Cement and Steel Sector
Both these sectors can outperform index in 2008.
Companies having backward integration with raw materials in Steel industry are set to benefit .
Steel prices are rising and will rise more in 2008. Raw material prices are also on the rise.
Biggest consumer China has also seen production cost go up significantly.
Indian Steel demand is robust and focus on infrastructure will keep it that way.
Gujrat NRE coke,sesa goa, Tata steel looks good in this sector.
Cement sector is going in for huge expansion to cope up with the demand, but the new capacities will start coming in from first quarter of FY09. Demand and price realization will remain firm in these scenarios. Some government has tried to curb the price rise in cement saying they will import cheap cement from outside. But cement prices are high across asia and so poses no immediate threat to local cement makers.
Till the monsoon kicks in around june-july. These 2 quarters can see huge construction activity.
India Cements, Grasim Industries , Shree Cements looks good if one want to enter this sector.
Sunday, February 10, 2008
Cement and Steel Sector
Wednesday, February 6, 2008
Value Buying in GE Shipping
Through mail from Abhay.
CMP 437
P/E 5.17
Market cap 6654.37
MarketCap/Sales 2.20
Financials for last 12 months( Jan 07 to Dec 07)
Net Sales 3012.13(2186.31) Up by 37.74%
Net profit 1298.31(825.91) Up by 57.19%
EPS 84.86(54.24) Up by 56.45%
Other players in this segment with their net sales for FY07 (i didn't calculate last 12 months sales for all) & their P/E
Company NetSales NetProfit MarketCap current P/E
ABG Shipyard 704.36 116.29 3717.29 25.06
Essar shipping 1024.30 134.04 10,227.98 60.45
GE Shipping 1990.6 883.31 6646 5.12
Shipping corp 3703.44 1014.58 6405.44 7.54
Among these companies only ABG shipyard is growing at faster rate but on smaller base & has P/E of 25.06 almost 5 times that of GE. Shipping corp also looks cheap but growth has been slow compared to its peers.
MarketCap/Sales ratio of 2.2 & P/E of 5.12 with potential growth of 50% plus makes it very cheap.
Also after the fall in stock price in January it has shown momentum back from 330 levels.
Tuesday, February 5, 2008
Stock News
Jindal Saw bags Cairn Energy order worth $200m for pipes
Jindal Saw gets Rs 200 crore power project contract
After saw pipes Jindal saw betting on infrastructure for growth.
Punj Lloyd tripped for past few days after heavy unwinding of position by a big broker.Stock to rise soon.
GMR Infra
GMR Group’s Vemagiri power plant will become operational this month.
Hyderabad Airport to be operational by March 08: GMR
Stock will retest it previous highs in 2-3 months.
Chattisgarh to become powe hub of the country. With 40 power plants planned with investment commitment worth Rs 1,58,000 crore. This will help add 39,500 mw in next 8 years.
