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Tuesday, February 13, 2007

SRF Limited : Value Pick

SRF Limited is a textiles and nylon fibre manufacturing company with nine months EPS at rs. 36 approx. At cmp of nearly rs. 160, this stock is definitely a Value Pick. The year's low was 136.50 and high was 372.70. The company also stands to gain from carbon credits. It is a very attractive buy at current levels and the current weakness in the overall markets can be used to accumulate this stock.

Recent pieces of news from the company:

SRF Ltd has informed BSE that the Board of Directors at its meeting held on October 27, 2004 inter-alia, had approved capital expenditure proposal for Modernization and Expansion of capacity of Industrial Synthetics Business (now Technical Textiles Business) at Manali (Madras) and Gwalior.The Company has now informed that, following projects have been commissioned:
1. Expansion of capacity of Nylon Tyre Cord Fabric at Gwalior— from 10000 MTPA to 17000 MTPA
2. Expansion of Poly and Spinning capacity at Manali — from 11000 MTPA to 25400 MTPA.

SRF Ltd has informed BSE that the Board of Directors of the Company at its meeting held on January 20, 2007 has approved the following projects:
1. Upgradation of R&D facility and pilot plant at a total cost of Rs 14.40 Crores.
2. Manufacturing of a new fluoro speciality chemical at a total cost of Rs 14.35 Crores.

34 comments:

Vinster Picks said...

An excellent pick superstar. I feel SRF is hammered purposely due to some operators. When this starts its journey it should only go one way that is towards the northpole leaving santa behind. Cheers !! *****

jig said...

good pick again, the nine month EPS stands @36,given devidend @30%.
But the EPS given is basic and not diluted, just need to make sure tht there are no /warrants etc outstanding convertible into equity shares.
Again wahts ur take now on the scripts like : Lok Hsng/Yash Mgt ...Thnk u had advised a stoploss @12.50 in Yash.Shld one still hold on to it or book profits.Plz advise...

jig said...

THNK LOK HSNG IS HEADING TOWARDS 200 ANOTHER LOWER CIRCUIT TOADAY WID 10000 SHARES SELL qTY AND NOW BUYERS ...nI COMMENTS

Superstar said...

Hi there,

Yes, I am very upbeat about SRF ltd. I think downside is limited and upside could be HUGE. I am yet undecided about Lok Housing and am holding it still. Real estate stocks have been under pressure due to a growing perception that real estate rates have peaked and property prices have to correct downwards sooner or later. But Lok is one of the cheaper valued stocks in this sector. The trigger for this stock could be coming out of T2T.
About Yash management, I gave a strict stop loss of 12.50 for that stock. One should have got out of Yash at 12.5 and switched to SRF Ltd. to play safe.

Cheers!

Vijay said...

Superstar
What are your comments on Chemplast sanmar. I think it is an underperformer for a long time. Can you tell us some more research about this company. Thanks.
Vijay C

Vandy said...

This is one of the ebst ones available in the current bottom fishing scene.Will give good returns for sure.

Naveed said...

Dear Superstar,

Do you have any recomendations on Ferro Alloys Corporation

jig said...

hey superstar,
too good a pick man.Even today the stock is below its 30/150 day average of 200 and wid the kind of valuations it is likely to go very high.
Wht i feel is tht frm monday we will once again start rallig and this was just one of those routine corrections lookin at the kind of breadth/volumes depicted yesterday wht do u say, how wld the mkts move frm here on.

Superstar said...

Dear Vijay,
I had already given Chemplast as a buy in one of my blogs here (at 7.70 levels) and also at moneycontrol. After which it had rallied to 10.30 levels.

Dear Naveed,
I had a cursory look at Ferro alloys and the earnings of that company are nothing to go ga ga about. There are better buys available in the mkt.

Dear Jig,
I had already predicted the dip in the market of early this week as a GOLDEN OPPORTUNITY to buy in one my blogs with that heading. I am bullish about next week and if you go through my astro site: http://superstarastro.blogspot.com you will know the predictions for next month for individual signs.

Cheers!

Kesaven said...

I am holding Ranbaxy at 414. SHould I hold it for some more time? WHat is your views on the short/med/long term on this stock?

Kesaven said...

What about Ind cements? I heard they are good holds. What is the price to buy and sell?

Kesaven said...

I am holding NOVARTIS for quite sometime at 380? I see completely going down. When should I sell it? Is it worth waiting?

Nikhil said...

Dear superstar, i want to know your opinion about Raj Rayon. i have 2000 share with rate of 59.

Yogesh said...

Hi Superstar,
What are your views on Manali Petrochemicals?

Yogesh said...

Hi Superstar,
What are your views on Manali Petrochemicals?
rgds,
Yogesh

Superstar said...

Dear Nikhil,
You bought raj rayon at an exhorbitant price. The promoters have been selling their holdings in the last one year and it is only around 23% now. The eps figures are not great. At cmp. I would say SALONA COTSPIN is a much better BUY than raj rayon. Cheers!

Superstar said...

Hi Yogesh,
I used to track Manali Pet before the split happened. Now that the face value has been reduced to rs.5 for that stock, I haven't tracked it actively. So, my views are neutral on that stock at cmp. Cheers!

ravchin said...

superstar..
thanxs for inviting to ur website i have couple of stocks which i want ur opinion if i could exit and enter in srf and madhav marbles...
hindalco
sreint
himfut
mtnl
hugtel
actually i have incurred losses n these above i am not a prolific trader. i have taken ur recommendation and bought salcot, gupsyn,kovlak and gesco.. plz advise

ravchin said...

hi superstar
thanxs fr inviting..well i have been following ur recommendations.. i have some stcks which i have it for sometime with not much movement do u feel i could exit these...
hindalco bought at 200
himfut 21
gujnre
sreint
mtnl
hugtel
ashley
well truth i have lost money in these.. but i have invested in kovlak, gupsyn,salcot, and gesco
after ur recommendation.. well do u think i should liquidate and invest in srf, and madhav marbles.. plz advise..

Superstar said...

Hi Ravchin,
If I was in your place then I would book profits in those stocks and invest in SRF and Madhav for an investment horizon of one year. Cheers!

kavgupt said...

Dear Superstar,

Have a look at co. Tutis Tech Bse code-532311. Visit website

www.tutistech.com.
Actual results are on website in investor relations .
Co. to report EPS 0f 7 rs this year

stock available at 17 rupees .

Co. is into biometrics , bpo, Kpo etc

I think it is horribly uderpriced . Book value is at 35 rupees .

Superstar said...

Dear Kavgupt,
Tutis was earlier known as Amex info tech and had a name change in Oct,2006. While the current eps figures look good on paper, I have my doubts. Why is the promoter holding so low at only 13% if the company is doing so well? I would be cautious. Cheers!

Superstar said...

Dear Ravchin,
Out of the stocks you mentioned, Madhav, Gupta synth, SRF, Salona Cotspin can be held for long term. Rest can be liquidated. Also, one should be cautious in previously high flying real estate stocks as there are fears in the market that real estate prices have reached their peak and may crash anytime.

Cheers!

kavgupt said...

Dear Superstar,

If u check promoter holding In AFTEk or Orchid chem is also very low .
Infact i think promoters are buying from the open market & keeping them in corporate bodies form . something is cooking .
I have information some big mumbai investor has bought shares in it . I think the stock is graet for 1 year hold for patience & value investors only

jig said...

hey superstar i agree to ur comment tht reality prices might have reached out but frankly speakin i donot see ni major corrections/crash happening in the property prices.U might have a situation wherein the prices may stabalise and not move uo much but a big correction doesnot seem realistic. If u see the survey conducted by CNBC and shown yesterday on their programme High rise they are stiil sayin that by this year end there wld still be shortage of property in cities like mumbai.So if these stocks correct a bit more i wld not actually be a bad idea to have a look at them .The same applies to banks also whch have corrected quite a bit.
Whts ur call on the 2 sectors if u take a 6 months to a years view.

manish_sat said...

right i dont think so builders will not make prices down of real estate.

so it will take another 1-1.5 year to get major correction in actual property down.

My World said...

With SRf falling everyday where do u think it will have a support? I invested at 155 and already in 2 days it has fallen to 143.......is it worth trying to avg it down?

Superstar said...

Dear My world,
Thanks for writing in. I know that the entire market is in pretty bad shape right now and most of our portfolios are in the red. But the price at which SRF is trading right now looks very attractive to me. I think if even on Monday the markets continue to be weak and if SRF tests its year's low of 136, then I personally would like to average it at that price. I will hold on to this stock for long term. The company had done a buy back at a price of 250 some time back and I'm sure it will go above that level once the current bearish market trend reverses. All we can do right now is to keep patience.

Cheers!

jig said...

PPle need to be very cautious in this counter. Agreed the valuations in terms of PE multiples are very cheap.But if that is he truth why is the stock not movin up. There have been romours that the company might increase the equity base by issuing shares through the private placement route which might actualy correct the price/PE ratio...Do u guys have ni info on this?

Bull said...

Dear Superstar.

Thanx for ur web address.

I find this Blog rocking as all recommendations are fairly justified with rationale.

SRF has been one of my fav. stocks and I am holding it at higher levels ie.180/- will avge down my price on any movement. up or down.

SRF is real Gem and must have @ this level.

I Will try to be regular on this blog.

Cheers!!

Vandy said...

Dear supperstar,
Now that SRF has closed above 160,can we hope for 180-200 levels in the medium term?That is if the market holds.

Superstar said...

Dear Vandy,

Sure we can hope for that. The next levels for SRF are 186, 193, 226. I am very bullish on this stock. This one is a long term, investment grade pick.

Cheers!

piyush said...

hi superstar

well i'm a very small investor and have also incurred few losses in recent past pl help me .
i have read a lot abt u on moneycontrol.com.
my email id is Brokenangel379@rediffmail.com
once again pl help me.
thank u.

Superstar said...

Hi Piyush,

Welcome to the site. One leans to walk only after stumbling. I hope you will make some profit from the tips on this site.

There is no point in leaving your email here because I don't send tips by email, as of now. You just have to visit this site regularly for my new picks which are posted from time to time.

Cheers!