TATASTEEL,NTPC,BHEL,MARUTI, HINDUNILVR,ITC,NIRMA

TATASTEEL @ 178 (241008) gets 1516 pancha-tattva points and is very good to buy.

NTPC @ 130 (241008) gets 933 pancha-tattva points and you may accumulate it over time for long term.

BHEL @ 1099 (241008) gets 822 pancha-tattva points and should be bought as a second choice on down days only.

MARUTI @ 538 (241008) gets 868 pancha-tattva points and may be bought on declines for long term.

HINDUNILVR @ 226 (241008) gets 905 pancha-tattva points and you may buy this in regular course for long term.

ITC @ 158 (241008) gets 1020 pancha-tattva points and is perfectly OK for long term investment.

NIRMA @ 900 (241008) gets 1018 pancha-tattva points and is good for investment for medium term.

BIRDINFO Stock Rx – A prescription for stock market

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Market Matrix – Value in Tata Steel at current share quotes

Friends,

Please note some numbers concerning Tata Steel:

Capital: Rs 731 crs Reserves Rs 21097 crs CMP(101008) Rs 287

It has sold steel worth Rs 20028 crs (07-08), Rs 17985 (06-07) and Rs 15394 crs (05-06) in last three years.

It has earned post tax profits of Rs 4687 crs, Rs 4222 crs and Rs 3506 crs over the last three years, this comes to total of Rs12415 crs ie Rs 170 per share. It has accounted for depreciation of Rs 2428 crs which is equivalent of Rs 33 per share.

Therefore its cash generation for last three years ended Mar 08 is equal to Rs 203 per share. The market has let it be traded for just Rs 283 today. The present value of its assets on revaluation would amount to no less than Rs 800 per share today after debt is paid out.

I talk to people and they seem to be so scared that they can not have any perception of value. I have been maintaining that the down side has limited scope simply on the strength of asset values with leading companies. These companies have capacity to buy all their outstanding stock out of their cash inflow over the next few years. I can not speak for US or European companies but for Indian companies I may say that the sum of parts for them is much more than the share prices prevailing today. The emotional damage to Indian investor psyche would correct if the govt instructs institutions and banks to buy in a small way in a falling market.

HariOm,
Krsna Khandelwal

BIRDINFO Stock Rx – A prescription for stock market

Buy TATASTEEL as good investment

TATASTEEL @ 681 on 31/07/08 gets 1175 panch-tattva points and is good for investment.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Buy TATASTEEL now and look for next guidance

TATASTEEL @ 756 as on 26/06/08 gets 1252 panch-tattva points and qualifies for investment without fear. The guidance after the next result under ‘panch-tattva’ should be obtained.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market

Market Matrix: Steel and Cement sectors in India

By krsna Khandelwal – A veteran market analyst

Friends,

Steel capacity in India would be quadrupling over next decade if the plan already announced are executed. The capacity could well rise to 175 million tonnes in 2020 from 44 million tonnes at present. The world average per capita consumption stands at 189 kg will be matched by India rising from 38 kg at present. If however the raw material shortages plagues the industry , the returns for steel producers will be very minimal. There are many alternative materials which may put pressure on steel prices. Auto makers would rely more on plastics and aluminum. The extraordinary premium placed on steel stocks is therefore not entirely borne out of pure logic , its is more on account of hangover of fancy returns of past few years. How else one may justify the per million capacity with the existing producers be valued at more then three times the cost of a million tonne capacity in a green field project. The valuation for the existing capacity for ‘Tata Steel’ is about Rs 12000 cr per million tonne roughly arrived by dividing the market cap by the present total capacity and for ’sail’ it is about Rs 10000 cr per million tonne on the basis explained earlier. The new plants would not have to spend more than Rs.4000 cr for one million tonne capacity , again on a rough reckoning.

Cement shares are not having further upward moves mostly on account of such scenario even though the profitability is no less. In fact the cement shares are down by about 10% to 20% and none sells at the all time highs while the steel shares are trading at their peaks and are still advancing. We have to find out what the current knows and we do not.

Hari Om

BIRDINFO Stock Rx – A prescription for stock market