Nod from US FDA sets up Claris Life Sciences as a low risk high return stock pick


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Claris Life Sciences is a new low risk high returns investment idea on our radar after getting an NOC from the US FDA.  Based on this news the stock was up ~20% today.

It is estimated from unconfirmed sources that the stock has high potential  to achieve an EPS of Rs 30-35 / share during FY13/FY14. This is a sizeable jump from the current Rs 20/share. Based on these expectations the stock is available at a PE of 8x 1 yr forward making it an extremely cheap stocks. Given its business of injectables it can easily get a PE of 12 as new products are launched and market starts recognising its true potential making it a multi bagger idea. However this is only a preliminary analysis based on here say and you are advised to do your own homework before investing in the stock.

Claris Lifesciences is one of the largest sterile injectables pharmaceutical companies in India with five manufacturing facilities spread over a 78-acre campus located in Ahmedabad,India. Claris primarily manufacture and market products across multiple markets, and therapeutic segments. A significant majority of these products are generic drugs that are capable of being directly injected into the human body and are predominantly used in the treatment of critical illnesses.

Its products range across various therapeutic segments, including anaesthesia, critical care, anti-infectives, renal care, infusion therapy, enteral & parenteral nutrition and oncology. We offer injectables in various delivery systems, such as glass and plastic bottles, vials, ampoules, pre-filled syringes and non-PVC/PVC bags.

Keep watching this space http://winningtrades1.com/ for new updates on the new find Claris Life Sciences which is a low risk high yielding investment or you may subscribe to the blog by clicking on the RSS links at top of the page or subscribing for email updates.

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Disclaimer: The views expressed in this article are entirely my own and do not reflect the views of my employer. This report is neither an offer nor a solicitation to purchase or sell securities. The information and views expressed herein are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in or have positions in the securities mentioned in their articles. Neither http://winningtrades1.com or myself accepts any liability arising out of the above information/articles.

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Vinit Bolinjkar Head of Research, Ventura Securities Ltd
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Gujarat Mineral Development Corporation – mineral resources stock to power your portfolio


GMDC
Reviewed by Vinit Bolinjkar on August 10, 2012.
Resource mineral stock GMDC to power your portfolio!
So compelling are its fundamentals that we wonder why any one would buy Coal India Ltd, when such a low risk high investment opportunity presents itself!
Rating: Low Risk Buy

GMDC monopoly lignite producer in Gujarat

GMDC powering Gujarat

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In line with the low risk high yielding trading  strategies philosophy of this blog, we introduce a new mineral resource  stock GMDC (Gujarat Mineral Development Corporation Ltd). Although it is not a new story however it has been much ignored by the market. So compelling are its fundamentals that we wonder why any one would buy Coal India Ltd, when such a low risk high investment opportunity presents itself!

Continuously improving lignite volumes, price hikes,  traction in the bauxite business and the turnaround of its loss making power business are triggers for an up move in the stock. We expect GMDC’s revenues and earnings to grow at a CAGR of 27.1% and 23.7% to Rs 2636 crore and Rs 745 crore respectively by FY14. Having a virtual monopoly in the lignite business in India’s fastest growing  and one of the most industrialized states of Gujarat, lends long term revenue visibility on assured off take and pricing power.

We rate this stock a core BUY and initiate coverage with a price target of Rs 255 representing an upside of ~32% over the next 15 to 18 months. At the CMP of Rs 193, the stock is trading at 6x and 5x its EV/EBIDTA estimates for FY13 and FY14

GMDC low risk high yileding investment opportunity for the Indian markets

GMDC’s compelling valuations present a low risk buying opportunity

Commencement of lignite production from new mines to ensure strong volume growth

Over the period of 5  years from 2007 to 2012, GMDC’s lignite segment has witnessed a robust production growth of ~7.3% CAGR. Going forward, we expect this segment to grow at a CAGR of 13.5% from FY12-FY14 aided by the commissioning of the new mine  –  Umarsar and healthy production growth from existing mines of Bhavnagar, Raj pardi, Mata-no-Madh and Tadkeshwar mines. This volume growth story is on despite declining production  at its largest mine Panandhro  from 3.6 MT in FY09  to 2.5 MT in FY12.

GMDC lignite production volumes set to rise

GMDC’s rising lignite production trend is encouraging

Approval for increasing production at Mata-no- Madh to ~ 4.8 MT from current 3.5 MT are expected over the next few months and once this mine starts ramping up it should further fuel the growth. To ensure long term growth and reserve addition, GMDC is all set to commission a new mine at Umarsar (24 mt reserves and mining  life of 24  years) by the end of FY13. In addition, two  new mines named Dhedadi and Akirimoto, are expected to commission over the next three years once government approvals come through

Lignite resource base for GMDC

Adequate reserves and reserve life of lignite mines provide long term revenue visibility for GMDC

GMDC is comfortably insulated from any price correction

Given the rapidly increasing demand for energy and the shortage of coal availability,  lignite prices are expected to trend firmly up over the medium term. GMDC  prices lignite at a discount of 15-20% to Indian coal (of equivalent calorific value of 3,600kcal/kg) and in absence of any coal mines in Gujarat, coal transportation costs over a distance of 750 km from the nearest coal mines based in Nasik provides for sufficient head room  to take further price hike in the near future, thereby ensuring profitability.

GMDC’s loss making power business has already turned around

Issues related with the bellow in the boiler at its 250 MW  (Kutch, Gujarat)  lignite based thermal power plant,  has led to a sharp decline in its PLF (40%) leading to lower revenues. Subsequently the recent replacement is working  properly and the plant has achieved a PLF of ~80% which is a huge turnaround. However not wanting too optimistic (the bellow was replaced 19 times in the previous  year! ), we have factored in a PLF of 55% and 69% for FY13 and FY14 respectively which should ensure that the profitability of the power business would be restored latest by FY14. Accordingly, we expect the  revenues of the power segment to grow at a CAGR of 15.1 % to  `  271.0  crore over the forecast period There is an upside risk to our estimates and would be an icing on the cake if the 80% PLF should continue.

Power business is an upside kicker to our estimates

Loss making power business of GMDC on course to profitability

GMDC realizing that power generation is not its core business plans to outsource O&M activity to third party power generators. The company has invited bids for the same and expects to complete the process in the next 5-6 months. The company hopes that this step would help in permanently improving the PLF of the power plant.

Investments in renewable power to enhance generation portfolio of GMDC

GMDC’s  105.5  MW  renewable  power  portfolio includes  the recently commissioned  5 MW  solar power plant at Kutch. It plans to enhance this by 50 MW  per annum taking the capacity to 200.5 MW by 2014 at an investment of ~ Rs 600 crore. We expect the plants to continue to operate at PLFs of 20-22% and boost revenue and profitability.

Bauxite mining and other business to add further value to GMDC

Apart from lignite GMDC also mines other minerals like bauxite, manganese, limestone, multi metal etc. Ramp up in production for bauxite at its Gadhsisa mines should lead to revenues growing at a CAGR of 57.7% to Rs 193  crore over the forecast period. The  other businesses are at an emerging stage and expected to take considerable time to prosper.

GMDC’s valuations are compelling

At the CMP of Rs 193, GMDC is trading at 5.9x and 4.8x its estimated EV/ EBIDTA for FY13 and FY14, respectively. We initiate coverage on GMDC as a BUY with a Price Objective of ` 255 (6.5x FY14 EV/EBIDTA) over a period of 18 months. Considering
the increasing production, adequate reserves life of its mines and pricing power, we expect GMDC to continue to register robust growth. The bauxite mining business is also witnessing good growth and the JV with Nalco for setting up an alumina plant and
aluminum smelter project, augurs well in terms of long term revenue visibility. However, we have not factored any business revenue from this JV in our earning model.

GMDC revenue growth and profitability projections are at reduced risk and provide high return potential

Healthy revenue and profitability growth augurs well for GMDC

GMDC EV/EBIDTA valuation charts seem to suggest low downside risk

GMDC is trending well above its mean valuation of the last 10 years

This blogpost is a review of the equity research report on GMDC prepared by Ventura Securities Ltd. Incidently I am also head the Equity Research at Ventura. For a detailed description and to aid you in better evaluating GMDC as a low risk high yielding investment proposition, we encourage you to read the indepth report.

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Disclaimer: The views expressed in this article are entirely my own and do not reflect the views of my employer. This report is neither an offer nor a solicitation to purchase or sell securities. The information and views expressed herein are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in or have positions in the securities mentioned in their articles. Neither http://winningtrades1.com or myself accepts any liability arising out of the above information/articles.

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Vinit Bolinjkar Head of Research, Ventura Securities Ltd
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Tel: | Mobile: 0 9730836363

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Analysis of the Indian budget – Speculating on the fiscal discipline


Keeping the increasingly complex political landscape in mind, the Finance Minister, Mr Pranab Mukherjee has presented a compromise budget (in which the specifics of fiscal discipline were not dealt with) with the intent to get it passed in the Parliament. The intent to keep subsidies capped to less than 2% of GDP is encouraging and implies that policy measures to be introduced in due course would help reign in the subsidy escalation.

While the subsidy cap is a step in the right direction, it seems a bit unrealistic given the firm oil prices and the embargo on Iran which threatens us with run away oil prices. In which case the fiscal discipline would be out of control leading to higher market borrowings. A case in point is the budgetary allocation of Rs 53,640 crore to petroleum subsidy of FY12 which was way behind the actual subsidy of Rs 68,481 crore and that too when the average oil prices were much lower than the current Brent crude price of $125 per barrel.

Already the governments borrowing at Rs 4,79,000 for FY13 is higher than that of last year. This is an uncomfortably large number and will ensure that the interest rates will remain elevated, at least in the immediate future. Further if strict fiscal discipline is not adhered to then we risk the danger of higher borrowings leading to fuelling of inflation and crowding out the private sector from the credit markets hampering growth and make the projection of GDP growth of 7.35 – 7.85 look ambitious.

Please download the file for Analysis of the Indian budget 2012 -2013. Speculating on the fiscal discipline

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It’s your gold stupid, that they are after !!!


In the small print of the new Greek deal lies a heavy penalty clause wherein Greece’s lenders will have the right to seize all of its 111 tonnes of the gold reserves. This Greek gold seizure is merely a dry run for the seizure of gold from the other countries that are in trouble – Portugal (382.5 t), Spain (281.6 t), France (2,435.4 t) and Italy (2,451.8 t). Meanwhile, Iran and Sudan are using their gold to buy food for their countrymen as nothing else will pay for it. Soon it would be the countries of India and China which would have to part with their gold if the time comes when OPEC refuses payments in any other form. A few months ago there were some press reports that said that EU finance ministers discussed the possibility of the ECB gaining control over the gold reserves of member nations.

Private gold confiscation just round the corner ?
So now we know what the Arab spring, Libya and all these skirmishes are about. And each passing event brings to light the severe, pathologically sick nature of the illuminati to enforce the NWO (new world order) and its devious plans. It’s your gold stupid, that they are after! And if you don’t shore up your reserves then the toilet fiat would not even serve wiping your behind with, as it would be all electronic money – binary numbers with value diminishing at the speed of light. If the central gold could be plundered in this fashion, then what stops these psychopaths from confiscating privately held gold – as Roosevelt did in 1935?

Emulate Hugo Chavez, Out with Buffet
Hugo Chavez is a visionary and his move to repatriate Venezuelan gold from vaults outside the homeland was far ahead of all. IMHO, the Greek seizure of their gold will lead to rapid repatriation of Gold back to home shores, à la Hugo movement which would be rapid and voluminous. Germany will notably be the mother of all repatriators as it empties the FED vaults.

About time that the hoax US gold reserves stand exposed; US Dollar to toilet paper
The sorry state of affairs at the ISDA to protect the interests of the bankers who pedaled insurance against sovereign debt will only lead to more money printing which will inadvertently cause currency induced cost push inflation leading to extreme price inflation. As debt implodes, so will the dollar and will bring to re-surge the commodities as the alternate currency, as each country will avoid the US Dollar like the plague. Here is where the US would stand exposed – naked to the world – as its questionable and unaudited gold reserves would be demanded that they be counted.

Ides of March to expose cracks in the global financial system
This would be the first crack for the international monetary system and while IMF as the banker of last resort would try to stitch up the fabric, would it be in time? Im sure not! But there is certainty that ITS ABOUT TIME THAT GOLD WENT BALLISTIC and rose in geometric proportions. 7 to 20 times current prices is what I expect considering the current levels of monetary stimulus, with significant upside risks in case the bankers get manic depressive and go berserk at the money presses.

Gold price rise is an eventual outcome
The date to watch out for is March 12, 2012 when the crucification starts with oil going ballistic, gold intraday volatility jumping and shrapnelling the shorts. Already the gold price in Japanese yen is hitting all time highs and signalling that gold prices are going to runaway against all currencies; notably the USD. Keep those gold holdings close to your chest.

Gold price in Yen

Gold breakout in Japanese yen

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Vinit Bolinjkar Head of Research, Ventura Securities Ltd

Tel: | Mobile: 0 9730836363

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