US stock market witnessed another day of bolt as the markets crashed due to the disappointing numbers on consumer spending. US Commerce department released the consumer spending data for Sep'09, showing a decline of 0.5%, first time in five months.
Dow fell by more than 1.5% to 9800 (down by 160 points). S&P 500 also came down by 2% to 1044.
However this fall in US markets may not have greater impact on Indian market on Monday. Sensex is moving based on the selling pressure by the investors who have invested in emerging markets. Moreover the market fell by more than 1% on Oct 30, a day after US markets bounced back (official data showed that US is recovering from recession). However Sensex is expected to be highly volatile in coming week as global markets are tumbling.
Friday, October 30, 2009
Sensex continues to fall...!
Sensex fell for consecutive fourth day to end below 16,000. The market closed lower by more than 1% to end at 15896 on Oct 30. This is led by telecom and oil sector companies.
Bharti Airel announced its Q2 results on Oct 30 in a positive note. But did not match the market expectation. The stock down by more than 6% to end at Rs.292. Airtel's lowest in a year was Rs.290. This shows that the stock is moving towards to break its lowest support next week.
Long term investors who can hold their investments for 1-2 years, can now consider investing in Bharti Airtel.
Sensex is expected to be in the range of 16000-17000 in coming weeks.
Bharti Airel announced its Q2 results on Oct 30 in a positive note. But did not match the market expectation. The stock down by more than 6% to end at Rs.292. Airtel's lowest in a year was Rs.290. This shows that the stock is moving towards to break its lowest support next week.
Long term investors who can hold their investments for 1-2 years, can now consider investing in Bharti Airtel.
Sensex is expected to be in the range of 16000-17000 in coming weeks.
Thursday, October 29, 2009
Bharti Airtel profit up, but lower than expected
Bharti Airtel, India's largest telecom service provider, has announced that its net profit was up by 13.4% Y-o-Y, during the quarter ended Sep 30, 2009. Net profit was at Rs. 23.21 billion ($497 m).
Revenues increased by more than 9% to Rs.98.45 billion.
However these numbers are lower than many expected.
The Indian telecom market is now entering into a new phase, 3G and 2G. Many new foreign operators are entering into the market and announcing various pricing schemes to customers, making Indian companies to react as well. This pricing pressure may have an impact on operating results of telecom companies in next quarter, or even next year also.
Consolidation is the better way to handle the current situation in Indian telecom market. Many 2G licensed telecom companies are selling stakes in their companies to foreign entities, making the competition even bigger. Indian companies may consider in acquiring these smaller telecom companies who have granted licenses.
Revenues increased by more than 9% to Rs.98.45 billion.
However these numbers are lower than many expected.
The Indian telecom market is now entering into a new phase, 3G and 2G. Many new foreign operators are entering into the market and announcing various pricing schemes to customers, making Indian companies to react as well. This pricing pressure may have an impact on operating results of telecom companies in next quarter, or even next year also.
Consolidation is the better way to handle the current situation in Indian telecom market. Many 2G licensed telecom companies are selling stakes in their companies to foreign entities, making the competition even bigger. Indian companies may consider in acquiring these smaller telecom companies who have granted licenses.
Wednesday, October 28, 2009
Sensex in November'09
As the US and Europe markets are stumbling, Asian markets are also expected to be more volatile. However China and India may have a less volatile market movements in November'09.
This is supported by expected strong economic growth (around 6.7%) in 2009-10 and better turnaround results from India Inc.
Moreover, Sensex is expected to be in the range of 16500-17500 in Nov'09.
We can expect the market to be more volatile and touch record lows in recent days on 29 Oct'09. Again this is backed by the fall in Dow on previous day.
Anyway this will be a season for rational investors to get their picks!
This is supported by expected strong economic growth (around 6.7%) in 2009-10 and better turnaround results from India Inc.
Moreover, Sensex is expected to be in the range of 16500-17500 in Nov'09.
We can expect the market to be more volatile and touch record lows in recent days on 29 Oct'09. Again this is backed by the fall in Dow on previous day.
Anyway this will be a season for rational investors to get their picks!
Friday, October 23, 2009
Welspun Gujarat - Where the stock heads?
Welspun Guajarat is one of the hottest stocks now in the mid-cap sector. The company is the seconda largest line pipe company in the world. The thing that keeps the stock rocking is its order book. The company recently announced that it had reached the landmark of Rs.10,000 cr in its order book. This ensures the better cash flow for Welspun in coming years, atleast throughout 2010.
The company's stock was at around Rs.50 in March/April this year, now trading at Rs.280.
Strong fundamentals such as impressing order book, strong financial results, good management, global presence,etc.
Welspun reported that its net profit has increased by more than 90% Year-on-Year to Rs.138 Cr for the quarter ended June 30, 2009.
EPS went up by more than 200% Y-o-Y to Rs.7.38 for the same quarter.
The company is expected to announce its results for the quarter ended Sep 30 with the same level of growth.
This is one of the best picks in the market. It has already reached its peak in the market, trading at Rs.380.
Anyone who wants to invest for atleast 1-2 years, this is the best pick!
The company's stock was at around Rs.50 in March/April this year, now trading at Rs.280.
Strong fundamentals such as impressing order book, strong financial results, good management, global presence,etc.
Welspun reported that its net profit has increased by more than 90% Year-on-Year to Rs.138 Cr for the quarter ended June 30, 2009.
EPS went up by more than 200% Y-o-Y to Rs.7.38 for the same quarter.
The company is expected to announce its results for the quarter ended Sep 30 with the same level of growth.
This is one of the best picks in the market. It has already reached its peak in the market, trading at Rs.380.
Anyone who wants to invest for atleast 1-2 years, this is the best pick!
Wednesday, October 21, 2009
Sensex - Short Term Outlook
Global markets are back on track, thanks to the promising results by corporates. India Inc is showing a healthy start towards Q3. Sensex has been recovering well from its 16,000 levels towards 18,000. Hope this may be reached in this month!
I have some stock picks expected to deliver a really 'good' returns in next 6-12 months. Here is the list:
1. Welspun Gujarat
2. Tanla Solutions
3. Gayatri Projects
4. Crompton Greaves
5. SAIL
6. Essar Shipping
7. Sujana Towers
8. GVK Power
Sensex is expected to be in the range of 16,000-18,000 in next 3 months.
I have some stock picks expected to deliver a really 'good' returns in next 6-12 months. Here is the list:
1. Welspun Gujarat
2. Tanla Solutions
3. Gayatri Projects
4. Crompton Greaves
5. SAIL
6. Essar Shipping
7. Sujana Towers
8. GVK Power
Sensex is expected to be in the range of 16,000-18,000 in next 3 months.
Saturday, September 12, 2009
Strong Oil Demand Forecast and BOLT Technology
BOLT Technology - FY 2009 Results
Top line revenues down by 21% to $48.9 million for the fiscal year ended June 30, 2009. This is mainly due to the decrease in sales in two main reporting segments: seismic energy sources and seismic energy source controllers. More than $11 million decrease in sales reported in seismic energy sources segment. This is followed by air gun replacement systems segment (decreased by more than $2 million) and seismic energy source controllers segment (decreased by $0.6 million).
Only segment that witnessed growth in sales was underwater cables and connectors. Sales from this segment went up by $1.4 million, from FY’08.
However gross profit margin increased to 49% for the year, compared to 46% in 2008. This is due to the higher price level and decrease in material costs.
BOLT uses high quality steel in its manufacturing process, hence any drastic increase or decrease in prices of steel could adversely affect the profit margin of the company. Cost of sales was 51%, lowest in last five years. This somewhat helped the company to achieve the highest net profit margin of about 22% in 2009.
40% of revenues from just three major customers
Top three customers (Schlumberger (16%), Compagnie Generale (15%) and Petroleum Geo-services (9%)) constitute 40% of sales in 2009. This is a real concern for any investors, though the company was able to book orders from other clients as well.
Risk Factors
- Oil price movements affect the sales of BOLT directly; Increase in oil prices improve the marine seismic activities, which in turn increases the sales
- Global economic conditions affect the demand for oil and gas products. This in turn will have an impact on BOLT’s top line revenues
- Dependency on few major customers for major portion of revenues
- 85% of sales from outside US
Relation between Oil Price and BOLT’s Sales
There’s a correlation of more than 0.5 between the oil price and sales. This however clearly do support that BOLT’s sales don’t rely wholly on oil price movements.
International Energy Agency (IEA) recently increased its demand forecast for global oil demand in 2009 & 2010 to 84.4 mb/d and 85.7 mb/d respectively. This is strongly supported by increasing demand in North America and non-OECD Asian countries. Hence BOLT could report an increase in sales in 2010 as the projections for oil demand and price seems to be optimistic.
Strong Fundamentals
BOLT’s average return on equity (RoE) in last five years stands at a healthy 18.5% and return on assets (RoA) at 16.1% for the same period.
2005-009
RoE 18.5%
RoA 16.1%
EBIT margin 26.2%
Net profit margin 19.0%
Sales/Share ($) 4.8
Cash and cash equivalents increased by 34% Y-o-Y to $25.69 million in 2009. Moreover the company does not hold any long term liabilities.
BOLT spends an average 1% of sales on research and development activities. This helps the company to use latest technology based products to clients and also improve its manufacturing processes efficiently.
Valuation
P/E 10.17
P/B 1.60
P/S 2.18
P/CF 10.94
Market Cap ($ million) 106.60
EV ($ million) 78.87
EV/Sales 1.61
EV/EBITDA 4.84
Top line revenues down by 21% to $48.9 million for the fiscal year ended June 30, 2009. This is mainly due to the decrease in sales in two main reporting segments: seismic energy sources and seismic energy source controllers. More than $11 million decrease in sales reported in seismic energy sources segment. This is followed by air gun replacement systems segment (decreased by more than $2 million) and seismic energy source controllers segment (decreased by $0.6 million).
Only segment that witnessed growth in sales was underwater cables and connectors. Sales from this segment went up by $1.4 million, from FY’08.
However gross profit margin increased to 49% for the year, compared to 46% in 2008. This is due to the higher price level and decrease in material costs.
BOLT uses high quality steel in its manufacturing process, hence any drastic increase or decrease in prices of steel could adversely affect the profit margin of the company. Cost of sales was 51%, lowest in last five years. This somewhat helped the company to achieve the highest net profit margin of about 22% in 2009.
40% of revenues from just three major customers
Top three customers (Schlumberger (16%), Compagnie Generale (15%) and Petroleum Geo-services (9%)) constitute 40% of sales in 2009. This is a real concern for any investors, though the company was able to book orders from other clients as well.
Risk Factors
- Oil price movements affect the sales of BOLT directly; Increase in oil prices improve the marine seismic activities, which in turn increases the sales
- Global economic conditions affect the demand for oil and gas products. This in turn will have an impact on BOLT’s top line revenues
- Dependency on few major customers for major portion of revenues
- 85% of sales from outside US
Relation between Oil Price and BOLT’s Sales
There’s a correlation of more than 0.5 between the oil price and sales. This however clearly do support that BOLT’s sales don’t rely wholly on oil price movements.
International Energy Agency (IEA) recently increased its demand forecast for global oil demand in 2009 & 2010 to 84.4 mb/d and 85.7 mb/d respectively. This is strongly supported by increasing demand in North America and non-OECD Asian countries. Hence BOLT could report an increase in sales in 2010 as the projections for oil demand and price seems to be optimistic.
Strong Fundamentals
BOLT’s average return on equity (RoE) in last five years stands at a healthy 18.5% and return on assets (RoA) at 16.1% for the same period.
2005-009
RoE 18.5%
RoA 16.1%
EBIT margin 26.2%
Net profit margin 19.0%
Sales/Share ($) 4.8
Cash and cash equivalents increased by 34% Y-o-Y to $25.69 million in 2009. Moreover the company does not hold any long term liabilities.
BOLT spends an average 1% of sales on research and development activities. This helps the company to use latest technology based products to clients and also improve its manufacturing processes efficiently.
Valuation
P/E 10.17
P/B 1.60
P/S 2.18
P/CF 10.94
Market Cap ($ million) 106.60
EV ($ million) 78.87
EV/Sales 1.61
EV/EBITDA 4.84
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