As per my earlier post tata sponge faced resistance at 244 which was 61.8% retracement which it has broken with big volumes and closed at 256.25Please check my earlier post from link given below
http://ritesh-researchreports.blogspot.com/search/label/Tata%20Sponge
Tata Sponge: Tata Sponge has given break out from Inverted Head and Shoulders Pattern and closed at 256.25 with good volumes of about 4 lac shares traded.
The immediate tgt are 290 and after that it is 310
FOR DATE 22-9-2009
IGL (INDRAPRASTHA GAS LTD) CMP Rs 165:-
NIFTY (4976.05)
Resistance : 4990 / 5015 / 5060
Support : 4960 / 4945 / 4910 / 4865
SENSEX (16741.11)
Resistance : 16800 / 16860
Support : 16705 / 16645 / 16550
NIFTY FUT (4978.05)
Resistance : 4995 / 5020 / 5050
Support : 4950 / 4925 / 4885
BANK NIFTY (8379.15)
Resistance : 8445 / 8505
Support : 8370 / 8305 / 8235
MKT COMMENTS
NIFTY FUT OI (both series) down with decreasing volumes indicating unwinding of long positions.
We expect profit booking will emerge on every rise.
On Tuesday,Opening Is Flat To Positive,
Buy NIFTY Above 4950,Sl Below 4930,Tgt 4975/95/5015/5040+
Sell NIFTY Below 4930,Sl Above 4950,Tgt 4905/4885/65/40+
BUY
BHARATFORGE@ 285,Sl 280,Tgt 290/95/300
ESCORTS@ 92/93,Sl 90,Tgt 95/97/99
HCC@ 127/28,Sl 124,Tgt 130/33/35
SBIN (2148), Sl Below 2130,Tgt 2175/85/95
SUZLON@ 100/101,Sl 98,Tgt 103/04/05
SELL
STER,Sl 785,Tgt 750/45/40
ZEE Below 205,Sl 210,Tgt 200/195/90+
FUTURES
Buy REL (1243)@ 1230,Sl 1215,Tgt 1260/70/80 (Close Above 1270,Hold Longs As BTST)
Sell STERLITE (762)@ 765/75,Sl 785,Tgt 755/45/35 (Close Below 740,Hold Shorts As STBT)
RIL (2099)
Buy@ 2085,Sl 2065,Tgt 2115/25
Sell@ 2140,Sl 2170,Tgt 2115/05
RNRL Above 92,Sl 90,Tgt 94/95/96
DLF Above 430,Sl 425,Tgt 435/40/45
KSOIL Above 63,Sl 61,Tgt 65/66/67
RPOWER Above 175,Sl 170,Tgt 178/80/83/85
SCRIP = APTECH LTD (BSE),
SCRIP CODE = 532475,
PREVIOUS CLOSE = 282.75,
STOP LOSS = 275,
TARGET = 375.
FOR INTRADAY MOVEMENT OF THE STOCKFILTER PLEASE Click Here!
(OR, CLICK THE LINK ABOVE LIVE SENSEX WATCH.)
- CHART AS ON 18-9-2009
WITH A CONSIDERABLE RISE IN VOLUMES, THIS STOCK HAS GIVEN A FRESH BREAKOUT IN THE LAST TRADING SESSION. THE STOCK WAS IN CONSOLIDATION SINCE SEPTEMBER.
THE STOCHASTICS AND RSI HAVE GIVEN A POSITIVE CROSSOVER, ALSO THE CANDLESTICK PATTERN IS BULLISH.
TECHNICAL ANALYSIS AND PORTFOLIO MANAGEMENT INDICATE THIS STOCK GOOD FOR A SHORT TERM RANGE.
STRICTLY MAINTAIN AND FOLLOW THE STOP LOSS.
RELIANCE raises Rs 3,188 crore from treasury stock sale
On Sept 10 2009 RELIANCE IND sold up to 210,000 tonnes of gasoline for October 2009-March 2010 lifting to Western trader Trafigura at a premium of 80 cents to Singapore's spot quotes on a free-on-board (FOB) basis. http://in.reuters.com/
Why did Reliance do both deal within short span and why are analyst who are familiar with RIL worried?
There have been many instances where RIL has set bench mark and most of the top and bottom has been formed after few actions taken by this company.
http://www.domain-b.com/
Monthly Graph of RPL from listing till date and November2007 has seen highest ever price and volume.
The forward contracts for crude oil were placed by a Dubai-based company which handles this part of RIL’s business. The company had booked at least three contracts at $120 a barrel, $100 a barrel and $80 a barrel, respectively, in the middle of 2008, an oil industry analyst said.
http://economictimes.
On 22nd January 2009 In evening(6.P.M) after RIL announced results below mail was send to my mailing list:
Reliance announces result Rs.3501crs profit for the 3rd quarter which is above market estimate with GRM (Gross refinery Margin) $10 highest in the industry.
Reliance didn’t break Rs.1080 and with that as stop the stock can target Rs.1400 & 1575 target given few days before.
Our view in morning report at that time: ( On 22nd Jan 2009 Morning report)
Reliance: During the quarter ended December 2007, the company had reported a net profit of Rs 8,079 crore, which included Rs 4,733 crore of extraordinary profit on sale of stake in Reliance Petroleum. Many reports talk about $1 bn loss on hedging of crude contracts. NP above Rs.2400crs would be excellent performance by the company if Rs.2800 above profit is reported then huge short covering possible.
Reliance Industries Ltd has informed BSE regarding a Media Release dated January 22, 2009 titled "Revenue and Earnings Growth in Challenging Times; RPL Refinery started on Schedule; KG D6 Oil Production Commenced in September 2008; KG D6 Gas Production Scheduled in This Quarter".
So bottomline is that whenever RELIANCE enters into some major contract or some major deal (like RPL stake sale or forward contract) they have normally made very good judgment or the best judgment. This time they have entered into short term forward contract in Refined product do they see short term Crude prices topping out and they have sold RIL 1% stake I don’t want to read much into the transaction, will this make History again.
On Sept 10 2009 RELIANCE IND sold up to 210,000 tonnes of gasoline for October 2009-March 2010 lifting to Western trader Trafigura at a premium of 80 cents to Singapore's spot quotes on a free-on-board (FOB) basis. http://in.reuters.com/
Why did Reliance do both deal within short span and why are analyst who are familiar with RIL worried?
There have been many instances where RIL has set bench mark and most of the top and bottom has been formed after few actions taken by this company.
1) During 2002 when Crude was trading near $16, RIL made a forward contract for 1year and @ a premium to the prevailing market prices that time and within weeks that had become bottom till today.
2) RIL sells 4.01% of RPL's equity for Rs.4,023 crore Reported on 27 November 2007 and month of November2007 highest ever for the stock till now.
 | ||
Monthly Graph of RPL from listing till date and November2007 has seen highest ever price and volume.
3)RIL sold refined products for one year forward @ discount when crude was around $130 around mid of 2008 and within month crude crashed.
http://economictimes.
On 22nd January 2009 In evening(6.P.M) after RIL announced results below mail was send to my mailing list:
Reliance announces result Rs.3501crs profit for the 3rd quarter which is above market estimate with GRM (Gross refinery Margin) $10 highest in the industry.
· Cash & cash equivalent in hand Rs.28, 500crs ($5.9Billion), over 95% in bank.
· Jamnagar refinery 98% capacity utilization
There where many rumor about hedging loss and Forex losses, 4month back when crude was $140 they sold 6month forward contract there entire production which I gave importance to say crude has seen peak- but I can’t find the link. The company performance has been good above market expectation.Reliance didn’t break Rs.1080 and with that as stop the stock can target Rs.1400 & 1575 target given few days before.
Our view in morning report at that time: ( On 22nd Jan 2009 Morning report)
Reliance: During the quarter ended December 2007, the company had reported a net profit of Rs 8,079 crore, which included Rs 4,733 crore of extraordinary profit on sale of stake in Reliance Petroleum. Many reports talk about $1 bn loss on hedging of crude contracts. NP above Rs.2400crs would be excellent performance by the company if Rs.2800 above profit is reported then huge short covering possible.
Reliance Industries Ltd has informed BSE regarding a Media Release dated January 22, 2009 titled "Revenue and Earnings Growth in Challenging Times; RPL Refinery started on Schedule; KG D6 Oil Production Commenced in September 2008; KG D6 Gas Production Scheduled in This Quarter".
So bottomline is that whenever RELIANCE enters into some major contract or some major deal (like RPL stake sale or forward contract) they have normally made very good judgment or the best judgment. This time they have entered into short term forward contract in Refined product do they see short term Crude prices topping out and they have sold RIL 1% stake I don’t want to read much into the transaction, will this make History again.
1) Genus Power Infrastructures Ltd.
Genus Power Infrastructure Ltd (GPIL) is an enabler in the power sector. GPIL is in the business of providing various solutions that revolve around the power theme. GPIL provides metering solution, commissions electric substations, manufactures inverters, UPS and batteries, and also builds some integrated circuit based applications.
For the past few years, GPIL was also one of the beneficiary of the overall growth in the power sector. The company was able to grow its revenues by 5 times and profits by 13 times in last four years (till financial year March 2008).
Going forward, the company’s growth will slow down, but as long term power story in India remains intact, growth rates will still be healthy. The competitive pressures on all the company’s business divisions are likely to intensify.
The market for inverters and UPS is cluttered with various players and to some extent is seasonal. Also the brand intensity in inverter and UPS business is not there resulting in poor product differentiation. Similarly batteries business has better players like HBL Power Systems. The metering solutions business is again cluttered with few big players like BHEL which generally garner most of the government contracts. The software solutions in T&D control and monitoring has also become competitive with ICSA emerging as one of the key player. The commissioning of electric substations and other ancillary infrastructure building in power space is dependent on government spending on future power projects. This sub-sector to power is going to witness entry of more players and margins will be under pressure.
Having said all these, the company is expected to do good business in almost all of its segments as power deficit is going to remain wide in near to medium future (5-10 years). Also, the company is expecting some growth from African and other developing countries.
The market has so far given reasonable, but a little bit subdued valuation to the company so far. The reason which we believe could be the not so enthusing reputation of the promoters. The share price has recently increased with some handsome gains in line with overall market upsurge.
The current P/E multiple of 6 at which the share is available seems to be reasonable, albeit on a bit lower side. Though some purchases can be made at current market price, a better proposition would be to make purchases at dips. We believe, if overall markets correct from the existing levels, this share will correct more, and that could be the good entry level. The company is likely to generate decent to high returns over medium term. If the power story still remains buzzing at that stage, investment horizon should be elongated to long term. Overall, a good buy at dips.
2) Micro Technologies Ltd.
Micro Technologies (MTL) is engaged in manufacturing and marketing of security devices. The company’s security segment is involved in manufacturing products such as access control systems, bike security systems, disaster management system, fleet monitoring systems, home security systems, intelligent black box, intelligent surveillance system, office security systems, shop security systems, vehicle security and tracking and video door phones. Its messaging segment is engaged in manufacturing messaging products such as micro buddy tracking system, micro cyber activity remote monitoring system, micro life line, micro lost mobile tracking system, micro lost notebook tracking system, micro mobile controller system and micro security system. In addition, the company markets exhibitor visitor participant management system, micro power sinewave home, micro professional placements and micro student attendance management system. The company was able to grow its revenues by almost 15 times and profits by 13 times in last five years (till financial year March 2009). Going forward, though the revenue growth would sublime, the profit growth is likely to surge relatively.
The market size estimates for various security solutions in India are not very clear. Even the forecasts are little bit confusing. However, looking at the kind of growth, the company has shown the size of the market either seems to be growing or not yet adequately penetrated. The company seems to grow most likely from fleet and bike (other mobile devices) trackers and security solutions. In home security systems, Zicom is acting as a big competitor. The company’s foray into Energy and Health systems will be growth accretive. The client base of the company seems impressive with a likelihood of repeat business. The exports can also be revenue booster in future.
Prima facie, the valuations of the company looks tempting. We couldn’t find any plausible reason for such a low P/E multiple the company is commanding (there is one article posted by our associate Arun Gopalan at HBJ Capital which talks abt possible reason for Micro Tech low valuation, pls refer link), despite the fact that the promoters have issued a large chunk of warrants to themselves. They have also reduced the dividend percent to 10% from the 20% earlier. It could be looked in different ways. One way is that management is confident in the long term possibilities of their business and wants to plough more money in the business. The other way is that by issuing more warrants to themselves, they might wish to garner more chunk of current profits to themselves. While Zicom is trading at a multiple of 12, the multiple of about 2.5 for the company remains unjustified. Even in normal circumstances (though market has surged) the company deserved a better multiple, say at least 5-6, unless there is an inside story, which we are not aware of but the market is. However, if nothing of such exists, and looking at pure fundamentals, this seems to be a little bit ignored scrip with a potential to explode. The downside risk appears very low. In the first look it seems to be a good buy for medium term perspective but we suggest avoiding this stock due to its product profile.
3) Vivimed Laboratories
Vivimed Labs is involved in the manufacturing and marketing of specialty chemicals. The company supplies active pharmaceutical ingredients, generics and specialty for personal care manufacturers and pharmaceuticals.
The company offers various specialty chemicals for manufacturers of anti-microbial, oral care, sun care, hair care, preservatives and anti-oxidant products through its H & PC Actives division. It provides Triclosan and Calcium Glycerophospate to oral care product preparations and offers Octocrylene, Benzophenone-4, Benzophenone-3, Octyl Methoxy Cinnamate and Avo Benzone for sun care preparations.
For the producers of skin care products the company offers Ndga and 4n-butyl Resorcinol. It also offers Zinc Pyrithione, Climbazole, Ketoconazole and Pdpo that are used under for the Hair care application. Additionally, the company produces preservatives such as Chlorphenesin and further offers Trichloro Carbanilide and Para Chloro Meta Xylenol that are applied for the production of homecare and industrial care products.
Vivimed Labs also offers contract manufacturing services from less than 1 MT level to more than 100 MT level through its contract manufacturing division. Under this division the company offers services such as determining and evaluating the right synthesis route, environmental factors, project commercialization, finalisation of layouts and production requirements, monitoring and reporting structure established, and ready for use project plans.
Vivimed Labs through its UK based subsidiary James Robinson develops innovative photochromic dyes which are marketed under the brand name Reversacol. This company primarily manufactures chemicals in the hair dyes and intermediate segments. Additionally, it produces specialty chemicals for photographic and fluoroscents.
Additionally, the company offers shipment, warehousing, re-distribution and door delivery services for its products to major producers.
The company’s revenues and profit grew by almost 3 times in last four years (till 2008). The growth rate in revenues and profits off late has slowed down. Going forward also, the growth rates are likely to get stabilized.
Overall, the company is in beautification and grooming business, with other businesses being dyes and pigments along with contract manufacturing for some API. Though the company appears to be a pharma & chemical company, its character is that of a consumer company.
The beauty and other related products are in brand intensive business. The products of the company seem to be good, but they are yet to build their brand strength. The similar products from other companies like Fem Care, HUL, Zydus etc enjoys considerable brand recognition. The beautification market in India is growing at a stable rate. However, to grow fast in this segment, the company has to build brand strength (advertising and marketing focus) and at the same time attack market share of its competitors.
The company’s valuation seems to be reasonable looking at its competitiveness in its business. The company’s fortune can change if its R&D facility turns out with some innovative and good consumer care products. At a multiple of five, and looking at the surge in price along with the upward movement in the overall market, further upside potential looks limited. It looks like a good play for stable, safe and steady returns with medium to long term perspective. Buying suggested at dips only.
4) Blue Bird (India) Ltd.
Blue Bird is in stationery, commercial printing and publication (primarily school books) business. Though the demographic profile of India (more and growing number of schools and school going students) is favourable for the company’s business, it can not be considered as a big bet on the education story of India.
The businesses in which the company operates are matured, competitive and with low barriers to entry. Its competitors like Navneet (in stationery), Macmillan (in publishing), Repro and Micro Inks (in printing) appears more established. The growth has stabilized, and it would be surprising if the company registers double digit growth going forward. The margins are also getting shrunk. However, the business remains stable. If the company is able to maintain and grow its dividend, it can be a good investment as a dividend play.
Realizing the limitations to grow organically in its businesses, the company has planned to diversify into construction activities, where it has apparently no business expertise. This foray appears risky to the overall business model of the company. This alone can change the outlook of the investors from stable to cautious.
Though the company can provide moderate or even above average returns over medium to long term, the likelihood of which remains low, as no positive and convincing clue is available to make any long term investment case out of it.
The current pricing of the company also seems to be reasonable with limited upward potential, unless the overall market rises. Can be avoided, as better alternatives are available. (If buying, take small exposure with a disciplined stop loss!)
Genus Power Infrastructure Ltd (GPIL) is an enabler in the power sector. GPIL is in the business of providing various solutions that revolve around the power theme. GPIL provides metering solution, commissions electric substations, manufactures inverters, UPS and batteries, and also builds some integrated circuit based applications.
For the past few years, GPIL was also one of the beneficiary of the overall growth in the power sector. The company was able to grow its revenues by 5 times and profits by 13 times in last four years (till financial year March 2008).
Going forward, the company’s growth will slow down, but as long term power story in India remains intact, growth rates will still be healthy. The competitive pressures on all the company’s business divisions are likely to intensify.
The market for inverters and UPS is cluttered with various players and to some extent is seasonal. Also the brand intensity in inverter and UPS business is not there resulting in poor product differentiation. Similarly batteries business has better players like HBL Power Systems. The metering solutions business is again cluttered with few big players like BHEL which generally garner most of the government contracts. The software solutions in T&D control and monitoring has also become competitive with ICSA emerging as one of the key player. The commissioning of electric substations and other ancillary infrastructure building in power space is dependent on government spending on future power projects. This sub-sector to power is going to witness entry of more players and margins will be under pressure.
Having said all these, the company is expected to do good business in almost all of its segments as power deficit is going to remain wide in near to medium future (5-10 years). Also, the company is expecting some growth from African and other developing countries.
The market has so far given reasonable, but a little bit subdued valuation to the company so far. The reason which we believe could be the not so enthusing reputation of the promoters. The share price has recently increased with some handsome gains in line with overall market upsurge.
The current P/E multiple of 6 at which the share is available seems to be reasonable, albeit on a bit lower side. Though some purchases can be made at current market price, a better proposition would be to make purchases at dips. We believe, if overall markets correct from the existing levels, this share will correct more, and that could be the good entry level. The company is likely to generate decent to high returns over medium term. If the power story still remains buzzing at that stage, investment horizon should be elongated to long term. Overall, a good buy at dips.
2) Micro Technologies Ltd.
Micro Technologies (MTL) is engaged in manufacturing and marketing of security devices. The company’s security segment is involved in manufacturing products such as access control systems, bike security systems, disaster management system, fleet monitoring systems, home security systems, intelligent black box, intelligent surveillance system, office security systems, shop security systems, vehicle security and tracking and video door phones. Its messaging segment is engaged in manufacturing messaging products such as micro buddy tracking system, micro cyber activity remote monitoring system, micro life line, micro lost mobile tracking system, micro lost notebook tracking system, micro mobile controller system and micro security system. In addition, the company markets exhibitor visitor participant management system, micro power sinewave home, micro professional placements and micro student attendance management system. The company was able to grow its revenues by almost 15 times and profits by 13 times in last five years (till financial year March 2009). Going forward, though the revenue growth would sublime, the profit growth is likely to surge relatively.
The market size estimates for various security solutions in India are not very clear. Even the forecasts are little bit confusing. However, looking at the kind of growth, the company has shown the size of the market either seems to be growing or not yet adequately penetrated. The company seems to grow most likely from fleet and bike (other mobile devices) trackers and security solutions. In home security systems, Zicom is acting as a big competitor. The company’s foray into Energy and Health systems will be growth accretive. The client base of the company seems impressive with a likelihood of repeat business. The exports can also be revenue booster in future.
Prima facie, the valuations of the company looks tempting. We couldn’t find any plausible reason for such a low P/E multiple the company is commanding (there is one article posted by our associate Arun Gopalan at HBJ Capital which talks abt possible reason for Micro Tech low valuation, pls refer link), despite the fact that the promoters have issued a large chunk of warrants to themselves. They have also reduced the dividend percent to 10% from the 20% earlier. It could be looked in different ways. One way is that management is confident in the long term possibilities of their business and wants to plough more money in the business. The other way is that by issuing more warrants to themselves, they might wish to garner more chunk of current profits to themselves. While Zicom is trading at a multiple of 12, the multiple of about 2.5 for the company remains unjustified. Even in normal circumstances (though market has surged) the company deserved a better multiple, say at least 5-6, unless there is an inside story, which we are not aware of but the market is. However, if nothing of such exists, and looking at pure fundamentals, this seems to be a little bit ignored scrip with a potential to explode. The downside risk appears very low. In the first look it seems to be a good buy for medium term perspective but we suggest avoiding this stock due to its product profile.
3) Vivimed Laboratories
Vivimed Labs is involved in the manufacturing and marketing of specialty chemicals. The company supplies active pharmaceutical ingredients, generics and specialty for personal care manufacturers and pharmaceuticals.
The company offers various specialty chemicals for manufacturers of anti-microbial, oral care, sun care, hair care, preservatives and anti-oxidant products through its H & PC Actives division. It provides Triclosan and Calcium Glycerophospate to oral care product preparations and offers Octocrylene, Benzophenone-4, Benzophenone-3, Octyl Methoxy Cinnamate and Avo Benzone for sun care preparations.
For the producers of skin care products the company offers Ndga and 4n-butyl Resorcinol. It also offers Zinc Pyrithione, Climbazole, Ketoconazole and Pdpo that are used under for the Hair care application. Additionally, the company produces preservatives such as Chlorphenesin and further offers Trichloro Carbanilide and Para Chloro Meta Xylenol that are applied for the production of homecare and industrial care products.
Vivimed Labs also offers contract manufacturing services from less than 1 MT level to more than 100 MT level through its contract manufacturing division. Under this division the company offers services such as determining and evaluating the right synthesis route, environmental factors, project commercialization, finalisation of layouts and production requirements, monitoring and reporting structure established, and ready for use project plans.
Vivimed Labs through its UK based subsidiary James Robinson develops innovative photochromic dyes which are marketed under the brand name Reversacol. This company primarily manufactures chemicals in the hair dyes and intermediate segments. Additionally, it produces specialty chemicals for photographic and fluoroscents.
Additionally, the company offers shipment, warehousing, re-distribution and door delivery services for its products to major producers.
The company’s revenues and profit grew by almost 3 times in last four years (till 2008). The growth rate in revenues and profits off late has slowed down. Going forward also, the growth rates are likely to get stabilized.
Overall, the company is in beautification and grooming business, with other businesses being dyes and pigments along with contract manufacturing for some API. Though the company appears to be a pharma & chemical company, its character is that of a consumer company.
The beauty and other related products are in brand intensive business. The products of the company seem to be good, but they are yet to build their brand strength. The similar products from other companies like Fem Care, HUL, Zydus etc enjoys considerable brand recognition. The beautification market in India is growing at a stable rate. However, to grow fast in this segment, the company has to build brand strength (advertising and marketing focus) and at the same time attack market share of its competitors.
The company’s valuation seems to be reasonable looking at its competitiveness in its business. The company’s fortune can change if its R&D facility turns out with some innovative and good consumer care products. At a multiple of five, and looking at the surge in price along with the upward movement in the overall market, further upside potential looks limited. It looks like a good play for stable, safe and steady returns with medium to long term perspective. Buying suggested at dips only.
4) Blue Bird (India) Ltd.
Blue Bird is in stationery, commercial printing and publication (primarily school books) business. Though the demographic profile of India (more and growing number of schools and school going students) is favourable for the company’s business, it can not be considered as a big bet on the education story of India.
The businesses in which the company operates are matured, competitive and with low barriers to entry. Its competitors like Navneet (in stationery), Macmillan (in publishing), Repro and Micro Inks (in printing) appears more established. The growth has stabilized, and it would be surprising if the company registers double digit growth going forward. The margins are also getting shrunk. However, the business remains stable. If the company is able to maintain and grow its dividend, it can be a good investment as a dividend play.
Realizing the limitations to grow organically in its businesses, the company has planned to diversify into construction activities, where it has apparently no business expertise. This foray appears risky to the overall business model of the company. This alone can change the outlook of the investors from stable to cautious.
Though the company can provide moderate or even above average returns over medium to long term, the likelihood of which remains low, as no positive and convincing clue is available to make any long term investment case out of it.
The current pricing of the company also seems to be reasonable with limited upward potential, unless the overall market rises. Can be avoided, as better alternatives are available. (If buying, take small exposure with a disciplined stop loss!)
EPS Rs 12.32 Book Value Rs 48.81
About the company:
Incorporated in 1998, IGL took over Delhi City Gas Distribution Project in 1999 from GAIL (India) Limited (Formerly Gas Authority of India Limited ). The project was started to lay the network for the distribution of natural gas in the National Capital Territory of Delhi to consumers in the domestic, transport, and commercial sectors. With the backing of strong promoters – GAIL (India) Ltd. and Bharat Petroleum Corporation Ltd. (BPCL) – IGL plans to provide natural gas in the entire capital region.
The transport sector uses natural gas as Compressed Natural Gas (CNG) , while the domestic and commercial sectors use it as Piped Naural Gas (PNG).
CNG:- The next generation auto fuel:-
Compressed Natural Gas (CNG) is a fossil fuel substitute for gasoline (petrol), diesel, or propane fuel. Although its combustion does produce greenhouse gases, it is a more environmentally clean alternative to those fuels, and it is much safer than other fuels in the event of a spill (natural gas is lighter than air, and disperses quickly when released).
IGL has more than 130 stations in NCR and its network is distributed between Motherstations, Mega stations, Daughter Booster Stations and Online Stations which are conveniently made to avoid as much rush as possible at busy hours.
PNG - The most convenient next generation kitchen fuel:-
PNG or Piped Natural Gas is natural gas that is piped to homes and establishments. It is considered as a safe fuel as it reduces possibility of leakage, it is lighter than air. With its narrower range of ignition there is in-built safety in PNG installation and round-the-clock customer support which is necessary in case of unfortunate accidents. The billing is made based on meter reading of gas consumed and natural gas can also be used for water heating, space heating and air conditioning.
Further catalysts:-
IGL is spreading fast as it now has 10 CNG outlets outside Delhi (6 in Noida, 2 each in Ghaziabad and Greater Noida). IGL’s sales volume CAGR has been impressive at 13% over FY05-09, led by 3.5x growth in CNG vehicles and 5x increase in domestic PNG customers. However, a large portion of the market is untapped and offers huge growth potential for IGL. Key growth drivers for CNG within National Capital Territory (NCT) would be new buses specially sourced for the Commonwealth Games, private vehicles, taxis, callcentre SUVs, LCVs and replacement of existing fleet. PNG growth is likely to be on account of a huge untapped domestic market. The conversion to CNG in NCR has been just around 15% so far and as government becomes more aware of environmental cleanliness, more and more vehicles are going to be converted which can be a major booster for IGL.
From where the gas can come?
As IGL is tapping other cities like Ghaziabad, Noida, Greater Noida, it is going to need more and more gas to comply with the rising demand of CNG. The demand will rise more in case IGL bids for authorization in Gurgaon and Faridabad also. The recent contract with RIL wherein the company can draw additional 0.3-2.1mmscmd from RIL’s KG-D6 block, will help sustain incremental growth beyond APM gas allocation of 2mmscmd at present.
Three-wheelers, Four-wheelers and Six-wheelers are already running on CNG but now IGL is testing using CNG in Railways to run diesel locomotives which, if successful, can be a major business winner for IGL. Strong promoter background like GAIL and BPCL is a special combination as GAIL is experienced in laying pipelines and BPCL has a big network for marketing, both being government companies, the growth potential is very high for IGL.
Technical Outlook:-
INDRAPRASTHA GAS stock shows a rounding bottom pattern but given current overstretched valuations in overall market the stock may see some downside of 10-15% also if broader markets start correcting. The stock should be accumulated from 1-2 year point of view with targets above Rs 250 in mind.
http://www.4shared.com/file/134012968/796762a3/IGL_June_2009.html IGL Investor Presentation
http://www.iglonline.net/pollution.asp Pollution Watch
http://timesofindia.indiatimes.com/news/city/ludhiana/Autos-to-replace-kits-with-CNG/articleshow/5019391.cms Autos to replace kits with CNG in Ludhiana
http://www.blonnet.com/2009/08/25/stories/2009082551880200.htm IGL looking for a pact with Reliance for city gas distribution
BUY BPCL SL 535 TGT 565
BUY DLF SL 420 TGT 485
BUY HPCL SL 375 TGT 392
BUY LARSEN SL 1595 TGT 1849
BUY SUZLON SL 95 TGT 124
BUY DLF SL 420 TGT 485
BUY HPCL SL 375 TGT 392
BUY LARSEN SL 1595 TGT 1849
BUY SUZLON SL 95 TGT 124
NIFTY (4976.05)
Resistance : 4990 / 5015 / 5060
Support : 4960 / 4945 / 4910 / 4865
SENSEX (16741.11)
Resistance : 16800 / 16860
Support : 16705 / 16645 / 16550
NIFTY FUT (4978.05)
Resistance : 4995 / 5020 / 5050
Support : 4950 / 4925 / 4885
BANK NIFTY (8379.15)
Resistance : 8445 / 8505
Support : 8370 / 8305 / 8235
MKT COMMENTS
NIFTY FUT OI (both series) down with decreasing volumes indicating unwinding of long positions.
We expect profit booking will emerge on every rise.
On Tuesday,Opening Is Flat To Positive,
Buy NIFTY Above 4950,Sl Below 4930,Tgt 4975/95/5015/5040+
Sell NIFTY Below 4930,Sl Above 4950,Tgt 4905/4885/65/40+
BUY
BHARATFORGE@ 285,Sl 280,Tgt 290/95/300
ESCORTS@ 92/93,Sl 90,Tgt 95/97/99
HCC@ 127/28,Sl 124,Tgt 130/33/35
SBIN (2148), Sl Below 2130,Tgt 2175/85/95
SUZLON@ 100/101,Sl 98,Tgt 103/04/05
SELL
STER,Sl 785,Tgt 750/45/40
ZEE Below 205,Sl 210,Tgt 200/195/90+
FUTURES
Buy REL (1243)@ 1230,Sl 1215,Tgt 1260/70/80 (Close Above 1270,Hold Longs As BTST)
Sell STERLITE (762)@ 765/75,Sl 785,Tgt 755/45/35 (Close Below 740,Hold Shorts As STBT)
RIL (2099)
Buy@ 2085,Sl 2065,Tgt 2115/25
Sell@ 2140,Sl 2170,Tgt 2115/05
RNRL Above 92,Sl 90,Tgt 94/95/96
DLF Above 430,Sl 425,Tgt 435/40/45
KSOIL Above 63,Sl 61,Tgt 65/66/67
RPOWER Above 175,Sl 170,Tgt 178/80/83/85
Nifty ::High wave bullish candle with Hanging Man bearish candle... In sequence third day Nifty made an selling pressure bar.. Still too many support in down side but now onward consternate in selling at higher level and avoid buy at high.. Conformation of healthy correction only below 4788/4774.. Till then go with trend buy at support and watch strong resistance for selling with strictly stop loss either side.. Watch one level 4958 above 4958 momentum seems up, below 4958 momentum turns down…Our strategy for 22nd Sep. same as yesterday sell at high (S.L 5048) buy in deep (S.L 4900/4874).. Resistance for up move at 5003/5030/5048/5135.. Supports at 4958/4932/4900/4888/4874/4840..
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