Tag Archives: BHEL

Another Fruitful Year for Share Market

For stock market in India, 2012 was a fruitful year posting biggest gain after 2009. BSE Sensex gained 26%, NSE Nifty 28% while my portfolio gained 30%. H

As at the end of the year, my most successful investments are in Wim Plast, Mayur Uniquoter, Astral Poly Technik, Hawkins Cooker and National Peroxide. These five stocks account for 95% of my total net gain (Unrealised gain/loss till date and realised gain/loss of 2012). All of them are in my top 10 holding in terms of current value as on 31st December 2012.

My worst Investments are in Opto Circuits, Ess Dee Aluminium, BHEL, Technofab Engg and TIL. These five stocks together swallowed 23% of my total gain (Unrealised gain till date and realised gain of 2012). Out of these, I sold Ess Dee Aluminium completely while I have considerable holding in BHEL and Technofab Engg. Loss on BHEL largely comes from shares I bought in 2010-11 and I have been buying it during 2012 which fared better. I have been buying Technofab last two years, but still at loss. I remain hopeful about the future of Technofab Engg.

In the year, my top 5 buys were BHEL, eClerx, Clariant Chemicals, Titan Industries and National Peroxide. Investments in some companies in which I had very marginal holding were completely offloaded. Top 5 in value sold are Mayur Uniquoter, Hindustan Zinc, NESCO, Tata Sponge Iron and HUL. All of them were partial profit booking and I currently hold a considerable number in some of these stocks.

As on 31st December 2012, my top ten holdings are Wim Plast, BHEL, Page Industries, Clariant Chemicals, National Peroxide, eClerx Services, Mayur Uniquoters, Astral Poly Technik, Hawkins Cooker and Titan Industries. These account for 49% of my total investments.

As the quarterly results will be coming out in coming months, a review of the investments becomes imminent.

What’s your best and worst?


Weekly Portfolio Review: 31 December 2010

With a gain of 17% for the year 2010, the Bombay stock market became the best performer among the top 10 biggest stock markets in the world.

My net return for 2010 is 12%. It is after deducting the transaction cost including provision for selling cost on my holding. The top 5 contributors in the year are Infosys, HUL, Bharti Airtel, Dabur India and Tata Global Beverages which together add up to 46% of my total gain. The top 5 losers in the year are Mangalam Cement, Suzlon Energy, Tata Communications, Divis Laboratories and L&T which ate 29% of my total gain. In fact shares that are in loss took away 48% of total gain!

My hope for 2011 is on my holding which are in red at present. They are good companies and reversal of sentiments will guide those shares to reach higher and will give me a good return. Shares that hold 40% of total value of my portfolio are in red.

I have been paying hefty charges for brokerage with ICIC Direct. My average buying cost with ICICI Direct is 1.52% including taxes. I started using HDFC securities since last week and the average cost with them is 0.97% including tax which makes considerable savings on transaction cost. My target for 2011 is to completely shift demat and brokerage account to HDFC Securities.

Good buys in my watch list

Script Sector 3 Years Target Current Price Expected Margin
Mangalam Cement Cement 400.00 132.05 203%
KSB Pumps Engineering 1,072.00 531.40 102%
Maharashtra Seamless Metal 762.00 382.35 99%
Tata Sponge Iron Metal 700.00 363.20 93%
Zensar Tech IT 318.00 166.65 91%
Oil Country Tubular Metal 173.00 96.85 79%
Honeywell Automation Engineering 4,100.00 2,364.90 73%
Divis Laboratories Pharma 1,095.00 645.70 70%
Swaraj Engines Auto Ancil 850.00 501.70 69%
Shanthi Gears Engineering 71.00 44.80 58%
Amara Raja Batteries Auto Ancil 301.60 191.20 58%
Bharti Airtel Telecom 551.00 358.40 54%
Tech Mahindra IT 1,074.00 702.40 53%

I will be buying Zensar Technologies, Oil Country Tubular and Amara Raja Batteries in coming week. My cap on top 10 companies is 50% of total value and at present it has crossed the limit. That is why I am not buying some of the top in the above list this time.

Interesting Read

Shariah 50 index: The whys and the hows

BSE and TASIS have conducted a back-test of the index from 1/1/2008. As per this the BSE TASIS Shariah index has outperformed both the BSE-Sensex and the BSE 500 over all time periods. This demonstrates that the stocks which have been selected using the Shariah conditions are fundamentally sound. http://www.equitymaster.com/detail.asp?date=1/1/2011&story=1&title=Shariah-50-index-The-whys-and-the-hows

Consumption key to India growth story

Consumption is the sole purpose of all production. When a steel manufacturer says it is adding new production capacity, one can assume that people are buying more cars and consumer durables. The same is true for housing, which propels the growth in cement, or for that matter, apparel purchases which stoke the growth in textiles. Clearly, when demand for consumerdriven products rises, manufacturing across segments takes a leap. When that happens, new jobs are created. This, again, boosts consumption. And so on. http://timesofindia.indiatimes.com/business/india-business/Consumption-key-to-India-growth-story/articleshow/7199390.cms#ixzz19nwaLAnT

Gas pipelines set to compete on price

The Petroleum and Natural Gas Regulatory Board (PNGRB), the downstream regulator in the energy sector, has proposed to give gas pipeline operators freedom to compete in overlapping areas so that consumers benefit by way of lower tariff and softer gas prices. Now, pipeline operators like Gail India and Reliance Gas Transportation Infrastructure do not have that freedom and have to charge the regulator-fixed tariff without a premium or discount. http://www.indianexpress.com/news/gas-pipelines-set-to-compete-on-price/730502/

BHEL & Bharat Electronics, two PSUs in top R&D spenders in India

In India Inc’s research and development firmament, it’s the Bharats that shine the brightest. Two public sector undertakings, Bharat Heavy Electricals Limited and Bharat Electronics Limited, are standout performers among brick-and-mortar companies in India. If you leave aside pharma companies, whose R&D average investments are traditionally higher owing to the research-driven sector they operate in, BHEL (Rs 830 crore) and BEL (Rs 292 crore) spend more on R&D than most of their manufacturing industry peers. While it is only recently that large sections of Indian industry have realised the importance of R&D, for both BEL and BHEL, it has been a part of their organisational DNA for more than a decade. http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/bhel–bharat-electronics-two-psus-in-top-rd-spenders-in-india/articleshow/7175544.cms

Industries: Looking back and ahead

As the year 2010 coming to an end, reports on various industries appeared across the news papers. Here are the links to those reports on the sectors related to our investments. http://dropssavings.com/2011/01/industries-looking-back-and-ahead/

My Portfolio

Return

My Portfolio BSE Sensex NSE Nifty
This Week 1.25% 2.17% 2.04%
This month 2.82% 5.05% 4.63%
This Year 12.11% 17.43% 17.95%
Since 1-1-2009 129.55% 112.60% 107.32%
Since 1-1-2008 54.29% 1.50% 0.90%
Since 1-4-2007 91.68% 56.89% 60.52%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 8 3.2 Years 106
Graphite India Engineering 5 3 Months 5
HUL FMCG 5 5 Months 19
KSB Pumps Engineering 5 3 Months -4
Divi’s Laboratories Pharma 5 2 Months -7

Shares I bought this month

Company Average Cost
Tata Sponge Iron 364.43
Graphite India 95.62
BHEL 2,339.58
HUL 302.01
Tractors India Ltd 690.22
Swaraj Engines 491.85
KSB Pumps 506.95
Honeywell Automation 2,406.00
Zensar Technology 163.94
Oil Country Tubular 89.66

Shares I sold this month

Company Average Price
Glenmark Pharma 353.32
Dr. Reddy’s 1722.27

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 217 2.7 Years
Dabur India 152 4.7 Years
Tata Global Beverages 103 2.2 Years
Berger Paints 154 3.8 Years
Infosys 106 3.2 Years

Top 5 most loss (absolute)

Company Return % Average Holding Period
Opto Circuits -10 2 months
Ess Dee Aluminium -5 2 month
Tata Communication -24 12 months
Mangalam Cement -16 3 months
Divi’s Laboratories -7 2 months

Archive of previous portfolio reviews

Weekly Portfolio Review: 31 December 2010

With a gain of 17% for the year 2010 in BSE Sensex, the Bombay Stock market became the best performer among the top 10 biggest stock markets in the world.

My net return for 2010 is 12%. It is after deducting the transaction cost including provision for selling cost on my holding. The top 5 contributors in the year are Infosys, HUL, Bharti Airtel, Dabur India and Tata Global Beverages which together add up to 46% of my total gain. The top 5 losers in the year are Mangalam Cement, Suzlon Energy, Tata Communications, Divis Laboratories and L&T which ate 29% of my total gain. In fact shares that are in loss took away 48% of total gain!

My hope for 2011 is on my holding which are in red at present. They are good companies and reversal of negative sentiment will guide those shares to reach higher and will give me a good return. Shares that hold 40% of total value of my portfolio are in red.

I have been paying hefty charges for brokerage with ICIC Direct. My average buying cost with ICICI Direct is 1.52% including taxes. I started using HDFC securities since last week and the average cost with them is 0.97% including tax which makes considerable savings on transaction cost. My target for 2011 is to completely shift demat and brokerage account to HDFC Securities.

Good buys in my watch list

Script

Sector

3 Years Target

Current Price

Expected Margin

Mangalam Cement

Cement

400.00

132.05

203%

KSB Pumps

Engineering

1,072.00

531.40

102%

Maharashtra Seamless

Metal

762.00

382.35

99%

Tata Sponge Iron

Metal

700.00

363.20

93%

Zensar Tech

IT

318.00

166.65

91%

Oil Country Tubular

Metal

173.00

96.85

79%

Honeywell Automation

Engineering

4,100.00

2,364.90

73%

Divis Laboratories

Pharma

1,095.00

645.70

70%

Swaraj Engines

Auto Ancil

850.00

501.70

69%

Shanthi Gears

Engineering

71.00

44.80

58%

Amara Raja Batteries

Auto Ancil

301.60

191.20

58%

Bharti Airtel

Telecom

551.00

358.40

54%

Tech Mahindra

IT

1,074.00

702.40

53%

I will be buying Zensar Technologies, Oil Country Tubular and Amara Raja Batteries in coming week. My cap on top 10 companies is 50% of total value and at present it has crossed the limit. That is why I am not buying some of the top in the above list this time.

Interesting Read

Shariah 50 index: The whys and the hows

BSE and TASIS have conducted a back-test of the index from 1/1/2008. As per this the BSE TASIS Shariah index has outperformed both the BSE-Sensex and the BSE 500 over all time periods. This demonstrates that the stocks which have been selected using the Shariah conditions are fundamentally sound. http://www.equitymaster.com/detail.asp?date=1/1/2011&story=1&title=Shariah-50-index-The-whys-and-the-hows

Consumption key to India growth story

Consumption is the sole purpose of all production. When a steel manufacturer says it is adding new production capacity, one can assume that people are buying more cars and consumer durables. The same is true for housing, which propels the growth in cement, or for that matter, apparel purchases which stoke the growth in textiles. Clearly, when demand for consumerdriven products rises, manufacturing across segments takes a leap. When that happens, new jobs are created. This, again, boosts consumption. And so on. http://timesofindia.indiatimes.com/business/india-business/Consumption-key-to-India-growth-story/articleshow/7199390.cms#ixzz19nwaLAnT

Gas pipelines set to compete on price

The Petroleum and Natural Gas Regulatory Board (PNGRB), the downstream regulator in the energy sector, has proposed to give gas pipeline operators freedom to compete in overlapping areas so that consumers benefit by way of lower tariff and softer gas prices. Now, pipeline operators like Gail India and Reliance Gas Transportation Infrastructure do not have that freedom and have to charge the regulator-fixed tariff without a premium or discount. http://www.indianexpress.com/news/gas-pipelines-set-to-compete-on-price/730502/

BHEL & Bharat Electronics, two PSUs in top R&D spenders in India

In India Inc’s research and development firmament, it’s the Bharats that shine the brightest. Two public sector undertakings, Bharat Heavy Electricals Limited and Bharat Electronics Limited, are standout performers among brick-and-mortar companies in India. If you leave aside pharma companies, whose R&D average investments are traditionally higher owing to the research-driven sector they operate in, BHEL (Rs 830 crore) and BEL (Rs 292 crore) spend more on R&D than most of their manufacturing industry peers. While it is only recently that large sections of Indian industry have realised the importance of R&D, for both BEL and BHEL, it has been a part of their organisational DNA for more than a decade. http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/bhel–bharat-electronics-two-psus-in-top-rd-spenders-in-india/articleshow/7175544.cms

Industries: Looking back and ahead

As the year 2010 coming to an end, reports on various industries appeared across the news papers. Here are the links to those reports on the sectors related to our investments. http://dropssavings.com/2011/01/industries-looking-back-and-ahead/

My Portfolio

Return

My Portfolio

BSE Sensex

NSE Nifty

This Week

1.25%

2.17%

2.04%

This month

2.82%

5.05%

4.63%

This Year

12.11%

17.43%

17.95%

Since 1-1-2009

129.55%

112.60%

107.32%

Since 1-1-2008

54.29%

1.50%

0.90%

Since 1-4-2007

91.68%

56.89%

60.52%

Top 5 holding in my equity portfolio

Company

Sector

% of Total Value

Average Holding Period

Absolute Return %

Infosys

IT

8

3.2 Years

106

Graphite India

Engineering

5

3 Months

5

HUL

FMCG

5

5 Months

19

KSB Pumps

Engineering

5

3 Months

-4

Divi’s Laboratories

Pharma

5

2 Months

-7

Shares I bought this month

Company

Average Cost

Tata Sponge Iron

364.43

Graphite India

95.62

BHEL

2,339.58

HUL

302.01

Tractors India Ltd

690.22

Swaraj Engines

491.85

KSB Pumps

506.95

Honeywell Automation

2,406.00

Zensar Technology

163.94

Oil Country Tubular

89.66

Shares I sold this month

Company

Average Price

Glenmark Pharma

353.32

Dr. Reddy’s

1722.27

Top 5 most gain (absolute)

Company

Return %

Average Holding Period

Gujarat Gas

217

2.7 Years

Dabur India

152

4.7 Years

Tata Global Beverages

103

2.2 Years

Berger Paints

154

3.8 Years

Infosys

106

3.2 Years

Top 5 most loss (absolute)

Company

Return %

Average Holding Period

Opto Circuits

-10

2 months

Ess Dee Aluminium

-5

2 month

Tata Communication

-24

12 months

Mangalam Cement

-16

3 months

Divi’s Laboratories

-7

2 months

Archive of previous portfolio reviews


Weekly Portfolio Review: 26 December 2010

BSE Sensex ended the last week higher by 209 points to close at 20,074 and NSE Nifty 63 points at 6,012. Return on my portfolio in the past week was 1.76%. Hero Honda gained 15% in the past week. Other gainers in my portfolio were TIL, Graphite India, NIIT Tech, Divi’s Lab, and Swaraj Engines which gained from 5% to 8%. In the losers pack were Opto Circuits, Dr. Reddy’s Lab, and Crompton Greaves which lost 5% to 9%.

The surge in Hero Honda was after the Hero Group management allayed fears that there won’t be any impact on minority shareholders in Hero Honda after its split from the Japanese auto major Honda. The official disclosure of details of the parting of the joint venture with Honda ended all rumours that were going around for sometimes now.

NIIT Technologies acquired an electronic health records and referral management platform called “Preferr” to initiate its foray into the lucrative healthcare segment in the US. In another tragic incident, 2 persons died after inhaling poisonous gas at a manufacturing facility of Dr. Reddy’s Laboratories.

Good buys in my watch list

Script Sector 3 Years Target Current Price Expected Margin
KSB Pumps Engineering 1,072.00 521.95 105%
Zensar Tech IT 318.00 159.85 99%
Tata Sponge Iron Metal 700.00 357.10 96%
Oil Country Tubular Metal 173.00 90.70 91%
Graphite India Engineering 200.00 105.40 90%
Divis Laboratories Pharma 1,095.00 635.95 72%
Honeywell Automation Engineering 4,100.00 2,398.05 71%
Tractors India Ltd Construction 1,150.00 683.00 68%
Swaraj Engines Auto Ancil 850.00 505.95 68%
Amara Raja Batteries Auto Ancil 301.60 182.00 66%
Bharti Airtel Telecom 551.00 348.50 58%
BHEL Engineering 3,567.00 2,284.75 56%
Tech Mahindra IT 1,074.00 688.10 56%

I will be buying Zensar Technologies, Oil Country Tubular, Divis Laboratories and Honeywell Automation in this week. KSB Pumps and Tata Sponge Iron are already within my top 5 holding.

My plan is to limit number of companies in my holding to 30. At present I have 32 companies and when I buy Zensar Tech and Oil Country Tubular this week, it will reach 34. In order to align my portfolio with my plan, I will be selling shares of four companies in coming weeks.

I will sell Glenmark Pharma and Dr. Reddy’s in this week. My return on Glenmark Pharma is 47% in 9 months and on Dr. Reddy’s Laboratories is 23% in 4 months.

News Update

I am discontinuing this part from my weekly portfolio review. However I will share on twitter any news on companies that has been mentioned in ‘good buys in my watchlist’.  You may follow me on twitter at www.twitter.com/mvalappil

Interesting Read

Margins to remain under pressure at consumer goods firms

In a year during which food inflation stayed stubbornly high for the most part, packaged consumer goods companies engaged in a pitched battle for market share, driving up volumes with price wars, new launches and increased spending on high-decibel promotions even as margins got squeezed. http://www.livemint.com/2010/12/21045902/Margins-to-remain-under-pressu.html?atype=tp

Tariff-based bids to hurt power PSUs

Competition among power companies could become fiercer soon, with the Centre all set to introduce tariff-based competitive bidding for the allocation of projects from January 6. Consumers can rejoice as the new regime would bring down electricity tariffs across the country. Private sector players like Reliance Power, Tata Power, Sterlite, JSW Energy, Adani and Lanco Infratech, who are well-equipped to negotiate prices with vendors and also have access to secure fuel supplies, would be at an advantage when it comes to grabbing projects under the new regime. However, NTPC, despite its unmatched project-execution expertise, is expected to face the heat, at least initially. http://www.indianexpress.com/news/tariffbased-bids-to-hurt-power-psus/728274/

My Portfolio

Return

My Portfolio BSE Sensex NSE Nifty
This Week 1.76% 1.05% 1.06%
This month 1.55% 2.82% 2.53%
This Year 10.72% 14.94% 15.58%
Since 1-1-2009 126.71% 108.08% 103.16%
Since 1-1-2008 52.38% -0.66% -1.12%
Since 1-4-2007 89.31% 53.56% 57.31%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 8 3 Years 102
Graphite India Telecom 6 2 Months 9
HUL FMCG 5 5 Months 12
KSB Pumps Engineering 5 3 Months -6
Swaraj Engines Auto Ancillory 5 2 Months 9

Shares I bought this month

Company Average Cost
Tata Sponge Iron 364.43
Graphite India 95.62
BHEL 2,339.58
HUL 302.01
Tractors India Ltd 690.22
Swaraj Engines 491.85
KSB Pumps 506.95

Shares I sold this month

Company Average Price

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 218 2.6 Years
Dabur India 152 4.6 Years
Tata Global Beverages 111 2.0 Years
Berger Paints 168 3.8 Years
Infosys 102 3.0 Years

Top 5 most loss (absolute)

Company Return % Average Holding Period
Opto Circuits -14 2 months
Honeywell Automation -10 1 month
Tata Communication -25 11 months
Mangalam Cement -17 2 months
Divi’s Laboratories -10 2 months

Archive of previous portfolio reviews

Weekly Portfolio Review: 19 December 2010

It is interesting to read the news reports to see the reason for up or down of share market every day – sometimes it is quite funny or weird! The last Monday Sensex closed up 183 points ‘taking support from positive Europe markets’, on Tuesday another 107 points high ‘amid hopes that dip in inflation rate will lead the Reserve Bank to halt the tightening of key policy rates for now’. However the Sensex was down by 151 points on Wednesday ‘reacting to profit booking in global peers. Rate sensitive sectors like realty and banks were under pressure ahead of Reserve Bank of India’s credit policy meet’ and then it closed higher by 217 points on Thursday, ‘after the RBI kept short term lending and borrowing rates unchanged’. Net effect is that the Sensex ended 356 points high at 19,865 and Nifty 91 points at 5,949 for the week.

In fact, one day it was up with the hope that RBI would halt the tightening of rate, next day it was down under pressure ahead of RBI’s meet and following day it went up as RBI kept rate unchanged!

The major news for the market last week was the official announcement of parting of Honda from the join venture, Hero Honda. It has been in the news for quite sometimes now and the uncertainty has ended with this formal announcement. But the ‘analysts’ are still divided on the outcome and long term effect on the company after Honda leaving the JV.

Good buys in my watch list

Script Sector 3 Years Target Current Price Expected Margin
KSB Pumps Engineering 1,072.00 501.15 114%
Graphite India Engineering 200.00 97.80 104%
Tata Sponge Iron Metal 700.00 352.95 98%
Mazda Engineering 207.00 111.80 85%
Tractors India Ltd Construction 1,150.00 631.30 82%
Divis Laboratories Pharma 1,095.00 602.10 82%
Zensar Tech IT 289.00 160.00 81%
Swaraj Engines Auto Ancil 850.00 481.45 77%
Tech Mahindra IT 1,074.00 669.45 60%
Opto Circuits Healthcare 450.00 280.95 60%
BHEL Engineering 3,567.00 2,304.70 55%
HUL FMCG 446.00 294.40 51%

I will be buying KSB Pumps and Tata Sponge Iron in coming week. Graphite India is within my top 5 holding, so not buying now.

News Update

Indian GSM telecom operators added a whopping 17.45 million new subscribers in November, taking the all-India GSM cellular subscriber base to 526.18 million, cellular operators’ association COAI said on Friday. Bharti Airtel, the largest GSM player, added 3.10 million new users in November, taking its total subscriber base to 149.39 million. It had 28.39 per cent market share as of the end of November, 2010, it added. – Indian Express, Dec 16, 2010

Bharti Airtel Ltd. plans to expand its mobile network coverage in Madagascar by about 25 percent in 2011 to attract customers in rural areas. The expansion will offer services to a further 5 million to 6 million people. The company plans to invest $50 million over 18 months and wants to increase customers to 3.2 million in Madagascar within a year from 2 million now. – Bloomberg, Dec 14, 2010

The Hero Group on Thursday announced that it would buyout the entire 26 per cent stake of its partner Honda Motor Company Group in Hero Honda thus breaking its 26-year-old partnership. Hero Honda will continue to produce and sell the existing models, while new models would be also launched. However, all future products will be rolled out under the new licensing agreement between Hero Group and Honda. Hero Honda brand name will also be changed over time. The new licensing arrangement signed between the Hero Group and Honda Motor Co., Japan, would also enable higher growth by giving it (Hero Group) the freedom to develop its own research and development capabilities and exploit global export and manufacturing opportunities.  The two-wheeler major will also start exporting products across the globe and look for manufacturing opportunities.  – The Hindu, Dec 16, 2010

State-run power producer NTPC may approach the government next fiscal for permission to raise funds through a follow-on public offer to part-finance power equipment purchases worth an estimated Rs 1,50,000 crore.  – The Economic Times, Dec 17, 2010

NTPC, the state-run power producer, signed a power purchase agreement (PPA) with the West Bengal government yesterday for a thermal unit it will be setting up at Katwa (Bardhaman district). “The total investment for the 2×800 Mw Katwa project will be Rs 9,600 crore, roughly around Rs 6 crore per Mw. Discussions are also going on for a greenfield (new) project at Santaldih (Purulia district),” – Business Standard, Dec 14, 2010

Public sector undertaking National Thermal Power Corporation Limited (NTPC) today signed a power purchase agreement with Punjab State Power Corporation Ltd (PSPCL) for a 2,640-Mw coal-based thermal power project at Gidderbaha, being undertaken at a cost of Rs 15,000 crore. – Business Standard, Dec 13, 2010

Gujarat plans to treble its cement production capacity in 3-5 years. Proposals have been invited from cement companies like ACC , ABG, Ambuja Cement, Emami , Indiabulls, Adani group, Ultratech and L&T and the state hopes to raise its capacity from 20 million tonnes per annum to 70 million tonne. – The Economic times, Dec 17, 2010

Interesting Read

Record car sales mark 2010 for Indian auto sector

Record sales made 2010 a special year for automakers in India, which also saw the iconic Maruti 800 take a bow from big cities, Hero split with Honda and demand for the promising Nano sputter following a string of accidents. For a country whose economy has been expanding at near 9% rate, it was not surprising that automobile sales broke all records between July and October to average a growth of 30%. Such was the appeal of the country and the appetite of the Indian motorist that Bugatti launched its Veyron 16.4 Grand Sport, which at Rs 16 crore became the costliest car in India, while other niche marques Aston Martin and Spyker Cars said they too would drive in soon. http://www.hindustantimes.com/Record-car-sales-mark-2010-for-Indian-auto-sector/Article1-640211.aspx

Car Trouble In India

India’s automobile industry has raced from a crippling slowdown to scorching growth in less than two years. But a severe shortage of parts is applying the brake in this otherwise rosy journey. http://www.forbes.com/2010/12/15/forbes-india-auto-industry-faces-ugly-turn.html

FMCG cos fastracked expansion in 2010

A total of 13 acquisitions in 2010, mostly global, that is how Indian companies announced their arrival in the global FMCG space as they looked to fastrack their way to international expansion. Led by Godrej, which had seven acquisitions on its account, domestic firms, including Marico (2 buyouts) and Dabur (2 acquisitions) and Emami (1 buyout) went on a global buying-spree during the year. The total valuations of the acquisitions could not be ascertained as the firms decided to keep it under wraps except in one or two cases.  http://www.indianexpress.com/news/domestic-fmcg-cos-fastracked-expansion-via-buyouts/726409/

Food in the fast lane

Although the market for ready-to-eat (RTE) and ready-to-cook (RTC) foods is still nascent, the fact that there is heightened activity from brands in both these segments points to the opportunities they see in them. While there is a lot more in Indian cuisine in RTE, RTC foods are more about non-traditional foods such as soups, noodles and pasta; vermicelli is also popular. For instance, Maggi is seeing some serious competition from big and small, national, regional and retail brands now. http://www.hindustantimes.com/Food-in-the-fast-lane/Article1-637647.aspx

HUL: from survival to revival

A year ago, India’s largest consumer firm by revenue seemed to be floundering. Here’s how the company achieved a turnaround. http://www.livemint.com/2010/12/13220503/HUL-from-survival-to-revival.html

Telcos unlikely to start tariff war in 3G

Consumers awaiting high-speed third-generation (3G) services should be ready to shell out a premium for data as telecom players gear up to rollout their services over the next few months. Industry experts say the price war fought during the 2G days will not hold true for the 3G services considering the hefty prices that operators have paid for acquiring licences. http://timesofindia.indiatimes.com/business/india-business/Telcos-unlikely-to-start-tariff-war-in-3G-/articleshow/7097008.cms

All that’s cheap is not good

Avoid buying stocks based on cost alone. Highly priced stocks may be expensive but provide better returns. Whenever we buy a product or service, we look at its cost. Cheaper products seem more affordable and hence attractive to buy. The same applies to stocks. Low-priced ones attract more buying interest. However, do they give good returns? One must know how to compare stocks, the pricing and how to find value for money. http://www.business-standard.com/india/news/all-that%5Cs-cheap-is-not-good/417884/

My Portfolio

Return

My Portfolio BSE Sensex NSE Nifty
This Week 1.46% 1.82% 1.56%
This month -0.21% 1.75% 1.46%
This Year 8.80% 13.74% 14.38%
Since 1-1-2009 122.78% 105.92% 101.04%
Since 1-1-2008 49.74% -1.69% -2.15%
Since 1-4-2007 86.03% 51.96% 55.66%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 8 3 Years 97
Graphite India Telecom 5 2 Months 1
HUL FMCG 5 5 Months 12
Mangalam Cements Cements 5 3 Months -17
Swaraj Engines Auto Ancillory 5 2 Months 3

Shares I bought this month

Company Average Cost
Tata Sponge Iron 368.41
Graphite India 95.62
BHEL 2,339.58
HUL 302.01
Tractors India Ltd 690.22
Swaraj Engines 491.85

Shares I sold this month

Company Average Price

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 219 2.6 Years
Dabur India 153 4.6 Years
Tata Global Beverages 115 2.0 Years
Berger Paints 159 3.8 Years
Infosys 97 3.0 Years

Top 5 most loss (absolute)

Company Return % Average Holding Period
KSB Pumps -11 3 months
Honeywell Automation -14 1 month
Tata Communication -25 11 months
Mangalam Cement -17 2 months
Divi’s Laboratories -15 1 month

Archive of previous portfolio reviews

Weekly Portfolio Review: 11 December 2010

Concern of interest rate hike amid rise in food inflation and intensified probe into the 2G scam affected stock market negatively in the last week. Report of strong industrial production growth published on Friday helped to regain some of the loss of preceding three days. During the last week, Sensex lost 2.29% to 19,509 and Nifty 2.26% to 5,857. My portfolio lost 1.64% in the month to date.

Good buys in my watch list

Script Sector 3 Years Target Current Price Expected Margin
Graphite India Engineering 200.00 97.15 106%
Swaraj Engines Auto Ancil 850.00 474.65 79%
Tractors India Ltd Construction 1,150.00 664.75 73%
HUL FMCG 445.00 295.45 51%
BHEL Engineering 3,567.00 2,278.00 57%
NTPC Power 293.00 192.20 52%
Hindustan Zinc Metal 1,730.00 1,150.80 50%

I will be buying Swaraj Engines, Tractors India, HUL and Bhel in the coming week. Graphite India is in my top 5 holding.

News Update

Public sector undertaking NTPC today signed a power purchase agreement with Punjab State Power Corporation Ltd (PSPCL) for 2,640 MW coal-based thermal power project at Gidderbaha for Rs 15,000 crore. The plant consists of four units of 660 MW each, which would be entirely funded by NTPC. – The Economic Times, 11 DEC 2010

Country’s largest power producer NTPC has earmarked a whopping Rs 1,50,000 crore investment for sourcing equipment for its power projects in the next fiscal, the deliveries of which will be made over five years – The Economic Times, Dec 8, 2010

The board of state-run Bharat Heavy Electricals Ltd (Bhel) board has approved the company’s plan of starting a non-banking financial company (NBFC) to finance power projects, said B.S. Meena, secretary, department of heavy industries (DHI). Bhel plans to apply for a licence from the Reserve Bank of India. – Livemint, 10 DEC 2010

The Munjals of Hero Group have initiated talks with lenders to secure bridge financing for the buyout of its Japanese joint venture partner’s equity in Hero Honda. – Times of India, Dec 10, 2010

B.M Munjal promoted Hero group will buyout the Japanese partner Honda from the world’s largest two wheeler producing venture, a deal for which would signed this month. After months of negotiations, Hero group is believed to have reached an agreeemnt to acquire 26 per cent stake of Honda in the 26 year old joint venure but it is not clear at what price. – Economic Times, Dec 8, 2010

The country”s largest two-wheeler maker Hero Honda today said it has hiked the prices of its models in the range of Rs 500- Rs 1500 to offset the rising input costs. – The Economic Times, Dec 8, 2010

The Hero Group is in the process of scouting for technology partners in Europe and South East Asia given that the company has reached an agreement with Honda Motor Co to end its partnership in producing motorcycles. The technology agreement between Hero and Honda for bikes expires in 2014.  – NDTV, Dec 7, 2010

Opto Circuits India has announced that Cardiac Science Corporation, the wholly owned subsidiary of the company and a global leader in automated external defibrillator (AED) and diagnostic cardiac monitoring devices, added two electrocardiographs (ECGs) under its Burdick brand, known for its accuracy, reliability, and ease of use. The ECGs, available only in the US, deliver built-in, bi-directional communication so customers can connect to leading EMRs. – India Infoline, Dec 10, 2010

Andhra Pradesh-based Amara Raja Batteries on Friday said that it is scouting for locations to set up a new manufacturing unit in the Northern part of the country which is likely to be operational by 2012.

Amara Raja Batteries Ltd, the technology leader and one of the largest manufacturers of lead acid batteries in India, today unveiled Amaron Volt TM, a specialized storage battery for the Indian telecom industry in the era of 3G & BWA enabled Data driven market and Mobile Internet.  Availability of assured source of Green Energy even in rural and harsh outdoor conditions is what Amaron Volt TM offers. Amaron Volt TM, a 2V high integrity series product is the latest VRLA offering from Amaron Hi Life range to meet the emerging demanding applications requirement of reliable backup power in Indian telecom market. – Business Standard, Dec 10, 2010

Electric vehicle-maker, Mahindra Reva Electric Vehicles , today launched its Revai priced at Rs 3.10-lakh (ex-showroom Pune) and is targeting tripling its sales in the next 12-18-months. – Economic Times, Dec 10, 2010

GAIL India has proposed to set up 5,500 km of gas connectivity over the next two-three years investing USD 4 billion, a senior company official said today. Economic Times, Dec 10, 2010

State-owned Gas Authority of India (Gail), the country’s largest gas transmission and marketing company, has launched 10-year bond issue to raise funds at an upper cap of 8.9% per annum. The issue, which opened on Tuesday, has got close to Rs 1,000 crore bids between 8.85 and 8.89%. According to distributors, the firm has been negotiating with arrangers for the past few days to raise funds at not more than 8.8%. However, with the cost of funds inching up, it could not get commitment from the arrangers. Interestingly, even at this rate, arrangers were not willing to underwrite the issue on their books. – The Economic Times, Dec 8, 2010

Telecom giant Bharti Airtel Friday launched its IMEWE (India-Middle East-Western Europe) cable system, an ultra high capacity fiber optic submarine cable system to deliver better connectivity requirements of Middle East and European countries to Asia transiting through India. ‘IMEWE will open a second gateway for Airtel’s customers to the European market from Asia via Mumbai,’ the company said in a statement. – Economic Times, Dec 10, 2010

Developing a technology that may change the way the world approaches cancer, Biocon Limited, in collaboration with a US-based research company, is working on creating a “therapeutic vaccine” that will help the body activate the immune system to fight cancer on its own. – DNA, Dec 7, 2010

Agri machinery maker Mahindra & Mahindra today announced a tie-up with Italy based farm equipment company Maschio-Gaspardo S.p.A for getting supply of a complete range of rotary tillage equipment. As part of this agreement between Maschio and Mahindra AppliTrac (part of Mahindra & Mahindra’s farm equipment sector) the Italian company will manufacture rotovators. This will be bearing the Mahindra brand name which will be available through both Mahindra and Swaraj dealerships. Maschio will also manufacture other kinds of rotary tillage equipment for planting, seeding, crop care and crop residue management for Mahindra AppliTrac – The Economic Times, Dec 4, 2010

Interesting Read

Pharma companies line up for clinical trials

Signalling a growing interest in new drug discovery research, some major Indian pharmaceutical firms had applied for conducting clinical trials on at least 12 new drugs in 2010. The most sought therapeutic area is cancer. The numbers are the highest ever in the history of domestic drug discovery initiatives triggered by companies such as Dr Reddy’s and Ranbaxy over a decade ago. http://www.business-standard.com/india/news/pharma-companies-linefor-clinical-trials/417751/

Input, ad costs put pressure on FMCG cos

Several mid-sized fast moving consumer goods (FMCG) companies such as Godrej Consumer Products , Dabur India , Marico and Emami have outperformed their larger multi-national peers over several quarters during the year. Acquisitions abroad and consumers’ shift from high-priced premium products to low-priced mass-market products have helped the companies post good performances. But results of the quarter to September indicate that this stand-out performance could be difficult to sustain. http://economictimes.indiatimes.com/news/news-by-industry/cons-products/fmcg/Input-ad-costs-put-pressure-on-FMCG-cos/articleshow/7068767.cms

Labour shortage in the fields drives farmers to tractors

Pawan Goenka noticed something unusual last year—tractor sales were climbing even though India had its worst monsoon in more than three decades and farm output dropped 2.8% in the three months to December last fiscal. The umbilical cord that tied rainfall patterns and tractor sales seemed to have been ruptured. The president of auto and tractor maker Mahindra and Mahindra Ltd offers an interesting explanation to this puzzle: growing labour shortages in rural India are encouraging farmers to mechanize operations. “The traditional model of predicting growth in the tractor market was only linked to the monsoon and didn’t factor in labour shortages,” says Goenka. http://www.livemint.com/2010/12/06233536/Labour-shortage-in-the-fields.html?atype=tp

Cement loosens grip again

With a meaningful demand recovery expected only around mid-CY11, analysts expect the demand-supply mismatch to prevail and stocks to underperform broader markets in the near term. After a superlative performance in October, when the overall dispatches of the cement industry grew over 18 per cent, the sector has taken a beating in November. In fact, on a sequential basis, the top five cement players have reported a 19.8 per cent drop in combined dispatches, indicating that demand is yet to pick up sufficiently to support prices. While analysts expect a demand recovery by mid-CY2011, most of them currently have a neutral to bearish view on the sector, as the valuations are not cheap. http://www.business-standard.com/india/news/cement-loosens-grip-again/417364/

What next for cement stocks?

The July-September quarter was the worst for the cement industry in the recent down cycle. Sales were unimpressive. Profits fell sharply. Every variable played spoil-sport. The extended monsoons dampened demand as construction activity remained poor. Despatches were further curtailed by unavailability of wagons and shortage of labour. Overhang of excess capacity reduced realizations. Correspondingly, an upsurge in raw material prices hindered profitability. The October-December quarter is expected to bring some relief. The month of October witnessed a sharp rebound in production and despatches. This is a normal trend after a dull monsoon season. Cement realizations also improved significantly. Fear of price hikes led dealers to build-up their inventory. http://www.equitymaster.com/detail.asp?date=12/7/2010&story=4&title=What-next-for-cement-stocks

BHEL adopts strategy to venture into newer areas

Bharat Heavy Electricals Ltd (BHEL), the country’s biggest power equipment company, has adopted a policy of forming joint ventures and concluding technical tie-ups for venturing into newer areas of business. While parking of surplus funds in productive activities is one driver for the approach, attention on diversification and risk sharing seems to be the theme behind all such collaborations. The company has a cash surplus of Rs 10,000 crore. It has floated joint ventures (JVs) and technical tie-ups or started preliminary exercises for entry into nuclear equipment, wind energy, specialised grade steel, transmission, transportation and water treatment businesses. http://www.business-standard.com/india/news/bhel-adopts-strategy-to-venture-into-newer-areas/417525/

Hero may have to play on Honda terms after break-up

Hero Group is believed to have won rights to use the Honda brand till 2014-end. As the final draft of separation between the Hero Group and Honda Motor Company gets readied, concerns are being raised on the Indian company’s ability to promote and sell its indigenous products in the long term, while managing the added burden of royalty payouts to the Japanese company. http://www.business-standard.com/india/news/hero-may-have-to-playhonda-terms-after-break-up/417263/

My Portfolio

Return

My Portfolio BSE Sensex NSE Nifty
This Week -2.35% -2.29% -2.26%
This month -1.64% -0.08% -0.10%
This Year 7.24% 11.70% 12.62%
Since 1-1-2009 119.59% 102.23% 97.95%
Since 1-1-2008 47.59% -3.45% -3.66%
Since 1-4-2007 83.36% 49.24% 53.27%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 8 3 Years 89
Graphite India Telecom 6 2 Months 1
KSB Pumps Engineering 5 3 Months -13
Mangalam Cements Cements 5 3 Months -17
Maharashtra Seamless Metal 5 4 Months -5

Shares I bought this month

Company Average Cost
Tata Sponge Iron 368.41
Graphite India 95.62

Shares I sold this month

Company Average Price

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 208 2.6 Years
Dabur India 143 4.6 Years
Tata Global Beverages 107 2.0 Years
Berger Paints 127 3.8 Years
Infosys 89 3.0 Years

Top 5 most loss (absolute)

Company Return % Average Holding Period
KSB Pumps -12 3 months
Honeywell Automation -14 1 month
Tata Communication -26 11 months
Mangalam Cement -17 2 months
Divi’s Laboratories -14 1 month

Archive of previous portfolio reviews


Weekly Portfolio Review: 04 December 2010

After three weeks of decline, market turned positive past week. The investors’ hunting for bargain stocks after steep fall in the preceding 3 weeks, report of improved GDP growth for the second quarter at 8.9%, positive news of food inflation sliding to 18-month low – all helped the market to turn to positive in the past week. BSE Sensex closed at 19,967 with a gain of 4.34% and NSE Nifty at 5,993 with a gain of 4.19% for the week. My portfolio gained 2.97% in the past week and 9.83% year to date.

Hero Honda declined 5.37% in the past week on the news of huge hike in the royalty payable to the Honda while Honda offered 6% stake to Hero at a significant discount to the market price. It is in fact looting of other shareholder’s money. Current value of my investment in Hero Honda comes to 4% of my total portfolio. At present, my decision is to hold on to it, but not to add any more until the dust is cleared.

Other major news are: Opto Circuits concluded merger of US-based Cardiac Science, NTPC secured finance from a Singapore-based Bank, auto companies registered double digit growth in sales in the month of November, M&M plans to introduce SUVs in India from its subsidiary Ssangyong and gar powered variant of its Logan car, Bharti Airtel cut mobile phone call rate in Nigeria by half, Bhel received order worth Rs. 3,700 crore from Karnataka, Tech Mahindra and Geometric plan for acquisition abroad.

A complete news round-up for the past week and a collection of interesting read is given in separate posts.

Good buys in my watch list

Script Sector 3 Years Target Current Price Expected Margin
Mangalam Cement Cement 400.00 133.70 199%
Graphite India Engineering 200.00 92.35 117%
KSB Pumps Engineering 1,072.00 498.55 115%
Tata Sponge Iron Metal 700.00 352.85 98%
Maharashtra Seamless Metal 754.00 397.75 90%
Ess Dee Aluminium Packaging 942.00 504.65 87%
Divis Laboratories Pharma 1,095.00 620.10 77%
Swaraj Engines Auto Ancil 850.00 484.75 75%
Honeywell Automation Engineering 4,100.00 2,480.30 65%
Tractors India Ltd Construction 1,150.00 703.15 64%
Amara Raja Batteries Auto Ancil 301.60 185.00 63%
HUL FMCG 486.00 299.40 62%
BHEL Engineering 3,567.00 2,209.70 61%
Tech Mahindra IT 1,074.00 667.20 61%

I will be buying Graphite India and Tata Sponge Iron in the coming week. Managalam Cements and KSB Pumps are in my top 5 holding.

My Portfolio

Return

My Portfolio BSE Sensex NSE Nifty
This Week 2.97% 4.34% 4.19%
This month -2.08% -0.33% -0.41%
This Year 9.83% 14.33% 15.22%
Since 1-1-2009 124.88% 106.98% 102.53%
Since 1-1-2008 51.15% -1.19% -1.43%
Since 1-4-2007 87.78% 52.74% 56.82%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 8 3 Years 87
Bharti Airtel Telecom 5 11 Months 19
KSB Pumps Engineering 5 3 Months -12
Mangalam Cements Cements 5 2 Months -15
Maharashtra Seamless Metal 5 4 Months 0

Shares I bought this month

Company Average Cost

Shares I sold this month

Company Average Price

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 217 2.6 Years
Dabur India 148 4.6 Years
Tata Global Beverages 113 2.0 Years
Berger Paints 129 3.8 Years
Infosys 87 3.0 Years

Top 5 most loss (absolute)

Company Return % Average Holding Period
KSB Pumps -12 3 months
BHEL -12 2 months
Tata Communication -22 11 months
Mangalam Cement -15 2 months
Divi’s Laboratories -12 1 month

Archive of previous portfolio reviews


Weekly News Round-up: 04 December 2010

Here is a quick look on the news of the last week that have a bearing on the stocks that is mentioned in the good buys watch list in my weekly portfolio review. A snapshot with link of some interesting reports is appended at the bottom. Hope it will be useful to you if you follow my wathclist.

News Update

Honda Motor Co plans to sell its stake in India’s top-ranked motorcycle maker, Hero Honda Motors , and instead focus on its wholly owned subsidiary in the country, a news report said on Saturday. The Japanese automaker may earn some 100 billion yen (1.2 billion dollars) from the sale of its shares in Hero Honda, founded in 1984 with India’s Hero Group, the Nikkei business daily said. Honda and the Hero Group reached a basic accord this week to dissolve their partnership, Nikkei said, adding that they will seek final approval from their respective boards of directors later this month for the break-up. – The Economic Times, Dec 4, 2010

India’s top motorcycle maker, Hero Honda, has agreed to increase its royalty payments to Honda Motor Co to 8 percent of annual sales in return for a technology makeover and a stake sale by the Japanese firm in the venture, the Business Standard reported. The newspaper cited unnamed industry sources as saying that Honda had agreed to cut stake in the joint venture with India’s Hero Group to 20 percent from 26 percent now, and to sell the balance to Hero Group at a discount to the current market price. – The Economic Times, Dec 2, 2010

The country’s largest two-wheeler maker Hero Honda today posted sale of 4,21,366 units for November, registering a jump of 10.48 per cent over the same month last year. The company had sold 3,81,378 units in the same month last year, Hero Honda said in a statement.  – The Indian Express, Dec 1, 2010

Auto major Mahindra and Mahindra said it will launch two SUV models — Kornado and Rexton — from its Ssangyong Motor Company Limited (SYMC) portfolio by next year. The company recently announced that it has signed a definitive agreement with SYMC to acquire 70 per cent stake in the ailing South Korean auto maker for USD 463 million (about Rs 2105 crore).  – The Indian Express, Dec 3, 2010

Auto maker Mahindra & Mahindra today (M&M) reported an 18-per cent jump in its total sales in November at 26,666 units. The company had sold 22,589 units in the corresponding month last year, M&M said in a statement.  – Business Standard, Dec 1, 2010

Mahindra & Mahindra will launch the compressed natural gas-powered variant of its Logan car at around Rs 5.20 lakh, in an attempt to spruce sales of the entry-level sedan. The car, to cost Rs 56,000 more than the traditional petrol model, will be made available in only two cities, Mumbai and Delhi initially, but will be distributed in other cities such as Kanpur, Surat and Ahmedabad at later stages. – Business Standard, Dec 1, 2010

Medical equipment-maker Opto Circuits today said it will conclude the merger of US-based Cardiac Science Corp with itself in the next few days. In October, India-based Opto Circuits had announced that it would snap up cardiology device-maker Cardiac Science at a price tag of around $85 million (about Rs 375 crore). – Business Standard, Dec 2, 2010

Bharti Airtel Ltd.’s Nigerian unit cut its mobile-phone call rate by 50 percent in a bid to attract customers from rivals six months after entering Africa’s biggest telecommunications market. The move is in line with the company’s policy to reduce costs for customers, Rajan Swaroop, chief executive officer of Airtel Nigeria, said in an e-mailed statement late yesterday. The rate was cut to 12 naira ($0.08) a minute from 24 naira, according to information on its website. – Bloomberg, Dec 2, 2010

Country’s largest power producer NTPC has tied up with a Singapore-based bank for a $300 million loan for funding its financial plans in this fiscal, a senior company official said today. The loan is for seven-year period, Mr. Singhal added.  – The Hindu, Dec 1, 2010

NTPC Ltd., India’s biggest power producer, plans to place orders for generators worth at least 328.5 billion rupees ($7.2 billion) by March 31 as it accelerates capacity addition to help reduce blackouts.  The utility will buy nine generators of 660 megawatts each and the same number of 800-megawatt units, Chairman Arup Roy Choudhury said in an interview at his office in New Delhi Nov. 26. The equipment cost per megawatt is 25 million to 30 million rupees, he said. – Bloomberg, Nov 29, 2010

State-owned BHEL has bagged an order to supply the country’s first super critical 700-MW coal fire unit by Karnataka Power Corporation Ltd (KPCL) for its thermal power station (TPS) at Bellary. The order is valued at Rs 3,700 crore, BHEL said in a press release today. – The Economic Times, Nov 30, 2010

Indian technology outsourcing firm Tech Mahindra Ltd. is looking for potential acquisitions in Latin America jointly with its software outsourcing unit Satyam Computer Services Ltd. in a bid to bolster the two companies’ foothold in the region and cater to global customers. – The Wall Street Journal, Nov 30, 2010

India’s software services company Geometric Ltd is in price negotiations with a German firm for buyout and has earmarked $20-30 million for acquisitions over next three years, a top official told Reuters on Monday. – The Economic Times, Nov 30, 2010

Interesting Read

Mid-tier IT firms look to shore up onsite presence

A revival in information technology spends, rising demand and the lure of larger contracts are prompting mid-size software service firms to step up their onsite presence, especially in the United States, industry watchers said. Increasing resources at overseas locations could also shield IT companies from any potential protectionist moves by governments, while better positioning them to tap into gradually reviving IT budgets.

http://economictimes.indiatimes.com/tech/ites/Mid-tier-IT-firms-look-to-shore-up-onsite-presence/articleshow/7034520.cms

Rally in cement shares seems premature

Cement prices have weakened due to oversupply in most regions. Cement prices, up nearly 20% from April until August, fell sharply thereafter. In November, they dipped by an average of Rs.15-20/bag over August across the country, barring the eastern region. As if defying industry fundamentals, share prices of most cement firms have appreciated in the past three months. Output, too, has declined. November despatches of some pan-India players such as Ambuja Cements Ltd and UltraTech Cement Ltd are not very encouraging. They declined by 9-10% over the year-ago period. However, despatches from ACC Ltdand Jaiprakash Associates Ltd rose 5% and 13%, respectively, due to capacity addition. Demand growth, too, has been weak, partly due to the high base effect of fiscal 2010 and partly due to poor offtake from real estate and slower infrastructure growth. http://www.livemint.com/2010/12/02221446/Rally-in-cement-shares-seems-p.html?atype=tp

MphasiS bets on software products for next billion

The newest entrant into the billion-dollar club of Indian IT services companies, MphasiS, is looking at software products as a growth engine that could take it closer to the next billion. The firm has already incubated two products and is currently refining its go-to-market strategy. Executives from the company said the firm is “testing out” a hospital information management (HIM) product, designed and developed entirely for small to medium-sized hospitals in emerging geographies. According to industry watchers, hospital information system is globally a $20 billion market; the Asian market, including Japan, may be worth $4 billion. http://www.financialexpress.com/news/mphasis-bets-on-software-products-for-next-billion/717743/0

Past issues


Weekly Portfolio Review: 28 November 2010

Decline in Indian stock market benchmark index continued for the third week in a row now. BSE Sensex declined 2.29% to close at 19,137 and NSE Nifty 2.35% to close at 5,752 in the past week. The Sensex dropped 4 out of 5 working days. On Monday market was up on Irish rescue deal. Then next four days saw the sharp falls as bribery scandal involving the officials of PSU banks and financial institution unearthed.

My portfolio’s return in the past week was -2.74% and the year to date return stands at 6.66%. Shares of 11 companies in my portfolio declined more than 5% while 4 companies gained more than 2% in the past week. Amara Raja Batteries was biggest saver with 6.36% gain.

Good buys in my watch list

Script Sector 3 Years Target Current Price Expected Margin
Mangalam Cement Cement 400.00 125.50 219%
Graphite India Engineering 200.00 85.95 133%
KSB Pumps Engineering 1,072.00 505.00 112%
Tata Sponge Iron Metal 700.00 347.95 101%
Maharashtra Seamless Metal 752.00 384.80 95%
Ess Dee Aluminium Packaging 942.00 487.05 93%
Swaraj Engines Auto Ancil 850.00 470.35 81%
Tech Mahindra IT 1,074.00 625.05 77%
Divis Laboratories Pharma 1,095.00 617.80 77%
Opto Circuits Healthcare 450.00 265.55 69%
Tractors India Ltd Construction 1,150.00 680.00 69%
NTPC Power 293.00 176.75 66%
HUL FMCG 485.00 293.40 65%
Honeywell Automation Engineering 4,100.00 2,482.75 65%
Amara Raja Batteries Auto Ancil 301.60 184.00 64%
Hero Honda Auto 3,151.00 1,936.40 63%

News Update

Dr Reddy’s Laboratories Limited has signed an agreement with GlaxoSmithKline (GSK), one of the world’s leading research-based pharmaceutical and healthcare companies, to buy the latter’s oral penicillin manufacturing facility at Tennessee in the US. The financial terms of the acquisition were not disclosed. The transaction is expected to be closed within the first half of calendar 2011.- Business Standard , 28 Nov. 10

Land acquisition for second phase of National Thermal Power Corporation (NTPC) power plant coming up near Mouda may run into trouble as farmers have scaled up their demand for compensation. They are now asking for Rs 25 lakh per acre compensation and job for one member of their family.  – Times of India, 26 NOV 2010

The National Thermal Power Corporation (NTPC), India’s largest power producer, has added a 500 MW coal-fired unit at Korba in Chhattisgarh, a company statement said Friday. ‘The new 500-MW unit of NTPC’s Korba super thermal power station in Chhattisgarh has been synchronised with the grid,’ the statement said. – Sify

NTPC has set up a joint venture with the Asian Development Bank and Japan’s Kyuden International Corporation to develop renewable energy projects with a capacity of 500 Mw over the next three years. NTPC will have 50 per cent stake in the JV, while ADB and Kyuden International will contribute 25 per cent each towards the equity share capital of the company, the power company said in a statement. The initial authorised share capital will be Rs 6.5 crore and the paid-up share capital Rs 1 crore. – Sify, Nov 25, 2010

Bharti Airtel Ltd.’s Kenyan mobile- phone unit will begin rolling out 3G services in the first quarter of 2011 as part of a push for more customers and a return to profit at its unprofitable African operations.  New products will include e-mail and e-commerce services, Rene Meza, managing director of Airtel Networks Kenya Ltd., said in an interview yesterday in Nairobi, the capital. Airtel is considering subsidizing laptops and Internet-enabled handsets to drive data use in East Africa’s biggest economy, he said. – Bloomberg 23 Nov 2010

IT company Mphasis said its consolidated net profit rose by 20 per cent to Rs 1,090.75 crore for the year ended October 31, 2010, over the same period last year. Revenues rose to Rs 5,036.52 crore during the year ended October 31, against Rs 4,263.88 crore in the same period last year. – The Economic Times, 22 NOV 2010

Mahindra & Mahindra today said it has signed a definitive agreement with Ssangyong Motor Company Limited (SYMC) to acquire 70 per cent stake in the ailing South Korean auto maker at a total cost of USD 463 million (about Rs 2,105 crore). The company said in a statement that it expected the deal to be concluded by March 2011. – Times of India, 23 NOV 2010

Bharat Heavy Electricals Ltd. (BHEL) and GE India Industrial Pvt. Ltd. (GEIIPL), a 100% owned subsidiary of GE, USA, have joined hands for cooperation on Water Treatment Equipment. As per the agreement, BHEL and GEIIPL will jointly engineer and supply water treatment solutions for the Indian market. Over the term of the agreement, through joint working, BHEL will acquire the capability to address large water treatment systems based on GE Products, on its own. – Indiainfoline.com 22 NOV 2010

Eurocor GmbH, wholly-owned subsidiary of Opto Circuits India, announced today the launch of FREEWAY, the latest second-generation, percutaneous transluminal angioplasty (PTA) balloon technology designed for the treatment of critical limb ischaemia associated with peripheral arterial disease (PAD). – Indiainfoline.com 22 NOV 2010

Interesting Read

Dr Reddy’s expands horizon

Acquistion of GSK’s facility in the US marks entry into a new therapeutic segment. Already having a deal with GlaxoSmithKline (GSK) for marketing its products in various emerging markets, Dr Reddy’s Laboratories (DRL) had this week inked an agreement to buy the latter’s oral penicillin manufacturing facility at Tennessee in the US. Though the financial terms were not disclosed, the transaction is expected to be closed within the first half of calendar 2011.

http://www.business-standard.com/india/news/dr-reddys-expands-horizon/416319/

DoT gearing up to penalise telcos over network roll-out delays

Even as the government contemplates the imposition of penalties worth over Rs 135 crore on old telcos that have not completed network roll-out in circles allotted to them, the Telecom Ministry is likely to issue showcause notices to new operators for similar lapses. As per the revised figures, Bharti Airtel faces a penalty of Rs 31 crore, while the Tatas (CDMA operations) are likely to be asked to be paid liquidated damages of over Rs 40 crore.

http://economictimes.indiatimes.com/news/news-by-industry/telecom/DoT-gearing-up-to-penalise-telcos-over-network-roll-out-delays/articleshow/7005003.cms

Rural FMGC markets ready to go premium

Market research firm Nielsen has sounded out premium goods marketers to take country roads, saying the rural FMCG market will grow 10 times to $100 billion by 2025 and that the rural consumer is increasingly buying premium and convenience-oriented products.

http://economictimes.indiatimes.com/news/news-by-industry/cons-products/fmcg/Rural-FMGC-markets-ready-to-go-premium/articleshow/6985029.cms

MphasiS joins billion dollar club

Indian IT and BPO services company MphasiS, which is majority-owned by HP, has achieved the milestone of $1 billion in revenues during the accounting year-ended October 31, 2010. The company posted revenues of Rs 5,037 crore ($1.09 billion) during the period with a growth of 18.1 per cent over the previous accounting year. The Bangalore-based company took about 12 years to achieve this. With sight on the next phase of growth and bring in better alignment in its business, MphasiS has also initiated a restructuring process in partnership with global consulting firm, Boston Consulting Group.

http://www.business-standard.com/india/news/mphasis-joins-billion-dollar-club/416044/

Bharti Airtel: An emperor sized operation

Bharti Airtel is an emperor sized operation in every sense of the term, starting with the standalone gross revenues of Rs 356 bn that it recorded, to its gross fixed asset base of Rs 442 bn (that makes it all possible), to its investment portfolio base of Rs 157 bn, to its gross working capital base of Rs 93 bn, to the humungous net cash flow of Rs 127 bn that it generated, to its 22 subsidiaries and fellow subsidiaries, 2 associates, 3 joint ventures and 18 companies where the management exercises control of some sort, to the Rs 8 bn in cash and bank balances, to the 43 companies that it had related party transactions with in FY10, and the Rs 7 bn in services that it rendered to these related parties and the Rs 41 bn in services that it received in return from these related parties.

http://www.equitymaster.com/outsideview/detail.asp?date=11/23/2010&story=2

My Portfolio

Return

My Portfolio BSE Sensex NSE Nifty
This Week -2.74% -2.29% -2.35%
This month -4.91% -4.47% -4.42%
This Year 6.66% 9.57% 10.59%
Since 1-1-2009 118.39% 98.37% 94.39%
Since 1-1-2008 46.79% -5.30% -5.39%
Since 1-4-2007 82.36% 46.39% 50.51%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 8 3 Years 82
Tata Global Beverages FMCG 5 2 Years 111
KSB Pumps Engineering 5 3 Months -11
Mangalam Cements Cements 5 2 Months -20
Maharashtra Seamless Metal 5 4 Months -3

Shares I bought this month

Company Average Cost
Ess Dee Aluminium 490.76
Graphite India 93.19
Opto Circuits 297.70
Swaraj Engines 480.38
Tech Mahindra 757.83
Tractors India Ltd 710.47
Amara Raja Batteries 190.03
NTPC 197.65
Honeywell Automation 2,633.95
KSB Pumps 522.76
Mangalam Cements 146.60
Maharashtra Seamless 406.07
Tata Sponge Iron 372.62

Shares I sold this month

Company Average Price
Suzlon Energy 57.65
Blue Star 453.11
Kansai Nerolac 916.04

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 202 2.5 Years
Dabur India 137 4.5 Years
Tata Global Beverages 111 2.0 Years
Berger Paints 113 3.7 Years
Infosys 82 3.0 Years

Top 5 most loss (absolute)

Company Return % Average Holding Period
Tech Mahindra -18 1 month
BHEL -18 2 months
Tata Communication -23 10 months
Mangalam Cement -20 2 months
Divi’s Laboratories -15 2 months

Archive of previous portfolio reviews


Portfolio Review: 20 November 2010

After 4% decline in the previous week, Indian stock market benchmark index BSE Sensex dropped another 2.84% last week to close at 19585.44. NSE Nifty shed 2.99% in the week to close at 5890.30. The corruption scandal and global worries are cited as reasons for the decline. This week is beginning with political uncertainties in the wake of 2G scam!

My portfolio’s return in the past week was -2.18% and the year to date return stands at 9.66%. Shares of most of the companies in my portfolio declined in the past week with Berger Paints, Mangalam Cements, Tech Mahindra, Amara Raja Batteries and Reliance leading the losers! However Bharti Airtel and Hero Honda, which are in top 10 in my portfolio, gained more than 7% last week. The biggest news in my portfolio was the launch of new logo by Airtel.  The company crossed the significant milestone of 200 million customers.

Good buys in my watch list

Script Sector 3 Years Target Current Price Expected Margin
Mangalam Cement Cement 400.00 138.70 188%
Graphite India Engineering 200.00 92.30 117%
KSB Pumps Engineering 1,072.00 508.00 111%
Ess Dee Aluminium Packaging 942.00 487.00 93%
Tata Sponge Iron Metal 700.00 366.00 91%
Maharashtra Seamless Metal 750.00 392.50 91%
Swaraj Engines Auto Ancil 850.00 471.30 80%
Amara Raja Batteries Auto Ancil 301.60 173.00 74%
Tractors India Ltd Construction 1,150.00 676.55 70%
Divis Laboratories Pharma 1,095.00 669.50 64%
Tech Mahindra IT 1,112.00 680.75 63%
Opto Circuits Healthcare 450.00 277.10 62%
HUL FMCG 483.00 298.70 62%
NTPC Power 293.00 184.30 59%
BHEL Engineering 3,567.00 2,256.65 58%
Honeywell Automation Engineering 4,100.00 2,610.00 57%
Bharti Airtel Telecom 510.00 328.85 55%
Mphasis IT 841.00 561.15 50%

News Update

Dr Reddy’s Laboratories today said it has received approval from US health regulator to launch generic Zafirlukast tablets, used for treating asthma, in the American market. According to IMS health, Zafirlukast tablets had total sales of around USD 50 million in the US market for twelve months ended August 31, 2010. – Economic Times, 20 Nov 2010

India’s GSM subscribers base grew 3 per cent in October with the addition of 14.7 million subscribers with telecom giant Bharti Airtel alone signing over 3 million users. Bharti Airtel now gains a market share of 28.76 per cent, with 146.29 million subscribers — the highest in the country. Vodafone added 2.49 million subscribers in the country, a growth of 40 per cent as against 1.78 million the previous month to have a total of 118 million subscribers. – Economic Times

The world’s fifth largest telecom operator Bharti Airtel, has christened itself as ‘airtel’, launching a global campaign that would re-brand its operations across the world. On Thursday, company’s CMD Sunil Bharti Mittal lifted the veil off the new logo – an artistically written small ‘A’ above ‘Airtel’ with the letters in lower case – all in red against a white background. Subsequently, the brand name – Zain Telecom in Africa and Warid Telecom in Bangladesh would be changed to ‘airtel’. – The Times of India

GAIL (India) Ltd has struck a long-term natural gas supply deal with state-owned National Fertilisers Ltd and Gujarat Narmada Valley Fertiliser Company Ltd, which have decided to convert their manufacturing plants from naphtha to gas, a more efficient feedstock.  – The Financial Express

Looking to cash in on the boom in auto sales, domestic utility vehicle major Mahindra & Mahindra has lined up as many as seven new products in the passenger vehicle segment that will hit the roads over the next 15-18 months. The list includes an all-new premium SUV from its own stable and two from the recently-acquired Korean company Ssangyong , apart from new versions of Logan, the mid-sized passenger car. – The Economic Times

Anand Mahindra-led Mahindra Group, which entered aerospace last year, has zeroed in on yet another business opportunity.  The group has firmed up plans for getting into solar energy generation business and is looking to rope in a partner, which would bring in domain expertise as well as funding for the venture. – DNA

Crompton Greaves Ltd (CGL), a part of the $4 billion Avantha Group, has claimed that it has become the world’s first company to develop high range power product- 1200 KV Capacitive Voltage Transformer (CVT). The company has spent close to Rs.70 crore to develop this high range power product, which has been indigenously developed and manufactured at its state-of-the-art Nashik facility. – Business Standard

Opto Circuits (India) announced that Criticare Systems USA, the company`s wholly owned subsidiary has released its next-gen CO2N2O module. The module is a compact version of the proven Criticare Systems Poet series CO2 detection technology, which, using non-dispersive infrared technology, will measure inspired and expired CO2 and N2O gases. – Myiris

Interesting Read

Small commercial vehicles fly as rural demand strengthens

The small commercial vehicle (SCV) segment, which is growing at a rate of 18% annually on the back of strong demand from hinterland and boom in construction, retail and production sectors, has caught the fancy of commercial vehicle makers. Tata Motors is the dominant player with Ace while Piaggio Vehicles and Bajaj Auto are the other major companies.M&M has recently entered the segment with Maxximo, Force Motors and Ashok Leyland have lined up forays. General Motors plans to enter the segment in 2012. – http://www.dnaindia.com/money/report_smallcommercialvehiclesflyasruraldemandstrengthens_1468750

FMCG cos mull soap price hike

With increasing pressure on their margins, fast-moving consumer goods (FMCG) companies such as Godrej Consumer Products (GCPL) are considering taking a price hike on products like soaps. The cost of palm oil, a key raw material for making toilet soap, has risen by 30-35 % in one quarter. Although market leader Hindustan Unilever (HUL) has not yet passed on the cost escalation to consumers, industry analysts said it was only a matter of time before the company takes a price increase in toilet soaps. Read more: FMCG cos mull soap price hike – The Times of India http://timesofindia.indiatimes.com/business/india-business/FMCG-cos-mull-soap-price-hike/articleshow/6958162.cms#ixzz15vv5w18b

Unilever to halve ecological impact by 2020: Harish Manwani

Hindustan Unilever has embarked on a new journey, on the path of sustainable living. As part of Sustainable Living Plan, the FMCG major has chalked out a 10-year roadmap to halve its environmental impact in the form of reducing water usage and greenhouse gas emissions by 2020. The company, whose products touch the lives of 2 billion consumers around the world every day, in addition targets to source all its agricultural supplies including palm oil and tea from sustainable sources. http://www.moneycontrol.com/news/business/unilever-to-halve-ecological-impact-by-2020-harish-manwani_500360.html

FMCG cos see return of ‘premium’ demand

Two years after consumers began downtrading, or preferring cheaper alternatives to regular brands, the trend has reversed in the `1,30,000-crore FMCG industry. People are now uptrading, or buying premium products across personal care and foods segments, thanks to rising incomes and confidence. Companies such as Hindustan Unilever , Procter & Gamble, GlaxoSmithKline and Marico are responding to this new trend by promoting and launching a spree of premium brands across shampoos, skincare products, toothpastes, biscuits, breakfast cereals and fine cheese. http://economictimes.indiatimes.com/news/news-by-industry/cons-products/fmcg/FMCG-cos-see-return-of-premium-demand/articleshow/6944533.cms

GAIL to make waves via expansion, consolidation and diversification

GAIL India, the state-run gas transmission and marketing company, has charted a new corporate business plan up to 2020. The focus is on consolidation, expansion and diversification. It plans to increase turnover to Rs 1 lakh crore by 2020 from Rs 24,996 crore. It plans to consolidate presence in petrochemicals and renewable energy, allocate 15 per cent of annual capital expenditure for exploration and production (E&P), pick up equity in upstream LNG (liquefied natural gas) projects abroad, and pursue investments in shale gas projects in and outside India. Besides, GAIL India is keen to expand its city gas distribution business and undertake distributed generation projects along its pipelines. http://sify.com/finance/gail-to-make-waves-via-expansion-consolidation-and-diversification-news-equity-klpbFsaijha.html

My Portfolio

Return

My Portfolio BSE Sensex NSE Nifty
This Week -2.18% -2.84% -2.99%
This month -2.23% -2.23% -2.12%
This Year 9.66% 12.14% 13.25%
Since 1-1-2009 124.53% 103.02% 99.06%
Since 1-1-2008 50.92% -3.08% -3.12%
Since 1-4-2007 87.49% 49.83% 54.13%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 8 3 Years 78
Tata Global Beverages FMCG 5 2 Years 122
HUL FMCG 5 4 Months 17
Hero Honda Auto 5 5Months 5
Graphite India Engineering 5 2 Months -5

Shares I bought this month

Company Average Price
Ess Dee Aluminium 484.19
Graphite India 93.19
Opto Circuits 297.70
Swaraj Engines 480.38
Tech Mahindra 757.83
Tractors India Ltd 710.47
Amara Raja Batteries 190.03
NTPC 197.65
Honeywell Automation 2,633.95
Mangalam Cement 147.00

Shares I sold this month

Company Average Price
Suzlon Energy 57.65
Blue Star 453.11
Kansai Nerolac 916.04

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 199 2.5 Years
Dabur India 145 4.5 Years
Tata Global Beverages 122 2.0 Years
Berger Paints 114 3.7 Years
Infosys 78 3.0 Years

Top 5 most loss (absolute)

Company Return % Average Holding Period
KSB Pumps -12 2 months
Tech Mahindra -11 1 month
Tata Communication -14 10 months
Mangalam Cement -13 2 months
BHEL -10 2 months

Archive of previous portfolio reviews


Portfolio Review: 30 October 2010

Many more companies published their quarterly results in the past week. Hero Honda posted biggest drop in quarterly profit in three years. Tata Communications’ consolidated loss widened to Rs 213 crore in the second quarter. Tata Global Q2 net profit slid 82%. KSB Pumps reported a 34% fall in net profit. NTPC’s net profit declined marginally in the second quarter despite a 20% increase in its net sales. Hindustan Unilever Ltd (HUL) beat market expectations by posting a 32 per cent rise in net profit. BHEL Q2 net up 33% at Rs 1142 crore on good revenue from power sector. Glenmark Pharma net up 38% to Rs 112 cr.  Reliance Industries profit Jumped 28% as gas output and refining earnings rise. Mahindra and Mahindra reported 8% rise in quarterly profit.

In the past week, BSE Sensex lost 0.66%, NSE Nifty 0.80% and my portfolio 2.05%. In the month of October, my portfolio made a loss of 0.69% while year to date gain is 12.16%. Many companies in which I have large holding such as Bharti Airtel, Mangalam Cement, KSB Pumps, HUL etc declined 5% to 11% during the month. Dr. Reddys Laboratories, Maharashtra Seamless, Tata Global Beverages helped me to trim the overall loss with a gain of 3% to 15% during the month.

Good buys in my watch list

Script Sector 3 Years Target Current Price Margin
Mangalam Cement Cement 400.00 149.20 168%
Graphite India Engineering 200.00 93.20 115%
KSB Pumps Engineering 1,072.00 503.00 113%
Ess Dee Aluminium Packaging 942.00 471.30 100%
Swaraj Engines Auto Ancil 850.00 468.10 82%
Maharashtra Seamless Metal 743.00 417.20 78%
Hero Honda Auto 3,122.00 1,865.80 67%
HUL FMCG 479.00 294.10 63%
Tractors India Ltd Construction 1,150.00 715.00 61%
Divis Laboratories Pharma 1,095.00 691.85 58%

News Update

Reliance Industries Ltd., India’s biggest company by market value, posted its highest quarterly profit since 2007 after growing fuel demand boosted refining earnings and natural gas production rose. – Bloomberg

Hero Honda on Friday registered a 15% decline in net profit in September quarter, its biggest drop in quarterly profit in three years, on higher raw material costs, capacity constraints and increased competition. Net profit stood at Rs 505.60 crore against Rs 597.14 crore in the same period last fiscal. Net sales increased 11.8% to Rs 4,551.95 crore against Rs 4,069.60 crore in the same period last fiscal. Ebidta margin for the period stood at 13.36%. – The Financial Express

Mahindra & Mahindra India’s largest utility vehicles maker, reported a 7.8 percent rise in second-quarter net profit, as robust volumes in a fast-growing auto market mitigated higher input costs. Costs rose 4-7 percent between April and September, Mahindra’s automotive president Pawan Goenka told reporters on Friday and he expects them to increase further, which may prompt the automaker to pass on some of the rise to consumers, he added. – Reuters

World’s largest electric carmaker Reva Motors, owned by utility vehicle major Mahindra & Mahindra (M&M ), plans to enter China, hoping to cash in on a rising demand for ecofriendly cars as governments push for stricter emission norms globally. The Bangalore-based company looks to introduce its mass market model in China which promotes ecofriendly vehicles through a subsidy programme. – The Economic Times

State-run BHEL reported a 33 per cent increase in its net profit at Rs 1,142.28 crore for the quarter ended September 30 on the back of good revenues from the power sector. The company had posted a net profit of Rs 857.88 crore during the same period last year. BHEL’s revenues from power sector stood at Rs 6,965 crore during the July-September quarter, registering a growth of over 28 per cent against Rs 5,428.3 crore reported during the corresponding quarter of the last year. – The Economic Times

Biocon will invest $161 million in a facility in Malaysia, joining a number of Indian companies that have chosen to establish facilities in the South-East Asian country. This investment would be done through a strategic partnership with a Malaysian firm Biotechnology. – The Economic Times

NTPC’s net profit declined marginally in the second quarter despite a 20% increase in its net sales. This was because of rise in employee cost following pay revision and higher tax burden. The company reported a net profit of Rs 2,107 crore in the September quarter against Rs 2,152 crore in the same period last year. The company’s employee cost for the latest quarter worked out to Rs 709 crore against Rs 504 crore in the corresponding period of 2009-10. The company’s net tax burden for the latest quarter was Rs 9,216 crore against Rs 6,183 crore.  – The Financial Express

State-run NTPC will invest about Rs 20,000 crore to set up a 3,960-megawatt (Mw) coal-based power project in Madhya Pradesh. NTPC had signed a memorandum of understanding with the state government and MP Power Trading Company regarding this, the company said in a filing to the Bombay Stock Exchange. The project is likely to be commissioned during the Twelfth Five-Year Plan Period (2012-17). NTPC currently generates over 32,000 Mw, of which nearly 60 per cent is coal-based. It plans to increase its capacity to 75,000 Mw by 2017. – Business Standard

NTPC Ltd is scouting for tie-ups with global reactor manufacturers for setting up nuclear power projects on its own. The thermal power major, which already has a minority stake in a partnership with its state-owned counterpart Nuclear Power Corporation of India Ltd (NPCIL) for setting up nuclear units, also plans to firm up independent collaborations with global reactor vendors to set up imported Light Water Reactor-based atomic projects. – The Hindu Business Line

KSB Pumps has announced its September quarter results. The company has reported a 6% growth in topline and a 34% fall in bottomline on a YoY basis.

Tata Communications on Thursday reported a consolidated net loss of Rs 213.50 crore for the quarter ended September 30, 2010. The Tata Group company had posted a net loss of Rs 155.54 crore for the same period last year. The company’s total income, however, increased by 8.82 per cent to Rs 2,960.66 crore in Q2, FY’11, from Rs 2,720.48 crore in the same quarter last fiscal. – The Economic Times

Bharti Airtel and Aircel Cellular are interested in buying the yet-to-be-launched Indian wireless broadband business of Qualcomm, industry executives said, an indication that the scales are tilting in favour of the wireless technology being championed by the US-based cellphone chip maker. Bharti Airtel, India’s largest mobile phone company, is primarily interested in Qualcomm’s airwaves and permits for Delhi, complementing the 3G frequencies it won in the circle earlier this year, the executives said. – The Economic Times

Riding on the back of strong growth in domestic sales and R&D innovation, FMCG major Hindustan Unilever (HUL) has clocked a 32.2 per cent jump in net profit at Rs 566 crore in Q2 FY’11 against Rs 428 crore in the year-ago period. Net profit also included an exceptional gain of Rs 40 crore that HUL received through sale of property and restructuring of its closed units. – The Indian Express

Tech Mahindra Ltd has reported a positive earnings surprise for the September quarter, with operating profit adjusted for one-offs rising by 32.1% quarter-on-quarter. But investors are likely to have questions about the sustainability of this growth – The Livemint

Mangalam Cement disclosed a phenomenon drop in standalone net profit for the quarter ended September 2010.  During the quarter, the profit of the company declined 97.58% to Rs 8.57 million from Rs 354.39 million in the same quarter last year. Net sales for the quarter declined 28.08% to Rs 1,157 million, while total income for the quarter fell 27.76% to Rs 1,179.03 million, when compared with the prior year period. – Myiris.com

Swaraj Engines announced that its board has approved expansion program to increase its installed capacity from 36,000 engines to 60,000 engines p.a. The proposed expansion project will entail total capex of around Rs 400 million, which will be fully financed from internal resources. – Myiris.com

For the Sep 10 quarter, Swaraj Engines reported net profit growth of 13% to Rs. 10.82 crore on overall poor performance though partially offset by crash in effective tax rate. The topline grew by 24% to Rs. 86.20 crore on increased sales in engine and high tech components. However fall in OPM by 100 bps limited the growth in operating profit to 17% to Rs. 15.01 crore. The profits were further affected by fall in other income and interest income though partially boosted by crash in effective tax rate. – IIFL

Interesting Reading

Opto Circuits Acquisition of Unetixs Vascular Creates Strong Synergies for Criticare Systems

The acquisition of Unetixs Vascular’s detection and diagnostics products complements and strengthens the existing Opto Circuits (I) Ltd. product portfolio investment in Criticare Systems, Inc.’s vital signs monitoring line and pulse oximetry sensors. Unetixs Vascular is a leader in products aimed at the detection of peripheral arterial disease (PAD), a condition that is affecting a growing portion of the population in both the developed world and in emerging economies.

Read more: http://www.centredaily.com/2010/10/28/2302348/opto-circuits-acquisition-of-unetixs.html#ixzz13rJu5Ctj

Suzlon Energy in a soup

The high-level committee headed by the Chief Secretary that investigated the Attappadi tribal land scam has demanded stringent action against power giant Suzlon Energy Ltd and the provider of the land, Sarjan Realities Ltd, in its report submitted to the government. The committee recommended the dismantling and removal of all the windmills and related accessories from the site. Read more:  http://expressbuzz.com/cities/kochi/suzlon-energy-in-a-soup/219329.html

End of privileges

NTPC is bracing itself for competition as the government mulls starting mandatory tariff-based bidding for power projects allocation from January. The company is taking a fresh look at various cost components of power generation. In the current cost-plus regime, any escalation in cost from project delays gets capitalised. And electricity consumers bear the extra cost, since project delays and cost escalation are not the developer’s headache.  Read more: http://www.indianexpress.com/news/end-of-privileges/701812/

My Portfolio

Return (%)

My Portfolio BSE Sensex NSE Nifty
This Week -2.05% -0.66% -0.80%
This month -0.69% -0.18% -0.20%
This Year 12.16% 14.70% 15.70%
Since 1-1-2009 129.66% 107.65% 103.37%
Since 1-1-2008 54.36% -0.86% -1.02%
Since 1-4-2007 91.77% 53.25% 57.47%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 9 2.99 Years 78
Tata Global Beverages FMCG 6 1.98 Years 133
Bharti Airtel Telecom 5 10 months 15
HUL FMCG 5 4 Months 15
Hero Honda Auto 5 5 months 1

Shares I bought this month

Company Avg Cost
Graphite India 98.12
Mangalam Cement 162.85
Ess Dee Aluminium 499.41
Opto Circuits 313.74
Divi’s Laboratories 727.32
Tech Mahindra 770.31

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 203 2.5 Years
Dabur India 150 4.5 Years
Tata Global Beverages 133 2.0 Years
Berger Paints 152 3.7 Years
Infosys 78 3.0 Years

Top 5 most loss (absolute)

Company Return % Average Holding Period
KSB Pumps -13 2 months
Opto Circuits -9 1 month
Tata Communication -9 10 months
Mangalam Cement -8 2 months
Ess Dee Aluminum -6 1 month

Archive of previous portfolio reviews