Dishman Pharama - Technical Update

Looks like it has bottomed out for the time being. One more additional buy push and scrip is up n up.

SJVN Technical Update

Early sign of Weakness in SJVN. Below 22 , stock may loose strength as it will be a failure to hold 200 DMA. Probbaly movement will become dull going held with hardly any fluctuation.

Noida toll Bridge - Q1 Update

Due to no rise in toll rates, Noida toll Bridge co has come out with insipid results.Sales are stagnant as it was last year. It appears no traffic growth has taken place this year against an exepcted traffic growth of 5 %. However, decline in interest is in right direction and there is a good chance that Co will be debt free in next three years. Co is likely to come out with an EPS of 2.3-2.5 Rs/share this year. It is recommended to hold shares of this co at this price and buy on decline. I have a holding of 1000 shares with an average price of 24.07 Rs/share and plan to buy 1000 more below 25 Rs/share.

Bannari Amman Sugars- Cyclical Play

Introduction:

BASL was incorporated in 1983; it started commercial production in the year 1986 with an initial capacity of 1,250 TCD at Sathyamangalam in Erode district, Tamil Nadu. As on March 31, 2010, the company has a total capacity of 19,000 TCD. The company’s other sugar units are at Nanjangud and Kunthur in Karnataka and at Kolundampattu in Tiruvannamalai district in Tamil Nadu. The company also has distillery units, with a total capacity of 127.5 kilolitres per day, situated in Tamil Nadu and Karnataka. Through these distillery units, the company manufactures extra neutral alcohol (ENA), ethanol or absolute alcohol, depending on the market demand. BASL has also developed cogeneration plants at Karnataka and Tamil Nadu, having combined power generation capacity of 84 MW. The company also has wind power generation capacity of 29 MW in Poolavadi and Gudimangalam near Coimbatore.

Sugar Unit-I: The first Sugar Unit near Sathyamangalam of Erode District, Tamil Nadu State, started its commercial production in the year 1986 with an initial capacity of 1250 Tonnes of Cane Crush per day and expanded to 2500 Tonnes in 1998. The crushing capacity is now expanded to 4000 TCD. The Sugar Unit -I has an imported facility to produce 300MT Refined Sugar per day with ICUMSA less than 20 IU and the same is mainly marketed to Pharmaceutical and Food Industries in India and exported to all countries.

Sugar Unit-II: The Second Unit of Bannari Amman Sugars Limited, near Nanjangud in Mysore District of Karnataka State, started the commercial production in the year 1992 with an initial cane crushing capacity of 2500 Tonnes per day and expansion to a capacity of 5000 Tonnes in Year 2000. Another expansion to 7500 Tonnes Cane Crush per Day was completed in July 2006. A Sugar Refinery Plant with a capacity of 500 MT per day has been installed.

Sugar Unit-III: The Company has acquired a sugar mill having a cane crushing capacity of 2500 TCD in Kunthur Village near Kollegal in Karnataka by way of amalgamation of M/s. Maheswara Sugars Ltd, with the company. The Karnataka Government has approved the proposal to change the location of this sugar plant and to establish a new Sugar Plant with 6000 Tonnes Cane per Day from the existing capacity of 2500 TCD besides setting up of a 28.8 MW Co-generation Plant.

Sugar Unit-IV: It is a new Integrated Sugar Complex comprising of 5000TCD Sugar Plant, 28MW Co-generation Plant, Distillery Ethanol Plant and a Bio Composting Unit at Kolundampattu Village, Thandarampattu Taluk, Tiruvannamalai District.

Sugar Industry

I. Global Scenario

Sugar is a widely traded commodity. On an average, about 70% of world sugar production is consumed in the country of origin, and the balance 30% is traded in the international market. A part of the international sugar trade occurs under specific agreements (Preferential trade, long term agreements, etc.) that, in some cases include clauses on import prices. As mentioned, around 30% of world sugar production is traded in the world market. The Sugar prices in the international markets are of vital importance. The demand-supply position is the main factor explaining changes in international prices. It is difficult to measure consumption; therefore, it is often estimated as the disappearance of stocks. The best indicator for explaining changes in sugar prices is the stocks-to-use ratio which encompasses the growth in consumption. There is generally an inverse relation between changes in the stocks-to-use ratio and prices. During the year 2009-10, weather played havoc with crops across the globe which resulted in significantly lower output in number of countries with Brazil, China, Thailand and Mexico being the most notable ones. The world production was 153.5 million tonnes as against 143.5 million tonnes last year showing 7% growth year on year. The consumption was at 155.1 million tonnes, thereby reducing the global stocks by 1.6 million tonnes and shown growth of 1.3% in consumption and export. Stock availability as a percentage of consumption (stocks to- use ratio) is down by 1% at 13% from 14% of last year which is at lowest level in last 20 years. For the season 2010-11, surge in domestic prices led to more plantations in large-scale producers such as Brazil, India, China, Australia, Thailand, Pakistan and Indonesia, with estimates of 165.0 million tonnes of sugar production the market can be expected to swing back into surplus in 2010-11. Being global demand is expected to rise in 2010-11; the surplus will not be burdensome and at the same time is even welcome as stocks need to be replenished to be at reasonable level.

II. Indian Scenario

India is one of the largest producer and consumer of sugar in the world. The Indian sugar industry has a turnover of around Rs. 70,000 Crore and is the second largest agro-based industry, next to textile industry. Indian sugar industry is highly fragmented with mills of average capacity of 3,600 TCD, where in internationally the minimum economic size is around 7,500 TCD. Out of various models of business in this industry, Sugar - Molasses - Power and Sugar - Ethanol - Power are more prevalent. The sugar production in Sugar Season 2009-10 outstripped the expectation owing to higher than anticipated production in UP and Maharashtra. Towards end of the year 2008-09, there was about 1.4 months stock available in pipeline but during 2009-10, once the prices started falling and also stock limits controlled by Government, the trade resorted to hand to mouth buying leaving hardly any stock in pipeline. The actual release was of 20.8 million tonnes but the consumption was around 22.5 million tonnes. India imported roughly more than 4 million tonnes in Sugar Season 2009-10 to meet the demand. In year 2009-10, cane acreage reduced by 2.1 lac hectares due to increase in minimum support prices (MSP) of alternative crops especially wheat and rice. As a result, India witnessed lowest sugarcane produce of last five years at 278 million tonnes. However, better yield at 66 tonnes per hectare was a support to some extent.

Million tones 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Production     14.00      12.69     19.27      28.3        26.3       14.5      18.8

Consumption 17.29       18.50     18.50     20.0        22.2        22.5      23.5

If one look at stocks to use ratio in case of Indian scenario, it has reduced from 63.3 % in 2002 to 13.5 % as on date. It simply means that earlier the inventory in pipeline was for almost seven months which have been reduced to one and half months now. It effectively means any crop failure will result in sharp upswing of sugar prices as sugar availability will be very low and this situation is all over the world. If some urgent measures are not taken then there is a good chance that sugar prices will be shooting up to roof as consumption is rising but production is stagnating. Besides, acreage for sugarcane in India this year will be almost at highest level. I am of the opinion that next year onwards we will start seeing hardening of sugar prices and sugar prices will be in a major long term bullish territory and opening up of sugar sector and industry is imminent.

Financials:

Co sales have increased from a meagre 14 Cr in 1985 to 853 Cr in 2010 and profits in the same period have increased from 55 lakh to 199.73 Cr while equity have just increased from 3.73 Cr to 11.44 Cr including one bonus of 1:1 also. It looks like a consistent growing sugar co which is rare to find in this industry. Co Current year EPS is around 55 Rs/share and current price looks reasonable from that angle. Dividend of 10 Rs/share means a yield of 2 % at present level.

Technical Analysis:

Share price of Co moved from a low of 95 in 2003 to 1700 + by 2006. Since then co share price is in correction mode with high price range of 1200-1500 and low price range of 400-550 Rs zone. Considering the long tern prospect of Sugar industry, it looks like this range will be broken on upside sooner than later. This short to medium term weakness in sugar looks like a good opportunity to me for investment.

 Investment Theme:

I am very bullish on sugar as a commodity on very long term basis. On international levels, the chart of sugar is looking extremely bullish though in short to medium term it looks weak and can test level of 15 even though at present it is trading at 24-25. Rather, I will say I am more bullish on agricultural commodities as the consumption of these will increase with Asia leading the growth and there will not be any decline in consumption in western world in agricultural commodities as it is essential. I am going to invest in 7-8 sugar cos to diversify base. Bannari Amman sugar is one of them as I have invested 20000 Rs in this stock @ 560 Rs/share with an option of investing 30000 more at price range of 450-500 Rs/share.

Indraprastha Medical -- Be Patient

Introduction:

Indraprastha Apollo Hospitals, India’s first JCI accredited hospital, is a joint venture between the Government of Delhi and Apollo Hospitals Enterprise Limited. Commissioned in July 1996, it is the third super-specialty tertiary care hospital set up by the Apollo Hospitals Group. Spread over 15 acres, it houses 57 specialties with more than 300 specialists and more than 600 operational beds, 19 operation theatres, 138 ICU beds, round-the-clock pharmacy, NABL accredited laboratories, 24-hour emergency services and an active air ambulance service. Apollo Hospitals Delhi has the leading programme in kidney and liver transplant in the country. The first successful pediatrics and adult liver transplants in India were performed at Indraprastha Apollo Hospitals. The hospital is at the forefront of medical technology and expertise. It provides a complete range of latest diagnostic, medical and surgical facilities for the care of its patients. The Hospital has introduced the most sophisticated imaging technology to India with the introduction of 64 slice CT and 3 Tesla MRI. Indraprastha Apollo has also pioneered the concept of preventive health check programmes and has created a satisfied customer base over decades.

In the year 1986, The Govt. of NCT of Delhi under the direction of the then Prime Minister, had decided to set up a multi specialty hospital. Indraprastha Medical Corporation Limited (IMCL) was promoted in the joint sector by the Govt. of NCT of Delhi and Apollo Hospitals Group and was incorporated as Public Limited company on 16th March, 1988 to set up a multi super specialty hospital in Delhi namely “Indraprastha Apollo Hospitals”. The incomplete building was handed over to the Company at a nominal lease rental of Rs. 1/- per month. A Management Agreement was also entered on the same date between Indian Hospital Corporation Ltd. (an Apollo Hospitals Group Company) and Indraprastha Medical Corporation Ltd. for providing technical and management services to the Company at a nominal management fee of Rs. 1/- per annum. This was the first joint venture Company and a first of its kind in Healthcare under the public-private partnership model. Later on, 15 acres of land at Delhi Mathura Road, Sarita Vihar, New Delhi, together with building constructed out of the money (including interest) received from Sport Authority of India was leased to the company for a period of thirty years up to July 31, 2023 renewable for a further period of thirty years on the same terms and conditions as agreed before. The Hospital was inaugurated in July 1996 and commenced various services in a phased manner.

As per the terms of the lease deed, the Company shall admit free of charge such patients as may be recommended by the Lt. Governor of the National Capital Territory of Delhi up to 1/3rd (one third) of the bed strength consisting of 600 beds or such number of beds as near thereto as may be commissioned for the time being, earmarked for such purpose by the Company. The Company shall provide free diet, medical diagnostic and such other facilities to the patients aforesaid as are required by the patients for indoor treatment. The Company shall also provide free medical, diagnostic and other facilities for not less than 40% of it’s out-door patients. There was also an implied obligation on account of custom duty exemption for import of medical equipment prevailing at the time when the Hospital project was conceived. However, the hospital could not avail the benefits due to relocation of the project and consequent time delay during which period the custom duty exemption on import of medical equipment was withdrawn. A Public Interest Litigation (PIL) was filed in the year 1997 in the High Court of Delhi for seeking direction that the Company should also provide free medicines and medical consumables to the Patients referred by the Govt. of NCT of Delhi for free treatment in the Hospital. The Petition was contested by the Company. An interim order dated 29.5.1998 was issued by the Hon’ble High Court of Delhi and accordingly the Hospital has been providing free treatment exclusive of medicines & medical consumables to patients referred by the Govt. of NCT of Delhi. The Delhi High Court decided the PIL vide its order dated 22nd September, 2009, and has held that free treatment provided by the Hospital as per the terms of the lease deed shall be inclusive of medicines and consumables. The Company has filed a Special Leave Petition (SLP) before the Hon’ble Supreme Court of India against the impugned judgment and order of the Hon’ble High Court of Delhi. The Hon’ble Supreme Court of India has admitted the SLP and passed an interim order on 30.11.2009. In pursuance of the interim order, the Hospital is providing free treatment to the patients referred by the Govt. of NCT of Delhi exclusive of medicines & medical consumables. The matter is pending before the Supreme Court of India.

Indraprastha Apollo Hospitals is distinguished by its focus on Clinical Excellence. It has participated in one of the most important programs of the Apollo Hospitals Group known as ACE@25 - a unique clinical balanced scorecard focusing on evidence based quality care and a safe environment for patients. The scorecard measures 25 clinical parameters every month, benchmarking them against the best institutions in the world and scores them on a 4 point scale, colour coded as green, orange or red. Each of the   participating hospitals is thus measured on a 100 point score and reported online for monitoring and sharing of best practices. A score of 75 and above is considered good performance and in the green zone. The average ACE @ 25 scores for the Indraprastha Apollo Hospitals this year has been 76.66. With sustained efforts, the Average Length of Stay (ALOS) of patients in the Hospital was brought down from 5.09 days to 4.8 days. A number of other initiatives were also undertaken in critical areas of hospital operations directly impacting patient care. The average turn around per dialysis chair per day has also got increased. Being the first hospital in the country to get Joint Commission International (JCI) accreditation, Indraprastha Apollo Hospitals has always strived to ensure all quality norms are being met. This year Indraprastha Apollo Hospitals continued to build on the strategy of focusing on the Apollo Centers of Excellence, with Orthopedics being identified as a key area. Anticipating joint replacement surgeries (particularly knee replacements) as a high growth area, the Hospital did a number of activities to increase the numbers of knee replacement surgeries. The Apollo Knee Clinics was set up in November 2009, followed by a focused marketing campaign through hoardings, posters and hand outs. Following these initiatives, significant growth in the number of surgeries was recorded significant renovation and up gradation work was completed during the year, which should add to patient comfort and help achieve more operational efficiencies. Among others, a new orthopedics operation theatre, a 5-bed ICU for critical cardiac care patients, a 12 bed Multi Organ Transplant Unit for Renal Transplant patients, a Mezzanine in the atrium for ICU patient attendants and international patient lounge were commissioned. Fifty eight patient rooms and three OPDs were also renovated during the year.

Financials:

Hospital Sales have increased from 204 Cr in 2006 to 458 Cr in 2011. Profit in this period increased from 16.66 Cr to 30.73 Cr this year resulting in an EPS of 3.35 Rs as compared to an EPS of 1.64 Rs/share. Dividend in the same period increased from 1.25 Rs/share to 1.6 Rs/share this year. On Margins front and on other parameters this hospital compares well with other hospitals. It is likely that this hospital will continue to grow at a rate of 10-15 % for years to come. No major expansion being in a Joint Venture can be expected to come out of it.

Technical Analysis:

For last six years the scrip is not able to go beyond 50-60 Rs band and on downside it have very good support in band of 20-27. The scrip ideally can be bought in the region of 25-27 Rs/share. In case of severe correction the scrip is unlikely to go below this level this time. 26.4 will be 76.4 % correction of 18.05 to 53.5 Rs rise. This may be the target of share on downside. No signs of turnaround on Weekly MACD n Weekly RSI has been observed on the chart.

Investment Theme:

The Investment Theme in this stock is dividend yield and defensive nature of stock. It is ideal stock in place of FD as it is likely to give 12-15 % return p.a. in general including dividend over long period of time. If price of acquisition is in ur favour then return can be more. I have 1000 shares in this hospital at present  and plan to invest 35000-40000 Rs more in case of decline in share price to 25-27 Rs band. In case it goes up to 50-60 , I will quit from this scrip .

SJVN - Q1 Fy11-12 Update

SJVN has come out with excellent numbers for Q1. Despite of no addition of capacity, Sales have improved from 524.98 Cr to 553.57 Cr. Interest cost has reduced from 38.98 Cr to 27.84 Cr and Other income have been boosted from  22.79 Cr to 52.61 Cr. Overall, it resulted in rise of net profit from 290.76 Cr to 348.21 Cr and an EPS of 0.84 from 0.70 year back. It appears Co is all set to post an EPS of 2.5 Rs/share for this fiscal. Anticipating good results the stock had rallied in advance and now is trading above 200 DMA of 22.15 but looks like it will be difficult for stock to hold about 23 in short run. I booked some profit today @ 22.9 to reduce my cost of holding. I hold now 2500 shares @ 21.43. Will add 500 shares more if it comes back to 20-21 band.

See Previous Link on SJVN here
http://indianstocktechnicalfunda.blogspot.com/2011/07/sjvn-long-term-investment.html

Dishman Pharma - Dark Horse

Introduction:

Established in 1983, Dishman Pharmaceuticals and Chemicals Limited (DPCL) provides a wide range of products to the global market, including an extensive range of reagents, specialty chemicals, active pharma ingredients (APIs), and intermediaries. The company operates in two segments: contract research and manufacturing services (CRAMS) and specialty chemicals. The co came with an IPO in 2004 at a price of 175 Rs/share which was spilt into 5:1. Effectively price of offering was 35 Rs/share. Shares of Co were listed at a price of 60 Rs/share which incidentally is the lowest price so far.

Product Offering

Dishman provides a wide range of products to the global market, including an extensive range of reagents, specialty chemicals, APIs and their intermediates.

Dishman Vitamins & Chemicals

Vitamin D2, Vitamin D3, Vitamin D analogues, cholesterol and lanolin related products for pharmaceutical, cosmetic and related markets. The Plant based in Veenendaal (the Netherlands) manufacture and supply a range of Vitamin D, Vitamin D analogues, cholesterol and lanolin related products for pharmaceutical, cosmetic and related markets. The manufacturing facilities include continuous saponification technology, large scale chromatography, crystallisation and filtration equipment, and high containment pilot plant facilities for toxic materials.

Dishman Specialty Chemicals

·         Manufacture and supply of quaternary compounds (Quats)

·         Manufacture and supply of phosphoranes and wittig reagents

·         Manufacture and supply of bulk APIs and intermediates

·         Worldwide material sourcing, outsourced products

Quats: Dishman Specialty Chemicals had a long association with manufacture and supply of Quaternary ammonium compounds (Quats) for use as phase transfer catalysts. Our expertise in solids handling technology has enabled us to expand our offer to include ammonium and phosphonium high purity solid Quats, Phosphoranes and Wittig reagents. These products find applications as phase transfer catalysts, personal care ingredients, fine chemicals, pharma intermediates and disinfectants. A number of our products are made under GMP manufacturing conditions at our Naroda facility in India

Dishman Disinfectants

Dishman Care, through its Disinfectant Division, offers a range of Antiseptics and Disinfectants for application in healthcare and related industries:

·         disinfectants for surgical instrumentation

·         hand and body wash sanitisers and antiseptics

·         pre and post-operative surgical scrubs

·         antimicrobial washes

Custom Services

Dishman Custom Services, comprising both the CARBOGEN AMCIS and CRAMS businesses, offer the pharmaceutical industry a global partnership solution to all of their intermediate and active pharmaceutical ingredient requirements. We operate seamlessly across the entire lifecycle of a product, having an ability to manage projects manufacture. In the domain of highly potent API development and manufacture we have expertise and capabilities that are unmatched in the CRAMS sector.

Highly Potent API Services

The Dishman Group offers unparalleled capability in scale-up, development and commercial manufacture of highly potent compounds. These highly potent API services are offered under the CARBOGEN AMCIS business. The Dishman Group provides state-of-the-art containment services. All of our facilities operate to current Good Manufacturing Practice (cGMP) and can produce material for preclinical testing, clinical trials and commercial use. Our highly-potent API services are located at two different sites: for process research and development up to medium scale production for clinical trials and market supply Bubendorf in Switzerland is the site of choice. Scaling up to larger scale for market supply your project will be handled in reactors up to 1600L out of Bavla,

Various Facilities

 Bavla

·         Located in India, 30km from Ahmadabad , State of the art R&D centre , 64 fume hoods , 200 scientists focused on process development and industrialisation, working in continuous 3 shift, 6 day R&D operations , Multiple kilo lab and cGMP pilot plant facilities, each with reactors at 50L to 3000L scale

·         Dedicated highly potent (including cytotoxic) API manufacturing facility. 4 segregated reactor trains.

Naroda

·         Located in India, 15 km from Ahmadabad , R&D laboratory , Pilot plant facility with 8 reactors from 50L to 500L scale , 10000m² site of which 4000m² currently developed , Plant cGMP approved and ISO 9001 certified

·         Manufacturing facilities:

o    Installed capacity of 5000 MT

o    Manufacture and supply of quaternary ammonium compounds (Quats), phosphonium high purity quats, phosphoranes, wittig reagents, fine chemicals and pharmaceutical intermediates

o    cGMP manufacture of disinfectant APIs

China

·         Located on Shanghai Chemical Industrial Park, Shanghai, China , Fully integrated cGMP manufacturing site focused on production and supply of pharmaceutical intermediates and APIs , Modern design, inherent flexibility to address most API challenges , Analytical, QC capability for API release and sourced RM release , 10 reactors from 2500L to 8000L scale

Switzerland (CARBOGEN AMCIS)

CARBOGEN AMCIS was acquired by Dishman in August 2006. The company is a leading service provider, offering a portfolio of drug development and commercialisation services to the pharmaceutical and biopharmaceutical industries at all stages of drug development. CARBOGEN AMCIS has sites in Switzerland in:  Aarau, Hunzenschwil, Bubendorf

Ne therlands (Vitamins and Chemicals)

Dishman Vitamins and Chemicals, based in Veenendaal (the Netherlands) manufacture and supply a range of Vitamin D, Vitamin D analogues, cholesterol and lanolin related products for pharmaceutical, cosmetic and related markets.

United Kingdom (CARBOGEN AMCIS)

The CARBOGEN AMCIS, Manchester site specializes in process development and custom synthesis of pharmaceutical intermediates. The larger production capacity (up to 4,500 L) allows the efficient production of early-phase APIs and large-scale intermediates.

Latest Concall Highlights:

• Unit 9 at Bavla plant is completely ready which would start the first trial & validation procedures next month. In addition, the company is expecting the European MNC to validate the same unit in June.

• China facility has commenced which has a total undertaking of production of 3 APIs. One of the APIs has completed the production phase.

• Dishman Pharma becomes the sole & preferred manufacturer & supplier to a Japanese company for one of the intermediates of a molecule which is in advance stages of Phase III trials.

• Marketable molecule segment is expected to contribute significantly in FY12 & FY13 as the company has received huge orders for production Benzethonium chloride which is a high margin product.

• The work at Unit 13 of vitamin D facility is nearing its completion which is expected to commercialize in July.

• Disinfectant facility is being validated which is expected to start the commercial production by mid of June

• Dishman pharma would be sole supplier for Eprosartan Mesylate to abbot.

• The company has guided a top-line & bottom-line growth of 15%. It is also confident of maintaining its margins around 20-21& the tax rate guidance for FY12 is ~ 20%

• The company under Vitamin D3 business has guided a top-line & bottom-line growth of 30% & 20% respectively.

Promoter Stake:

Promoter has increased its already high stake from 60.9 % to 61.2 % in this quarter. As per exchange information, this stake has been bought at more or less in range of 90-110 Rs/share.

Financials:

After listing, co net sales rose smartly for two years from 585 Cr to 1070 Cr but in last two years sales have declined to 999 Cr.  During this period net profit declined from 146 Cr to 80 Cr. There are many reasons for the decline of the profitability. First of all, there was decline in outsourcing activity which mainly happened due to slowdown and rationalization of inventory by Pharma majors due to mergers between them. This resulted in decline in Sales of the co. Due to prolonged slowdown; it affected the margins of the co which have seen a decline from 23-24 % to present level of 16-17 %. It affected the bottom line of the co. Besides, co was in major capital expenditure phase in this period which not only resulted in increased interest expenses from 19 Cr in 2007 to 44 Cr this fiscal but also resulted in high depreciation from 26 Cr to 68 Cr in this period. With all these worse combinations, co took a major hit in profitability. However, co has started making efforts in making a turnaround. Co’s management had undertaken a massive restructuring exercise, wherein the focus would be on improving profitability rather than growing the top line. This showed positive results in 4QFY2011, with a 25% reduction in the employee strength that led to 5mn CHF saving for the company in FY2011. For Carbogen Amcis, the company expects a muted performance in FY2012, with the restructuring efforts to be visible in FY2013.Besides, Capex is likely to be muted going forward and interest and depreciation as a proportion to sales will come down. There is also a chance of pick up in out sourcing activity which is a long term upward trend. It looks like 2012 may be the year of consolidation for Dishman Pharma and from 2013 onwards Co may be back to business as usual.

Technical Analysis:

Share price of Co was listed at a price of 60 Rs while it was allotted at a price of 35 Rs/share. This price of 60 Rs is the lowest price ever for the Co. After listing along with general momentum of the market and good performance of the Co, Share price zoomed to a high of 427 in Jan’08. After hitting all time high along with overall market decline scrip plummeted to a low of 87 in mar 2009. From this low, scrip was in corrective rally to 275 which was hit on Jan 2010. From this price onwards, Co Is in long downward trend and took support again on 87 Rs which was its previous bottom. Present structure of share price is not very good even now and there is a good chance that it will break down sooner than later. Once 87 is broken down convincingly, share price can seek support at Rs 73 and later on to Rs 60 per share.  It looks like this band will be very strong band and should be used as an opportunity to invest in the co for long term investment. Momentum indicators are not favoring bottoming out scenario as there is hardly any positive divergence on these indicators so in all probability scrip will touch 73 on downside.

Dishman Pharma Weekly

Dishman Pharma Weekly MACD

Dishman Pharma Weekly RSI

Investment Theme:

Co business is showing signs of bottoming out and it looks like the Co will bottom out in this fiscal but how strong will be the recovery and how quickly co will be able to regain sales growth and margin growth is yet to be seen. Having said that, Present price of Co looks like that it captures all the possible negative in the Co. Co EPS have halved but co share price has corrected around 80 % from top which looks a bit exaggerated. Promoter is increasing his stake from open market which in my view is a very big positive. I have invested 50,000 Rs in or around these prices and I am willing to invest 25,000-35,000 more in the Co on decline and after seeing signs that co is taking support in this band of 60-73 Rs.

Noida Toll Bridge - What an Investment !!!

Introduction :

The Noida Toll Bridge Company Ltd. (NTBCL) has been promoted by Infrastructure Leasing and Financial Services Ltd. (IL&FS) as a special purpose vehicle (SPV) to develop construct, operate and maintain the DND Flyway on a Build Own Operate Transfer (BOOT) basis. NTBCL is a public listed company, incorporated in Uttar Pradesh, India, in 1996 and operates only in India. DND Flyway grew out of a need to bridge the growing population of Delhi with its neighbours across the Yamuna. Today, a major portion of Delhi's population lives in the Trans-Yamuna area and there was a need to build a major connecting facility between the areas growing on both sides of the Yamuna.  In January, 2008 Mayur Vihar Link (MVL) Toll Plaza with 11 lanes was commissioned. The Mayur Vihar Link Road was developed by NTBCL to shorten the travel distance for people living in Mayur Vihar and others accessing areas in its vicinity. Salient features of DND Flyway 8 Lane Dual Carriage ways Connecting Noida Sector 15a With Ring Road Near Maharani Bagh. 6 Km Link With 552 Meter Long Main Bridge Across River Yamuna And 3 Minor Bridges. 8 Lane Approach Road On Embankment. 31 Lane 200m Wide Fully Computerised Toll Plaza. Concession Agreement

A Concession Agreement confers the right to Noida Toll Bridge Co. Ltd (NTBCL) for recovering the project costs with a designated rate of return (20%) over the 30 years concession period or till such time the designated return is recovered whichever is earlier; and if not recovered the right is extendable by 2 years at a time till the project cost and the designated return thereon is recovered. The Concession Agreement provides for granting Land Development Rights to NTBCL for supporting any shortfall in earnings. The Company has 100 acres of land and has been seeking development rights. Upon approvals and the commencement of land development, it will get revenues and profit contribution from land development also.

Recent Toll Hikes & Traffic Growth Rate

In Feb 2011 proposed toll hike was rolled back due to protests. As required for maintenance, NTBCL has taken up issue for increase in toll rates with authorities. Except in year 2008, Co has not been able to hike toll rates and have met with stiff resistance whenever it has tried to hike it. It is expecting a hike in the range of 10-22% (at least 10%) in the toll rates by May - June 2011 which I do not think they will be able to implement particularly in view of UP elections. From 2000-01 to 2009 -10 there has been good growth in the average daily traffic. For FY 2012, NTBCL is expecting at least 5% further traffic growth. The planned implementation of Noida and development of Yamuna Expressway will also lead to further increase in traffic. Present composition of Traffic is 74 % for four wheelers and 24 % two wheelers and rest around 2 % is commercial vehicles. For last few years, rise in traffic in four wheelers and Commercial vehicles is more which has resulted in increase in average toll rate per vehicle. It is expected that this trend will continue in future also.

Financials:

Co sales have increased from 47.11 Cr to 84.31 Cr in last five years. Co sales are stagnant for last three years as it is not able to increase toll rates in this period and the growth have been sluggish in traffic including negative growth last fiscal. However, profit in this period increased from 11.06 Cr to 37.49 Cr in same period resulting in an EPS of 2.01 Rs/share this fiscal. Co declared a dividend of 0.5 Rs/share this fiscal first time. For current fiscal, total Debt for the Co stands at a level of 138.66 Cr as compared to over 180 Cr three years back while investment has increased to 23.76 Cr this fiscal. It is expected that co will become debt free in next three years and interest cost of 17 Cr p.a. will be saved totally. It can be expected that EPS will increase 40 % just on account of interest saving in next three years and traffic growth of 4-5 % will result in an increase in EPS of 15-20 %. It can be safely assumed that EPS of co will be 3.5 Rs / share three years onwards without considering any increase in tool rate hike. It can be expected that Co will start increasing dividend in next one or two year onwards.

Technical Analysis:

After hitting its all time high of 85.05 in Jan’2008, share price collapsed to a panic low of 16.05 Rs/share in Nov’2008 which was incidentally low since Jan’2005. After hitting a low of 16.05, share price was in corrective rally phase to a high of 48.4 Rs/share in Sep 2009. Since Sep 2009, share price is in bearish trend and has almost lost 50 % from its recent high. Technically 76.4 % & 85 % Retracement level supports are at 24.2 & 21.5 Rs/share. 200 DMA is placed at a price of 28.6 Rs/share which offers good resistance.

MACD on weekly charts is showing positive divergence and is showing a very good sign of turning around.

Similarly RSI on weekly charts is showing positive divergence and is showing a very good sign of turning around. The shares of the Co can be accumulated on every decline and it looks like all sell offs from here on will be temporary in the share price. 

Investment Theme:

There are two scenarios for investment in this Co: ---

1.    Granting Development Land Rights:  There is a possibility of granting development land rights to the Co for shortfalls of revenues. It is estimated that these development rights is equal to Rs 30 per share of the Co. Whenever this will happen then share price will immediately shoot up to almost double from present level in short run.

2.    Extension of Lease Period: In case Land rights are not granted then there is no other possibility except to increase the lease period for the Co. It is likely to be the most likely scenario in present circumstances. In this scenario, there may not be immediate run up in short run but it will be a long term story and 20 % p.a. (including dividend payout) easily can be realized in this co. Besides, till the time there is clarity on this aspect, speculative jacking up time to time cannot be ruled out and can be a good opportunity to book profits.

I have invested 2000 shares in this Co at a price of 25.35 Rs/share with an option of investing 25,000 more in case of a further decline in the share price. 

SJVN - Long Term Investment

Introduction : 

The SJVN Ltd was incorporated on May 24, 1988 as a joint venture of the Government of India ( GOI ) and the Government of Himachal Pradesh for Hydro-electric power projects. The Nathpa Jhakri Hydro – Electric Power Station– NJHPS ( 1500 MW ) was the first project undertaken by SJVN for execution in 2003-04. 1500 MW NJHEP has been designed to generate 6612 MU of electrical energy in a 90% dependable year with 95 % machine availability. Out of the total energy generated at the bus bar, 12 percent is supplied free of cost to the home state i.e. Himachal Pradesh. From the remaining 88% energy generation, 25% is supplied to HP at bus bar rates. Balance power has been allocated to the beneficiary states / UTs of Northern Region by Government of India. Govt Of India had come with an IPO of the Co with an offer price of Rs 26 per share and at a discount of 5 % to retail. So far price wise , the performance of Co is bad as it is not able to to trade above 26 and investors have not made money on the stock if they have not lost much. Govt presently holds a stake of 90 % in the Co which is a drag as any FPO will depress the price down in short run.

SJVN’s Future Projects

SJVN is currently constructing the 412 MW Rampur Hydro Electric Project in the state of Himachal Pradesh which is expected to be completed by Sept 2013. SJVN is also implementing three hydro projects (252 MW Devsari, 60 MW Naitwar Mori and 51 MW Jakhol Sankri) in the state of Uttarakhand. Further, SJVN has also been allocated Luhri Hydro Electric Project (775 MW) and Dhaulasidh HEP (66 MW) in the state of Himachal Pradesh for preparation of Detailed Project Report and subsequent execution. Further, SJVN is entering into a Joint Venture for the implementation of 1500 MW Tipaimukh HE Project in Manipur with an equity participation to the extent of 26%. The company has now gone across the borders and has bagged 900 MW Arun III hydroelectric project in Nepal through, competitive bidding. In addition, the corporation has also been assigned the task of updating/preparing DPRs of two Hydro Electric Projects 600 MW Wangchu HE Project and 650 MW Kholongchu HE Project in Bhutan by Govt. of India.

SJVN Venturing into Wind Energy Sector

SJVN is venturing into the Wind Energy field with an initial addition of 50MW of wind energy by the end of 2012 to promote and develop more renewable resource of energy. The consultant for this new venture of setting up of the 50MW wind Power Project has already submitted the feasibility report for establishing the project with the advantages of various locations.

Financials :

Despite of constraint of a single plant, Co is able to increase electricity generation from it year on year basis. In last four years, Co has increased generation from 5942 MU to 7140 MU exceeding all performance criteria set by GOI. Even this year in Q1, Co has reported 226 MU in excess of last year same Quarter and 363 MU more than target set by GOI. It results in extra incentive for Co. Co sales revenue has gone up from 1618 Cr in 2006-07 to 1812 Cr this fiscal. Profit in this period have increased from 732 Cr to 912 Cr this fiscal resulting in an EPS of 2.25 Rs/share. It is expected that co will be able to add in its capacity generation at a rate of 8-10 % pa. It is expected that Co will post an EPS of 2.5 Rs/share this fiscal and a rise of 15 % EPS growth can be expected for many years to come ahead. Co is more or less debt free as surplus cash is equal to long term debt. Co is paying dividend of 0.8 Rs/share and at a price of Rs 21-22 , it more or less results in a div yield of 4 % . It is expected that co will be having an EPS of Rs 4-5 per share in next 4-5 years with a dividend of 1.6-1.75 Rs/share. 

Technical Analysis :

Co share price was listed in may 2010 and it was a lacklustre listing. Since its listing co share price is lacklustre and after hitting a high of 25.8 Rs/share it hit a low of 19.4 Rs/share but it rebounded quite sharply  from sub 20 Rs level. Dspite of Nifty testing 5200 level co share price refused to follow and hit 21 Rs/share outperforming major indicies. After consolidating for almost two months, co share price is making an upmove and is facing resistance at its 200 DMA of 22.2 , 22.65 & 23.5 Rs/share. 

MACD has turned positive on daily charts and from Zero level it has gone back into positive terriotry again which is a positive sign. 

Investment Theme :

          SJVN is a hydro Power co and is doing extremely well. Co is having a portfolio of various projects which are under various completion stage. Recently, Co have announced to get in Wind Power also with setting of 50 MW power generation at an investment of 300 Cr which will be excellent for the Co. Co's 1500 MW NJHPS  will be a huge cash flow for the Co. Co is targeting completion of Rampur Project by Sep 2013 which once completed will be a big positive for the Co not only from cash flow point of view but from incremental profitability point of view. What I like about the Co is sweating of its assets !!! Co is giving excellent performance every year. Co is giving a dividend of  8% this year with an expected increase of 10 % almost every year. 

   On Replacement Cost also, co share price looks undervalued. NJHPS project was completed in year 2004 at app cost of 8500 Cr. If same project is implemented today, it will not cost less than 16000-17000 Cr Rs. Considering 20% depreciation level, it is worth 12000-13000 Cr at present value. Besides, they have already invested more than 1200 Cr in Rampur project. Their debt level is more or less equal to cash level. Considering negligible value of other projects in hands, Co's EV value is more or less equal to 13500 Cr. With an Equity of 4136 Cr, replacement cost works out to be 32-33 Rs/share.

  I have invested 60,000 rs in the Co @ 21.65 for a steady flow of income. Though Co is likely to do extremely well but promoter high stake in Co does not auger well as there will be a chance of FPO of the Co in years to come which will be a drag on Co's share price. Co's share price is moving in a band of 3 Rs with upper band @ 22 and lower Band @ 19.5 which incidently is lowest price traded of the Stock.