Tag Archives: M&M

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 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: 13 November 2010

Indian stock market benchmark index declined sharply in the past week. BSE Sensex declined 4.04% to close at 20,157 and NSE Nifty 3.81% to close at 6,072. Some reports cited global worries of financial crisis and weak industrial output data as reasons for the crash. G20 summit in Seoul that concluded on Friday failed to take any reasonable action on the ongoing currency wars. Rate hike fears in China, payment default by Dubai group and Eurozone worries on Ireland’s worsening debt woes also added fuel to the fire.

My portfolio’s return in the past week was -2.65% and the year to date return stands at 12.11%. Shares of every company in my portfolio declined in the past week with Bharti Airtel, Berger Paints, Amara Raja Batterires, Bhel and TIL lead the decline.

Good buys in my watch list

Script Sector 3 Years Target Current Price Expected Margin
Mangalam Cement Cement 400.00 149.25 168%
Graphite India Engineering 200.00 93.70 113%
KSB Pumps Engineering 1,072.00 512.00 109%
Ess Dee Aluminium Packaging 942.00 488.00 93%
Maharashtra Seamless Metal 747.00 413.45 81%
Swaraj Engines Auto Ancil 850.00 484.40 75%
Bharti Airtel Telecom 510.00 306.05 67%
Tractors India Ltd Construction 1,150.00 695.55 65%
Amara Raja Batteries Auto Ancil 301.60 185.25 63%
HUL FMCG 482.00 301.55 60%
Honeywell Automation Engineering 4,100.00 2,581.50 59%

News Update

Costs linked to the newly acquired African operations and stiff competition at home have pulled down Bharti Airtel‘s net profit 27 per cent to Rs 1,661 crore during the second quarter ended September 2010 compared with Rs 2,263 crore in the corresponding period last year. This was the first full quarter of the African operations. – The Hindu Business Line

Bharti Airtel is going in for a mega brand change of Airtel for which the company will spend Rs 300 crores globally, sources close to the development said. The unveiling of the brand is expected next week. The new brand is expected to be splashed all across India, Africa, Sri Lanka, Bangladesh, Seychelles.  – The Economic Times

Bharti Airtel on Wednesday said it may look at listing its telecom tower subsidiary – Bharti Infratel. Bharti Infratel has 31,831 towers in 11 circles. According to analysts, the IPO can help Airtel unlock value in its tower infrastructure company. Passive infrastructure generated Rs 2,116 crore revenue for Bharti during the second quarter ended September, 30. – The Economic Times

A report that Bharti Airtel is eyeing Qualcomm’s wireless broadband business in Delhi is “sheer speculation”, Bharti’s CEO for India and South Asia said on Wednesday. – Reuters

Mahindra & Mahindra (M&M) on Thursday said that the company’s new tractors plant in South India will commence operations by financial year 2013. The plant, expected to come up close to Chennai, will produce both Swaraj and M&M brand tractors and have a capacity of 75,000 to one lakh units per annum. – The Financial Express

NTPC will commission the first unit of Stage-II expansion project of Simhadri Super Thermal Power Station by March 2011. Two units of 500 MW each in the first phase were synchronised in 2002. Simhadri, the first shore-based power plant, is adding two more units each with 500 MW by investing around Rs.5,000 crore. – The Hindu

India’s top power producer NTPC Ltd said on Friday its board had approved investing 31.94 billion rupees for a coal mining project in the east Indian state of Jharkhand. The coal block, which was allotted to NTPC in October 2004, will start production in 2012. – Reuters

Swiss drugmaker Hoffmann-La Roche (Roche) has sued Dr Reddy’s Laboratories (DRL) a fourth time, this time for patent infringement involving its osteoporosis drug Boniva (ibandronate sodium). Boniva has been a major revenue earner for Roche and the sales are estimated to be between $850 million and $1 billion. Various patents covering the drug are due for expiry between 2019 and 2023. Boniva, a once-a-month drug, is used in treating or preventing post-menopausal osteoporosis. – DNA

Amara Raja Batteries will invest nearly Rs 130 crore by September next year to hike production capacity in a phased manner and on other capital expenditures. The company, which is aiming to become a global brand also said it is considering the possibility of setting up a manufacturing unit overseas, preferably in Southeast Asia and Africa. – The Economic Times

Opto Circuits (India) Ltd. (OCI), India’s leading developer and manufacturer of patient monitoring systems and interventional products registered 30% growth in consolidated net sales to Rs. 331.38 crore for the quarter ended September 2010. Operating profit margins contracted by 360 basis points to 31.9% on the back of increase in manufacturing, Administrative & Marketing Expenses.  – IIFL

Divi’s Laboratories reported 15% decrease in consolidated net profit to Rs. 71.93 crore despite 13% increase in net sales to Rs. 255.31 crore for the quarter ended September 2010. Operating profit margins contracted by whopping 1330 basis points to 33.9% on the back of increase in manufacturing expenses and consumption cost. Thus, operating profit decreased by 18% to Rs. 87.84 crore. Other income increased by 67% to Rs. 5.63 crore. – IIFL

TIL Ltd [Formerly Tractors India] announced financial results for its half year & quarter ended 30th Sept, 2010. On a consolidated basis, during April – September 10-11, the company reported a total income of Rs. 6.42bn vis-à-vis Rs. 4.23bn in April-September last year, registering a growth of 52% over same period previous year. Profit Before Tax stood at Rs. 348mn vis-à-vis Rs. 249mn, showing a growth of 40%. Profit After Tax also grew to Rs. 243mn from Rs. 174mn, in the corresponding period- previous year, registering a growth of 40%. EPS stood at Rs. 24.31as on 30th September, 2010 vis-à-vis Rs. 16.65 as on 30th September, 2009. – IIFL

GAIL (India) plans a capex of Rs.40,000 crore for the next four years for undertaking various projects, including sourcing of LNG, a top company official said on Saturday. – The Hindu

Interesting Read

Bharti Airtel adds customers, not value

Bharti Airtel’s September 2010 quarter numbers raise doubts over the feasibility of adding new subscribers to the mobile network . The country’s largest telecom operator reported decent user additions during the quarter but failed to show any meaningful addition to the minutes of usage on its mobile network. … So far, Bharti’s stock has not participated in the broader stock market rally. It gained a meagre 2% in the past three months compared with the 14% gains in the benchmark Sensex. The benefits from the 3G launch expected in the next two quarters and a gradual turnaround in its African business are long term in nature. In the near term, however, the stock’s movement may be restricted given the lack of any fresh triggers.  http://economictimes.indiatimes.com/news/news-by-company/earnings/earnings-analysis-/Bharti-Airtel-adds-customers-not-value/articleshow/6904529.cms

Hero Honda market share falls closer to 50% mark

The market share of India’s largest two-wheeler manufacturer Hero Honda Motors Ltd may slip to below 50% as competition heats up and production lags demand, say analysts. Amid talk of a possible exit by its Japanese partner Honda Motor Co. from the joint venture, the company’s market share in the motorcycle segment dropped to 52.9% at the end of the September quarter from 60.4% a year earlier, according to data from the Society of Indian Automobile Manufacturers. http://www.livemint.com/2010/11/09214824/Hero-Honda-market-share-falls.html?atype=tp

My Portfolio

Return

My Portfolio BSE Sensex NSE Nifty
This Week -2.65% -4.04% -3.81%
This month -0.05% 0.62% 0.90%
This Year 12.11% 15.41% 16.74%
Since 1-1-2009 129.54% 108.94% 105.19%
Since 1-1-2008 54.28% -0.25% -0.13%
Since 1-4-2007 91.68% 54.20% 58.88%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 8 3 Years 80
Tata Global Beverages FMCG 6 2 Years 134
HUL FMCG 5 4 Months 18
Hero Honda Auto 5 5 months -2
Maharashtra Seamless Metal 5 4 months 5

Shares I bought this month

Company Average Cost
Ess Dee Aluminium 490.76
Graphite India 94.72
Opto Circuits 297.70
Swaraj Engines 482.21
Tech Mahindra 757.83
Tractors India Ltd 733.96
Amara Raja Batteries 197.71
NTPC 197.65

Shares I sold this month

Company Average Price
Suzlon Energy 57.65
Blue Star 453.11

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 204 2.5 Years
Dabur India 143 4.5 Years
Tata Global Beverages 134 2.0 Years
Berger Paints 136 3.7 Years
Infosys 80 3.0 Years

Top 5 most loss (absolute)

Company Return % Average Holding Period
KSB Pumps -11 2 months
Amara Raja Batteries -6 0 month
Tata Communication -10 10 months
Mangalam Cement -8 2 months
TIL -5 0 month

Archive of previous portfolio reviews


Portfolio Review: 6 November 2010

Last week saw the Sensex hitting all-time high breaking the record set in January 2008.  In the past week, BSE Sensex gained 4.86%, NSE Nifty 4.90% and my portfolio 2.67%.

Good buys in my watch list

Script Sector 3 Years Target Current Price Margin
Ess Dee Aluminium Packaging 942.00 495.00 90%
Maharashtra Seamless Metal 745.00 424.30 76%
Swaraj Engines Auto Ancil 850.00 489.15 74%
Tractors India Ltd Construction 1,150.00 738.80 56%
Divis Laboratories Pharma 1,095.00 706.55 55%
Bharti Airtel Telecom 510.00 329.45 55%
Amara Raja Batteries Auto Ancil 301.60 197.30 53%
NTPC Power 293.00 196.20 49%
Opto Circuits Healthcare 450.00 303.30 48%
Tech Mahindra IT 1,112.00 750.55 48%

News Update

Biocon Ltd., India’s biggest biotechnology company, may spin off its Syngene contract research unit as early as May 2012, Chairman Kiran Mazumdar-Shaw said. Biocon plans an initial public offering of Syngene during the next 18 to 24 months and expects to hire as many as 500 people in India by December 2011, Mazumdar-Shaw said in an interview yesterday. – Bloomberg, November 04, 2010

GAIL India Ltd., the country’s biggest natural gas distributor, posted a 30 percent increase in second-quarter profit after sales climbed. Net income in the three months ended Sept. 30 rose to 9.24 billion rupees ($208 million) from 7.13 billion rupees a year earlier, the company said in a statement to the Bombay Stock Exchange today. – Bloomberg, November 03, 2010

Graphite India disclosed a steep drop in standalone net profit for the quarter ended September 2010.  During the quarter, the profit of the company declined 28.08% to Rs 491.90 million from Rs 684.00 million in the same quarter last year. – myiris.com, November 02

Auto maker Mahindra & Mahindra (M&M) reported 34.38% jump in its total sales in October at 34,495 units. Its Farm Equipment Sector (FES) division reported a 29.35 per cent increase in tractor sales in October to 24,281 units. It also reported over three-fold jump in its two-wheeler sales at 21,204 units in October.

The country’s largest two-wheeler maker Hero Honda reported its highest ever monthly sales at 5,05,553 units in October, registering a jump of 42.75 per cent over the same month last year. The five-lakh mark is the highest ever for a two-wheeler company in India. The company launched the new Super Splendor, Hunk and Splendor Pro during the festive season.

Interesting Read

Amara Raja sees telecom batteries spurring growth

Installation of new towers by telecom companies and most of the batteries in the existing towers falling due for replacement are seen as key factors for revival of demand. Amara Raja is also eyeing the solar segment. Though details are being worked out, the official said the growth in the segment would have a positive impact in the long term. Within the automobile segment, the company is working on a capacity expansion. While the four-wheeler battery capacity would be expanded from the existing 4.2 million units to 6 million units, the two-wheeler battery capacity would go up from 2.4 million units to 5 million units. http://www.dnaindia.com/money/report_amara-raja-sees-telecom-batteries-spurring-growth_1461857

Expansion, more gas to benefit GAIL

The company has embarked upon an ambitious expansion project, which will triple its gross block in the next four years. Being the largest player in its field, it is also a natural beneficiary of the increasing gas volumes in the country. With the government planning to introduce some formula to apportion oil industry’s under-recoveries, Gail stands to benefit from a better visibility on its earnings. http://economictimes.indiatimes.com/news/news-by-company/earnings/earnings-analysis-/Expansion-more-gas-to-benefit-GAIL/articleshow/6868288.cms

IT sector to benefit from surge in global demand

The enthused investor attention in IT stocks is on account of a recovery in global IT spends. On the back of a revival in the global IT spending, the industry biggies, including TCS, Infy and HCL, have delivered robust growth for the quarter ended September 2010. However, the country’s third largest IT outsourcing company Wipro seems to be a laggard. Another factor that fuelled the investor interest in the IT scrips was the revised recruitment targets to higher levels by the top players. Also, rupee’s appreciation against dollar towards the end of the September 2010 quarter has further pulled the margin down. http://economictimes.indiatimes.com/features/investors-guide/IT-sector-to-benefit-from-surge-in-global-demand-/articleshow/6845682.cms

My Portfolio

Return (%)

My Portfolio BSE Sensex NSE Nifty
This Week 2.67% 4.86% 4.90%
This month 2.67% 4.86% 4.90%
This Year 15.15% 20.27% 21.37%
Since 1-1-2009 135.78% 117.74% 113.33%
Since 1-1-2008 58.48% 3.95% 3.83%
Since 1-4-2007 96.88% 60.69% 65.18%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 9 3 Years 85
Tata Global Beverages FMCG 6 2 Years 135
Bharti Airtel Telecom 5 10 months 13
HUL FMCG 5 4 Months 18
Hero Honda Auto 5 5 months 0

Shares I bought this month

Company Average Cost
Ess Dee Aluminium 490.76
Graphite India 94.72
Opto Circuits 297.70
Swaraj Engines 482.21
Tech Mahindra 749.71
Tractors India Ltd 733.96

Shares I sold this month

Company Average Price
Suzlon Energy 57.65
Blue Star 453.11

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 212 2.5 Years
Dabur India 152 4.5 Years
Tata Global Beverages 135 2.0 Years
Berger Paints 153 3.7 Years
Infosys 85 3.0 Years

Top 5 most loss (absolute)

Company Return % Average Holding Period
KSB Pumps -10 2 months
Divis Laboratories -3 1 month
Tata Communication -7 10 months
Mangalam Cement -5 2 months
Graphite India -2 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


Portfolio Review: 9 October 2010

BSE Sensex dipped 0.95% and NSE Nifty 0.65% in the week after the five-week rally and my portfolio gained 0.35% during the week. In the year to date, the gain in my portfolio is 15.13%. In the year 2010, the 65% of my total gain came from the 5 companies – Gujarat Gas, Infosys, Tata Global Beverages, HUL and Dabur India. Top 5 companies in terms of market value in my holding are Infosys, Tata Global Beverages, Bharti Airtel, HUL and Hero Honda.

Good buys in my watch list

Script Sector 3 Years Target CMP Margin
Maharashtra Seamless Metal 737.00 398.30 85%
Hero Honda Auto 3,101.00 1,833.75 69%
HLL FMCG 475.00 295.85 61%
Divis Laboratories Pharma 1,094.00 726.65 51%
Tech Mahindra IT 1,112.00 765.95 45%

News Update

Tata Communications

Tata Communications on Thursday launched InstaCompute and InstaOffice to offer productivity enhancing services to Indian businesses. This marks the company’s expansion in to the cloud space to deliver self-service, pay-as-you-use IT application and data centre infrastructure services, accessed through the Internet. – The Hindu 2010 October 07

Tata Communications expects its international operations, that contribute 65% to the overall revenues of the company, to turn profitable in the next two years. Its president and COO, Vinod Kumar, said, “We expect to break even in the next two years. The wholesale and enterprise services are expected to grow 25% and these will accelerate our growth.” – The Financial Express, 2010 October 09

Hero Honda

Hero Honda plans to set up a fourth manufacturing unit in the Baddi-Barrotiwala-Nalagarh industrial belt of Himachal Pradesh, on the expectation that it will exhaust its installed capacity in the current fiscal year. The world’s largest two-wheeler maker by volumes has sought the Himachal Pradesh government’s help in acquiring land for the project, which includes a mother plant and ancillary units. – The Economic Times, 2010 October 08

Mahindra & Mahindra

Mahindra & Mahindra (M&M), the country’s largest utility vehicles manufacturer, is planning to launch a sub-100 cc motorcycle. The bike, which will be the first of its kind in India, will help company carve out a niche of its own in the highly competitive motorcycle market in India. – The Financial Express, 2010 October 07

Auto major Mahindra & Mahindra (M&M) on Friday said it has advanced the period for redeeming the outstanding Foreign Currency Convertible Bonds (FCCBs) worth USD 141.2 million to this year from earlier April 14, 2011. – The Economic Times, 2010 October 08

NTPC

Noting that a thermal power plant near human habitat and on agricultural land was not viable, a Central green panel has refused to give approval to the National Thermal Power Corporation (NTPC) to set up a 1320 MW coal-based project in Madhya Pradesh. The Public Sector Unit had proposed 2×660 MW coal based thermal power plant over 1000 acres of land in Jhikoli and Tumra villages in Narsinghpur district.  – The Hindi, 2010 October 08

The Centre will compensate NTPC to the tune of Rs 600 crore for cancellation of its 600 megawatt hydropower project at Loharinag-Pala in Uttarakhand, Power Minister Sushil Kumar Shinde said on Friday. NTPC has so far invested about Rs 600-crore on the project and placed orders worth Rs 2,000-crore for equipment. – The Indian Express, 2010 October 08

State-owned NTPC today said it may invest over Rs 10,000 crore to set up a 2,640 MW thermal power project at Gidarbaha in Punjab. – The Economic Times, 2010 October 08

BHEL

Public sector power equipment manufacturer Bharat Heavy Electricals Ltd. (BHEL) has bagged an order from the Karnataka Power Corporation Limited (KPCL) for setting up 700 MW supercritical Unit-3 at the Bellary Thermal Power Station (TPS) in Karnataka on a turnkey basis. The company won the bid for the Rs.3,700-crore contract in an international competitive bidding process, according to a BHEL release. – The Hindu, 2010 October 08

GAIL

State-owned gas utility GAIL India Ltd today placed orders worth Rs 677 crore for laying a gas pipeline from Dabhol in Maharashtra to Bangalore.  With this, within the last 3 months GAIL has placed orders worth about Rs 2,000 crore for both line pipes and pipeline laying to enable swift project implementation, a company press statement said here. – The Economic Times, 2010 October 06

Suzlon Energy Ltd

Suzlon Energy Ltd., India’s largest maker of wind turbines, said it plans to install 800 megawatts of wind energy plants in South Africa over the next two years as the country looks to reduce its power shortage. – Bloomberg Business Week, 2010 October 06

Dr Reddy’s Laboratories

Dr Reddy’s Laboratories is likely to see a major upside coming its way in the form of olanzapine, a drug to treat schizophrenia and bipolar disorder. Currently being marketed under the brand Zyprexa by Eli Lilly, the drug is seen having sales of $1 billion. Eli Lilly has the patent for it now, but this would expire in 2011, and Reddy’s is expected to launch it in the fourth quarter next year. – DNA, 2010 October 05

My Portfolio

Return (%)

My Portfolio BSE Sensex NSE Nifty
This Week 0.35% -0.95% -0.65%
This month 1.93% 0.90% 1.22%
This Year 15.13% 15.95% 17.35%
Since 1-1-2009 135.74% 109.91% 106.27%
Since 1-1-2008 58.45% 0.21% 0.39%
Since 1-4-2007 96.85% 54.91% 59.71%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 10 2.91 Years 84
Tata Global Beverages FMCG 7 1.90 Years 149
Bharti Airtel Telecom 6 9 months 21
HUL FMCG 6 3 Months 16
Hero Honda Auto 5 4 months -1

Shares I bought this month

Graphite India 93.61
Mangalam Cement 160.87
Ess Dee Aluminium 491.95
Opto Circuits 309.05

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 212 2.4 Years
Dabur India 168 4.5 Years
Tata Tea 149 1.9 Years
Berger Paints 176 3.6 Years
Infosys 84 2.9 Years

Top 5 most loss (absolute)

Company Return % Average Holding Period
KSB Pumps -6 1 month
Graphite India -5 2 months
Opto Circuits -1 0 month
Hero Honda -1 4 months
Tata Communications -1 9 months

Archive of previous portfolio reviews

Weekly Portfolio Review: 3 October 2010

BSE Sensex closed the week 1.87% higher and NSE Nifty 1.88% and my portfolio gained 1.58%. When the three quarters of 2010 passed, return on my portfolio stands at 14.73%. In the year 2010, the 68% of my gain came from the 5 companies – Gujarat Gas, Infosys, Tata Global Beverages, HUL and Dabur India. Top 5 companies in my holding are Infosys, Tata Global Beverages, Bharti Airtel, HUL and Hero Honda.

Good buys in my watch list

Script Sector Target PoR CMP Margin
Mangalam Cement Cement 400.00 204.00 160.25 150%
Graphite India Engineering 200.00 79.00 92.65 116%
Swaraj Engines Auto Ancil 850.00 428.00 423.40 101%
Ess Dee Aluminium Packaging 942.00 490.00 492.45 91%
Divis Laboratories Pharma 1,094.75 755.00 702.30 56%
Hindustan Zinc Metal 1,730.00 1,203.00 1,110.70 56%
Opto Circuits Healthcare 450.00 316.00 301.00 50%

News Update

Mahindra and Mahindra

Mahindra and Mahindra Ltd (M&M), India’s largest utility vehicle maker by unit sales, on Thursday made its entry into the competitive motorcycle market by unveiling two models—the 106cc Stallio and the 300cc Mojo. The entry-level Stallio, priced at Rs. 41,199 (ex-showroom, Pune), will compete with Hero Honda Motors Ltd’s Splendor and Bajaj Auto Ltd’s Discover, among others. The Mojo, aimed at the premium luxury segment, will cost Rs. 1.75 lakh, (ex-showroom, Pune). M&M has 370 sales outlets for two-wheelers, and is expected to increase the network to 400 by October. –  Livemint.com 30 September 2010

Auto-maker Mahindra & Mahindra reported its highest ever sales in a month at 35,177 units in September, an increase of 23.71 per cent over the same period last year. Total sales of M&M utility vehicles, including Scorpio, Xylo, Bolero and Pick-Ups, stood at 16,537 units as against sales of 15,296 units in September 2009, up 8.11 per cent. Sales of the Logan sedan went up by 96.08 per cent to 1,000 units during the month, compared to 510 units in the same month a year ago. The company said sales of three-wheelers and Gio and Maxximo mini-trucks during September jumped by 40.90 per cent to 6,005 units from 4,262 units during the same month last year. – The Indian Express, 01 October 2010

Auto major Mahindra & Mahindra on Monday said it will raise prices of its all products by up to Rs 8,000 with effect from October 1 due to higher raw material costs and implementation of new emission norms. “This increase would be in the range of Rs 3,000 to Rs 8,000 depending on the model and will be effective from October 1, 2010,” Mahindra & Mahindra said in a statement. – The Times of India, 27 September 2010

Hero Honda

The country’s largest two-wheeler maker Hero Honda today reported a jump of 8.06 per cent in sales in September at 4,33,641 units. Besides, for the 5th consecutive time, the company has recorded more than 4 lakh dispatch sales in a single month. – Business Standard, 01 October 2010

The country’s largest two-wheeler maker, Hero Honda Motors Ltd, today launched a new version of its biggest selling motorcycle, Splendor, priced at Rs 39,950 and Rs 41,950 (ex-showroom Delhi). The new bike, Splendor Pro, has features such as a power start and a new engine and comes in two variants, the company said in a statement. – The Hindu, 27 September 2010

Dr Reddy’s Laboratories

Dr Reddy’s Laboratories expects U.S. revenue to more than double to about $1 billion by fiscal 2013 and is planning to expand its presence in emerging markets like Russia. Dr Reddy’s, India’s No. 2 drug maker by sales, plans to consolidate in Russia by acquiring more prescription generic drugs. – Reuters, 29 September 2010

Hindustan Unilever

Hindustan Unilever (HUL) has forayed into the retail cafes segment to promote its beverages and food brands, in a significant brand extension to capitalise on the increasing trend of eating out. The FMCG major is test-marketing ‘Lipton Cafes’ and kiosks across the education, travel, corporate and leisure channels in key cities. While it is principally a beverages business, the cafés also sell other HUL products like soups. They also offer food items like pastries and cakes at locations in airports and malls. Currently, HUL has over 40 Lipton Cafes (with seating arrangement) and kiosks as pilot models in India. – The Financial Express, 29 September 2010

Suzlon Energy

Suzlon Group Company, REpower Systems, wind turbine manufacturer, said on Wednesday it signed a contract with German wind farm project developer Denker and Wulf AG, to set up, operate and maintain wind power plants with the capacity of generating 74.8 megawatts of power. The 74.8 megawatt (MW) project will be constructed by 2012. The contract includes a 15-year integrated service package, which covers project servicing and maintenance, in addition to delivery and installation of the turbines. – International Business Times, 29 September 2010

Indian wind turbine maker Suzlon Energy is in talks to buy the remaining nine percent stake in German unit REpower Systems AG, its chief financial officer said on Monday. – Reuters, 27 September 2010

Opto Circuits India Ltd

Opto Circuits India Ltd. plans to spend 7.5 billion rupees ($167 million) over three years to set up two medical equipment factories in India and Malaysia as the global incidence of diabetes and heart disease rises. People are becoming more aware of lifestyle diseases, said Vinod Ramnani, managing director at Opto Circuits, India’s largest domestic medical equipment maker. “That is the main driver” for growth, he said. – Bloomberg, 30 September 2010

Interesting Reading

M&M is not a conglomerate; it’s a federation

In an interview, Mahindra answers critics who say M&M is spreading itself too thin by entering too many areas—two- and three-wheelers, tractors, utility vehicles, cars, light commercial vehicles, trucks and even aeroplanes, and offers insights into his leadership style. http://www.livemint.com/2010/09/29205723/MampM-is-not-a-conglomerate.html?atype=tp

Mahindra & Mahindra: The Italian job

Mahindra & Mahindra is set to launch its range of motorbikes by this month-end. It had launched scooters last year, leveraging its Kinetic purchase. With incumbents well-entrenched in the market, Mahindra & Mahindra has started on an offensive even before the launch. “It had to go aggressive with a bevy of bikes because it has to break the clutter,” says PricewaterhouseCoopers Leader (automotive practice) Abdul Majeed. http://www.business-standard.com/india/news/mahindramahindraitalian-job/409208/

Ess Dee set to take on Hindalco in household aluminium foils market

Ess Dee Aluminium, which acquired India Foils from Sterlite Industries in 2008, is poised to mark its maiden entry into the retail market for household aluminium foils, pitching it against the industry leader Hindalco Industries . Ess Dee’s foray into foils comes at a time when global aluminium giants, like Novelis, have decided to shut their foils unit in the UK and consolidate operations across Europe. Earlier, Alcoa too had divested Reynolds, its packaging and consumer business best known for the ‘Reynolds’ foil wrap. http://economictimes.indiatimes.com/news/news-by-industry/indl-goods-/-svs/metals–mining/Ess-Dee-set-to-take-on-Hindalco-in-household-aluminium-foils-market/articleshow/6550191.cms

My Portfolio

Return (%)

My Portfolio BSE Sensex NSE Nifty
This Week 1.58% 1.87% 1.88%
This month 1.58% 1.87% 1.88%
This Year 14.73% 17.06% 18.12%
Since 1-1-2009 134.91% 111.93% 107.62%
Since 1-1-2008 57.89% 1.18% 1.05%
Since 1-4-2007 96.16% 56.40% 60.76%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 10 2.91 Years 86
Tata Global Beverages FMCG 6 1.90 Years 131
Bharti Airtel Telecom 6 9 months 26
HUL FMCG 6 3 Months 21
Hero Honda Auto 6 4 months 0

Shares I bought this month

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 220 2.4 Years
Dabur India 174 4.5 Years
Tata Tea 131 1.9 Years
Berger Paints 175 3.6 Years
Infosys 86 2.9 Years

Top 5 most loss (absolute)

Company Return % Average Holding Period
Divis Laboratories -3 1 month
KSB Pumps -3 1 month
Graphite India -7 2 months
Swaraj Engines -2 2 months
Tata Communications -8 9 months

Archive of previous portfolio reviews


Weekly Portfolio Review: 26 September 2010

BSE Sensex closed the week 2.3% higher and NSE Nifty 2.27%. The month to date gain on my portfolio is 6.78% and year to date 13.29%. Gujarat Gas, Tata Tea, Infosys, HUL and Bharti Airtel are the highest gainer in my portfolio so far in this year.  I partly booked profit on Blue Star in the past week with a 47% margin.

Good buys in my watch list

Company Sector Target Current Price Margin
Divis Laboratories Pharma 1,094.75 710.35 54%
BHEL Engineering 3,567.00 2,454.90 45%

News Update

NTPC

–          NTPC is aiming to add capacity at 13% compounded annual growth rate (CAGR) in order to generate 75,000 mw by March 2017 and reduce its carbon footprint by increasing the share of renewable and nuclear power in its energy mix and improving energy efficiency of coal-fired plants. The firm has projects worth 17,340 mw under implementation and has initiated tendering for execution of another 7,092 mw capacity. Projects worth 27,000 mw are under preliminary stages, NTPC has said. – The Financial Express, 27th September 2010

–          The Sri Lankan government has offered a 25-year tax waiver and customs duty concessions to NTPC’s  500 Megawatt (Mw) power project planned at Sampur near Trincomalee in the east coast of the island nation, through a gazette notification earlier this month. The Sri Lanka government said it accorded the special incentive as it was a project under the Strategic Development Projects Act of the country. NTPC and Sri Lanka will finalise the details soon. – Business Standard, September 25, 2010

–          NTPC’s Pakri-Barwadih coal mining project, for which the Union Coal Ministry has allotted coal blocks, has got forest clearance from the union Ministry of Forest and Environment for its stage two work. “With this the stage is cleared for starting Conveyor Corridor, Railway Corridor and starting coal mining production by 2012 as per the revised target fixed by the union government,” Rao, the general manager of NTPC’s coal mining project, told newsmen here on Wednesday. – The Economic Times, September 22, 2010

Suzlon

–          The country’s largest wind turbine manufacturer Suzlon Energy on Friday said it has crossed 5,000 MW (megawatt) of cumulative installations in India, underlining the strong momentum in the country’s fast-growing wind energy market. Suzlon has cum ulatively added over 5,000 MW of wind power capacity for over 1,500 customers in India across 40 sites in eight states. – The Business Line, September 24, 2010

–          Wind power major Suzlon Energy today said it has bagged a Rs. 1,149-crore order from Kolkata-based engineering firm Techno Electric Group. The 202 MW (megawatt)order is a part of Techno Electric Group’s agreement with Suzlon for developing 500 MW of new capacity and is the single largest deal signed by an Independent Power Producer (IPP) in the wind power sector, Suzlon said in a filing to the BSE. – Livemint.com, September 21, 2010

Bharti Airtel

–          Zain Kenya, a unit of Bharti Airtel Ltd., plans to overtake market leader Safaricom Ltd. to become the east African nation’s largest mobile phone operator within three to four years, Managing Director Rene Meza said today. Over the next 18 months, the company plans to spend 28 billion shillings ($345 million) expanding Internet coverage to rural areas and rolling out a third-generation network by year- end, Meza said in an interview in Kenya’s capital, Nairobi. – Bloomberg, September 23, 2010

–          Telecom major Bharti Airtel said on Monday that it has given contracts to Ericsson India, Nokia Siemens Networks (NSN) and Huawei Technologies to set up infrastructure for providing 3G services in the country.  These vendors will plan, design, deploy and maintain 3G-HSPA (third generation, high speed packet access) networks in 13 telecom circles where the company has won 3G licences, Bharti Airtel said in a statement. – The Economic Times, September 20, 2010

–          Bharti Airtel, India’s largest mobile-phone company, forecasts “rapid growth” at its satellite television unit on rising demand in rural areas for Bollywood movies and soap operas. Bharti has signed up 3.8 million customers to gain a 14% market share, said Ajai Puri, chief executive officer of the company’s digital TV services business. Industrywide, as many as 12 million people may take up satellite television this year, Mr Puri said in an interview on September17 in New Delhi. – The Economic Times, September 21, 2010

Dr Reddy’s

–          Promoters of Dr Reddy’s Laboratories have no intention of diluting their stake in the company, its managing director K Satish Reddy said today. “Let me be clear once again. We have no such intention to sell any stake or what so ever. There is no such move (dilution of stake),” Satish Reddy replied when asked on the sidelines of pharma CEOs conclave here. He said they will continue to focus on achieving three billion dollars turnover by 2013. – Business Standard, September 24, 2010

GAIL

–          State-run gas transporter GAIL India will make capital investment of around 400 billion rupees ($8.8 billion) by 2014/15, mainly to expand its pipeline network and boost petrochemicals capacity, its chairman said on Wednesday. B.C. Tripathi also said GAIL was exploring gas sector opportunities in the African market. He was speaking at the company’s annual general meeting of shareholders. – Reuters, September 22, 2010

–          State-run GAIL India on Wednesday imported its first liquefied natural gas (LNG) cargo of the year at around $8.3 per million British thermal unit, about a dollar more than what Petronet LNG paid just four-days ago. GAIL, which bought the cargo from BG Group of UK at around $8.3 per mmBtu, plans to import two more cargoes from the spot market this year. – The Economic Times, September 22, 2010

Hero Honda

–          With arch rival Bajaj Auto gaining ground in the entry level of bike segment, the country’s largest two-wheeler maker Hero Honda has admitted its leadership position will come under pressure. The company, which is currently a subject of speculation over a possible exit of Japanese partner Honda from the joint venture with Munjals, has been witnessing a decline in market share in motorcycles of 75cc and above but less than 125cc category. Its market share declined to 61.62 per cent in the April -August period this fiscal, from 73.85 per cent in the same period of 2009-10. – Business Standard, September 20, 2010

Interesting Reading

Brand Hero eyes life after Honda

With Hero Group’s 25-year old marriage with Japan’s Honda Motor seen drawing to a close, all eyes are on the future of Hero’s brands assiduously built up over the years. Will popular bike brands like Splendor and Passion continue to evoke the same excitement or will the absence of the Honda brand change the fortunes of the company? http://www.indianexpress.com/news/brand-hero-eyes-life-after-honda/686793/

Mahindra & Mahindra’s U.S. Plans Are in Jeopardy

Car buyers expect a degree of haggling when shopping for a new vehicle. Yet the fate of trucks built by India’s Mahindra & Mahindra may be determined in the federal courts and by arbitrators, long before the rugged-looking 4×4s even begin rolling onto dealership lots. Mahindra and its American importer, Atlanta-based Global Vehicles U.S.A., are embroiled in a dispute that could halt plans to bring the first Indian-built vehicles into the American market. http://wheels.blogs.nytimes.com/2010/09/21/mahindra-mahindra-u-s-plans-are-in-jeopardy/

Revving two-wheeler sales to cross 12 m this fiscal

Two-wheeler sales for this fiscal are projected to be in excess of 12 million units, a jump of 20 per cent from around 10 million units in 2009-10. Sources say Hero Honda and Honda Motorcycle & Scooter India will together account for nearly 55 per cent of this number at 6.5 million units, followed by Bajaj Auto with over 3.5 million units and TVS Motor with nearly two million units. Yamaha and Suzuki, which are marginal players in comparison, will add to the overall kitty. http://www.thehindubusinessline.com/2010/09/21/stories/2010092150080300.htm

RIL puts out annual reports of 82 of 96 subsidiaries, still not unravelled many layers

It was big, but secretive. It was clever, but complex. That was Reliance Industries Limited (RIL), India’s largest private sector company, when it came to organising its books of accounts and presenting them to the public. Even as it takes a big leap to become more transparent, all those attributes — in shades of black, white and grey — remain characteristic of RIL. http://economictimes.indiatimes.com/news/news-by-industry/energy/oil–gas/RIL-puts-out-annual-reports-of-82-of-96-subsidiaries-still-not-unravelled-many-layers/articleshow/6617094.cms

Crompton Greaves puts wind in Europe sales

The cold, choppy waters of the North Sea are increasingly playing host to a new creature — the slender-necked, rotor-headed, offshore windmill. Sprouting along the coasts of Germany, Norway, Denmark and more recently Belgium, offshore wind energy farms are the new temples for the 21st century environmentalism sweeping across Europe. They perform the seemingly utopian transformation of a free, non-polluting resource — the wind — into the electricity needed to feed the power-hungry contemporary world. And being offshore, they avoid entanglements in the land-use disputes common in densely populated regions, while enjoying the higher and more consistent wind speeds available over the sea. http://www.business-standard.com/india/news/crompton-greaves-puts-wind-in-europe-sales/408897/

Paint companies: Glossed over

Companies in the paints sector are bracing for the increased demand due to robust economic growth and rising incomes. Berger Paints, the third-largest player, plans to increase its capacity from 250,000 tonnes to 450,000 tonnes in the next two years, while the second-largest Kansai Nerolac will enhance its capacity by 50 per cent to 300,000 tonnes over the next three years. Market leader Asian Paints plans to triple its current capacity of about 600,000 tonnes in the next few years. http://www.business-standard.com/india/news/paint-companies-glossed-over/408755/

Hindustan Unilever’s Bharat Darshan

The new consumers in India’s villages are ambitious and demanding just like their urban counterparts. And Hindustan Unilever is responding to the change with a distribution overhaul. Read more: http://business.in.com/article/boardroom/hindustan-unilevers-bharat-darshan/17462/1#ixzz10fSQE554

My Portfolio

Return (%)

My Portfolio BSE Sensex NSE Nifty
This Week 1.13% 2.30% 2.27%
This month 6.78% 11.54% 11.40%
This Year 13.29% 14.77% 15.71%
Since 1-1-2009 131.97% 107.79% 103.39%
Since 1-1-2008 55.91% -0.80% -1.01%
Since 1-4-2007 93.70% 53.34% 57.48%
Since Beginning 124.31% 54.93% 60.69%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 10 2.85 Years 82
Tata Global Beverages FMCG 7 1.80 Years 134
Bharti Airtel Telecom 7 8 months 27
HUL FMCG 7 3 Months 23
Hero Honda Auto 6 4 months 1

Shares I bought this month

Company Average Price
Dr Reddy 1,363.00
KSB Pumps 562.99
Hero Honda 1709.70
Maharashtra Seamless 378.95
Hindustan Zinc 1140.86
HUL 279.15

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 214 2.3 Years
Dabur India 164 4.4 Years
Tata Tea 134 1.8 Years
Berger Paints 172 3.5 Years
Infosys 82 2.9 Years

Top 5 most loss (absolute)

Company Return % Average Holding Period
Mangalam Cement -6 1 month
KSB Pumps -6 1 month
Graphite India -5 2 months
Hindustan Zinc -4 1 month
Tata Communications -4 9 months

Archive of previous portfolio reviews