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| Focuses on keeping you updated on high-risk,
high-return stocks. There are some major developments taking
place in the company which will have a significant impact on
the fundamentals and strategic path of the company in the long
term. |
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| Larsen & Toubro Ltd. |
Last |
Chg |
%
Chg |
Volume |
Year
H / L |
| L&T |
846.20 |
-8.20 |
-0.96 |
809,667,007 |
2,200.00 / 670.00 |
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Larsen & Toubro Ltd (L&T) is India`s largest private sector engineering & construction company. The company has diversified business interests in cement, information technology and communications. For the first quarter ended June 31, 2001, the firm has posted revenues of Rs 1,831 crore, up 10 per cent on the back of a robust 21 per cent growth in the cement business. The growth was on the back of a 36 per cent rise in realisations to Rs 1,478 per tonne. Net profit stood at Rs 65 crore, a phenomenal growth of 245 per cent for the quarter. More importantly, the demerger of the company’s cement business is on the anvil. DSP Merrill Lynch has valued the cement business at Rs 6,700 crore which works out to $95 per tonne. This is one of the highest valuations done for any cement business in India. L&T has narrowed down on three bidders for the proposed strategic partnership in its cement business. More than the higher cement realisations and rising order book in the engineering business, it is the impending demerger of the cement arm which is likely to trigger an upsurge in the stock. |
| Date: July 28, 2001. Price: Rs 203.60 |
| Top |
| India Cements Ltd. |
Last |
Chg |
%
Chg |
Volume |
Year
H / L |
| INDIA CEMENT |
117.75 |
11.45 |
10.77 |
111,282,346 |
295.00 / 68.50 |
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| India Cements is South India`s largest cement producer. ICL sells about 90% of its production in the Kerala and Tamil Nadu markets. The company is planning to hive off shipping division into a separate company in order to focus on cement. According to recent newspaper reports the firm is scouting around for a buyer for Sri Vishnu Cements, the company which India Cements bought from the Raju family less than two years ago. The sale of Sri Vishnu Cements could fetch India Cements anywhere between Rs 650 crore and Rs 700 crore. Given the huge debt overhang over ICL, the move to sell Sri Vishnu could be aimed at bringing down the company's debt. Sri Vishnu bounced back into the black on better realisations for the year ended March 31, 2001, as against a loss during the previous year. The company recorded a net profit of Rs 6.84 crore on a sales turnover of Rs 143.28 crore against a net loss of Rs 7.23 crore. A fair valuation for Sri Vishnu and the firming up of trends in the industry, which is growing at a rate of eight per cent, could propel the stock higher. |
| Date: July 28, 2001. Price: Rs 34.05 |
| Top |
| Tata Tea Ltd. |
Last |
Chg |
%
Chg |
Volume |
Year
H / L |
| TATA TEA |
621.50 |
-2.15 |
-0.34 |
5,270,942 |
998.00 / 430.00 |
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| The next 2-3 quarters could see a good story emerging in Tata Tea. After a poor third quarter ended December 2000, when its net profit fell 24 per cent and sales declined 14 per cent, quite a few factors have turned in favour of the company, which augurs well for the stock. Last year, Tata Tea took a hit due to low tea prices. But things have now started to look up on this front. A drop in tea crop in south India due to adverse weather and a planned production cut in December in northern India have helped tea prices recover. From an average of Rs 47 last year prices have moved up to Rs 76 in the beginning of 2001. Meanwhile, the Russia market is also showing signs of improvement. Russia is expected to buy 50 million kg of Indian tea by March and try to double its imports by the end of the year. This is one of the largest markets for Indian tea. Though the company will stand to gain since about 30 per cent of its tea sales volumes comes from bulk tea. The major benefit will come from its packaged tea business. Last year, the company lost market share to bulk tea, but with prices rising consumers could come back to packaged tea. Further, realisation is higher as well as more stable in packaged tea. The other big opportunity for the company comes from its acquisition of the Tetley brand. This throws up two kinds of benefits. In the short-term, the benefit would come from Tetley sourcing its black tea requirements from Tata Tea. But the real benefit lies if the company can cater to existing and new markets worldwide for Tetley brand teas from its plantations and factories in India and Sri Lanka. This would open up a whole new avenue for Tata Tea. |
| Date: March 21, 2001. Price: Rs 232.00 |
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