BALKRISHNA IND

Balkrishna Ind is biggest player in OTR [off the road] Tyre segment, manufacturing tyres for Agri segment [tractor and lawn/garden machines] and Ind.&Construction segment [including earthmoving equipments]. Its present capacity is 72,000 MTs, which is being raised in stages to touch 1,00,000 MTs by June'07 and further to 1,50,000 by 2008. Almost 92-93% of the products of company are exported to Europe [55%], US and other [45%] countries. Now looking to the cooling off witnessed in key raw materials prices, and rising production, the H-2 of current year will show significant improvement in margins. The stock is available at less then 9X for 08 earnings, which looks very attractive for a Tyre company which is enjoying best margins in the industry and exporting more then 90% of products to developed markets. One can buy the stock around Rs 515 , with an stop loss of Rs 490 and look for a target of Rs 675 to 750 in medium term

GreenPly...RS 90

Greenply Ind has signed a contract for CC.Here is the annoucement made at bse.
It is a buy according to me.Have a look at shareholding pattern at bse.Many FII's have taken stake in it.


Greenply Industries Ltd has informed BSE that the Company has signed the Carbon Emission Purchase Agreement with a private investment fund. The deal, worth around $5 million, which has been signed under the Clean Development Mechanism of the Kyoto Protocol, facilitated by Aeneas Capital Management. The agreement for delivery of Certified Emission Reductions (CERs) is valid till 2012, where CERs shall be delivered every year, starting FY 2006—07. The estimated revenue that will be added to the Company's topline every year shall be around EURO 500000. Under the agreement, the Company, India's largest interior infrastructure Company, will sell its emission reduction credits, created by burning bio mass at two of its plants. These plants will be using biomass for generation of steam. The normal practice, followed by players in the interior infrastructure space, is to use coal/firewood/waste timber/fossil fuel, which is environmentally hazardous. Carbon credits, unlike paper money that trades for physical goods and services, are a new money exchange intended to reduce pollution, particularly emissions of carbon dioxide that is caused by burning fossil fuel/coal. Carbon emissions are said to be the leading cause of global climate change

Eagle Eye Picks

supertex industries.....its been on circuits with huge trading volumes compared to its average vol.....frm .40 paise to .82 paise in juss one week...n can go more up till there is no major correction..those holding shld continue holding it as it can stilll give superlative returns frm here....ofcourse penny stock with punters riding it....ride it with ones own risk....i will book profit when it closes negatively on low volumes..........for 2-3 days.....expecting 5-7 rupess in a yr

one shld keep an eye on raipur alloys....expected to touch 200 soon....though has run up frm 100 to 150 in 15 days......enter now at 143 with stoploss of 125-130.....a value pick at 100....reliance n morgan stanley have entered the company

hyderabad industries might soon bottom out at 250...again gonna touch 325-350 by jan...thts something we have to wait n watch

surya pharma n hiran orgochem.....value picks with limited downside...max 10-15 % frm my viewpoint in the worst case scene looking at current market position

Immediate Buys

hyderabad industries....270.....target 330 by jan....12-15 months target 700 (bonus candidate too)
surya pharma....77....target 95-105 by jan......12-15 months target 200
ssi....180 right now.....250 by march....invest according to one risk appetite
super tex is on the move again.....keeep holding on to it....seems like things have finally started cooking into it
karur kcp...61......target 75 by jan

Confidence Petroleum can touch Rs 15...right now 6

Confidence Petroleum India in a penny stock because it’s Re 1 paid-up had it been a Rs 10 paid-up it wouldn’t have been a penny stock. It is into three business segments; they are into bottling up LPG cylinders, they make LPG cylinders and they also market LPG to commercial and industrial segment. Earlier this company was into very little business of bottling of LPG they have recently merged their privately closely held company into the listed company. On a consolidated basis this company made about Rs 18 crore of revenue and Rs 1 crore of profit last year on the merged basis."
Going forward the company is going to expand rapidly. Their LPG bottling business wherein they do the bottling for the PSU oil companies like HPCL, BPCL, IOC and they also do it for Reliance Industries that’s going to be more than double very shortly. They have about 22 operational LPG bottling plants, which we expect that will go to about 48 plant by the end of this year. They already have 38 plant now but 15-16 plant are currently not operational and they have ten more plant in the pipeline. They recently started one bottling plant for HPCL in Himachal Pradesh and they are setting up one more plant in Baddi again for HPCL

There will be more than 100% growth in this segment within this fiscal itself. They even have cylinder-manufacturing unit near Mumbai where they have about 600 cylinders per day, which they have already ramped-up to seven fold to about 4000 cylinders.

They have got an order of about Rs 47 crore in September from IOC and HPCL for cylinders. So that’s another segment where there will be an exponential growth. The third business segment which is a recent addition they have been doing very little of that business which is LPG marketing, there are lot of subsidies so that’s not the viable business for the private sector. But they have entered into commercial segment wherein they are procuring LPG from Reliance and they are distributing it in Maharashtra to Reliance bottlers as well as lot of commercial units, they supply both in cylinders and bulk. So that’s another segment

I expect that all these three business segments will contribute equally to their bottomline going forward. So the kind of ramp-up that we see in terms of revenues and earnings because of these developments - they have made Rs 1.1 crore of profit in FY06. In the first six months on a consolidated basis they made a profit of Rs 2 crore, in the second half I expect that they will do about Rs 6 crore of profit and the total revenue estimated this year would be around Rs 100 crore

"Next year i.e. FY08 they should do about Rs 180-190 crore in revenues and about Rs 30 crore in terms of bottomline. At, Rs 30 crore next year it will have an EPS of about Rs 1.5 and we have given a PE of around Rs 10 so, that sets a target of about Rs 15. The PE of Rs 10 is based mainly on a comparison with Everest Kanto and I have valued it at a discount of about 26% to Everest Kanto’s valuation. Given that there is a lot of difference in the product mix as well as the size, scale and the management."

I think that PE of Rs 10 is a reasonable for this company given the kind of growth etc. so I set a target of Rs 15, which might be just initial target because the company is also getting into CNG cylinder manufacturing, they have a plan to set-up a CNG plant, which I believe the construction will start sometime in January. So that will add to their revenues and growth from FY09 onwards. So none of the company is moving of their valuations so the valuation should also improve going forward. "