My View On Tata Steel Ltd.

About The Company

The largest private sector steel company of India. The company has been headed by the well reputed group of country " TATA ". The company has been ever developing with lots of acquisition in India and overseas. The company is so well known that doesn't need an introduction. The name itself is its' intro.

About The Results

Tata steel has posted disappointing results for the third quarter ended 31^st Dec 2008. It would have been naïve to have expected anything else. The only vagary was in the expectation of the fall in the profits. Obviously the market has expected the fall in profit to be quite sharp but the actual numbers were better and thus the stock reflected this with a rise in the share price. Despite the fall in the topline and bottomline for Q3FY09, the stock closed over 2% higher.

These are standalone results and do not include the performance of Tata Steel Europe Ltd. (Corus) for the quarter / nine months ended December 31, 2008.This would be published by the end of February 2009.

The company's standalone net sales declined to Rs.4,735.68 crore, a YoY fall of 4.8% and QoQ it fell 30%. Its sales volumes were down 13.8%. The company's exports dropped to Rs 404.30 crore from Rs 596.04 crore in the corresponding quarter last year.

Steel production for the quarter fell to 1.23 lakh tonnes as compared to 1.25 lakh tonnes, while steel sales dropped to 1.07 lakh tonnes from 1.24 lakh tonnes for the corresponding period of the previous year.

The operating expenses of the company have gone up and this only added on to the woes. YoY it surged 19.23% and the biggest increase was on account of the raw material cost which YoY rose 73% and 17% on a sequential basis. Cost of power rose 10% YoY and 5% on a QoQ. The staff cost went up 56% on a YoY but QoQ it showed a drop of 5%.

EBITDA on a YoY was down 37% at Rs.1359.64 crore and PBT was down 52% at Rs.760.13 crore. Net profit for the quarter was down 56% on a YoY at Rs.466.24 crore and this was down 74% on a sequential basis.

The margins have also been battered down substantially. OPM was down at 28.31% from 43.16% in Q3FY08 and NPM was down at 9.71% as against 21.48% in Q3FY08. Lower volumes, lower realisations and also higher inventory pile up led to the overall fall. Steel inventory increased to Rs.636 crore from Rs.61 crore on a YoY.

Notional exchange loss during the period includes an unrealized translation loss of Rs.153.56 crore for the quarter on Convertible Alternate Reference Securities (CARS) issued in September 2007. The liability has been translated at the exchange rate as on December 31, 2008. CARS are convertible into equity shares only between September 04, 2011 to August 06, 2012 and are redeemable in foreign currency only in September 2012, if not converted into equity, and are neither convertible nor redeemable till September 04, 2011.

During the quarter the company subscribed to 35,88,022 Rights Shares of Tayo Rolls and consequently it has now become a subsidiary of Tata Steel with effect from December 01, 2008.


About The Stock.

The stock need to be accumulated for long term prospective at every dip. There is no need to check the potential of the company. The bad phase in entire country and abroad is effecting its results , rest the whole story remains intact.

Disclaimer : I do not have any personal holding in this stock.

My View On BASF

About The Company

The company is a part of the giant conglomerate which manufactures pesticides and other chemicals.The performance recently has been disappointing as such the second half of the fiscal is not very good. As look at the past figures that this is the cyclical nature of the business – the agriculture sector especially, typically there is a slowdown in the second half as the crop is harvested. The products are used in the first half when crops are planted. The cyclical nature plus the overall global slowdown has pulled down the bottomline to a new low.

News In the Counter

Sometime ago there was news that its parent company had made an open offer to acquire to acquire Ciba Holding AG, Basel, Switzerland, [CIBN], and was to soon make a public takeover offer to Ciba’s shareholders. BASF was to pay CHF 50.00 in cash for each nominal share in Ciba. Wel, no development on that front till now but with Pfizer to now buy out Wyeth, once again hopes have revived that we could see more consolidation in this sector.

About The Results

The company has posted results for the third quarter ended 31^st Dec 2008. This is probably one the worst performances ever of the company.YoY, right from the beginning, i.e: the topline, there has been a decline, coupled with a rise in the operating expenses thus aggravating the already bad situation. Net sales was down 7.3% at Rs.206.39 crore. Operating expenses which is usually over 90% of the revenue , in current Q3 ate away 97% of the net sales, which in Q3FY08 ate away 91%. EBIDTA was down 70% at Rs.6.65 crore but after depreciation and taxation, PAT was down to a paltry Rs.41 lakhs as against Rs.11 crore in previous fiscal’s third quarter.

The shareholding pattern as on 31/12/08 indicates that promoters hold 71.18% of the shares, institutions hold 10.02% and floating stock is 18.80%. Of this again, 15.83% shares are held by individuals holding nominal share capital upto Rs.1 lakh.

About The Stock

The stock has now been a bad choice for any sort of investment including short to medium to long term horizon.

Disclaimer: I do not have any holding in this stock.

My View On Indusind Bank

About The Company

Hinduja owned IndusInd Bank is in que to establish the brand in the Indian Market. The bank has been trying to have a significant market share , which the upcoming times would say.

About The Results

The Bank has posted a good performance for the third quarter ended 31^st Dec 2008. And to a large extent, the spurt in the performance has been on account of the rise in other income, which was at Rs.133 crore as against Rs.74.30 crore in Q3FY08. And this was mainly on account of an increase in operational fee income, sale of third party products such as insurance, trade finance, treasury gains and foreign exchange transactions.

QoQ, Net Interest Income was up 11% at Rs 116.58 crore and 17.10% on a YoY. Advances grew by 12% while the management has give a guidance of a rise of 25% for FY09. The main focus of the bank has now shifted from vehicle financing, which as such was risky business with higher bad debts, to corporate financing. 50% of its bad loans are from the retail segment ad the rest from the wholesale portfolio.

The biggest positive for the Bank is the recovery it has made from Essar Oil. It has got back Rs 115 crore, lent to Essar in the 90’s and this has got down its NPA drastically in the third quarter. In Q3FY09 net NPA was at 1.3% which in Q2FY09 was at 2.21% and in

Q3FY08 at 2.42%. The loan recovery is expected to improve the asset quality of the bank substantially. CAR for the quarter was at 12.40% as against 12.45% in Q2FY09 and 12.04% in Q3FY08.

Net interest margin has improved from 1.7% in Q3FY09 to 1.95% and from 1.84% on QoQ. This was mainly due to increase in yields which rose from about 12.6% to well above 14%.

About The Stock

The stock has never been in limelight and the investor do not react to the stock much.There are better choices available in this sector for investment and trading , so this stock could be avoided.

Disclaimer : I do not have any personal holding in this stock.

My View on Dr Reddy

About The Company

The company is engaged in medicine business . Dr Reddy's , Ranbaxy and Cipla are some of the market leaders in this segment. The stock has been fancied among the investor for long time in the capital market.

About The Results

The company has posted result for the last quarter with a PAT at Rs.192 crore. The earnings would have been much higher but for the lower earnings from Europe fell due to declining prices, affecting the margins. But on the other hand, its sales in USA more than quadrupled due to the launch of its new generic drug Sumatriptan, used for treating acute migrane.

Overall revenues were up 49% on a YoY at Rs. 1840 crore. EBITDA was up 58%. Net profit was at Rs.192.0 crore as against a net loss of Rs.121.30 crore it posted in Q3FY08. What is commendable is that it posted a net forex loss of Rs 49.3 crore as against a net gain of Rs. 8.7 crore in Q3FY08. The forex loss was mainly on account of fluctuations of Russian Rouble.

Germany continues to remain a problem region. The withdrawal of Olanzapine stocks due to upholding of patent validity by a German court and price decline pulled down the margins. Its AOK tender too is entangled in legal problems and the company has said that a better profitability picture from Germany would emerge only in Q4.

Dr Reddy’s launched 10 new products during the quarter and it plans to launch two biologics products during next fiscal in the domestic market. For FY10, the company has projected a flat growth as a lot of its growth depends on the outcome of its tenders in Germany.

About The Stock

The stock has been evergreen performer but some pain is yet left and need to be over before fresh buying in this counter.

Disclaimer : I do not have any personal holding in this company.

My View On Bongaigaon Refineries

About The Company

A good company in the refinery segment and stock has been popular among the investor in the capital markets.

About The Results

The company has posted results for the third quarter ended 31^st Dec 2008 reported a 24% drop in net sales on a YoY at Rs.1112.07 crore and this fall is precipitated further at 49% on a QoQ. This fall is despite the company stating that its refinery capacity utilisation during the quarter was 95.1% as compared to 79.1% during Q3FY08 and this higher capacity utilization was due to higher availability of crude oil. DMT and Polyester Staple Fibre (PSF) unit continue to remain under shutdown during the period due to economic reasons. The reformer unit of Xyelene plant continues to operate on Motor Spirit (MS) mode and consequently the same is being treated as a part of Refinery Unit. Obviously these factors pulled down the realisations despite higher utilization.

The company posted a net loss of Rs.224.09 crore as against a net profit of Rs.84.90 crore in Q3FY09 and net loss in Q2FY09 was at Rs.81.15 crore. This was mainly on account of the Rs.350 crore lost due to inventory. The GRM from April to December was marginally lower at 5.3, which in Q2FY09 was at 5.4.

What is notable is that it’s operating expenses for the current third quarter has come down drastically. This is obviously due to the fall in the price of crude. It has come down by 40% on a QoQ and on a YoY it remains steady with a rise of just 2.47%. In the coming months, commodity experts confer that price of crude is expected to go up, not to three digit numbers but surely higher than the levels it is at today.

Clue in The Stock

The merger with Indian Oil Corporation? Subsequent to the approval by the shareholders and creditors of the company to the Scheme of amalgamation for merger of Bongaigaon Refinery with IOC, a confirmation petition was filed by the company with the Ministry of Corporate Affairs (MCA). The final hearing before MCA has been concluded on November 19, 2008 but the order in the matter has been reserved by MCA.

About The Stock

A shrewd eye to be kept on Indian markets and some stake could be added up on dips.

Disclaimer : I do not have any personal holding in this stock

My View On Jet Airways

About The Company

The high cost flight counted in privileged class of flying is passsing under a very bad phase. The whole aviation sector as a whole is under the influence of slowdown and finding difficult path for the survival itself.

About the Results

Jet Airways has announced its third quarter performance .Its Q3FY09 performance was dismal to say the least. It posted a loss of Rs 214 crore in the third quarter, which is more than double the net loss of Rs 91 crore recorded in Q3FY08. This loss was despite the fact that net sales rose to Rs.2908 crore from Rs 2,426 crore year-on-year. Yet, the silver lining here is that QoQ, the net loss has come down 44%.

The most apparent reason for the loss was obviously the high fuel and other operating costs and the matter was further aggravated due to lower load factors. The company also had to big price due to the launch of its international activities which hiked the costs. It also posted a forex loss of Rs.49 crore.

On the international front, the company cancelled its loss making route of Amritsar-London and also San Francisco via Shangha. It is also planning to cancel Bangalore to Brussels. The profitable sector is to the Gulf, SAARC region and ASEAN.

It is also working out lease agreements, it has already leased three long haul flights to Turkish Airlines, two to Gulf Air and is also close to finalising lease for four more longhaul aircrafts thus eliminating surplus capacity.

To cut costs, the company did want to slash jobs but was not allowed to do so due to large scale public demonstrations against the company. It then announced salary cuts but is yet to be implemented. It has also renegotiated agreements for goods and services and all these measures would hopefully bring down the costs in Q4.

Yes, the slowdown would impact the load factor but the company hopes to offset this with lower ATF. And more importantly, the company has clarified that it does not face any liquidity crunch as it has received close to Rs.1250 crore to meet its working capital needs from various banks and in the coming weeks, it also plans to go for another term loan of Rs.750 crore. Interest outgo would thus burgeon and is a cause for concern. Interest outgo in Q3FY09 was at Rs.205.93 crore as against Rs.156.46 crore in Q2FY09 and 155.41crore in Q3FY08.

About The Stock

The stock has failed to performed ever since it has entered into the capital market.The stock didn't show any significant rise even when the company was in profit and the performance of the stock has been so bad that it failed to touched even the issue price.The investor in the stock has been literally looted. The conclusion is clear that one should stay away from this stock in aviation sector.

Disclaimer : I never had any holding in this stock

My View On Bajaj Finance

About The Company

This company provide finance to the customers to buy two-wheelers which should have actually seen a dip, given the soaring interest rates and thereby culling demand, Bajaj Auto Finance has emerged victorious. Despite Bajaj Auto reporting a fall in the sale of its two-wheelers, month after month, this company which finances the two-wheelers also has posted a very good performance for third quarter ended 31^st Dec 2008.

About The Results

For current Q3, the company has shown a 44% rise in net sales on a YoY at Rs.157.46 crore which on QoQ was up 15.6%. Despite operating expenses going up by 25% and interest coming down marginally by 2%, the rise in PAT has been phenomenal – it has gone up by a whopping 147% on a QoQ and 40% on a YoY at Rs.11.28 crore. Deployments were down at Rs.612 crore and the company has tightened its credit lines across all its products.

The company’s bad debts for the quarter rose by a sharp 54% at Rs.45.81 crore and its recovery commission was up 13% at Rs.10.91 crore.

Clues In the Stock

Clearly, the jump in the topline has helped the company and this jump was achieved through some smart marketing strategies. During Q3, it launched a new scheme – Loan against property across 11 cities in India. And this scheme, as the name suggest, offered loans against the properties – residential or commercial, for amounts ranging from Rs.25 lakhs to Rs.10 crore. This was sweetened with unique features like rewards for prepayment, nil preclosure charges, free personal accident coverage and non-medical insurance cover too. And for the two wheelers that it finances, it announced a scheme wherein it gave free extended warranty on all the Bajaj Auto vehicles it finances.

About The stock

The result could not be based as justification for fresh investment in this stock. This stock should be avoided for current times.

Disclaimer: I do not have any personal holding in this stock.

My View On J K Lakshmi Cement

About the Company

One of the renowned company in the cement sector and been fancied stock in the capital market.

About the Results

The company declared its third quarter performance for the period ended 31^st Dec 2008, the company did surprise all with a very good QoQ increase in performance, though on a YoY there has been a slip in the bottomline.

QoQ profit margins have improved and this has been vastly possible due to the lower operating expenses and lower interest outgo. Net sales rose by just 1.35% but a 7.68% fall in operating expenses helped it post a 39% rise in EBITDA at Rs.78.58 crore. Interest outgo, which was at Rs.10.82 in Q2FY09, has come down to 4.73 crore in Q3FY09. Net profit at Rs.56.04% was up by a whopping 108% on QoQ. OPM improved from 19.30% to 26.39% and NPM from 9.15% to 18.82%.

But the story does a U-turn when compared on a YoY basis. Net sales was up 5.45%, operating expenses rose 12% and this pulled down the EBIDTA, which was down 10% and consequently, PAT was also down 8.28%. Production on a YoY rose from 8.89 lakh tonnes to 9.98 lakh tonnes and sales was up marginally from 9.09 lakh tonnes to 9.98 lakh tonnes.

QoQ, this is a good performance but YoY, clearly the pressure of the slowdown in realty activities and the fall in the price of cement, especially in Northern India where KJ has its cement unit and also where it sells, has been reflected. The lower fuel costs have come to the rescue which helped it post a better QoQ, which otherwise might not have been possible.

The company’s ongoing expansion plans are well on schedule. Infact the project is expected to be completed by Jan 09’ end and then the capacity will go up from the present 3.65 mtpa to 4.75 mtpa. It is also setting a greenfield cement plant with a 2.7 mtpa capacity in Chattisgarh and for that it is yet to acquire the land.

About The Stock

Unless the slowdown is over and specially in reality sector , any hope for major positive news from cement sector could not be made. Stock is a good buy but the present scenario doesn't suggest an immediate buy.

Disclaimer : I do not have any personal holding in this stock.

My View On Ahluwalia Contractors

About The Company

This Delhi based company is engaged in constructing wide range of structural buildings such as healthcare facilities, hotels, educational institutions, information technology parks and corporate office premises. Despite the slowdown in the sector, the company is poised to do well and this change in fortune is on the back of this huge order

About The Results

The going has been good for the company. In the second quarter ended 30^th September 2008, the company posted a very healthy 60.5% rise in net sales on a YoY. EBITDA was up 45% and PAT grew 19% at Rs. 14.52 crore. The company's current equity is Rs 12.55 crore. Face value per share is Rs 2. The revenue guidance for FY10, based on the back of the order book looks promising a growth of 40% is expected in the topline.

Clue In The Stock

1. Investor fancy was back on this counter on news that it has bagged orders worth Rs 394.01 crore. And post this order, its order book stands at Rs 4150 crore as on 31 December 2008, which is nearly 5 times its sales in the year ended March 2008.

2. This is being viewed by the analysts as a great news and reflects very good going for the company in the coming fiscal. These projects are to be executed over a period of 24 months so this naturally means that in FY10, the company will have a robust growth and the future looks bright.

About The Stock

The stock performance is good but fresh investment at current times in reality sector is to be avoided as the slowdown in reality is yet to come.

Disclaimer : I do not have any personal holding in this stock.

My View On Future of Future Group

The present scenario is tough for the retail sector. The future group engaged in retail business under the brands for all categories of public including Pantaloons , Big Bazaar and Food Bazaar is not an exception.

The consumers just do not seem to be in any mood to buy. Ignoring the massive sales and discounts announced by the Pantaloon group, which are also includes Big Bazaar and Food Bazaar; consumers seem to have given it all the thumbs down. People are buying less and surely, with uncertainty all over, the mood steers towards saving and being discreet in where they spend their monies.

In December, Big Bazaar, food Bazaar reported a 4% fall in sales, Pantaloon sales fell 14% and its home retail sales was down 10%. Its fashion, food and general merchandise have registered a good growth in same-store sales but the fall in categories like mobile handsets, electronics and furniture have pulled down the overall sales. Sales in the lifestyle segment have taken a hit because some high-value international brands sold, like Etaam and Lee Cooper, from the stores did not do well.

Kishore Biyani refuses to accept that the margins will be under pressure as he justifies saying that his private labels are doing well and sales would go up across all segments, by around 19% in January. Right now expansions are on hold but once again, Biyani is confident that it will be able to add 15 Big Bazaars, 5 Centrals, 3 Home Towns, 10 E-zones, 1 Ethnicity and 4 Pantaloon stores by July 09’. Once again, expansions are on hold not because the group has a crunch but more due to the fact that malls are deferring openings and slower construction of malls due to the liquidity crisis faced by the developers. The market did not buy this logic and the stock dipped yesterday by around 9% and touched a new low at Rs.170.15.