Sensex Technical View :
Sensex seems to be taking support around the range of 16500-16600. The view remains as before the trend remains very positive till 16200 holds up on weekly closing basis.
If Index holds up above these levels for the next 2 weeks a move to 17.5k again cannot be ruled out.
But its time to be stock specific till we dont see a clear picture in coming days.
Stock Specific Technical View :
After quite some time a technical view on large cap stocks - The leaders SBI and Reliance which i expect could lead any upmove or downmove from here.
The charts would clear out the view.
SENSEX the next MULTIBAGGER .... a technical view ....
Planning for a Banglore edition on January 9. Would like to know if people would be interested. If yes please send in a mail to analyseindia@gmail.com. The seminar is open to all :)
SBI :
Multiple bottoms in the zone of 2060-2120.
Trendline support comes closer to 2095 zone. Holding these levels could give a smart bounce.
RELIANCE INDS :Trendline support in the zone of 990-980. Holding on to this would signify strength.
Only a move below 960 on closing basis would lead to weakness.
LOK Housing : Another high risk high return stock for next 2-4 mths. Earlier discussed many times. For the record advised to clients at 39/32 with long term view but small exposure.
Seems a fresh breakout could happen over 46 to take it higher.
SCRIP = STEEL AUTH. (BSE),
SCRIP CODE = 500113,
PREVIOUS CLOSE = 225.5,
STOP LOSS = 218,
TARGET = 270.
FOR INTRADAY MOVEMENT OF THE STOCKFILTER PLEASE Click Here!
(OR CLICK THE LINK ABOVE LIVE SENSEX WATCH.)
CHART AS ON 22-12-2009
WITH A CONSIDERABLE RISE IN VOLUMES, THE STOCK HAS GIVEN A FRESH BREAKOUT IN THE LAST TRADING SESSION. THE STOCK WAS IN CONSOLIDATION SINCE DECEMBER.
THE STOCHASTICS, RSI AND MACD SHOW A POSITIVE CROSSOVER.
TECHNICAL ANALYSIS AND PORTFOLIO MANAGEMENT SUGGESTS THIS COUNTER GOOD FOR A SHORT TERM RANGE.
STRICTLY MAINTAIN AND FOLLOW THE STOP LOSS.
Balmer Lawrie & Company: Bargain Hunt begins!
21 Dec 2009
Balmer Lawrie & Company (BLC) is a diversified PSU having Mini Ratna status. Its business spans across
Industrial packaging – Manufacturing barrels and drums
Logistics Infrastructure – Container Freight stations and warehousing activities
Logistics Services – Air and related logistics activities
Travels and tours – Ticketing, tours and money changing activities
Greases and Lubricants
Tea blending and packaging
Leather Chemicals
Engineering and Technology services
Stock data (18 Dec 2009) BSE
Share Price (Rs.) 543
52 week high/low (Rs.) 600 / 204
Market Cap (Rs million) 8843
P/S (x) 0.54 P/E (x) 8.75
No. Of Shares (Million Nos.) 16.29
Average Daily Volume (6month) 13,471
The company is aiming to achieve Rs. 2000 crores revenues and Rs. 200 crores in PBT by the end of FY2010.
Amongst the segments, it can be seen that travel and tours contributes ~40% of the total revenues and Logistics Infra and services contribute ~24% of the total.
Considering profit margins, despite tours and travels contributing maximum to the revenues, bulk profits come from Logistics Infra and services (contributing 63% of PBT). This segment has the highest profitability (26% margins) and also the fastest growth whereas travel segment contribute only 14% of PBT and has very low margins of ~3.4%
Greases / lubes and Industrial Packaging segments are moderate growers with growth of ~7% and together contribute ~32% of the revenues.
Tea blending and engineering services are the least contributors to the revenues and profits. As tea blending division is a commodity product their returns are quite low and does not justify the capital allocation, especially for this segment. Even the revenues from this segment have declined by 15% in current financial year. The company may be planning to exit the tea business if these returns do not justify the investments
BLC has grown its sales by 13% CAGR since last 5 years and its net profits by 35% CAGR. The sales and net profits in FY09 were Rs.1636 crores and Rs.101 crores respectively. The company wants to push the sales to Rs.2000 crores by end of FY10 and is also making efforts to achieve PBT of 10% during that time frame.
Since last 5 years, Balmer Lawrie has been able to maintain ROE greater than 22% because of proper cost controls, effective working capital management and better utilization of resources. The company is also an effective cash generator and this can be seen from the fact the cash from operations is equivalent to net profits with minimal capex.
The company also has strong balance sheet with zero debt and has net worth of ~Rs. 390 crores in FY09. It also has substantial cash balance of ~Rs. 248 crores which it can use for expansions or it can payback its shareholders by increasing the dividend. BLC post an attractive dividend yield of ~3.5% and with impressive record increasing dividends.
BLC is setting up a lube and grease manufacturing plant in Indonesia through a 50:50 joint venture with a local company by investing ~US$5m (~Rs. 24 crores)
Key concerns:
BLC is diversified to various businesses and it seems that it requires focusing on its key growth drivers i.e. focusing especially on logistics infra / services, tours and travels, and industrial packaging.
The company also needs to reorganize its business units for better allocation of capital. For example: The returns generated by the tea business do not generate adequate returns on capital.
Valuation:
BLC seems fairly valued with P/E of ~9x, P/S of ~0.6x and P/B of 2.4 (the margin of safety is not there), but when the company is evaluated on segmental basis the stock is valued cheaply especially when the travel business is contributing ~40% (Rs.662 crores) of the revenues. The current IPO of Cox and Kings whose revenues were just ~Rs.155 crores is valued 17 times its sales and similar is the case of Thomas Cook also (5 times its sales). If those companies are getting valuations at this level then Balmer Lawrie should also fetch some decent valuations in the travel business. The price / sales ratio of the whole BLC is ~0.6 indicating that it is largely undervalued.
Other segments like Logistics infrastructure and services, Greases and lubes, and Industrial Packaging should be atleast valued at P/E 10-12 (Gateway Distriparks has P/E of 14, Castrol is available at P/E of 26). So by adding up the numbers, we get the fair value of ~Rs.1500 crore vs. mcap of Rs. ~900 crores for the whole company making a stock at really attractive “BUY”.
Deccan Chronicle :
Good for short term on breakout... Traders keep a watch.
Nifty :: An insider day with positive bias.. Made Belt Hold line bull candle with low volume.. From last two days we constantly say that bounce may be possible near strong support zone due to over sold short term indicator and it is.. Now for 23rd Dec watch first resistance 4998 above 4998 momentum turns positive at least for short term but face resistance near breakdown trend line at higher level.. Our strategy for 23rd Dec. only above 4998 buy in deep (S.L 4935) Sell at high (S.L 5074) .Watch next strong resistance zone 5040 to 5075, if face resistance in between this zone change strategy as sell at high (S.L 5091) buy in deep (S.L 4998).. Resistance for up move at 4998/5040/5063/5075/ 5091.. Supports at 4962/4944/4935/4900..
SCRIP CODE = 500113,
PREVIOUS CLOSE = 225.5,
STOP LOSS = 218,
TARGET = 270.
FOR INTRADAY MOVEMENT OF THE STOCKFILTER PLEASE Click Here!
(OR CLICK THE LINK ABOVE LIVE SENSEX WATCH.)
CHART AS ON 22-12-2009THE STOCHASTICS, RSI AND MACD SHOW A POSITIVE CROSSOVER.
TECHNICAL ANALYSIS AND PORTFOLIO MANAGEMENT SUGGESTS THIS COUNTER GOOD FOR A SHORT TERM RANGE.
STRICTLY MAINTAIN AND FOLLOW THE STOP LOSS.
Balmer Lawrie & Company: Bargain Hunt begins!
21 Dec 2009
Balmer Lawrie & Company (BLC) is a diversified PSU having Mini Ratna status. Its business spans across
Industrial packaging – Manufacturing barrels and drums
Logistics Infrastructure – Container Freight stations and warehousing activities
Logistics Services – Air and related logistics activities
Travels and tours – Ticketing, tours and money changing activities
Greases and Lubricants
Tea blending and packaging
Leather Chemicals
Engineering and Technology services
Stock data (18 Dec 2009) BSE
Share Price (Rs.) 543
52 week high/low (Rs.) 600 / 204
Market Cap (Rs million) 8843
P/S (x) 0.54 P/E (x) 8.75
No. Of Shares (Million Nos.) 16.29
Average Daily Volume (6month) 13,471
The company is aiming to achieve Rs. 2000 crores revenues and Rs. 200 crores in PBT by the end of FY2010.
Amongst the segments, it can be seen that travel and tours contributes ~40% of the total revenues and Logistics Infra and services contribute ~24% of the total.
Considering profit margins, despite tours and travels contributing maximum to the revenues, bulk profits come from Logistics Infra and services (contributing 63% of PBT). This segment has the highest profitability (26% margins) and also the fastest growth whereas travel segment contribute only 14% of PBT and has very low margins of ~3.4%
Greases / lubes and Industrial Packaging segments are moderate growers with growth of ~7% and together contribute ~32% of the revenues.
Tea blending and engineering services are the least contributors to the revenues and profits. As tea blending division is a commodity product their returns are quite low and does not justify the capital allocation, especially for this segment. Even the revenues from this segment have declined by 15% in current financial year. The company may be planning to exit the tea business if these returns do not justify the investments
BLC has grown its sales by 13% CAGR since last 5 years and its net profits by 35% CAGR. The sales and net profits in FY09 were Rs.1636 crores and Rs.101 crores respectively. The company wants to push the sales to Rs.2000 crores by end of FY10 and is also making efforts to achieve PBT of 10% during that time frame.
Since last 5 years, Balmer Lawrie has been able to maintain ROE greater than 22% because of proper cost controls, effective working capital management and better utilization of resources. The company is also an effective cash generator and this can be seen from the fact the cash from operations is equivalent to net profits with minimal capex.
The company also has strong balance sheet with zero debt and has net worth of ~Rs. 390 crores in FY09. It also has substantial cash balance of ~Rs. 248 crores which it can use for expansions or it can payback its shareholders by increasing the dividend. BLC post an attractive dividend yield of ~3.5% and with impressive record increasing dividends.
BLC is setting up a lube and grease manufacturing plant in Indonesia through a 50:50 joint venture with a local company by investing ~US$5m (~Rs. 24 crores)
Key concerns:
BLC is diversified to various businesses and it seems that it requires focusing on its key growth drivers i.e. focusing especially on logistics infra / services, tours and travels, and industrial packaging.
The company also needs to reorganize its business units for better allocation of capital. For example: The returns generated by the tea business do not generate adequate returns on capital.
Valuation:
BLC seems fairly valued with P/E of ~9x, P/S of ~0.6x and P/B of 2.4 (the margin of safety is not there), but when the company is evaluated on segmental basis the stock is valued cheaply especially when the travel business is contributing ~40% (Rs.662 crores) of the revenues. The current IPO of Cox and Kings whose revenues were just ~Rs.155 crores is valued 17 times its sales and similar is the case of Thomas Cook also (5 times its sales). If those companies are getting valuations at this level then Balmer Lawrie should also fetch some decent valuations in the travel business. The price / sales ratio of the whole BLC is ~0.6 indicating that it is largely undervalued.
Other segments like Logistics infrastructure and services, Greases and lubes, and Industrial Packaging should be atleast valued at P/E 10-12 (Gateway Distriparks has P/E of 14, Castrol is available at P/E of 26). So by adding up the numbers, we get the fair value of ~Rs.1500 crore vs. mcap of Rs. ~900 crores for the whole company making a stock at really attractive “BUY”.
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