Rishi Laser Ltd BUY (59.00 Rs)

A dedicated vendor for many MNC engineering giants in construction equipment,power and metro rails

From a fabricating subcontractor to a laser cutter and welder, Rishi Laser has come along way, moving up the value chain and becoming a dedicated vendor to some of the major construction equipment (CG) players like JCB, BEML, L&T, Volvo, Ingersoll Rand and Caterpillar, supplying them various assembly parts and other fabricated structures. The company is a dedicated vendor to power transmission and distribution (T&D) companies such as Areva, ABB, Alstom, Crompton Greaves, and Schneider, supplying fabricated structures like SS boxes and switchgear kits .

Rishi Laser is a sole dedicated vendor for the supply of various assemblies and fabrications to Tata Hendrickson’s for its commercial vehicle suspension system. The company provides various assembly parts and fabrication works to Bombardier Transportation(BT) for its Delhi metro projects. It supplies and undertakes fabrication works for the textile machinery and food processing industry. Rishi Laser has 14 plants located across India to serve its customers. Sales to the CE sector accounted for 24% of total sales in the fiscal ended March 2010(FY 2010). Sales to rail transportation (RT) comprised 11%, sales to power generation and distribution (PGD) segment 18%, and automotive sales 23%. Once all the industries pick up,sales to the CE, RT, PGD and automotive sectors each will range between 20% to 25% of total sales.

Rishi Laser started FY 2011 on a strong note. Standalone net sales were up by 50% to Rs37.69 crore in first quarter ended June 2010, while better operating profit margin of15.1% resulted in strong operating profit growth of 93% to Rs 5.68 crore. The June 2010 quarter was very unique for Rishi Laser. Its traditional business verticals, construction equipment and power T&D were not growing as expected. Yet,growth came from other business verticals including automobiles and railway transportation(Metro rail). The company is a dedicated fabricator for these sectors. Orders from Tata Hendrickson for autos and from BT for metro projects ensured strong set of numbers.Exports of moulds to Brazil also helped.
CE and power T&D players are expecting a strong set of growth in orders from H2 ofthe fiscal ended March 2011 (FY 2011) onwards. JCB, the largest player in back loader,plans to manufacture 18,000 numbers of back loaders in August 2010 as against about 10,000numbers on an average in Q1 fo FY 2011. One of the units of the Pune, Maharashtra, plant of Rishi Laser is fully dedicated to fabrication and assembly of JCB order. Further, there is less inventory lying with CE players. So ordering and execution will be much faster.
Consolidation is happening in the power T&D space. Large players like ABB, Arevaand Siemens are still fighting for orders and margin. However, all these giant players arebetting big on the country and have laid out massive capacities in India. ABB already hashuge capacity in Baroda in Gujarat, while Areva just expanded it by spending about Rs 950crore and Siemens Rs 350 crore for more indignation of products. Rishi Laser has worked with all these companies and is a preferred vendor for all of them. As and when the consolidation within the power T&D sector ends, volumes will kick in, resulting inbetter orders and margin for Rishi Laser.
Rishi Laser already had expanded in the downturn of FY 2009, and has sufficient capacities to serve its customers. However, the downturn resulted in lower utilization of capacities, resulting in lower margin. With the economy back on track and orders expected to flow strongly from all sectors, capacities will be utilized at the optimum level,resulting in better margin.

We expect Rishi Laser to report net sales and profit after tax of Rs 177.51 crore andRs 7.76 crore in FY 2011. This gives an EPS of Rs 8.8. This EPS is expected to rise to Rs13 in FY 2012. At the current market price of Rs 80, the scrip is available at 7 times expected FY 2011 earning and only 4.5 times its expected FY 2012 earning.

Rishi Laser has worked very closely with many of the large engineering giants and now has become a dedicated vendor to serve them. While the number of dedicated customers is onrise, the growth of the company will depend upon how that particular industry is growing.With an all-round growth expected from H2 of FY 2011 onwards due to pick-up in capex cycle and the company having sufficient capacity to serve vendors for all stream of businesses,Rishi Laser is set to get the maximum benefits.

Source: Capitaline Databases

International Travel House Ltd

Focused on business class

India’s economic recovery and attraction as investment destination willboost corporate travel

International Travel House (ITHL), a constituent of the ITC group (61.7% stake), is oneof India’s leading travel management companies servicing the travel needs of Indianand multinational business houses with implants in 160 companies. Since commencingoperations in 1981, ITHL offers a full bouquet of travel services and has grown to be oneof the largest complete travel management companies in India, with each of its productsand services bearing the distinct ISO 9001 quality benchmarking. Clients include NDTV,Infosys, HCL, Siemens, Citibank, ABN, Samsung, Max Hospitals, FICCI, Essel group and 3M,apart from the ITC group. It owns a transport fleet of 900 cars and has over 700 trainedtravel professionals.Recognised and approved as a travel agent and tour operator by the Air TransportAssociation. ITHL is affiliated with the World Tourism Organisation, Universal Federationof Travel Agents Associations, American Society of Travel Agents, International Congresses& Conventions Associations, and the Travel Agents Association of India.

Due to severe global slowdown in 2009, most Indian and MNC companies had imposed travel restrictions to reduce cost. Many travels were canceled and cheaper alternatives were preferred. As the Indian economy springs back, most travel restrictions have been lifted.Business travel, thus, has got back on track.With a team of dedicated professionals, a nationwide network, and state-of-the-art technology, ITHL is well equipped to address all possible travel needs of both business-and leisure travelers. It offers a range of services including corporate travel, car rental, destination management services, world class holidays, incentive group travel,conference management and foreign exchange.
With India identified as a strong center for medical services globally, ITHL is pursuing the niche segment of medical tourism. The company is also aspiring to be a leader in the conference and exhibition segment of the business. It has been appointed as the official travel partner and professional conference organizer in India by several important international conference organizers. These linkages are expected to generate continuing business during the coming years. Though ITCH was doing the business of travel insurance for quiet some time, it has started promoting it aggressively right now. At present, the company is insuring more than 80% of its clients going abroad.
After the global turmoil, things have started looking up. Companies across various sectors have started posting healthy profit growth. Global mergers and acquisitions are happening across sectors. Meeting, incentive, conference and exhibition tourism has also picked up on demand for events and incentive tours from the booming consumer durables and auto companies. The Commonwealth Games in October 2010 also offer opportunities,particularly for the car rental business. Apart from inbound traffic, outbound traffic is looking up as the Indian economy gathers steam, reducing the cost of foreign travel and stay and increasing the disposable income and confidence of Indian tourists.

ITHL was enjoying an operating profit margin (OPM) in the range of 30% till the fiscal year ended March 2008 (FY 2008). Due to severe squeeze in business, OPM compressed to21.2% in FY 2009 and slightly recovered to 23.1% in FY 2010. With demand reviving and due to various cost control measures undertaken by the company, OPM can return to near 30%level in years to come. Income from operations registered a robust growth of 51% to Rs32.98 crore in the quarter ended June 2010. OPM expanded a whopping 490 bps to 26.4%,boosting operating profit 86% to Rs 8.72 crore. Net profit increased 156% to Rs 4.27crore.

We expect ITHL to register sales and net profit of Rs 140.87 crore and Rs 18.29 crore,respectively, in FY 2011. On equity of Rs 7.99 crore and face value of Rs 10 per share,EPS works out to 22.9. The share price trades at Rs 252. P/E works out to just 11.Expected EPS for FY 2012, is around Rs 29 and P/E to 8.7. This is low for an ITC group company in a healthy growth mode.

Source: Capitaline Databases

Following are the famous quotes and sayings in Stock Market:-

1. “ A stock broker is one who invests other people’s money until its all gone.”
-Woody Allen, American Film Maker

2. “ Average investors who try to do a lot of trading will only make their brokers rich.”
-Michael Jenson, Finance Professor -Harvard.

3. “ To the investment manager, soft dollars are someone else’s money and hard dollars are your own.” -Dean own.”Ibid.

4. “ Nobody works as hard for his money as the man who marries it.”
-Kin Hubbard, 1868-1930, American Journalist.

5. “ There are three classes of people who don’t think markets work: the Cubans, the North Koreans and the active find managers.”-Rex Sinquefield, Dimensional Fund Managers.

6. “ It is difficult to find a portfolio to find a portfolio manager who will continue to provide superior performance after he is retained”-Eugene B. Burroughs

7, “ We have two classes of forecasters: Those who don’t know and those who don’t know they don’t know.”-Jhon Kenneth Galbraith.

8. “ The periods of boredom have grown shorter and shorter-and the terrors last a bit longer.”
-Arthur Cashin, Floor Broker, New York Stock Exchange.

9. “ Stocks are bought on expectations, not facts.”
-Gerald M. Loeb

10 “ I never attempt to make money on the Stock Market. I buy on the assumption that they could close the market the next day the next day not reopen it for five years.” -Warren Buffet.

12. “ Give me a stock clerk with a goal and I’II give you a man who will make history. Give me a man with no goals and I’II give you a stock clerk.” -James Cash.

13. “ Sometimes your best investments are the ones you don’t make.’ -Donald Trump.

14. “ Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised.” -Warren Buffet.

15. “ Gambling with cards or dice or stock is all one thing. It’s getting money without giving an equivalent for it .” Henry Ward Beecher.

16. “ Never make forecasts, especially about the future.” -Samuel Goldwin.

17. “ Sell to the sleeping point.—if you are troubled by an investment but still desire to hang onto it,sell just enough so that you can feel that you’ve ‘dealt’ with the anxiety and can calmly sleep at night, but you’ve kept enough to feel comfortable with what you have left.”

18. “ Obvious prospects for physical growth in a business do not translate into obvious profits for investors” -Ben Graham in The Intelligent Investor.

19. “Practicing the Golden Rule is not a sacrifice; it is an investment.” -Anonymous.

20. “ You’re neither right nor wrong because other people agree with you. You’re right because your facts are right and your reasoning is right-and that’s the only thing that makes you right.” -Warren Buffett, the world’s most successful investor.

21. “I know from experience that nobody can give me a tip or a series of tips that will make more money for me than my own judgment.” -Jesse Livermore, the greatest stock market trader who ever lived.

22. “ No matter what information you have, no matter what you are doing, you can be wrong.” -Larry Hite, Mint Investment Management Company

23. “ You cannot teach a man anything; you can only help him to find it within himself.” -Galileo Galilei.

24. “ Investment, if you like, is a math exam where the powers that be work out the answers based on new formulae they develop after your papers have been handed in.” -Dr Marc Faber, international stock market guru (famous bear).

25. “ The investor’s chief problem-and even his woarst enemy is likely to be himself.” -Peter Lynch.

26. “ The only way to “beat an index” is to invest in something other than the index. Why would you, when the only source of long-term risk and return data is the index ?” -Hebner, Mark, Founder, Index Funds Advisors, Inc.

27. “ Market Timing is a wicked idea. Don’t try it ever.” -Ellis, Charles D.

28. “ There are two kinds of investors, be they large or small: those who don’t know where the market is headed, and those who don’t know that they don’t know. Then again, there is a third type of investor –the investment professional, who indeed knows that he or she doesn’t know, but whose livelihood depends upon appearing to know.” -Bernstein, William.

29. “ Markets can remain irrational longer than you can remain solvent” -John Maynard Keynes.

30. “ The average long-term experience in investing is never surprising, but the short term experience is always surprising. We now know to focus not on rate of return, but on the informed management of risk.” -Ellis, Charles.

31. “ Since the dawn of capitalism, there has been one golden rule: “If you want to make money, you have to take risks.” -Announncer.

32. “ If your broker [or investment advisor] is not familiar with the concept of standard deviation of returns, get a new one.” -Bernstein, William.

33. “ Investors must keep in mind that there’s a difference between a good company and a good stock. After all, you can buy a good car but pay too much for it .” -Richard Thaler.

34. “ Buy on the cannons, sell on the trumpets.” -Old French Proverb.

35. “ The four most dangerous words in investing are, It’s different this time.” -Sir John Templeton, legendary investor.

36.“ Design a portfolio you are not likely to trade… akin to premarital counseling advice; try to build a portfolio that you can live with for a long, long time.” -Robert D. Arnott, President, First Quadrant Corp.

37. “ Most investors don’t even stop to consider how much business a company does. All they look at are earnings per share and net assets per share.” -Kenneth L Fisher, stock market guru.

38. “ Investment planning is about structuring exposure to risk factors.” -Fama , Gene Jr.

39. “ Emotions are your worst enemy in the stock market.” -Don Hays.

40. “ A maket is the combined behavior of thousands of people responding to information, misinformation and whim.”
-Kenneth Chang.

41. “ It is the part or wise man to keep himself today for tomorrow, and not venture all his eggs in one basket,” -Miguel de Carvantes

42. “ Risk is good. Not properly managing your risk is a dangerous leap” -Evel Knievel, Motorcylist.

43. “ The essence of effective portfolio construction is the use of a large number of poorly correlated assets” -William Bernstein.

44. “ Sometimes your best investments are the ones you don’t make.” -Donald Trump.

45. “ Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised.” -Warren Buffet.

46. “ The most predictable thing about the stock market is the number of experts who take credit for predicting it.” -Dave Weinbaum

47. “ Value Investing-The art of buying low and selling lower.” -Anon.

48. “ P/E ratio- The percentage of investors wetting their pants as this market keeps crashing.” Anon

49. “ Countless incidents have demonstrated that a dollar of reported profits can easily prove to be worth less than 100 cents once the dust has settled.” -Martin S Fridson , director, US investment bank Merrill lynch.

50. “ Every set of published accounts is based on books which have been gently cooked or completely roasted.” -lan Griffiths.

51. “ Astronomic price earnings ratios rarely last for long, as they thrive on excessive hope and for that reason the most has to be made of them while they persist.” -Jim Slater, Private client guru.

52. “It’s human nature to find patterns where there are none and to find skill where luck is a more likely explanation (particularly if your’re the lucky [mutual fund] manager).” -Bernstein,William.

53. ”To invest blindly in the TMT (Technology,Media and Telecom) sector is a bit like assuming someone’s bound to be good at cricket just because they’re Australian.” -Jonathan Maitland.

54. “ It is a myth that profits are higher in fast growing industries.” -John Kay, Economist and academic.

55. “ The children (or designated heirs) of a great CEO are about as likely to excel as replacement CEOs as are any of Beethoven’s children to write great symphonies.” -Robert A G Monks.

56. “ Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.” -Peter Lynch.

57. “ 90 % of the people in the stock market, professionals and amateurs alike, simply haven’t done enough homework,”
-William J.O’Neil.

58. “ I have probably purchased fifty ‘hot tips’ in my career, maybe even more. When I put them all together, I know I am a net loser.” -Charles Schwab.

59. “ The problem with the person who thinks he’s a long-term investor and imperivous to short-term gyrations is that the emotion of fear and pain will eventually make him sell badly.” -Robert Wibbelsmen.

60. “ The function of the press in society is to inform, but its role in society is to make money.” -A. J. Liebling.

Automobile Corporation Of Goa Ltd (at 310 Rs )

Automobile Corporation of Goa Ltd. (ACGL) , the first major engineering unit to be set up in Goa, a tiny but picturesque state of India, was jointly promoted in 1980 by Tata Motors Ltd , the largest automobile manufacturer in the country and EDC Ltd (formerly known as Economic Development Corporation of Goa , Daman & Diu Ltd.) .

Right from the inception, ACGL, with its emphasis on Quality, Safety, Productivity & Reliability in line with the Tata ethos has been endearing itself to its customers.

The Company manufactures Sheet metal components,assemblies and Bus coaches at its factories situated at villages Honda & Bhuimpal, Goa.

The Company is in operation since 1982 and is a major supplier of pressings and assemblies to Tata Motors' Pune factory. To meet “Just In Time” supplies to the customer, the Company has set up a Press shop at Jejuri, Pune.

The Sheet Metal Division at its three units has High tonnage presses with an output of more than 17,620 tonnes that have ensured complete customer satisfaction.

In 1987, the Company entered into a Technical Collaboration Agreement with Fuji Heavy Industries Ltd., Japan,makers of Subaru car for various models of chassis mounted bus bodies and set up a full fledged Bus Body Building Division.The company had a further agreement with FHI Ltd. to build Monocoque buses in 1995.

Excellent production facilities,highly skilled and continuously trained manpower of Engineers,Technicians and other staff have ensured world class products and services. In its quest towards business excellence , the company practices Integrated Management Systems including Quality,Environment,Health and Safety in all its operations.
The Company is professionally managed. The Company’s shares are listed on The Stock Exchange, Mumbai. (505036)

see financial details in 2007 they gave rights at 475 rs.

http://cmlinks.com/moneypore/profilenew/financial.asp?mainopt=8&cocode=44

BUY AT CMP 310 EXPECTING 450 IN NEXT 3 MONTHS