A Time Communications Publication 1

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T I M E S

ATIMECOMMUNICATIONSPUBLICATION
VOL.XXIIINo.34Monday,30June6July2014Pages20Rs.15


Marketsstruggleathigherlevels
BySanjayR.Bhatia
The markets continued to struggle at higher levels and displayed a range bound trend with a negative bias. The FIIs
remained net buyers in the cash segment but were net sellers in the derivatives segment. Domestic institutional
investors (DIIs) continued to press sales and were net sellers for the week although they did turn into net buyers on
somedays.TheRupeecontinuedtotradeabovethe60markagainsttheUSDollar.
The breadth of the market remained positive although the benchmark indices fell indicating that buying was
concentratedinmidcapandsmallcapstockswhilesellingwaswitnessedinindexheavyweights.Thevolumesrecorded
during the week remained low indicating lack of interest among participants or indecisiveness due to uncertainty of
trend ahead of the Union Budget. Global market cues, too, remained subdued and were range bound with no major
triggersforabroadbasedrally.Crudeprices,ontheotherhand,sustainedathigherlevelsduetothecontinuingtensions
in Iraq. On the domestic front, the Central government deferred its decision on oil and gas prices by another three
months.
Technically, the prevailing negative technical conditions weighed on the market sentiment leading to selling
pressure.TheStochastic,MACD,RSIandKSTareallplacedbelowtheirrespectiveaveragesonthedailycharts.Further,
the RSI and Stochastic are also placed below their respective averages on the weekly charts. Moreover, the RSI is still
placedintheoverboughtzoneontheweeklycharts.Thesenegativetechnicalconditionswouldleadtofurtherboutsof
sellingpressure.
However, the prevailing positive technical
conditionsstillholdgoodandwouldleadtobuying
support at lower levels. The KST and MACD are
placed above their respective averages on the
weekly charts. The Nifty remains placed above its
50day SMA, 100day SMA and 200day SMA.
Further, the Niftys 50day and 100day SMA are
placed above the Niftys 200day SMA, which is
known as the Golden Cross breakout. These
positive technical conditions would lead to buying
supportatlowerlevels.
The +DI line has slipped below the ADX line but
is still placed above the DI line on the weekly
charts. Further, the +DI line is placed above the 38
level on the weekly charts but has come off its
recent highs indicating that buyers are booking
profits regularly. The markets lack clear direction
ahead of the Budget and the lack of buying support

A Time Communications Publication 2
at higher levels is turning the markets weak. If the Nifty slips below the 7400 level, then it is likely to fall further and
could test the 72297200 support levels. However, if the Nifty manages to move up and sustains above 7600 level, it
couldtestthe8000levelandasustainablerallycouldunfold.Inthemeanwhile,themarketswouldcontinuetotakecues
fromthenewgovernmentspolicydecisionsandnewsflowontheforthcomingBudgetsessionnextmonth,theRupee
Dollarexchange,globalmarketsandthecrudeprices.
Technically,ontheupside,theBSESensexfacesresistanceat the25420,25700and26000levelsbutseekssupport
at the, 24750, 24500, 24000, 23408 and 22323. The support levels for the Nifty are placed at 7402, 7229, 7118, 7067
and6872whileitfacesresistanceat7593,7675,7700,7750and7800levels.
InvestorsshouldavoidlongpositionstilltheNiftyclosesabovethe7600level.

Rain,rain,pleasebegin
ByFakhriH.Sabuwala
TheModisarkaarcompletesitsfirstmonthinofficeandissatisfiedwiththeworkdonebyit,PrimeMinisterNarendra
Modi acknowledges that thereare areaswherewe need to improve. He also empathized that unlikethe previous
government he did not have theluxury of a honeymoon period.Hisevery movewasclosely watched and commented
upon.
Althoughheenjoyedtheluxuryofaweakopposition,someofhisdecisionslackpoliticalacumen.Whiletherailway
fare hike was the need of thehour, it overdone and hit a largeportion of Mumbaispopulation. Theangerof theBJPs
allies at the rail fare hike indicates that it may have cost them the luxury of an easy win in the Maharashtra assembly
elections. Although the rollback of second class suburban fares did save the situation, it lefta scar on the image of the
government,whichwasonepreparingtotakesomeharshmeasures.
Taking a cue from the rollback of suburban train fare, the Modi cabinet possibly decided to defer the gas price rise
andputonholditsdecisiontoraisepetrol,dieselandkeroseneprices.Forthefirsttime,Modi'sneweconomics(Modi
nomics) stood diluted and politics wasonce again seen to score over economics. While the BJP won the election by
makingeconomicsthepoliticsofthenationbutgoverningrunningisadifferentballgamealtogethersincepoliticsis a
populism and not economics! The impact of this was visible as it halted thepreBudget rally midway and left the
marketgaspingforafreshairinitsfirstsprintsession.
InflationisgivingthesleeplessnightstothegovernmentingeneralandthePMandFMinparticular.Taminginflation
isbecomingmuchmoredifficultwiththedarkgreycloudsplayingtruant.ItistheendofJuneandmostpartsofIndiaare
yettoexperienceadownpour.Pricesofessentialsarerisingandthereisverylittlethatthegovernmentcandoevenby
managingthedwindlingsupplyside.
Lowrainfall will not only hit agricultureandagrobased industriesbut also affect the overall demand and growth
prospects. Initially the impact is noticeable only in the agrirelated segments butthedownturn thereafter will have a
viral impact on all the other segments too. Deficit rainfall will have a direct impact on our $2 trillion economy and the
companies that directly or indirectly depend on the farm sector for raw materials and for rural consumption of their
products.
Weak monsoon will upset plans of the new government and derail the nation's wheels of growth. Modinomics,on
whichthemarketwasbooming,mayhavetoretraceitsforwardmarchandadjusttothebitterrealitiesoftheday.The
damage may be contained to a great extent if the Rain Gods smilein early July 2014 and retain the wet spell. But will
theysmile?Thatisabilliondollarposer.
TheimmediateimpactofthisdevelopmentcanbeseenonrestrictingtheupsideinstockslikeJainIrrigation,Rallis,
KaveriSeeds,Mahindra&MahindraFinancials,HindustanUnilever,Escorts,KirloskarBrothers,Mahindra&Mahindra,
RCF,BajajAuto,HeroMoto,BalrampurChini,UPL,Marico,GodrejConsumerProducts.
The list may be limited for now to theAgriand Consumption stocks but the downward slope may trigger a viral
impact that may turn out to be the toughest test for the NDAModisarkaar. So, the rainsalone can rescue the Modi
sarkaaratthisstage!
Ifthesituationdoesnotimprove,wemayhavetowaitforlongtobreachtherecenttopontheupsideandnightmares
mayhaunttheDalalStreettillthen.

BAZAR.COM

A Time Communications Publication 3
Correctionstillon
ByHitendraVasudeo
Last week, the BSE Sensex opened at 25108.08
attained a high at 25427.80 and fell to a low
24878.66beforeitclosedtheweekat25099.91and
showed a net fall of 5.58 points on a weektoweek
basis. A doji candlestick pattern was formed on the
weekly chart, which indicates sideways volatility
duringtheweekendedFriday,27June2014.
Further rally can continue if it sustains above
25735. Till then, expect profit booking or selling
pressureonthespikesonSensexandSensexrelated
stocks. Specific sectors will perform in a selective
market henceforth. The bull band wagon that was
witnessed in the last couple of months has
momentarily been halted. There is no denying that
the rally would continue for a few months. Intra
day, intraweek or intraday month corrections will
continuebuttherallywillnotalwaysbesmoothforeachperiod.
Support will be at 24878 and 24644. Weekly resistance will be at 2545726010. Weekly support will be at 24904
248782465524351.
Onthemonthlychart,ifwelookatthemacrocountthenWave1endedat4643inSeptember1994andWave2endedat
2904 in May 2003. Wave 3 ended in January 2008 at 21206 whereas Wave 4 ended in August 2013 at 17448. Wave 5
projection can, therefore, be as low as 28800 but can exceed to 35000. A major problem on the monthly chart can
developbelow17448.Broadly,thecorrectionsareforbuyingaswemaysurpass28800induecourseoftime.
ThefallontheSensex/Niftyin2008wasof914monthsdurationfromtheJanuary2008peak.ThebreakoutinMarch
2014 happened. So ifwe look at 9 month to 14months, the rallycan last between December 2014 andMay 2015. The
fallwas63.7%fromthe2008peakof21206to7697.Ifweaddthesamepercentage,thentheupsidetargetis34715.
BSEMidCapIndex
The range for this index is 93188763. Correction will be seen below 8763 and the upside momentum will continue
above9318.
BSESmallCapIndex
Therangeforthisindexis102039478.Correctionwillbeseenbelow9478andupsidemomentumwillcontinueabove
10203.
BSEBankex
Deepercorrectionisbelow16845.
Strategyfortheweek
TraderslongandholdingstockscankeeptheSensexstoplossat24000.Usetherisefromthecurrentlevelto25700to
bookprofitsonlongpositions.Buyifabreakoutandcloseabove25700iswitnessed.


WEEKLY UP TREND STOCKS
Let the price move below Center Point or Level 2 and when it move back above Center Point or Level 2 then buy with
whatever low registered below Center Point or Level 2 as the stop loss. After buying if the price moves to Level 3 or above
then look to book profits as the opportunity arises. If the close is below Weekly Reversal Value then the trend will change from
Up Trend to Down Trend. Check on Friday after 3.pm to confirm weekly reversal of the Up Trend.

Scrips

Last
Close
Level
1
Level
2
Center
Point
Level
3
Level
4
Relative
Strength
Weekl y
Reversal
Value
Up
Trend
Date

Stop
Loss
Buy
Price
Buy
Price
Book
Profit
Book
Profit
LAKSHMI MACHI NE WO. 3643.00 3485.0 3518.7 3609.3 3733.7 3948.7 79.4 3582.0 09-05-14
RELIANCE CAPITAL 634.95 611.9 614.3 632.5 653.2 692.1 79.1 624.6 16-05-14
TRADI NG ON TECHNI CALS


A Time Communications Publication 4
BHARAT FORGE 608.40 578.8 587.6 599.6 620.4 653.2 79.1 577.3 09-05-14
PRISM CEMENT 74.85 67.1 68.5 73.5 79.9 91.3 78.4 72.5 21-02-14
ENGINEERS INDIA 312.55 295.6 296.4 311.7 327.8 359.1 78.3 305.8 07-03-14



EXIT LIST
Scrip
Last
Close
Sell
Price
Sell
Price
Sell
Price
Stop
Loss
Target
1
Target
2
UNITED SPIRITS 2500.00 2636.22 2682.00 2727.78 2876.00 2248.2 1860.2

BUY LIST
Scrip
Last
Close
Buy
Price
Buy
Price
Buy
Price
Stop
Loss
Target
1
Target
2
ABB INDIA LTD 1100.00 1033.22 1009.50 985.78 909.00 1234.2 1435.2
ABBOTT INDIA 2151.00 2005.39 1953.00 1900.61 1731.00 2449.4 2893.4
BERGER PAINTS IND. 283.70 271.31 265.62 259.94 241.55 319.5 367.6
BIOCON 524.40 494.86 483.62 472.39 436.00 590.1 685.4
CENTURY PLYBOARD 75.35 71.94 69.95 67.96 61.50 88.8 105.7
CENTURY TEXT.& IND. 583.00 555.39 541.03 526.66 480.15 677.1 798.9
CITY UNION BANK 74.90 74.81 73.52 72.24 68.10 85.7 96.5
CMC 1980.00 1819.58 1762.00 1704.42 1518.00 2307.6 2795.6
GREAVES COTTON 114.10 108.26 105.90 103.54 95.90 128.3 148.3
J AGRAN PRAKASH. 130.00 124.99 122.12 119.26 110.00 149.2 173.5
J .M.FINANCIAL 41.60 41.40 39.85 38.30 33.30 54.5 67.6
LUPIN 1048.00 999.90 983.50 967.10 914.00 1138.9 1277.9
PFIZER 1417.00 1358.32 1330.00 1301.68 1210.00 1598.3 1838.3
PRISM CEMENT 74.85 73.13 70.45 67.77 59.10 95.8 118.5
RELIANCE CAPITAL 634.00 615.28 599.00 582.72 530.00 753.3 891.3
SOUTH INDIAN BNK 30.90 29.50 29.00 28.50 26.90 33.7 37.9
STRIDES ARCOLAB 630.50 592.76 575.82 558.89 504.05 736.3 879.9
TIMKEN INDIA 269.95 256.74 250.30 243.86 223.00 311.3 365.9
TATA COMMUN. 379.75 373.53 367.70 361.87 343.00 422.9 472.3


PUNTER'S PICKS
Note: Positional trade and exit at stop loss or target whichever is earlier. Not an intra-day trade. A delivery
based trade for a possible time frame of 1-7 trading days. Exit at first target or above.

Scrips
BSE
Code
Last
Close
Buy Price
Buy On
Rise
Stop Loss Target 1 Target 2
Risk
Reward
PHOENIX LAMPS 517296 163.75 160.00 164.80 152.10 172.7 185.4 0.76
TALBROS AUTOMOT. 505160 78.40 75.00 81.00 71.90 86.6 95.7 1.27

WEEKLY DOWN TREND STOCKS
Let the price move above Center Point or Level 3 and when it move back below Center Point or Level 3 then sell with
whatever high registered above Center Point or Level 3 as the stop loss. After selling if the prices moves to Level 2 or
below then look to cover short positions as the opportunity arises. If the close is above Weekly Reversal Value then the
trend will change from Down Trend to Up Trend. Check on Friday after 3.pm to confirm weekly reversal of the Down
Trend.

Scrips

Last
Close
Level
1
Level
2
Center
Point
Level
3
Level
4
Relative
Strength
Weekl y
Reversal
Value
Down
Trend
Date

Cover
Short
Cover
Short
Sell
Price
Sell
Price
Stop
loss

ARVIND REMEDIES 38.05 33.5 36.8 38.8 40.0 40.8 37.99 38.36 27-06-14
ITC 319.85 287.2 309.8 322.4 332.4 335.0 39.25 331.60 23-05-14
BOMBAY RAYON FASH. 165.65 155.0 162.6 167.2 170.3 171.8 39.90 171.10 30-05-14
GODFREY PHILLI PS 2805.00 2647.3 2764.3 2840.7 2881.3 2917.0 40.46 2911.75 30-05-14
IDEA CELLULER 130.50 116.7 126.9 133.4 137.1 140.0 40.48 136.27 27-06-14

A Time Communications Publication 5

PlastiblendsIndiaisattractingtheattentionofinvestorsasthecompanyisexpectedtoreportgoodgrowthover
thenextfewyears.
EsselPackagingstockmayhitahighofRs.175.
TheBancoProductsstockhasgivenastrongbreakout.Goodgrowthisexpectedinthecompany.
SutlejCottonisanunderpricedstockthatmayhittheRs.450markinfuture.
MarketmenexpectagoodturnaroundinKilburnEngineering.
AfterafundboughtthesharesofISGECHeavyEngineeringlastmonth,thestockisattractingattentionofinvestors.
Uflex,whichpostedanEPSofRs.27inFY14isallsettogarneranEPSofRs.35+inFY15.Theshareisexpectedto
touchRs.175mark.
SuperhouseisexpectedtopostanEPSofRs.40inFY15againsttheEPSofRs.33.4inFY13.Theshareisbeing
corneredbyHNIs.AconservativeP/Emultipleof5willtakeitssharepricetoRs.200.
SharesIFGLRefractorieshavebeenboughtbyHNIsandinformedpersonsonthebackoftherobustdemandforits
productsandmajorexpansionatitsoverseassubsidiaries.ItsFY14EPSofRs.18islikelytorisetoRs.25inFY15and
thesharemaytouchRs.250markonaP/Eratioof10asagainsttheindustryaverageof24.
AmarjothiSpinninghasnotparticipatedintherallyoftextileshares.ItsFY14EPSofRs.30willtakeitsshareprice
tooverRs.120mark.
DeepakFerilizersisanunderpricedshareconsideringitsexpectedEPSofRs.35inFY15asagainsttheFY14EPSof
Rs.27.ThesharehasallthepotentialtotouchRs.200mark.
TechnocraftIndustriesissettoclockanEPSofRs.45inFY15.(Rs.34inFY14).Theshareispoisedtocrossthe
Rs.270markataP/Eofonly6.
AnAhmedabadbasedanalystrecommendsMoldtekTechnoasahotbuyfortheweek.
ByAmitGupta
DLink(India)Ltd.(Code:533146) LastClose:Rs.55
DLink (India) is into marketing and distribution of networking, broadband, digital, voice and data communication
products of its parent, DLink Corporation of Taiwan, which is globally renowned for its networking products and
solutionsandhaspresencein67countries.Itdistributesswitches,routers,modems,voiceoverinternetprotocol(VOIP)
products, surveillance equipment, print servers, Ethernet cards and broadband equipment. It has a strong demand for
networkinginfrastructureinIndia.
EnterpriseITspendinghasgrownfromUS$28.5billioninCY10toUS$39.7billioninCY13ataCAGRof12%,which
will lead to a strong demand for networking products like routers, switches and access points to storage and
surveillanceproductsacrossallverticals.
Also, the robust growth in mobile connectivity the number of subscribers has zoomed from 26 crore in FY08 to 90
croreinFY14ataCAGRof23%andbroadbandpenetrationhasalmostquadrupledfrom10lakhinFY08to1.5crorein
FY14ataCAGRof25%,whichispushingthedemandforPCs,tablets,smartphonesfornetworking,especiallyinWiFi
networks.
Its sales have grown at a CAGR of ~56% during FY1114 on the back of aggressive marketing and steps taken to
enhancecustomersatisfactionlikeensuringapresenceatthelowestpricepoint,augmentingdistributionnetworks,etc.
OnahigherrevenuebaseofFY14,weexpecttherobustgrowthtocontinueataCAGRof~24%throughFY1417dueto
the following reasons. It is a market leader in important product categories such as Switches (1
st
with 37% market
share),Wireless(1
st
with40%marketshare),Routers(2
nd
with37%marketshare).
Robust growth expected in active product at a CAGR of 20% through FY1417 and passive product at a CAGR 40%
throughFY1417categories.
Strong parental support by way of a pipeline of a latest and innovative products as well as working capital cycle
management.
ItspanIndiadistributionnetworkwithover18branchoffices,90distributorsatNationalandRegionallevelsacross
Indiawith500dealersand5000resellersallowsittoreacheverynookandcornerofIndia.
TOWER TALK
BEST BET

A Time Communications Publication 6
Enterprise IT spending is expected to grow at a CAGR of 12% and reach US $50 billion bythe end of CY15 from US
$38billioninCY13.WiththespendingonITontherise,networkingproductsandservices willcontinuetobeingreat
demandintheforeseeablefuture.
Theemergenceofanaffluentandgrowingmiddleclassistriggeringthedemandinthemobileandinternetsegments
and fuel the increase in 3G/4G subscribers and broadband users thereby creating greater demand for networking
productsbyindividualusers.
Itsexcellentservicequalitymaintainedwithinitiativeslikepickupanddropfacilityfordysfunctionalproductsfrom
the clients place helps it retain existing clients and obtain repeat business as well as acquire new clients through
referrals.
Valuation:WerecommendtoBuyDlinkforapricetargetofRs.70ata
P/Emultipleof10.0xtoitsFY16EEPS.Weexpectrevenueandprofitsto
post a CAGR of 25% and 28% respectively, through FY1416. At the
CMP, the DLink stock trades at 7.6x and 6.1x times its estimated
earnings for FY15 and FY16 on a diluted equity base (Equity issued to
fundtheacquisitionofTeamF1Networks).
Technical Outlook:The DLink stock is very strong on the daily chart as it has been making higher highs and higher
lows.Itisverystronginalltimeframesandhasbeentradingaboveallimportantmovingaverageslike200DMA&100
DMAandhasformedanascendingtrianglepatterninthelongertimeframes.
Start accumulating it at the current level Rs.56 andon dips to Rs.49 for mediumtolongterm investment and price
targetofRs.70+inthenext6months.

ExcelIndustries:Forfertilegains
ByDevdasMogili
ExcelIndustriesLtd.(EIL)isaMumbaibasedcompany,whichispartofA.C.ShroffsExcelGroupincorporatedin1960.
The other group companies include Excel Crop Care. It manufactures Industrial Chemicals, Speciality Chemicals, Bio
fertilizers and Bioremediation technologies. Its manufacturing facilities are at Roha, Lote Parashuram in Maharashtra
andanotherunitatAhmedabadinGujarat.Mr.AshwinShroffisthechairmanandmanagingdirectorofthecompany.
EILs product portfolio includes a range of Agrochemical Intermediates, Pharmaceutical Intermediates, Polymer
Input Materials, Speciality and Performance Chemicals. Its business can be broadly classified in the five divisions:
Chemicals,PolymerInputs,Veterinary,EnvironBiotechandPharmadivisions.
Ithasalsolaunched3newformulationsunderthebrandnameofCelcron,HexzolandBipex.ItsChemicalsBusiness
divisionhascommissionedtwoplantstomanufacture200TPAofminingchemicalsand200TPAofspecialitychemicals.
As a part of diversification, it has commissioned a plant to manufacture of Celrich at Ahmedabad with a treatment
capacity of 500 MT of waste per day. The companys prestigious CWM (Centralized Waste Management) plant is
considered one of the best waste treatment plants in the country. The biofertilizer manufactured at this plant is sold
underthenameofCelrichbyitsgroupcompanyExcelCropCare.
New Projects/Expansion: EIL has set up a new plant at its Lote Parshuram site to manufacture pharmaceutical
intermediates. The company is developing the market for certain identified intermediates and has developed their
manufacturing processes through its Research & Development (R&D). Certain veterinary products are also being
introduced.
Performance:ForFY14,EILrecordedconsolidatedrevenueofRs.418.92crorewithnetprofitofRs.17.99croreposting
anEPSofRs.16.50.
Financials:(Rs. in lakh) Standalone Consolidated
Particulars Q4FY14 Q4FY13 FY14 FY13 FY14 FY13
Total Income 11226.62 9287.59 41691.93 38411.30 41891.93 38411.30
Total Expen 10301.54 9388.27 38873.16 35425.31 38893.04 35432.07
Other Incom 279.54 296.62 456.23 405.12 518.10 429.83
Finance Cos 336.59 289.71 1221.58 1220.78 1221.87 1220.99
Tax Expense 4.74 (58.06) 305.27 688.79 316.14 695.06
Net Profit 863.29 (35.91) 1748.15 1481.56 1798.98 1493.01
KeyFinancialRatio:
Y/EMar NetSales EBITDA PAT EPS
2013 353.7 19.5 12.3 3.5
2014 487.6 21.7 13.6 3.8
2015E 614.4 27.6 17.8 5.0
2016E 757.7 34.1 22.3 6.3
STOCK ANALYSI S

A Time Communications Publication 7
Equity (FV:Rs.5) 545.28 545.28 545.28 545.28 545.28 545.28
Re Ex Re Reserves - - 14119.45 12849.77 14326.88 13006.36
EPS (Rs) 7.92 (0.33) 16.03 13.59 16.50 13.69
Latest Results: It posted highly encouraging standalone results for Q4FY14 as it recorded Total Income of Rs.112.27
crore with Net Profit of Rs.8.63 crore against a Loss of Rs.35.91 crore in Q4FY13. Thus it posted an EPS of Rs.7.92 for
Q4FY14asagainstanegativeEPSofRs.0.33inQ4FY13.
Financials:EILhasalowequitybaseofRs.5.45crorewithasharebookvalueofRs.136.37andaprice:bookvalueratio
of0.93.Ithasalowdebt:equityratioof0.57withRoCEof16.20%andRoNWof11.49%.
ShareProfile:ThecompanyssharewithafacevalueofRs.5islistedontheNSEandBSEundertheBgroup.Itsshare
price hit a 52week high/low of Rs.170/Rs.56.20. At its CMP of Rs.170.20, it has a market capitalization of just Rs.185
croreagainstitstotalrevenueofRs.419croreindicatingaveryattractivemarketcap:salesratio.
Dividends:Thecompanyhasbeenpayingdividendsasfollows:FY1475%,FY1360%,FY1240%,FY1175%(incl.
SpecialDividendof25%),FY1040%,FY0910%,FY0820%.
Shareholding Pattern: The promoters hold 42.04% equity stake while the balance 57.96% is with noncorporate
promoters,institutionsandtheinvestingpublic.
Prospects: Agrochemicals continue to be the leading business segment of the company contributing over 50% of its
revenue.ThedemandforagriintermediatescontinuestobestronginFY15aswell.
Thereisasteadilygrowingdemandforthecompanysminingchemicalsbasedonthetinpricerulingintheglobalmetal
marketanditsabilitytomeetthedemand.
EIL has developed new customers for its speciality products and is introducing some new products whose full
potentialwillberealizedinthecomingyears.ItsstrongR&D basewillenableittodevelopadvancedintermediatesfor
the newly launched Herbicides and Fungicides. It has also taken steps to develop the new business of Electronic
ChemicalsthatfindapplicationintheSolarPhotovoltaicIndustryandinDisplaydevices.
ThevolumesofitsWatertreatmentchemicalsarelikelytogrowowingtoitsshiftinthepricingstrategy.Thedesign
and construction of the facility to manufacture Pharmaceutical intermediates has also been completed and trial
productionsareunderway.TheoutlookforitsOrganicWasteConverter(OWC)businessisalsoencouraging.
Forcentralizedplants,itsfocusistoprovideWasteToEnergy(WTE)solutionsatacentralizedleveltoUrbanLocal
Bodies(UBL).TheirurgentneedtofindWTEsolutionswillopenupalargenumberofprojectsacrossthecountry.Since
the ULBs seek integrated operations like collection, transportation, treatment, recycling and final sanitary landfill, EIL
canofferitsmicrobialprocessforacceleratedcomposting,whichcanbea15stepintheintegratedprocess.Theproject
in Mauritius on the process licensed by the company is running very successfully and is likely to open up further
opportunities for the company both in India and overseas. If the present NDA Governments penchant for creation of
megaandsmartcitiesinthecountryisanythingtogobytheprospectsforwastedisposalcompaniesisextremelybright.
EIL is also venturing into Veterinary Medicines and trial productions have begun. With the introduction of several
newbusinessareas,EILshealthygrowthiscertain.
Conclusion: Excel Industries is a pioneer in indigenous chemical technology and sustainable waste management.It is
alsooneofthepremiermanufacturersofSpecialityPolymerAdditivesandhighqualityVeterinaryAPIsinthecountry.
AtitsCMPofRs.170,theEILsharediscountlessthan10.5timesitsFY14EPSofRs.16.50againsttheindustryaverage
P/E multiple of around 21. Since the stocks of Agrochemicals and Speciality Chemical companies are fancied, the EIL
stock would attract attention on the bourses.
Considering its exuberant performance, good
earnings, low P/E multiple, high payouts,
attractive price:book value, market cap:sales,
professional and investorfriendly
management and bright prospects going
ahead,theEILshareoffersvalueformoney.It
may be picked up for fertile gains in the
mediumtolongterm. Moreover, the EIL
shareisavailableslightlybelowitsbookvalue
indicating a good margin of safety for risk
averseinvestors.

MARKET REVI EW
Better than stocks!
3500 sq. ft. carpet prime space in Bandra West, Mumbai
For sale, a 29-year old investment company holding 3500 sq. ft.
carpet area across two floors in superstructure with lift and terrace
available for residential or commercial use. Brand new construction.
Situated off Turner Road near Linking Road & S.V. Road junction, it
is 2 minutes walk from the station and 5 minutes drive from Western
Express Highway or Bandra-Worli Sea Link. Going cheap!
Interested parties please call 9820708361. Brokers excuse.

A Time Communications Publication 8
Marketssettleatadlower
ByDevendraA.Singh
The BSE Sensex (30share index) settled at 25,099.92 falling 5.59 points and the CNX Nifty closed at 7,508.80 edged
lower2.65pointsfortheweekendedFriday,27June2014.
Onthelastdayoftradingsession,theBSESmallCapindexmovedup40.91pointstocloseat10,022.29whiletheBSE
MidCapindexedgedup24.33pointstocloseat9,205.17.BoththeseindicesoutperformedtheSensex.
The market settled flat ending a tad weaker on global worries during the week. Key bourses fell in 3 out of the 5
tradingsessionsfortheweek.
Ontheinflationfront,Indiasheadlineinflationsurgedto6.01%inMay2014from5.2%inApril2014.Foodinflation
soaredto9.50%inMay2014from8.64%inApril2014.Pricesofnonfoodarticleswereupby4.94%inMay.
Manufacturedgoodsinflationcameat3.55%whileprimaryarticlesinflationwasat8.58%inMay2014.
Finance Secretary Arvind Mayaram said, I believe our potential growth rate is 8%. And to get there, we need to
develop resources. And that which we cannot generate domestically must come from outside and if it comes from
outsidethenwepreferitintheformofforeigndirectinvestment(FDI)ratherthanforeigninstitutionalinvestment(FII)
ifoverseasresourcesneedtobegeneratedtospureconomicexpansiontoitspotentiallevel.
Foreign investment is considered crucial as India needs an estimated $1 trillion in the 5year period ending March
2017 to overhaul its infrastructure of ports, airports and highways to boost growth. A decline in foreign investment
couldaffectthecountrysbalanceofpaymentsandtheIndiancurrency.
Overallinflowsgrew8%to$24.29billioninFY14from$22.42billioninFY13.Tofurtherattractforeigninflows,the
governmentplanstorelaxtheFDIpolicyinsectorssuchasDefence,RailwaysandConstruction.
An announcement made by Finance Minister (FM), Arun Jaitley, that in order to provide a fillip to the capital goods
and automobile sector and given the governments commitment to revive economic growth, it has decided to extend
duty concessions by 6 months up to 31 December 2014 beyond 30 June 2014. This was done in the wake of an
unprecedentednegativegrowthintheautomobileindustry.
In February 2014, the central government had reduced the excuse duty on small cars, motorcycles, scooters, 3
wheelers and commercial vehicles from 12% to 8%. On midsegment cars, it was reduced from 24% to 20% on large
carsdownfrom27%to24%andonSUVsfrom30%to24%.
Also, to stimulate growth in the capital goods and consumer durables sector excise duty was reduced from 12% to
10%onallgoodsfallingwithinChapters84&85oftheCentralExciseTariff.
Meanwhile,theConfederationofIndianIndustry(CII)welcomed thestatementofFMArunJaitleytofurtherextend
the stimulus provided on 17 February 2014 by way of reduction of excise duty up to 31 December 2014 on certain
goods.
CII hopes that further extension of the stimulus package will be considered by the government keeping in view the
negativegrowthinautomobilesaswellascapitalgoodssectorsduringFY15.
ThereservemoneywithReserveBankofIndia(RBI)jumpedRs1,714.1billion(11%)onaYoYbasisason20June
2014.Thereservemoneygrowthwasat5.6%inthesameperiodlastyear.TotalreservemoneyasonthisdatewasRs
17,226.3billion.
Thecurrencyincirculationwentup11.5%orRs1,413.5billiononaYoYbasisason20June2014.
BankersdepositwithRBIwasalsoupbyRs309.3billion(9.8%)YoYbasis.TotalbankersdepositwithRBIasonthis
datewasRs3,473.4billion.
OtherdepositswithRBIfellRs8.8billion(43.1%)onaYoYbasisason20June2014.TotalotherdepositswithRBIas
onthisdatewereRs11.6billion.
Onthemonsoonfront,themonsoonhascoveredhalfthenationtillmidJune.Theweatherofficehasforecastbelow
averagerainfallin2014duetofearsofElNino,aweathereventmarkedbythewarmingofseasurfacetemperaturesin
thePacificOceanthatcanleadtodroughtsintheAsiaPacificregionincludingIndia.
KeyindicesedgedweakeronMonday,23June2014,onsteepriseincrudeoilprices.TheSensexfell74.19points(
0.30%)tocloseat25,031.32.TheNiftywasdown18.10points(0.24%)tocloseat7,493.35.
KeyindicesregisteredgainsonTuesday,24June2014,onsome positivescenario.TheSensexrallied337.58points
(+1.35%)tocloseat25,368.90.TheNiftywasup86.85points(+1.16%)tocloseat7,580.20.

A Time Communications Publication 9
Key indices fell on Wednesday, 25 June 2014, on global worries. The Sensex lost 55.16 points (0.22%) to close at
25,313.74.TheNiftywasdown10.95points(0.14%)tocloseat7,569.25.
KeyindicesmovedloweronThursday,26June2014onhighcrudeoilprices.TheSensexfell251.07points(0.99%)
tocloseat25,062.67.TheNiftywasdown76.05points(1.00%)tocloseat7,493.20.
MarketperformancesettledonarisingnoteonthelasttradingsessiononFriday,27June2014onbuyingofstocks.
TheSensexedgedhigher37.25points(+0.15%)tocloseat25,099.92.TheNiftywasup15.60points(+0.21%)toclose
at7,508.80.
TheSensexslippedby5.59pointstocloseat25,099.92lastweek.MarketparticipantswillcloselylookattheBudget
sessionofParliament,whichislikelytobeginonMonday,7July2014.
TheCabinetCommitteeonParliamentaryAffairs(CCPA)hasdecidedthatthefirstbudgetofthePMNarendraModi
will be presented on Thursday, 10 July 2014. The Rail Budget will be presented on Tuesday, 8 July 2014, while the
EconomicSurveywillbetabledonWednesday,9July2014.
TheVoteonAccountapprovedbythepreviousParliamentendsonThursday,31July2014andanewBudgethasto
bepassedbythenewParliamentbeforethatdate.
Moreover,theelectionoftheDeputySpeakerwillalsotakeplaceduringtheBudgetsession.
Investors will closely watch the countrys monsoon rain for JulySeptember 2014, which is a crucial factor and will
decidethemarketscenarioahead.
On the global front, investors will focus on the Middle East crisis that will decide the global market movements in
future.

GURU SPEAK - By G. S. Roongt a

MarkettoremainvolatiletilltheBudget
Last week was influenced by the F&O expiry on Thursday, 26 June 2014. There was a huge outstanding position to be
squared up both by the Bulls & Bears. Because of this, no hectic movements were seen despite the fact that the global
situationremainstenseascrudeoilpricesflareduponaccountofthestrifeinIraqandtheweakmonsoonsituationin
India.
ThebullswereextremelyexcitedatNarendraModispositiveoutlookandactioninreformingtheeconomythrougha
liberalizedpolicyoutlook.Therecentrailwayfreighthikeandthesharphikeinimportdutyinsugarfrom15%to40%
andprovidinginterestfreeloansworthRs.14,000croretoenablethesugarmillstocleartheduesofsugarcanefarmers
weretwoimportantstepsinthatdirection.Besidesthis,ahikeinGaspriceisverymuchonitsagenda.Butlookingatthe
populardiscontentonrailwayfare&freighthike,thismovehasbeendeferred.
Ontheother hand,bears werebetting onhigherinflation,lowerfactoryproductionin May2014andfallingRupee
withcrudeoilpricesrisingglobally.Thus,higherstockpricesappearunsustainabletothemandledtoofprofitbooking.
The fight between the bulls and bears was like a tugofwar as both tried to pull the market to
theirsidebasedontheirvision,understandingandfutureoutlookabouttheeconomyandthestock
market.
TheBSESensexwhichsettledat25,105.50followedbyCNXNiftyat7511fortheweekendedon
Friday, 20 June 2014, has not moved significantly on either side and was extremely range bound
throughouttheweekneartothepreviousweeksclosing.TheSensexclosedat25099.92verynear
tothepreviousweeksclosingof25105.50asmentionedabovewhiletheNiftyclosedat7508.80on
the F&O expiry value to excess speculations in Nifty Futures. The Sensex fell 5.59 points while the
Niftylost2.65pointsfortheweekendedFriday,27June2014,whichcanbeignoredlookingtothe
increasedvolumesandoverboughtpositionsbothintheFuturesandOption(F&O)andcashsegmentsofstocksaswell
astheindexfutures.
The F&O position is fully settled, squared up and rolled over wherever feasible by both the bulls & bears in Nifty
futuresandindividualstocks.Therolloverisreportedtobenearly71%inNiftyFuturesandbetween65%and70%in
indexstocks.
Going forward, the Union Budget will be big trigger for the market. Anything may happen on this most important
eventfromthestockmarketpointofview.
Expectations built on the first budget of Prime Minister Narendra Modi after winning the election with an absolute
majoritywasasuresignofaneuphoricmarket.Captainsoftrade&industryareallhopingforsomeortheothersopsby

G. S. Roongta

A Time Communications Publication 10
way of relief in duty or reduction etc. But how long and how far it would be possible to satisfy all of them needs to be
seen?ItisindeedaherculeantaskandwhatwouldbetheimpactoftheBudgetisamatterofspeculationratherthanan
academicorintellectualexercise.
However,itiscrystalclearthatMr.NarendraModisBudgetwillbeasvibrantashespeaks,growthorientedandwill
attempt to remove the bottlenecks wherever possible to set the sectors free from bureaucratic controls. The Budget is
alsoexpectedtobereformoriented.Thus,itwillbealandmarkbudget.Buttheproblemisthatthemarketisalreadyup
by5000pointsandisalsooverbought.Inviewofthissituation,whowillcomeforwardtopulluporlistthemarketany
further fearing a trap on
account of the excess
speculativepositionbuilt.
Under such
circumstances, instead of
taking a big position in
anticipation of a good
budget, it would be better
to watch the situation
closely and act only when
you are sure of a good
budget or wait for it to
shed some of the
accumulatedbudgetaryfat.
Blind betting is not
advisable on the Nifty or
Sensex stocks since mid
cap and small cap stocks
have ample opportunities
to ride the market if the
Budget proposals are
industryfriendly.
As I have been
emphasizing, there is
amplescopeinmidcapand
smallcapstocksasmanyof
them are traded below
bookvalueandavailableat
extremely low P/E ratios
compared to other stocks
due to lack of awareness
among investors. They can
rise by 100% to 200%.
Their list is long but a few
of them could be counted
on ones finger tips in the
limitedspaceavailable.
1.) IdeaCellular:This
Aditya Birla group
companyisasubsidiary
ofAdityaBirlaNuvo.
It is the 3
rd
largest
telecommunications
company after Bharti
Airtel and Reliance
Communications. It has
recently raised funds
RoongtasPanchratna

Launched on 1
st
April 2014, check out the mind-blowing performance of
Panchratna
Scrip Name Recom.
Price (Rs.)
High
(Rs.)
Date of
High (Rs.)
CMP (Rs.)
25-06-14
% Gain
to High
CheslindTextiles 4.98 9.45 12-06-14 9.00 89.76
Katare Spinning Mills 19.50 26.00 07-05-14 18.60 33.33
Trident Ltd. 18.80 27.30 09-06-14 25.80 45.21
Elecon Engineering 36.75 70.40 20-06-14 67.90 91.56
Essar Ports 50.90 97.25 10-06-14 81.60 91.06

Panchratna is a quarterly investment newsletter by our esteemed fundamental

analyst, Mr. G. S. Roongta.
The lacklustre five years between 2008 and 2013 have created a great opportunity
to invest in Penny stocks, Dark Horses and Turnaround stocks in 2014-15 and
reap profits higher than what expensive blue chips or Index based stocks can
offer.
Mr. G. S. Roongta, who has acquired a name in identifying such winners early in
Money Times, will pick five such stocks below Rs.50 each for an investment
horizon of 1-2 years.
Priced at Rs.2500 per quarter, Rs.4000 half-yearly & Rs.7000 annually,
the next issue will be released on 1
st
July 2014.
Book your copy now!
To subscribe, you can deposit cheque/cash or transfer the amount via
RTGS/NEFT to the company bank account:
(1) Time Communications (India) Ltd C/A 10043795661 at State Bank of India,
Fort Market Branch, Fort, Mumbai 400 001 (IFSC: SBIN0005347) or
(2) Time Communications India Limited C/A 623505381145 at ICICI Bank
Ltd., Fort Branch, Fort, Mumbai 400 001 (IFSC: ICIC0006235)
Note: For cash deposit, kindly add Rs.25 extra for SBI or Rs.100 extra for ICICI Bank as cash
counting charges levied by the bank.
After transfer, please advise us by e-mail mentioning the bank & branch,
electronic transfer number and date of payment with your subscriber name and
the product selected to enable us to begin your supply immediately.
You can contact us on 022-22616970, 22654805 or
moneytimes.support@gmail.com.

A Time Communications Publication 11
throughequitydilutionworthRs.3000crorethroughaQIP.The IdeaCellular sharemadea52weekhighofRs.188
about four to six months back. Many Midcap shares have doubled or trebled thereafter but Idea Cellular lost Rs.52
instead!
Thus,thereisgreatvalueinit.ButsinceitisanAdityaBirlagroupstockbrokeragesprefertobeatitdownfirstto
grab it in large quantities at lower levels. This is the groups history because it cares little about its stock values or
sharepricesaftermoppingupthepromotersstaketoasatisfactorylevel.
2.) Sangam(India):Thisisagoodsmallcapstockswithgoodfundamentals.ThisTextilestockisexpectedtofare
extremely well FY15 onwards as the Budget may provide some sops to the Textile industry ailing since the last 34
years.
Its current share price is Rs.50 while the 52week high was Rs.60 and the stock may double in the next 69
months.
Itisadividedpayingcompanyandreportingprofitsforthelastseveralyears.Itisavailablebelowbookvalueand
athrowawayP/Eratio.Itsfinancialprofileisenumeratedbelow:
A) FY14turnover:Rs.1450crore.
B) OperatingProfit:Rs.195crore,
C) LessDepreciation(Rs.74crore)+InterestofRs.66crore=Rs.140crore
D) Profitbeforetax:Rs.55crore
E) OtherIncome:Rs.6crore
F) Tax:Rs.21crore
G) NetProfit:Rs.40crore
H) PaidupEquity:Rs.39crore.
TheEPSisRs.10.27givingprice:earningratioofjust5.
The company has declared a dividend of 15%. Its book value (BV) is Rs.100 but the share traded below 50% of BV or
available200%loweronanactivemarketbasis.
3.) AnothergoodstockisOCLIron&SteelacompanydemergedfromOCLIndustriesLtd.andanemergingcement
companyinOdisha.
Readersarewellawarethatanystockidentifiedbythiscolumnhasgreatpotentialasitisbackedbygoodfundamentals.
Six months back, the stocks recommended at a nascent stage of their potential were many but RCF, SCI, DCW Ltd and
EleconEngineeringrecommendedherehaverisenbyover200%injustsixmonthsorso.
The super bull run has already started, as I reported earlier. The Indian stock market was tuned and habituated to
follow Asian and global markets trends before opening. Now I am of the opinion that the time has come that global
marketsandAsianmarketswillfollowthetrendoftheIndianstockmarkets.
The Sensex has corrected by 500700 points on weektoweek basis but has rebound speedily to cover the lost
groundinadayortwoasseenlastweekonTuesday,24June2014byrisingover300points.
Thus, the longterm trend of the market is extremely bullish but jerks & jolts will of course be there always like on
journeyduringlandingandtakeoffinanaeroplanewhenitfliesatdizzyheights.
The F&O expiry for June 2014 settled at a healthy level. But the new month of July 2014 will see a new game
impactedbyBudgetexpectationandreality.
Themarkethasyettohitanewhighbutanyeventbasedcorrectionshouldbetakenasaconsolidationphase,which
isamustinarisingmarkettomakeitmorehealthyandsound.
The second edition of Panchratna featuring five low priced stocks will be out on Tuesday, 1 July 2014. We have
selectedstockskeepinginmindtheBudgetimpactedstockssothatsubscribersstandtogainthemaximum.

By Vinod Harlalka

Given below are the TOP 10 Gainers & Losers in the Futures segment in the June 2014 expiry.
TOP 10 GAINERS
No. Scrip May Exp. June 2014 Expiry Dif
FUTURES WATCH

A Time Communications Publication 12
Closing Open High Low Close %
29-05-14 30-05-14 26-06-14
1 ARVIND 185.85 187.50 237.30 181.85 234.50 26.18
2 UNITECH 26.95 27.60 38.85 27.55 33.50 24.30
3 GAIL 371.75 375.95 468.85 374.55 460.05 23.75
4 BIOCON 428.25 433.80 525.00 432.30 519.85 21.39
5 ASHOKLEY 31.55 32.30 38.90 30.75 37.95 20.29
6 INDIACEM 97.95 99.30 130.35 98.50 117.35 19.81
7 VOLTAS 180.20 186.85 233.60 183.60 215.10 19.37
8 RELCAPITAL 525.20 529.00 670.90 519.15 624.20 18.85
9 BAJAJ-AUTO 1940.75 1951.20 2317.55 1935.10 2293.85 18.19
10 CENTURYTEX 482.80 490.95 574.70 475.10 569.50 17.96

TOP 10 LOSERS
No. Scrip May Exp. June 2014 Expiry Dif
Closing Open High Low Close %
29-05-14 30-05-14 26-06-14
1 ORIENTBANK 351.25 352.10 368.60 298.80 309.65 -11.84
2 BANKINDIA 324.70 325.85 334.75 275.20 290.80 -10.44
3 UBL 763.90 770.00 776.00 672.80 693.15 -9.26
4 MCDOWELL-N 2825.30 2774.10 2850.00 2430.00 2585.55 -8.49
5 ITC 342.85 333.00 341.75 313.80 316.00 -7.83
6 IOC 354.75 357.75 388.00 318.80 328.90 -7.29
7 UCOBANK 107.45 108.55 115.45 93.60 100.55 -6.42
8 RELIANCE 1072.80 1091.00 1137.00 1006.40 1009.55 -5.90
9 JPPOWER 22.55 23.00 26.45 20.05 21.35 -5.32
10 M&MFIN 291.05 294.95 320.40 269.00 276.10 -5.14

ByAmitGupta
RECLtd.(Code:532955)(CMP:Rs.354)(TGT:Rs.380+)
RuralElectrificationCorporationLtd.(REC)isapublicsectorfinancialinstitutionthatprovidesinterestbearingloansto
stateelectricityboards(SEBs),statepowerutilitiesandstatepowerdepartmentsortheprivatesectorfordevelopingall
segments of rural power infrastructure. It has diversified into other related areas and activities such as financing of
decentralizedpowergenerationprojects,useofnewandrenewableenergysources,consultancyservices,transmission,
subtransmission distribution systems, renovation, modernization and maintenance. Its subsidiaries include REC
Transmission Projects Company Ltd; REC Power Distribution Company Ltd; Vemagiri Transmission System Ltd and
VizagTransmissionLtd.
RECsloangrowthcontinuestodeceleratewith17%v/s24%+in thepreviousthreeyears.T&D(Transmissionand
Distribution)segment(Rs.82,100crore;55%ofloans)grewat25%YoYwhilethegenerationsegmentgrew~18%YoY
toRs.65,400crore(44%ofloans).
Privatesectorloansgrew28%YoYtoRs.21,100crore(14%ofloans).Weexpect15%loanCAGRinFY1416E.Loans
worthRs.31,100crorewithcurrentyieldof12.6%toberepricedinFY15.
Borrowings stood at Rs.1,30,000 crore (17% YoY) with ~foreign borrowings at ~14%. Borrowings of Rs.13,000
crore would be repriced in FY15E. Foreign borrowings to the tune ~32% remain unhedged. Unamortized foreign
currencylossstandsatRs.530crore.
Margins were marginally lower at 4.9% QoQ with pressure on yields at 12.1% by 244 bps QoQ. However, cost of
funds(CoF),too,declinedby20bpsQoQat8.4%.Wehavefactorednetinterestmargins(NIMs)of4.8%overFY1516E.
Assetqualityremainedstableasitreportedflatgrossnonperformingassets(GNPAs)ofRs.490croreQoQ(0.3%of
advances). However, with increased Provisional Coverage Ratio (PCR), net nonperforming assets (NNPAs) declined
12% YoY at Rs.350 crore. RECs rescheduled assets 22.2% of loans stand at Rs.33, 000 crore. We expect GNPA at
0.8%/1.3%andfactorhigherloanlossprovisioning(LLP)by25bpsinFY1516E.
Valuation:TheRECstockhasseena sharprunup recentlyonhopesofreformsinthepowersector.Ifthereforms do
play out, they will improve business visibility, help keep net interest margins (NIMs) high and assure higher return
ratios. REC enjoys regulatory arbitrage since it is not required to provide for rescheduled loans. This is the key risk to
STOCK WATCH

A Time Communications Publication 13
reported earnings. However, in the interim, asset quality would be a key factor. We advise a Buy on this stock with a
pricetargetofRs.385.
TechnicalOutlook:TheRECstockisverystrongonthedailychartasithasbeenmakinghigherhighsandhigherlows.
Itisverystronginalltimeframesandhasbeentradingaboveallimportantmovingaverageslike200DMA&100DMA.
It has formed an ascending triangle pattern in the longer time frames. Start accumulating at CMP and on dips to
Rs.325formediumtolongterminvestmentandpricetargetofRs.380+inthenext6months.
*******
SuprajitEngineering(Code:532509)(CMP:Rs.105)(TGT:Rs.125+)
Suprajit Engineering Ltd. (SEL) manufactures a range of control cables and instruments. It is a manufacturer of
automotive cables with plants strategically located in the South, West and North India to serve automobile
manufacturersthroughoutthecountryandisanexporterofnonautomotivecontrolcablesandpushpullcablestosome
oftheworld'smanufacturers.Itsproductsareclassifiedasautocomponentsanditoperatesintheprimarysegmentof
autocomponents market. It produces an exhaustive range of mechanical control cables for motorcycles, cars,
commercialvehiclesandvariousnonautomotivecableswithacapacityofover150millioncables.Italsospecializesin
the production of instruments, speedometers and many other parts. In December 2012, SEL implemented a new
automotivecablemanufacturingplantatBengaluru.
Q4FY14 highlights: SEL reported Q4FY14 consolidated adjusted PAT at Rs.13.2 crore (+13.1% YoY) in line with
estimates. Revenues grew 15.3% YoY to Rs.130 crore while EBITDA grew 27.9% YoY with margins at 18.1% that
expanded 177 bps YoY led by better gross margins (+176 bps) and lower other expenses of 116 bps. Employee costs
wentupby114bpsYoYinQ4FY14.
The business share of Hero Motorcycle and Scooter India Pvt Ltd (HMSI) improved 2025% in FY14 from ~10%
earlierandthemanagementexpectsittoreach~50%overthenext12years.
ThemanagementhasannouncedCapexplansofRs.60croreoverFY1516Eacross:(1)newcableplantsatNarsapura
Industrial area in Karnataka and VallamVadagal in Chennai; (2) capacity expansion at the existing Pathredi plant in
Rajasthan;(3)additionalequipmentsforSuprajitAutomotiveits100%subsidiary;(4)renovationoftheBommasandra
inBengaluruplant,whichitcanmanagethroughinternalaccruals.
WeexpectSELtoregister28%CAGRinearningsoverFY1416Ewithmarginsmaintainedat~17%.
SEL is a high quality autoancillary company with healthy return ratio at ~30% and a strong balance sheet and
ambitiouscapacityexpansionplans.AttheCMP,SELtradesat17/13xFY15/16EEPS.WemaintainaBuyonthestock
witharevisedpricetargetofRs.125.
TechnicalOutlook:TheSuprajitEngineeringstockisverystrongonthedailychartandhasbeenmakinghigherhighs
andhigherlows.Itisverystronginalltimeframesandhasbeentradingaboveallimportantmovingaverageslike200
DMA&100DMAandhasformedanascendingtrianglepatterninthelongertimeframes.
Start accumulatingatCMPandondipstoRs.90formediumtolongterminvestmentand pricetargetofRs.125+in
thenext6months.

ByVihari
Ushdev International: For solid appreciation
TheshareofUshdevInternationalLtd.(UIL)(Code:511736)(Rs.304)canbeboughtforakillingasitisavailableata
mouthwateringP/Emultipleofjust5.1onFY14EPSand4.5timestheestimatedFY15EEPSofRs.70.
Incorporatedin1994,UILisoneofthelargestcompaniesinMetaltradingwithinterestsinpowergenerationtoo.It
came out with an IPO of 17.5 lakh equity shares aggregating Rs.1.75 crore in December 1994. It was incorporated and
ledbythelateMr.VijayGuptaandispresentlybeingledbythethirdgenerationpromoter,Mr.PrateekGuptawhoisthe
ViceChairman.
UILdiversifiedintoWindPowerGenerationin1997andhasaninstalledcapacityof28.3MWinfiveStatesofTamil
Nadu,Maharashtra,Gujarat,RajasthanandKarnataka.
Itcommencedoperationswithtradinginsteel&steelproducts.Constantlyexpandingitsproductportfolio,UILraced
aheadofitscompetitorsandhasemergedasagiantinthemetaltradingbusinessandtradesinferrousandnonferrous
metals.Itisamongthetop50metaltradingcompaniesintheworldintermsofannualsalesandthe3
rd
largestprivate
EXPERT EYE

A Time Communications Publication 14
sectormetaltradingcompanyinIndia.Forsteelmills,itnotonlysuppliesrawmaterialsbutalsopurchasesthefinished
goodsfromthem.
On 2 September 2009, it inaugurated its first whollyowned subsidiary UIL (Singapore) Pte. Ltd inSingapore which
commenced operations by trading with countries like Philippines, Malaysia, India, Indonesia and Australia. It has
facilitated expansion of the overall business operations of the Ushdev group outside India exponentially. Strategically
placedatageographicaladvantage,italsohelpstobecloser tothesuppliersandcustomersandisaccessibletonewer
markets. UIL Singapore achieved sales of Rs.2940 crore for FY14. Subsequently, the stake of UIL has been diluted to
43.17%inMarch2014.
UILHongKongLtd.wasinauguratedinHongKongbyUILon12November2009.Thiswhollyownedsubsidiarywas
set up to cater to the markets like Vietnam, Thailand, China, Canada, USA, UAE, India etc. UIL HK has achieved sales of
Rs.3784croreinFY14.Subsequently,thebalancestakeofUILhasbeendilutedto43.21%inMarch2014.
Although UIL commenced operations by trading in steel & steel products, it now trades in each and every product
relatedtosteelmanufacture: RawMaterials:MetallurgicalCoal/Coke,SpongeIron,IronOreLumps,Fines,Pellets, Pig
Iron, Steel Scrap and Liquid Metal; Flat Products: H. R. Coils/Steel/Plates, H. R. Pickeled Coils, C. R. Coils/Sheets,
Galvanised products, Annealed products, Pickeled Products, Colour Coated Sheets, Corrugated Sheets, MS
Sheet/Coils/Plates and Tin; Long Products: Angles, Beams, Channels, Billets, Ingots, Pipes, Rods, Wires, Carbon &
StainlessSteelBars/Rods/StructuresandWires.
For Q4FY14, its net profit soared 78% to Rs.102.6 crore on 74% higher revenue of Rs.5236 crore and quarterly
consolidatedEPSstoodatRs.30.3.ForFY14,netprofitclimbed68%toRs.208croreon46%higherrevenueofRs.12962
crore.TheEPSstoodatRs.61.5andadividendof21%hasbeen proposed.UILsequitycapitalisRs.33.8croreandwith
reservesofRs.733.5crore,thesharebookvalueworksouttoRs.227.
In FY13, it forayed into nonferrous metals comprising Aluminium, Copper, Zinc, Lead, Nickel and Tin in a big way.
The demand for nonferrous metals comes from sectors such as Agriculture, Automobiles, Railways,
Telecommunications, Construction and Chemicals. It also trades in LME registered Copper Cathodes, NonLME
registered Copper Cathodes, Copper scrap, Copper Rods and Copper concentrates in the copper category and Nickel
wires,NickelCathodesandNickelBriquettesintheNickelcategory.
It currently imports different forms of metals from 26 countries and also exports different forms of metals to 28
countriesworldwide.
AccordingtothePlanningCommission,India'ssteelproductionisexpectedtogrowbyaround60MMTPAduringthe
12
th
FiveYearPlan201217andthedomesticsteelconsumptionwillcontinuetogrowsteadilyforseveralyearsdriven
by increasing urbanization, favorable demography, GDP growth, refocus on industrialization and stepped up
investmentsininfrastructure.
Renewable energy accounts for approximately 12% of the total 200 GW of power generation capacity installed in
India. The Indian wind energy sector has an installed capacity of 21, 136 MW as on 31 March 2014. In terms of wind
power,Indiaranks5
th
intheworld.TheprospectsforwindenergyinIndiaarebright.
InMarch2014,itdiluteditsholdingsinsubsidiarycompanies worthRs.148.4croretoagroupcompanyUDTrading
GroupHolding.Further,thesesubsidiarieshavealsoissuedfreshsharestothesaidUDTradingGroupHoldingforatotal
valueofRs.102crore.Thefundraisedisbeingutilizedforexpansionpurposes.
The grading factors in the company's market position of being one of the largest players in the domestic metals
trading business with exposure in steel
finished products, raw materials and non
ferrous metals. It follows an aggregator
business model for its ferrous metals
trading business wherein the company has
a policy of placing an order with a supplier
only after receiving an order from a
customer, which mitigates the risk of price
fluctuationintheunderlyingmetal.
In the nonferrous trading business
while UIL does hold inventory, it largely
insulates itself from price risk in the
underlying metal. The grade also factors in
company's high exposure to nonferrous
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A Time Communications Publication 15
metalstradingbusinessgoingforward,whichhashigherPATmargincomparedtotradinginferrousmetalswithhigher
exposuretooverseasmarketsthroughrisingexportsandhighershareofrevenuefromsubsidiaries.
It is ranked amongst Asias top 200 Most Promising Brand in 201213 by the World Consulting & Research
Corporation (WCRC). It has been ranked no.4 among the 30 fastest growing companies in India by Outlook Business
magazine.
Today, it is a wellknown name in the Wind Power Industry. Its results reflect the sound execution of its business
plans centered on expansion and disciplined cost. Even in a fragile global economy, it remains wellpositioned to earn
solidprofitsandgrowth.
Basedonthecurrentgoing,UILisexpectedtonotchanEPSof Rs.70inFY15.AttheCMPofRs.311,thesharetrades
ataP/Emultipleofjust4.9onFY14EPSofRs.61.5and4.3timestheFY15estimatedEPSofRs.70.AconservativeP/Eof
just 6.5 will take the share price to Rs.455 in the mediumterm and offer a cool gain of about 45%. The 52week
high/lowofthesharehasbeenRs.388/200.
*******
DCM Shriram Industries: Great potential
Sugarstocksareinthelimelightaftermediareportssuggestedthatinamovetobailouttheailingsugarindustry,Food
Minister,Mr.RamVilasPaswanhasagreedtoraiseimportdutyfrom15%to40%.Withmajorturnaroundaheadofthe
governmentsinitiatives,DCM ShriramIndustries(DCMSIL) (Code:523369)(Rs.118)hasproducedexcellentQ4FY14
resultsanddeclaredahandsomedividendof35%.Theshareisworthbuyingfordecentappreciationofover40%inthe
mediumterm.
DCMSILisapartofthediversifiedDCMShriramgroupandwasestablishedin1990followingthe3waysplitofDCM
Ltd.IthasoperationsinSugar,Alcohol,OrganicandInorganicChemicals,DrugIntermediates,RayonTyrecord,Shipping
Containers and Processed Cotton Yarn. It has manufacturing facilities located at Daurala in UP and Kota in Rajasthan.
Halfofitsturnovercomesfromsugar.Ithas12MWcogenerationpowerplants.
ItsDauralaSugarComplexcomprisesa12000TCDsugarplant,a distilleryandanaromaticchemicalsunit.Shriram
Rayons,situatedatKota,comprisesrayontyrecord/yarn/fabric andnylonchafer/fabricplantswithcapacityof16,200
TPA. Daurala Organics, its chemical division, manufactures new generation of drug intermediates. Its capacity of
Organic/FineChemicalsis13,874TPAwhilethatofalcoholisat45,000kilolitrep.a.
The sugar division of the company was established in 1932 in the name of Daurala Sugar Works. Since then, the
companyhasdiversifiedintoaspectrumofrelatedactivities, whichincludemanufacturingpharmaceuticalgradesugar,
sugarcane research farm, setting of distillery, manufacture of Indian made Foreign Liquour (IMFL), BioMethanation,
manufactureofaromaticchemicals,cogenerationofpoweretc.
Its indigenously designed distillery is rated among the largest in terms of capacity producing rectified spirit, extra
neutralalcohol(ENA),denaturedspiritandpotablealcohol.Its9000KLAnhydrousAlcoholplantthatproducesethanol
for mixing with petrol has the latest stateoftheart Membrane Technology and is the first plant of its kind in India
establishedbyaJapaneseMNC.
The Shriram Rayons division was set up in 1965 to produce rayon tyrecord and the engineering and design for the
plantwasprovidedbyChemtexofUSA.Itisamajormanufacturerofhighgraderayontyrecordwithnylonandrayon
conversionfacilitiescateringtoboththedomesticandoverseasmarkets.
It also has a complex for the manufacture of inorganic chemicals. The company receives technical assistance from
twoforeigncompanies,BeunitFibresIncofUSAandChemtexIncofUSA.
Aspersegmentanalysis,sugarconstitutes49%ofthetotalturnover,fibreconstitutes27%andindustrialchemicals
24%.BothSugarandFibrecontributed41%eachtotheoveralloperatingprofitwhileindustrialchemicalscontributed
18%totheoperatingprofit.
For Q4FY14, net profit zoomed to Rs.15.8 crore from a loss of Rs.13 lakh in Q4FY13 on 17% higher sales of Rs.318
crore.ForFY14,consolidatednetprofitzoomed441%toRs.31.9croreon19%highersalesofRs.1284crore.TheFY14
EPSstoodatRs.18.3andadividendof35%hasbeenproposed.
DCMSILequitycapitalisRs.17.4 croreandwithreservesofRs.202crore,thesharebookvalueworksouttoRs.126.
The promoters hold 43.8% in the equity capital, foreign holding is 0.4% and institutions hold 7.7% with PCBs holding
32%leaves16.1%withtheinvestingpublic.
Indias sugar output is likely to decline 5.33% this October 2014 to September 2015 sugar season as unfavourable
climatic conditions will lead to lower yields in the major growing areas. The governments decision to give subsidy on

A Time Communications Publication 16
exports of raw sugar will lead to higher exports and reduce the excess sugar stocks in India. Aided by lower output in
India,exmillsugarpricesareexpectedtoincreasegradually.
Most sugar mills encountered problems of cash flow in view of the losses incurred. This coupled with the delay in
disbursement of interest subvention loans due to high leverage of sugar companies resulted in relatively lower
paymenttofarmersinthefirsthalfofSugarSeason(SS)201314.Withtheincreaseinarrears,farmersarelikelytoshift
toalternatecrops,resultinginloweracreageundersugarcanecultivation,resultinginadeclineinsugarproductionand
inventorylevelsevenintheSS201415.Consequently,sugarpricesareexpectedtocontinuetomovehigher.However,
the government has announced a loan package of Rs.14,000 crore to enable sugar mills to clear these arrears. Also
Ethanolblendingwithpetrol,too,hasbeenraisedto10%from5%,whileimportdutyhasbeenraisedfrom15%to40%
allofwhichangurswellthesugarindustry.
Its capability in the industrial fibre and products division has helped the unit to post a solid performance. With
sustainedimprovementintheproductquality,DCMSILisapreferredsuppliertointernationaltyremanufacturerssuch
asGoodyear,Bridgestone,Pirelli,MichelinandDunlop.
DemandforDCMSILschemicalproductscontinuestoremainstableanditwasabletoraisepricesaswell.Itsfocusis
on valueadded products such as extra neutral alcohol and anhydrous alcohol as well as on exports. A plant to
manufactureahighvaluecommissioned.
Based on the current going, DCMSIL is expected to post an EPS of Rs.30 in FY15. In view of its diversified business
model,increasedsugarconsumptionandimprovingfutureprospectsforitsfibreandindustrialchemicalscoupledwith
improvedresults.
TheshareRs.118trades ataforwardP/Eoflessthan4onFY15expectedEPSofRs.30.Theshareisrecommended
formediumtermgainwithpricetargetofRs.150atwhichthesharewilltradeataforwardP/Emultipleof5.The52
weekhigh/lowofthesharehasbeenRs.118/28.

TECHNO FUNDA
ByNayanPatel
ShriDineshMillsLtd.
BSECode:503804
LastClose:Rs.125.80
ShriDineshMillsLtd.(SDML)isaTextilecompanythatmanufacturesand
markets woollen/worsted suitings and machine clothing (felt) products
undertheDineshbrandnameinIndiaandabroad.Italsomanufactures
and markets empty hard gelatin capsules for the pharmaceutical and
dietarysupplementmarkets.Thecompanywasincorporatedin1935and
isbasedinVadodara,Gujarat.
IthasanequitybaseofjustRs.5.08crorethatissupportedbyreservesofaroundRs.93.63crore,whichis18.43times
itsequity.It hasasharebookvalueof Rs.188.42andprice:book valueratioofjust0.60,whichishighlyattractive.The
promoters hold 45.01% while the investing public holds the balance 54.92%. The promoters held 43.36% stake till
March2013buthaveincreasedto45.01%inoneyear,whichindicatestheirconfidenceinthefutureofthecompany.
ForFY14,netprofitclimbed25.19%toRs.4.87crorefromRs.3.89croreinFY13.AlthoughFY14totalturnoverwas
nearlyflatatRs.107.55croreasagainstRs.106.26croreinFY13.ItthusreportedanEPSofRs.9.47forFY14.
Thecompanyhaspaidregulardividends.Itpaid18%forFY13andhasdeclared18%forFY14.
The company may declare a turnover of Rs.125 crore with net profit of Rs.7.26 crore in FY15 and Rs.147 crore
turnover with Rs.9.1 crore profit in FY16. At its current market price,
thesharepricediscountslessthan8timesitsFY15(E)EPSofRs.14.29
and less than 6.5 times its FY16 (E) EPS of Rs.17.91, which is much
cheaper than its peers. The stock appears undervalued and is likely to
attractvaluebuyingatthislevel.
Investors can buy this stock with a stop loss of Rs.100 on a closing
basis. On the upper side, it will zoom to Rs.140 level in mediumterm
andRs.175+inthenext912months.ItsalltimeshighpriceisRs.325.

Last5yearsperformance:(Rs.incrore)
Year NetSales NetProfit EPS(Rs.)
200910 90.85 5.89 12.48
201011 95.95 8.24 15.64
201112 100.88 6.26 11.89
201213 106.26 3.89 7.37
201314 107.55 4.87 9.47
201415(E) 125 7.26 14.29
201516(E) 147 9.1 17.91
Review
Last week, we recommended Freshtrop
Fruit at Rs.31. In a negative market, it
zoomed to Rs.35.90 recording ~15.81%
appreciation in just one week. Hope you
enjoyedthefruits.

A Time Communications Publication 17

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A Time Communications Publication 18

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