Learning Value Investing: May 2011

Tuesday, May 31, 2011

Solar Energy Market sees entry of DuPont Amorphous Silicon Thin Film Modules with Wipr

Solar Energy Market sees entry of DuPont Amorphous Silicon Thin Film Modules with Wipro

Indian Solar Energy Market has seen the entry of many foreign companies eager to tap this huge opportunity.This list of foreign solar companies in India keeps growing on a daily basis with both startups like Abound and large companies like First Solar,Suntech making India as an integral part of their global growth strategy.DuPont the global chemicals giant too has entered the solar energy industry in partnership with Wipro EcoEnergy.DuPont Apollo will supply Wipro with its Thin Film Amorphous Silicon Solar Panels which will be used in the grid projects.Note a number of Joint Ventures in Indian solar industry have been recently formed.

DuPont Apollo

DuPont Apollo is a wholly-owned subsidiary of DuPont started a 50 MW thin-film photovoltaic module manufacturing facility at Shenzen in 2010. DuPont Apollo is focused on the China domestic market but seems like that they are not getting too much traction in the hyper competitive Chinese market and now trying its hand in the Indian market where solar manufacturing industry is not too competitive.

Note India is a good market for solar thin film panels because of the high temperature which is suitable for thin film technology.A large number of ground mounted solar projects are being set up in India spurred by state and federal incentives.This provides a good market for solar thin film panels whose prices have nearly touched $1/watt in the international markets due to oversupply.Note DuPont is not a big name in solar panel manufacturing but like other small time solar companies like Advent Solar is trying to establish a beachhead in the growing India solar market.

Wipro Solar Business

Wipro is known mainly for its IT business in which it ranks third in India after Infosys and TCS.The company also has interests in the Indian FMCG sector,lighting etc.Wipro decided to enter the solar installation business in 2008 through a subsidiary Wipro EcoEnergy.The company has not announced any big solar projects till now nor has it won any solar plant tenders under JNNSM.

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First Solar might invest $500 million to build a Thin Film Solar Factory

First Solar might invest $500 million to build a Thin Film Solar Factory near Chennai,India – Preempt Domestic Content Requirements

Solar Energy in India is poised to be the biggest Energy opportunity in the 21st century and nobody realizes it better than top solar companies in the world.First Solar which is the biggest thin film company in the world and the most valuable solar manufacturer might be close to investing $500 million to build a solar factory in India.First Solar is the largest producer of solar panels in the world using its proprietary thin film technology.The company is also one of the biggest utility solar system developer in the world focusing mainly on the North American Market.The company has built and sold the world’s largest solar farms in Sarnia,Ontario.The company has beefed up its solar installation business by buying a number of solar developers like Optisolar,Turner etc.

First Solar may invest $500 million in Tamil Nadu,India

According to the Financial Express, a top US Thin Film Based module manufacturer is exploring the possibility of setting up a facility in Tamil Nadu with an investment of $500 million (about R2,255 crore) in the coming months.Note the sources have not revealed the name of the company but it is clear from the investment amount,solar technology that the company is First Solar.A a top level team from the company is expected to visit sometime early next week to initiate discussions with the state government officials.Note First Solar has emphasized the importance of India for its growth aiming to supply 100 MW of solar panels in 2011 itself which would make it a leader in the Indian solar industry.Other top solar panel companies like Suntech and Trina too have invested heavily in selling their solar panels in India through partnerships with local companies.

First Solar not getting too much success in China,so it may be putting redirecting its investment dollars to India

First Solar has been facing massive hurdles in getting solar projects in China which is home to most of the top solar panel producing companies in the world.Its 2 GW Ordos project has been delayed a number of times forcing First Solar to tie up with one of the Big Five utilities in China.Note foreign companies in China routinely face discrimination and the Chinese protectionism and discrimination issue has been raised by government as well as top companies like Siemens.On the other hand India does not have such a policy though it has put in a domestic content requirement for solar projects under JNNSM.This does not apply to thin film technology yet but First Solar may be looking to preempt this by building a solar factory in India.

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Analysts' corner Bse Nse Stock

Ashok Leyland, Apollo Hospitals, Mphasis & GSPL

ASHOK LEYLAND
Reco price: Rs 51
Target price: Rs 68
Ashok Leyland has reported better-than-expected result for the fourth quarter of FY11. Earnings have beaten market estimates by 17 per cent on better-than-expected revenue and margin on higher non-vehicle sales (spares, defense kits among others). Revenue for the quarter increased 30 per cent y-o-y and margins improved 110 bps q-o-q. Management has cut industry volume for medium and heavy commercial vehicles to 8-10 per cent from an earlier estimate of 15 per cent. Profit margin is also expected to fall to 10-10.5 per cent from 11.2 per cent in FY11 on higher input cost and lower margin from newly launched U-Truck range. Considering the above factors and higher expenses on depreciation and interest, earnings projections for FY12 and FY13 have been cut by 2-3 per cent and target price lowered to Rs 68 from Rs 70. Maintain buy.

— Geojit BNP Paribas Financial Services

APOLLO HOSPITALS
Reco price: Rs 476
Target price: Rs 520
Apollo hospitals (AHEL) has achieved good growth both in FY11 and the fourth quarter of FY11. FY11(consolidated) top line at Rs 2,605 crore, grew 28.6 per cent y-o-y on the back of a steady revenue growth from their increased network of hospitals and better performance from their standalone pharmacies segment. The Group has identified Tier-II cities across the country for its expansion plan and will undertake expansion in a phased manner, substantially increase its presence by FY12-13. AHEL telemedicine services segment is expected to bring in good revenues and spread the company’s brand name and reach to remote areas. Maintain Buy.

— Bonanza Portfolio

MPHASIS
Reco price: Rs 476
Target price: Rs 480
Mphasis reported rupee revenue growth of 1.9 per cent to Rs 1,257 crore and volume growth of 2.5 per cent q-o-q. The gross margin declined 200 bps q-o-q to 26.9 per cent. There were one time expenses of Rs 27 crore due to client claims (Rs 8 crore), FPP expense (Rs 16 crore) and acquisition of large deal activity (Rs 3 crore). Offshore billing rate increased from $19/hr to $20/hr each for APO and ITO segments. Net profit declined 4.2 per cent q-o-q to Rs 217 crore. HP channel business contributed 67 per cent and declined 0.4 per cent q-o-q to Rs 831 crore but direct channel revenues grew strongly at 8.5 per cent q-o-q to Rs 415 crore largely due to deal wins in the emerging markets. Huge addition of 30 new clients, highest known in the last 3 years, and it included 17 new clients from the direct channel and remaining from the HP channel. Bankingcapital markets/insurance grew 7.5/6.9 per cent q-o-q, respectively. IT, communication and entertainment declined 3.7 per cent q-o-q and emerging industries increased 2.5 per cent q-o-q. Maintain hold.

— Pinc Research

GUJARAT STATE PETRONET
Reco price: Rs 97
Target price: Rs 120
Gujarat State Petronet (GSPL) reported results below analysts estimates at revenue and Ebitda level due to lower volumes and lower realisation. However, net profit of Rs 150 crore was significantly ahead of estimates on account of depreciation write back of Rs 17 crore during the quarter. Revenue for the quarter was at Rs 250 crore, down 3.3 per cent y-o-y, mainly on account of lower transmission volume and transmission tariff. Ebitda during the quarter was at Rs 2.3 billion, down 5.4 per cent y-o-y, due to higher other expenditure which has grown by 29.9 per cent to Rs 21 crore. During the quarter depreciation cost has significantly declined 127.4 per cent, on account of change in depreciation rate to 3.17 per cent from 8.33 per cent resulting in a higher profitability. Transmission tariff declined 4.1 per cent y-o-y and volume dropped marginally by 2.4 per cent y-o-y to 35.5mmscmd. Current valuations look attractive at 9.3x FY13E EPS and 1.8x P/Bv, Maintain buy.

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Monday, May 30, 2011

Solar Projects in India

Solar Power in India is going to be one of the biggest opportunities in the 21st century with a number of favorable supply and demand factors converging.The Indian government too has supported Solar Energy in India through the ambitious JNNSM which aims for around 20 GW of Solar Capacity by 2020 (which is too low in my view).

A Number of Green Companies both domestic and foreign have already made huge plans to capitalize on this oppurtunity.

Here are some of the major happenings in India’s solar sector in the last month or so.
Juwi which is one of the biggest solar energy developers in Germany ( a market which has become saturated) has joined hands with Lanco Solar ( a subsidiary of one of India’s biggest private power companies) to set up a 75 MW Solar Plant in Maharashtra winning a contract from the state power generation company Mahagenco.The contract value is Rs 884 crore which works out to be just under Rs 12 crores/MW or $2.6/watt which is extremely low even with the price of solar panels crashing in the international market.At this price the electricity generated won’t be too expensive and Mahagenco has a good deal.On the other hand Juwi and Lanco get bragging rights to being the development team for one of India’s biggest solar plants.

Lanco Solar bags Rs.884.18 crore solar power project

    Lanco Solar, a fully owned subsidiary of Lanco Infratech, Thursday said the company in consortium with Juwi Renewable India had bagged a Rs.884.18 crore ($195 million) 75 MW solar power project in Dhule district by Maharashtra State Power Generation.’The project will be fully commissioned by mid-February 2012,’ the company said in a regulatory filing.

Maharashtra government has cleared the way for Mahagenco to build a 150 MW solar PV plant in Dhule which will use 100 MW of solar crystalline panels and 50 of Thin Film Panels.The government intend to finance the plant through a mix of debt and equity with 20% equity being contributed by the state government and 80% by the German development Bank KFW (which has played a vital role in developing Germany as the biggest solar country in the world).The Solar Plant is being touted as the biggest in the world though there are much bigger solar thermal as well as solar PV plants in the world in the pipeline .Note out of the 150 MW,75 MW has been awarded to Lanco-Juwi as mentioned at the top so it has been a really quick decision on the part of the state government ( however I wonder whether competitive bidding was done,though the government has got a really good deal).

    World’s largest solar project to come up in Maharashtra

        Maharashtra government today cleared the proposal by the state power generation company, MAHAGENCO, to set up a 150 Mw solar energy project in Dhule district.According to the government, this project would be the largest of its kind in the world.The state government would have 20% equity in the Dhule solar project as well as in the two other proposed projects of 1 Mw and 4 Mw in Chandrapur, Chief Minister Prithviraj Chavan told reporters after the weekly cabinet meeting today.The three projects would cost a total of Rs 1,987 crore, of which the state government’s investment would be Rs 397.40 crore.Messers KFW, a German financial institution, will provide the remaining funds.


        Maharashtra Electricity Regulatory Commission (MERC) has fixed the rate of solar energy at Rs 17.91 per Mw, however for this project, the rate would be Rs 12 per Mw.

    India will cancel licenses for solar projects awarded to companies under its first auction if they don’t obtain loans to build their plants by July 9, an official said today.“That’s it. They’ll be over,” Deepak Gupta, secretary at the Ministry of New and Renewable Energy, said in an interview in New Delhi today when asked what would happen to projects that don’t meet the deadline.Rather than fining companies for delays, their project licenses will be revoked, he said.

    Companies were given six months from the date of signing power purchase agreements to line up financing for their projects. Commercial banks have been reluctant to lend to the new industry on concerns the technology may not perform as expected and that projects may not get paid for the power they generate by financially troubled state electricity distribution companies.

Some good news finally for the solar developers facing an onslaught of problems.The government won’t require environmental clearances for solar power plants.Some developers had been facing problems as banks needed the clearance before sanctioning loans which make up almost 70-80% of the funding requirement.With this hurdle cleared,the solar energy plants will have less red tape to cross ( though I think it should be required for large solar plants above 10 MW in size).
No environmental nod needed for solar power projects: MoEF

    In a relief for developers of solar power projects, the union ministry for environment and forests (MoEF) has clarified that no environmental clearance is required for solar PV power projects. The clarification comes in the wake of the minister of new and renewable energy (MNRE) taking up the matter with MoEF.“It is clarified that solar PV power projects are not covered under the ambit of EIA notification, 2006 and no environment clearance is required for such projects,” a memorandum issued by the MoEF on May 13, says.“The clarification is welcome as it will help developers planning to set up solar PV power projects,” said DJ Pandian, principal secretary, state energy department.

And now for the funny part,the former head of India’s Atomic Energy Commission Anil Kakodkar does not thing that solar energy is commercially viable even after 20 GW of solar capacity was built globally last year.His bias is evident as both solar and nuclear energy require government support.If nuclear energy in the current day was commercially viable and without risks (think Fukushima) then nobody would need to lecture on the pros and cons of nuclear energy.Also why nuclear energy is inevitable for India is beyond me since the country manages to run with less than 5% coming from nuclear energy ( a situation which won’t change even in 2020 if the current nuclear energy expansion happens).
Solar energy yet not commercially viable: Kakodkar

    Nuclear energy will continue to be an inevitable option for India [ Images ] as other alternative renewable energy sources like solar will take few more years to establish as a commercially viable technology, according to experts.

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Saturday, May 28, 2011

Azure Power to invest Rs 1,500 crore in solar projects

Azure Power to invest Rs 1,500 crore in solar projects

A grid-connected solar power generator, Azure Power aims to build 100 Mw solar-based power plants in the next three years, with a total capex of Rs 1,500 crore.

The New-Delhi-based firm is expected to float an IPO, said Inderpreet Wadhwa, chief executive officer, but did not set any timeline. Azure Power, part-funded by venture capitalists Helion Venture Partners and Foundation Capital, may opt for further fund raising in the medium term, he said. “I think we are very well capitalised at this point, but I can certainly expect another round in may be 18-20 months.”

The firm has a running grid connected 1 Mw solar photovoltaic plant in Punjab and is expanding it by another megawatt. It is also in the process of setting up a 15 Mw plant in Gujarat by November 2011.

Country’s grid-connected solar power capacitycurrently is close to 3 Mw, recently launched its solar policy framework, National Solar Mission, that aims to increase it to 1,000 Mw by 2013 and to 4,000 Mw by 2017. European countries like Italy have added 800 Mw solar power projects in just 12 months, while Germany has added 3,000 Mw in a short period, and India can also achieve a similar feat, provided policies are supported by vigorous efforts, he added.

The main challenge of higher capex for solar technology is not preventing companies like Azure Power from going ahead as costs are falling slowly and also India has set up a differential tariff regime for solar power to make it more attractive.

“The first project we actually did was about Rs 19 crore per Mw, the second project we are doing is about Rs 17 crore per Mw, and we expect that prices would continue to decline, to about Rs 15 crore per Mw over couple of years,” he said.

The firm is selling the entire power it produces at its Punjab plant to the state-run utility under a 30-year agreement, which will yield Rs 15 per unit for the first 10 years to the firm and Rs 8.93 per unit for next 20 years, he said.

The 15 Mw Gujarat project, in partnership with US-based SunEdison, has a 25-year contract with Gujarat state-run utility to offload its power at Rs 15 per unit for 12 years and Rs 5 per unit for the remaining period, he added.

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Friday, May 27, 2011

NTPC Renewable Green Energy

NTPC Renewable Energy – Negligible Capacity,however 500 MW Wind,Solar Energy PPA signed with States eager to meet Green RPO

NTPC,India’s largest power generating utility with around 35 GW of electricity capacity is set to enter renewable energy in a big way as it has singed 500 MW of PPAs with state distribution companies for supplying green energy.Note India’s electricity regulator CERC has mandated a 6% Renewable Purchase Obligation (RPO) in 2011 which will increase by 1% each year to 15% by 2020.A number of states have fallen behind in meeting their RPO and would need to either generate or buy Green Energy to meet the CERC targets for renewable energy.The State of Solar Energy in India is currently extremely bad though massive growth is being planned ahead.India’s JNNSM which plans to build 20 GW of solar capacity by 2022 ran into debt troubles recently.ADB has come to the rescue and signed a JV with NTPC to build solar plants in the country.NTPC which is predominantly a thermal power utility has been planning to set up wind and solar power plants but nothing has been done till now.However after signing these PPA with the Madhya Pradesh,Orissa and Karnataka government,the renewable energy projects should get accelerated.

NTPC Renewable Energy

As can be seen below most of NTPC’s Renewable Energy plants till date have been extremely limited in capacity.It has major plans in the hydro power are with more than 1300 MW of capacity being planned.However big hydro in India faces a long gestation time and risks of cancellation due to environmental concerns.

NTPC Hydro Power Capacity

    1) Koldam,Himachal Pradesh 800 MW

    2) Tapovan Vishnugad,Uttarakhand,520 MW

    3) Singrauli (Small Hydro) Uttar Pradesh , 8 MW

NTPC Renewable Energy Capacity (Current)
DG Projects – Commissioned(15 Nos.)

Sl No.	Name of Village	Capacity	No of HH	Resource	Commissioning date
1.0	Biomass based DG Project at Village JEMERA (Korba) Chattisgarh	10KW	100	Biomass (woody)
2.0	SPV based DG Project at Village JARAHA-CHETWA (Rihand) Distt. Sonebhadra (U.P.)	10KW	233	Solar	28.03.2005
3.0	Biomass based DG Project at Village BHAOGARH (Anta), Rajasthan	10KW	89	Biomass (Mustard Stem)	23.03.2006
4.0	Biomass based DG Project at village BAGDARA (Korba) Chattisgarh	20KW	110	Biomass (woody)	12.07.2006
5.0	Biomass based DG Project at village UCHLENGA (Korba) Chattisgarh	20KW	134	Biomass (woody)	19.10.2006
6.0	Biomass based DG Project at village KHIRTI (Korba) Chattisgarh	20KW	105	Biomass (woody)	05.11.2006
7.0	Biomass based DG Project at village PIPRAHAR (Rihand) Distt. Sonebhadra (U.P.)	25KW	160	Biomass (woody)	31.03.2007
8.0	Biomass based DG Project at village MAHULI (Korba) Distt. Sonebhadra (U.P.)	30 KW	183	Biomass (woody)	29.06.2007
9.0	Biomass based DG Project at Village BIYAR BASTI (Rihand) Dist. Sonebhadra (U.P.)	40KW	250	Biomass (woody)	14.10.2007
10.0	Biomass based DG Project at Village BIRHUNI (Auraiya) Distt. Auraiya (U.P)	35 KW	405	Biomass (woody)	28.03.2008
11.0	Biomass based DG Project at Village Dhummadand Dist. Singrauli (Madhya Pradesh)	10 KW	42	Biomass (woody)	31.12.2009
12.0	Biomass based DG Project at Village Gulriha Dist. Singrauli (Madhya Pradesh)	20KW	120	Biomass (woody)	07.03.2010
13.0	Biomass based DG Project at Village Baharatola-I Dist. Singrauli (Madhya Pradesh)	20KW	200	Biomass (woody)	14.03.2010
14.0	Biomass based DG Project at Village Baharatola-II Dist. Singrauli (Madhya Pradesh)	20 KW	200	Biomass (woody)	17.03.2010
15.0	Biomass based DG Project at Village Bakriha Dist. Singrauli (Madhya Pradesh)	10KW	55	Biomass (woody)	18.03.2010

DG Projects – Under Implementation(1 Nos.)
Sl No.    Location    Capacity    No of HH    Resource
1.0    Micro hydro DG Project at Village NAKKIA (Korba) Chattisgarh    40KW    80    Hydro
NTPC to supply 500 mw of green energy to states

    The state-run power producer National Thermal Power Corporation (NTPC) will allocate 500 mw of green energy to various states to help them meet the Renewable Energy Purchase Obligation (RPO) as mandated in the National Tariff Policy.“We are going to allocate about 500 mw of renewable energy that we are now generating from solar, wind and small hydel stations to various states,” NTPC executive director(commercial) MKV Ramarao told FE.NTPC has signed power purchase agreements with Maharashtra and Karnataka to supply 75 mw of wind power. It is also, now, negotiating with the Madhya Pradesh government to supply 50 mw of solar power, he informed. “Talks are on with Karnataka government for supply of 100 mw of wind power,” he added.Ramarao was here on Tuesday to sign the PPA with the Orissa government-owned transmission company, Gridco, for supply of 10 mw of solar power. The power will be supplied to the state from NTPC’s solar plants at Dadri in Uttar Pradesh and Faridabad in Haryana.

Note Indian state owned companies in the power,energy and capital goods sector have been firming plans to enter the renewable energy industry.However things have been quite slow as is typical with the government sector.Except for a lot of plans and statements,no big green power plant or manufacturing facility has come about till now.Most of the action has been from the private sector in both the wind and solar energy.NTPC has an exemplary record in execution and a good management as well.

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Today's Bse Nse Stock picks

Nifty, Bank Nifty, TCS & RELIANCE INDS

NIFTY
Current: 5,.412 (June fut: 5,396)
Target: NA
The index hit resistance at 5,425 and it could slide back to hit 5,300-5,350 in the next 3 sessions. A long put butterfly with long June 5,400p (121), two short 5,300p (2x81) and long 5,200p (53) costs 12 and could pay a max 88 at 5,300 with breakevens at 5,388 and 5,212. On the upside, a simple long June 5,500c (69) and short 5,600c (39) has a decent risk: reward ratio.

BANK NIFTY
Current: 10,468 (June: 10,385),
Target: 10,250
The discount on the June future suggests the financial index could fall sharply. Chart patterns indicate a downside till 10,225-10,250. Keep a stop at 10,500 and short the June future. Add to the position between 10,275 and 10,325, and reset the stop to 10,375. Start booking profits below 10,250.

TCS
Current: Rs 1,136
Target: Rs 1,115
The stock seems to be stuck range-trading Rs 1,115-1,145 and it bounced off the top of the trading range yesterday. Potential breakouts could be Rs 1,080 or Rs 1,180. TCS could test the bottom of the zone in the next 3 sessions. Keep a stop at Rs 1,150 and go short. Add to the position between Rs 1,125 and Rs 1,130, and reset the stop to Rs 1,135. Either book profits at Rs 1,115 or book partial profits and hold, hoping for a breakout. If Rs 1,150 is broken, go long.

RELIANCE INDS
Current: Rs 934
Target: Rs 910
The stock bounced on short-covering but it’s due to hit resistance between Rs 937 and Rs 942. On the downside, it could fall back till Rs 905-910 inside 3 sessions with a little support coming at Rs 920. Keep a stop at Rs 940 and go short . Add to the position between Rs 920 and Rs 925, and reset the stop to Rs 931. Start booking profits below Rs 910. If Rs 962 is broken, RIL could jump till Rs 960.

NTPC
Current: Rs 171
Target: Rs 176
NTPC has bounced off a decent support at Rs 165-166 and it could rise till around the Rs 177 levels before it hits severe resistance. Keep a stop at Rs 168 and go long. Add to the position between Rs 173-175 and reset the stop till Rs 172. Book profits above 176.

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Friday, May 20, 2011

Todays Bse Nse Stock Picks

Nifty & L&T

NIFTY
Current: 5,428,
Target: NA
No material change today in the index. It remains range-bound, with a negative bias. A previously recommended long put butterfly of long May 5,400p (36), two short 5,300p (2x11.5) and long 52,00p (3) remains attractive. Maximum loss of 17, breakevens at 5,383 and 5,217. Maximum gain of 83 at 5,300. Another trading position is a long strangle of long 5,400p and long 5,500c (25). Maximum cost of 61, breakevens at 5,339 and 5,561, while potential returns are unlimited.

L&T
Current: Rs 1,595,
Target: 1,660
A sharp rise from what looks like fair support at 1,500-1,510 levels. There is resistance between 1,600 and 1,610. If that is broken, the scrip could go till 1,660 within three sessions. However, due to the sudden rise, there is a big downside risk. Keep a stop-loss at 1,570 and go long. Increase the position between 1,610 and 1,620 and reset the stop to 1,610. Book profits at 1660. If the 1,570 stop is broken, consider going short with a target of 1,535 and a stop-loss at 1,585.

The target price and projected movements are in terms of the next one trading session

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Thursday, May 19, 2011

List of Major Solar Panel Companies

Solar Energy in India represents one of the Biggest Opportunities in the Energy Sector.The Government has recognized India’s massive potential in Solar Energy and has planned a huge subsidy scheme through the Jawaharlal Nehru National Solar Mission (JNNSM).While currently the Support is mainly targeted towards big commercial plants,its only a matter of time before distributed residential systems become widespread.Some states like Gujarat and Rajasthan are also independently supporting solar energy through subsidies and grants.

List of Major Solar Panel Companies

1) Tata BP Solar

2) Moser Baer

3) Solar Semiconductor

4) IndoSolar

5) Topsun Solar

6) Titan Energy

7) PLG Power

8 ) Maharishi Solar

9) Kotak Urja

10)Photon Energy Systems

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Analysts' Corner Bse Nse Stock

GCPL, Kalpataru Power & Jaiprakash Associates

GODREJ CONSUMER PRODUCTS
Reco Price: Rs 390,
Target Price: Rs 425
Godrej Consumer Products(GCPL) is one of the leading players in the FMCG market, catering to Indian household with many well known brands. GCPL’ s Q4FY11 top line grew by 96 per cent YoY from Rs 999.50 crore in Mar 2011 against Rs 509 crore in the previous year aided by revenue traction from the company’s recent acquisitions on a low base. Net profit grew 55 per cent YoY, driven by strong revenue growth in almost all segments. With various acquisitions during the year and various other’s in pipeline, Company is expected to make its strong presence felt in the international markets as well. With increasing growth in the whole FMCG segment, the company is expected to continue its growth momentum at a CAGR of 18 per cent over FY11-13. Maintain buy.

— Bonanza Portfolio

KALPATARU POWER
Reco Price: Rs 120,
Target Price: Rs 160
Kalpataru Power’s (KPP) Q4FY11 results fell short of expectations essentially on modest revenue growth in the transmission and distribution segment and a revenue decline in the infrastructure segment. KPP’s order book totalled Rs 6,000 crore at the end of FY11, with 75 per cent of the order backlog covered under price variation clauses. KPP’s revenue/ net profit for Q4FY11 came in at Rs 880 crore/Rs 60 crore, up 5.5/7.2 per cent YoY. The Ebitda margin for the quarter remained flat YoY at 11.1 per cent. Revenue growth in the T&D segment moderated to 7.2 per cent YoY for the quarter versus 50 per cent growth recorded in Q4FY10 on account of delays in project execution in Algeria. The Ebit margin for the segment contracted 10bps/40bps for Q4FY11/FY11 to 9.9/10.4 per cent. Maintain buy.

— Religare Institutional Research

JAIPRAKASH ASSOCIATES
Reco Price: Rs 88,
Target Price: Rs 96
Jaiprakash Associates' adjusted net profit at Rs 287 crore (up 17 per cent yoy) is inline with estimates, led by real estate Ebit up 7.3 times yoy to Rs 285 crore. Construction Ebit was down 46 per cent yoy to Rs 218 crore, Cement Ebit up 57 per cent yoy to Rs 223 crore. Revenues at Rs 3,998 crore ( up 21.4 per cent yoy) led by real estate revenue up 4.8 times yoy to Rs 597 crore - positive surprise, Cement realizations up 8.7 per cent restricts revenue growth to 27.2 per cent yoy at Rs 1568 crore. Massive expansion of cement capacity, continue to pose pressure on realizations, coupled with input cost pressures resulted in Ebita/ton falling 36 per cent to Rs 529. Upgrade FY12E earnings by 2.7 per cent to Rs4.7/share. Accumulate.

— Emkay Research

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Wednesday, May 18, 2011

List of Wind Energy Companies in India

1) Suzlon Energy – Suzlon Energy is the biggest Wind Energy Company by far with 4-5 Gigawatts of WTG Capacity per year.Its subsidiaries Hansen Transmission and RePower are also big players in the Wind Energy in Europe.The Company has seen its revenues and profits take a huge hit in recent times but has been recovering slowly.

2) RRB Energy – The company has a long history and manufactures Wind Turbines at its plants in Tamil Nadu.The Company has a capacity of 300 MW which it is expanding to 700 MW.The Company makes only 2 models with power rating of 600 Kw and 1.8 MW.Merill Lynch has made a small investment in this company.

3) NEPC India – This company was one of the wind energy heavyweights and a stock market darling earlier.However It no longer remains an active player in the Indian market .Heavy Debt and Bad Management drove to this company to the ground despite being a pioneer in the Indian Wind Power Market.

4) Auro Mira Energy – The company is more of a Green Utility rather than a full fledged WEG manufacturer.It has made plans to manufacture Wind Turbines in the future.It has attracted funds from Baring and IFC to push forward its Green Plans.

5) Regen Powertech - It is a small scale WTG Supplier like RRB Energy which recently set up a small 300 MW manufacturing facility in Tada,Andhra Pradesh recently.The company licenses technology from Vensys to manufacture 1.5 MW gearless Wind Turbines.The company has managed to supply both big and small wind farms over the last 2 years.The company is supported by the PE arm of Future Group.

6) WinWind – The company is not exactly a domestic company rather one with a Finnish Origin.It is owned by the Abu Dhabi Masdar ,Siva Group and the government of Finland.It has recently estalished a 1000 MW capacity in Venga,Tamil Nadu and also has a 500 MW plant in Finland as well.The company plans to producer 3 MW Turbines at its Indian plant as well.

7) Pioneer Wincon – The company is a JV between the Pioneer Group and Wincon of Denmark.It makes small 250 KW Turbines and is a bit player with 30 years of operations in India.The Company remains a small static player in the Wind Energy Market of India.

8) Chiranjeevi Wind Energy – A Small bit player like Pioneer Wincon which engages mostly in the sale of small 250 KW Wind Turbines.Like Pioneer Wincon it has sold a number of these Turbines to small companies mainly in the Southern Part of India.

9) Lietnar Shriram Limited - The company is a 50:50 JV betwen the Shriram Group of India and Lietnar of Italy.The company makes gearless turbines of 1.5 MW capacity and has supplied to small farms in Maharashtra.The company has a major inhouse customer in the form of Orient Green Power which is building a 300 MW farm in Tamil Nadu using Lietnar Shriram Wind Turbines.

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Today's picks Bse Nse Stock

Nifty, Bank Nifty, ONGC, HDFC & Mundra

NIFTY
Current: 5,438.95 (May fut: 5,450);
Target: NA
The index made a downside breakout, creating lower lows that suggest a weak intermediate trend. The target by settlement should be 5,300-5,325. There’s an interim support between 5,400 and 5,425. There’s resistance between 5,450 and 5,475, and another resistance at 5,500-5,525. A bearspread of long 5,400p (41) and short 5,300p (16) costs 25. Breakeven is at 5,375 and it gives a maximum return of 75 at 5,300. If you short the future instead, keep a stop loss at 5,500.

BANK NIFTY
Current: 10,669 (May fut 10,654);
Target: 10,400 (May 20) or 10,250 (May 26)
Monday’s target of 10,650 was hit and exceeded with a low of 10,587 on Tuesday. It may be worth holding the short May futures since the trend is clearly negative. The chart pattern suggests a target of 10,150-10,250 possible by settlement. Keep a stop at 10,800 and go short with a 3-session target of 10,400. If that is hit, you can book profits. Or else, reset the stop to 10,550 and stay short with a target of 10,250 by settlement.

ONGC
Current: Rs 277
Target: Rs 265
The stock has made a downside breakout and it now has a 3-session target of Rs 265. It could drop further if selling pressure intensifies. There’s some support at Rs 275, and resistance above Rs 280 and again at Rs 285. Keep a stop at Rs 281 and short. Add to the position between Rs 272 andRs 275 and reset the stop to Rs 278. Book profits below Rs 265.

HDFC
Current: Rs 632
Target: Rs 610
The stock is under selling pressure but its holding at support between Rs 625 and Rs 635. If it falls below Rs 625, it could drop till Rs 610-615 in a 3-session timeframe. By settlement, it could test Rs 580, if it breaks 610. Keep a stop at Rs 638 and short. If it’s a one-session position, book profits or partial profits at Rs 625. If you can hold for 3-sessions or longer, increase the position between Rs 620 and Rs 625 and reset the stop to Rs 630. Book profits or partial profits at Rs 610

MUNDRA
Current: Rs 145
Target: Rs 155
The stock could see some profit booking on Wednesday after a sharp climb. But it has good support at Rs 139-141 and it should test resistance between Rs 155 and Rs 158 in the next 3 sessions. Keep a stop at Rs 140 and go long. Add to the position between Rs 147 and Rs 149 and reset the stop loss to Rs 144. Start booking profits above Rs 154.

The target price and projected movements given above are in terms of the next one trading session

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Tuesday, May 17, 2011

Green Energy

Pls click the below link to read the complete post

JSW Green Energy enters Indian Solar Developer/Installer Industry Buying 0.5 MW Thin Film CIGs Panels From Troubled Energy Conversion Devices

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Green Energy

Pls Click the Link below to read the complete post.
Power Finance Corporation Green Energy – PFC Subsidiary to become one of the biggest Green Energy Financiers in India

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Todays's Bse Nse Stock Picks

Nifty, Tata Motors, IDFC, DLF, Ranbaxy

NIFTY
Current: 5565 (May fut: 5563);
Target: NA
Range trading between 5500-5600 has led to a falling VIX. Breakouts in 5 sessions could move till 5400 or 5700. By settlement, we may see 5300 or 5800. A strangle of long May 5400p (30) and long 5700c (30) costs 60. This seems a good position — premiums are low. A butterfly of long 5600c(64), two short 5700c (2x30) and long 5800c(13) also looks good with a maximum loss of 17, a maximum gain of 83 at 5700, and breakevens at 5617, 5783.

TATA MOTORS
Current: Rs 1,212
Target: Rs 1,230
A mini-breakout could pull the stock up till Rs 1,230. However, it could also collpase till Rs 1,175-1,180. Keep a stop at Rs 1,200 and go long. Increase the position between Rs 1,216-1,222 and reset the stop till Rs 1,210. Book profits above Rs 1,230. If the Rs 1,200 stop is broken, consider going short with a target of Rs 1,175 and a stop loss at Rs 1,210.

IDFC
Current: Rs 133
Target: Rs 137
The stock is consolidating at a support around Rs 131-134 and it could be capable of a rally till the Rs 137-138 levels in the next two sessions. However, the long-term trend is down. Keep a stop at Rs 131 and go long. Add to the position between Rs 135-136 and reset the stop to Rs 133. Start booking profits above Rs 137.

DLF
Current: Rs 227
Target: Rs 233

The stock has bounced off reasonable support and it cleared a resistance at Rs 226, creating a pattern for higher highs. The target could be around Rs 233 in the next 3 sessions. Keep a stop at Rs 224 and go long. Add to the position between Rs 229-231 and reset the stop to 227. Book profits above Rs 232.

RANBAXY
Current: Rs 478
Target: Rs 495
The stock has swung down to a recent low of Rs 425 and then it made an upside breakout yesterday on big volumes. The chart pattern suggests a target of around Rs 495. Keep a stop at Rs 470 and go long. Increase the position between Rs 484-488 and reset the stop to Rs 480. Book profits above Rs 495.

The target price and projected movements given above are in terms of the next one trading session, unless otherwise stated

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Analysts' Corner Bse Nse Stock

Oil India, Jubilant FoodWorks, GE Shipping & Elecon Engineering Company

OIL INDIA
Reco price: Rs 1,376
Target price: Rs 1,370
Oil India is likely to register a compounded annual growth rate of 11 per cent for gas production over the next five years, with a new petrochemical/power project being set up by a joint venture of PSUs (OIL, GAIL, ONGC). At two per cent, oil production growth is likely to be moderate. If OIL can overcome these technical challenges at its Rajasthan block, production growth has the potential to surprise positively. However, the core business is likely to register stable growth. OIL had a net cash equivalent of Rs 10,200 crore on its books for 2010-11. Its utilisation for a major acquisition or exploration thrust could substantially improve valuations and return ratios. Analysts expect OIL to make some acquisition in 2011-12. With under-recoveries at Rs 72,900 crore in 2010-11 and oil marketing companies unable to bear more than Rs 7,300 crore (or 10 per cent of the total under-recovery) and GoI’s share at 50 per cent, there are concerns the share of upstream companies could be higher than the 33 per cent norm. Importantly, continued uncertainty over future sharing is also impacting valuations significantly. Initiate with hold.

— JM Financial

JUBILANT FOODWORKS
Reco price: Rs 708
Target price: Rs 725
At Rs 19 crore, Jubilant FoodWorks’ fourth-quarter adjusted net profit was below the expected Rs 20 crore, led by lower then expected Ebitda margins (17 per cent). JFL targets to add 80 new stores in FY12 — 11 per cent higher then 72 stores in FY11. It also expects continued momentum in same-store sales growth (up 33 per cent y-o-y). Ebitda margin expansion at 150 bps y-o-y to 17 per cent was below expectations. The revenue of Rs 190 crore was in line with expectations. The Dominos model has generated an operating cashflow of Rs170 crore and repaid outstanding debt of Rs 80 crore with surplus liquid funds of Rs 40 crore in last two years. Brokerages remain convinced about the ability of the Dominos model to generate surplus cash after incurring growth expenditure and build 110 bps expansion in Ebitda margins in the FY11-13 period from 17.7 per cent in FY11 to 18.8 per cent in FY13. Upgrade FY12 and FY13 earnings estimates by 6.4 per cent and 10.3 per cent to Rs 16.1 a share and Rs 23.4 a share. Maintain accumulate.

— Emkay Global Financial Services

GREAT EASTERN SHIPPING
Reco price: Rs 285
Target price: Rs 425
Great Eastern (GE) Shipping is a triple play on dry bulk shipping, tankers and offshore services. While dry bulk and tanker rates are under pressure because of a global supply glut, offshore services have a strong tailwind of a hardening crude price that could soon begin to influence tanker demand as well. Transport volumes of iron ore are expected to pick up and tanker rates are starting to move up. On the offshore side, rates had not plunged as much (practically no spot market) and have still remained reasonably healthy. GE Shipping has a long record of successfully riding wildly volatile freight cycles. The company is trading at the bottom quartile of its P/BVPS trading band. Initiate coverage with buy.

— IIFL

ELECON ENGINEERING COMPANY
Current Market Price: Rs 68.5
Current Intrinsic Value: Rs 98
CARE Equity Research assigns a fundamental grade of 4 on 5 to Elecon Engineering Company Limited, indicating ‘very good fundamentals’. EECL is among the few large Indian companies in the material handling equipment (MHE) industry and the market leader in the domestic industrial gear industry. Both these segments cater to the core sectors of the economy. This places EECL in a sweet spot, as outlook for the growth in core sector remains buoyant. EECL has a revenue visibility of around two years in case of the MHE business and three quarters in the gear business, with a buoyant order-book pipeline. Being a part of the Elecon group, which largely focuses on the engineering sector, adds to the operational strength of EECL. Acquisition of the Benzlers-Radicon group for £18.4 million (Rs 130–135 crore) is also expected to open up opportunities for EECL in the American and European markets.

— CARE Equity Research

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Tuesday, May 10, 2011

Analysts' corner Bse Nse Stock

Rallis India, Bajaj Hindusthan & Everest Kanto Cylinder

RALLIS INDIA
Reco price: Rs 1,387;
Target price: NA
Rallis India (RAIL) reported disappointing numbers for 4QFY2011, although top-line growth was marginally below analysts’ expectations. Ebitda margin stood at 16 per cent due to high contribution from the company’s low-margin products. Net profit for the quarter declined by 20 per cent y-o-y. RAIL’s revenue for the quarter grew by 14.4 per cent to Rs 232 crore. However, Ebitda margin contracted by 510bp y-o-y to 16 per cent on account of change in product mix and unseasonal rains in South India. Unseasonal rains led to absence of pest occurrence, in turn negatively affecting demand for the company’s key products. East India witnessed less pest occurrence in key vegetables, which also affected the company’s overall sales. All this led to higher demand for low-margin products, thereby affecting the company’s overall Ebitda margin.

—Angel Broking

BAJAJ HINDUSTHAN
Reco price: Rs 76;
Target price: Rs 83
Bajaj Hindusthan Q2 and H1 F9/11 performance incorporates its erstwhile subsidiary Bajaj Hindusthan Sugar & Industries which renders y-o-y comparison difficult. At a generic level, average free sugar realisation declined 18 per cent y-o-y to Rs 28.8/kg while alcohol realisation increased two per cent y-o-y to Rs 27/BL; Reported net profit includes forex fluctuation on long-term monetary items without which net profit would have been lower by Rs 8 crore. The company has redeemed outstanding $100 million FCCBs in the quarter and paid out an aggregate $133 million, debt increased to Rs 5,900 crore in March 2011 from Rs 5,500 crore in September 2010. Maintain buy.

—IIFL

EVEREST KANTO CYLINDER
Current market price: Rs 85;
Fair value: Rs 93
CRISIL Equities lowers Everest Kanto Cylinder Ltd’s (Everest Kanto’s) fundamental grade to 3/5 indicating Rs good’ fundamentals. The revision is driven by increasing competition in the high pressure cylinder manufacturing business resulting in permanent margin contraction at the industry level and continued underperformance by Everest Kanto’s US and Chinese operations.

—Crisil Equities

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