This DIWALI, may the SCRIP called life pay you DIVIDENDS of joy, issue a liberal BONUS of good fortune, you get all the RIGHTS to enjoy Life. Your Success reaches ALL TIME HIGHS, let there be no CORRECTION in your happiness & let the SUPPORT of our good wishes, help you cross the RESISTANCE of prosperity.
DIWALI PICKS
You can buy some or buy all of them, but be assured that this shopping will only make you richer. So go on, keep a target of atleast 12 months and take your pick. Brighten your Diwali with these new jewels in your portfolio. Happy shopping!
POWERGRID (Rs.150.)
A PSU, it is the country’s principal electric power transmission company, owning inter-state and inter-regional electric power transmission system. The company owns and operates 61,875 circuit kilometers of electrical transmission lines and 106 electrical sub-stations. In FY 07, the company transmitted about 29,800 crore units of electricity, which represents 45% of power generated in the country.
The company is now eyeing up to 20% stake in Philippines' transmission company, estimated to cost $800 million, whose total valuation is being estimated at $4 billion. If the company gets this stake, it will be able to get 18% returns per annum, against 14-15 per cent in the country. The company is also setting up an office for consultancy services in Dubai, which is expected to cater to the needs of the entire Middle Eastern region.
Power is one of the biggest necessities of India and given the current pace of growth in the country, it would be no exaggeration to say that India is a “power starved” country. Power Grid is thus poised to cash-in on this huge market. A rock solid company, it is one power stock which once should surely have in the portfolio.
LAKSHMI ELECTRICAL CONTROL (Rs.480.)
A part of the LMW group, the company is engaged in the manufacture of all types of switchgears and currently has a capacity of 4 lakh switchgears, 5,000 Control Panels and 400 Tonnes of Plastic Components per annum. The company also has captive power by way of Wind Mill of 2.90 MW.
Financial performance for H1 ending September 07 has also been exemplary. FY08 is likely to have net sales of Rs.95 crore, PBT of Rs.20 crore and PAT of Rs.12.30 crore, resulting in an EPS of Rs.50 on tiny equity of Rs.2.46 crore. The biggest positive factor in favour of the company is that, on a standalone basis, the company is virtually debt free, as debt of Rs.20 crore has net current assets of Rs.26 crore.
The share is now ruling at a PE ratio of less than 10 times, based on FY 08 EPS. Share has potential to touch four digit mark in the next 12 months. So don’t forget to include this stock in your portfolio when you do the Lakshmi pooja for Diwali.
DLF (Rs.915.)
The real estate company which, through its IPO, trailblazed itself into the big league and earned the promoter, K.P Singh a place amongst the richest men in India, is today a great stock in the portfolio. Maybe, it could turn your fortunes around also, like how it did for Mr.Singh!
After the mega IPO of DLF, the company is now truly into the big league. In real estate, the most important thing today is the brand name, a reputation. And that is what probably the biggest asset and a huge plus which DLF has. The sheer money and the brand power which the company has today will take it way ahead from there.
The company has posted very good results for the first half of the current year and with the kind of orders which the company currently has under its belt, the going will only get better. Its biggest project is undoubtedly development of the ‘New Bangalore’ in Bidadi, which has a potential value creation of approx. Rs. 50,000 crore. It acquired 38 acre land in Central Delhi for an integrated development, with a potential value creation in excess of Rs 10,000 crore. It also launched two IT SEZs in Gandhinagar and Nagpur; and second IT Park in Kolkatta. It is getting into hospitality business in a big way and for the hotels, acquired 39 sites, of which, 19 projects are under various phases of development.
Irrespective of whether or not you buy a DLF property, do buy this stock. It could prove to be your great asset for the future.
LARSEN & TOUBRO (Rs.4150)
Now what do you say an evergreen blue chip like L&T? A stock which has earned profits spread over generations, even today, in this ever changing world, this is one stock which continues to remain sound.
Again, in terms of growth rate of India, the capital goods sector is also one such sector which is doing extremely well. Given the pace of economic growth and building of infrastructure at break neck speed, the capital goods sector is poised to do very well. And when we talk of capital goods, can there be anyone better than L&T? The company caters to the needs of not just India but has also formed various joint ventures, with companies all over the world. For the first half of the current year, customer order inflow was at Rs. 17,428 crore, which is an increase of 30% over the corresponding period of previous year.
The fundamentals in the economy continue to support the strong growth trajectory of the capital
goods sector with robust investments in infrastructure, power, hydrocarbon and minerals & metal
sectors. On the back of strong oil prices, the Middle East region is expected to further ramp up investment in oil & gas production and distribution facilities. Given the favourable investment climate, L&T is expected to benefit immensely from the order flows from these sectors. With a healthy order book and a huge brand presence, L&T is a stock one must surely have in the portfolio. That way, you too will feel that you have been a part of the growth story of India!
NOIDA TOLL BRIDGE (Rs.48.)
This is one of the best low priced stocks available in the market today. The potential of the stock has not been recognized by the market, which is probably why it continues to remain low. For all those who wanted to be the “early bird”, Noida is one such stock.
The biggest plus in favour of the company is that the company has about 240 acres of surplus land, of which, about 200 acres is on Delhi side while 40 acres is on Noida side. This land is likely to get developed, for which permission has been sought. This land was valued at about Rs.350 crore in 2002 which is presently valued at close to Rs.1,500 crore. Also company’s toll bridge across Yamuna, a 553 meter bridge, linking Noida with Delhi, where present traffic is close to 1 lakh vehicles per day, is currently one way. Once the route fully becomes two-way, the prospects of the company get even better.
So given the growth prospects of its real estate foray and once the Mayur Vihar-Noida link becomes two-way, Noida Toll is expected to show an even better growth rate. At the current rate of Rs.46, surely there is nothing else you can buy so cheap for Diwali and that too a buy, which is expected to fetch you more money.
BHEL (Rs.2800.)
One of the largest PSU’s amongst the “navratna’s” of India, it could also become the jewel of your crown. An engineering conglomerate, BHEL is in the most advantageous position to take advantage of the current boom in the power sector and the economic growth rate of the country.
BHEL offers, over a wide spectrum of products and services for core sectors including power generation, transmission and distribution; transportation; and oil and gas. as well as the supply of non-conventional energy systems. Over 65 percent of power generated in India comes from BHEL-supplied equipment. Overall, it has installed power equipment with a total capacity of over 90,000 MW.
The company is currently in a virtual monopolistic situation with the Govt’s insistence of awarding all power equipment orders to BHEL. The orders are so much and coming in so fast that BHEL is unable to keep pace with the growing demand for turbines, boilers and spare parts. To cope up with the demand, the company is working three shifts, is trying its level best to step up production and is also trying to outsource low-technology parts. The company had an outstanding order book position of about Rs. 72,600 crore at the end of Q2 FY08.
BHEL is like the cushion in your portfolio, its growth will shield from all the other upheavals. Buy BHEL and see the way in which your portfolio grows.
GMR INFRASTRUCTURE (Rs.195.)
Now this is indeed one of our favourite stocks and how can any shopping list be complete without the inclusion of GMR Infra? Getting to be recognized as an “airport” company, indeed the biggest strength of GMR today is its ability to develop world class airports. The fact that it won the contract in Turkey to build its international airport.
But it is more than a, “airport” company. The Company has three power projects aggregating 790 MW of which 420 MW is Naptha/LSHS based and 370 MW is natural gas based. It has 6 road projects for about 421 KM of which 3 are annuity and 3 are BOOT projects. And it is the only company having interests in two leading airports of the country - 50.1% in Delhi Airport while 62% is held in Hyderabad Airport.
The biggest plus, over and above all this, is the huge land bank owned by the company in the vicinity of the Delhi and Hyderabad airport. In Delhi airport, company has about 245 acres available for development and that could translate to about 2 crore sq feet or 20 million sq feet and its valuation is pegged at Rs 20,000 crore. In Hyderabad, GMR has totally 5,500 acre, of which 2,500 acres is the airport and the balance is being developed by the company. The two s are being developed by the company in the vicinity of Hyderabad as they have the entire land in and around that. Taking the Hyderabad developable land at 3000 acres, its valuation is expected to be around Rs 25,000 crore.
In the next 3-5 years, GMR Infra will be a much bigger company than what it is today. Be a part of its superlative growth. Buy this stock and just forget all about it for 12 months or so, see the way your money would have multiplied after a year.
RELIANCE INDUSTRIES (Rs.2730.)
Now, why are we recommending Reliance Industries (RIL)? Well, it’s the largest private sector company of India and its fundamentals are the best that you can come across. Also it is the darling of the bourses and a stock which holds market fancy will never fail you. Ask anybody on the street and the most commonly heard dialogue, “you will never loose money on Reliance”, such has been the faith and over a period of time, it has indeed managed to live to its reputation. With 3 million shareholders, it is one of the world's most widely held stock, did you know that trivia?
The various superlatives affixed to the company, by Indian and international media is not without reason. Apart from doing exceedingly well in its core business – petrochemicals and petroleum products, the company’s foray into retailing – Reliance Retail and Reliance Fresh, giving a fresh impetus to its dormant garment business by relaunching the brand “Vimal”, the company can go only one way – up.
Mukesh Ambani is being touted as the richest man on earth and the company’s ranking in Forbes is expected to only go up further when its time to make the report card in December.
As a stock RIL has a lot of momentum. For a long term investor, RIL can prove to be a goldmine and frankly, what’s the point of trading on Dalal Street and not owning the favourite stock of the street?
RELIANCE COMMUNICATION (Rs.750.)
If bade bhaiyya is doing so well, can chhote do any less? Really, this is one split of brothers, which has created immense wealth for the country and the shareholders. The brothers might have split, but for the man on the street, all that matters is the name tag of “Reliance” and the fact that it is run by the sons of the illustrious Dhirubhai Ambani.
Rcom is undoubtedly one of the best companies in the fold of Anil Ambani. The telecom sector is booming and those in the know say that the best for the sector is yet to come. So keeping the industry prospects and the position of Rcom in the sector, the company is all set for a very fast paced growth, Anil Ambani ishtyle!
With over 35 million subscribers, Rcom is a perfect “new generation” stock to own, to make your profits into wealth. Ring-in to this stock for long term wealth.
Though these Navaratnas have been given as Diwali Shopping List, they can be bought over a period of time, during Samvat 2064, which would definitely be market outperformer and are stocks which can be comfortably held even for a period of 3 – 5 years to have consistent and decent returns.