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Investor's Eye [November 28, 2007] Please see the attachment for details
Hexaware Technologies Cluster: Ugly Duckling Recommendation: Book Outsharekhan Current market price: Rs84
Book out Hexaware Technologies (Hexaware) has reported that it has come to the management's notice that one of the officials from its treasury department has conducted fraudulent foreign exchange (forex) transactions over the past few months. There are a total of 11 such transactions spread across various currencies such as the US Dollar, euro, pound, yen and Swiss Franc. The board of directors has appointed an internal committee to investigate the matter and has suspended the official in question. Hexaware plans provisions of $20-25 million to cover any potential loss as a result of these transactions.
Though the scrip has corrected substantially in the recent past and is trading at attractive valuations, it is likely to continue with its underperformance due to lack of any positive triggers. Consequently, it is advisable to exit the stock.
ICICI Venture picks up stake in Jaypee Infratech With the company bagging the Taj Expressway project accompanied by a land parcel of 6,250 acres, the stock has received a tremendous re-rating. As we have mentioned in our earlier reports, we expect the stock price to move up as and when clarity emerges on the development of real estate sector. The ICICI deal now only reinforces our bullishness on the stock. We maintain our buy recommendation on the stock with a price target of Rs2,000 per share .
Bharat Heavy Electricals Cluster: Apple Green Recommendation: Buy Price target: Rs3,289 Current market price: Rs2,725
Price target revised to Rs3,289
Bharat Heavy Electricals Ltd (BHEL) had a spectacular order inflow in the past 18 months. In H1FY2008, the company's order inflow rose by 74% year on year (yoy). At the end of Q2FY2008, BHEL has an order backlog of Rs72,600 crore ( 4.2x FY2007 revenues), which represented a staggering increase of 59% yoy.
In a strategic move, BHEL signed a memorandum of understanding (MoU) with the Tamil Nadu Electricity Board (TNEB) for a joint venture (JV) to set the first 2x800 mega-watt (MW) super-critical power project in Tamil Nadu. We believe this tie-up is positive for the company in two ways. First, the equity stake in the JV would ensure BHEL as a supplier for the super-critical project. Second, the deployment of surplus cash-on-book would yield better returns from the investments made in the JV.
After National Thermal Power Corporation's (NTPC) Barh-II project, BHEL has emerged as the sole bidder for the AP Genco project at Krishnapatnam, which is a 2x800MW project based on super-critical technology. We expect the order flow in the super critical space to remain buoyant for the company going forward.
The union cabinet has approved BHEL's proposal of taking over Bharat Heavy Plate & Vessels Ltd (BHPV), an engineering company catering to oil and gas sector. The company's current turnover stands at Rs150 crore, and the BHEL's management believes BHPV's turnover has a potential to grow to Rs1,000 crore plus.
For Q2FY2008, the nets sales of BHEL grew by 18.7% to Rs3,965.4 crore, which was slightly below expectations. The operating profit margin (OPM) improved by 380 basis points, which came in as a positive surprise. Led by better OPM and higher other income, the net profit (before extra-ordinary items) increased by 57.5% to Rs567 crore. The profit growth was above expectations.
Indian banks have become more resilient The Reserve Bank of India (RBI) in its annual report on the trend and progress of banking in India 2006-07 has highlighted the improving resilience of Indian banks' operations to changing macro-economic conditions. It has also stated that the incremental credit-deposit ratio is on the decline and credit growth has shown some moderation in the real estate and retail sectors. Since the credit growth has been strong in the past few years, some minor deterioration could be expected in the asset quality of banks going forward. The medium-term risk for the domestic banking sector could emanate mainly from global developments (US subprime mortgage saga) and the fall-out of the same in the other asset classes (equity, real estate). However, the main challenge facing domestic banks at this juncture remains raising resources to maintain their growth momentum.
BKC auction sets high benchmark According to media reports, Reliance Industries Ltd (RIL), Wadhwa Builders and TCG Infrastructure--Hiranandani Construction consortium emerged as the leading bidders for the three Bandra-Kurla Complex (BKC) plots measuring 75,350 square meter (sm). The value of the top three bids was Rs2,790 crore, which amounts to an average price of Rs34,424 per square feet (sf).
23RD ,JUNE India's fortune-hunters believe their new-found love for biofuel will pay off. India's well-known investors who are known for their Midas touch have spotted an opportunity in bio-fuel, betting big on ethanol, bio-mass and even bio-fuel equipment makers in India and other parts of the globe. Billionaires Rakesh Jhunjhunwala, C Sivasankaran, Vinod Khosla, founder of Sun Microsystems, and Nemish Shah, the media-shy joint partner of Enam Financial Services, are investing in bio-fuel makers quietly, expecting that bio-fuel will have a big play in the coming years as the world looks for a viable alternative to the fast depleting oil reserves. Jhunjhunwala, who is known for his ability to spot a multi-bagger at a very early stage, recently invested in Hyderabad-based bio-fuel firm Nandan Biometrics.He is also a 10 per cent stakeholder in Praj Industries, which is a bio-fuel technology provider…
By Rahul Oberoi, ETMarkets.com | Updated: Dec 01, 2017, 04.06 PM IST
Post a Comment Efficiency pays in the long run. Among the top smallcap plays on Dalal Street, 30 companies with stable return on equity (RoE) and return on capital employed (RoCE) have surged up to 8,500 per cent over the past five years.
All these companies had a debt-to-equity ratio of less than 1 and have been maintaining RoE and RoCE of over 20 per cent since 2012-13.
Avanti Feeds emerged the chart topper, with an 8,527 per cent gain to Rs 2,596.60 as of November 28 from Rs 30.10 ..
ovember 28 from Rs 30.10 on November 27, 2012. The company’s return on equity for FY17, FY16, FY15, FY14 and FY13 stood at 42.65 per cent, 46.21 per cent, 52.41 per cent, 45.79 per cent and 27.60 per cent, respectively. Avanti also managed to achieve a return on capital employed of over 50 per cent in last four years. Its RoCE stood at 28.59 per cent inRoE measures net income earned for every rupee of shareholder funds, while…
If you are a conservative investor, using the mutual fund route is the best way to invest in stocks. But if you are game for some excitement, you might want to dabble directly in stocks, especially small-cap stocks.
Stocks that are smaller in size, in terms of market capitalisation, carry higher risk. The reasons are — one, lower traded volume increases price volatility, two, information is usually scarce on these companies, three, business risk is higher since many of these companies are dependent on a single product and four, governance risk is also higher in these stocks.
That said, small-cap stocks have the capacity to deliver far greater returns when compared to large-cap stocks. Sample this: there were 16 stocks with market cap more than ₹50,000 crore in January 2009. These stocks delivered an average return of 138 per cent in the last eight years but 4 out of every 10 stocks in this group delivered negative returns.
On the ot…