Essel group acquires 10.2% in IVRCL (CMP 60.05)

MUMBAI: Subhash Chandra-promoted Essel Group has acquired 10.2% in Hyderabad-headquartered IVRCL setting the stage for a possible take-over battle. The Essel Group, which acquired 10.2% through secondary market transactions, said it was keen to increasing its stake.

IVRCL Group`s chief financial officer Balaram Reddy told ET that the company had not received any communication from the Essel Group. IVRCL officials said that chairman and managing director Sudhir Reddy was travelling abroad and has been informed about the block deals.

Entities owned by Reddy together hold 11.2% stake in IVRCL, making the company a potential target for a hostile acquisition.

"In line with its philosophy to grow its infrastructure business to match and benefit from the rising proportion of infrastructure investment by India, the Essel Group has acquired a 10.19% stake in IVRCL and is keen to increase it and is in the process of increasing it," it said in a statement late on Tuesday.

The equity market was abuzz with speculation that Essel Group`s flagship infrastructure company Essel Infraprojects has been acquiring shares of IVRCL through block deals.

Essel, which made the announcement late evening, did not reveal the acquisition cost for the stake but the current market capitalisation of IVRCL stands at 1,612 crore, making the stake worth around 160 crore.

"The Essel Group sees exciting business possibilities to expand its infrastructure portfolio through this investment," Essel Group said. It also said that neither Zee Entertainment Enterprises nor any other

media entity of the Essel Group had participated in the investment. Essel Infraprojects is currently executing road, urban infrastructure, power, water and solid waste water projects. Its infrastructure business order book is worth 27,000 crore. The company currently has six operational projects and a consolidated turnover of 1,250 crore.

Prakash Industries - Buy

Prakash Industries (Rs.45):  price realisation is better in this quarter for all the products like billets, sponge iron, ferro alloys & wire rods. International coal prices have softened in this quarter. Investors can accumulate this stock on dips around Rs.41/43 levels.

Fundamental analysis :-
Expected FY 12 EPS = Rs 19.64
PE ratio at market price = 2.83
Promoter share holding % = 46.48%
Number of pledged shares = 0
Debt to Equity Ratio = 0.41
Book Value = Rs 116.54
Price to Book Value Ratio = 0.48
Dividend yield % = 1.80%
Free Reserves per share = Rs 102

 I have a target of Rs.100 for 1 - 2 years.

Hyderabad Industries - Buy

 Hyderabad Industries (CMP Rs.327/-)  Hyderabad Industries is likely to post an EPS of Rs.70 in FY12. With a book value set to touch Rs.450, it may even announce a liberal bonus.Consider the above all positives investors are strongly recommended to buy it at current levels and add more at declines.I have a target of Rs 400 for short term and Rs. 700 will be achieved in the next 1-2 years.

News for the week 26th March - 1st April

* Elecon Engineering is finally scouting for strategic partnership to raise Rs.150-200 crore. Scrip may attract attention once the deal is done.

* Kobe Steel, Japan, will invest Rs.30 crore in Man Industries to acquire over 3% stake at Rs.165 per share under strategic partnership. Hold on to your position

* Don’t get tempted to buy Muthoot Finance or Manappuram Finance. Scrips may see further correction before they stabilize on account of new RBI regulations for gold loans

* 3i Infotech has got the approval for corporate debt restructuring. This will save the company from a financial crisis to a great extent. Hold on as the scrip may see some upside in coming weeks.

* Some IT analysts are extremely bullish on Zensar Technologies, which is expected to post an EPS of Rs.40 in FY12 and take its share price to Rs.240 in the medium-to-short-term.

* Knowledgeable sources, aver that IFB Agro is likely to register an EPS of Rs.45 in FY12. A reasonable P/E of 8 will take its share price to Rs.360 in the medium-term.

* Hyderabad Industries is likely to post an EPS of Rs.70 in FY12. With a book value set to touch Rs.450, it may even announce a liberal bonus.

* With a likely EPS of Rs.18 in FY12 and Rs.22-24 in FY13 post expansion, Pitti Laminations is an excellent buy. The share is poised to touch Rs.100 in the medium-to-short-term.

* KNR Constructions can be bought at the current level with a target price of Rs.175 in the medium-term.

* Persons close to the management are quietly buying the shares of Torrent Cables. The share is expected to touch Rs.150 in the next 6 months.

* MBL Infra is likely to post an EPS of Rs.35-38 in FY12. The counter is likely to see strong investment buying.

* Ashok Leyland, recommended by Money Times since Rs.24, is now recommended by Jefries, a global investment bank, for a target price of Rs.35.

NIFTY OUTLOOK FOR 22 MARCH

For Intraday Trading today trend deciding level is at 5350. If Nifty Manages to trade above 5350 levels then rally to 5385-5410-5450 can be seen otherwise Nifty below 5350 Nifty could see selling pressure to 5300-5260 levels. However Global cues will continue to influence market trends.

BUY CLARIS

Claris Lifesciences Ltd. 
Code: 533288.
CMP:Rs.143.35


     Claris Lifesciences Ltd. (CLL) is one of the largest sterile injectables pharmaceutical companies in India.It was incorporated in 1994 and is headquartered in Ahmedabad.CLL  has  an  equity  base  of  Rs.63.82  crore  that  is  supported by  huge  reserves  of  around Rs.757.84 crore. The promoters hold 69%. At the current level, the stock is available at a P/E multiple of 13.70. It declared 20% dividend for Cy11.
     
     Investors can buy this stock with stop loss of Rs.135.On the upper side, the stock will zoom to Rs.175 level in the short term and up to Rs.200+ levels in the medium term.

Market out look for march 21st

For intraday trading Nifty is having resistance at 5,305 and 5,340 while the support is there at 5,242 and 5,205. It is very likely that a bounce back may happen once Nifty test its crucial support of 5,171. One should also keep in mind that the government plans to allow oil companies to raise the fuel price once the parliament is over by March 31st which will have a negative impact on the markets.

Opening bell

Nifty (Spot) Support for the day exists at 5230-5200 and Resistance to the up-move is at around 5280-5310. The elections, the monetary policy and the Budget, all the three big events, they are all history right now and the market will focus on global liquidity and global market movements. 

LITTLE OF THIS LITTLE OF THAT

* Stocks of Kewal Kiran clothing, Phoenix Mills, Shoppers Stop, Provogue etc. are recommended as efforts are on to
arrive at consensus for 51% foreign direct investment in multi-brand retail.
* The shares of Oil India (cum 2:3 bonus) are an excellent buy as the stock has fallen due to hikes/cess on crude oil
produced in India.
* Marketmen advise selling the stock of BHEL, Thermax and L & T as no import duty on power equipments has been
levied in the Union Budget. The shares may dip over 10%.
* The shares of  IRB Infra, MBL Infra and Supreme Infra are an excellent buy as the finance minister decreased
withholding tax from 20% to 5% on interest payments on external commercial borrowings for roads and highways sector.
These companies may go in for ECB for their road projects.
* A banking analyst strongly recommends the shares of United Bank of India, which is likely to generate an EPS of Rs.20
in FY12. The share is expected to touch Rs.100 mark.
* Standard Chartered PLC can be bought after Finance Minster Pranab Mukherjee allowed two-way fungibility of Indian
Depository Receipts (IDRs), which are shares issued by foreign companies to list on the Indian exchanges.
* With a likely EPS of Rs.20 in FY12, the shares of Globus Spirits at a P/E of about 5.5 are an excellent buy for 40%
appreciation in the medium-term.
* IT share ASM Technologies is expected to notch an EPS of Rs.22 on its small equity of Rs.5 crore. This can take its share
price to over Rs.100.
* Natco Pharma has won the licence to sell the copy of Bayer’s cancer drug Nexavar. But its share price has run up too
much in the last one month. Time to book profit and not to be greedy.
* Bombay Burmah has sold off Sunmica and Spring business on a slump basis. At market cap of Rs.725 crore, its grossly
overvalued. Book profits immediately.
* In the mid-cap cement sector, Deccan Cements and Sagar Cement are the dark horses. Buy them and hold them for a year.

* Watch out for Balaji Telefilms. Looks extremely bullish on charts and is poised to make new highs. Hold it for a target of Rs.60 in a month or so.

Budget Analysis

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