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Deepak Fertilizer and Petrochemicals, is mainly into production of chemicals which accounts for 66% of its revenues and 87% of its net profits and manufacturing of fertilizers accounting 31.8% of revenues and 11% of Net Profit. The company has recently forayed in the realty sector with the setup of a specialty Mall in Pune, which also generated almost 4 crores of revenues in Sep 08 quarter.

The company in the last quarter has announced a net profit increase of 91% amounting to 41.81 crores and jump of 65% in revenues to 369 crores. The company during the last financial year had touched 1000 crores of revenue for the year and is well on track this year to surpass it by crossing 700 crores of revenue in the first half. The EPS declared for the half year is 9.83 compared to 11.37 declared for FY08.

The company is currently trading at 5 times its last year earnings. At the 52 Week high, the valuation had jumped to 15 times on 6-Jan-2008. With the companies diversification into realty providing it a steady stream of revenue and hopes of a brighter future for its fertilizer business and the drop in prices of raw materials especially Naphtha gives a brighter cost future for the company. The only risk being the downturn in the economy leading to depression in prices and sales. But we expect the company to be better placed to face the uncertain future with its past execution strength, strong management and well planned diversification. The valuation at 4 times is quite attractive considering the high dividend yield of 4%.

Technicals
The company made a 52 week high of 178 on 2-Jan-2008 and a 52 Week low of 40 on 27-Oct-2008. Its all time high was 178 made on 2-Jan-2008. The price has fallen sharply since and is now taking support at 50 levels. It is forming an inverted head and shoulder pattern with potential upside target of 69 in the short term . Once it breaks above the 69 resistance it can move up to 90. On the downside, the stop loss should be placed at 47 which can be broken if there is fresh panic in the markets.

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Year 2008 has been not so good for the Indian stock markets, as the Nifty has lost nearly 53% in year’s time. The fall in prices has sharp and volatile and many large caps and other stocks have seen heavy selling and lost most of their gain achieved in last few years.
Some of the stocks lost to the extent of more than 90% and have become best buys, but one need to excises great degree of study before making investments in these companies.
There are some good companies which have lost quite a bit and have become good buys at current market prices.
These stocks have been picked based on technical analysis and can be invested only with long term view. Investor with 1-2 year holding period can buy these stocks for good returns.

portfolio of 9 best stocks with 10 lakhs investment for referance.  

Stocks to Invest in 2009

CMP As on 26-12-2008
As current markets are showing some kind of weakness and volatility so one has to understand even these stocks may see some downside from current levels. But in long term these stocks will see good upside.

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Cairn India which dose oil exploration business in India having its main focus on Rajasthan, India has stuck more oil and gas.

The company which has the production sharing contract with ONGC for this oil field in which the cairn hold 70%

The companies share price has trading between 130-170 in recent times, the market analyst feel the stock is good long term buy.

Though the fall crude oil price may act as dampener in the share price movement and the analyst feel the stock can touch 300-320 levels in long term.

Investor with the long term can buy the stock for handsome returns

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If one has to go by the amount of pessimism in the market and the mood being really negative and nothing but negative, then going by the past experiences, markets  bottom out when every  one is talking about only down sides ignoring the  fundamentals and the latest financial results.

One more point which may support these levels is the latest results which are not as bad as expected by the market.

At SENSEX level of 21000, we saw the same euphoria where every one was talking about only higher levels for the index, and not looking at the PE, Fundamentals, or results. That’s when market made the TOP.

So will market stop falling at this level of 8000-7600 which is nearly 70% from the peak and show some sideways movement?

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A visit of PepsiCo Chairman and CEO, Ms Indra Nooyi, and all its top executives, merits a announcement such as a $500-million investment over the next three years to triple business in the next five years in India.“Looking forward, as a tangible sign of our continued confidence in India, I am delighted to announce that we expect to invest $500 million over the three years, with a goal to triple our business here. This represents a substantial acceleration of our business here,” said Ms Nooyi addressing a press conference in Gurgaon on Sunday.

The money would be spent on expanding manufacturing capacity and adding new facilities and further building marketing infrastructure, as well as for sustainable initiatives and R&D, said PepsiCo India’s CEO, Mr Sanjeev Chada.

Consumers can look forward to new fortified and flavoured water over the next 12 months and more offerings from its Quaker portfolio. PepsiCo will also look to bring in the “good for you” products and ideas that have helped its portfolio elsewhere to shift away from a predominantly “treat for you” or comfort food bias. India ranks among the company’s top ten markets overall in dollar terms. In purchasing power parity terms it would be counted among the top 5-6 markets, and is a very substantial one whose prospects the company was bullish about, said Ms Nooyi.

She was accompanied by Pepsico’s senior leadership team that included Vice-Chairman and Pepsico International CEO, Mr Michael D. White, and Mr Saad Abdul-Latif, President South Asia, Middle East and Africa (SAMEA) Region.

The Pepsico Executive Committee (PEC) is to meet here on Monday.

The three-day India visit is to give the 26 business leaders a first hand insight into “what makes India tick, its history, politics culture and most importantly cuisine.”

Source:Business line dated: 22-09-08

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Reliance Industries will be ready to sell gas from its Krishna Godavari offshore basin from the January-March quarter next year.Commercial production of gas from the D6 block in the KG basin would start from January-March quarter, said Mr Mukesh Ambani, Chairman, RIL, at a news conference on Sunday called to announce the commencement of oil production from the block.

Mr Ambani said the crude, which started flowing on September 17, is now stabilised at 5,000 barrels a day, and would be scaled up to 5.5 lakh barrels of oil equivalent a day over the next four to six quarters. This would account for 40 per cent of domestic output. Gas would account for 90 per cent of production from the D6 block, and crude the rest.

The gas from the D6 block is currently being injected back. By fiscal 2010, oil and gas would contribute 25 per cent of the RIL’s profits, against 2 per cent currently.

Source: Business line dated: 22-09-08

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While the collapse of the US-based investment bank Lehman Brothers may not have a direct impact on Indian banks, some of them may face marginal losses due to their exposures to the US bank.The biggest private bank in the country, ICICI Bank, has the largest exposure. It has invested €57 million, (approximately $80 million) in senior bonds of Lehman Brothers. The investment is through the UK subsidiary, ICICI Bank UK PLC, and the bank has already made a provision of about $12 million against investments in these bonds, said Ms Chanda Kochhar, the bank’s Joint Managing Director and Chief Financial Officer.

The investment in Lehman Brothers bonds constitutes less than 1 per cent of the bank’s UK subsidiary’s assets and less than 0.1 per cent of ICICI group’s total assets, she said in a statement issued on Tuesday.

“Considering a 50 per cent recovery estimate, the additional provision required would be about $28 million. There is no other material impact on ICICI Bank or ICICI Bank UK PLC on account of exposure to Lehman Brothers,” she said.

Some Indian banks which have overseas operations have an exposure to Lehman Brothers, but as the amounts involved are negligible, the impact is likely to be minimal, banking analysts said.

Among the public sector banks, State Bank of India has an exposure of $ 5 million to Lehman through one of its foreign offices, said a senior official from the bank.

Bank of India has an exposure of about $10 million to FRNs (Floating Rate Notes) of Lehman Holdings, (which has gone bankrupt) and about $20 million thorugh CLN (Credit Linked Notes) to a Lehman subsidiary which has not been affected, said Mr T S Narayanasami, Chairman and Managing Director, BoI.

“There will be a hit, but we will know only as time evolves. We will have to make some provision,” he said.

Bank of Baroda has an exposure of $10 million (approximately Rs 47 crore) to CLNs (Credit Linked Notes) issued by Lehman Brothers, said a senior official of the bank.

Axis Bank has an exposure of about $1 -$ 1.5 million to Lehman Brothers, through a marked-to-market forex counter-party deal, which is maturing sometime in 2009-2010, said a senior official from the bank. “The exposure of Axis Bank, Bank of Baroda and Bank of India is immaterial. The only bank to be the most impacted would be ICICI Bank, but they too have exited a large part of their portfolio consisting of international clients and are now concentrating on the domestic portfolios”, said a banking analyst with a brokerage.

Source:Business line dated:17-09-08�

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State-owned Bharat Heavy Electricals Ltd (BHEL) on Monday announced it has bagged an order worth Rs 200 crore for a hydro-electric power project in Vietnam.The contract, which marks the equipment manufacturer’s entry into the Vietnamese market, was awarded by State-owned Nam Chien Hydropower, BHEL said in a press release.

The project is located in Muong La, 350 kilometres north of Hanoi and is slated to be completed by end-2010.

“This success opens a huge market potential for BHEL not only in the hydro segment but also in the thermal and gas based power plants segments in Vietnam, which will witness huge capacity additions in the future,” the statement said.

Under the contract, BHEL would be responsible for the design, engineering, manufacture, supply and supervision of installation as well as commissioning of electro-mechanical equipment.

Major equipment to be supplied for the project include hydro turbines, generators, transformers, controls, monitoring and protection system and switchgear. The project is being funded by a line-of-credit from the Government of India to Vietnam.

Source: Business Line Dated 05-Aug-2008�

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The Essar group  on Monday said that its Aegis BPO has agreed to buy the Nasdaq listed PeopleSupport Inc firm for $250 million (Rs 1,057 crore). This will the eleventh acquisition of Aegis in past four years. The acquisition would result in revenues of $500 million and also employment for about 29,000 people.

Under the terms of the agreement, Aegis will pay shareholders of PeopleSupport $12.25 per share, a 29 per cent premium to the closing share price on August 1, 2008, said a joint statement from the companies. The company person also added that the deal will be funded through internal accruals of the Essar group.

The US company(PeopleSupport Inc) offers customer management, transcription and captioning and additional BPO services for global clients in areas such as travel, consumer, financial services, healthcare and others. It has three delivery centres in the Philippines and one in Costa Rica.

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Daiichi Sankyo is planning to acquire up to 9.21 crore shares at Rs 737 each through the open offer. The Japanese company had announced earlier that it was buying out 34.81 per cent stake in Ranbaxy held by the Singh family. It will also acquire 9.5 per cent through preferential allotment of equity shares and another 4.5 per cent through share warrants to be issued on a preferential basis. Daiichi Sankyo’s stake in Ranbaxy could go up to 58 per cent after the open offer. The entire deal is valued at $3.4-4.6 billion.

However this would increase the stake of Daiichi by 20% in Ranbaxy. Ranbaxy’s share price went up 2.8 per cent to close at Rs 524 on Monday after the final word from SEBI.

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