Stock Dreams for Indians: 09/01/2009

30 September 2009

Intraday stock tips for 30-Sept-2009

Nifty Intraday Support & Resistance levels for 30-Sept-2009

Support-2	Support-1	Pivot	Resistance-1	Resistance-2
4974.95	4990.85	5005.55	5021.45	5036.15

Intraday stock tips for 30-Sept-2009 :

1. ICICIBANK : SELL at Rs. 870 -873, Target- Rs.861, Stop Loss- Rs. 880

2. INFOSYS : SELL at Rs.2300 -2305, Target - Rs. 2285; Stop Loss- Rs.2317

3. HINDALCO : SELL at Rs.128, Target - Rs.125; Stop Loss- Rs.129.70

Note: Please ignore above intraday tips in case given stocks are sharply UP or DOWN during start time for trading.

Disclaimer:

(Please take your own decision before investing or trading in stocks or take advise from your financial adviser. Trading in stock market is very risky. Please analyze yourself what is your risk profile. This blog is not an advisory service to buy or sell. The contents of “this blog” are only for educational purposes. )

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Wish you happy trading,

Jai ho.

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Do & Don't for Intraday trading :-

* If index is in positive from yesterday & the share you are holding is in minus then it should be cut & if intraday trend of index is in buy then one should buy a stock in which is in plus.

* If index is in minus then one should look to short stocks which are minus & not stocks which are in plus.

* It is not necessary that a stock which is weak today during intraday trading might be weak tomorrow also, simultaneously if a stock is strong today might not be strong tomorrow.

* If US Markets have gone up overnight, the markets here in all probability will open strong, so one should be quite careful when buying stocks as the general psychology of public is to buy when good news is there.

* Being a contrarians is very important while trading intraday.

* Stop loss is a must while trading intraday.

* Always trade în very liquid stocks i.e. which have very high volume because as entry & exit can be very fast in such stocks.

* Do paper trading before you actually start trading so that when you start making paper profits, then shift to actual trading.

* Keep your volume constant e.g.: îf you trade in five lots of nifty future then trade în five lots only. This position can be increased only when you are satisfied with your trading for a month. It shouldn't be that one day you buy five lots & next day you trade in ten lots and third day you get a loss & stop trading for two days.

* Fear & Greed are at maximum levels while trading intraday so always have less position when you are new to intraday trading as otherwise you will be mostly under tension

For Intraday Tips commentry visit www.rupeedreams.com

Please post your comments (or) suggestions in the comment box at the end of this article.

Thank you,

If you have any queries please E-mail to kaliki.srikanth@gmail.com

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Disclaimer:
(Please take your own decision before investing or trading in stocks or take advise from your financial adviser. Trading in stock market is very risky. Please analyze yourself what is your risk profile. This blog is not an advisory service to buy or sell. The contents of “this blog” are only for educational purposes. )

28 September 2009

Intraday stock tips for 29-Sept-2009

Nifty Intraday Support & Resistance levels for 29-Sept-2009

Support-2	Support-1	Pivot	Resistance-1	Resistance-2
4898.40	4928.65	4961.50	4991.75	5024.60

Intraday stock tips for 29-Sept-2009 :

1. SATYAMCOMP : BUY at Rs. 121, Target- Rs.123 & 126, Stop Loss- Rs. 119

2. WIPRO : BUY at Rs. 566, Target - Rs. 575; Stop Loss- Rs.558

3. DR REDDY : Sell this stock on OPENING PRICE Target : 975

Note: Please ignore above intraday tips in case given stocks are sharply UP or DOWN during start time for trading.

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Do & Don't for Intraday trading :-

Please post your comments (or) suggestions in the comment box at the end of this article.

Thank you,

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25 September 2009

Intraday stock tips for 25-Sept-2009

Nifty Intraday Support & Resistance levels for 25-Sept-2009

Support-2	Support-1	Pivot	Resistance-1	Resistance-2
4856.40	4921.40	4969.05	5034.05	5081.70

Intraday stock tips for 25-Sept-2009 :

1. WIPRO : SELL at Rs. 587 - 590, Target- Rs.575, Stop Loss- Rs. 596

2. ICICI BANK : BUY at Rs. 858 - 860, Target - Rs. 872; Stop Loss- Rs.850

3. FORTIS : BUY ABOVE 112, Target - Rs. 116; Stop Loss- Rs.109

OTHER TIPS:

Long term stock tips on POWER TRADING CORPORATION

Note: Please ignore above intraday tips in case given stocks are sharply UP or DOWN during start time for trading.

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Please post your comments (or) suggestions in the comment box at the end of this article.

Thank you,

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24 September 2009

Intraday stock tips for 24-Sept-2009

Nifty Intraday Support & Resistance levels for 24-Sept-2009

Support-2	Support-1	Pivot	Resistance-1	Resistance-2
4912.20	4941.00	4985.90	5014.70	5059.55

Intraday stock tips for 24-Sept-2009 :

1. DR REDDY : BUY at Rs. 865 - 867, Target- Rs. 882, Stop Loss- Rs. 857

2. TATAMOTORS : SELL at Rs. 610 -612, Targets - Rs. 601, 596; Stop Loss- Rs.617

OTHER TIPS:

Long term stock tips on POWER TRADING CORPORATION

Note: Please ignore above intraday tips in case given stocks are sharply UP or DOWN during start time for trading.

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Please post your comments (or) suggestions in the comment box at the end of this article.

Thank you,

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23 September 2009

Intraday stock tips for 23-Sept-2009

Nifty Intraday Support & Resistance levels for 23-Sept-2009 :

Support-2	Support-1	Pivot	Resistance-1	Resistance-2
4952.00	4986.05	5011.20	5045.25	5070.40

Intraday stock tips for 23-Sept-2009 :

1. SUZLON: BUY at Rs. 99.50 - 100.50, Target- Rs. 103 Stop Loss- Rs. 98

2. RPOWER : BUY at Rs. 170- 171, Target- Rs. 174, Stop Loss- Rs.168

OTHER TIPS:

Long term stock tips on POWER TRADING CORPORATIO N

Note: Please ignore above intraday tips in case given stocks are sharply UP or DOWN during start time for trading.

Disclaimer:

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Do & Don't for Intraday trading :-

Please post your comments (or) suggestions in the comment box at the end of this article.

Thank you,

If you have any queries please E-mail to kaliki.srikanth@gmail.com

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22 September 2009

Intraday stock tips for 22-Sept-2009

Nifty Intraday Support & Resistance levels for 22-Sept-2009 :

Support-2	Support-1	Pivot	Resistance-1	Resistance-2
4913.90	4944.90	4962.90	4993.90	5011.85

Intraday stock tips for 22-Sept-2009 :

1. SATYAMCOMP: SELL at Rs. 120 -121, Target- Rs. 117.50 Stop Loss- Rs. 122.50

2. MTNL : BUY at Rs. 92.50, Target- Rs. 94, Stop Loss- Rs.91

OTHER TIPS:

Long term stock tips on POWER TRADING CORPORATIO N

Note: Please ignore above intraday tips in case given stocks are sharply UP or DOWN during start time for trading.

Disclaimer:

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Do & Don't for Intraday trading :-

Please post your comments (or) suggestions in the comment box at the end of this article.

Thank you,

If you have any queries please E-mail to kaliki.srikanth@gmail.com

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21 September 2009

Long term stock tips - 7 (POWER TRADING CORPORATION)

Company : Power Trading Corporation (NSE code: PTC )

Close price : 87.95 ( 18-Sep-2009)

Recommendation : BUY

Market Cap	2,574.71	\|	* EPS (TTM)	3.58	\|	* P/E	24.46	\|	* P/C	23.10
* Book Value	55.67	\|	* Price/Book	1.57	\|	Div(%)	10.00	\|	Div Yield(%)	1.14
Market Lot	1.00	\|	Face Value	10.00	\|	Industry P/E	27.04

Investment with a long-term horizon can be considered in the stock of Power Trading Corporation of India. PTC is India’s largest power trading company promoted by PSU majors NHPC, NTPC, PowerGrid and Power Finance Corporation; it has a 46.5 per cent share of traded electricity volumes.

The Electricity Act defines power trading as “Purchase of electricity for resale thereof”, which means the company facilitates flow of power from surplus generators to electricity deficit customers.
Early mover

An early mover in power trading, PTC has built a presence across the entire energy value chain, which includes advisory services, investments in power projects, power tolling and fuel intermediation. At the current price of Rs 87, the company trades at a trailing price earnings multiple of 20.

The chronic shortage of power has led to higher peak and energy deficits in recent times, prompting many merchant power and captive capacities, with higher return on equity, to be commissioned. This is likely to increase the trading volumes and offers immense scope for companies involved in power trading.

PTC’s nodal agency status for cross-border trading may also add to its trading volumes. Sums raised through Qualified Institutional Placement (QIPs) are likely to be deployed in acquiring equity stakes in captive and merchant power projects in the private sector, which will also aid volumes.

PTC has already signed around 37,133 MW of power purchase agreements/MoUs with various power generators for the long-term. PTC has also signed 5,990 MW power supply agreement/MoUs. PTC’s increasing focus on long-term trades reduces the seasonality factor inherent to short-term agreements. A presence across the entire energy value chain may also lift overall margins, which are thin in power trading.

At present, short-term trades contribute 52 per cent of the company’s power trading volumes and 80 per cent of the value. The CERC (Central Electricity Regulatory Commission) norms cap trading margins on this segment at 4 paise/unit; only the rest of the volumes came from medium- and long-term trades, where margins are unrestricted.

In this respect, entry by a host of new players into the power trading business could affect PTC’s short term trading volumes. It needs to be noted that the market share of PTC has already fallen from around 70 per cent in FY’06 to 47 per cent in FY’09.

Apart from energy exchanges such as IEX and Power Exchange of India, as many as 43 other players, mainly from power generation and distribution, have also bagged trading licences to enter power trading.

Power generators, such as Tata Power, Reliance Energy, have opened their own trading arms mainly to deal in the power produced by the parent companies. However, PTC’s attempts to step up volumes through long term power purchase agreements, is expected to be a mitigating factor.

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If the regulatory change of removing the cap on trading margins comes through, it could trigger much better margins and earnings. This may give scope for unrestricted margins and bring in sustainable revenues. Cross-border trades for which PTC is a nodal agency, are expected to increase as more projects come up in Bhutan and Nepal. Apart from trading, the company’s forays into other related businesses also have the potential to prop up revenues and margins. The company has made an entry into fuel intermediation (procuring fuel and selling it to thermal projects) and recently signed an agreement with power projects in AP for power tolling.

Power tolling is a new business where the company supplies fuel to a power plant and sells the resultant power to other users. The company has raised around Rs 1,700 crore through QIPs in the last two financial years, helping it to invest in subsidiaries such as PTC India Financial Services and PTC India Energy. The company also plans to acquire coal mines in Indonesia which will help in supporting its fuel intermediation and power tolling businesses.

Financials

PTC India’s sales grew at 28 per cent annualised during 2006-09 driven mainly by an increase in trading volumes. The sales momentum is expected to pick up as trading volumes get a boost from new merchant power and captive projects (India has 19,509 MW of captive capacity and more than 7,000 MW is expected to come up by 2012). Increased popularity of the open access system and strengthening of the national grid will also help improve the volumes.

Thanks to strong sales growth, profit grew by 31 per cent compounded annually during the period 2006-09. For the quarter ended June 2009, net sales grew by 97 per cent, thanks to 56 per cent increase in the trading volumes owing to better realisations on long-term contracts and gaining new clients. Due to a rise in employee costs, profits lagged topline growth with a 76.8 per cent growth.

Apart from investments routed through subsidiaries, which include stake in India’s first energy exchange (IEX), it also holds part-stake in Athena Energy Venture, Teesta Urja and Barak Power (JV with BHEL). These investments will support its trading volumes. PTC plans to unlock value in its subsidiary, PTC India Financial Services, by listing it.

Risks to be consider as

Delays in power projects due to various reasons are a key risk, in the light of long-term contracts PTC has signed with the generating company. Specialised energy exchanges such as Power Exchange of India, IEX (in which PTC has a stake) pose a competitive threat to PTC.

SOURCE: Leading Business daily

20 September 2009

Hand-picking stocks

“I have a full year’s savings with me and equity investments look attractive at this stage. Tell me, what stocks to buy?” I was surprised when my friend shot this question at me. But my friend isn’t the only one eyeing the equity plunge.

With markets beginning to look up again, such enquiries are on the rise. So, how do you decide which stocks to buy, that too in a market that has already run up considerably?

Granted, picking stocks is not as easy as shopping for a pair of jeans. But then, certain basic aspects of making a choice hold good for both. For instance, the value-for-money proposition or the “would-it-fit-me” question still remains the same.

Broadly, there are two ways of selecting a stock — top-down approach and bottom-up approach. The top-down style involves identifying sectors first and then getting down to stock specifics — akin to getting the ‘big picture’ first.

The bottom-up approach, on the other hand, entails a stock-specific approach to investments, giving higher weightage to a thorough analysis of the company, while remaining relatively uninfluenced by macro-economic trends or concerns relating to that sector. Whichever of the two you opt for, note that there are some basic tests that the stock you eye should clear before it becomes a part of your portfolio.

Financial filters

Compounded growth

The compounded annual growth rate (CAGR) in sales and profits of a company would give you a picture of the historic performance of that company over a longer time frame.
This becomes more relevant as the CAGR also irons out the lumpiness in the growth numbers of a company during that time.

For instance, while the year-on-year sales or profit growth would tell you how the company has performed in that particular fiscal year, the yearly performance, however, may be prone to seasonality.

So, to that extent, it could be misleading. CAGR, on the other hand, may help give a perspective on the average sustainable growth rates.

For instance, take the case of Hindustan Unilever and Marico. While for the last fiscal year, Marico grew its sales by 25 per cent, HUL reported a sales growth of about 46 per cent.

This growth picture, however, would change considerably if we consider the compounded growth rates over the last five years. While HUL reported a sales growth of 14.11 per cent, Marico expand its sales by 21.87 per cent during the period.

Operating profit margin

Operating profit margin denotes the sales margin left with a company after meeting all its operating expenses. This is different from operating profit.

For example, Hero Honda posted an operating profit of Rs 692.60 crore for the quarter ended June 2009 while Bajaj Auto, for the same period, posted an operating profit of Rs 454.54 crore. While on the face of it, it may seem that Hero Honda made more money from its operations, the story changes if you consider operating margins for comparison. Despite a lower operating profit, Bajaj Auto has a higher OPM (21.12 per cent), while that of Hero Honda stood lower at 18.17 per cent.

Price earnings ratio

Price to earnings multiple of a company indicates the price the stock market is willing to pay for every rupee of earnings generated by a share of the company.

Typically, stocks with high PE ratios indicate that their stock price is at a premium to their earnings, whereas ones with lower multiples are believed to be a discount.

On the whole, the general perception is that stocks with low PE offer better growth potential. For example, between Maruti Suzuki and Mahindra and Mahindra, while Maruti Suzuki trades its trailing four quarters earnings at a PE ratio of 33 times its peer M&M trades lower at about 24 times.

But even as the general idea is to spot stocks that are trading at a discount to their intrinsic value, note that a lower PE doesn’t necessarily mean that the stock has a potential to appreciate. In some cases, the market accords a lower multiple to certain stocks in keeping with the overall business dynamics of those companies. On a similar line, a higher PE also doesn’t necessarily mean premium valuations.

More to go While these filters will help you line up a list of suitable stock candidates, know that these tools by themselves aren’t enough to spot the right stock.

You may need to employ other filters and take a closer look at the company-specific financials, its balance sheet strength, cash flows and management bandwidth before making an investment.

Is water the next oil?

On the face of it, water seems to be a common enough resource, present in the form of large water bodies (remember, threefourths of the earth’s surface is covered with water). Till the beginning of the new millennium, even in an apparently arid region such as the Gulf, most countries used around a fifth of the water they received naturally.

So, why is there a water shortage now? Is this a problem that can drive the course of investing, economics and politics? In the past 50 years, the world’s population has doubled to 6.5 billion and, as yet, this is not entirely under control. Moreover, much of this increased population is only beginning to taste the fruits of a higher per capita income (across large swathes of Asia, for example) that drives the consumption of water-intensive foods like meat. The amount of water needed to produce 1 kg of meat is about 15 times the quantity required to produce 1 kg of wheat! Meanwhile, population hotspots are emerging in areas that are not naturally self-sufficient in water.

In terms of consumption, threefourths of all water intake is for agriculture. This does not mean that water consumption is more rural. Actually, this rising water requirement is being driven by the grain and meat hunger of rapidly growing urban centres. The industry, which is usually not a responsible user of resources, has learnt to recycle and conserve water to the extent that it now utilises less than 10% of humanity’s water withdrawals from nature. Meanwhile, municipal water, which constitutes 15% of the usage mix, continues to grow unabated as urbanisation picks up across the world. Many mega-cities, from Los Angeles to Delhi, depend on water supplies from reserves that are located at large distances, far enough to make the delivered/piped cost of water a significant subsidy guzzler.

This is where politics comes in. Water is a sensitive item to tax. Cities in India don’t recover even a fraction of what it takes to deliver water. Most citizens are, therefore, wasteful users. Many end-users in India are, anyway, too poor to pay a fair price, and form large vote banks that politically sensitive leaders dare not antagonise. But things are rapidly reaching a point of no return. Consumption is running ahead of sourcing and distribution, and inevitably, the people in the cities are at the short end of the receiving cycle.

Also, the weather patterns have become increasingly volatile, with alternate spells of heavy precipitation and drought. Right now, we are in the midst of one such period of apparent shortfall, which seems to have afflicted the market sentiment and economic outlook. In a year when the rest of the world is grappling with economic recession, it will hardly help India’s case if large parts of the country report significantly lower-than-normal rainfall. This could have a cascading effect on rural production, incomes and consumption, thereby puncturing a big part of the ‘resilient consumption’ theory that has driven up FMCG and other consumer-related sectors in the post-budget fall.

As of now, little has been done to tackle this problem. If some smart thinking is put in place, there are ways to balance social needs with commercial or business opportunities in the water supply space. This could attract large investments in water infrastructure.

Source : Dipen Sheth is Vice-President, Institutional Equities, BRICS Securities Ltd.

18 September 2009

Intraday stock tips for 18-Sept-2009

Nifty Intraday Support & Resistance levels for 18-Sept-2009 :

Support-2	Support-1	Pivot	Resistance-1	Resistance-2
4911.95	4938.70	4970.90	4997.65	5029.80

Intraday stock tips for 18-Sept-2009 :

1. HINDALCO: SELL at Rs. 138 - 140, Target- Rs. 134 Stop Loss- Rs. 142

2. MARUTI : SELL at Rs. 1575 - 1585, Target- Rs. 1550, Stop Loss- Rs.1595

OTHER TIPS:

Long term stock tips on KALINDEE RAIL

Note: Please ignore above intraday tips in case given stocks are sharply UP or DOWN during start time for trading.

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Do & Don't for Intraday trading :-

Please post your comments (or) suggestions in the comment box at the end of this article.

Thank you,

If you have any queries please E-mail to kaliki.srikanth@gmail.com

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17 September 2009

Intraday stock tips for 17-Sept-2009

Nifty Intraday Support & Resistance for 17-Sept-2009 :

Support-2	Support-1	Pivot	Resistance-1	Resistance-2
4900.80	4929.55	4947.95	4976.70	4995.05

Intraday stock tips for 17-Sept-2009 :

1. STERLITE: SELL at Rs. 784 - 788, Target- Rs. 771 Stop Loss- Rs. 795

2. SUZLON : BUY at Rs. 98 - 99, Target- Rs. 102, Stop Loss- Rs.96.5

OTHER TIPS:

Long term stock tips on KALINDEE RAIL

Note: Please ignore above intraday tips in case given stocks are sharply UP or DOWN during start time for trading.

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Please post your comments (or) suggestions in the comment box at the end of this article.

Thank you,

If you have any queries please E-mail to kaliki.srikanth@gmail.com

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16 September 2009

Intraday stock tips for 16-Sept-2009

Nifty Intraday Support & Resistance for 16-Sept-2009 :

Support-2	Support-1	Pivot	Resistance-1	Resistance-2
4775.50	4833.75	4866.60	4924.85	4957.70

Intraday stock tips for 16-Sept-2009 :

1. RELIANCE: SELL at Rs. 2200 - 2210, Target- Rs. 2170, 2160 Stop Loss- Rs. 2130

2.STERLITE : BUY at Rs. 748 - 752, Target- Rs. 765, Stop Loss- Rs.740

OTHER TIPS:

Long term stock tips on KALINDEE RAIL

Note: Please ignore above intraday tips in case given stocks are sharply UP or DOWN during start time for trading.

Disclaimer:

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Please post your comments (or) suggestions in the comment box at the end of this article.

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15 September 2009

Intraday stock tips for 15-Sept-2009

Nifty Intraday Support & Resistance for 15-Sept-2009 :

Support-2	Support-1	Pivot	Resistance-1	Resistance-2
4762.95	4785.75	4809.05	4831.85	4855.15

Intraday stock tips for 15-Sept-2009 :

1. UNITECH: BUY at Rs. 104 - 105, Target- Rs. 107, 109 Stop Loss- Rs. 103

2.SATYAMCOMP : BUY at Rs. 118, Target- Rs. 120.5, Stop Loss- Rs.116.5

OTHER TIPS:

Long term stock tips on KALINDEE RAIL

Note: Please ignore above intraday tips in case given stocks are sharply UP or DOWN during start time for trading.

Disclaimer:

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Please post your comments (or) suggestions in the comment box at the end of this article.

Thank you,

If you have any queries please E-mail to kaliki.srikanth@gmail.com

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14 September 2009

Intraday stock tips for 14-Sept-2009

Nifty Intraday Support & Resistance for 14-Sept-2009 :

Support-2	Support-1	Pivot	Resistance-1	Resistance-2
4761.15	4795.35	4825.75	4859.95	4890.30

Intraday stock tips for 14-Sept-2009 :

1. SUZLON: BUY at Rs. 93 - 94, Target- Rs. 97, Stop Loss- Rs. 92

2. KFA : BUY at Rs. 45, Target- Rs. 46.5, Stop Loss- Rs.43

OTHER TIPS:

Long term stock tips on KALINDEE RAIL

Note: Please ignore above intraday tips in case given stocks are sharply UP or DOWN during start time for trading.

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13 September 2009

Long term stock tips - 6 (KALINDEE RAIL)

Company : KALINDEE RAIL NIRMAN ENGINEERS (NSE code: KALINDEE )

Close price : 145.60 ( 11-Sep-2009)

Recommendation : BUY

Market Cap	163.55	\|	* EPS (TTM)	8.11	\|	* P/E	17.97	\|	* P/C	16.26
* Book Value	87.16	\|	* Price/Book	1.67	\|	Div(%)	10.00	\|	Div Yield(%)	0.69
Market Lot	1.00	\|	Face Value	10.00	\|	Industry P/E	18.44

Kalindee Rail Nirman Engineers is a Long term investment stock and is operates in the field of railway signalling, telecommunication and track, including gauge conversion and laying of new rail lines. A direct beneficiary of the higher government spending on rail infrastructure, Kalindee stands to benefit significantly from initiatives such as setting up dedicated freight corridors, increased outlay for gauge conversion and the rollout of metro rail projects.

The company has long-standing relationships with Indian Railways, Delhi Metro Rail Corporation (DMRC) and Rail Vikas Nigam (RVNL)

Investors can consider investment in small lots during market down time.

The government is focused on improving rail infrastructure in the country and increased the latest Railway Budget towards laying new lines and gauge conversion which will be positive for Kalindee Rail.

The Budget has set aside Rs 2,921 crore for new lines outlay, an increase over the Rs 1,100 crore allocated in the Interim Budget, while increasing the provision for gauge conversion by 24 per cent to Rs 1,750 crore.
Since Kalindee had earlier undertaken many gauge conversion projects for RVNL as well as some zonal railway authorities, it appears well placed to capitalise on the planned outlays. Its presence in the metro rail space may be yet another revenue spinner for the company.

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The company has been involved in laying metro rail tracks for DMRC and has even won repeat orders from them, including a relatively difficult work order of laying tracks on partly elevated and partly underground link.
With many cities such as Mumbai and Chennai looking to establish Metro Rail links, the company’s business liaison with DMRC may also serve as a reference point for future orders.

The proposed setting up of dedicated freight corridors spanning over 2,762 km, entailing an overall investment of over Rs 40,000 crore, also holds business potential for the company.

Though no orders have so far been awarded in the track works, initial tendering is likely to begin by the end of this year.

Even so, it merits note that the work orders in these projects, despite their long gestation, may typically be of higher value that entails better margins.

Challenges The company’s current order book stands at about Rs 400 crore, over 1.4 times its FY-09 revenues.
Though this doesn’t provide Kalindee with a healthy revenue visibility for the year, the company expects to add significantly to its order-book by December 2009, by when there would be more clarity on orders pertaining to dedicated freight corridors as well as from Bangalore Metro Rail, for which it plans to bid in the meanwhile.

While that may subject the company’s order book and revenues to lumpiness, it also relatively shields its revenues from the slowing economic growth, as the investments in rail infrastructure — a must to bolster the economy — may be the last to see any downturn.

Over the last three years, the company managed a compounded growth of 46 per cent and 47 per cent in revenues and profits, respectively, albeit on a low base.

The company’s margins too have more or less remained stable at about 9-10 percentage points.
For the year ended March 2009, though the company grew its revenues by 14 per cent, net profits fell by 19 per cent, led by pressure due to high input costs and interest outgo. Even though railway orders do offer price escalation clauses, their ambit is limited, leaving the company’s profitability susceptible to significant rise in prices of commodities such as steel and cement.

Further, even as Kalindee’s associations with global players in the field of telecommunication, signalling, civil and track works lend confidence, a lot would also hinge on the company’s ability to scale up its operations, especially given the huge opportunity available

Source: Leading Business daily.

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