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Showing posts with label India Stock. Show all posts
Showing posts with label India Stock. Show all posts

Wednesday, September 19, 2007

Venkys India

At the current market price of Rs. 180/- the stock trades at 6 times it FY08E earnings of 30 per share. Investor with a medium risk profile can consider position in this stock for a duration of 9 to 12 months with a target of Rs.250. The company has seen a substantial increase in Operating margins during the last two quarters and is expected to maintain the same margin levels in the current year.

Venky's India is engaged in poultry breeding, processed chicken, poultry medicines, producing eggs and hatching layer. Venky's has a strong domestic presence and the domestic sales is expected to grow 15% this year. The company has annual service contracts with multinational giants like Domino's, Pizza Hut, KFC and McDonald's. Venky's has strong export presence in middle east and Asia pacific region. The revenues from export is expected to grow at around 30% this year.

Fundamentals:

1) Diversified product portfolio.

2) Government policy initiatives for agricultural projects.

3) Strong client portfolio.

Risks:

1) Bird flu which has been off late seen frequently appearing in some of the Asian countries can dampen the revenue forecast.

2) Competition from countries like Thailand, Vietnam and china which operate on lower cost.

Posted by Srivatsan 2 comments

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Monday, September 3, 2007

Buy Tamil Nadu Newsprint (TNPL)

Investors with medium to low risk profile can consider investment in TNPL with a horizon of 18-24 months. At the current market price of Rs. 99 the stock trades at 8 times it's 12 months trailing EPS of 12.5. Despite the firm raw material prices, the company saw a marginal increase in the operating margin during the first quarter of 2008.

The company is in the process of completing it's Rs. 565 crore mill development plan which is slated to go on stream by October '2007. After the mill development plan in place the paper production is expected to raise to 2.45 lakh tpa from the current 2.3 lakh tpa.

The company margins are further set to raise in second half of FY08 after the mill development plan in place. The stock is currently trading at 6 times it's FY08E EPS of 16. Based on it's FY08E earnings the stock has a target of Rs. 132.

The company is planing to set up a mini cement plant with lime sludge generated as a waste product at it's paper unit. This is expected to be operational by march 2009. The company is also evaluating option to build a IT park at it's vacant Ambattur plot.

Fundamentals:

1) Modernization and Capacity increase of paper production.

2) Building Cement plant to utilize the waste generated out of paper production.

3) The company is sitting on an vacant land in chennai. Evaluating IT park to be constructed over there.

Risk:

1) Increasing raw material prices.

2) Rupee appreciation to crunch margins on paper exports.

3) Decline in International paper prices can impact the Operating margin of the firm.

Posted by Srivatsan 2 comments

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Fundamental Analysis

Fundamental Analysis is the cornerstone of Investing. In fact, some would say that you aren't really investing if you aren't performing fundamental analysis.

During fundamental analysis we look at a stock from three aspects

Company

At the company level, fundamental analysis may involve examination of financial data, management, business concept and competition.

Industry

At the industry level, there might be an examination of supply and demand forces for the products offered.

Economy

Fundamental analysis might focus on economic data to assess the present and future growth of the economy.

To forecast future stock prices, fundamental analysis combines economic, industry, and company analysis to derive a stock's current fair value and forecast future value. If fair value is not equal to the current stock price, fundamental analysts believe that the stock is either over or under valued and the market price will ultimately gravitate towards fair value. Fundamentalists do not heed the advice of the random walkers and believe that markets are weak-form efficient.