What's In My Portfolio

• HDIL
• Omaxe
• Parsvnath Developers
• Bajaj Hindustan
• Yes Bank
• KLG Systel
• Atlanta Limited
• Acrow India
• UTV Software
• Reliance Capital
• Zee News
• Pantaloon Retail
• Tech Mahindra
• Network 18 Fincap Ltd.
• Bihar Tubes
• Banswara Syntex
• L & T

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Monthly Call

Parsvnath Developers

CMP: 341
Target 1: 390
Target 2: 430

Current Quote of Parsvnath Developers

For the real estate sector per se only those investors who have higher risk appetite and a long-term horizon should enter this sector because there are lot of good prospects and side by side there are lot of problems also with the sector with the interest rates going up, the land bank valuation going here and there. So unless and until you have a higher risk appetite and a long-term horizon you should not enter this sector."

Parsvnath Developers is in strong footing with presence in both residential and commercial sector. They have the contracts with DMRC (Delhi Metro Development) of the stations, malls, they are coming up with multiplexes, they are into SEZ at Gurgoan, now they have announced a roll out license for mobile telephony. All these speak well for Parsvnath and if the investor has a long-term view, one can certainly enter into this stock.

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Six Month Call

Motherson Sumi System

CMP: 101
Target 1: 161
Target 2: 187

Current Quote of Motherson Sumi System

Motherson Sumi System is definitely an outperformer due to the following reasons: (1) 23%+ compounded annual growth rate (CAGR) in EPS during FY07-FY10E and sustainability of 20%+ earnings growth over a longer period; (2) 560 bps expansion in return on equity capital (RoCE); and (3) new business ventures.

Expansion of the rubber components business following the recent acquisition of Empire Rubber in Australia and beginning of commercial production of mobile phone plastics parts business in H2 FY08 are the key growth drivers, apart from the 22% CAGR in wiring harness revenues. There is significant possibility of earnings surprise on account of: (1) management guidance of 43% CAGR in earnings being significantly higher than expectations; and (2) likely benefit of 18% fall in copper prices in the next six quarters, compared to Merrill Lynch's assumption of flat prices. The stock is trading at 11.97x FY09E EV/EBITDA — a discount of 15% and 31%, respectively, compared to Mico and Cummins India, despite better growth prospects and good track record. At management-guided EPS of Rs 9.8 in FY10E, the stock trades at 9.7x earnings.

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Target-A-Year

IDBI Bank

CMP: Rs 141
Target 1: 191
Target 2: 211

Current Quote of IDBI

IDBI Bank has transformed itself from a development financial institution (DFI) to an active participant in the booming banking and financial services space.

The amalgamation of United Western Bank with IDBI Bank has given the latter the much-needed branch network to enhance its retail presence. This, coupled with unlocking of value in its investments, is expected to lead to a surge in earnings. Expert expects earnings to witness a CAGR of 19% over FY07-09E to Rs 885 crore. IDBI Bank has a huge investment portfolio of quoted and unquoted equity stocks. It can unlock the value from these stocks and boost its profitability.

The value of the quoted and unquoted equity book is Rs 52 per share of IDBI Bank. The bank is expected to improve its core business gradually with net interest margins (NIMs) expanding from 0.48% in FY06 to 0.74% in FY07 and further to 1.07% by FY09E. At the current price around of Rs 130, the stock is trading at 1.3 its FY09E adjusted book value (ABV) and 10.6x its FY09E EPS of Rs 12.2. Based on a theoretical book value multiple of 0.9x its FY09E ABV, the value of its core banking business comes to Rs 87 per share. Its huge investment portfolio is valued at Rs 52 per share and subsidiaries at Rs 17 per share.


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Next IPO

None at the moment!

Wait for next round of upcoming IPOs, after market stabilizes.




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Grey Market Premium

Power Grid Corporation 44 to 52 20 to 21

Dhanus Tech 280 to 295 95 to 100

Koutons Retail 370 to 415 70 to 75

Consolidated Construction 460 to 510 205 to 210

Supreme Infra 95 to 108 60 to 65

Saamya Biotech 10 3 to 4

Circuit Systems (India) Ltd. 35 3.5 to 4

Kaveri Seeds 150 to 170 5 to 7

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Recent Happenings

• Sensex made a new all time high.

• Markets rejoice crucial US Fed policy announcements of 50 basis point.

• Industrial output growth declines sharply in Jul'07.

• Power Grid IPO over-subscribed.

• Oil price hits record $82-plus levels.

• Inflation hits 17-month low of 3.32%.

• Nawaz Sharif deported back on the day of arrival in Pakistan.

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Prominent Stocks From Realty Sector

1. Unitech : Testing a crucial Red resistance line, good if sustains above, else ...
2. DLF : Previous resistance at 616.50 turns into crucial support
3. HDIL : Supported at 480, moving up in a rising Blue channel
4. Indiabulls Real Estate : Supported at 420, testing the Blue rising line
5. Mahendra Gesco : Triangular action holding crucial 456 level

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