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Showing posts from April 27, 2008

Acquisition of coal mines powers Reliance Power

Reliance Power gained 1.88% to Rs 401.70 at 11:57 IST on BSE after the company said Reliance Coal Resources, a wholly owned subsidiary of the company has entered into a definitive agreement to acquire 100% interest in 3 coal mines in Indonesia. The company made this announcement during trading hours today, 2 May 2008. On BSE, nine lakh shares were traded in the counter. The scrip had an average daily volume of 57.30 lakh shares in the past one quarter. The stock hit a high of Rs 404.35 and a low of Rs 395.25 so far during the day. The stock had a 52-week high of Rs 599.90 on 11 February 2008 and a 52-week low of Rs 303.45 on 24 March 2008. The large-cap scrip had outperformed the market over the past one month till 30 April 2008, gaining 23.30% compared to the Sensex's return of 10.63%. The company's current equity is Rs 2259.82 crore. Face value per share is Rs 10. In a meeting held on 25 February 2008, Reliance Power's board of directors approved 3:5 (3 bo…

Understanding P/E Ratio and its significance*

The most commonly used valuation metric by investors is the price to
earnings ratio or commonly referred to as the P/E ratio. Though commonly
used, it is also misunderstood for various reasons. Here is an attempt to
simplify this valuation metric.

*How is P/E calculated?*

It is calculated by dividing market price of a stock by EPS (earnings per
share). EPS in turn is calculated by dividing the net profit of the company
by the number of shares outstanding.

*Having calculated the P/E, what does it stand for? *

Lets assume a stock is trading at Rs 100 and its EPS is Rs 20. The P/E
multiple is 5 (100 upon 20). Assuming that the company's EPS is likely to be
Rs 20 each year, it will take 5 years for the investor to realize Rs 100. Of
course, the assumption here is that the company's EPS is not growing at all.


Now taking the example of commonly traded stocks like Infosys and Tisco.
While the former trades at a P/E multiple of 25 times, the latter trades at
7 times. Why is it so? It is…

On the fast track

The Rs 2.5 lakh crore investment planned by Indian Railways over the next five years indicates promising prospects for its suppliers. A booming economy and the rising needs of transportation on its network is forcing the Indian Railways to improve and expand its infrastructure across the country. Unlike in the past, the railways is not hampered by the large investments needed to overhual a congested and an overworked system. Four consecutive years of profit has meant a cumulative cash surplus of Rs 68,800 crore. This turnaround in the railways coupled with the targeted capital expenditure (capex) of about Rs 2.5 lakh crore over the next five years will not only improve the railway infrastructure, but also provide an attractive opportunity for its suppliers. "The railways has budgeted for a FY09 spending of Rs 37,500 crore, up 21 per cent on y-o-y basis for network expansion, upgradation, and development …

Share buybacks in India touch a record $1.1 billion

MUMBAI: Notwithstanding the global credit concerns and high interest rates and growing inflationary pressures back home, share buyback deals in India are at record highs.

Share buybacks totalled $1.1 billion from nine deals so far this year. Of the nine only that of Madras Cements has been completed (March 5, 2008).

The other buybacks that have been initiated but are yet to be completed include that of Reliance Energy, Great Offshore, Mastek, Patni Computer, Gujarat Flurochemicals, JB Chemicals and Pharma, Sasken Communication and Goldiam International.
Says Prime Database MD Prithvi Haldea, "The current depressed mar-ket conditions provide ideal opportunity for companies sitting on cash to increase promoter holding."

Adds investment strategy Gul Tekchandani, "It's a good practice that allows an exit to minority shareholders as long as it is not forced on them."

As per Thomson data, India is the 15th most active in share buybacks globally. With…

Dena Bank capitalises on robust Q4 figures

Dena Bank surged 2.98% to Rs 60.45 at 15:19 IST on BSE after posting 153.40% rise in net profit to Rs 110.99 crore in Q4 March 2008 over Q4 March 2007. The state-run bank announced the results during trading hours today, 30 April 2008. On BSE, 33.92 lakh shares were traded in the counter. The scrip had an average daily volume of 7.10 lakh shares in the past one quarter. The stock hit a high of Rs 63.75 and a low of Rs 58.70 so far during the day. The stock had a 52-week high of Rs 99.55 on 2 January 2008 and a 52-week low of Rs 34.50 on 8 May 2007. The mid-cap scrip had outperformed the market over the past one month till 29 April 2008, gaining 15.44% compared to the Sensex's return of 11.08%. It had underperformed the market in the past one quarter, declining 16.38% compared to Sensex's decline of 2.14%. The bank's equity is Rs 286.82 crore. Face value per share is Rs 10. The current price of Rs 60.45 discounts its Q3 December 2007 annualised EPS of Rs 14.…

Rajesh Exports shines on overseas order win

Rajesh Exports jumped 5.28% to Rs 94.70 at 14:32 IST on BSE after the company said it has secured a contract worth Rs 534 crore from Lazorde Jewellery, Kuwait. On BSE, 19.41 lakh shares were traded in the counter. The scrip had an average daily volume of 6.19 lakh shares in the past one quarter. The stock hit a high of Rs 94.45 and a low of Rs 89.75 so far during the day. The stock had a 52-week high of Rs 170 on 12 December 2007 and a 52-week low of Rs 62.01 on 9 May 2007. The small-cap scrip had outperformed the market over the past one month till 29 April 2008, gaining 15.84% compared to the Sensex's return of 11.08%. It had underperformed the market in the past one quarter, declining 35.40% compared to Sensex's decline of 2.14%. The order has to be executed by 30 June 2008. The order will be executed at the company's manufacturing facility at Bangalore. In January 2008, Rajesh Exports (REL) secured an export order worth Rs 463 crore from Excel Goldsmiths…

NMDC soars on setting record date for bonus

NMDC was locked at upper limit of 5% to Rs 1416.25 at 12:45 IST on BSE after setting record date for 2:1 bonus issue. Meanwhile, the BSE Sensex was down 87.54 points, or 0.50%, to 17,290.92. On BSE, 22,556 shares were traded in the counter. The scrip had an average daily volume of 6,343 shares in the past one quarter. The stock hit a high of Rs 1416.25 and a low of Rs 1359.80 so far during the day. The stock had a 52-week high of Rs 1658.41 on 6 November 2007 and a 52-week low of Rs 197.50 on 14 May 2007. The mid-cap scrip had outperformed the market over the past one month till 29 April 2008, gaining 30.36% compared to the Sensex's return of 11.08%. It had also outperformed the market in the past one quarter, rising 31.36% compared to Sensex's decline of 2.14%. The company's current equity is Rs 132.16 crore. Face value per share is Rs 2. National Mineral Development Corporation (NMDC) has fixed 22 May 2008 as the record date for issue of bonus shares in th…

Sesa Goa strikes gold on stock split, bonus plans

Sesa Goa jumped 7.14% to Rs 3750 at 9:55 IST on BSE after the company said it has scheduled a board meet on Monday, 28 April 2008, to consider stock split and issue of bonus shares. The company made this announcement on Saturday, 26 April 2008. Meanwhile, the BSE Sensex was up 122.55 points, or 0.72%, to 17,248.53, as Asian markets were mostly in the green. On BSE, 5,035 shares were traded in the counter. The scrip had an average daily volume of 72,110 shares in the past one quarter. The stock hit a high of Rs 3799 and a low of Rs 3635 so far during the day. The stock had a 52-week high of Rs 3969 on 1 January 2008 and a 52-week low of Rs 1630 on 7 June 2007. The mid-cap scrip had outperformed the market over the past one month till 25 April 2008, gaining 13.67% compared to the Sensex's return of 6.93%. It had also outperformed the market in the past one quarter, gaining 6.13% compared to Sensex's decline of 6.73%. The company's current equity is Rs 39.36 cr…

IDBI banks on decent Q4 show

Industrial Development Bank of India gained 1.01% to Rs 104.95 at 10:10 IST on BSE after posting 14.7% rise in net profit to Rs 244.99 crore on 20.3% growth in total income to Rs 2628.20 crore in Q4 March 2008 over Q4 March 2007. The company announced results on Saturday, 26 April 2008. Meanwhile, the BSE Sensex was down 62.90 points, or 0.37%, to 17,063.08. On BSE, 1.18 lakh shares were traded in the counter. The scrip had an average daily volume of 17.02 lakh shares in the past one quarter. The stock hit a high of Rs 106.70 and a low of Rs 104.70 so far during the day. The stock had a 52-week high of Rs 181 on 20 November 2007 and a 52-week low of Rs 81.55 on 24 March 2008. The mid-cap scrip had outperformed the market over the past one month till 25 April 2008, gaining 21.03% compared to the Sensex's return of 6.93%. It had underperformed the market in the past one quarter, declining 14.80% compared to Sensex's decline of 6.73%. The company's current equi…

PSL: Buy

Helical pipes in demandWell-timed capexSteel prices, a riskWith large capacities for helical pipes and a big order book, PSL faces strong growth prospects.

With newer facilities being added, the growth momentum is likely to continue. Srividhya Sivakumar Investments with a two-three year perspective can be considered in the stock of PSL. The company's strengthening order book, expansion in capacities and healthy demand from user industries also suggest strong growth prospects. With an installed capacity of over a million tonnes per annum, PSL appears best placed to benefit from the rising global acceptance of helical pipes. At the current market price of Rs 320, the stock trades at about 10 times its likely FY-09 per share earnings on a fully diluted basis. This appears fairly reasonable considering PSL's growth potential. Investors, however, can consider buying the stock in lots given the broad market volatility. Business
PSL has the largest HSAW (helical submerged ar…

dallar panic

URGENT INVESTMENT UPDATE
April 25, 2008The U.S. dollar is being hammered on world markets, crashing against virtually every major — and minor — currency in the world. As a direct result, your buying power, investments and retirement are in grave danger.But the profits to be made in foreign currencies are the greatest of all time!My free gift to you: Our Emergency Video Summit — Friday, May 2, 2008 at 2 p.m., Eastern Time!The Fed's response to the housing bust and credit crisis is killing the dollar — just like we said it would.After pouring tens of billions of dollars directly into the mortgage markets and slashing the Fed's discount rate over and over again, the government has now launched an all-out assault on the rapidly spreading housing and mortgage catastrophe. First, President Bush announced that Washington would throw yet more money at the credit crunch with massive spending initiatives to help at-risk mortgage holders keep their homes.On the very same day, in Jackson H…

dallar effect

URGENT INVESTMENT UPDATE April 25, 2008
The U.S. dollar is being hammered on world markets, crashing against virtually every major — and minor — currency in the world.
As a direct result, your buying power, investments and retirement are in grave danger.
But the profits to be made in foreign currencies are the greatest of all time!
My free gift to you: Our Emergency Video Summit — Friday, May 2, 2008 at 2 p.m., Eastern Time!
The Fed’s response to the housing bust and credit crisis is killing the dollar — just like we said it would.
After pouring tens of billions of dollars directly into the mortgage markets and slashing the Fed’s discount rate over and over again, the government has now launched an all-out assault on the rapidly spreading housing and mortgage catastrophe.
First, President Bush announced that Washington would throw yet more money at the credit crunch with massive spending initiatives to help at-risk mortgage holders keep their homes.
On the very same day, in Jackson Hole, Wyom…