Concept Consultants

Voltas Ltd, and TATA group company is an air-conditioning and engineering solutions provider. While the company’s primary business is providing comfort air-conditioning requirements for homes and offices, malls, airports homes and multiplexes, it also operates in areas which require monitoring of temperature, humidity, or treatment of air. The users in this segment include steel and power plants, petrochemicals facilities and laboratories. The company is also into manufacturing of material handling equipment and provides agency services for selling textile machines and construction and mining equipment. This diversification should provide cushion for the company against any slowdown in any one segment.

The company’s main strengths lie principally in area of, the design and manufacturing of industrial equipments, and management and execution of air conditioning and public work projects. In it’s engineering division the company caters products and services to the Textile industries and mining & construction equipments,

The Company in its results for Q2 FY2009 ahs reported Sales / Income from Operations an increase by 29% to Rs.931 crores, as against Rs.722 crores in the same period last year.  Operating Profit has increased by 28% to Rs.89 crores as against Rs.69 crores in the same period last year. Profit after Tax increased by 16% to Rs.62 crores, as compared to Rs.53 crores in the same period last year.

The Company’s Electro-mechanical Projects and Services segment’s revenues grew by 40%. The Order Book of this segment stands at Rs.5575 crores, registering a   growth of 107%.

The Engineering Products and Services segment’s revenues grew by 21%, despite a slow down in demand for capital equipment.  Mining & Construction Equipment business achieved 40% growth in sales, over the corresponding period, last year.
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The company share price which has fallen more than Rs. 200 from its 52week high of Rs. 261 to current market price of 61 is currently trading at attractive PE  compare to its pears. And the stock which has been recommended by most of the stock brokers and fundamental analysts if good pick at these level and can scale to higher levels in a years time.
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Punj Lloyd Ltd is a diversified in Engineering & Construction services in Oil & Gas, Infrastructure and Petrochemicals, and with interests in Defense, Aviation, Marine and Upstream sectors. The company known for its capabilities in finishing the mega project on time

The company has done projects across the world, the Group continues to provide integrated design, engineering, procurement, and construction and project management services for the energy, infrastructure and petrochemical sectors. From pipelines, tanks and terminals to refineries, power plants to renewable, airports, rail transit systems to expressways, the Group can offer EPC solutions across a wide spectrum of businesses.

The company has recently singed MOU with Thorium Power Ltd, The MOU establishes a framework to explore and identify the strengths of Thorium Power in areas of the deployment of Thorium Power’s nuclear fuel designs in India, Southeast Asia and other territories; to expand consulting activities for the development of nuclear power generation regionally and worldwide; and to pursue the establishment of a joint venture between Thorium Power and Punj Lloyd to best capitalize on the emerging nuclear renaissance. 

In the Q2 FY2009 company got more orders for leading companies like, Qatar petrochemical, GVK Power. The company also won it’s first drilling contract in Libya. The company’s order book stood at more than 21000 crore at end Q2. As per the company statement the 28% of order book is from South Asia and 26% from Middle East, 37% form south East Asia and Asia pacific.

The company announced following numbers in its Sep 2008 (Q2) quarter.

Total revenue of the company have gone up by 53% to Rs2954 crore. The net profit after tax of the company has shown increase of 60% to Rs. 144 crore. The EPS of the company stood Rs. 4.94 for Q2 FY2009 and Rs 8.44 for half year. Also the EBITA of the company has been showing consistent growth to the tune of above 75%.

The company has been trading in the range of 120-140-170 and at current market price the company is trading at around 11 times of last yeas EPS of 12.65 and the company has already reported 8.44 for first two quarter. The stock price of the company had heavy correction along with the entire market, looks good the current market price.

On Technical charts the company made its 52 week High of Rs 656 and low of 127.40, if showing consolidation formation and trading in the range of 130-180 range the stock huge support at 140 levels, Rs 140 has been acting as support when the stock is trading above 140 and as  resistance when the stock is trading below 140. In my view the stock may reach 250-300 range in year’s time. Investors with long term view can invest in this stock.

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Cairn India which is an Indian arm of Cairn Energy Plc, which is mainly into Oil and Gas exploration and production, Cairn India has become one of the leading players in oil and gas industry. Cairn which came with an IPO in January 2007 has garbed considerable amount of market capital and has become India’s fourth largest oil and Gas Company

Cairn has mainly operating its exploration business in Rajasthan, in 2004 the company made one of the largest oil discoveries in India. Recently company also made oil and gas discovery in Rajasthan,

The company has announced following numbers in its Sep 2008 quarter results.

The consolidated Profit before tax for Q3 2008 was Rs. 3,600 million (US$ 82.5 million) and for Q3 2007 was Rs. 674 million (US$ 16.6 million).

The consolidated Profit after providing for tax (including deferred tax and FBT) for Q3 2008 was Rs. 2,933 million (US$ 67.2 million) and for Q3 2007 was Rs. 232 million (US$ 5.7 million). Tax (including current tax and deferred tax) is calculated at entity level and not on a consolidated basis; losses arising within one jurisdiction are not available for offset against profits arising in another.

The Companies stock price made its life time high of Rs.342.70 when crude oil touched record high, and has treaded as low as 88.20 in last 52 weeks. Now the company trading in trading range of 140-170, at current market price the stock is at higher side of the trading range, investor with long term view can buy the stock for target of 300+ in years time.

With company making new oil and gas discovery and crude oil prices getting consolidating around the 38-48 mark the company can make good profits going forward.

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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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ROLTA INDIA One of India’s leading engineering and IT companies announced the acquisition of Piocon Technologies, Inc. of Chicago, II, USA. Through this strategic move, Rolta India has acquired a unique template-based solution that addresses critical operational needs of refineries in the Oil & Gas sector. This solution is field proven, and has been deployed successfully in multiple refining facilities of one of the world’s largest oil companies.

The Piocon solution is based on the Institute of Nuclear Power Operations (INPO) AP-913 standard, which was originally developed to ensure equipment reliability within the nuclear power industry, but is now widely accepted by other process industries. Therefore, this solution is eminently suited to be extended beyond refinery operations to up-stream and down stream operations in Oil & Gas, and to other industry segments like petrochemicals, mining, power, and especially highly regulated sectors like pharmaceuticals and nuclear power.

The Piocon acquisition is a part of Rolta’s systematic growth plans to provide configurable solutions that address the real challenges faced by industry today.

Based on the above news the stock saw up move today, with India and US singing nuclear deal and company getting its self ready to face the new challenges one can consider investment in the company with long term view.

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CMP: Rs. 230
Buy Jaiprakash Associates at the current market price of Rs. 230 with the stop loss of Rs. 200 for the targets of Rs. 270 and Rs. 315. The stock has completed corrective on channel supports and is gaining upside momentum.The stock has recovered from its low of 190 and has been showing lot of strength  This stock also has been added to the index, which  should get some buying from index mutual funds.

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