebates — are gone. All three carmakers have shed workers, plants and brands. And a new breed of top management — the three chief executives are outsiders to Detroit, as is the newly named GM chief executive — says it is determined to keep the Big Three lean, agile and focused on building better cars that earn a profit.
"What weve come out of this with," said Sergio Marchionne, who runs both Chrysler and its Italian owner Fiat, "are much more rational, more grounded players making moves for the long term." The proof is emerging in dealer showrooms, where customers are buying more of Detroits cars and paying higher prices. In July, GM, Ford and Chrysler sold their vehicles at an average price of $30,400 — $1,350 more than a year ago and higher than an overall industry gain of $1,100, according to the auto research web site Edmunds.com.
With fewer factories churning out products, inventories are smaller and sales incentives like rebates and low-interest financing are gradually declining. "They were nibbling at these issues before, a little bit here and a little bit there," said Jeremy Anwyl, Edmunds chief executive. "Its just different now that they are in fighting shape." Detroit has vowed to change before, slimming down when sales slumped or pouring resources into vehicle quality to catch up to foreign competitors. Those efforts stalled or failed. But many auto analysts say the current makeover has a more permanent feel, largely because of the presence of the outsiders at the top and the lessons learned from the neardeath experience of last years bankruptcies at GM and Chrysler. Fords chief executive, Alan R Mulally, broke the mould four years ago when he came from Boeing and set out to streamline Fords bureaucracy and integrate its worldwide operations. At GM, Edward E Whitacre Jr, a former AT&T chief, has replaced dozens of top officials with outsiders and younger executives, and driven the company to make decisions faster.

The first sector to show the sign is Auto sector coming up for any economy turning around and that US Auto sector showing sign of recovery is a great news for the world.
If Auto sector is going to revive in USA and in India Auto sector booming in big way , I am bullish on this sector perticularly on Auto Anciallary sector and all knows my picks in this sector....
1)Rico Auto
2)Hitech Gear
3) Lumax Ind
4) Jamna Auto
I would like to mention Clutch Auto & Bharat Gears  here. Both are  10 paid up share and making profit available at Rs 68.65 & 70.65 respectively  are going cheap along with Jamna Auto and Hitech Gear. All 4 are still worth buying and should give multibagger returns from here on as well.Rico Auto will also start moving once the things start looking up ...like coming in profit....

Friday, August 13, 2010

I am back.......

I am back to work.I am back to USA.
One of the reader gave the link of "ET Now Market Summit 2010" and I was able to see what Chris Wood of CLSA and RJ spoke.I would have liked to hear and see what Shankar Sharma, Manish Chokhani and Samir Arora spoke.If anyone can post that link I willbe gratefull to them.
Now coming back to what I heard what Chris Wood Spoke and what RJ spoke....I am writing it down here ...
1)" Fundamentally Silly" to worry about inflation....that is very important sentence.These is a reply to all those who keeps worrying on Inflation.As RJ righly pointed out that every dog knows there will be inflation and then deflation but market do not moves as per them.
Bottom line,don't read too much on when the Guru's speaks out pessism.
2)According to Chris Wood, India can grow at 9% for next 5 yrs .That is huge.As Rakesh pointed out that with such a big country, 9% growth is too much world can ignore not to invest in India...that is the finer print to understand....
3)I saw one clipping when I was in India, of Manish Chokhani saying, that Chris Wood says that even if world collapse again , India still will be insulated, because India has got 40,000 tonnes gold with the people....and that makes it worth $1 trillion....that is huge huge.....so the cat is out....I have been trying to figure out how much GOLD people of India possesses......I got it this time...and am extremly excited to hear that......40,000 tonnes GOLD wow!.....How many countries poeple have this kind of Gold ?
4)Chris Wood says India has decoupled......and I think that is the decoupling we are talking of.That is a great sign for us....
5)Chris Wood says, India is not cheap but also not expensive.When he says this remember that he talks of MSCI Index stocks or A gr stocks and not B gr stocks......
6) Chris Wood advice to buy Dollars......I think it gives all answers for any sceptism......

Rakesh has been bullish on India and that he says in open.I have been bullish on India and that is open too!He says that we will touch a new high by Dec or by next calender year , means Mar 2011.Now when market makes a new high it is obvious that it will not cross 21k but also go up much more then that.
Now it is your call what to do and what to buy.....but as I have written many times, this year is turning out to be the year of Small/mid/penny stock.I am seeing many stocks making 52 week high.Many of these are manupalated stocks and many have stories in it.......the key is we need to be there in it and need to book profit as well to capitalize the gain.....

Thursday, August 5, 2010

CWG...Common Wealth Games......

What a fiasco?Shame India!
Only 2 months left for CWG to start and we are still nowhere near to the completion of 10% of infrastruture.Kudos to Suresh Kalmadi.
I have been hearing and viewing all this mess since last 2-3 days and let me write that I am shocked to see this.Every MP wants to make money.We have seen Madhu Koda's case of Rs 900 cr  cash found in a bank a/c of Mumbai br.We have seen gunny bags of Sugar hide in a godown and thus taking the sugar prices up and Mr.Sharad Power was laughing in parliament.
Congress is not able to find out what is what?Whether the allegation made by Sushma Swaraj and whether the finding of Headlines Today were true or not and punish the culprit.That paved way to Suresh Kalmadi doing wrong things and making money from this deal.The money at stake for the infrastructure is no less then WHOPPING.....Rs 30,000 CR!Wow! and what people wants to make out from it? Rs 29,000 cr?They even don't want to spend even 50% of the allotted money?They all wants everything in pocket?
A Tissue paper role cost was shown as Rs 4400?
Shady what ever work done for CWG.I am seeing the pictures on TV.And Suresh Kalmadi coming out to justity the cost shown for tissue paper role for Rs 4400?
What image we are going to create at International level?Congress ,Mr Manmohan Singh ,.Mrs Sonia Gandhi....do you understand what will be the message we are sending to the global society?
This is something terrific....I am seeing.Seems like we do not care atall for our country.It is all about making money.That is at the centre stage.
Alloting Rs 30,000 cr for CWG seems to be a delibarate thing.The amt is so big so that those at the helm of affairs can show some atrocious bills like showing some enormous price for tissue paper and do away with it.These monies are to be pocketed .
There is a fear that CWG has to be delayed due to the incomplete work done.That will be a shame on our part.
I have been writing here time and again, we lack in Planning and then Execution.The whole country works like that.All the projects are delayed and the cost overruns.We as a poor country would like to save the money and those money can be spend on poor people and I am seeing we are doing the opposite.Over running the cost and spending those money which people paid as TAX.......
I donno when people and government will understand the value of discipline.Completing project in time makes a huge huge difference.New project can be started in right earnest and we prosper.
It was predicted that in 2020 , India will overtake USA in consumer  growth  and economical growth.This is how we are going to overtake USA?
The biggest problem with us is we are hypocrates.We show we are in for big but we are not doing the right things at right time.After so many charges , how can Mr Kalmadi be still there as a minister?But I am not surprised because when Madhu Koda and Sharad Power  have no explanation to give to the people of India , why Mr Kalmadi should resign.
What steps Congress has taken to unearth all these charges against Madhu Koda and Sharad Powar?Set up a committe which will ultimately come out with a clean cheat?
Not doing nothing in case of Madhu Koda and Sharad Power has made Mr Kalmadi fearless.
What answer we will be giving to the international community?
I read just few days back, when Mr Cameron , UK PM was suppose to visit India...he was briefed by the his cabinet and media that if he wants to clinch a deal from India . he is not to utter a single word on POVERTY AND CORRUPTION...and should talk of  NEW INDIA only.......
Isn't that a shame for us?This also implies that West knows everything but are keeping the eyes closed to get the contracts and orders.What a paradox we are seeing !
Where I live here in India, next to that is a Ril Super Store and I was surprised to see that Ril has bought that store from someone else without taking care that there is at all no parking place for vehicle! The scooters, cars, bicycles all are parked on the road and there is no way the running traffic can go smoothly!
How can a Co like Ril can buy a store where there is no parling place for the customer who comes for shopping?If a Co like Reliance can do like this what to ask for other Cos?

Nemish Shah, Ramesh Damani, Radhe Kishen Damani.......

One of the reader has asked which Nemish Shah RJ is talking of, whom he respect as an investor.
Well, first we will look at some big investor who invest big and make money also big.
1)Rakesh Jhunjhunwala( we all know him)
2)Ramesh Damani( comes frequently on CNBC and speaks his view)
I have big respect for both of them.Even though Rakesh do not speak on where he is investing, he atleast comes out and speak on how market will do and that helps us immensly in taking decision.
Ramesh Damani is a gem of a person who not only comes on CNBC to speak on market course but also comes on Money Control site for chat on every tuesday at 4 pm to give answers of queries of his followers as well as gicving some new ideas on stocks.....that is a very wonderful thing he is doing.A person of Ramesh Damani stature is coming to people and share his ideas is very big thing.
3)Ramdeo Agarwal(Motilal Oswal, known for his pick of Hero Honda)
5)Atim Kabra(HNI)
Now I will be writing 2 more names one whom Rakesh always speaks about , but one has never seen him anywhere and he is RKD, known as Radhe Kishen Damani.He is also known as Old Fox and also known as person in White and White as he always wear white cloths.
Rakesh says RKD is his mentor.RKD taught him how to trade.
If some one can see the video of Rakesh speaking, on his 50 years, we see his brother speaking for him, his sister speaking for him , then his close coiterie Utpal Steh speaks, His close freind Lashit Goel speaks and then one can see RKD speaks for him as well and he comes 2-3 times to speaks on Rakesh and that is the only time RKD has come on TV......He came on for the first time ......
Now coming to ramesh query, which Nemish shah Rakesh was talking.
There are Nimish Shah of Fortune Capital, Nimesh shah of ICICI and Nemish Shah of Enam Sec.There must be others as well but I know these 3 ofcourse not personally.
Now Whom Rakesh is referring whom he respect as Nemishbhai Shah is tyhe owner of Enam Sec.Actually,Manu Manek, brother of Vallabh Bhansali and Nemish Shah started Enam sec in around 1980.Manu Manek was the mentor of Nemish Shah just like RKD is the mentor of Rakesh.
The name Enam came from first two word of Nemsih viz: NE but they made it E first and N second viz:EN, so was Manu,Viz: MA again same, alter it as AM.....means ENAM.......
Nemish Shah is Media shy and never comes on TV.I can say that both RKD and Nemish shah must be of same age....57-58....
The only time I saw Nemish Shah in a picture was in Harshad Mehta time in Business India Magazine with Harshad hand going round on Nemish Shah shoulder and both standing side by side......
So, the Nemishbhai whom Rakesh is respecting as an investor is the Nemish Shah of Enam Sec .......
I hope these clarifies who is who.......

Sunday, August 1, 2010

Markets may hit a new high, Titan best pick: Jhunjhunwala

On July 22 when Nifty touched a 30-month high of 5442, experts and investors — both foreign and domestic, began betting high on Indian markets which has shown a remarkable recovery. With corporate India announcing generally good first quarter results, the scenario appears promising and inviting.
India’s own Warren Buffet Rakesh Jhunjhunwala is the original bull of Indian markets. His optimism is palpable when he says: "The way the market is technically rallying and if there is a good monsoon, I wouldn’t rule out 6300."
However, according to him at 5400, lots of people are left out of the rally as they are waiting at the sidelines for a buying opportunity. His acumen in picking stocks has influenced many. On turning 50, Jhunjhunwala laments on the stocks with which he is emotionally attached to and which helped him made money.

In an interview with CNBC-TV18’s Managing Editor, Udayan Mukherjee, Jhunjhunwala said that Euro is being overplayed. He said that India’s economic growth cannot be suppressed.
Following is the transcript of an interview with Rakesh Jhunjhunwala on CNBC-TV18. Excerpts:
Mukherjee: Do you think we are breaking out of this range, the one 12-15 month range that we have got stuck?
Jhunjhunwala: I think we will breakout, whether we have broken out or not, ultimately we will. And I also think that Euro is being overplayed. The manufacturing index in Europe has surprised everyone. I think whatever crises have been created by Euro and by the Chinese perception, I think that is getting reversed decisively.
I personally think that there is going to be a double dip, may not be a recession, but it will be slowing of growth. But I think it is better for India that the world grows at 1% and India grows at 8%, rather than the world grows at 2%, and India grow at 9%.
I think India’s economic growth cannot be suppressed. I think we have good government, they would do something, at least there is a will. I don’t know how much they will be able to do. So I remain the eternal bull. At the same time, I personally feel that there is going to be uncertainty maybe 12-24 months later.
Mukherjee: 12-24 months later?
Jhunjhunwala: Could be because today the problems in Greece, Portugal or in Spain are for real. Now the question is when will they blow off. See one thing is a fact, I feel personally that American growth cannot be more than 1-1.5% for the next five years for the simple reason they have to save, and they have to under leverage. But even if growth slows down, if software exports hold and if commodity prices are reasonable, what is India going to do with the world.
Mukherjee: So you think you could have a 1% US growth in the next one year and India could be heading towards a new high?
Jhunjhunwala: Absolutely, why not?
Mukherjee: Do you think it will happen?
Jhunjhunwala: I think it can happen.
Mukherjee: So when will you see signs of that?
Jhunjhunwala: We are already seeing signs today, every broker whether it’s Goldman Sachs or Credit Suisse, all have downgraded US economic growth. India is now at 24 months high, China is rebounding. I have learned in life when anything tries to outperform or go against public opinion, the initial reaction is always contempt, and people join the party only at a later stage. So I think that could be happening in India.
Mukherjee: Do you think a lot of people are left out at 5,400 plus, a lot of people are still out?
Jhunjhunwala: What do you think?
Mukherjee: I think yes. What do you think?
Jhunjhunwala: I also think the same.
Mukherjee: You sense angst when you talk to people because everybody has been waiting for a big dip to buy, still not coming?

Jhunjhunwala: Look at the call pricing. If you look at the call for a stock, it’s unbelievable. That itself is an indicator of what low expectations people have, and markets are showing absolute opposite. I think it would be a golden opportunity. We could be on the brink of something big.

Mukherjee: You think we could have a high this year also?
Jhunjhunwala: Who knows.
Mukherjee: Possible, you think?
Jhunjhunwala: Surely.
Mukherjee: 6,300, this year?
Jhunjhunwala: I don’t know 6,300. But, yes, we could have a new high, the way the market is technically and if we have good monsoon, of course there are a lot of ‘ifs’, but I wouldn’t rule it out.
Mukherjee: Do you think we have a floor at 4,700-4,800 for the Nifty now?
Jhunjhunwala: I think we have floor at 5,100.
Mukherjee: No, I said 4,700 because that’s been the floor for the last 12-15 months. You do not see going there again?
Jhunjhunwala: I do not think, unless and until something untoward happens.
Mukherjee: Do you think 5,100 is a new floor for the market?
Jhunjhunwala: I would think so.
Mukherjee: So you are superbly bullish. Why you are saying you are cautiously bullish, 10% chance of double-dip?
Jhunjhunwala: I think two opinions. One is maybe the next nine months to one year and one is maybe the period beyond that.
Mukherjee: That second view I know, you tell me about the first nine months?
Jhunjhunwala: First view, I am bullish, second view, I am cautious. I think in nine months to one year, nothing is going to happens which is very untoward in the Western world. Beyond that, I cannot say and then India will get affected, if there are major crises in banking or there is actual recession, means that there is negative growth, all that which I do not rule out.
Mukherjee: But first we will see a high and then the correction will come, not the other way round you are saying?
Jhunjhunwala: My feeling is we could see it in six-nine months. What I personally feel is that in Western world and Europe you are not going to see major problems in the next 9-12 months. Beyond that, we do not know.
Mukherjee: I want to come back to your portfolio, since we are talking 50 years, what is the best stock you have ever owned, your all time favourite stock?
Jhunjhunwala: Titan, I wear it on my hand.
Mukherjee: Just because it has made you money? There is no other emotional attachment to any other stock?
Jhunjhunwala: Look at the company.
Mukherjee: It has done superbly, phenomenally well; I thought it might be a close contest with Lupin, which is another stock, which has made you a lot of money?
Jhunjhunwala: No, I think a stock in which I have emotions is in Karur Vysya Bank.
Mukherjee: Why? What is the story?
Jhunjhunwala: Look at the sheer performance. There is 21% compounded growth in profits for the last ten years, comes from a place nobody knows called Karur. It is not a small bank now, its profitability is about USD 90 million, growing at 20-25% and I own it since 1992-1993-94.
Mukherjee: You haven’t sold anything?
Jhunjhunwala: No, I haven’t sold. I think this investment has given me I don’t know how much thousand percent return.
Mukherjee: In the listed space, one stock which really makes you angry that you bought that?
Jhunjhunwala: Infomedia18. I sold it just about six months back. But if you look at the stats, special interest publication magazine with a market in America, leadership in yellow pages and I held the stock for at least for seven-eight years.
Mukherjee: Eight years?
Jhunjhunwala: May be seven-eight years and then I sold it, maybe with some loss. Though I think good industry, good positioning, but I never made money.
(Note: Web18, which owns Moneycontrol.com and Indiaearnings.com, belongs to the Network 18 Group).
Mukherjee: You bought VIP recently, what attracted you to that story?
Jhunjhunwala: It is a no-brainer in terms of growth. In travel, it dominates. I started buying it at Rs 65. My average cost would not be more than Rs 120 or maybe less. So, it is a no-brainer, according to me.
Mukherjee: What do you think of banks? You have never spoken about that, it is a big industry, you have spoken once or twice about State Bank to me in the past, are you bullish or bearish, because it seems like the bellwether in the system right now?
Jhunjhunwala: I was very bullish on State Bank, but now I am negative on the stock because I don’t like a bank who cannot provide for its bad debts. They are under providing every quarter and they need time from RBI to make 70% provision. But one thing they may have upside and uprun now, but over a medium time period all of them will need capital, which is one thing, which will dilute returns.

Mukherjee: You were speaking about government policy, I remember you telling me about IOC some one-and-a-half years back, were you holding it from then, did it work out finally?

Jhunjhunwala: I was holding some shares but I have sold it. I did not make much money, and I made money after this decontrol. But this was inevitable, it has to happen.
Mukherjee: But you are out of it now?
Jhunjhunwala: I am out of it.
Mukherjee: You made your money and you left, you don’t think there is huge upside which has opened up after what the government did?
Jhunjhunwala: Essentially, the oil marketing companies were being paid entirely by the government. Only the payments were delayed, there was uncertainty and there was liquidity problem. But that is what will be solved, it’s not that the profit will go up. But because of the fact that it was an imperfect market, the value of their marketing networks are not being recognised. So now that will be recognised.