indiTraders - Forum for the Active Indian Trader  

Go Back   indiTraders - Forum for the Active Indian Trader > Markets > Stocks and Indices

Stocks and Indices General Discussions

Reply
 
Bookmark and Share LinkBack Thread Tools Display Modes
  #1001 (permalink)  
Old 27-10-2012, 08:33 PM
kkseal kkseal is offline
Hip-py
 
Join Date: Apr 2009
Posts: 4,879
Thanks: 6,486
Thanked 9,367 Times in 4,026 Posts
kkseal has a reputation beyond reputekkseal has a reputation beyond repute
kkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond repute
Default

For me it's not the Reddy lineage rather the margins All overseas contracts anyways Even HCLTECH used to underperform (valuation-wise as well) till the margins got abv 20% So if this one get 10-12X then the upside is till 200-240. Will see on a correction.
__________________
'Growth & Value are joined at the hip' - Warren buffet
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!
Reply With Quote
  #1002 (permalink)  
Old 27-10-2012, 09:21 PM
achinj achinj is offline
Regulars
 
Join Date: Nov 2009
Location: Pune
Posts: 324
Thanks: 932
Thanked 452 Times in 238 Posts
achinj has a spectacular aura aboutachinj has a spectacular aura aboutachinj has a spectacular aura aboutachinj has a spectacular aura aboutachinj has a spectacular aura aboutachinj has a spectacular aura about
Default

Originally Posted by kkseal View Post
With a 8-9 Rs EPS for the current fisc, an earnings CAGR of ~20% & ROEs of arnd 25% (ROCE in the 30s) it's fully priced at 200-225. Has had a great run already (from <40 in March 2009) But has a good innovative basket of products (with pricing power). Input costs rise & fall with crude (there's some buffer to a weak rupee though as the export-oriented industrial chemicals does better during such times). Debt/EBITDA <0.3 Debt less than half it's OCF (& reducing, though some increase in equity due to FCCB conversion Outstanding FCCBs is the reason i avoided the stk at a time the Re was tanking).

There's roughly 150Crs of outstanding FCCBs which is 3X the comps equity (They have the money to redeem most of it though, even at a 40% or so YTM premium).

There are 257 Bonds aggregating US $ 25.7 million outstanding, as on date.

Rest have agreed to be converted into equity
__________________
Cheers
~ AJ
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!
Reply With Quote
The Following 2 Users Say Thank You to achinj For This Useful Post:
  #1003 (permalink)  
Old 27-10-2012, 09:27 PM
achinj achinj is offline
Regulars
 
Join Date: Nov 2009
Location: Pune
Posts: 324
Thanks: 932
Thanked 452 Times in 238 Posts
achinj has a spectacular aura aboutachinj has a spectacular aura aboutachinj has a spectacular aura aboutachinj has a spectacular aura aboutachinj has a spectacular aura aboutachinj has a spectacular aura about
Default

Originally Posted by kkseal View Post
For me it's not the Reddy lineage rather the margins All overseas contracts anyways Even HCLTECH used to underperform (valuation-wise as well) till the margins got abv 20% So if this one get 10-12X then the upside is till 200-240. Will see on a correction.

@ Kalyan - The problem is not with Reddys. But many hyd companies can show and vanish the revenues. And so is IT and then you bad mgmt people also which go for wrong mergers. (hinting towards CESC / Firstsource buyout)

Jupiter / moscship / satyam .. the list can be appended. So better make a concious decision.
__________________
Cheers
~ AJ
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!
Reply With Quote
The Following User Says Thank You to achinj For This Useful Post:
  #1004 (permalink)  
Old 27-10-2012, 09:46 PM
kkseal kkseal is offline
Hip-py
 
Join Date: Apr 2009
Posts: 4,879
Thanks: 6,486
Thanked 9,367 Times in 4,026 Posts
kkseal has a reputation beyond reputekkseal has a reputation beyond repute
kkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond repute
Default

Originally Posted by achinj View Post
There are 257 Bonds aggregating US $ 25.7 million outstanding, as on date.

Rest have agreed to be converted into equity

Yep that's the big hang on the stock My guess is they'll go for part conversion part redemption.
__________________
'Growth & Value are joined at the hip' - Warren buffet
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!
Reply With Quote
The Following User Says Thank You to kkseal For This Useful Post:
  #1005 (permalink)  
Old 27-10-2012, 09:49 PM
achinj achinj is offline
Regulars
 
Join Date: Nov 2009
Location: Pune
Posts: 324
Thanks: 932
Thanked 452 Times in 238 Posts
achinj has a spectacular aura aboutachinj has a spectacular aura aboutachinj has a spectacular aura aboutachinj has a spectacular aura aboutachinj has a spectacular aura aboutachinj has a spectacular aura about
Default

Kalyan Sir - how would you play the cash on the books of the companies! Is it just good for a company to have cash on books or it is important to know if it knows how to utilize cash to generate more cash
__________________
Cheers
~ AJ
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!
Reply With Quote
  #1006 (permalink)  
Old 27-10-2012, 09:55 PM
kkseal kkseal is offline
Hip-py
 
Join Date: Apr 2009
Posts: 4,879
Thanks: 6,486
Thanked 9,367 Times in 4,026 Posts
kkseal has a reputation beyond reputekkseal has a reputation beyond repute
kkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond repute
Default

Originally Posted by achinj View Post
@ Kalyan - The problem is not with Reddys. But many hyd companies can show and vanish the revenues. And so is IT and then you bad mgmt people also which go for wrong mergers. (hinting towards CESC / Firstsource buyout)

Jupiter / moscship / satyam .. the list can be appended. So better make a concious decision.

I've tracked it best i can over the years (in fact more familiar with this one than Geometric) When they did fall upon bad times it was quite visible No hide & seek Satyam kind of risks can be mitigated only by staying out of the stk mkts Else how does one know if a Gujarat based comp is any better? They are in the Morgan Stanley coverage list (but so must have been Satyam).

Anyway not into it yet Will see in a deep correction (in Jan surely) From hereon only ST punt kind of positions.

Don't know why CESC had to exhaust their cash to buy FS (that too with the same struggling mgmt) unless they see some synergies in the retail venture. But the Goenkas do have ZENSAR, which has a breakeven kind of BPO arm So maybe they have some plans. Too early to debunk yet.
__________________
'Growth & Value are joined at the hip' - Warren buffet

Last edited by kkseal; 27-10-2012 at 10:00 PM.
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!
Reply With Quote
The Following 2 Users Say Thank You to kkseal For This Useful Post:
  #1007 (permalink)  
Old 27-10-2012, 10:22 PM
achinj achinj is offline
Regulars
 
Join Date: Nov 2009
Location: Pune
Posts: 324
Thanks: 932
Thanked 452 Times in 238 Posts
achinj has a spectacular aura aboutachinj has a spectacular aura aboutachinj has a spectacular aura aboutachinj has a spectacular aura aboutachinj has a spectacular aura aboutachinj has a spectacular aura about
Default

Originally Posted by kkseal View Post
Don't know why CESC had to exhaust their cash to buy FS (that too with the same struggling mgmt) unless they see some synergies in the retail venture. But the Goenkas do have ZENSAR, which has a breakeven kind of BPO arm So maybe they have some plans. Too early to debunk yet.

They should have raised debt on zensar books and declared zensar buying out FS.

Any views on Piramal HealthCare. Value buy or trap
__________________
Cheers
~ AJ
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!
Reply With Quote
  #1008 (permalink)  
Old 28-10-2012, 07:33 PM
kkseal kkseal is offline
Hip-py
 
Join Date: Apr 2009
Posts: 4,879
Thanks: 6,486
Thanked 9,367 Times in 4,026 Posts
kkseal has a reputation beyond reputekkseal has a reputation beyond repute
kkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond repute
Default

Originally Posted by achinj View Post
Kalyan Sir - how would you play the cash on the books of the companies! Is it just good for a company to have cash on books or it is important to know if it knows how to utilize cash to generate more cash

Impt to know the source Oodles of cash from operations is FAR better than cash from say sell of assets (the latter & likewise idle cash will always be valued at some discount) Which is why the INFOSYSs & JUBLFOODs quote at such rich multiples. Another factor is growth Good/steady/accelerating earnings + good cash flows is the ideal combination (And if this is happening without a commensurate amt of new investments with return ratios high/improving- toh kya kehna! ).

Which is why i'm not as impressed with Piramal YET Would like to see some earnings catchup. Better to play it in the 450 to 530 range (currently getting into a narrower 450-60 to 480-90 range Think will hibernate for sometime). But they are re-orienting the biz From generics to specialty, formulations, lifestyle & CRAMS Made some interesting acquisitions (Jazz has given enough info on the same) So maybe in near future.

On the FS issue Yes that would be the first thought But then Zensar is on a better growth path So maybe the BPO (KPO actually) biz of Zensar (which is a bit of a drag) could get demerged & subsequently merged with FS. The question actually is have they used the cash prudently? The mkt ans is a big NO (specially when the retail venture is still a cash guzzler & barely EBIDTA positive).

And no Sir.
__________________
'Growth & Value are joined at the hip' - Warren buffet

Last edited by kkseal; 28-10-2012 at 07:43 PM.
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!
Reply With Quote
The Following 2 Users Say Thank You to kkseal For This Useful Post:
  #1009 (permalink)  
Old 28-10-2012, 08:40 PM
Shrees's Avatar
Shrees Shrees is offline
indiTraders VIP
 
Join Date: Mar 2009
Location: Dehradun
Posts: 5,617
Thanks: 22,440
Thanked 17,011 Times in 4,733 Posts
Shrees has a reputation beyond repute
Shrees has a reputation beyond reputeShrees has a reputation beyond reputeShrees has a reputation beyond reputeShrees has a reputation beyond reputeShrees has a reputation beyond reputeShrees has a reputation beyond reputeShrees has a reputation beyond reputeShrees has a reputation beyond reputeShrees has a reputation beyond reputeShrees has a reputation beyond reputeShrees has a reputation beyond repute
Default

KKS give your pick on stocks in midcap and multibagger category.

Fundamental analyst Chokalingam calls to buy
CLARIANT
MRF
KARURVYSYABNK
STYROSLUTION ABS
INDIA MOTOR PARTS
ANDHRA SUGAR
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!
Reply With Quote
The Following User Says Thank You to Shrees For This Useful Post:
  #1010 (permalink)  
Old 28-10-2012, 09:27 PM
kkseal kkseal is offline
Hip-py
 
Join Date: Apr 2009
Posts: 4,879
Thanks: 6,486
Thanked 9,367 Times in 4,026 Posts
kkseal has a reputation beyond reputekkseal has a reputation beyond repute
kkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond reputekkseal has a reputation beyond repute
Default

Think they have got FSL at a decent prc The debt net of reserves is about 1500Crs The fixed asset value conservatively is ~2500Crs Not taking anything else into acct FSL would be worth at-least 1000Crs CESC has got 49.5%* of it at 640Crs. A little below the 1500Crs networth.

With debt servicing costs going down for FSL, think there's a good chance they'll be able to eke out FD rate of returns on the cash invested.

*likely to be 79.5% post open offer If so, the deal gets much cheaper for CESC Currently as i understand they are dishing out 280Crs for the 49.5% stake
__________________
'Growth & Value are joined at the hip' - Warren buffet

Last edited by kkseal; 28-10-2012 at 09:54 PM.
Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!
Reply With Quote
The Following 2 Users Say Thank You to kkseal For This Useful Post:
Reply

indiTraders - Forum for the Active Indian Trader > Markets > Stocks and Indices


Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are On
Refbacks are On



All times are GMT +5.5. The time now is 03:31 AM.


vBulletin Copyright by vBulletin

Content Relevant URLs by vBSEO 3.3.2