Jitendra Kumar Gupta's blog

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Rakesh Jhunjhunwala "For trading i look at technicals, which are essentially price movements. when price movements confirm my thought process, i buy aggressively. The sheer feeling that the markets have bottomed out or that the fundamentals and valuations are favourable is not enough" "The ingredients of successful investing lie in locating gaps between current expectations and future likely performance which provide me favourable odds as an investor. Perhaps the single biggest error in the investment business is failure to distinguish between knowledge of a company's fundamentals and the expectations implied by the stock price"    "The issue is not which stock will be the winner, but rather, which companies are available at valuations that promise superior returns"  "Markets disproportionately reward companies that are leaders, innovators and performers. We can predict future prices by predicting future EPS and PER, but in order to predi...

The large opportunity in the infrastructure space has helped many companies grow faster and bigger. This trend, many experts believe, will continue in the near future, too, considering that the government has outlined huge infrastructure spends in the country. Incorporated in 1994, Ramky Infrastructure has seen its revenue growing five-fold in the last four years to Rs 2,251 crore in 2009-10. The company has come out with an initial public offer (IPO) of Rs 530 crore, which includes Rs 180 crore on account of an offer for sale. Of the Rs 350 crore Ramky will receive, Rs 80.4 crore will be spent on equipment, Rs 175 crore towards working capital and Rs 25 crore on repayment of debt. Visible growth The growth from current levels may not be as fast as the historical annual growth of over 50 per cent seen in the last four years. However, considering its current order book and opportunities in the infrastructure sector, the company’s revenue and profits should grow about 40 per cent annuall...

Jitendra Kumar Gupta / Mumbai September 9, 2010, 1:35 IST http://www.business-standard.com/india/news/road-sector-infast-lane/407454/ Activity in the road sector is picking up after a slow start in 2008-09, when the National Highways Authority of India (NHAI) awarded only 643 km of new projects. While 2009-10 saw projects for 3,361 km of roads being awarded, the government is now looking at disbursing up to 18,000 km of new road projects in the current as well as the next financial year. In fact, in the April-July 2010 period, the government has awarded projects for 2,873 km, which leaves a lot of room for awarding new projects and indicates that the pace should pick up going forward. The target for the current year is over 9,000 km. “The government has an internal target of about 12,000 km for this year, which may look difficult, but we will see more projects getting announced in the next two-three months,” says Abhinav Bhandari, who tracks infrastructure at Elara Securties. SMOOTH R...

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http://www.business-standard.com/india/news/time-to-be-cautious/408759/ Jitendra Kumar Gupta / Mumbai September 22, 2010, The phrase most experts use to describe the current rally in the markets is: “Probably, this time will be different.” On Tuesday, the Sensex closed over the physiologically important 20,000-mark, which is just about 1,200 points away from its all-time high of January 2008. While there are fundamental reasons that justify the rally, there are concerns as well, especially about the pace of rally and its sustainability in the near term. Positively, there is a clear difference in the rally of 2008 and the current one, with the latter on solid ground. “In 2008, dreams were being bought. It was frenzied — people were jumping in as if there was no tomorrow. At this point, there are no bubbles. But the pace of the rise has been scorching, so it might correct a bit,” says Gul Teckchandani, an investment expert. “In 2008, everything – commodity prices, global econ...

There is a huge untapped opportunity in the solar power space and governments across the globe are focusing on attempts to harness this potential as a part of their diversification towards greener energy. This can be gauged from the fact that global solar power capacity has grown 47 per cent annually during 2004-08 to reach 13,424 Mw. In India, the industry is yet to take off as policies are still being framed. The country has a solar-based power generation capacity of over 200 Mw, which the government aims to expand to almost 20,000 Mw by the end of year 2022 under the national solar mission plan. Seeing the light Several companies have now begun to see potential in the field. Indosolar is one such company. It forayed into the solar power business very recently in 2009. The company makes poly-crystalline solar photo-voltaic (‘SPV’) cells, which are supplied to system integrators. These system integrators, in turn, market them in the domestic as well as such international markets as th...

Stocks of paper producers have been doing well in the last few months, outperforming the broader markets by a huge margin. Against a four per cent rise in the BSE Sensex, stocks of major paper companies have risen 26-66 per cent since end-March. Improving prospects are one of the key reasons driving the stock prices higher, which are also reflected in the good set of results for the June quarter (see table). “On the back of higher demand, increase in paper prices and better capacity utilisations, paper companies have been able to report better revenue and profit growth. As demand continues to be better, we think companies should be able to maintain margins as a result of lower input prices and higher capacity utilisations,” says Sridhar Chandrasekhar, head, Crisil Research. Paper and newsprint prices, which were flat to down in the calendar year 2009, have firmed up in recent months. During the month of July, prices for Creamwove ( Rs 41,000 a tonne) and Maplitho ( Rs 52,205 a tonne), ...

Jitendra Kumar Gupta / Mumbai September 17, 2010, 0:24 IST http://www.business-standard.com/india/news/coal-india-insweet-spot/408313/ Coal India’s Initial Public Offer (IPO), expected to open in the next few weeks, is a first in quite a few ways. To begin, not a single IPO has been given a rating of 5/5 by any rating agency; Coal India has earned this rating by Crisil. Indicating its fundamentals are strong or superior to any other listed company. The other first is that its IPO, in terms of value, will be the biggest ever in India. The earlier big IPO was of Reliance Power, worth about Rs 9,000 crore, which came out in January 2008. More important, with energy security at the top of the mind of many countries and companies, Coal India offers a unique play as a source of energy, given India’s growing need for the ‘black gold’. Experts say most institutional and retail investors will be eagerly waiting for the IPO. The company will be hitting the market in mid-October and the governmen...

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http://www.business-standard.com/india/news/what%5Cs-hot-what%5Cs-not-for-fiis/405850/ Post the sharp sellout in markets in 2008, foreign institutional investors (FIIs) have once again started accumulating Indian stocks. Notably, estimates suggest that India’s average weight in Global Emerging Markets (GEM) Funds reached an all-time high of 7.91 per cent as on March 2010. Even in the Asia-Pacific Funds, India's weight in the portfolio allocation has increased in the recent past, thereby leading to increased inflows. FIIs have been net buyers to the tune of Rs 57,538 crore year-to-date in 2010, as against Rs 84,278 crore in the whole of last year (2009). As FIIs continue to invest in new companies or churn their existing investments, we looked at some of these changes in their India portfolio in the June quarter to understand their likes and dislikes in terms of individual stocks and possible reasons for the moves . THE FII REPORT CARD ...

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http://www.moneycontrol.com/video/fii-view/chancesdouble-dip-recessionus-raised-roubini-_483064.html?utm_source=Article_Vid Economist Nouriel Roubini has come out with yet another chilling prediction. Roubini warns that the chances of a double dip recession in the US have increased as the second half of the year is expected to be even worse, reports CNBC-TV18. “Compared to six months ago when the probability of double dip was very low, right now, I expect it to be very high,” Roubini warned. Growth in Q2 has been revised downwards from 2.4% to 1.6%, given the construction numbers will be revised down to 1.2%,” he added. He reasoned that based on the data the second half of the year is going to be worse than the first half 2 because all the tailwinds will become headwinds. He is concerned that if we finish Q2 with 1.2% then the second half will be worse. “Once the growth rate is 1%, you are already in a growth recession, and then the risk is that the financial markets are going to...

http://www.business-standard.com/india/news/good-prospectsexpensive/405695/ There is no doubt about the growth prospects of container traffic, which typically grows at double the rate of the country’s economic growth. Even as India’s foreign trade is still minuscule compared to the size of its economy, the prospects are bright for port logistics companies, especially those catering to north and north-western regions, which account for 65 per cent of India’s container traffic. The traffic in this region is expected to grow 11-12 per cent over the next three to four years. Gujarat Pipavav Port Ltd (GPPL), promoted by the biggest terminal and port operator in the world, APM Terminals, is one of the first private sector port developers operating in Gujarat, providing port handling and marine services for container cargo, bulk cargo and LPG cargo. In light of the projected outlook for the sector, the company’s prospects look good. The key concern stems from the IPO’s expensive pricing. Key ...

http://www.business-standard.com/india/news/suzlon-energy-lowpower/405580/ The last two years have been tough for shareholders of Suzlon Energy. They have been hoping for a recovery in the company’s performance: Against a 20 per cent return by the Sensex in the last one year, Suzlon’s share price is down 43 per cent. And, the company as well as its share price is showing no signs of a recovery. A look at the company’s results for the quarter ended June suggests that its woes are not yet over. Suzlon reported a 42 per cent decline in consolidated revenues, while losses further deepened to Rs 912 crore from a loss of Rs 453 crore in the year-ago quarter. The epicentre Considering that about 50 per cent of Suzlon’s turnover is derived from the US and European markets, the slowdown in demand, higher capacities, postponement of projects and pricing pressure in these markets have resulted in the poor performance of the company. During the quarter, its European subsidiary, Repower, rep...