All posts by Drops Savings

Weekly Portfolio Review: 23 January 2011

My portfolio lost 1.15% in the last week while BSE Sensex gained 0.78% and NSE Nifty 0.74%. The loss in the month to date for Sensex and Nifty is 7% and for my portfolio 6%.

Top gainers                                           Top Losers

Opto Circuits 10.88% Zensar Tech 7.11%
HCLT 6.36% GAIL 6.88%
Tata Communications 2.96% Mangalam Cement 4.99%
Ess Dee Aluminium 2.03% Amara Raja Batteries 4.99%
Tech Mahindra 1.77% Tractors India Ltd 4.21%

I bought Swaraj Engines, Bharti Airtel, Zensar Technology, Honeywell Automation and Clariant Chemicals in the last week.

So what’s next? Continue buying in instalments!

Good buys in my watch list

Company Sector 3 Years Target Current Price Expected Margin
Mazda Ltd Engineering 207.00 108.50 91%
Zensar Tech IT 318.00 167.20 90%
Honeywell Automation Engineering 4,100.00 2,394.85 71%

I will be buying all of the above in small quantities in the coming week.

Mazda Ltd is new to my portfolio. It is predominantly an engineering company producing different types of engineering equipments used by various industries. It has also ventured into food segment with brand name of BCool!

Mazda Ltd

Mazda Limited is predominantly an engineering company producing different types of engineering equipments like vacuum systems, evaporator systems, air pollution control equipment. It’s one of the largest sellers of steam jet vacuum systems and condensers worldwide.

Mazda Limited has built a strategic alliance with Croll-Reynolds Inc. USA (C-R), who is a major shareholder in Mazda Controls. Croll-Reynolds has shared a substantial amount of technology with Mazda. At its facilities in Ahmedabad, Gujarat State, India, Mazda and Croll-Reynolds work together to design, manufacture and test high quality equipments for sale to all the regions of the world.

Company’s 85-90% of export orders come from Croll-Reynolds. As on date Croll-Reynolds holds 6.8% stake in Mazda Ltd. Croll-Reynolds clients in India are being served by Mazda ltd.


Vacuum, Evaporators and Food

Vacuum division produces Steam Jet Air Ejector (SJAE) System, Chill Vactors Systems, Surface Condenser, Heat Exchanger, Feed Water Heater

Evaporators division produces Forced Circulation Evaporators, Combination Type Evaporators, Air Pollution Control Equipment

Food division produces Bcool brand soft drink concentrates, essences and jams etc and also supply for private labelling.

Consuming Industry

The equipments manufactured by the company are widely used in the petrochemicals, power generation, fertilizer manufacturing, chemical, bulk drugs, edible oil extraction, steel manufacturing and other industries.

ML’s clients include Reliance Industries, Indian Oil Corporation (IOC), Siemens, Triveni Engineering, Aventis, Clariant Group, Unilever, Kvaerner Gas Power, Bhel, Cadila Transpek, United Phosphorus, Voltas, Atul, Grasim, Aarti Group, Wockhardt, Jacobs, Sterlite, Thermax, Shasun, Unilever, Atul, and GHCL among others. ML also supplies its products to the Nuclear Power Plants at Tarapore.



Peer Group

Thermax, BEML Ltd, Alfa Laval,

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Updates on Drops Savings | Company website | BSE Market Tracker | Information at | Information at HDFC Securities

Invest in Gold Through Dubai Gold Securities

Throughout the centuries, gold has managed to become a profitable investment vehicle for millions of people around the world. Despite geopolitical instabilities, warfare, natural disasters, and economic meltdowns, this commodity has not only survived but has substantially thrived when compared to the world’s leading currencies. During the last 10 years, gold surged 338.21%. Central banks, mutual funds, and regular investors have always diversified their stock and bond portfolios with gold for the purpose of getting a great return on their investment and offset long-term inflationary concerns.


One of the most cost effective and easiest ways to invest in gold is through exchange-traded funds. Essentially, investors can purchase shares that are 100% backed by gold. The Shariah compliant Dubai Gold Securities (DGS) offer investors the ability to purchase shares that are directly tied into the daily spot price of gold. Dubai Gold Securities (DGS) are traded on NASDAQ Dubai under the symbol GOLD, and can be bought through most regulated broker dealers. There is no minimum or maximum transaction size, however, the relative level of commissions charged by your broker or financial advisor may influence the minimum transaction size.

Each Dubai Gold Securities share is equivalent to approximately one tenth of one fine troy ounce of allocated gold bullion. For each Dubai Gold Security in issue there is a corresponding amount of gold held in the vaults of the Custodian. The issuer (DGS LLP) has designated HSBC Bank to act as the independent custodian of the London based vault that stores all investor gold bullion. As of July 2010, there are 50,000 securities in issue that represent 13 uniquely identifiable London good delivery bars which are being held for investors by the custodian. DGS LLP also assesses a reasonable management fee and offers full website access to daily investor gold bar holdings. The Shariah Supervisory Board conducts regular audits of all DGS operations as well as performs physical inspections of the vault to insure continuous compliance with Islamic Law.

DGS LLP offers retail investors the unique and affordable opportunity of buying and selling gold without incurring the enormous costs associated with physical metal bar maintenance and insurance. To invest in gold through Dubai Gold Securities during these turbulent times will undoubtedly add considerable value to any portfolio. It’s important to keep in mind that gold is not affected by national fiscal policies. Most economic cycles are sensitive to non-discretionary spending, inflation or corporate sector earnings and as a result, currencies have always experienced a steady decline in purchasing power and will continue to do so in the near future.

However, gold carries no credit risk and is highly liquid. This makes it possible for investors to engage in 24 hour trading at the Nasdaq Dubai Exchange, capitalize on price fluctuations and easily increase or decrease their market exposure, as they deem necessary. Wise investors who are interested in preserving their wealth and establishing an effective hedge against the inflation should look no further than investing in gold.

Crompton Greaves – update

Crompton Greaves: Buyouts, strong cash position offer comfort – Economic Times

Crompton Greaves posted another impressive quarterly performance for March 2010. Its consolidated profits grew by 40%, despite a modest sales growth…

… The outlook for the company remains strong, as its expansion strategy through acquisition has paid off, backed by a strong cash position. It has also managed its input prices well, which dented the profits of most engineering companies. While the lack of growth in international markets is a drag on topline, Crompton Greaves has used this to its advantage though buyouts, as the targets were available at more attractive prices. Clearly, there isn’t much for the company to worry, for now.

Crompton Greaves: Global concerns emerge – Business Standard

Crompton Greaves’ consolidated financial performance in the March 2010 quarter was disappointing, as revenue grew marginally at 2 per cent to Rs 2,508 crore, compared to the same period a year ago. The domestic market, which grew at 19 per cent, supported the revenue stream…

… Moreover, there are concerns over the fate of its international business, as the Eruozone crisis might take a toll on revenue growth. The stock, like its peers in the engineering and capital goods space, looks expensive at 17 times and 15 times price to estimated earnings for FY11 and FY12, respectively. Attractive acquisitions, faster recovery in developed key markets, and unlocking value from listing of its 32 per cent group power generation company Avantha power will reinforce positive outlook and lead to further re-rating.

Fixed Deposit with Islamic Banks in UAE

Fixed deposit is one option if you need to park your savings for a shorter period, say a year or less. Fixed deposit is for a fixed period from one month to one year or even more. Conventional banks offer a fixed interest rate which varies based on the duration. Islamic banks in UAE give better return compared to its counter part in the conventional banking sector. The rate with Islamic bank is not fixed upfront, but it is declared at the end of a fixed period which is mostly every three months.  It is a profit rate which is derived from the profit they make from the investment of your fund. The profit earned on the fund is shared between bank and the depositors in a fixed proportion and the share of depositor profit is distributed among depositors periodically. Recently more and more conventional banks are offering Sharia compliant deposits and investment products.

Profit rate declared for the quarter ended 31st March 2010


1 month

3 months

6 months

9 months

1 year

Dubai Islamic Bank 3.00% 3.05% 3.10% 3.15% 3.25%
Emirates Islamic Bank N/A 3.26% 3.35% 3.53% 3.80%
Mashreq Al Islami 1.82% 3.28% 3.77% 4.25% 4.49%
Noor Islamic Bank* 3.00% 3.40% 3.65% 3.60% 3.80%
ADCB Meethaq 2.47% 3.60% 4.08% N/A 4.70%

* Noor Islamic Bank rate is as declared for the month of April 2010

Related Links:

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“I SAVE & I WIN” promotion from National Bonds

The new promotion ‘I save, I win’ announced by National Bonds gives away exciting prizes including Blackberrys,  iPhone,  iPads, Gold Coins and Gold Bars with a grand draw for 1 Kilo gold in addition to the regular weekly draws for bonds which is cashable immediately . National Bonds is the sharia compliant national savings scheme of the UAE that provides a profit based annual returns besides weekly prize draws!

The promotion runs from 5th May to 31st July 2010. There will be three draws for this promotion prizes on 29th May  and 26th June  and 31st July 2010. The grand draw for 1 kilo of gold will be on 31st July 2010. There will be a total of 163 prizes comprising Blackberry 9700 (30 numbers), iPhone  16GB (30 numbers), iPad – 16GB (60),  30 grams gold coins (30) and 100 grams Gold Bars (12) to be given away in three draws plus 1 kilo gold in grand draw.

To be eligible for the draw for Blackberry and iPhone, there should have a minimum savings in bonds of AED 1,000, for iPad AED 5,000, for 30 grams gold coins AED 10,000 and for 100 grams gold Bars AED 15,000 and for the grand draw of 1 kilo gold, minimum savings required is AED 25,000.

Prizes can be exchanged for National Bonds Savings certificates at the same value of the prizes.

Related Link:

Save with National Bonds

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Crompton Greaves Limited

Crompton Greaves one of the India’s large private sector enterprises, has diversified business model  in designing, manufacturing and marketing technologically advanced electrical products and services related to power generation, transmission and distribution, besides executing turnkey projects. The company is the single largest source for a wide variety of electrical equipments and products. With several international acquisitions, Crompton Greaves is fast emerging as a first choice global supplier for high quality electrical equipment. The company addresses all the segments of the power industry from complex industrial solutions to basic household requirements.

The company is organized into three business groups viz. Power Systems, Industrial Systems, Consumer Products. Presently, the company is offering wide range of products such as power & industrial transformers, HT circuit breakers, LT & HT motors, DC motors, traction motors, alternators/ generators, railway signalling equipments, lighting products, fans, pumps and public switching, transmission and access products. In addition to offering broad range of products, the company undertakes turnkey projects from concept to commissioning. Apart from this, CG exports its products to more than 60 countries worldwide, which includes the emerging South-East Asian and Latin American markets.

Recent Developments

Crompton Greaves Ltd just concluded an arrangement for the acquisition of 3 businesses on a slump sale basis. The first one is Traction Electronics which deals with railways as the main customer. The second one is Supervisory Control and Data Acquisition (SCADA), of which the main customers the railways, Power Grid Corporation of India, NTPC, all utilities which do the transmission and distribution of electricity. The third one is Industrial Drives which is controlling the speed of the motors for energy efficiency through a variable voltage or variable frequency drives. For the year ending is September 2010, they hope to do a sale of about Rs 115 crore. These units have an opportunity to grow compounded at an annual growth rate of 30%. In five years time this should be a major business for Crompton Greaves.

Crompton Greave’s acquisitions over last five years overseas include PTS, Pauwels, Ganz, Microsol, MSE power and Sonomatra. PTS is a UK-based electrical engineering firm with rich exposure to comprehensive electrical engineering space and diverse clientele base in the UK. Pauwels with manufacturing facilities in five locations—Belgium, Canada, the US, Ireland and Indonesia – was catering to the US and west European markets. The Hungarian switchgears maker Ganz was selling in markets like the Middle-East and Eastern Europe. Microsol Holdings in Ireland provides automated technologies for running sub-stations. France-based Sonomatra will help enhance the Company’s capabilities in the services segment of its transmission & distribution business. US-based MSE Power would help to increase its strength as a systems integrator in the engineering, procurement & construction (EPC) international business arena, particularly in the renewable energy (wind) segment. MSE recently purchased wind-turbine monitoring technology from Second Wind Systems Inc.


All economic indicators point towards the manufacturing sector being the future driver of India’s economic growth. India is today preferred destination for sourcing various engineering goods not only due to low cost but also due to high quality of products. Strong positioning in the domestic transformer market, steady profit margins despite competitive pressures and continuing inorganic growth augur well for the company’s earnings growth.

The concern is the threat of imminent competition from global players who are already in the process of setting up manufacturing facilities in India. The market is expected to remain competition with an added element of competition from imported products. Chinese and Korean players are biggest competitors for Crompton Greaves.

While European  subsidiaries have been unable to grow in 2009-10 owing to unfavourable economic conditions in Europe and North America, return to growth  is expected from 2010-11. Recent acquisition of Power Technology Solutions (PTS) will help to expand its geographical reach! PTS is also looking to tap the opportunity in the renewable energy space, a growing market in the UK.

The scenario for the Indian Economy in general and that for the Capital Goods Industry in particular has undoubtedly improved to an extent, after the political stability in the country along with the easing liquidity situation and the offshoots of recovery in the global economy. The capital goods companies catering to the Power Sector will continue to enjoy a degree of comfort, owing to the government’s thrust on this core sector. However the sector has its own set of issues, with around 49% of the planned power projects for the Eleventh Plan already running behind schedule.

Updates Company website | Market Information | News and Analysis |


Charged with global ambition

April 13, 2010

Crompton Greaves: Buy

April 4, 2010

Indian Capital Goods sector 4Q FY2010 outlook

April 8, 2010

Bharti Airtel, A good long term pick

Bharti Airtel and Tata Communications are two companies from the telecommunication sector in my watch list. Both are a good buys at the current market price with a long term perspective. Bharti Airtel current market price on 28th April is 293.80 and Tata Communication is available at 271.50. Since the market has been treating telecom sector stocks very badly for some time, its market valuation has become attractive. The current market treatment is mainly due to intense competition in the Telecom market which has resulted in aggressive price war and dented the profitability. But it is considered as a short term phenomena.

The immediate future of Bharti Airtel continues to remain pretty cloudy. Long term investments with 5-7 years horizon until when the positive effects of consolidation in the sector could be more pronounced in nature. The company is also well-placed to benefit from the 3G revolution. Post Africa’s Zain acquisition, the company is in a better position to diversify its revenue source and allay the fears of saturation in the Indian markets. Bharti Airtel’s acquisition of 15 of Zain’s African mobile networks will make it one of the five largest mobile groups in the world by subscriber connections, according to the latest Wireless Intelligence operator-group rankings.

2009-10 Result

Consolidated sales grow by 12% during FY10, 5% during 4QFY10 compared to same period last year. Growth for the full year was led by a 38% rise in revenues from the passive infrastructure segment. Revenues from the mobile services segment stands at 63% of sales and has increased by 7% from last year. Mobile subscriber base grows by 36% during the year. Total count of subscribers stood at around 128 m at the end of March 2010.  Operating margins decline by 0.5% during the year owing to higher network operating costs (as percentage of sales). Net profit drops by 1% during 4QFY10 as compared to same period last year, grows by 17% during the full financial year 2009-10. While higher interest income aids profit growth, the higher tax expenses curbs growth during the year. Exceptional items during the year and quarter relate to acquisition related costs such as advisory and professional fees directly attributable to the acquisitions in Bangladesh and Africa. It recommended a dividend of Re 1 per share.


One can reasonably expect a lot of potential growth in subscriber numbers that is still remaining in the India’s telecom industry. India added a record 20 million new mobile subscribers in March 2010. India had 584.32 million subscribers at the end of March, which indicates that 49.6 percent of Indians have mobile connections, according to TRAI. India’s largest operator, Bharti Airtel had a 21.84 percent share of the market at the end of March 2010, followed by Reliance Communications with 17.53 percent share, and Vodafone Essar with a 17.26 percent share, TRAI said.

Mobile phone operator Vodafone Essar has added 3.6 million new users in March to pip number one player Bharti Airtel in mobile subscriber additions.  Bharti Airtel and Reliance added 3 million subscribers each.

Competition and Price war

Indian mobile operators have dropped voice call rates to below 0.01 Indian rupees per second in a bid to gain market share, even as new entrants are rolling out services. These gains have come at the expense of lower average revenue per user and fewer calling minutes used by subscribers. Last year, the offer of a pay-per-second plan by a new operator triggered off a price war, leading to charges of predatory pricing by some telecom operators. In Q4 2009, new telecom operators such as MTS and Uninor extended the price wars with 30 paise per minute plans which led to many cases of multiple number ownerships and churn rates. Revenue per minute (a key measurable in the telecom industry) is expected to fall by five to six per cent.

3G Spectrum

All eyes are now on the 3G auctions in which the operators are expected to participate aggressively. Failing to win 3G spectrum in metros and Circle ‘A’ areas could place them at a disadvantage vis-à-vis competition. They would, therefore, be prepared to incur higher cash outflows.

Zain Deal

The last quarter gone by also saw Bharti Airtel entering into an agreement with the Zain Group to acquire Zain Africa assets for $10.7 billion. “In the short term, Zain Telecom’s financials may have some negative overhang on Bharti’s consolidated results but on a long term basis the same would prove to be earnings accretive. The key points to be monitored are market share gains in key geographies like Nigeria, the operational turnaround of Zain Telecom’s African operations and the acceptability and success of Bharti`s model in Africa,” Sharekhan Securities said in a recent report.

Airtel is to takeover Zain’s mobile operations in 15 African countries which cover a total population of over 450 million with telecom penetration at approximately 32 percent. As well as its home market of India, Airtel also launched in Sri Lanka in 2009 and acquired Warid Telecom in Bangladesh in January 2010, bringing its total to 18 markets, a global footprint surpassed only by the large European operator groups and its new African rival, MTN. Based on Q4 2009 pro forma data, international (non-Indian) markets will account for around 30 percent of Airtel’s total connections following completion of the Zain deal.

For an enlarged Airtel Group, the challenge is obtaining approvals. Given Airtel’s domestic market is in the midst of a next-generation rollout and calls for consolidation, managing existing operations whilst steering a pan-African purchase seems a daunting challenge. Airtel already has the experience of managing one of the fastest growing markets in the world. A major opportunity for Airtel would be to transplant their Indian pricing model into some of the low-usage markets Zain occupies to drive usage quickly and garner market share. Hard work lies ahead for the Indian company to turn Zain’s loss making operations into a profitable business venture.

New Services

Airtel digital TV Recorder

Recently, Airtel digital TV- the DTH service from Bharti Airtel launched ‘Airtel digital TV Recorder’, an enhanced Set Top Box (STB) with capability to record live television, anytime, anywhere. A first of its kind example of convergence between the mobile and TV screen, Airtel offers customers the convenience, to record their favorite shows using their mobile phones from anywhere in the world.

Airtel has also introduced the first universal remote in India, 9 interactive (iTV) applications, a multilingual EPG, low battery indicator and more that offer customers the freedom to book movie ticket or update themselves on the latest stock news.

3G enabled smart phones

Taiwan-based handset maker HTC entered into an exclusive partnership with cellullar operator Bharti Airtel to launch a 3G-enabled smartphone priced at Rs 9,990. As per the alliance, the touchscreen phone will be available in the country exclusively on Airtel networks.  With the operators gearing up to launch the 3G service by the end of this year, the handset makers are coming up with 3G-enabled handsets. Besides, service providers like Airtel and Vodafone had already launched the 3G version of Apple’s iPhone in India.

Airtel Talkies, World Sim and Khel Radio

Airtel Talkies a new service that offers previews and trailers of movies which are yet to come. It also offers all time classic movies in five languages – Hindi, Tamil, Telugu, Kannada and Malayalam.

Bharti Airtel launched this month a new SIM card for global travellers through which a customer can save upto 85% on international calls. Bharti Airtel and Radio Mirchi announced a new tie-up to offer mobile radio service, ‘Mirchi Mobile’ allowing Airtel’s mobile subscribers to listen to Radio Mirchi’s FM radio services of any region. It also launched a new value added service, ‘Khel Radio’ for the subscribers of UP East, UP  West, Bihar, Mumbai,Maharashtra, and Goa. Now the Airtel subscribers can enjoy bollywood quizzes, antakshari, pehchaaan kaun and exciting games with exotic prizes everyday. Airtel prepaid and postpaid customers can access this portal by calling 56655 at a charge of Rs 1/min.

Network expansion and upgrade

The recent $1.3 billion contract with Ericsson to supply its industry-leading portfolio of energy efficient 2G/2.5G radio base stations, circuit and packet core, microwave transmission and Intelligent Network will improve voice quality and faster data access to its customers. Bharti Airtel can now look forward to reduce time to market and enable the fast rollout of 3G services as its core and transport network will be 3G-ready. The expansion, according to the agreement, will cover some of the latest technologies within the wireless world. According to Ericsson, this will bring better quality voice to end users, support more users in using one base station, enhanced data rates using Evolved EDGE technology and other new services.


India Adds Record 20 Million Mobile Subscribers in March

April 27, 2010

Airtel launches World SIM

April 26, 2010

Bharti Airtel follows OnMobile in launching geographical barrier-free mobile radio services

April 26, 2010

Bharti Airtel launches ‘Khel Radio’ exclusive Bollywood portal

April 22, 2010

Mobile tariffs likely to go down further

Apr 21, 2010

Top 5 Stocks to Invest in Indian Markets

April 19, 2010

Bharti Airtel to become global mobile superplayer: WI

Apr 15, 2010

Record TV Shows Using Your Mobile Phone With Airtel

Apr 15, 2010

Bharti, RCom, Idea Cellular may post lower Q4 profits

April 12, 2010

Bharti Airtel Selects Ericsson for Network Expansion

April 06, 2010

Airtel Talkies brings movie content on mobiles pre-release

April 05, 2010

HTC in tie-up with Airtel for 3G smart phone handset

April 03, 2010

Pharma may log modest growth in Q4

The pharma sector is expected to log a modest performance for the quarter ended March 2010. Mid-sized pharma companies like Cadila Healthcare, Lupin, Piramal Healthcare, Biocon, Glenmark Pharma are likely to outperform sector biggies like Cipla and Ranbaxy. – A report in Economic Times says.

Aggressive product launches in the US, growth registered in the emerging markets and revival in contract manufacturing are likely to trigger this growth. Though rupee appreciation is negative for export oriented companies, the companies with foreign debts will benefit.

Read complete report of Economic Times

Related Link

Biocon | Cadila Healthcare | Glenmark Pharma | Pharma

Hero Honda 4th Quarter result

Hero Honda Motors Ltd., India’s biggest motorcycle maker, reported a better-than-estimated 49 percent increase in fourth-quarter net income as sales climbed. Profit totalled 5.99 billion rupees in the three months ended in March from 4 billion rupees a year earlier, the company said in a statement today. The company’s operating profit margin  was 17.2 percent in the quarter, according to the statement.

For the entire 2009-10 financial year, the profit soared by 74.1 per cent to Rs 2,231.83 crore. The total turnover in the last fiscal stood at Rs 15,860.51 crore, up 28.1 per cent compared to that in 2008-09. During FY 2010, the company’s total sales increased by 23.6 per cent to 46,00,130 units. The company, which had set a target of selling 40 lakh units in 2009-10, had launched nine new models and variants across segments in last fiscal.

Hero Honda will pay a final dividend of 30 rupees a share.

Related Links:

Hero Honda’s Net Income Gains 49% on Indian Motorcycle Sales: Business Week

Hero Honda’s profit up 50 per cent in Q4: Hindustan Times

More updates

Hero Honda’s Net Income Gains 49% on Indian Motorcycle Sales