Micro Technologies - 532494

Forbes had a article in  Sep 2010 about Micro technologies.

http://www.forbes.com/global/2010/0913/best-under-billion-10-micro-technologies-inventively-pleasant.html?boxes=Homepagelighttop

Promoter - Sekhar Padmanabhan, pHd from University of Mumbai. Aditya Sekhar is his son and taking over his reins - now, he is the Chief Strategic Officer.

Established in 1992

223 Cr market cap at current price of Rs. 156.20. FY11 NP was at 44Cr. Expected NPM is 10 to 13 %. Regular dividend payer with a yield of 0.5 to 0.75%. 

Mumbai based company. Production and assembly in Baddi, HP (tax benefits). 

Security products like software that calls or SMSs when someone accesses your computer or black boxes placed in power stations which monitor temperature, fuel levels, sabotage etc and calls/SMSes employees.

Clients:

Reliance Industries, Reliance Energy, ICICI Bank, Bank of Maharashtra, Sicom, 

HPCL, BPCL,  IL & FS, IOC, TVS Group, Rolta, Eureka, Glenmark, Pantaloon, 

Shapoorji Group, Mumbai Railway, RCF, Atlas Copco, MTNL & L & T etc.

http://www.microtechnologies.net/ 

IVRCL group workings

3 group companies which have been used by promoters to play around:

IVRCL (earlier IVRCL infra)

IVRCL holdings (promoted by IVRCL)
Hindustan Dorr-Oliver (promoted by IVRCL)

Promoter is Sudhir Reddy. He holds very low shares (11% in IVRCL infra, IVRCL holds 75% in IVRCL holdings and 55% in Hind Dorr-Oliver) - no pledged shares. So, essentailly Sudhir Reddy is holding very less in these companies. Government pension fund, HSBC and ICICI hold double Sudhir Reddy's shares. Again, this is not a L&T to run without promoters.

Stock split in Mar 2006

Bonus Shares 1:1 in Mar 2010

Sell a part of the company (IVRCL holdings) listing it as an IPO

Sell BOT assets of IVRCL to IVRCL holdings and move IPO money to IVRCL

Announce IVRCL and IVRCL holding to merge and move real estate to a new company

BUY UK based bankrupt firm Davy Markham through Hind Dorr Oliver.

Seek a Buyer for HDO.

Finally, move HDO's manufacturing unit into a new company and seek a Buyer for either HDO or the manufacturing company.

Great Offshore - business

This stock is in its 52 week low. Is it a good time to buy?

Approximately 2900 Cr debt as of March 2011. This is the reason, I think GOL is finding new bottoms. Profits have declined, but this company is not making any losses as such. 

Bharati Shipyard is the promoter

In 2009, Vijay Kantilal Sheth, the promoter of Great Offshore Ltd (GOL), was in trouble when lenders made margin calls under a share-pledge deal. The promoters of Bharati Shipyard stepped in to help Sheth with the required cash.

Although Bharati Shipyard’s PC Kapoor maintained that it was only a strategic investor, it subsequently wrested around 14.89 per cent stake in GOL, making itself the largest shareholder, and launched an open offer for another 20 per cent. This was the first instance in the history of corporate India, where pledged shares were invoked.

The battle to acquire GOL intensified after ABG Shipyard made a counter offer to acquire 33.8 per cent. Both continued mopping up shares from the market and revising the offer price in a takeover battle that lasted over six months. It finally came to an end when ABG Shipyard exited the race and Bharati Shipyard took control of GOL.

Source: Business Standard

A2Z Maintenance and Engineering Services - 533292

BSE: 533292 

NSE: A2ZMES

Sector: EPC, Engineering, Power


Jhunjhunwala stock, very volatile. Has been falling since listing in Dec 2010. Now at 12 times PE. This company was established in 2002. Serves state Ebs, State distribution companies and transmission companies. EPC company focussing on power.


http://www.a2zgroup.co.in/

The group lists the following companies as group companies:

A2Z Maintenance & Engineering Services Limited

A2Z Infraservices Limited

A2Z Infrastructure Limited

A2Z Powercom Limited

A2Z Powertech Limited

A2Z Water Solutions Ltd

A2Z E Waste Management Ltd

As this has listed only for a year, it is better to wait to understand the regular dividend payout. 

Pledged shares - Promoters have 42% shareholding. 17% is pledged. So essentially promoters hold 25%.

Amit Mittal the major shareholder himself has pledged 40% of his shareholding.

This share is case of major fall in prices and great loss to public who just invested because of Jhunjhunwala, engineering and power. It is not right to pay 30-40 times earnings for new companies listing in BSE comparing them to Areva and Alstom which are MNC companies. Now Areva and Alstom trade at 15-20 PE. Now A2Z is trading at 12 times. I feel there is even more downside. can buy at 10 times.

If you had bought this is IPO at Rs. 400. you have 25% of your money remaining. This is why I stay out of unknown companies in IPOs.

ICICI Direct Muhurat picks 2011

1. Bharti 

2. Biocon

3. HDFC Bank

4. HPCL

5. ITC

Voltas

As soon as I think of this company, I think of air conditioners. Is this company worth current market capital of 3500 Cr just for selling ACs?

A - Electro-Mechanical products and services

B - Engineering products and services

C - Unitary Cooling products (ACs)

This company does more than that. 

More than 50% of the business is from EMP or MEP services - Voltas is still seen as a HVAC player in India. HVAC contracts would be offered by airports, metro train stations, malls, IT parks, hospitals, industry floors, games stadias, etc. Voltas would essentially have to design and implement heating, ventilation and air conditioning contracts. Voltas may get other parts of the project as well such as plumbing, electrical work, fire and safety, environmental control system, etc. Full fledged MEP contracts are still not common in India, but are common in developed countries. The company has been winning and executing waste water and air quality projects in environmental engineering. Middle east is a major market for Voltas' MEP projects.

Around 10% of the revenues come from the engineering services. Voltas manufactures textile machinery - spinning, weaving, knitting and dyeing. The company also manufactures mining and construction equipment - crushing, screening, mining loaders, crawler cranes and large excavators. Materials handling equipment are also manufactured by Voltas.

The remaining 35% of the revenues for Voltas are from ACs. They have all types of models in the market and a very good distribution network. This is a very competitive market, esp from foreign brands.

Gold - Who sells gold?

In India, everyone I know only buys gold. No one sells them. Glitter of gold is always invigorating to the average Indian female. From my pea brain, I also know that women from Asian countries such as Indonesia, Malasia, Philipines and African countries such as South Africa, Kenya and Zimbabwe are also gold crazy. 

Governments, banks and even some huge organizations hoard gold assuming gold is a safe haven. What do they even do with that? they just spend on a huge security system and an strong vault which would keep the value locked in it. What happens if gold price falls a bit - they still hold it.

More than women and governments, there are these ETFs which buy gold on behalf of many investors (investors are both people and organizations). This is the category which really manipulates the price of gold. The ease which with you can buy or sell ETFs make this crazy market even crazier. 

So, when I sit back and read that Marc Faber expects prices to go down to $1500 or even lower to $1100, I am angered at the ETF investor who has both been pumping in money when gold was lower and sell when gold was higher.

Spicejet - is it a good time to buy?

Maran buys more stake in Spicejet putting in 130 Cr and making his stake 43%. Does that mean it is profitable to buy Spicejet at this time?

I dont think so. I always am not a fan of airline companies. Or any companies which do not make profits.

the company just shows 85 Cr of debt and 90 Cr of negative reserves. For a 1000 Cr market cap and FY11 earnings of 100 Cr seems like around 10 times and hence attractive. Until 2 years back this company made heavy losses. these have still not been recovered.

But the negatives are that, this is a very competitive industry with Air India, Jet and Kingfisher taking most of the costly tickets. So called no-frills airlines are also very competitive with JetLite, KF(delta), Paramount, GoAir, etc.

With crude prices at more than $100, airlines cannot be profitable as they need to competitive, i.e. low revenue.

As it is seductive to own an airline, a lot of people try to own an airline. Richard Branson (Virgin) and VIjay Mallya are of that breed. They own an airline and that is a style statement.

Worldover, airline stocks have been the most speculative, they have never made continuous profits.

Some people say Maran has put in 2G money into Spicejet. To me, what matters is, can Spice pull off?

I appreciate Maran for the way he built Sun (though with political connections) - it was a well run company. But can he make this a sucess story? Can putting money into a loss making enterprise, buying more airplanes, improving customer service, introducing more routes really help a faltering company? I dont know.

let us watch and see. To me, I dont know, but I feel it is too difficult a task.

Sanjivani paranteral Ltd - 531569

Name of Company	Sanjivani paranteral Ltd.
BSE Code	531569
NSE Code	Not listed
ICICI Code
Established
My Take	Dislike
Headquarters	Mumbai
Promoters
Story
Sector	pharmaceuticals
Sub-sector
Website	http://www.sanjivani.co.in/
Positives	Regularly profitable company. Reasonable growth in the last 5 years.
Negatives	No dividends, very low promoter holding, very low NPMs in FY11, Interest payments are increasing faster than sales – In FY11, 5% of sales were interest payments.
Peers
News
Price @ blogged	29.40 (09-Sep-11)
Cost of company	17.34 Cr market cap for a 2.73 Cr NP in FY ending Mar ' 11 makes it 7 times. This is for a company with 44.84 Cr debt and 22.09 Cr reserves
Group	Dull
Growth	Revenues have grown from 70 Cr to 145 from FY07 to FY11. NP has in fact come down to half of what it used to be.

Educomp Solutions - Is it worthy?

Educomp is at a 2150 Cr market cap as of today when it quotes at Rs. 224. Is Educomp worth this much?

Let's see. FY11 report says they reach 16 million students through 26000 schools.

Searching for millenuim schools in google would fetch a lot of schools which are coming up with the Educomp model. Subsidiaries like Gateforum and Vidyamandir classes are well respected test prep classes. They claim to be the largest CA coaching in India now.

The best thing according to me is this is just at the starting stage. A very few schools have implemented smart teching methods. Education is regarded very important in India (as in aspiring coutries like China, Indonesia, etc). As India become richer, people would not mind spending on education.

The worst thing is that this is heavy competition industry where low capital and low experience is needed to start a similar business.

Lot of IT raids at Educomp offices have brought the share price less than 200, it has mildly recovered now though.

Shantanu Prakash (and Anjlee Prakash) has been holding neat 50% shares and have not pledged any shares. This gives some confidence in the company.

This company makes 1000 Cr revenue. They show 4 segments - School learning systems (the biggest and almost whole of the profits), K-12, Higher learning solutions and Online & Retail. they are making around 400 Cr profits with around 40% NPMs.

600 Cr debt makes us worry a bit.

In all, integrity of the promoters, debt management and focus on the right areas are important for the company to be a good bet. If what happened till now will last, I would rather believe in the management.

As most of the revenue comes from School learning systems - software, equipment and training - if these can bring in 1000 Cr revenue in this fiscal, with a 40% NPM. I guess it is worth more esp as it can grow heavily.

Everonn - news and views

This is a Chennai based education company with a market cap of 491 Cr at current price of Rs 256 (PE of 6.4).

P kishore is the founder and MD of Everonn education which claims to be the largest VSAT education network in the world. He was arrested in early September 2011 for tax evasion - bribe of 50 lakh was given to supress 116 Cr of income. 

Immediately after the arrest, Nikhil Gandhi, who was an independent director, took over as Chariman of the board as JJ Irani, former director of Tata sons and known for his corporate governance, resigned from the position.

Susha John the co-promoter was promoted as the CEO to run the company. 

I wonder why would some public company suppress income. Is it to move money into promoters pockets either to get back the pledged shares or to retain personal earnings?

Nikhil Gandhi - Is Mukesh Ambani backing him?

Nikhil Gandhi

Flagship: SKIL Infrastructure

Founded in: 1984 (it’s SKIL’s silver jubilee year), along with his younger brother Bhavesh Gandhi

Claim to fame: Built India’s first private all-weather port, the Pipavav Port, in 1996

Other projects completed: Pipavav Railway, first-of-its-kind JV with the Indian Railways; Pipavav Expressway, a 20-km, 4-lane road to the Pipavav port from the state highway

What happened next: Sold SKIL’s holdings in the port for an undisclosed price in 2005 to a Maersk/A.P. Moller-led consortium. The rail JV was transferred to the railways and the expressway to the Gujarat Government.

Had investment of roughly $500 million in these projects

Biggest influence: Dhirubhai Ambani

Likes to consider himself: A pioneer in infrastructure, an “infrapreneur”

Three of Gandhi’s acquisitions soar in a falling market.

Why is the man who’s talking about multi-billion dollar investments picking up micro-cap firms with an equity base in the Rs 3-10.7 crore range? The answer would be evident from the way the stock prices of these three companies, Horizon Infrastructure, JPT Securities and KLG Capital, have been regularly hitting new highs in 2008. 

At a time when the broader market has only been falling, these three companies in which the SKIL group has mopped up majority stakes have soared between 200 and 1,700 per cent till June 30, 2008! SKIL group company Awaita Properties bought 60 per cent in JPT Securities from its promoters through market purchases in April and 60.5 per cent in KLG Capital in February. 

In Horizon Infrastructure the group has a 55.3 per cent stake. Gandhi told BT that all these companies are now a part of the SKIL group and he has big plans for them. Horizon Infrastructure, for instance, will develop tourism infrastructure in Himachal Pradesh.

Sources: http://businesstoday.intoday.in/story/is-this-man-for-real/1/2517.html

Nikhil Gandhi
is right hand of Mukesh Ambani and has pioneered MUMBAI SEZ , chandigarh sez,PIPAV port , PIPAV shipyard ..he is the main man who look after Mukesh Ambani group's infrastructure foray ..Jai corp (he was the main person for
the share price rise and not Anand Jain )and Horizon infrastructure (from
40 to 1800 in 1 year) are companies owned by him .. 

Source: http://jaicorp-and-others.blogspot.com/2008/08/jpt-secklg-caphorizon-infra.html

Biggest losers this year - Till September 2011

Company	Price on 03/01/2011	Price as on 08/09/2011	Change (%)
GTL	416.65	52.7	-87.3515
KGN Industries	212	28.85	-86.3915
GTL Infra	43.05	12.57	-70.8014
D B Realty	197.35	59.3	-69.9519
SpiceJet	81.9	25.45	-68.9255
IVRCL	133.9	45.85	-65.758
SKS Microfinance	646.7	253.05	-60.8706
Jet Airways	761.2	299.3	-60.6805
Jai Corp	224.9	91.35	-59.3819
Guj NRE Coke	69.3	28.35	-59.0909
Jindal Poly Film	532.1	218.15	-59.0021
Educomp Sol .	543.2	229.9	-57.6767
GVK Power Infra.	41.6	17.85	-57.0913
NCC	151.9	65.75	-56.7149
BEML Ltd	1026.6	470.05	-54.2129
BGR Energy Sys.	735.8	341.05	-53.6491
Sunteck Realty	549.55	263.25	-52.0972
Bajaj Hindusthan	120.35	57.9	-51.8903
Hathway Cable	169	84.4	-50.0592

Source: Moneycontrol

Bombay Burma - why to buy

Ashish Tater on moneycontrol:

One reason why I like this is stock is their strong balance sheet. The stock might bore you from a  longer term perspective. It may be hovering around Rs 400-500 mark. As of now it is trading at Rs 407-410 levels. One can take a call of 20% from eight-12 months perspective.

From a balance sheet perspective, it owns almost 51% in Britannia Industries through its subsidiaries. Current market cap of Britannia is around Rs 5,600 crore. This 51% roughly works out to be Rs 2,800 crore and the market cap is Rs 560 crore. As a holding company it warrants that 20% discount. So it is fairly valued.

Its exposure to Bombay Dyeing was almost 14% so it is again a safe bet. Interestingly, Britannia Industries is available at a dividend yield of 1.6%, similar is the case with Bombay Burmah. They will be getting Rs 35-40 crore in terms of free cash flows to equities through dividends from Britannia.

Last year they sold their JV into the rubber JV. This year they have sold their sunmica division so there is some reorganization happening in Bombay Burmah or the Wadia group. There is lot of potential going forward. Their core business is tea and plantations and they have good presence in Tamil Nadu and Karnataka.

They have good ability to generate pre-cash flow to equity. So from fundamental perspective, if one ignores the balance sheet value it will be somewhere around Rs 180-200. On conservative side, the replacement value of this plantation business works out to be Rs 180-200 so Rs 400 plus the investment.

People try to get in the stock at Rs 380 to 400 because they have actually generated free cash flow of equity of close to Rs 165 crore. This year they have fetched Rs 100 crore on sunmica division and Rs 65 crore from JV ventures sell. It is a cash rage company with limited downside and has a potential target of Rs 500. One can take a trading bet in this turmoil times.

--------------------

HNIs raising stake in Bombay Burmah in moneycontrol

Most of the HNIs are looking for stories where there are embedded values and there is valuation in the subsidiaries. There are stocks that invest into group companies and other companies; the values of which are significantly above the market cap of the company. One such company is Bombay Burmah.

Bombay Burmah ’s market cap is at Rs 1,165 crore. Its total investment is Rs 1,710 crore. The total value of its investment is nearly 50% more than market capital. This would mean that the value of subsidiaries would be nearly 50% more than the market cap. In Bombay Dyeing , they hold 15% stake. In Britannia , they hold 25% stake. In Go Air , they control around 40% stake.

It’s investment in Bombay Dyeing, Britannia and Go Air is as follows:

Investment                   (Rs Cr)

Bombay Dyeing             400

Britannia                       910

Go Air                           400

Total                             1710

Go Air is an unlisted entity. CNBC-TV18’s analysis has taken the valuations on the basis of Spice Jet. Spice Jet was having an 8.3% market share and is commanding a market cap of about Rs 1500 crore. If one sees the latest figures that are released, Go Air has a market share of around 5.5 % and by that valuation, the figure should come at around Rs 1000 crore.

Also, there are media reports suggesting that Paramount is looking at buying the company. The management of Go Air denies this. But, the valuation that they are likely to pay for the 40% stake is around USD 100-150 billion. So even on the basis of this, it will command around Rs 1000 crore market-cap; and 40% will be around Rs 400 crore.

Thus, the total valuation of Bombay Dyeing, Go Air and Britannia would be around Rs 1700 crore.

Since all the investment is done via subsidiary companies, one would not see all the value of investments on the balance sheet side. Hence, it’s very important to see all the investments that are there in the subsidiary companies. This could be a good company for investment, as per CNBC-TV18 analysis.

This is not a holding company. It has operations in tea, coffee plantations, rubber, palm-oil segment. So it commands an EPS of its own. On trading basis, for FY07, it had an EPS of around Rs 34 and in FY06, it was around Rs 35. This means it is trading at around 24-25 times.

In the kind of business that they are in, this looks a bit expensive, if compared with the peers. But the valuations of the company make it attractive.

Krypton Industries - 523550

Name of Company	Krypton Industries Ltd.
BSE Code	523550
NSE Code	Not listed
ICICI Code
Established	1990
My Take	Dislike
Headquarters	Kolkata
Promoters
Story	Manufactures cycle tyres and footwear under the brand Softflex.
Sector	Tyres
Sub-sector	Cycle tyres, footwear
Website	http://www.kryptongroup.com/
Positives
Negatives	Paid 6% of the revenues as interest. Does not pay dividends. Lot of insider trading. FY09 was loss making. NPM in last 5 years between -3.5 to 12%. Lot of competition from local players.
Peers
News
Price @ blogged	14.47 (09-Sep-11)
Cost of company	16.8 Cr market cap for a 1.03 Cr NP in FY ending Mar ' 11 makes it 15.9 times. This is for a company with 12.12 Cr debt and 6.63 Cr reserves
Group
Growth	Revenues have grown in 5 years from 11 to 24.5 Cr. NP has moved 1.31 to -3.55 and back to 1 Cr in these 5 years.