Archive for the 'ONGC' Category

Buy ONGC with conviction

July 29, 2008

ONGC @ 1011 on 28/07/08 gets 1236 panch-tattva points and should be bought. It was even earlier recommended for purchase and rewarded in a market which is otherwise drifting lower.

ONGC’s MD Mr R S Sharma has called upon govt. to rather have provision for taking extra profit tax on windfall gains due to crude prices rising exorbitantly and not subject it to (whimsically) asking to give subsidies to oil marketing companies. He has also told that making cess on crude production ad-valorem instead of ad-quantum will take care of need to tax extra for gains in an transparent manner. I fully endorse his view. Earlier on I have many times raised this issue, if only the govt. will listen. Now, with left kept aside, Mr Man Mohan Singh should sing some rational tunes.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Buy ONGC with confidence

June 25, 2008

ONGC @ 871 as on 25/06/08 gets 1195 panch-tattva points and you may purchase it as much as you can for long term. You should also book profits on sudden surges on small quantity in parts.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

ONGC @ 1116 as on 21 Jan 2008 after Q3 results

January 22, 2008

ONGC @ 1116 (21/01/08) gets 1041 panch-tattva post result points and you may accumulate this over time for long term also please book profits on part quantity to lower cost.

Previous Recommendations:

@1245(31/10/07) :1140 points-Buy regularly but book profits.
@930(27/07/07) :1145 points-Buy with confidence.
@916(25/06/07) :1144 points-Good for investment.
@880(30/03/07) :1154 points-Buy in a few strokes.
@768(07/03/07) :1205 points-Buy straight away.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Market Matrix: Economic News and Market Analysis as on 28 Nov 2007

November 28, 2007

By krsna Khandelwal – A veteran market analyst

Friends,

Limited Partnership Bill would soon be cleared. This is a step in right direction and would open possibilities of partnership between people with common business vision but no personal history of mutual trust. Another important feature is that the stepping in shoes of outgoing partner would be easier and the continuity of business will not break.

RPL share price movement has been such as to give rise to doubt of manipulation. Price went up in a frenzied manner and than came down to under 200/- per share after scaling high of beyond 290/- in a short time. The Reliance management sold off big chunks at an average price of around 230/- per share and enriched the company by over Rs. 3000 crs. There has been enrichment of some at the cost gullible investors. I expect the price to touch still lower levels before the production starts.

Dedicated eastern and western freight corridors would entail investments of over Rs.28000 crs and the plan has been given a green signal by the cabinet. Eastern corridor will take about five years to complete and would begin at Ludhiana and pass through Saharanpur, Khurja and Allahabad in U.P. The western corridor would cover the distance between JNP (Mumbai) and Delhi. On completion, a useful link in fast movement of goods will be established.

ONGC would have to absorb Rs.7448 crs of subsidy burden during first half of current accounting year. The jump in the crude oil prices by about $6.67 per bbl translates in to $1.88 per bbl gain to ONGC (roughly by 28%).

RBI governor says that any disorderly adjustment in global financial markets will result in sharp rise in interest rates. The local banks would face greater threat of defaults in loan portfolios.

FM says that the state owned banks will not be allowed to have lower than 51% holding by the govt. and this poses a problem fore the banks to get adequate funding while the expansion business takes place. This needs to be amended in an era where the competition etc has gone up and the funding requirements of the banks has increased enormously.

Some 2.22 million D-Mat accounts have been frozen in India for want of PAN particulars. I think there is case for defreezing these accounts; however, as an incentive to give the PAN numbers some extra charges may be levied up to the time the PAN particulars are supplied. Further, the transfer of the holding may be allowed in to an account, which has the PAN particulars.

Income Tax dept. want a levy in shape of ‘Capital Transaction Tax’ on property deals based on circle rates to take care of under reporting of the value of transactions. As per an estimate 40%, payment in these transactions is settled through cash payment out side of books. In 2006-07, the number of real estate deals worth over Rs.30 Lacs went up by 40% to 109000 transactions across India.

The attrition rates in IT sector is climbing inspite of measures by the companies to keep it in check.

Today Nifty closed at 5617 after the slide for the second consecutive day. This is after a surge in US markets yesterday and has actually not shown a linkage with the world markets after a long time. The month of December will be seeing the liquidity tighten due to last but one advance tax installment for the accounting year 07-08. It may now be expected that the range bound trading in stocks will have downward bias at least till the end of December.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Market Matrix: NOT for BULLS II

November 1, 2007

By krsna Khandelwal – A veteran market analyst

Friends,

I gave an idea earlier as what the macro number convey to us. Since then there has been a further attempt to take the leading indices to higher levels. They (the unknown bull operator or let us say the unknown operator is preparing conditions to play the bear card with ferocious speed and for longer time) have been successful in making Nifty touch 6000 mark while Sensex kept company to scale 20000 mark yet again. While this was done on the strength of cap. goods/power/steel and the Reliance pack and the PSU giant ONGC, it was evident that the smart money was continuously moving out of the rest of sectors.

For the first time I listened on CNBC the results for the quarter (on aggregate basis) for some 1600 companies beside NBFCs and oil sector companies. What was given out has convinced me that we are on a downhill path, which extends far in to future unlike the impression so far that if the downhill journey commences it will be for a short distance and will end soon. The gross sales were up by around +14%, the other income was up by around +40%, the OPM was healthy at around +26%, and the PAT was up by around 24% and the interest outgoes were substantially up. This has clearly given the idea that the slow down is a sure thing. The high OPM level does not leave room for further improvement and the sales are not keeping pace, the interest burden has affected the profitability and is affecting the demand also. The bottom line is healthy due to the jump in other income, which comes out of the sales of some good investments or the surplus real estate of the companies.

The expanded capacities have yet to flood the goods in to market but such capacities are almost ready. The whole matter of concern is that capacities have been created as flow of money has been so generous in the hands of management and it came as a good percentage on capital employed. I have earlier also told that the Indian management is very much averse in distributing the windfall to shareholders and rather keeps it in company and uses for whatever it pleases for in India the mighty is the one who has the mullah. In a bid to save on taxes these managements (I am talking in general lest some in the other boat feel offended) have even gone ahead and loaded themselves with debt too, it has been just an effort to maintain debt equity ratio. This money pool gave them ability to expand capacities or even put up green field projects. Those who had still bigger flows have gone out of borders to expand empires like Tatas and AV Birla Group. The smaller ones have also done their bit in this area. Both the types have been imprudent and eventually will pay through their nose and of the shareholders who are attached by the umbilical cord and are fed as much as is deemed proper by the managements. The leftover remains more at risk than the money of the managements as they gift themselves with cheap equity and handsome remuneration. These very managements who one time reward themselves with cheap equity start selling their controlling stakes into market before the public has an inkling of the rough patch ahead. You, the reader, may check how much the promoter stake has come down for the last two quarters and how much more would be sold in the intervening period i.e. from now until Dec 07. You must do this homework.

The smaller fries, which got the ESOPs, have done the same thing. I even overheard the gossip that the top brass of L&T has become rich in their own right and may leave en block to set up a company like the one the one L&T from out of money got through sale of their ESOP stake. They are sure of wooing the right people out of L&T. Though it may just be a rumour but what the design shows has a streak of genius.

There is a danger lurking on the construction, infrastructure and cap. goods sectors. The Chinese are the giants in these fields and they are going to be shortly free from their Olympic related projects. They would come here to compete fiercely with Indian pygmies and the infrastructure space here is nowhere near the Chinese scale of activity in recent past. They have no dearth of capital and expect much lesser return on capital employed. So, who is making fool and who is being fooled can be clearly made out. The organised attempt of the predators has now the support of massive market convenience and the added F&O tool. The bait has been set; the prey will be the one who will fail to understand the design.

Please excuse me if any of you think otherwise. Just have patience to wait for some time and then pass your judgment; I would be more than willing to accept my analysis wrong. Once again, I remind you that logical progression in the business world happens albeit with some time leg so the prudence is only to be in safe waters before the deluge of any kind occurs.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market