949-228-7621 anilselarka@gmail.com

Confused Mind Clear Answers 2013 (2Q 05 to 06)

May to June 2013 ISSUE

Ref: CMCA – 2013 – May to June of  4th May, 2013

Basic Requirements to Post Queries and Stocks Inquiries.
I am starting today “2013, May to June  series”. Post your Oct onwards comments here using comment box at the bottom or add comment on the top. This I am going to implement strictly in future. Use the Readers Corner to make any suggestions for any stock to be covered by us in future.
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Example:
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  • US, Economy, Reg: Housing Recovery
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  • India, Bonds, IFCI Infrastructure Bonds, Reg: IPO – Is it good to subscribe?
  • India, Stocks, Ashtavinayak, Reg: Trapped. Need Solution
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It is a fee based solution. Send your portfolio with your problems and expectation. Send it over to readers.kalidas@gmail.com
This column is free for about 2 months after which it will be “subscription based” from 1st April, 2011. Prior announcement will be made however.

PERSONAL PROBLEMS:
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DISCLAIMER: The Author uses his vast experience of about 42 years in finance especially in bank, stock markets, bond trading, currencies, precious metals etc. He is retired and does not have allegiance to any brokerage firm,.bank, investment bank or any other professional or listed company. However, he expressly disclaims any liability for any loss, damage suffered by any reader of this blog by following any opinion or advice given by the author in good faith and without negligence. This is a free service, and should be used it at Reader’s risk and responsibility.No liability – Civil, Criminal or Tort – shall attach to the Author.

Kalidas (Anil Selarka)
USA, 4th May, 2013

 

247 Comments

  1. Dear Sir,
    Wish you a happy new year. Nice to see site opens again

    Kind regards
    Rajmohan
    Kampala, uganda

  2. Respected Kalidas Sir,
    Happy Holi to you and your family.
    With Regards
    Arvind
    Chandigarh
    India

  3. Subject:Come back Call
    Respected Kalidas Sir,
    Please come back. 
    With Regards
    Arvind
    Chandigarh
    India

  4. Major Bank Crash and Gold Rush
    Sir,
     Here is a news report on probable crash of HSBC and the gold rush. When what you have been telling all along seems to be coming true, you are not in touch with us :(
    https://topinfopost.com/2014/01/25/hsbc-bank-may-collapse
     
    regards,
    Vijay Hegde
    Bangalore

  5. Hi,
    Anybody having account with NSEL for E-gold/E-silver have any update?
    Whats happening regarding holding of units OR encashment/refund.
     
    Regds
     
    Rajeev
    Noida, India

  6. Sir,
    The wait seems endless and we are all rudderless without your guidance and directions.Please return and enrich us as soon as possible.
     

  7. sub: IOC stake sale
    Sir, Your comments .
    Regards,
    Atharva, Pune India
     

  8. Its been almost 2 months ince last mssg frm Anilbhai!No updates! No news!
    If anybody knows pls update. 

  9. PROPHECY COME TRUE? – (HOW US LEFT BEHIND IRAQ)
     
    Hello Sir,Could you guide me on the Iraqi Dinar as a long term bet considering the recent awarding of oil fields for developments and the upcoming March elections in Iraq? As per the projections, if these oil fields are up, within 8 Years Iraq’s daily production capacity will be around 12million bpd which is bit higher than Saudi the largest producer. Ofcourse, Iraq is saying they will produce per guidance of Opec.
    Tarun,Dubai,UAE30-12-2009
    Kalidas Says ….Wednesday, December 30, 2009It makes sense, but we do not know how US will leave the country behind. Americans are not known to leave a good political or legal system behind – they leave brothels, prostitution and other vices behind. Look at where they were before – Thailand, Cambodia, Vietnam, Philippines, Japan, Korea etc etc.
    British always left a perfect system behind – political, legal and educational. This is why Gandhi respected British a lot. He did not heed advice of Subhash Chandra Bose to attack British by siding with Japan or Germany. He knew that British were lesser evil than American/Japanese/German devils.
    Look at the India itself – nearly 70% of present laws are still in basic framework of British raj. They left perfect legacy in Hong Kong, Africa, Asia, Singapore, Malaysia etc. They built roads, bridges, water plants, railways etc. Even the toy trains in Simla, Darjeeling, Ooty etc are all legacy of British Raj and administration. Even IAS imitates ICS of British Raj.
    We do not yet know what is the real potential of Iraq Oil. Such large find was main reason for Bush to invade Iraq which was far more liberal Islamic state than anyone else.
    It is still too early to make a guess.
     
    re-posted by 
    VC Sekar, Delhi, India
    06/01/2014

  10. SUB : Happy New Year 2014
    Sir.
    First of all, wish You and your family a wonderful 2014.
    Sir, your absence is at a time when new bull run is under formation and lot of money can be made if stocks are selected at right time and exited before major correction takes place around declaration of Loksabha results. Already lot of stocks have doubled/ tripled in last quarter.
    Kindly , have a look on Indian market for guiding others to create wealth.
    Regards
    Arun
    Mumbai, India
     

  11. Dear Sir, I hold HPCL at Rs 350, Ptronet LNG at Rs 145, ioc at Rs300 PTC fin. at Rs 16, Essar shippsng at Rs 28, Silver at Rs.62000, all your recomendaions.Kindly advidse if I hve to book my losses.

  12. Dear All,
     
    Wish you All a Very Happy, Healthy, Prosperous and Profitable New Year 2014
     
    Sreeram
    01012014
    Sofia, BLG

  13. Happy new year Sir
    With Regards
    Arvind
    Chandigarh
    India

  14. IFCI CMP 25.60
    sir i want to seek your guidance about long term 10-12 months, and short term  for this stock. regards
    RAHUL

  15. Dear All,
     
    I think we should have little patience here as Anil sir is dealing with Indian Govt. Depts. and there as we all know things wont proceed as planned and that might further delay Anil sir to come back here and respond.
     
    Lets wish and pray things go in favour of Anil Selarka ji and wish you all happy investing.
     
    regards
    Sreeram
    3rd Dec 2013
    Sofia, BLG

  16. Sir,
    Hope things are sorted at your end and you would resume Stock observatory and responses to CCMA soon.
    Thanks,
    Atharva, Pune, India.

  17. Hi Sir,
    Please suggest on my HPCL holding
    Purchase price 318
    CMP 215
    Quantity 142
    Thanks

  18. Sir,
    Trident Limited
    This is an addendum to my post below on Trident Ltd. I should have mentioned the previous closing price: please forgive me for that.
    Trident Ltd closed at Rs 18.20 on NSE on 29 Nov 2013, with huge volumes. NSE+BSE traded 12.7 Lakh shares on 29 Nov, against an average volume of 4 Lakh shares. In fact the volume has gone up very significantly in last few weeks.
    Suresh Krishna, Thane, Maharashtra, India

  19. Sir,
    It is very heartening to see you back!
    My query is about Trident Ltd – former Abhishek Industries – which was referred to a few times earlier in this blog and was considered to be a nice small-cap with good growth potential. I had accumulated 1400  at average price of 15.50. But it had plunged thereafter to levels of Rs. 7, but I kept it  –  frankly I was timid to book loss.
    However over last 3 months this scrip is on a consistent upward fire and has gained more than 150%, still moving up. This seems to be based on good results. I request you to please look at it and advise – I am a long term Investor.
    Thank you sir, again to be back!
    Suresh Krishna, Thane, Maharashtra, India
     

  20. Dear Kalidasji,
    I was quite disheartened by your long term absense.
    Various untoward thoughts about your health & wellbeing. I am not up-to-date with all the messages but anyway you are back .
     It was a stroke of luck that my chrome browser auto-puked your web address when key ‘a’ was pressed by mistake.
    It would be very good news if you can get court case in your favour. My good wishes are with you. 
    Dongre,
    Mumbai,
    India

  21. Dear Readers,

    As I had to attend to certain court related matters relating to my pending Retirement Claim involving very large amont, I could not keep up my promise to update the stock observatory. The abe work is nearly over, and I will be able to start my work from day after tomorrow, or November 30, 2013

     

    Anil Selarka

    November 28, 2013 US time

  22. Why suddenly no ore updates nor any new quries from foloowers?

  23. Subject: Gold or Silver,
    Respected Kalidas Sir,
    I wish to invest Rs 2 lac in gold or silver for 2-3 years horizon. Which of them can give better returns.
    With Regards
    Arvind
    Chandigarh
    India

  24. Respected sir I’m over whelmed to see the blog active again and have always prayed for your good healh and very glad/happy to see you back as a silent watcher of the blog have always learnt and got quite a guidance from your inputs.
     
    Rgds – Manu Sharma – Guangzhou – China

  25. Sir,
    I request your reply on my query on essar oil,essar shipping raised on 13-Nov-13.
     
    Parthiban
    chennai,india
     

  26. Sir,
        I have been following you for 7-8 years now and every time you amaze me. I have taken both Bajaj and TVS autos and i have felt the difference. But using this factor to analyze and judge a company and its customer focus and link it with the business, is outstanding !! I wish, you will continue to write your thought process and one day, we will be standing on our own feet:)
     
    Thanks,
    Vijay Hegde
    Bangalore, India

  27. Sub: Property purchase in Bangalore
    Sir,
         I have decided to buy a flat in Bangalore. Need to mop up finance now. I have Gold 300gms, Cash: 5L, FD: 3L, Equity: 13L ( BPCL, IOC, HPCL, MRPL, all bought in their recent lows).
    I plan to put in 20L cash and take 40L loan. In a dilemma which one to hold and sell. My gut feel is to retain equity as gains there could be 300-400% in next 5yrs and i may be able to clear all my loan.
     
    Please  advise.
     
    Thanks,
    Vijay
    Bangalore, India

    Kalidas Says … Sunday, November 17, 2013
    Bangalore is the only city where the property related consolidation is nearly over. It was first to slow down, so it will be first to quicken up.

    Almost all the stocks and metals are near their low, so it may be difficult to tell you which one. In my opinion, under the circumstances, sell all proportionately to raise the amount of cash you need. Take a small bite off each stock and gold you own for sale.

    I agree with your other observation. After 5 to 7 years, you may be able to pay off the entire loan with capital appreciation from the owned stocks and metals (Gold)

  28. Sub: Global, Currencies, Aussie Dollar
    Reg: when to sell?
    Sir,
    I have a few FCNR deposits in Australian dollars that are due to mature in 1 year (1st tranche) and 2 years time.
    I have no further need for these deposits (other than as a hedge against government stupidity!) as I am presently in India for the last 2 years and intend to remain here for at least 5 more years.  
    Is this the right time to sell and convert to Gold and Silver? (say in the event of another COMEX engineered  ‘Flash Crash’ for Gold) ?
    Regards,
    Ashish Dandekar
    Mumbai/Mandangad, Maharashtra, India

    Kalidas Says … Sunday, November 17, 2013
    Understood. Give me the amount involved so that I can guide you correctly. For the moment, stay with your Australian dollars, since metal and mining are looking up in my opinion. Australia is a commodity based currency and even in India, I think you get more than 6% interest rates.

  29. Sub: PSU Banks
    Dear Kalidasji,
    Can you please review Q2 results of following stocks and suggest suitable entry levels post results ?
    Andhra bank (CMP:59) : http://www.andhrabank.in/PressReleases/Press%20Release%20for%20Sept%202013.pdf
    Corporation bank (CMP:264) : http://www.corpbank.com/asp/0100text.asp?presentID=2912&headID=21
    Thanks
    Srinivas | Bangalore

    Kalidas Says … Sunday, November 17, 2013
    I intend to give special coverage of select stock in revamped stock observatory since it may be of interest to many readers. Special coverage will be twice a week – Monday and Thursday.

    Andhra Bank will be covered on Thursday, since it may take some time to finalize revised format. I have already seen the news report linked by you. My preliminary recommendation is a strong buy. More will be under Special Coverage. I thought I will be able to do it on Monday, but can not.

    I have not followed Corporation Bank which is indeed a very good bank. I intend to cover entire banking sector in general and select 3 stocks in descending order.

    Same way, I intend to cover other sectors also, and cover the top 3 recommended stocks. Such sectoral coverage will appear twice a month, on Second Sunday and Fourth Sunday (India time)

    Depending on the comments that I may receive, I may refine the format in future, so that most readers get what they want.

  30. Dear Kalidasji, 
        More than 6 months back you had recommended M&M ( around 830 level) for its robust sale. After that it went to 52W high at 1026 (20-05-13) and then at 52W low at 740 (28-08-13). What is its prospect after 6 months and after 5 years?
        For TATA MOTORS you had advised to purchase later. Is this the time to accumulate gradually or we can again will get it below 300?
       You never recommended BAJAJ AUTO. It has been multiplied several times (from 262 on 02-12-2008 to 2130 on 31-12-2013; also 1:1 bonus given at 3000 on 08-09-2010). Is there still some adventure left to ride on it at suitable opportunity?
    Rajesh Yogi
    Durgapur, India
    14-11-2013

    Kalidas Says … Thursday, November 14, 2013
    Since the markets have become Internet based with very fast movements, it is difficult to predict future of any stock 5 years down the road, unless we see very distinct trend when the stock is trading near historic low.

    Coming to Mahindra group – which is one of the most dynamic group on Indian horizon today. There comes a time for every company or its management “When they do everything right, and in adverse times, they do everything wrong”like every individual including you and me.

    At the moment, whichever name contains the expression “Mahindra” is shining like a Golden Sun viz. Mahindra & Mahindra, Tech Mahindra, Mahindra Eugine, Mahindra Finance, Mahindra Real Estate, Mahindra Scooters, Mahindra Resorts, Kotak Mahindra Bank (Some of them are unlisted) etc.

    Mahindra has best of both words – in Auto sector. It has good vehicles (Passenger cars and SUV), Tractors (which buffets it from recession in Passenger vehicles). If it enters three wheelers, it will perform very well. The advantage for Mahindra is that it has good experience in Diesel operated engines (mostly used in Tractors).

    Currently, while Auto sector is witnessing slow down, but Mahindra is excepted. M&M is its flagship company where most of its activities are concentrated. Considering solid markets in India with no let up seen in next 3 months, it appears that M&M will continue to do well. Current slowdown in its prices is more due to weakness in Auto sector in general and not so company specific.

    The Auto industry usually perform well after monsoon. thus, for next 6 months, the stock may do well, and may reach a new high by March, 2014 or in late April (when March end quarters result will be known by Mid May, 2014). M&M is riding on its success, and it may continue for another 18 months.

    I did not say for Tata Motors, but Tata Steel, if I remember right. Except for TCS, Tata coffee and Tata Global Beverage, and now Tata Steel, most other group companies are losers. However, I will study Tata Motors which is also a major force. I can not comment now.

    You are very right. Bajaj Auto is the stock I have always ignored for the reason that I never pick up No. 1 company because they usually have limited upside. There is nothing more than No. 1. I usually try to pick up No. 2 to 5 companies who can go one step up always. That is, they always have growth prospects, whereas No. 1 companies does not have that much potential.

    Further, I also have some prejudices (old man’s prejudice), because I have never seen any improvement in the Bajaj scooters or three wheelers. They are same mediocre as they were in late 1970s. Have you seen any improvement in any feature in three wheelers which are being used in millions in India? They have not increased height in passenger cabin by even 3 inches so that the passengers could see upright in the Auto. You have to always seat with “hunched shoulders” while traveling in Bajaj Auto three wheelers. When the companies do not bother about passenger comfort, those companies eventually falter. Bajaj has not suffered because it has monopoly. TVS Motor is the only company which raised the height of its three wheelers.

    It is undoubtedly a good stock, may not be its manufactured vehicle. I will survey this stock and let the Readers in my revamped stock observatory column which will be effective from coming Monday onwards.

  31. Sub : Indian stock Rei Agro
    Sir,
    I hope you  have studied the company Rei Agro by now as promised on 10.11.2013. I am also interested in this company as considering  share very cheap @ Rs. 6.5 .
    Awaiting to hear your views on this company before investing in it.
     
    Regards
    Arun
    Mumbai, India
     
    Kalidas Says … Thursday, November 14, 2013
    I am sorry I missed it. At the moment I am occupied to recover my 26 years old retirement benefits such as Provident Fund, Gratuity and unpaid wages, which amount to over Rs 3.5 crores, if it is paid legally and properly. so it is taking time. I will be free from Monday onwards, when I will advise. I have already seen some statements but want to know more details from company’s website. Please have patience – I will certainly give final opinion within next 5 days positively.

  32. Subject : Outlook for interest rates in India
    Dear Sir,

    Looking at current rate of inflation, it looks quite early to say that interest rates have peaked in India.  Rather, it is possible that rates might be increased in next policy review by RBI. However, flip side is that this might affect growth to some extent.

    What is your outlook about interest rates in India over next quarter ?
    Is it right time to invest in Gilt funds or we should wait for another quarter or so.
    Regards,
    Gaurav, Pune, India

    Kalidas Says … Thursday, November 14, 2013
    Interest rates are dependent on three major factors – Inflation, Growth and Indian Rupee.

    Yes, Inflation is higher more due to exchange rates rather than local demand/supply equilibrium. RBI is in dilemma – if it raises the rates, the finance ministry would scoff at it for affecting growth. And if it does not, it would be blamed for not doing enough to control inflation.

    Growthdoes depend on lower interest rates. Look at US, EU and UK – all are bent on keeping the rates at historical low in the interest of growth, in spite of enormous budget and trade deficit, several times that of India, and are willing to take risk in inflation. European Union recently said that it was more interested in inflation so that growth does not suffer. Every one likes higher prices – you want your property price, personal income (or employer’s job bill), stock you are invested in, and Gold – the traditional saving vehicle in India to go higher. Everyone loves higher prices of any thing.

    RBI is required to abandon its defense of inflation, and remove the basic elements of inflation causing factor – the Rupee – which it was always acting to stem its rise by using what is called “Sterilization process” which was propounded by C Rangarajan, now Economic Advisor to the Prime Minister. He is the hindrance and must be sacked from any advisory assignment anywhere – in Ministry of any kind or RBI or planning commission.

    RBI is acting in “reaction mode” rather than “pro-active mode”. Unless this attitude is shed very quickly, it would be doing “greatest disservice” to the nation. Somehow, I think that new Governor – Raghuram Rajan – is in different mould than other past governors, but his actions so far does not justify my confidence in him. By keeping the interest rates at higher level, he is merely increasing the “interest servicing cost” on governments borrowing. FED does not want to raise rates, because it does not want to raise the interest servicing cost of the Government debt. India is acting just opposite.

    Rupee Exchange Rateis another factor. When the Rupee was getting stronger, RBI was intervening to keep it lower to encourage exports – a useless and uneconomic strategy.

    In any market, there is one cardinal rule that is, If the price does not move up, it will move down This is my golden unwritten rule. When Rupee was not going up in spite of solid fundamentals, it gave signal to Hedge funds and FII Commodity operators, that go ahead and weaken the Rupee, we like it and will not intervene in it. This is why large Hedge Funds and FII commodity operators used MCX and COMEX to short the Rupee and crashed it.

    Now your questions are answered in above context
    Yes, the interest rate has not peaked it. It would be deemed to have peaked, if Rupee falls below Rs 56 at least, because higher Oil prices causes higher agriculture inputs, transportation costs, electricity costs, LP Gas costs, Kerosene costs and Fertilizer costs – all have elements of pushing up the inflation.

    However, there is some check on RBI in the form of FM Chidambaram opposing any rate rise move. Mr.Ragu ram Rajan can not afford to displease him, so he is taking just baby steps upwards, when the need of the hour is to make big steps down. The correct interest level in India should not be above 5% at the most (since India does not have pension policy for its citizens who depend only on interest rates on Fixed deposits to support themselves.

    Infrastructure development is the key to the growth. It is high capital intensive sector, which depend on borrowed money. If the borrowing costs are higher, then its profitability and affordability will get lower and it may become almost all projects “unviable”.

    RBI and Finance Ministry have to make “public pronouncement” that it wants Rupee to go higher and higher Rupee is in national interest, in same fashion Rupert Rubin – former US treasury chief and Ex vice president of Goldman Sachs made a policy with idiom that “Stronger dollar in US interest”. Further Government has to come down heavily on “non deliverable Rupee trade” and treat it as “illegal wherever it is traded” and make it as “crime against the State” so as to be punishable with death. Then you see, the Rupee will swoon up and make all inflation, higher rates to disappear within a period of just 3 months.

    I still feel that Raghuram Rajan is having different DNA than any other former RBI Governor. He has to play true to its name Raghuram = Lord Ram and Rajan = King. If he does that, then India is saved.

    These are the matters relating to policy matters which I can not forecast. As such it is difficult for me to give you answer whether or not the rates have peaked. On traditional basis they have not, and may rise by another 2% in baby steps – that would be a recipe for disaster.

    This is why I am remitting money in Rupee and earn higher interest, and do not invest in any stock unless it is absolute bargain. At one time my personal investment peaked to Rs 1.35 crores, and now it is only Rs 300,000 only, because I am making more in interest than in capital gain.

  33. Hello Kalidasji,
    Welcome back sir..would like to know if your mystic number is ready.
    Regards,
    Awadhesh,Mumbai

  34. Essar Shipping Ltd (CMP 17) & Essar Oil Ltd (CMP 52)
    Dear Kalidasji,
    I am holding these 2 stocks for nearly a year. I would like to know your views on the 2 stocks for long term. Is it worth holding them or its better to exit and move to some other stocks. Below is my holding in these stocks.
    Essar oil – Buy price – 55, qty – 5000
    Essar shipping – Buy price – 27, qty – 10000
    Parthiban
    Chennai,india

  35. http://profit.ndtv.com/news/forex/article-rupee-may-crash-to-78-per-dollar-in-6-months-sharekhan-371976
     
    Do you think this situation likely?
    Sanjay Shah ,Mumbai

    Kalidas Says … Tuesday, November 12, 2013
    The link you provided was good, but the interview was punctuating number of times, so I left it. I understand from the Interview that Mr. Srinivasan of Share Khan is a technical analyst who normally work with the charts and momentum. They rarely bother about the fundamentals.

    They usuall go by the technical levels of support and resistance. They therefore believe that if the Rs goes to 63.50, it will go to next support at 69-70 and then to 75-78. They are also in habit of accepting US numbers on face value, and give lot of weightage to tapering talks which may raise the interest rates in United States.

    They ignore the fact that United States has budget deficits of nearly 16 Trillions. Even a rate rise of 1% will cost the economy $160 billions – equivalent to India’s trade deficits plus 30% bonus. US does not want to raise the interest rates, and tapering talks are aimed to please the Republican Senators who will be reviewing the budget numbers in February. Once the limit is raised and objective achieved, they will soon start reducing rates to boost the economy. It has been happening for over last 15 years.

    Fall of Rupees from Rs 48 to Rs 63.50 now is huge 32%. Why should there be a fall of another 30%, making fall of 62.5%? It is a technical number which every analyst project once 50% tier is reached. The technical levels all analysts follow are10%, 20%, 39%, 50%, 62% and 80%.

    Take the Rupees last major consolidation level. The above levels are working both ways on upside and downside. Let us consider downside. The various Rupee levels are at 10% (52.80). 20% (57.60), 39% (66.72), 50% (72.00), 62% (77.76) and 80% (86.40).

    When the Rupee breaks the level of 20% ( for that matter any stock or commodity including gold and silver) from last major consolidation, it would be deemed to have entered the bear market. It happened when the Rupee broke the support at Rs 57.60, so the Rupee has to go down more in bear market, where first stop is at 39% or say Rs 66.75, then at Rs 72, then Rs 77.76 (a major point) and then Rs 86.40 which is almost a bankruptcy level.

    Such huge fall means that India is almost bankrupt within last 12 months. No one lends money to a bankrupt person or nation. But in India, almost Rs 91,000 crores of new money came in last 12 months from FII.

    Even I was shocked when the Rupee fell so much. In fact, Chinese Yuan and Indian Rupees are two of the most valuable Asian currencies in the world. There are reasons – the growth today lies only where the headcounts are more. If there are more people, there are more consumers, there is more real demand, and there is real growth. True that Indian Rupee was hammered by complete mismanagement of future markets (which also saw the collapse of National Spot Exchange).

    The recent weakness was more due to general strength in USD caused by tapering talks and huge rise in employment numbers which was a hoax. the numbers did not include loss of 448,000 jobs to temporary workers. The permanent increase of job was around 200,000. You will see these numbers winding down when the actual numbers hit, but by that time, no one bothers about the actuals, only the futures.

    Even current level is a good level to enter India, and that is what FII are doing. Are they stupid that if the Rupee was to rise to Rs 78 as predicted by Share Khan, they will remit the money in hoardes?

    I go only by fundamentals, and of course at some time I do look at some technicals, because most of the trading activities are determined by short term players – look every day on your TV the stock recommendations where they advise the investors to buy at Rs 158 and sell at Rs 162 with a cut loss sales at Rs 155. Most people use these tips but it works only for few moments.

    As NRI, I like Rupee going down because I can now get 30% more money in Rupees and also get 10% interest rates. I will hatch these Rupees like a hen hatching an egg. It does take time, so let us wait. My long term target for Rupee is still Rs 26 and not Rs 78!

  36. Dear Sir,
    Subject : Ashok leyland
    Ashok Leyland (AL) was in news after the quarter numbers and the VRS that they would be introducing. Also the projection of sales havesnt been too encouraging. You have AL on your list and have recommended , do you still hold the same view or any change in opinion for an entry point now for long term time horizon. 
    CMP : 15.2
    http://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=3&cad=rja&ved=0CDMQFjAC&url=http%3A%2F%2Fwww.business-standard.com%2Farticle%2Fcompanies%2Fashok-leyland-announces-vrs-to-reduce-manpower-costs-113110800424_1.html&ei=x_WBUvb7LoayrgenmYDYBQ&usg=AFQjCNHkaCba41IsMiVKM6q4zGZjWw7ORQ&bvm=bv.56146854,d.bmk
     
    Thanks,
    Atharva, Pune, India

    Kalidas Says … Tuesday, November 12, 2013
    The first time I recommended this stock very recently to my best friend in Hong Kong, who also happens to be my partner in Agriculture trades. It was the level of Rs 12+. He bought some and then the stock went as high as Rs 17.8.

    Yes, the current numbers are disappointing. It is an industry event. Even the controlling shareholders, Hinduja, bought over 2.6 crore shares in October spending over Rs 41 crores. Whenever the big shareholders like Hinduja (who also owns Indusind Bank) want to raise their stake, they somehow manage to push the stocks down to the bottom, so that they get the lowest price.

    The stock has corrected due to bad news, and the market is near high. If the market corrects, the stock could take further beating because next result is still 3 months away. The monsoon quarter is always a poor quarter for the Auto majors. The real demand comes for Auto after Diwali.

    I like Ashok Leyland for two reasons –
    (1) It is located in South India where there is lot of job and income growth due to ever prospering high tech sectors. More money means more money for buying home and home and auto sales go together. No one wants to buy jewellery more by Rs 5 lakhs but they would not mind buying some really good car even if it cost upto Rs 9 lakhs.

    (2)It is backed by solid Hinduja group who is disliked by many sindhis, but we look only at non sindhis. It does have tie up with Nissan which is also making good cars, may be not as good as Toyota and Honda, but still a good car. The company also is very liberal in dividend pay out. so when the things turn around, get the benefits of higher dividend in terms of % which do well compared to bank deposits.

    Should you buy now, may be not, let the negative news play out for a while and allow the stock to falter for a while. When it is Rs 12 plus (though I still like this stock when it comes down to Rs 14 to make my first entry price), it will be a good buy. UNLESS of course, some real bad news hit the economy.

    I always get a email from HDFC Bank, IDBI Bank and ICICI offering cheap finance to buy car. It means that credit is still available for car purchase, which is a good news. The demand therefore may not falter much. And with inflation at high level, the chances of car prices going down are relatively less, but some price reduction is not ruled out to attract new customers.

    I did not like why AL is offering VRS to its employees – it cost a lot of money to force out old employees by VRS. I never like VRS being used in every industry in India, especially Banking sector, where a person even after VRS continue to get pension for another 20 years, and if he dies his wife also continue to get for another 15 years (women live longer than men, I observe). So a person may get paid for 20 years at low wages for doing some work, but after VRS he gets paid for another 35 years and that too after VRS package. A dead elephant is more valuable than live one!

  37. Dear Kalidasji,
    I am overwhelmed to see you back and do not have words to express how happy I am  to see you back. I knew  you would be back one day.
    Missed you a lot Sir. Wish to meet you once and chat whenever you are in Mumbai.
    A Very Happy Diwali and a prosperous new year to you and your family.
    Regards,
    Kiran Khair, Mumbai, India.

    Kalidas Says … Sunday, November 10, 2013
    I am still stuck in USA and may come to India only in late January. I will inform readers before I reach India. Thanks for your thoughts and feelings.
     
     
     

  38. HEARTENING TO SEE YOU BACK!
     
    Dear Kalidasji,
    Hope is a good thing, may be a great thing.. It is this hope, that brought me back to visit this site after September.. And I’m glad I did so.
    Its heartening to see you back with unmistakable humility in your words.. That is so obvious. Your words & ways teach, apart from stock market stuff, a great deal on ‘giving/sharing’, ‘humility’ and ‘life’ itself. Thanks for everything. And welcome back!
     
    Warm regards,
    Abhyasi
    Hyderabad, India 07 Nov 2013

    Kalidas Says … Sunday, November 10, 2013
    Thanks for your expressive feelings. I wish I was upto the mark to receive such compliments
     

  39. Hi Kalidas-ji,
    Wish you and your family a happy diwali. I have seen the pic of your family on the Stock Obs. column. Nice to see your family for the first time. Your son is aged around me. And you are looking glamorous too :)
    One thing I noticed here, the format of this page got distorted to some extent. When we are submitting comments, the look and feel (GUI or simply UI – in software language) is affected. Not sure if you have noticed this. We are still able to post comment without much difficulty. So it is not a major issue.
    Yet one more thing before coming to my original question. Please do not misunderstand me. But I am a dedicated follower of this website and I feel the overall structure of the site, Navigation Architecture – in formal language, is completely out of order. There are several sections, sub-sections glued one into another and hard to find (we know where to click, but a new comer would get lost very easily). It seems many different sections are planned but they have become out of order. The compartmentalization is not done well. I love this website and hence I humbly request you to spend some time (if possible) to simplify the site. The easiest way to do so is to cut all excess baggage into a section called “Other Topics” without deleting them. The sections which get regularly updated, can have their own presence in the Home Page via appropriate link. In that way, any visitor can navigate through the site easily. When you get more time, you can look into the “Other Topics” section and make a better structure for that. In this way we can do an initial clean-up and leave future expansion possibilities intact. This is just my opinion. But after all this is your website and you will decide how it should look like. Whatever be the shape and size of the website, we will always be glued to it, there is no doubt about that. We love you, we depend on your advise, and the website is only a medium to interact with you.
    Now let me take your suggestion on a financial planning. We all know 2 facts: Fact1 – Sensex is all time high. And Fact2 – Many stocks are much lower than their all time highs and the economic condition is not all-time-best at this moment. So, a logical conclusion is, the rally will slow down or even take a hit sometime in near future. We just don’t know when and how much. At this moment I have total 10 lakhs to invest in equity. I am fully invested at this moment. Out of 10, I have 4 lakhs in stocks that I can hold 5-6 yrs at a minimum (max it can be 20-25 yrs). I do not intend to sell them even in a market crash. It includes IOC, HPCL, Essar Shipping, LIC, Petronet LNG. As you can see, this section is composed of shares recommended by you. I am not bothered about this section and I am confident of the return. Next 4 lakhs I have invested into mid-term targets including many banking shares (I am at 30% profit on them already), Media (15-20% loss), Tata Beverage (profit), Aviation (loss), Sugar (profit), Metal (huge profit). Overall I am in 10-20% profit. The last 2 lakhs I have used in gambling. No, not in future or options, but I am using that 2 lakhs for very short term bets – from 3 days to 30 days range. I am gaining small amounts from them like Rs. 200-500 (after tax etc.), but cumulatively it is not negligible. I have no exposure to Gold or IT (recently I have booked huge profit and sold everything in Gold and IT).
    My request is, please guide me and investors like me on the market trend. Do you think it is risky to be 100% invested at this moment. How do you advise to control our dipstick ? We have 3 major events coming up. The Union budget, the Fed tapering, the General election – expectedly in that order of time. So how do you see the market behave for next 8-10 months ? Please guide so that I can adjust my exposure accordingly. In addition to overall trend, if you have any suggestion about my specific investment plan, please share as well. I am more interested to learn the rules and apply them myself than taking stock-specific direct advice from you. Because I want to also learn apart from making profit. The way I learned mathematics in class 5, by practice, I want to learn investment. And I have seen no better teacher than you.
    To help you advise me, I want to tell you that I have constraints in other type of investments like land or real estate, gold in physical form etc. Basically I want to invest least possible “time” & “maintenance” in investment. 80% of my time I use for learning & enjoyment in life, and only 20% for wealth generation. So I avoid other forms of investments where I need to invest more time. I have a small exposure in terms of real estate etc. but I do not want to increase that any further.
    Thanks for your advice in advance. And thanks for being with us as a guide…. friend, philosopher & guide :)
    Sudipta, Kolkata, India.

  40. Dear Sir,
    Wish You a very Happy Diwali
     
    Kind Regards
    Rajmohan Babu
    Kampala, Uganda

    Kalidas Says … Sunday, November 10, 2013
    I also wish you Happy Diwali and prosperous new year.

  41. Dear Sir,
    Wish You and Your family Very Happy and Prosperous Deepavali .
    Shiva
    Minneapolies USA

    Kalidas Says … Sunday, November 10, 2013
    Thanks. I also wish you the same.

  42. H Respected Kalidas Sir,
    Wishing you a very Happy and Prosperous Deepawali to you and Your Family.
    With Regards
    Arvind

    Kalidas Says … Sunday, November 10, 2013
    Thanks

  43. Respected Sir,
    Welcome back to the blocg.To me it is the best Diwali Gift you have given to your blog readers. Happy Diwali to you and your family and all the blog readers.May this Diwali bring new hope and prosperity
    .
    Sir, please suggest some Diwali Dhamaka stock.

    Sir, as you again reasserted your bullish views on IOC and we already have positions in the stock, but the Govt.’s OFS (offer for sale ) has damaged the stock severely.

    Sir, I want to know your views on long term impact of this on the stock.For short term it has done the damage fully. I have 650 shares at an avg. price of 350+.

    Secondly on your recent recommendations I have purchased 1000 IFCI @23.70  CMP is 25.6. There is some rumour that IFCI and LIC housing will be merged to get banking licence.Sir, do you have such piece of information and can it be viable?
    Anjali, Lucknow ,India,2/11/2013

    Kalidas Says … Sunday, November 10, 2013
    It may take some time for me to give recommendations on stocks right now. There are two reasons – One, I am still not in grip of the market outlook and stocks after prolonged absence and Two, the market is too high to give any recommendations of any stock, except some dead beaten stocks. At the moment, the market is reacting more to international events and inflow of money of FII, rather than individual merits of any industry or company. Where I like some companies are so much overpriced, that I tend to ignore them. I will make up my old skills soon, and then come up with real recommendations.

    My recommendations have not changed for any of the OMC stocks. The rise in petrol, diesel and gas prices are slowly becoming realities, but the pace is not the one I looked for. One of the dampener that even I could not visualize at the time of recommending OMC stocks, is massive devaluations against all calculations. If the Rupee rate was nearly same as before (Rs 46 to 48), then the profits would have sky rocketed for all OMC. When the Government is interfering in currency matters, it is most difficult to take a firm view on import dependent stocks like all OMC.

    In your case, the Government is under intense pressure to reduce its deficits, so it is singling out IOC when the stock price is at Rs 212. When the IOC prices were 385 or about, and talks of stake sell was being discussed, the Government wanted to have price of Rs 450 or about. Same government is now trying to sell the stake at Rs 212 or much less, may be at 5% to 8% discount ( no one will come forward to invest unless he gets the discount due to poor perception of OMC stocks.)

    Since your purchase price is relatively high, at almost 75% from current price or about 43% from original price, I would strongly urge you to place some new fresh money (if you are comfortable with relatively long term holding), say buying about 350 shares to begin with. It is possible that if the divestment exercise fails, then the stock may suffer temporarily, but the downside is pretty limited because the stock is consolidating between 180 to 215 level for quite some time. I also have some position at about 312 or about after which it did go to over Rs 400 but I never sold. I intend to buy this stock soon and will never try to sell below Rs 1500 equivalent. If the present policy remain same, then perhaps I will leave this stock to finance education of my grand children whose college education is still 10 years away.

    The profit on your IFCI is too low to book, and investment amount is not so large. Any sale will not release substantial fund for you.

    I do not know whether or not IFCI and LIC will merge. Are you referring to LIC or LIC Housing Finance? LIC is not a listed company. I doubt LIC may have interest in buying banking license because it has so much of free of interest income by way of premium, that it may not need CASA deposits (Current Account and Savings Account) which are low interest cost bearing.

    After listing IDBI bank, I think that IFCI may get the banking license on its own, and may not need any other institution to join its hands. Banking license is a very attractive proposition, but banking is a high capital and high staff cost bearing exercise. It is also more in retail banking side, whereas IFCI experience has so far been in wholesale or project finance on long term basis. Banking activity will take heavy toll on management time and profitability will suffer. I do not think IFCI even needs banking license – there are enough borrowers out there who need wholesale loans. One industrial loan of Rs 100 crores may engage only 5 senior employees to analyze or follow, where on retail front, it may need 500 employees. If I were a Chairman of IFCI, I would never go from wholesale to retails unless there are strong benefits are accruing.

    So I would evaluate IFCI as “stand alone” stock without speculating over its banking license or alliances.

  44. India,Stocks,REI agro Ltd.
    Sir,
    REI Agro Ltd , one of the largest basmati rice processing and marketing company in the world. CMP Rs.6.Stand alone diluted EPS for 2012-2013 was Rs.1.87 and Rs.6.57 on consolidated basis. Q1 2013-2014 revenue is 2937 crores,EPS Rs.1.76 PAT 187 crores , mostly coming from overseas subsidiary “Ammalay commodities JLT,Dubai” which is into distribution of basmati rice and trading of other commodities. Dividend yield is  8.28% at CMP. Promoters have been consistently increasing their stake from 37.9% in March 2010 to 53.38 in September 2013. FII’s holding is 35.6%.Total debt is over 5000 crores.
    The price has been falling from Rs.15 in June 2013 to Rs.6 by yesterday’s closing ,without much change in the share holding pattern.(June-2013 to Sep-2013).I have 10000 shares at an average price of 9.I took exposure considering their revenue and profit growth, capacity expansion, promoters interest to increase the stake , good performance of basmati rice industry and  dividend history. It is strongly suspected that promoters are involved in the manipulation of the share price and they were punished by SEBI  in January 2013 for fraudulent trading during 2004-2005.
    Recently  their attempt to raise fund by issuing bond by “Ammalay commodities,Dubai” failed due to poor investor sentiment. Yesterday they made a disclosure to the exchange that they are exploring the possibilities of a reverse takeover involving “Ammaly commodities,dubai” and “GEM TV Holdings” ,Singapore.Below links will provide some information about the company and the deal involving with GEMS TV Holding,Singapore.
    http://www.reiagro.com/img/Updates/Fragrance%20Roadshow%20presentation%20v54%20-%20wo%20transaction%20summary.pdf
    http://www.btinvest.com.sg/markets/news/71197.html?source=si_news
     
    Sir,If time permits could you please go through the financials of the company ,since we can’t understand the accounting jugglery of these type of companies. What is your opinion about the company ,can I add more at this price?
    Joy.Joseph,Mangalore,India,02.11.2013

    Kalidas Says … Sunday, November 10, 2013
    I am studying financial of this company right now, and will offer the comments tomorrow under this section. It it too late at night over here, so I got to go.

  45. Hi Kalidas-ji,

    I bought 250 shares of Den Network at avg price of 185 and CMP is 150. I have a loss of Rs. 9000. I am stuck in this stock and unable to decide whether I should exit or I should stay for profit in future. When set-top-box was introduced in India almost 1 year back, like everyone I also hoped that the cable network companies will be profitable. But what actually happened in our country is some sort of joke. I stay in Kolkata and my house is under Den Network coverage. I still enjoy all the channels at Rs. 150 per month while this package is actually priced at Rs. 250 per month according to their own rate chart. The middleman i.e. local cable operators control the price and they do not let the price go up in fear of losing the market share.

    My family is definitely very happy that they are getting all channels at a very low price. But I think this is a major reason why the share price of this company is not close to what we had expected.

    But with time, I think the monthly rental has to increase. Already the local operators have told us that it will be Rs. 170 per month very soon. Likewise, if we see the rental go to Rs. 250 after an year (which is debatable, we have no idea when this will happen) – the profit of the company and the share price will also increase. I did some simple calculations based on this data and the quarterly result of the company. As per the last quarterly result, the Total Income from operation is Rs. 161 Corrie. Each subscriber is paying Rs. 150. Company gets only Rs. 130 after Entertainment Tax etc. If I divide Total Income by the monthly rental (Rs. 130) I get the number of subscribers i.e. approx 1.24 crores. If the rental is increased to Rs. 250 per month, the company will get Rs. 210 after Entertainment Tax etc. So we will have an increment of 100 crores in the Total Income. I assume the profit will also increase by that much amount (I mean approx). In the last quarter, there was a loss of 12 crores. So we can expect that there will be a profit of 70 crores for the company when the monthly rental will go up to Rs. 250.

    Next I checked the P/E ratio. It is currently 129. Today EPS is -0.89 (because there is a loss in the last quarter). With new rental, EPS should be 4.8 and if we apply P/E ratio of even 100, we get the share price at 480. If we discount some part of it for various other expenditures etc. we can still bet for Rs. 400 per share as a target price.

    I request your help to suggest if my calculation and thought process is correct or not. I am not much bothered about what profit or loss I make on this particular stock. But I am trying to learn. I need your valuable opinion to understand the price calculation. I am sorry if my calculations are completely bogus and baseless. I will not be hurt even if you tell me that it is non-sense. Please criticize and share your views so that I can learn. Thank you in advance :)

    Sudipta, Kolkata, India.

    Kalidas Says … Friday, November 01, 2013
    I find very difficult to evaluate the telecom and internet company. I therefore never dabble into them. These companies follow some weird accounting practice and there is cut throat competition.

    I have some disagreement with your calculations. They are listed as under:

    1. You do not have to count the subscribers based on your logical formula. It also has some flaws. Not all subscribers are monthly members – some may be even pre-paid members as well for a limited time. You can not take all of them while working annual revenue.

      Further, you do not have count the subscriber base yourself. Most of the telco companies quarterly or annual report do contain such information which is essential part for the analysts. When authenticated information is available, why do you break your head?

    2. P/E ratio always look demanding when the company is into loss. You can not use same p/e ratio or even discounted one of that company while working out projections. You have to consider the Industry Average, and that too, in Kolkata area since the situation in Delhi, Mumbai and Kolkata vary considerably.

      The average Industry P/E ratio is single digit. Look at Bharati, RCOM, Idea, Dish TV, Tata Tele and Vodafone. They are the leaders who call the shots. May be Den Network is a local name which may not have following outside Kolkata.

      When investing into companies having complex statistics, it is better to stay invested in first 3 or 4 names in the industry. Den Network may be a listed company but with Kolkata as base, it may not have much following in major financial center like Mumbai or Delhi. I never seek to invest in Kolkata listed or based company unless they have very strong presence outside West Bengal and also a national player.

      When the market corrects severely, let us say, the non profitable company’s stock price suffer most. In your case, please reassess the company and if possible, better switch your position into Idea or Rcom which are followed by leading funds and investors

  46. Dear Readers,

     

    Today being a Halloween Day in United States, we have to attend the Community Celebration over here. I may not be able to post therefore the Stock Observatory today (1st Nov, 2013 India time)

     

    I will try to reply later tonight, some of the pending CMCA queries. Please excuse me for some delay.

     

    Kalidas (Anil Selarka)
    United States (31 October, 2013 – US time)

  47. Dear Kalidasji,
    The link below has details of some multibagger stocks of the last decade (2003-13 for benefit of readers).
    http://jalansaurav.wordpress.com/2013/08/02/some-multibagger-stocks-of-the-last-decade/
    Can you please review following stocks, if they are fit and suggest suitable entry levels ?
    1) MCX (52H/52L/CMP:1600/238/470)
       SHP(Promoter:26/FII:37/DII:15/Public:22)
       Key share holder:SBI/NSE/Fidelity/BOB/HDFCBank/MerrillLynch/NYSE
       Almost in monopoly business
       No exchange has failed in past
    2) Gitanjali Gems (52H/52L/CMP:650/50/62)
       SHP(Promoter:39/FII:19/DII:6/Public:36)
       Promotor holding dropped from 59% to 39% due to pledged shares
       Promotor banned by sebi
       45+ year old company with 4000 outlets
    3) Dr.Datsons Labs (Aanjaneya Life) (52H/52L/CMP:850/29/64)
       SHP(Promoter:25/FII:2/DII:0/Public:73)
    4) TV Today (52H/52L/CMP:93/53/84)
    5) TV18 (52H/52L/CMP:38/15/23)
    Thanks
    Srinivas | Bangalore

    Kalidas Says … Saturday, November 09, 2013
    No one is too big not to fail, says the idiom. This is why mighties of mighty like Citigroup, AIG, Lehman Brothers, Merrill Lynch and even Morgan Stanley failed. They were saved by the FED by pumping into them billions of dollars, now running into trillions, but the truth is that they did fail.

    Yes, the key shareholders in MCX are big names because they have interest in them to hedge their portfolio. Except for Fidelity and NSE, almost all were in trouble and they continue to remain in trouble.

    Based on the premise that MCX is controlled by so biggies, you may succeed in investing into this stock, unless the stock market collapses by at least 65% from current level. At the moment such collapse look unlikely because there are no enough strong signs to dictate that trend.

    I do not know about Datsons Lans. I do not understand this kind of stocks, so I remain away. My principle is that if I do not understand, I do not invest.

    GITANJALI GEMS: I never liked this company. In fact, I never like such diamond jewellers. Most diamond traders make money in Forex market because size of their trades is very high. Further, diamond market thrives on very long unsecured trade credits. The Mumbai seller to say, Hong Kong buyer will be for at least 6 months trade credit. If the Hong Kong does not get money from his buyer’s default, he defaults on his obligation to Mumbai seller.This affects the entire chain.

    It is still a widely followed company. I do not look at FII or DII holdings because if one FII invests into this company, Other FII take the notice and they also invest on the premises that when that FII invested, there must be some thing. Most FII and DII follow similar “herd” metality.

    The fact that the stock has come down from high of Rs 650 to Rs 62, that is by 90%, it means that there are some troubles we do not know. Loss of 90% value is a sign of virtual bankruptcy in my opinion. In bonds, I use market value at 30% of below, but certainly at 20% of below as first sign of potential bankruptcy.

    My be you can try for your speculative money. In such companies, once you make money, you must cash it immediately and note not to invest in such company in future after two or three adventures.

    However, do not go by my opinion. I do not advise the readers if I do not understand or follow a company.

    TV today and TV 18 are both media stocks. I do like the media stocks and may be you can dabble into them for a while. I will cover these stocks in future.

  48. Dear Sir,
    Stock               Buy Price     CMP        Quantity
    1. IOC                310            200.2         500
    Kalidas View … The price difference is large. Since the market is all time high, I suggest buying 250 more for the time being, with balance 250 to be added when the market is down by at least 10% or when the stock still drops to Rs 180 or below, preferably around 165 to 168 if it really does go down to that level due to adverse sentiments. With diesel prices being slowly de-controlled, the fundamentals have returned in favour of the company, but trade off by the government on subsidy front for the sale of election, is postponing the real earnings to some future date. Please note that this stock is not going to work in short term (it may give about 15% return in short term, but making serious money is still about 18 months away.

    2. HPCL              245            200.7        500
    Kalidas View …
    May be you can buy 100 shares more for the time being. Buy 200 more if the stock falls to Rs 180 or below for any reason – market or stock specific.

    3. Jaypee Infra    27              17.5          10000
    The price difference being high, I suggest buying 2000 only at current market level. Do not hesitate to sell it if the stock moves up due to strong market. The recovery in infra structure is still months away.

    4. Hin Copper    126             70             700
    Kalidas View …
    Buy 500 more at current level, since I am bullish on metal market now. The stock is near low, and this being illiquid stock, it is better to buy slowly. I doubt whether you can get even 500 shares so easily. I still believe that this company is a take over target of Anil Agarwal led Sesa Sterlite. Mr. Agarwal is grabbing almost all precious asset in ferrous and non ferrous sector, especially non ferrous one. Do not sell quickly and hold the position for a while. Earnings are not the only reason to buy this stock. The government also want to divest some holding in this company as well, but it has not formally put the proposal in place. Due to low market prices, the government may not be willing to sell or dilute its stake.

    5. BHEL               270            500           136
    Kalidas View … I have not studied this stock at all, I will revert to you later after some study. Briefly, I can say that when you find that infra structure sector is recovering, this will be first one to go higher. In fact, any strength in this stock is an “Advance Indicator” that recovery of infra structure is under way.
     
    I have confidence all these can perform very well in long term but I would like to seek your advise, I can add more, I have 5 laks allocated for these stocks but would like to wait until Nifty below 5700.
    Please advise.
    Thanks
    Ramesh, Suzhou, China, Oct 30th, 2013

    Kalidas Says … Friday, November 01, 2013
    Read my comments under Kalidas View above.

  49. Sir Jee ,
    With regard to news that IOC ( CMP 199.75) has put in a bid for Haldia Petrochemical ltd at Rs25 a share at a cost of 1,688 crore. If successful can you advise what impact this will have on EPS of the share in the future . Wish to understand how news like this impact share price of a stock. ie. If this money goes from their balance sheet , how will they show the value of the company they have bought
    Andy ,Manama , Bahrain , 28Oct2013 

    Kalidas Says … Tuesday, October 29, 2013
    Neutral effect. Such investment is at the instance of the Central Government – there are no profit motives in such moves. The EPS will be governed by the speed with which the diesel prices are decontrolled and payment of under-recoveries – both of which are not immediately possible due to (1) upcoming election where the Government needs votes from farmers who will detest the hike in diesel prices and (2) payment of under-recovery may not be possible without increasing the budget deficits which is worked out on the basis of cash accounting, not on accrual basis. So when the cash is paid, it will be out of increased budgetary deficit. Due to lower growth, the higher subsidy may cause the economic numbers too bad and too sensitive to foreign investments.

    I do not read much taking a stake in Haldia Refinery. It is to assist West Bengal government to secure the cash for its budgetary needs. There are no business considerations.

  50. Sub: Petronet Lng
    Dear Sir,
    Recently Petronet Came out with Q-2 Numbers and the numbers were very bad , the link is given below:
    http://www.moneycontrol.com/news/results/petronet-lng-disappoints-q2-net-slips-19-to-rs-182-cr_972881.html
    http://www.petronetlng.com/PDF/Q2_Results_2013-14_18102013.pdf
     
    I am holding 6000 shares of Petronet at an average rate of Rs.150/- from almost 2 years.
    Now My query is:
    1.What is the future of this company in coming years
    2.Should I Hold, sell or Purchase more at current rate of Rs.124/-.
    3.What are the target of Petronet in 1-2 years of time frame.
    Please Guide 
    Basant Kejriwal
    Kolkata,India

    Kalidas Says … Wednesday, October 30, 2013
    It seems that you have bought the stock in a rally which makes the cost at relatively high level.

  51. You bought however a really a growth company. The company has been reporting “double digit Volume gain” which shows the tremendous business it is in. Gas, not oil, is the future for the entire world, including India
  52. There are two negative factors which affected the company which are
  53. Rapid depreciation of Rupee by 25% over two years, especially last 9 months, that caused the cost of import much higher. It could not pass on the extra cost to the consumers, partly due to indirect price control on the domestic gas prices. In the past, the cost of import used to cost about 92% of sales value, whereas due to depreciation, the cost has soared to 95%. That is, the profit margin was eroded due to Forex factor which was beyond its control.
  54. It entered into long term supply contract with Qatar at high prices when the oil prices were galloping at rapid pace. One should not commit for 20 years when the prices were high. This was the factor within company control, but there is nothing can be done here.
  55. At the moment, the Oil, Gas and Petroleum prices are hovering at lower level. The stock has also been trading below 50 days average, which suggests that this may not be opportune time to buy more.
  56. Recent low price is about Rs 106 and high was Rs 174. I do not think that low price of Rs 106 might be reached anytime soon. The present negative news is neutral as many were projecting revenue and profit near or slightly above current Q2 numbers.
  57. I take the view that Rupee has almost stabilized with upward bias. It makes the cost of import relatively cheaper in future 6 months or so.
  58. I would stay with this company and would not swap into other counters. However, there are some bargains in banking stocks which are trading at almost 50% of Petronet. If you want to switch into some other sectors, even partially, then only I will give alternatives.
  59. If you want to stay with this company, allow about 7 to 10 days to let the negative result to play its part. In all probability, I would buy more at current level or slightly lower level. Buy only 1000 shares at one time. If the stock goes higher from new purchases, do not hesitate to sell it to book profit and reduce your overall cost.
  60. If the stock goes above Rs 131 and stays there, it would be a good sign. The company has finalized its Kochi terminal and would from July 2014 start getting gas supply from Australia. It is also setting up 5 mmtp re gassification project in Andhra Pradesh. In short the company is in expansion mode with deep pockets, considering share holders like GAIL, ONGC and IFC
  61.  

  62. Sub-Your reply to Mr Badrinath’s mssg on 27th oct.
    Your coments that ” I also made some mistake in judging United States”.Pls explain in which ref you meant this?
     
    Sanjay Shah,Mumbai.

    Kalidas Says … Saturday, November 09, 2013
    It was my view that no one, individuals, Pension Funds, Hedge Funds, Exchanges for stocks and commodities and respective Governments can manipulate the market for long.

    I used to include even United States in that list. However, I have found in actual experience that United State is the only country who can successfully manipulate most of the markets with its expertise of futures and options.

    Future exchanges in United States (CBOT, NYMEX, COMEX, CME etc.,) are extremely well controlled by the US Government and its affiliated agencies. They too failed at times, with latest one in 2008 when severest form of financial crisis emerged.

    However, instead of succumbing to the ultimate market forces, US refined its system, improved its control systems and used its expertise of mathematics and other models to counter the market forces.

    The entire US economy is being tightly controlled by FED, Chicago Board of Exchange, NYMEX, COMEX, NYSE and finally its SEC. The US President controls the world with its omnipotent military power and its economy is controlled by other agencies listed above.

    This is the main reason that US has been able to control various currencies, its own US Dollar value, Gold and other markets through CME Group. In spite of massive deficits, trade and budget, US has been succeeding in forcing gold and silver markets down, control various currencies so that other countries do not get upper hand, and also defeated some of the moves of its biggest creditor – China – to take charge of global trade.

    Even so, it will not be able to succeed all the time. The truth and ultimate market forces always prevail. No country is supreme in that regard. Yes, US has proved many prophets wrong by its successful practice of futures and options with the help of CME Group.But it will eventually fail, because wrongs con not continue for ever.

    To give you an example, SWAP trades were the invention of the United States. Originally designed to provide hedging risk, it was slowly converted into controlling mechanism of most of the commodity items. When the options were running out, they used to change the system.

    Just look at the Oil trades. They usually short the oil in the futures markets at short end and buying it on longer term. When the obligations under buying are about to mature and it may face a prospect of pushing the price higher, it changed the system by inventing very long term future trades, so that it can now short the future trades at short end and swap it into buying at longer end.

    Many years ago, the Oil prices used to trade at the most 3 years in forward market. Now, the oil can trade for as long as 15 years. How can one take the view of mass commodity like oil for 15 years in advance?

    US also taught the world that one should look at the future market, not spot market, to judge the futures of any investment item. This is why most analysts do not bother about the spot market, but look at the futures whether it is trading at premium or at discount. If it is trading at discount, they conclude that the current market might ultimately go down, and if the future market is at premium, they conclude that the market is heading higher in future.

    When the Hedge Fund notices this, it buys the stock in the spot market and immediately sell at premium in future market so that it can pocket the difference securely. This works so long as the future market functions properly. In India it did not, and this is why we see the failure of MCX, National Spot Exchange and its promoter Financial Technology group.

    With same force, US brought down and control the Interest Rate market with clever use of Interest Rate swaps. This is the main reason why the interest rates globally are near the low for so long. Something has to happen to destroy the supremacy of future market operators. And it will happen.

  63. INDIA – STOCKS – Prospects for OMCs
     
    Kalidas Jee
     
    There is an article in Bloomberg on expectation of oil-price analysts about oil price (Brent Crude) heading down towards USD 70-80 levels by next year.
    The link is :
    http://www.bloomberg.com/news/2013-10-24/oil-s-5-trillion-permian-boom-threatened-by-70-crude.html
    Kindly give your views on the prospects of OMCs … in particular IOC … in case the expectation of the analysts as per the article comes true.
     
    Thanks & Best Regards.
     
    Laxman
    Bhubaneswar, India, 28th October 2013

    Kalidas Says … Wednesday, October 30, 2013
    Oil prices are inversely related to $ strength. With trillions of US dollars being printed by FED over 3 years by now, the value of dollar is bound to lose. As such, the possibility of oil prices to Rs 70 to Rs 80 is less. Arabs will reduce the production if the prices fall to even Rs 90 per barrel.

    Please note that the correct measure of oil prices is “Brent Crude” which is trading in London. The price of $97 or 98 that you see on board is WTI Crude which trades only in United States. A few years back, WTI crude used to trade at 4% to 5% premium to Brent Crude but of late it is trading at 10% discount

    10% movement in prices is always there in any stock or commodity. However to expect 30% fall in mass commodity like oil is not that easy. But in the market place, everything is possible at all the time. But the possibility for above prediction is relatively less, much less.

    You would have seen the Auto Production in almost all countries are slated to rise by at least a few millions of cars. Consider how much fuel may be needed to run these cars?
     

  64. INDIA – STOCKS – Prospect OMCs, – IOC in particular
     
    Kalidas Jee,
     
    There has been a news that Indian Govt (FM Mr Chidambaram in particular) has decided to defer re-imbursement of under-recoveries of OMCs  for the current fiscal amounting to USD 1.5 Billions (= approx. Rs 93,000 Crores @ current rate of 1USD=61.5 INR) to the next fiscal. The news item also states that It is almost certain that  – in view of the forthcoming election in early 2014 – price rise of Diesel & Petrol will not be allowed by the UPA Govt.
     
    Since Congress party is almost certain that it is going to lose the 2014 elections … given the mischief-minded-ness of the Congress party – it will surely indulge in the mischief of throwing its own burden of this huge subsidy (created mostly by its corrupt & mis-governance) to the next Government …. to create a massive economic hurdle for the next Govt. and blame it for economic mis-management
     
    Under this scenario … how do you assess the prospects of OMCs … HPCL, BPCL, IOC, MRPL, ESSAR OIL etc, … in particular IOC … which is your most recommended stock for accumulation ? Should we start accumulating IOC at the present price level (as has been earlier recommended by you) OR should wait till the effect of the likely non-reimbursement/deferment  of the under-recoveries for the current fiscal to be fully played out ?
     
    Waiting for your reply to take a decision as to whether to start accumulation of IOC right now or to wait .
     
    Thanks & Best Regards
     
    Laxman
    Bhubaneswar, India, 26th Oct. 2013

    Kalidas Says … Wednesday, October 30, 2013
    There are many issues some of which are political where our judgement may not be accurate. Let us face a few facts for OMC stocks, especially IOC

    Please read today’s stock observatory where some comments are made. But I repeat them over here. The space constraints may force me not to write too much details but following are the observations:

    1. Election Prospects: Yes, I tend to agree that Congress may lose the election this time around, especially when BJP has fielded strong contender Mr. Narendra Mody who command respect even if it is with some hatred. Whoever comes to power, the problems may be same.
    2. MoneyControl reported today of Parikh Penal’s recommendations in which he suggested raising diesel prices by Rs 5 per liter with immediate effect. Other raised tariffs recommended are Kerosene Rs 4 per liter and LPG by Rs 250 per cylinder.
    3. Whatever fundamentals that we expected at the time of recommending OMC stocks way back in 2009 are coming true one by one, although it has taken about 1 year longer. When the diesel, petrol and LPG prices are deregulated or only loosely controlled, most of the profitability of the OMC will return with a bang. IOC’s diesel sales is around 87% of its total turnover of Rs 400,000 crores plus. Same applies to lesser degree to HPCL, BPCL, MRPL and ONGC (Producer).
    4. I therefore expect the controlling mechanism on Oil prices will be severely diluted in 18 months, whoever comes to power. In 2 years time, I expect almost all OMC to come back to heavy profits as projected in 2009. The government too will benefit from heavy dividend flow from these OMCs.
    5. The most important question, which is most relevant to Stock Investors everywhere, is whether or when will that happen, and what is the opportune time to enter these stocks. Now, the question of “whether” is no longer there, but the question “when” is there and everywhere.
    6. Only two companies – Reliance (RIL) and IOC have revenue turnover of over Rs 400,000 crores plus. RIL does not have pricing control to face except in KG-D6 wells from where LP Gas is produced. It will not be as much benefited as IOC. Further, the number of shares outstanding for RIL has over 322 crores shares outstanding. IOC on the other hand, has 242 crores shares outstanding, about 25% lower than RIL.
    7. IOC has now turnover of Rs 463,000 crores of which 87% comes from diesel operation. that is, almost Rs 400,000 crores of sales are from Diesel side. Any change in prices therefore will benefit IOC to the maximum extent. For instance, if profit margin improves by 5%, then 5% of Rs 400,000 crores is Rs 20,000 crores or Rs 82 per share. Diesel is currently undersold by Rs 30 per liter. Thus, if full price effect is given, IOC profitability will improve to Rs 500 per share at least. In other words, the stock even if it trades at 6 times P/E, it can still go to Rs 3,000 from current level of Rs 202.50
    8. Now this stock is not for active traders now ( it will be after two years at least). Instead of keeping money in LIC, Bank Deposits or Equity of other companies, I would wager my bet on this stock on at least 3 years basis from now.When we suggested position in 2009, the time frame proposed was 7 years or until 2016.My original perception therefore is still maintained. (2009 + 7 years = 2016) with possibly one more additional year.
    9. If the stock goes to Rs 1200 (not Rs 3000 projected) from current level, the market cap of this company will rise 6 times or 6 x 48,864 crores or RS 293,304 crores, and it may become one of the largest companies in BSE/NSE. May be RIL may hold its No. 1 position, but IOC will certainly No. 2 company if not No. 1. In all probability, IOC may become one of the most valued company in the world.

     

  65. Dear Sir,
    I have got cash (INR 4L) quite unexpectedly out of my  retirement benefits due to job switch, which I would like to invest for my retirement (25 yrs. horizon). Current options that I see are

    Kalidas View … Good to know that you got the Retirement Benefits on job switch. Even my own retirement benefits have not been paid by Indian Overseas Bank for over 26 years and 6 months, and if they pay according to rules and normal practice of awarding the interest, I might get over Rs 6 crores. Finally, Government of Hong Kong is moving at my request, so let us see how it goes. Your news is giving me some hope that I too might get my benefits. A request – Can I borrow your luck for a while?

    1.tax free bonds (PFC/NHPC) which are giving @ 8.9 % returns  and very safe bet .
    Kalidas View … Go for NHPC. For PFC, better prefer the equity, not bonds

    2. Corporate FD’s horizon would be 5-7 yrs max , giving higher returns @12 % , can be slightly risky
    Kalidas View … Very risky. When you invest Retirement Funds for retirement purpose, you do not take chance with Corporate borrowers howsoever they may be large. Extra return of 1 to 2% is not so great. You can not take risk of 100% of your capital for the sake of just 2% extra return. Keep the money in the banks

    3. Gold ? not sure , I am holding 100 gms + already
    Kalidas View … No need for the moment. May be you can buy some Silver upto Rs 1 lakh.

    4. IOC : as you have suggested few days back or any other you think .
    Option 1 & 2 would just beat inflation and I am not sure what would be 4 L worth after 20-25 years (peanuts mostly ).

    Kalidas View … Do not worry. Rs 4 lakhs is not going to disappear anyway. 4 lakh is a 4 lakh which is lot of money for many people. Yes, I would certainly bet on IOC and buy at least 500 shares at current prices. It also pays good dividend. My original expectation is going exactly as planned such as decontrol of diesel prices, may be partially. Sudden depreciation of Rupee (from Rs 48 to Rs 62 or by about 30% or more)changed the equation. You can not rule out Rs 400,000 crores revenue company so quickly. When the IOC prices go higher, Government may take opportunity to sell some stake to the bidders to reduce its holding below 75% when more shares would add liquidity in the stock and encourage FII to take major position. My original target of Rs 2000 plus remain intact. It is a matter of time, and you have more than 25 years on your side, whereas I am seeking just 3 more years for major appreciation in this stock. Believe me, this company will become No. 1 stock in terms of market cap in India and may become leading BSE Index stock. I will leave giving financial advice if it does not work the way I projected.

    Bit unsure  if to invest in any single option or divide in two, as the amount is as well not very high, but I fear if I don’t lock I will spend it J

    Regards,
    Atharva, Pune, India.
     
    Kalidas Says … Monday, October 28, 2013
    See my comments under each item above.

  66. Dear Sir,
    Good to see you back…
        Stock               Buy Price     Quantity       CMP
    1. Delta Corp         81               1000             78
    Kalidas View …
    2. RCOM                170              1000            152
    Kalidas View … Buy about 500 more at CMP. It may be noted that Telecom industry is going to witness more and more demand due to rapid change in technology. Further, Vodacom is seeing every opportunity to expand, and it is possible, though a speculation, that it may seek to expand by acquisition. It has deep pocket, and RCOM is a very large company. If you are not comfortable with RCOM, then may be you can sell about 700 of RCOM and buy Idea Cellular which is expanding well (Birla concern)
    3. Reliance             825              100              900
    Kalidas View … Continue to hold for a while though it may come down a bit due to today’s news where Oil Ministry is touting idea of asking RIL to surrender the 5 wells under KG-D6 area due to RIL’s unwillingness to expand fast. It is possible that a company like CAIRNS India or ONGC may bid for wells under RIL control. We do not think that RIL will surrender the wells after spending several billion dollars. It is just pressure tactics from both side.RIL wants higher prices and government exploits its licensing power.

    4. GVK Infra           13                 21000          7.85
    Kalidas View … I do not think that the company may go bust. May be you sell some RCOM and use the proceeds to buy 9000 more of this stock. This will not involve any new funds.

    5. Esaar shipping   28                4000             17.4
    Kalidas View … It is still in doldrum. However, it is stable at this level for quite some time. May be you can just add 1000 shares for the time being, and watch this stock for A while. It is not time to go aggressively to average down on this stock.

    6. Wockhardt          600                200               463
    Kalidas View … Please change your column order, so as to keep the CMP and Buy price together. Add 100 shares during correction in the market.

    Please advise whether I can hold these stocks or move into better stocks. If so please advise which stocks are better to move-in.
    Thanks
    Ramesh, Suzhou, China, Oct 24, 2013

    Kalidas Says … Monday, October 28, 2013

  67. Dear Sir,
    nice to see you back. Iam  regular reader of  your blog…
    I have heard that in 2015 year , USA will be spilt into two nations.. there may be a war.
    Regards
    Badrinath
    Bangalore, India
     
    Kalidas Says … Sunday, October 27, 2013
    Unlikely. I also made some mistake in judging United States. It is simply strong enough not to let that happen. What war you are talking about? Internal Civil War? It may be a few years away, if at all.
     

  68. Hi Kalidas-ji,
    I used to visit your blog everyday… then when you stopped coming, I still used to visit everyday… everyday I used to hope that you will be back… and slowly I felt sad – very sad – that you are still not back. Like many other people, I really take you as my father figure. It was so painful to see you absent that one day I stopped opening this blog. Still I open it once in a month… because I heard even miracles do happen. And today when I opened it – My Joy Knew No Bound !! Kalidas-ji is back !! WOW !! I am really really pleased to see everything back to normal again.

    Thanks for coming back. We have been missing you like anything. Financial questions etc. are secondary. I am happy to see you back. May God give you and your family 100 more years and a very good health – I am ready to donate 1 year of my life to add to yours. We love you really !

    Sudipta, Kolkata, India.

    Kalidas Says … Tuesday, October 22, 2013
    Do not give me one year of your life to me. It rightfully belongs to your family. It is their right. I am sorry that I let down most of our readers, but it may not happen in future. I would be more responsible in future ( I do admit that I was irresponsible for not letting Readers know why was I so silent – I will disclose it later)

  69. Dear Sir,
    It’s very heartening to see you back. Thanks a lot.
     
    Best Regards,
    Shaan
    Bangalore, 22nd Oct’13

    Kalidas Says … Tuesday, October 22, 2013
    Thanks

  70. Dear Readers,

    Stock Observatory for today (Tuesday, 22 October, 2013) will be posted at about 12:00 PM due to reasons beyond my control. It will appear in the morning from tomorrow onwards. Please excuse me today for being late. 

     

    ANIL SELARKA
    October 22, 2013 (India Time)

  71. India – Stocks  .. OMC Advance Tax Payment
    Kalidas Jee
     
    My heartiest wishes of Happy Birth day to You & Maa’m.
     
    Regarding your opinion (in response to Mr. Vijay;s query on IOC) that advance tax paid in a quarter could be an indicatior of  the earnings (& EPS) fot that quarter …. while I am waiting for your ascertained opinion on this aspect, I would like to point out the following  :
     
    For PSU companies in India, and OMCs in particular … which are used as milching cows by the Indian Govt … where OMCs coyly carry on with the heavy burdon of under-recovery of lakhs of crore perennially under pressure of Govt … nothing can be known for sure.
     
    Only a few days back Mr Chidambaram (FM) has gone on record asking the PSUs to pay more dividend for the current fiscal, or at least not less than last year’s amount ( irrespective of earnings/profits) AND that too in advance !
     
    As such, it is possible that PSUs (and OMCs in particular) could have been asked to deposit higher quarterly advance tax than due (to tide over the revenue deficit) … subject to adjustment at the end of the year.
     
    In such a scenario, could it be possible to ascertain the actual quarterly earnings/EPS of IOC from the advance tax paid by it for the current quarter ?
     
    Thanks & Best Regards.
     
    Laxman
    Bhubaneswar, India, 21st Oct 2013

    Kalidas Says … Monday, October 21, 2013
    I will reply tomorrow, as it is too late now at this hour in USA – it is 11:35 PM here.
     
     

  72. Sir wish you and your  wife belated very happy birth day.
    Shiva
    Minneapolis,USA

    Kalidas Says … Monday, October 21, 2013
    In time or belated, best wishes are always best wishes. Thanks.

  73. Subject : Happy Birthday
    Respected Kalidas Sir
    Wishing  you and Mrs Selarka  a very happy Birthday. 
    With Regards
    Arvind

    Kalidas Says … Sunday, October 20, 2013
    Thanks

  74. Birthday Wishes
    Dear Sir,
    Wish you a Happy Birthday
    Kind Regards,
    Rajmohan Babu
    Locksher, Kenya

    Kalidas Says … Sunday, October 20, 2013
    Thanks
     

  75. Sub : Belated Happy B’day
    Sir
    Wish you and Mrs Selarka a belated happy B’day.
    Regards
    Arun, Mumbai,India

    Kalidas Says … Sunday, October 20, 2013
    Thanks

  76. Kalidasji,
         nice to see you back here .
    Wish both of you a belated happy b’day .
    I needyour advice on a personal matter and sent you an email, please reply with your convenience .
    Best regards,
    Prashant
    India, Bangalore .

    Kalidas Says … Sunday, October 20, 2013
    Thanks

  77. INDIA, STOCK, IOC, Advance Tax Payment
    Sir,
         Happy to see you back. Is there a way to “guess” earnings from the advance tax paid ? Say eg: IOC paid 125Cr advance tax during June2012 and it made 39/- EPS during the quarter. This quarter they have paid 255Cr as advance tax and  roughly they might have made 70+ EPS. Does it makes sense ?
       IOC has been beaten to death and if my theory holds good, there is going to be a dramatic rally in coming days. Please suggest.
     
    Thanks,
    Vijay Hegde
    Bangalore
    India

    Kalidas Says … Sunday, October 20, 2013
    Yes, it could be an indication. No one pays more taxes unless his income is larger.

    Let me study this for a while and come back.

  78. Dear Sir,
    Wish you and your wife a very Happy and Prosperous Birthday

    Kalidas Says … Sunday, October 20, 2013
    Thanks.
     

  79. ALL READERS

    I will reply all posting tomorrow due to my prior engagements. Please bear with me.

     

    ANIL SELARKA (KALIDAS)

    USA, October 17,2013

  80. Many Many Happy Returns of the day to You folks !
    May god bless with you with best of the things in life .
     
    Sachin , Pune , India

    Kalidas Says … Monday, October 21, 2013
    Thanks

  81. Kalidas Sir,
     
    Welcome Back! Good to see you back in action. You have recommended Ruchi Infra stock couple of years ago and I have accumulated about 2000 stocks at an average price of Rs. 24. CMP is Rs. 15.35. Please advise if I can exit from this and move the amount in any other stock that has more potental to appriciate in future.

    Raunak, Bangalore, India

    Kalidas Says … Monday, October 21, 2013
    Let me evaluate the alternate stock in swap strategy. I also own Ruchi Infra at Rs 19 or about. I will come back soon under this reply.
     

  82. Good to see you back.
    I am your usually silent follower.

    Regards
    Manoj
    AK, New Zealand

    Kalidas Says … Monday, October 21, 2013
    Thanks

  83. Hello sir,
    Welcome back,
    I have $35000 in my us account would like to transfer to India, I missed the 67 rate now it is at 61 do you think it is still good time to send money or should I wait till it go back to 67 again
    Rs
    Thanks,
    Tushar Chicago USA

    Kalidas Says … Monday, October 21, 2013
    You must know that sum total of all markets finally get converted into Money, that is, Rupee in India. The currency market is therefore the largest market of any kind.

    When the currency drops unexpectedly by over 20%, it becomes a strong buy. You could have bought Rupee when it was Rs 65 or about, may be you can not grab the lowest price. That opportunity is gone.

    Now, do one thing. When the USD becomes strong even for a few days, send at least $15000 to India at whatever price . Please note that your dollar does not even earn 0.25% interest, whereas Rupee will earn you at least 9% interest on NRE deposit. 9% of Rs 62 is about Rs 5.50. Thus, downside is protected by at least Rs 5.50. Yes, Rupee was very weak before, but now it has regained some strength.

    I still take the view that there is no real recovery in United States. There is no way USD will get its best days of glory for ever. Its deficit is bulging and bulging beyond any control. I therefore wish to keep money in high yielding currencies even if the risk of depreciation is more. The higher interest rates alone will more than compensate any kind of devaluation over a period of 36 months.

  84. You made my day. Thanks for coming back.
    Best,
    Prakash
    Rotterdam, The NL

    Kalidas Says … Monday, October 21, 2013
    Thanks

  85. Dear Sir,
    Sub: Gold , OMC’s
    I wasn’t  active on buying any stocks, and market has been very volatile through out this time frame, so opted to be mere observer.

    But have been holding gold (had re-entered at 31K levels – 90 gms )  and OMC’s – IOC, HPCL for over an year.

    Pl. guide on my above mentioned holdings and what would be the direction you suggest going ahead.

    Regards,
    Atharva, Pune, India

    Kalidas Says … Monday, October 21, 2013
    GOLD: It has risen by 2% in last few days following Debt Ceiling agreement. The current market price of Rs 29,500 is not strong attraction to add more. Gold would have come down more if there has been no increase in duty. Indian investors in gold are therefore protected by depreciation in rupee and higher duty.

    I take the view that the gold may benefit due to FED’s implied suggestion to continue QE or Quantitative Easing policy. Gold may benefit more close to Mid November onwards due to expiration of December contract, when lot of physical delivery may jig up demand for physical gold. At the same time, on set of marriage season may also induce more demand.

    It think that the consolidation phase for Gold and Silver may be over soon. Stay with your gold for now, and do nothing for the time being. Your patience may be rewarded soon.

    IOC: IOC is very weak at the moment, just 10% above lowest price of Rs 186. Current Price offers excellent opportunity to enter again. I do prefer market correction to enter the stock, but I would not let go this stock even if the market is high. The dividend payout is about 30% of Annual Profit after taxes. Almost all factors listed at the time of recommending OMC stocks have been proved right – Petrol prices are decontrolled substantially, Diesel prices, a major item for IOC, has also become flexible. Govt under pressure to reduce the budget deficit, and oil price subsidy is likely to be reduced in 12 to 18 months (because election is near). It is likely that IOC may soon see its EPS rising to Rs 100 to Rs 150, and therefore the current price of Rs 202 is a steal. I am still a strong buyer of this stock. In fact, I will personally buy more of this stock very soon. (My purchase price was Rs 315 to Rs 330).

    IOC is better buy than even Gold now.

    Same thing goes for HPCL. I will cover all OMC in the form of two part article soon.
     
     

  86. Dear sir,
    India,stocks,Dhunseri petrochem and Tea.

    Kolkata based PET resin and tea company.two PET plants in kolkata,project in Egypt will be over by December. DPTL Will become one of the top global PET manufacturers after commissioning of Egypt capacity,currently largest PET manufacturer in India,second is Reliance.

    Dividend yield is 5.3% at CMP of 84,promoters holding 67%,combined holding of LIC,GIC,New India assurance,International Finance corporation and West Bengal industrial development corporation is 16.75%.

    I am already holding some at an average price of Rs100,Can I add more at this price considering,revenue growth after expansion,low floating,good dividend history,holding by LIC,GIC,IFC etc. Do you see it becoming a performer in the coming years.

    Regards
    Joy.Joseph,Mangalore,India,15.10.2013

    Kalidas Says … Monday, October 21, 2013
    I agree with your analysis. The stock has gained in last three days from Rs 84 as per your statement to Rs 93.50 today. A good thing to note is that the company’s PET plant is operating at nearly 107% capacity. The company’s production record is also very impressive, having risen by 30% in last 12 months, but the profitability has not improved due to margin pressure and effect of relatively less profitable Tea operation due to bad weather last year. .

    The credit rating is also maintained at highest level as of latest reaffirmation of rating on September 30.

    The difference in your purchase price and current market price is not more than 6% which is not strong enough reason to make further buying. It may be noted that the company’ stock has following only in Kolkata and not in major financial centers like Mumbai. This could be the reason for lower P/E rating for this company. Agriculture base also reduces the P/E.

    You could have bought more when the stock fell below Rs 72 at one time. When a company is good, and stock price falls more due to the market reason, it becomes a strong reason to buy.

    Hold your position at the moment because the market is at high end. The stock may not see the old level of Rs 72 but it is possible for the stock to come down to Rs 81 to 85 level in market correction. May be at that time you can add more.

  87. Dear Anil ji,
    Its Fantastic to see you back :)
    Thank you
    Pipi,India

    Kalidas Says … Tuesday, October 15, 2013
    Nice to see you again. I was also missing you.

  88. Great to see you back sir !
    Eagerly waiting for your fortnightly articles .
     
    Sachin , Pune , India

    Kalidas Says … Tuesday, October 15, 2013
    It will be soon.

  89. Dear sir,
    What a pleasant surprise,so happy to see your message after long time.
    Regards,
    Joy.Joseph,Mangalore,India,15.10.2013

    Kalidas Says … Tuesday, October 15, 2013
    Thanks

  90. Dear Sir,
    It was heartening to see you back after a long gap. Beleive me we felt as if something was amiss in the past 3 months.
    I have query regarding Praj Industries and Essar Shipping .I hold these stock for more than a year but it has not performed well and there is substantial loss. Should we hold or book loss ?
    Stock               Buy Price  Quantity CMP
    Praj Industries   50.90       1800      38.90
    Essar Shipping   28.80       4000      17.65 
    Regards
    Ravi Sehgal Gurgaon, India

    Kalidas Says … Tuesday, October 15, 2013
    Thanks for waiting for two days. Due to my and my wife’s birthday, some unexpected visits outside my town prevented me from replying.

    PRAJ INDUSTRIES:
    I never followed this stock in the past. It was my Broker’s favorite stock however. I have seen the financials and last year’s history and news, and give you my opinion as under:

    It is a difficult stock to analyze, because the company has been forming subsidiaries in whichever country it wants to operate. As such, there is no point of depending on the stand alone result of the company. The subsidiaries’ accounts are not given as the company has been exempted from providing or disclosing full set of accounts.

    The company’s performance is not bad nor good. The company appears to be debt free as evident from its balance sheets, but it is surprising. Whatever cash the company had were being used up to buy back its own shares, for what reason, we do not know. It could be one of the reason for support to the stock prices.

    The stock does have good following from institutional investors, viz. Mutual funds. In last quarter, the Mutual Funds have increased their position, may be due to good market. In previous quarter, most Mutual Funds were sellers. It has changed for better for the stock.

    The stock has been stable of late, and it has been trading above 200 days Moving Average, which is a good sign provided the market strength remains. The profit picture is not so strong. The earnings may not show much improvement.

    Your purchase price is near last 12 months’ high. If the market remains strong, the stock may see uptick to Rs 43.50 when you can afford to reduce some position, say 800 shares and buy back later when the stock retreats. Honestly, I am not able to take very clear view of this company due to overlapping subsidiaries. If you can switch your position to much larger company with simple balance sheet structure, it might help. The only other alternative is not to sit on the stock but play within its level, selling about 800 shares in rally and buying them back in correction. (by 12% OR MORE).

    ESSAR SHIPPING:
    I would have suggested you to sell some Praj (say 500 shares) and buying of Essar Shipping, say 1000 shares. However, Essar Shipping is not giving me clear picture. Its book value is shown to be Rs 250 on stand alone basis, and Rs 350 plus against current market price of Rs 17.50, a discount by 90%. Nevertheless, it is still worthwhile to transfer some money from Praj Industries to Essar Shipping, instead of pumping in fresh money at a time when the market is near high.

    I may have to study its balance sheet from Annual Reports and from website, as Moneycontrol site is not so informative. I will cover this stock in Stock Observatory so that most readers can benefit.

  91. Had almost lost hope to see you back on this blog.A big surprise from you this Dusherra from you Sir!Welcome back.

    Kalidas Says … Tuesday, October 15, 2013
    Hope is the only thing that distinguishes one from human to other form of life. Lose everything, never lose hopes. It is the most important vitamin available almost free and from within.

  92. Dear Mr. Kalidas,
    We are fortunate to see you back in this blog.  You have guided us lot over the years not only about market but also on personal life.  The perceivarance and patience never fails.
    Thanks and regards
    Saravanakanth
    Salalah, Oman.

    Kalidas Says … Tuesday, October 15, 2013
    Thanks. We will continue as ever.

  93. Sir,
    Glad to see your posts after a long time & to hear that you all is well at your end. I was concerned about your well being, not knowing the reason behind your long & unannounced absence.
    Wishing you and family a happy Dussehra!
    Regards,
    Aby, Bangalore

    Kalidas Says … Tuesday, October 15, 2013
    Nothing wrong with me. Just I was not in right frame of mind which might cause lot of errors. Forget it now, look to the bright future. Read my Stock Observatory released a bit late, again due to guest because of holidays due to Columbus day.

  94. ALL READERS

    I have started Indian Stock Observatory from today onwards. There was some delay in the morning (evening time here in USA) because of dinner guest I have had today. 

     

    Please visit the page of Indian Stock Observatory every day. I will change the logo to bear 2013 in stead of 2012 tomorrow. 

    ANIL SELARKA (KALIDAS)
    October 14, 2013 (India Time)

  95. America on shutdown mode & Kalidasa  on start up  mode. Extremely pleased see you, at the best of your health. Sir, your valuable information kept us away from losses, in this destructive market & indeed we are thankful for it. Compliments of the season to you & your fly & also a great happy birthday to you & your blessed best half.
    Thanks & regards
    Mohan
    Qatar

    Kalidas Says … Sunday, October 13, 2013
    Wow, what a statement – America on shut down and Kalidas on start up mode!This blog will gain strength from day to day from now onwards. I was missing all of you as much as you were missing me.

    Thanks any way for your good wishes.

  96. sub: welcome back Sir
    It’s 8th wonder to see you back on the blog.
    Sir, How about a return gift to your readers with an article on expected mood of market in next 9 months on your Birthday .
    Regards
    Arun , Mumbai, India 

    Kalidas Says … Sunday, October 13, 2013
    I will surely do that in next few days, possibly before the end of this week. Thereafter, I will start writing at least two articles per month – on every first and second on 16th of that month.

  97. What a pleasant surprise to see you back!
    Regards,
    Sam, Delhi, India

    Kalidas Says … Sunday, October 13, 2013
    Thanks

  98. Dear Sir,
    Good to see that you are good health and doing well. Your long absence brought in too many worries/doubts.
    wish you happy dussera and diwali in advance – (and birthday wishes if my memory serves me right.oct 18th right?)

    Raghav
    Bangalore

    Kalidas Says … Sunday, October 13, 2013
    Thanks. I also wish you Happy Dasera and also Happy Diwali in advance. Incidentally, my wife is having Birthday today as per Indian Calendar (that is, Dasera) although as per English calendar she and also me will have on 18 October.

    I have started the Stock Observatory today. It will come to full glory after a few days, since some of the sources I used to rely on have changed their data format with the result that I get only change in prices without any volume. If any reader knows any website where one gets the price change with the volume, I will appreciate it. Thanks in advance.

  99. TO ALL READERS

    Stock Observatory will restart from Monday, 14 October, 2013, India Time. I will be regular thereafter. 

    Kalidas

    USA – 10/10/2013

  100. Dear Sir,
     Happy to hear this. We are very happy to read this
    Kind Regards
    Rajmohan
    Kampala, Uganda

    Kalidas Says … Thursday, October 10, 2013
    I always remembered you when I took sudden Sanyas for a few months. I knew that you will be first one to react, as always. Happy Uganda.
     

  101. Hello Kalidas ji,
    We must say to you “Welcome Back”. Hope you are in good health.
    Take Care,
    Veekay

    Kalidas Says … Thursday, October 10, 2013
    Health and Wealth has never been a problem for Kalidas. I was just not in right frame of mind with the result that I never wanted to give wrong guidance to the readers. That’s all. It is now history. Let us look forward.

    I may be slow for next 3 or 4 days, by which time I will pick my speed and place foot on accelerator. No more breaks or hand brakes in future.

  102. I think i have checked this site just in time , to see this message  from Sir !  :-)
    Dear Sir , eagerly waiting for your post tomorrow.
    Regards,
    Atharva, Pune 

    Kalidas Says … Thursday, October 10, 2013
    thanks for checking. Stay on course.

  103. Welcome back. Hope all were well at your side.
    1) Your revised target (when it was below Rs. 80) at Rs. 180 of Satyam [ now 180X(17/2)= Rs. 1530 for Tech Mahindra] will be achieved soon. Original target of Rs. 240 ( Rs. 2040 for Tech Mahindra) also seems possible in near future. Will it be wise to take out invested money and stay with the remaining floating profit? Or its growth is intact for some years more so that one can hold fully?
    2) About 2 years back you have advised to hold TCS for 5-6 years. It was hovering around Rs. 1000 then. But why after 4 years it will be a sell? Is it not possible that the stock will give 15-20% CAGR for another 10 years? Please advise.
    Rajesh Yogi
    Durgapur, W.B.,India
    09/10/2013

    Kalidas Says … Thursday, October 10, 2013
    When the uncertainties were out, the stock began to recover. Sudden fall in Rupee also helped the stock. Right now, in spite of bullishness everywhere in stock and property market, I am bit skeptical or say very much worried about the global economy. We are on fast track now, and that is when the accidents happen.

    In normal course, I would have continued to ride the rally until the stock triples of quadruples. However, in present case, it will be wise to sell 40% in the rally steadily and let the floating profit run its course. In fact, one should sell upto 65% of this stock in next few months. That is, if you are holding 10000 shares of original satyam, sell 4000 by now or in rally steadily, and more 2500 when the stock drops by 5% after hitting higher target. Thereafter, I will let my 3500 shares to ride the further rally, because I will never lose – entire capital and some profits have been cashed already.

    This stock from “fraud tainted history” has finally turned around. I have not followed this stock in recent month, but I am accepting what you have stated. More later.
     

  104. Thank God. That is pleasant surprise Sir.
    Shiva
    Minneapolis USA

    Kalidas Says … Thursday, October 10, 2013
    Since when you have migrated to USA from Bangalore? Thanks for your patience too.

    I will send you separate email with my contact details to you. Call me any time. I will be in USA until Mid January 2014 thereafter I may visit Hong Kong and India for about 4 months. I will keep the readers informed through this column

  105. My goodness!! I was really worried…welcome back and remain with us, pl.
    Rgds
    Rangjama
    (Bangalore, India)
    8/10/2-13

    Kalidas Says … Thursday, October 10, 2013
    Do not worry for me at all. I am in perfect health. I am now 65 and until I reach the age of 84, nothing may happen to me in natural course, except of course Accident. So continue to visit this column as before, and I will not let you down.
     

  106. Respected Sir,
    Thanks for goodnews
    regards
    seshavataram

    Kalidas Says … Thursday, October 10, 2013
    Thanks to your for patience.

  107. Sir,
    God knows how much we missed your presence in these turbulent times!
    More than a mentor you were a father figure to us in the world of investment.

    Kalidas Says … Thursday, October 10, 2013
    It is my fault for not informing the Readers at critical times, and for that I apologize. There was nothing wrong with me or my health at all, and everything was fine on my family front too.

    However, I was not in right frame of mind. It always happens to almost all Financial Advisers at times, when they get burnt out due to excessive mental fatigue and due to some bad luck also, although I believe in luck less than efforts.

    Nevertheless, I promise you to be regular from now on. I will certainly take one day off during weekend, that is, Saturday (US time, or Sunday Indian time) to attend to family outings and dinners outside.  

  108. Welcome back Sir.
     
    Regards
    Arvind

    Kalidas Says … Thursday, October 10, 2013
    Thanks. I will be very regular from today onwards. There may be interruption only for a few days in Mid January, 2014

  109. TO ALL READERS

     

    I will restart the blog and answering from 11 October, 2013 (India Time)

    Anil Selarka (Kalidas)

    USA

  110. Normal
    0

    For Sachin and All boarders of this blog
     
    I have seen the postings of one “Kalidas” on the link provided by dear Sachin.
     
    Before stating my observations on the “Kalidas” messages of the MMB (at the link provided by Sachin) … I would like to inform that I am among the few followers of Kalidas Jee from his very first appearance on the boards of MMB.
     
    AND I have stored almost all his postings on various topics on MMB boards (till he stopped appearing there)
     
    I am 99% sure that this “kalidas” now appearing on various boards of MMB is not our Kalidas Jee, BUT a heinous imposter appearing in in Kalidas Jee’s name … in active connivance with MMB fellows …. with the mischievous purpose of misguiding the boarders in the name of Kalidas Jee to suit their vested interest.
     
    It is well known that after Kalidas Jee left MMB and started his own blog, most of the genuine boarders …whoever had the knowledge of Kalidas Jee’s own blog … have abandoned MMB … leaving the vultures, wolves and scoundrels only on the MMB. ..to hoodwink the gullible boarders.
     
    Since that day these wolves & vultures were trying to do something about this. All of you are aware of the fact how some of those scoundrels are abusing this blog with all sorts of nonsense and vulgarism … when ever Kalidas Jee is absent for some time. Finally they have devised this splendid satanic idea of planting an imposter on the MMB to hoodwink the boarders of this blog !
     
    The intriguing features about the messages now appearing on MMB in name of “Kalidas” … which made me sure about the “imposter Kalidas” are :-
     
    1. The quality of the language and the contents … it is quite different from real Kalidas Jee’s writings … in spite of the imposter’s efforts to give it a look like actual Kalidas Jee’s messages.
    2. Whoever had followed Kalidas Jee’s messages on MMB … must be aware that each and every message of Kalidas Jee ended in Kalidas style …with his name,place and date … without exception. This aspect is missing in the imposter’s messages. ( I am afraid that the imposter (s) who is/are definitely following this blog … after noting this missing feature … will atart provide name,place & date at the end of the messages )
    3. MMB’s collusion in this mischivious activity is certain because of the fact that without MMB’s participation Kalidas Jee;s nick could not be duplicated on MMB.
    4. When Kalidas Jee, for whatever reasons, is not finding time to write on his own,by-now-wellknown blog … How can one imagin that he has started writing on the damned  MMB boards which he abandoned for ever ?
     
    I hope all the boarders on this blog should apply their common sense and should not be carried away by the messages of the “imposter Kalidas” on the MMB.
     
    Laxman
    Bhubaneswar, India,  14.09.2013

    Kalidas Says … Sunday, October 06, 2013
    I have already left MMB of Moneycontrol for several years, and never even visit them. What you inform here is a news to me, and I will check up with MMB to see who the new Kalidas is? I will ask them to shut him down for good. Give me a day or two to act in this regard.
     

  111. Dear Sachin
     
    I think you have confused with the messages of somebody else in the name of “Kalidas”  or ‘Kalidasji”  on MMB. There are a no. of nicknames starting with ‘Kalidas’ on MMB. I am sure … after Kalidas Ji started his own blog after despising MMB ( which turned into a grazing ground of vultures & foxes ) in utter disgust … has never again thought of visiting that board.
     
    However, to become very sure about what you have said … could you please drop a hint about the particular board (scrip)  in which has Kalidas Ji given his comment and the date ? It will really help every body on this blog.
     
    Laxman
    Bhubaneswar, India, 12.09.2013
     
     

  112. That is nice to know. I thought sir never writes on mmb after starting this blog. kudos Sachin.
    Shiva
    Minneapolis, USA
     

  113. Good news for all the followers .
    Saw messages from Kalidas sir on MoneyControl site. So its clear his health is good . When and Whether he will post on this site is not clear though .
    Sachin ,Pune ,India .

  114. Desperately seeking Kalidasji,

    Sir,

    we desperately need your guidance, especially at this time when some of the stocks have corrected a lot.

    Hope you are doing well and will sort out issues preventing you from visiting the blog regularly.

    you are being missed desperately

    regards
    Sam
    Mumbai
    29 Aug 2013

  115. Dear Sir,
    This is the time when you are the most needed to your followers.
    Hope you keep the blog alive.
    Regards,
    $amir,
    pune 08/22

  116. Hi everyone,

    I have observed that many of us still keep visiting this blog hoping to see a post from Anilji marking his comeback. I suggest till the time he is not back, lets discuss the queries among ourselves.

    I am sure there are plenty of experienced people visting this blog who can provide thier views.

    regards
    Sam
    Mumbai
    20th August 2013

  117. Hi everyone,

    I have observed that many of us still keep visiting this blog hoping to see a post from Anilji marking his comeback. I suggest till the time he is not back, lets discuss the queries among ourselves.

    I am sure there are plenty of experienced people visting this blog who can provide thier views.

    regards
    Sam

  118. Dear Sir, I have been following you since so many years, and I have always found every suggestion on the movement of market so correct. Sir ,I want to ask you if it is right time to buy stocks of IOC, BPCL, HPCL in present conditions for long term.  Thanking you. 
    Anupuma (New Delhi)

  119. Dear Sir, I have been following you since so many years, and I have always found your on every move in the market so correct. Sir ,I want to ask you if it is right time to buy stocks of IOC, BPCL, HPCL in present conditions for long term.  Thanking you. 
    Anupuma (New Delhi)

  120. Dear Anil,
    For God’s sake, please stop your blog and remove it from the internet.
    It has seen good days and now is the time it should be completely wound up as you are not able to contribute to it regularly.
     
    Regards,
     
    Rajesh Agrawal
    Lucknow
    11th August 2013
     

  121. Kalidasji,
        I have essar oil 1400 @ 61 CMP (47.50) and Essar shipping 1000 @ 28 CMP (13.70) .
    I am holding essar oil from past 2+ years and did missed your suggestion to sell some at 84, apologies for the same .

    Do let me know how to go ahead with these stocks .

    Thanks & regards,
    Prashant
    Bangalore, India

  122. Dear Investors,
    Shri. Anil Selarka is a wise man.  He was available for many of us for free advice.  But He is a elder person. He may need some rest and every-time he cant just spoon feed everything to everyone. So if he is not returning to his blog, its ok.  But it would be much appreciated if he says something about the closure of the blog or something like that.
    Regards,
    Shivam, Chennai
     

  123. SIR,
    YOUR RECOMMENDATIONS REG:
    I had switched portfolios over an existing high loss list and invested in IOC, hpcl, ruchi infra, mrpl, evinix etc. as per ur suggestions. although i stood to lose a lot still i wont blame u bcos i am convinved of your sincerity and i know ur recos are quite rational and not intended to benefit any co bcos u are a genuine advisor doing selfless service ( UR COVICTION ON SATYAM a case in point). of course i have my reservations on evinix bcos i had queried twice to u as to why u were recommending such a low value scrip. i lost nearly75k on it tho i know u had given a sell order very late. now that my portfolios are almost 50% down from the already 400% loss b4 i switched over. any fine tuning u would suggest . i hold THE FOLLOWING. being fed up the beating from the mkt i had stopped checking on my scrips and let them lie. with a falling market i seek ur suggestions. thank you.
    HPCL-1000 (350) CMP 320,
    IOC -500 (320)    CMP 210
    MRPL-2000 (65)   CMP 35
    EVINIX 30000 (2.5) WASHED OUT
    satyam now( tec mah) 2000( 90) 
    HARIDAS, KERALA.
     
     

  124. Hello Guruji,
    I see HPCL and IOC are again down by 5 to 7%. Where do you bottom for these companies?
    It is disheartning to see loss of around 5.5 Lakhs just on these two stocks.
    Please give your insight.
    Thanks,
    Prakash

  125. spicejet reco by tulsian
    sir i wish to caution all and everyone who buys shares on TULSIANS reco. I have burnt my fingers very badly with his reco on scores of stocks like GMR, HM, NOIDA TOLL, EMPEE DIST, LAKSHMI IND, and many many more. not even one share has seen the light of day barring the first few days since his reco. sincee then it has been a steady fall. he is one individual one should never trust and if he has recommended spice jet take it from me , after an initial spike iy will go down and down. BUYERS BEWARE OF TULSIANS RECOMMENDATIONS.
    HARIDAS

  126. kindly inform how to get One O One in connect with you.
     
    rashesh 
    ghatkopar.

  127. Hi Sir ,
    Hope all is well at ur end .Ur long absense makes us worried for ur health.
    Sachin , Pune , India

  128. Hi Kalidasji,
    If you do not want to post or are in urgency, then please put up a oneliner indicating the same.

    Its quite irritating to see the blog not getting updated.

    Regards,
    Atul
    Singapore

  129. India, Stock-IOC.
    Dear Sir,
    Firstly I sincerely apologize if it is a repeat question. I hold 300 IOC shares bought at 354 in May 2011. The current market price is around 225. I am willing to hold it for another five years or more. I know it’s a highly speculative question but can it reach at least 800 or so. FYI, I don’t have any more money to invest in other stocks. Just need your advise on this whenever you get time. Will be eagerly awaiting your response.
    Warm Regards,
    Rakhee
    Mumbai, India

  130. Anilbhai,
     
    Almost a month since your last update.Hope all well.
     
    Sanjay Shah,Mumbai.
     

  131. http://indiatoday.intoday.in/story/narendra-modi-rajnaths-man-of-steel/1/286704.html
    Sir,

    Do you believe  the reason alleged by Rajanath on the devaluation of Rupee?He says “The devaluation of the rupee is a ‘well-made’ conspiracy by Congress as its leaders were now withdrawing black money stashed in Swiss banks”  :-)

     
     
    The devaluation of the rupee is a ‘well-made’ conspiracy by Congress as its leaders were now withdrawing black money stashed in Swiss banks,

    Read more at: http://indiatoday.intoday.in/story/narendra-modi-rajnaths-man-of-steel/1/286704.html
    Shiva
    MN USA

  132. Sir,
    I have 3100 RCom shares at an average price of Rs. 257. My loss is 50% now. RCom share price has been rising in the recent past and is showing good promise. Should i sell RComand and swap with some other share. I would like know your thoughts.
     

  133. As always I have RAPED all of u !!

    Look at my Big Silver Dick…it is at 40000, i said buy at 70000; now its down 50%

    That’s how we rape in Selarka Land..
    Isko kehte hai SuperSelarkaRape !
    Now see All OMC, Ashtavinayak, its all raping u..

    All down more than 50% !!

    U guys dont understand i just fuc u ppl !!!
    Now u take loss,,,sell your mother & sister….then only u will b able to regain profit !!

  134. hi

  135. Sub – TTML (CMP Rs 6.60)
    Dear Kalidasji,
    Please review data below.
    Recent developments:
    1) Announced floor price of Rs 7.6 for OFS to make public holding 25%
    2) OFS failed and stock tanked to Rs 5
    3) Now company has announced bonus 2:15 for non-promoters
    4) Bonus news has failed to inspire investors
    Other information:
    1) Subscriber base as on 31 May 2013
       TTML: Mumbai and Rest of Maharashtra: Total=0.90 crore – Company announcement
       Airtel: 18.88 crore (http://www.coai.com/statistics.php)
       Vodafone: 15.47 crore
       Idea: 12.37 crore
       BSNL: 0.97 crore
       TTML: 0.90 crore
       Aircel: 0.60 crore
       Uninor: 0.32 crore
    2) In Nov 2008, NTT Docomo bought 26% stake in Tata Teleservices for $2.7B, putting value of $10B for Tata Teleservices which has pan India presence. Current value should be $15B (Rs 90000 cr).
    3) NTT Docomo is the predominant mobile phone operator in Japan.
    4) Based on population of Maharashtra, TTML value should be around 10% of Tata Teleservices, which translates into 9000 cr as market cap of TTML. Current market cap is 1200 cr.
    5) Idea market cap is 45000 cr for 12.37 cr subsribers. So TTML with subsribers of 0.90 cr should have mcap of 3300 cr.
    How do you see the outlook of TTML ? Can we see levels of Rs 30-40 in next 12-18 months? I am holding 7000 shares at Rs 5. Any suggestions for me ?
    Thanks
    Srinivas | Bangalore | India

  136. OMC stocks
    Sir,
    Your favourite OMC stocks IOC And HPCL have been totally decimated in trade. They are trading at less than 50% of their all time highs. What is the outlook for these stocks.
    Regards,
    Pawan,
    Delhi, India

  137. Sorry I could not append signature as the system got hanged.
    Anjali Lucknow India 22/6/2013

  138. Respected Kalidas Sir,
    Indian stock market
    There is all around sale in the market.Sir how much more carnage you foresee in the market.I have zeroed on some stocks which I want to own in staggered phase.I would be grateful if you please suggest me the 1st entry point of these stocks.Please also prioritise the stocks as I may not able to own them all.
    Bank Of india  CMP 244      Tata Global  CMP  136        Sterlite  CMP      79     Hindalco   CMP  94
    Dena Bank    CMP  74                          Essar Oil       CMP   62 
    Essar Shipp   CMP  18                          Tata Steel    CMP   272
    Gspl               CMP  52                          IOC               CMP  .235
    Petronet        CMP  123                        HPCL             CMP  248

  139. Dear sir, 
    Reg: Gold and Silver,
    Sir can you please give us your view what’s going on in gold and silver,when would they really rise in dollar terms,and also what is going with indian rupees,hope to get your great view,Thank you.
    Manish,Hyderabad,India.

  140. Sir,
    What’s your view of US economy and stock in the next 1 to 2 quarters. If that’s  vague, what could be the 1 year scenario ? I’ve been watching the US large cap, top tech companies like cisco, that are meeting or exceeding projections for almost 8 consequtive quarters, solid fundamentals , product portfolio & pipe line and stocks are up by 50%. Trying to understand what is Cisco’s 2-4 quarter potentional ?
    Thanks,
    Aby, Bangalore, India

  141. Hi Sir,
    Please provide your inputs on Opto Circuits.
     
    Regards,
    Vinod, Bangalore, India

  142. Dear Sir,
    As you were predicting that Ben Bernanke should be removed from Fed, I think it is becoming true.
    In recent interview, Obama has hinted on the same. Please see the below links for the same:
    Obama Says Bernanke Has Stayed at Fed ‘Longer Than He Wanted’
    http://www.cnbc.com/id/100823620
    Obama Raises Possibility of Change at the Fed
    http://www.nytimes.com/2013/06/19/business/economy/obama-raises-possibility-of-change-at-the-fed.html?_r=0
    Obama suggests possible change at Federal Reserve
    http://www.bostonglobe.com/business/2013/06/18/obama-raises-possibility-change-fed/NkHPupr5n2rYYkpUZRTSsN/story.html
    If this happens, do you forsee some recovery happening in USA and also in Commodity Space especially on Gold and Silver?
    Will there be no more QE’s going forward. Will it have any impact on Currency market?
    Thanks & Regards,
    -Venkat Gurukrishna, Bangalore, India,
    19th June 2013, 1:38PM

  143. Dear sir,
    Few days back you had promised to look upon financials of Opto Circuits. 
    This share has fallen down from 200 to merely 20.
    My investment in this counter is 1000@46 & 1500@23.
    Should I hold or add this counter.
    Jayesh Mange
    Vashi, Navi Mumbai
    India

  144. SUB : TECH MAHENDRA AND SATYAM MERGER 
    Respected Sir,
    Andra Pradesh High Court has approved the merger of Satyam into Tech Mahindra.  News item in the link http://www.livemint.com/Companies/Hwphh6ibfY76zfd9qhE7xH/Court-clears-Tech-Mahindra-Satyam-merger.html
    Earlier in Mar 12 the boards of both the companies had agreed to a merger ratio of 2:17 (for 17 shares of Satyam 2 shares of Tech Mahindra).  
    http://www.livemint.com/Companies/3gvuJGAgAumXazCDQ4otRO/Tech-Mahindra-Satyam-get-nod-to-merge.html
    CMPs of Satyam is 110 and Tech Mahindra is 965.  I am holding 760 shares of Satyam at an average price of 90 and bought 20 shares of Tech Mahindra at a price of 990.  I presently have one more lac to invest in these stocks.  I request your advice on both the stocks so as to get better returns in future.
    -S Sivakumar, Chennai

    Kalidas Says … Sunday, June 16, 2013
    There is no point of buying Satyam because it may not exist consequent on its merger with Tech Mahindra. When the merger process gets into advanced stage, the Satyam stock will begin to discount compared to Tech Mahindra.

    Satyam counter will cease or be frozen later on. Focus only on Tech Mahindra, unless the discount widens to 10% to 15%. When the stock is getting into merger process, it is better to stay away.

    Invest your Rs 1 lakh somewhere else.

  145. Hi Sir ,
    Your openion on DishTV as investment for longer term .
    Sachin , Pune , India
     

  146. Finance minister P Chidambaram has a simple solution to bring the economy back on track: People should stop buying gold for a year.The unusual suggestion, made by the finance minister on Thursday, shows the helplessness of a government struggling to rein in the current account deficit – the difference between a country’s imports and exports – which is at an all-time high.“I once again appeal to everyone to resist the temptation to buy gold. People think they are buying gold in rupees, actually they are buying gold in dollars… If for one year there are no gold imports, it will change the current account deficit story of the country,” said Chidambaram.He said people should rather invest in financial instruments such as mutual funds and government bonds to safeguard their investments against inflation. At a time when stock markets and mutual funds have failed to fetch good returns on investments, gold is seen as a lucrative investment by many.The yellow metal was the second-largest commodity in India’s import basket at $53.8 billion in 2012-13, after crude oil imports at $169.3 billion in the same year. “People who are financially well-informed should put their savings in financial instruments and other savings instruments rather than gold,” Chidambaram said.India, the largest consumer of gold in the world, imported 142 metric tonnes and 162 metric tonnes in April and May 2013, respectively. To check imports, the government increased import duty from 6% to 8% earlier this month. While imports are expected to come down in June due to the tax revision, the Indian consumer’s penchant for gold fluctuates on a seasonal basis, and spikes during the wedding season.To discourage people from investing heavily in gold, the Reserve Bank has also placed restrictions on overseas purchases on a consignment basis and limited imports for local consumption against cash only. It has also asked banks to not give advances against gold exchange traded funds (ETFs) and units of gold mutual funds.The measures come as the rupee plunged to a record low of Rs 58.16 against the US dollar last week, making imports even more expensive. The depreciation of the rupee has been on account of an increasing current account deficit, which is expected to be around 5% in 2012-13 and over 4% in the first quarter of 2013-14.

    Kalidas Says … Sunday, June 16, 2013
    Append your signature. Also space your long write in small paragraphs to make it readable.

    Is your post merely reproduces what Chidambaram says or you have any comment on that and then seek my comments. Since your post is just reproduction of message conveyed by Chidambaram, I limit my comments to what Chidu said.

    It is not the business of Finance Minister to advise the people where should they be investing their funds, Mutual Funds, PPF, Bank Deposits, and also precious metals. No minister or official in countries OTHER THAN India ever make such statement, because concerned person would face “imprisonment” for resorting to offer advice to investors which can be done only by approved and registered Financial Advisors.

    Have you ever seen any other minister say, FED, US TReasury, Governor of Bank of England, European Union Chief or Presidents/Chancellors of respective nations such as Germany, France or Spain?

    The Minister has to focus on managing his own house, and should never venture on advising side what the investors must do.

    What is the return on Mutual Fund in last 10 years, and compare it with return on Gold. Who offers “protection against inflation’? Gold even at depressed prices, has offered the investors over 550% in last 10 years or averaging 55% in one year.

    Buying of gold is the tradition in India, it is India’s basic culture. Chidambaram does not have that much power to cause change in “cultural practices” in India. Whether Gold is imported against $ or not, the people in India will continue to buy Gold to meet the demand in wedding season.

    I think Chidambaram’s exercise is futile one and is misguiding the people. Why not he sells the 200 tons of Gold bought by Manmohan Singh about 3 years back which is still making money by 30%? The actions should begin from his stable.

  147. Indian Oil

    Respected Kalidas Sir,
    Can we initiate buying IOC, owing to today’s fall in the share price.CMP being 250. Whether further fall is expected in the stock. What should be our 1st entry level for the stock.
    Anjali, lucknow, India, 13/6/2013

    Kalidas Says … Sunday, June 16, 2013
    Not yet. When the stock falls below Rs 257 or 260, it may retrace to 230~235 region, which is still intermediate support level. The strong support could be at Rs 210. Nevertheless, better be a buyer at 230-235 region. The stock is still weak and government policy is also inconsistent.

  148. Sub:  GSPL
    Sir,
    What is sooo wrong with GSPL?  I have about 2000 at an avg cost of Rs.90.00.  CMP is 54.7.  Your views on 2 year span will be reassuring.  Thanks.
    Ganesh
    SALEM, TN, INDIA

  149. Hi Kalidas

    Good to see you back.

    I want your view on what is the likely sensex target if third front comes to power in India. I know you may not agree that third front stands a chance but assuming it comes what is likely to be the result for the markets.

    Prince
    Abu dhabi

    Kalidas Says … Sunday, June 16, 2013
    It is too speculative. We do not know who would be the “Third Front”, will they be leaning towards left, right or center, and what will be their political and economic agenda. We know at least about UPA and BJP. Other dark horses are not known. In fact most of the “third power” parties are regional and do not have national following.

    Better focus only on UPA and BJP

  150. Sub: Agricultural Land
    Dear Anilbhai,

    I am looking at making some investment in Agricultural land as my retirement plan. The plan is to buy some land, develop it over a period of next few years, generate a steady stream of income, build a small farm house, manufacture some agri products and finally retire there in 20 years looking after the agri business. I also intend to use the farm house as a second home during weekends, etc.

    I would love to do that in Gujarat, but I understand that one has to be a Gujarat farmer to buy agri land there, which I am not. Hence, the only feasible option is Maharashtra (around Pune, where I am currently based). I was looking at options around Junnar.

    I would like to know your views in terms of where can I buy, is it the right time to buy, what is the right price to buy, any other guidance that you can provide from your experience.

    Regards,
    The Monk, Pune, India

    Kalidas Says … Wednesday, June 12, 2013
    If you are living in Maharashtra, focus on Maharashtra. In both state, Gujarat and Maharashtra, one has to be registered as farmer.

    Normally, you buy a small piece of land, say 2.25 acre at least and buy it jointly with someone who is already a farmer.(say, any of the relative). This is what I did. Further, make sure that you are buying land more than 12 kms away from main Municipality. The reason is that Agriculture land when sold, do not attract Capital gain tax, because Farm land is not treated as “Capital asset”. this is why when you sell the land, it is all Tax Free gain. Therefore, not only current revenue but also capital revenue is totally Tax Free.

    Under Income Tax rule, if the land bought is within 8 Kms of Municipality, then its sale will be treated as Capital Asset sale, and Long Term Capital Gain will be applicable. Sometime, the IT department do ask for a certificate from Tehsil that your land was more than 8 kms away from Municipal limit so as to qualify for tax free treatment.

    When the 7/12 document is registered in your name, you have become a farmer. Normally, the broker primarily dealing in Agro land might help you because they have some setting with the registering officials. It may cost you a few thousand rupees more.

    One you are designated as farmer, then you can afford to buy more land in your name, because you already have one 7/12 document in your name.

    If you buy land below 2.10 acre, then 7/12 may not be registered in your name. This is a basic requirement to buy more than 2 acres to start with.

    At the moment, the Farm land is very expensive. In fact, I am selling my lands in Amravati, where my land prices have gone up from Rs 1.65 lakhs/2 lakhs per acre 4 years ago, to Rs 18 lakhs to Rs 21 lakhs. If you remember, I did ask Readers to buy the Agro land when the prices are low. this is why I got out of stock market and jumped into Agro land, which worked fine for me.

    Gujarat is better than Maharashtra, but there are also some “goonda” elements in centers like Rajkot etc (Saurashtra region). If you are buying in proper Gujarat, then it is fine.

    I did not succeed in farm operation as much I wanted, however, because my peoples were not so good. The reason is I am in some other country so the workers get easy on working. Even after paying liberally, I am not able to extract more work out of them. This is why I am getting out of lands in Indian and shift to United States where the lands are almost at 15% of prevailing prices in India.

    If you want to succeed, make sure that you have good workers and sufficient water. Thoughts are noble, but the practical considreations are different.

    In USA, the yield of Potato is almost 30 tons per acre, but in India, it is less than 12 to 15 tons. I was growing Soybean. My yield was just 6 quintals per acre, whereas in USA, it is over 16 quintals. You can not control with remote control switch. If you can get good workers then you have won almost 60% battle.

  151. Reg. Rupee Depreciation
    Dear Sir,
    Today Rupee made an all time low against Dollar by hitting 58. But Indian Stock Markets almost are insulated with this. Earlier if Rupee appreciates then there was demand for Rupee to buy into the Indian Stock Market and if Rupee Depreciates it means to sell into the Indian Stock Market.
    But by looking into recent depreciation of Rupee there is no impact on Indian stock market How do you see this scenario? Do you see that there is a disconnect between INR and Indian stock market?
    And definitely it will contribute to Current Account Deficit (Budget Deficit will widen).

    Thanks & Regards,

    -Venkat Gurukrishna, Bangalore, India

    Kalidas Says … Wednesday, June 12, 2013
    The people in India are more sensitive to Rupee and Gold, and they react too much too soon.

    I have warned you earlier last year that we are in the midst of currency war. US wants to ensure use of US$ as much as it can. It tried to Euro, but could not make a dent. Greece, Portugal, Italy, Spain, in quick succession, but ECB was more resolute than ever. As result, many state sponsored funds lost lot of money. Finally, they had to give up and search for easy and willing target who agree to let its currency go lower, and it was Yen. They caused a drop of over 25% for simply no reason.

    After damaging the Yen, they wanted to teach China a big lesson because it was shying away from dollar into commodities. So they attacked Commodities and its currency so that China could be influenced to buy more of US$, but China understands the game too early to get away from its love on commodity.

    Almost all Asian currencies have fallen by 4% or more, including New Zealand dollar and Aussie dollar. Euro has in fact strengthened 2%. Thus, fall in Rupees was NOT country specific but more aligned to Asian currencies.

    When the currency was rising, RBI and Ministry were trying to suppress its rise, and when it is falling, they want to shore it up. There is one common rule in any investment product, If the country try to stem the natural rise, and take measure to fall, the Hedge funds take it as indication of government policy to weaken the currency. They become reasonably sure that even if they short the currency, the country will welcome the development.

    This is why your observation that the fall in rupee did not cause the fall in the market is correct, because the fall in rupee is not country specific. When it becomes India specific, they it will force the funds to sell the currency and also the market to cause fall on both fronts.

  152. Dear sir,
    Vinod Asked u question About Opto Circuits, U promised to Analyze today.
    I too have invested 1000@46, Want to add more.
    Today it again fell 18% and now trading at 24.
    This company has been suddenly falling more and more. Analyst S P Tulsian says that this company has working capital issue and investor should remove this company from their portfolio.
    Sales also falling. CEO of Company few days back said that Business model is Very good and NOW they are selling goods by following credit policy. Looks like earlier they were not asking payment from debtors, as debtors amount ( 1500 Cr) stands for whole year sales figure. Does this (Credit policy) may be result for Sales Decline ?
    Kindly analysis as you are only capable to go depth to the financial where we cant imagine.
    BTW here monsoon in Mumbai has started and going well.
    Thanx
    Jayesh Mange
    Vashi, Navi Mumbai
     
     
     

  153. ONGC and Essar Oil,Essar Shipping

    Respected Sir,

    Please advise me on the following stock-
    Ongc 200@ 317  CMP 319.85
    Essar Shipping 5000 @ avg. 32 CMP 18.90
    Essar Oil 1500@75.50 CMP 73.50

    Originally I had purchased Essar Oil @avg. of 68, which I sold @85,I have then again taken the above position .Kindly advise.

    Please also inform from when you are going to start Stock Observatory.We all are eagerly waiting for that.
    Thank you Sir,

    Anjali, Lucknow., India, 9/6/2013

    Kalidas Says … Wednesday, June 12, 2013
    OMC stocks are lower due to rupee fall. Rupee fall is not unique to India. Almost all Asian currencies have fallen, esp Commodity related.

    When the attack on Euro failed, another target was found in Japan. After much damage done, it is the turn of the Asian currencies who were the heavy gold, silver, copper and other commodities producer or buyer. The weakness may remain only for a short while, and then they may recover but only slowly. The fall is always sharper and faster, and recovery always slow and painful.

    Coming to your specifics, do the following:

    SELL 1,000 shares of Essar Oil and swap into the following cheaper stocks:
    1500 shares of Essar Shipping at CMP
    1000 shares of IFCI at CMP
    1000 shares of Ashok Leyland at CMP

    Do nothing for core stock of ONGC

    The idea is to take 3% loss and use the proceeds in stocks that have corrected by over 20% to 30% in last 6 months. It will also diversify the risk. If Essar Shipping recovers by Rs 4 in next few months, sell it and buy equivalent of Ashok Leyland and to lesser extent IFCI if both are trading at below Rs 23.50 level.

    I am still occupied with personal work relating which may take two or more weeks. I expect to start Stock Observatory positively by 1st July, 2013

  154. Dear Kalidas,
    I have query on the subsidy burden on ONGC, OIL and GAIL.
    For last few years these three companies together have been paying between 35% and 40% of he total subsidy burden. For last two years, the subsidy was about Rs 1,60,000 crore and they paid about Rs 60,000 crore. Government paid the rest. With the recent increase in prices of diesel, it is estimated that the total subsidy requiement will be about Rs 60,000 crore going forward. Now the news coming from the government (saw it on CNBC) is that government will force these companies to pay this entire amount. Thus these companies will not gain anything by the diesel deregulation.
    Do you think we should stay away from these three companies?
    Thanks,
    Bhushan,
    Hasan, Karnataka,  India

    Kalidas Says … Saturday, June 08, 2013
    May be yes, until full policy comes into force. We can not act upon heresay or rumors or loose talks.

    The Government is under intense pressure to reduce the Budget Deficit. It will do anything including “illegal pressure” on ONGC and other OMC

    ONGC, MRPL, and all OMC are public listed companies who are supposed to follow “healthy pricing policy commensurate with their commercial activities”. Under Constitution of India, esp under Fundamental Rights, every citizen (including legal citizen like Corporation, private or public) are given undeniable rights to carry on their activities freely without any restrictions.

    As such, these companies are entitled to oppose the government on its pricing or subsidy policies, and conduct their own independent pricing formula in the best interests of its shareholders especially minority shareholders. If these companies move Supreme Court, they will win the hands down. These companies are not “government in itself” that should bear the subsidy or commercial losses on social considerations.

    The thing is, Who will bell he cat”?

  155. Hi,
    Your views on Opto Circuit  are awaited. It fell from 250+  to 50. It has again fallen from 50+ levels to sub 30 levels. The company seems to be having working capital issues.
    I had bought 200 at 50+ level. I added 500 more at 35. Planning to add more, but it seems to falling day by day.
    Thanks,
    Vinod, Bangalore, India

    Kalidas Says … Saturday, June 08, 2013
    I never followed this stock in the past. However, I will study it tomorrow and give you my comments or suggestions. The reply will be posted here.

  156. Dear Sir,
    I have the following positions. Please suggest how should I proceed. I have about 3 Lakh Rupees to invest. 
    Satyam 2000: cmp 106.35          gain 15.6K
    Kalidas View … Do nothing

    PTC India 14000: cmp 13.9         loss 27.44k
    Kalidas View … Do nothing

    Tala teleservices 20000: cmp 7.3 loss 52.6k
    Buy 10,000 more when the stock is at or below Rs 6.10. Do nothing in the meanwhile. The difference of Rs 2.50 or about may be wiped out in few sessions when good time returns

    Kingfisher 10000: cmp 5.25        loss  1.349Lakh
    Kalidas View … This is risky suggestion. Since your loss is over Rs 13.5 per share, your cost would have been Rs 19 or about. Buy 10,000 more shares and take the risk if you can afford. Alternatively, shift to TTML because Tata may not let it to go bust. (I do not know the fundamentals of TTML at the moment, but it is just arithmetical hunch)

    Essar shipping 18000: cmp 18.9  loss 1.963 Lakh
    Kalidas View … BUY 12000 more shares now. If necessary, sell some voltas share where your losses are minimum.

    Voltas 1000: cmp 81.85              loss 2.15K
    Kalidas View … Swap to other more loss making situations

    Essar oil 15000: cmp 73.5           gain 1.95lakh
    Kalidas View … Reduce some position when the stock hits Rs 88 level.
     
    For the investment of 23.32 lakh, I am loosing 2.02 Lakh. I have some investment in gold and silver in  UK about 9600 GBP which is currently 7650 GBP. I am loosing about 20% here. Please let me know how should I proceed.

    Kalidas View … If your losses in gold is less, swap to Silver. Do not worry. When the vicious attacks take place on these metals, it means that the short position holders are panicky when the delivery dates are approaching near. This is very complex scenario, but there is a saying that when a person is driven to the wall, he will do anything.
     
    Regards,
    Vishal, London, UK.

    Kalidas Says … Saturday, June 08, 2013
    Read my view as above.

  157. RBI USD/INR settlements
    I remember in your article few years back talking about mandatory settlement of forward contracts sort of for better INR/USD. I came across similar news in Reuters here by RBI governor. “The central bank is also working towards making guaranteed settlement of dollar/rupee mandatory“. Is it in right direction for better future for INR? 
    Kumar, Tokyo, Japan, 08-06-2013.

    Kalidas Says … Saturday, June 08, 2013
    Thanks for remembering it. The present news item as quoted appear to be rather loose and fragmented. What is the meaning of “Guaranteed settlement”? Is he suggesting that US$/INR should be settled in physical exchange of currencies through Authorized Dealers (which was my proposal) or something else?

    The Rupee is traded overseas especially in Bermuda, Cayman Island and other off shore centers, including United States, where final settlement is not on “delivery basis” but settled in US$ difference.

    For instance, a few years back, banks like BNP, Citi Corp, used to issue Indian Rupees denominated Swap deposits issued overseas (in off shore center) offering higher exchange rate (that is, if local exchange rate is Rs 57/US$, they will offer say, Rs 63/US$ with a maturity of one year with a proviso that on the maturity date, the depositor will be paid only in US$ equivalent, and not in Indian Rupees. That is, it was black money or similar to Havala related settlement”

    Various exchanges have different settlement procedure. In USA, the authorities provide for mandatory physical settlement if it is in favour of US protected industries, but will allow dollar denominated settlement if the concerned commodity is dominated by foreign nations.

    If Indian Rupee value is to be protected, the Government should follow the following steps (which will be staunchly opposed by United States):

    1. All spot and forward contracts relating to any foreign currency (all free currencies) vs Indian Rupee MUST BE SETTLED by physical delivery of Rupee vs concerned foreign currency, through Authorized Dealers in India or their overseas branches or through Reserve Bank of India.
    2. Those who violate this Law, it should be treated on par with “Attack on Sovereignty” punishable with death penalty or life imprisonment for the employees of the parent company, with minimum fine of US$ 10 Millions plus return of illegal gains with no limit on maximum penalty.
    3. The banks, brokers, investment banks, and any financial institution engaged in illegal practice or trafficking in Rupee trade within India or overseas, may be banned for 10 years or life from entering India, and their banking license may be canceled forthwith.
    4. All foreign exchange trades in Imports or Exports of goods or services, must be invoiced only in Indian Rupees
    5. The Individuals or Corporations may enter into spot or forward contracts in currency or interest rate swap overseas subject to final settlement through MCX in India

    This will stabilize Rupee and may even cause massive upward appreciation that will reduce costly Oil and gold imports, reduce the specter of inflation, lower interest rates and propel the Stock market by at least 30%.

  158. Sub : TTML and MTNL
    Sir, Any advise on my query on TTML and MTNL posted earlier ?
    Chetana,
    Bangalore, India

    Kalidas Says … Saturday, June 08, 2013
    Sorry for some delay. I will reply positively tomorrow here.

  159. Sub – Delta Corp – is it an indian Las Vegas Sands in making ?
    Dear Kalidasji,
    Need your views on this stock.
    Market Cap: Rs. 1386 Cr
    FY12-13 Rev: 39 Cr
    FY12-13 NP : 21.62 Cr
    Total Shares: 23.24 Cr
    Current Price: Rs. 61
    Book Value: Rs. 34
    Stock is Rs. 1.00 paid up
    52 Week High/Low: Rs. 84 / 38
    Announced dividend Rs 0.25/- per Equity Share of Re. 1/- each
    Corporate presentation: http://www.deltacorp.in/pdf/Delta%20Mgmt%20Presentation%20-%20Mar%202012%20-%20Final.pdf
    Share holding :
    Promoters: 42.3%
    Rakesh Jhunjhunwala: 7% (Board member)
    ICICI Ventures: 6.2%
    CLSA (Mauritius): 2.2%
    Morgan Stanley : 0.95%
    Can we touch this stock ? If yes, please suggest entry levels.
    Thanks
    Srinivas | Bangalore | India

    Kalidas Says … Saturday, June 08, 2013
    Regret I have one principle given in heritage by my Father that “Never ever gamble or visit gambling den or place, and never teach (advise) others on gambling route”.

    I therefore avoid giving any of my recommendations. May be it is good, may be too good, but I avoid it for the sake of my principle which I do not want to compromise at the age of 65.

    Kindly consult others.

  160. Sub – AstraZeneca Pharma India Ltd
    Dear Kalidasji,
    Need your views on this stock.
    Market Cap: Rs. 1939 Cr
    Current Price: Rs. 775
    Book Value: Rs. 39
    Stock P/E: 100
    Dividend Yield: 0.45%
    Stock is Rs. 2.00 paid up
    52 Week High/Low: Rs. 1984 / 595
    Reduced promoter holding to 75% through OFS with floor price of Rs 490.
    Parent company has provided a financial grant of 119-140 Cr
    Recent presentation- http://www.astrazenecaindia.com/_mshost1589107/content/navigation/investor-relations/13858929/

    Thanks
    Srinivas | Bangalore | India

    Kalidas Says … Friday, June 07, 2013
    Not my cup of tea. A good company but too expensive. I would not touch it unless it returns to at least 15 times PE.

  161. Dear Sir,
    Mallya has told his employees that he do not have money to pay their salaries. He also said that Karnataka High court is not allowing him to use the proceedings from Diago deal. I have 12000 shares of KFA @11.5 per share. The CMP is 5.3, it is good to average at this price now? or hold? or sell? I have around 2L cash.
    Here is the link:
    http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/vijay-mallya-tells-striking-kingfisher-airlines-staff-he-has-no-money-to-pay-them/articleshow/20478045.cms
     
    Thank you
    Shaan
    Bangalore, 7th Jun’2013

    Kalidas Says … Friday, June 07, 2013
    I had thought earlier that Government would see the reason and will not try to precipitate the situation which will cause heavy losses to its owned or controlled nationalized banks. I misjudged that this government relish in troubles, bankruptcy and post mortem rather than taking practical steps to protect the investments of all.

    Many nationalized banks and State Bank of India also have large equity stake in KFA by converting lot of their debts into equity @ Rs 60 per share, if my memory is correct. I can not quote accurate source of this information, so treat this view with caution.

    If I were a Bank Chairman, I would have suggested Government or to my own board to buy more shares at 90% discount to original purchase, and thereby give lot of relief to stocks and also enable the banks to make fortune when the good days return, if they at all.

    In all probability, the advances given by banks are so huge, that there is possibility that the company may go to IBRD as sick unit in need for nursing. The KFA may not go bankrupt because most creditors will get nothing.

    Based on this logic, I would buy some more shares if I were you. It is highly speculative, and the real possibility is that you might lose entire investment.

    You already have lot of money in this counter. The price difference may be 64%, but this being a very small value stock, the losses could be recovered in less than 10 sessions. Look at RCOM which has almost 5 times the debt of KFA but it has finally come back due to reconciliation between Ambani brothers.

    Mallya is made out to be villain and non payment of salary may induce sympathy for employees. But Mallya can not be expected to use proceeds of other business for losing KFA – no businessman ever does that, and for that matter, no individual will ever do that.

    If you are worried, sell some and reduce the chances of total loss or if you are courageous, hold on to what you have and watch the show. When the specter of recovery is noticed, then only buy more from new funds. At the moment, do not buy more from extra Rs 2 lakhs you have.

  162. Sub – VST, HDIL, IVRCL, MANPURRAM, RELCAP & RELINFRA
    Dear Kalidasji,
    I am re posting this post. Need your views on above stocks. Listed out key info from http://www.screener.in.

    VST: A debt free company, announced dividend of Rs 65. (cmp-1616/52H-1960/52L-1480)
    -BV of Rs 267
    -Dividend yield of 4.05%
    -Stock not reacting to market corrections
    Kalidas View …
    Tobacco stocks world over trade at low P/E multiple due to controversial health issue associated with the use of tobacco. There is always a possibility of some or other regulations coming into force that may restrict the use of tobacco, and many times tobacco industry is subjected to heavy fine or compensation esp. in USA.

    Having said that the stock even at fairly high P/E of nearly 20 times. Yes, it is relatively safe company, but its presence is more on other exchanges (not in Mumbai, to my knowledge). As result, the liquidity of the stock is very low – the volume ranges between 550 to 15000 shares per day. The stock does not react to good news for simple reason that (1) it is not widely followed (2) stock liquidity is very low (3) The tobacco industry is normally not in big funds’ buy list due to unfavorable press and (4) High dividend pay out is more due to promoters unable to sell their shares at higher price in the market, forcing them to rely more on dividend to earn their livings.

    It is a good company though. However, such stocks are best bought at the time of market crash or heavy negative press on tobacco stocks.

    HDIL: Beaten down reality stock Mcap-1700cr Revenue – 980cr (cmp-41/52H-124/52L-39)
    -Promoters have pledged 96.12% of their holding
    -Promoter’s stake has decreased
    -FII stake has decreased(42%/32%)
    Kalidas View …
    This is highly leveraged company. They went all the way out buy more and more land with the result that they are in debt trouble. They do have quality assets but all these assets are valued too high at the peak of property prices. If you are positive on property market, you may take a chance. I never invest into property stocks, for simple reason of weird accounting practices and more black money related transactions which returns good money only to the Directors and not share holders.

    If this company is unable to pay off its debt, most of the pledged shares will be dumped in the market. It is possible, that many creditors would have dumped their shares in realization of their dues.

    Take a small plunge if your views are bullish on property. I have never followed this property sector and their stocks because of over leveraging of their balance sheets. No one makes good money anywhere in the world (except Hong Kong) by investing into property stocks, not even in USA or UK. India is new to property sector, so local investors do not have much knowledge of behaviour of these stocks.

    It is my normal practice NOT to rely on sector or companies where black money related transactions constitute 60% of their trading activities.

    IVRCL: Beaten down infra stock Mcap-566cr Revenue 9months – 3400cr (cmp-19/52H-58/52L-17)
    -Contingent liabilities of Rs.3574.10 Cr
    -Reduced FII/DII holding

    Kalidas View …
    This is yet another Infra play. I do not like the companies based in Hydedrabad. Many of the managements of various companies are liars. I was always negative on “infrastructure plays” which were mostly “story stocks”. Look at this company – the company has almost Rs 3000 crores of debts and the company is going on talking of order position of over Rs 26000 crores. By its own admission, many of the projects are just non starters. No words as yet whether they are getting paid by government for the projects undertaken.

    Honestly, I do not have opinion on this company or other infra play stocks. I am more of a industrial stocks player where the information is verifiable. If this company says that it has Rs 26000 crores of order book, I have to believe them because there is no way to verify their bullshit’s.

    May be Readers may buy this sector as a pool, by dipping into leading stocks that were battered and lost value from their peak by 70% to 80% or more. It will like a self monitored mutual fund of real estate and infra plays. When this sector will recover, and it will after many years of consolidation, one can make decent return then. In the meanwhile, please be prepared to bear losses on some counters who might go bust.

    MANPURRAM: Beaten down gold loan stock Mcap-1400cr Revenue 2200cr (cmp-16.6/52H-46/52L-14.7)
    -Dividend yield of 8.93%
    -Increased FII holding (36%/42%)
    If you are positive on gold, then this should be bought whenever gold corrects.
    Kalidas View … Yes, gold financing will remain on top in India. Buying gold and buying gold financing company are different things. Gold is meant for investors, whereas gold financing is meant for those people who find themselves in tight corner to sell the gold. The profit margin is healthy for most companies. Almost everyone owns gold in one form or other, so this business is going to grow for next 10 years at least.

    One may take a small dip into gold financing stocks. Relative risk is less.

    RELCAP: Beaten down NBFC stock Mcap-8400cr Revenue 3800cr (cmp-340/52H-508/52L-282). Trigger – increasing FDI limit to 49% in insurance.
    -BV of Rs 511
    -Dividend of Rs 8 announced
    Kalidas View … Okay to buy some

    RELINFRA: Beaten down infra stock. Mcap-9900cr Revenue 9months – 14300cr (cmp-377/52H-580/52L-315). Holds 32% stake in Rpower(Mcap 20000cr)
    -BV of Rs 1003
    -Dividend of Rs 7.3 announced
    -Contingent liabilities of Rs.15071 Cr
    -Market value of investments Rs.13288 Cr is more than the Market Cap
    Thanks
    Kalidas View … Highly leveraged company. However, I take the view that Ambani brothers have finally reconciled, and some of the RIL cash might come ADAG stable stocks. I am still negative on infra stocks, but I would prefer RCOM stock at much lower cash investment value than RELINFRA. Further, RCOM has already shown that Mukesh is keen to invest into telecom business, so future cash flow is somewhat assured.
    Srinivas } Bangalore | India

    Kalidas Says … Saturday, June 08, 2013
    My reply under Kalidas View above.

  163. India Stocks – Corporation Bank
     
    Kalidas Jee
    With reference to your recommendation for Banks like Indusind Bank, Yes Bank, HDFC Bank, Axis Bank, Kotak Mahindra Ban (in reply to Anjali) – what is your view on Corporation Bank (CMP 379 ) ? It has been paying dividend at the rate of around 5% on CMP for the last  3 years. I wish to invest in this Bank at the level of 360-350. Your advice please.
     
     
    Laxman
    Bhubaneswar, India  07.06.2013

    Kalidas Says … Saturday, June 08, 2013
    It is a good bank to invest.

    The question is the timing of investment. Bank stocks as sector are very in poor shape. Nevertheless, it may be good to invest there.
     

  164. OMC stocks
    Sir,

    It is true that govt. policy on OMC stocks is still not clear. However, govt. policy is only one factor. The other factors are Oil prices and rupee-dollar exchange rates.

    Can you give an opinion on the other factors?

    Regards,
    Pawan,
    Delhi, India

    Kalidas Says … Friday, June 07, 2013
    Generally, the Refiners tend to make more money when the oil prices move down. The oil prices in this case is (1) $ based (2) Exchange rate based and
    (3) Import or custom duty. The reason being that petrol, gas and diesel being price controlled commodity in India, the rise in crude oil prices will reduce the profitability of the refiners, as they may not be able to pass on the rise to the consumer.

    Rupee rate is exchange specific and is common factor to all refiners. All refiners stock have same footing. $ price is also common for all refiners except those who are domestic producers like ONGC and to minor extent, Essar Oil, Cairns energy (now part of Sterlite group)

    IOC was selected because it was the largest of all distributors in India. Its sales is over Rs 400,000 crores, almost twice or three times that of nearest competitor. Thus, IOC is having “volume leverage” on other peers. If the diesel price rise takes effect, the subsidy burden goes down with the result that IOC may not have to wait for realization of subsidy dues, as it can secure higher price from the market.

    Further, IOC does not have too many shares in the market. The higher profit will be divisible amongst less number of shares, that will propel EPS much higher. Since it is government owned entity, majority of shares are owned or controlled by the government, so in that sense, the free float of the shares in public hands will be much less, creating huge shortage versus demand when the good days return to IOC.

    Higher price may lead to higher market cap which will propel IOC into highest league and become top notch BSE/NSE Index stock. The Index based funds may have to buy more IOC shares and reduce their holdings of other in the sector, including RIL, to balance their index portfolio. The change in BSE/NIFTY index usually take place (to my knowledge which may not be accurate) in June to September, that is, during monsoon season.

    The real booster prices come in September when most foreign fund managers return to the market after summer holidays .In foreign countries, like UK, Europe and USA, the children get vacation from June to August (their Academic year is Sept to June as against June-April in India). So their parents take holidays during June-August and return to their desk in first week of September. This is why the market activity rises from September onwards. Funds are usually big buyers.

    This is why we suggested IOC in preference to other stocks in same sector.

  165. Need guidance with ADSL and KFA:
    Dear Kalidas,
    I currently hold the below positions, although they do not involve great deal of an amount, but still pretty much of the portfolio and are currently at a great loss. Can you please suggest what should be the strategy for these stocks with a mid-long term view? Shall I hold them as anyways they are at a great loss or sell-off or swipe to any suggested stock by you! Please guide accordingly.
    1. KFA – Qty-2750, Avg buy price-13.28, CMP-5.28, Loss > 60%
    2. ADSL – Qty-1250, Avg buy Price-21.91, CMP-7.75, Loss >64 %
    Regards,
    Suman
    Zurich.

  166. India Stock Market
    Dear Sir,
    what are you thinking on india stock market. please suggest some stock (IFCI, ESSAR SHIPPING, UNITECH, IOC and gold, silver).
    Regards,
    Amit Jain
    Ajmer, India

    Kalidas Says … Thursday, June 06, 2013
    I do not know much about Unitech. Rest are all good buys For first entry point of view. Essar Shipping, IFCI, Silver and even Gold are worth buying. Gold and Silver are both supported by weaker rupee and government policy to impose heavy duty. This will make the metal harder to find, and until the smuggled gold find its way into Indian market, we may see stable to higher prices.

    I am still bearish on property, so I would not touch any property stock (except Godrej property) with a remote pole.

  167. Sub:Stanberry & Associates Investment  – analysis
    Dear Sir,
    In your response to Manjunath you have given the link to the analysis of Stanberry & Associates Investment Research, where they have presented their good point of view and they reitirate your views on Gold & US .

    But we have seen in last 5 years that all the central banks of the world are convinced or forced to convince that this is the only way they can avoid catastrophic effect for US and rest of world. Do you think in realistic terms US-$ would get replaced by any other  currency as worlds foreign reserve currency even in next 5 yrs ?

    The attempts by some nations and certain businesses not accepting U$D are few events or might be start on this process, but do you think any country has the strength  in them to drive this  ?
    Accessing current situation for US economy the picture is “all is well”, Dow is trading at all-time high, unemployment numbers are down , dollar index is 82 etc ..

    My knowledge sphere is limited and don’t understand the Macro events of world economics..and request you to give opinion and impact to Indian stock market..the way we are heading etc.
    Thanks,

    Atharva, Pune , India

    Kalidas Says … Thursday, June 06, 2013
    You are right. Stanberry has given more importance to intention of some countries to avoid dollar. The transaction size is still very small and may not be felt by the market. Main item is not daily trading but the investments of each nation in US dollar.

    US is master of manipulations. It has few core brains that understand the mathematics and the psychology of various investing country. When the country like China was gobbling up mining assets so as to diversify from US dollar, they (US) started attacking commodity that resulted in sharp mark down of the metal prices in particular. It was dampening the rapid diversion being followed by China from USD to other currencies, metals or precious metals.

    Most of the commodities are being traded on Nymex, Comex and CBOT which is in direct control of US manipulators. The commodity market that we see elsewhere including at MCX are nothing but reflection of US trades.

    Something is sure to happen and that too very soon. Some moves of US are also counter productive. When they caused Japanese Yen to fall by 25% in matter of months, Gold prices which are denominated in USD were more expensive in Japan due to currency weakness. In India too, Gold prices did not correct as much as the dollar prices due to again, currency factor. Now, that import duty is raised from low of 2% to 8% (by 6%), the gold prices in India got buffeted by 6% rise in cost. Otherwise, the gold prices would have been lower by another Rs 1500 at least.

  168. Mystic Numbers
    Dear Sir,
     Last year we talked about the mystic number’s e-book. Unfortunately it was not happen due to your other projects. Can we get this year?
    Kind Regards
    Rajmohan Babu.M
    Kampala, Uganda

    Kalidas Says … Thursday, June 06, 2013
    It looks like my book writing may take a lot of time. I have some other engagements. However, I will post the Basic Table probably next week and write a small article how to read it. The full features will be known only in the form of book which will detail each stock or item of investment with full illustrations.

  169. IOC stock CMP 282 cost price (avg) 285
    dear sir i had bought IOC at various points of time and average cost is 285 holding of 650 shares , i have with me around 2 lakh to invest shall i put some money in IOC or would suggest some other stock…
    thanks
    RAHUL SINGH
    JAMSHEDPUR, INDIA

    Kalidas Says … Thursday, June 06, 2013
    Not now. Let us await clear government policy. The present policy is still not very firm, and may change due to election year ahead. You have enough quantity. Look for some other stocks.

  170. PSU Banks

    Respected Sir,

    All the PSU banks are now trading on through away prices, with very good dividend yields of nearly 5%. Some of their CMPs are Dena 83.85,Indian Bank 141, allahabad bank 124.In my view they are not going to vanish out, they are well controlled by RBI.Can we start buying into them to be entitled for getting dividend.Is their more price errossion left.I seek your kind advice sir.

    Thanks
    Anjoli, Lucknow,5/6/2013

    Kalidas Says … Thursday, June 06, 2013
    I do not think that PSU Banks are trading at throw away prices. The GDP growth is slowing, almost near 4.8% (Remember, my prediction in Oct 2011 that India’s growth may slump to 4.5% when entire Brokers’ world was predicting growth in excess of 9% and even double digit -10% or more)

    Most of PSU lenders have lent heavily in hard assets like Properties, power sector, infra structure etc. where the stagnation is very acute. I do not think banks have provided fully towards NPA which may develop even more troubles. Further, the markets are at near high level. If the market corrects sharply, the weaker banking stocks could become even more weaker.

    It is time to follow the sector closely and focus only on those banks which see the level of its revenue rising. The property market in my opinion is firm no doubt but showing no signs of major deals or frequency of deals are greatly reduced. Yes, banks may not lose much from Retail mortgages but on wholesale level, the big builders will be vulnerable.

    Further, the banks business in gold sales or lending may come down due to aggressive Duty policy. Gold was the safest banks for the banks, but now, this sector may be less contributory – not for the faults of the bank.

    Nevertheless, I will follow up this sector closely ( I was also a banker for 19 years). When the GDP growth moves up convincingly, then only we can move in to this sector.

    If at all you want to take small holy dip, watch out for IDBI Bank, Indian Overseas Bank, which in terms of price are relatively cheaper. IDBI bank has lot of hidden assets which are more worthwhile than disclosed or appreciated. It will be your first point of entry.

    I would still allow this sector to drop 15% to 20% (which is possible when the market corrects, the small value stocks suffer more in market routs). The large value bank stocks may not come down that sharply. As rule of thumb, allow 30% correction to stocks 40 and <120; 15% for >120 and <200; 10% for stocks >400.

    Better managed banks are found in private sector – look for Indusind Bank, Yes Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank.

    From earning growth point of view, the bank stocks are still expensive.

  171. Dear Kalidasji,
    RBI sets 1.44 percent real yield on inflation-indexed 2023 bond
    Link -> http://in.reuters.com/article/2013/06/04/india-inflation-bonds-poll-rbi-idINDEE95304P20130604
    1,44% yield, no idea how convert this into interest rate. Going to search and find out.
    But do you think it is a good idea to convert some of Gold investment into these bonds ?

    Kalidas Says … Tuesday, June 04, 2013
    Kindly “Append your signature” to your comments all the time.

    The Bonds usually make money if the interest rates go down. The Inflation Index Bond issued by RBI are mimicking similar bonds issued by FED of United States a few years ago.

    YIELD ON IIL Bonds (Inflation Index Linked Bonds)- what it does mean?
    The yield as given is Net Yield, inflation adjusted at the time of issue. The Gross Yield may be 1.44% + WPI INDEX of say 6.62% = 8.06% against Bank Deposits carrying over 8.25% for 10 years (It could be higher for Senior Citizen – Bonds do not give special treatment to Senior Citizen). It is based unfortunately on “Wholesale Price Index” which is gauzing inflation at 6.62% now (if it is based on CPI Index or Consumer Price Index which is nearly 9%, then it was more relevant). The present issue may appeal only to FII or DFI. (Latest News – the bond issue was fully subscribed by mostly Domestic Institutional Investors like Banks, Mutual Funds and high end corporate customers rich in cash like Reliance, Infosys, Mahindra, Wipro, TCS or Satyam)

    The bonds in issue will make more money as under:

    1. If the inflation index goes higher from current WPI Index of nearly 6.62%. The issuer, RBI, may pay higher rate of interest at the end of quarter or half year, depending on interest payment schedule.

      If the WPI Index goes down from current level, the interest payment will be less at the end of quarter. Those looking for interest payment alone may be attracted by this bond. It does not carry cumulative interest.

      Further, this bond is NOT TAX EXEMPT. The yield given is “Yield as adjusted for current WPI Index” but subject to taxes (depending on your tax slab)

    2. If interest rates go down. However, it will be more complex in this case. Normally, interest rates go down if the inflation goes down. Thus in present case, if WPI goes down (to cause fall in interest rates), the bond prices may rise only slightly (because the Bond Price rise only on sustainable fall in interest rates, one time fall may not generate positive feeling. WPI Index will go down, the yield will go down with rising bond price.

      If the WPI goes higher due to say, devaluation of rupee, then the bond yield may rise (bond price may fall), because WPI may rise due to higher cost of oil imports.

    ONE CARDINAL PRINCIPLE OF INVESTMENT is if you do not understand any investment product, DO NOT INVEST. for me, this is not a good investment product for retail investors, who are not equipped with thorough knowledge and intricacies of interest rate movement.

    Prefer instead “pure vanilla” investment product or very simple investment product which is not subject to many “ifs and buts”. If you really want to protect against inflation, better go for “Gold and Silver” which is easy to understand and you are always in physical control.

    if any investment product does not give you direct control, just do not think about it. Most of brokers or investment advisers are extremely poor in their depth of understanding. They try to sell you those “complicated” products because they tend to make hefty commission from each trade.

     

  172. Respected sir,
    Thanks for your valuable feedback on dollar trend. Sir i wanted to know whether USD will surpass Rs.57 levels in coming days. If this happens my imports cost will be much higher and i have to pay higher price. One more issue i cant postpone my order as my material i.e. mechanical tools should be in continuous supply. sir please suggest me what if i short the dollar at current level and import the goods at present dollar price. so once the dollar starts moving down i can compensate my losses  in import purchase. seeking your advice sincerely.
    Manjunatha.R
    Bangalore, India
    Date: 4/6/2013

    Kalidas Says … Tuesday, June 04, 2013
    This is a dangerous game. You are mixing business with investment. Dollar is running much ahead of fundamentals, and my long term view on dollar has hardly changed.

    If you, and for that matter any reader, has time of over one hour or so, kindly see the following video from a leading expert (whose views are more on sync with my views). It will tell you what is going to happen in next 12 months.

    You may go short on dollar in future, and place the order on spot basis. Please note that your short position may be several times higher (because the Forex contracts are for minimum $250,000) whereas your spot purchase may not be that high. In that case, you have to keep the stop on your future contract position.

    If you are able to match the size of long and short position (so that you can play both ways), then nothing to worry much.

    ALL READERS – PLEASE FOLLOW THE LINK AND WATCH THIS VIDEO WHEN YOU HAVE AT LEAST ONE HOUR TO SPARE. This is one of the most important Video on the subject of investment.

    Stansberry and Associates Investment Research is the firm which has made this video.DO NOT CLICK “Subscribe now” button. It is not necessary. Instead, press “Play” button on the video window.

  173. Subject : Essar Shipping a buying opportunity?
    Hi Sir,
    I have 13000 Essar shipping at an average price of 24.9 Rs. This is available now at 19 Rs, around 25% down from my buy price. Do you think, it can be added more if the view is long.
    Regards,
    Nadim, Kuwait
    4 Jun 2013

    Kalidas Says … Tuesday, June 04, 2013
    Any small value stock below Rs 40 is generally volatile. The volatility increases when the value gets smaller and smaller, say 30, 20, 10 etc.

    The % loss may seem higher in such small value stock whereas in absolute terms, the loss may not be significant. The difference in stock price from 24.5 to say, 19.5 or say Rs 5 per share is relatively small, and can be covered in two or three days rally. I normally buy the small value stock again when the price difference is around 30% to average down if I want to stick to the stock.

    If you are convinced to hold the stock, buy more about 7000 when the stock is between 17.80 to 18.35. These are the levels normally tested by any stock when they are on slide.

  174. <Quote>
    I am reposting this query since it missed your attention </Quote>
    PSU OMCs vs Private OMCs
    Dear Kalidas ji,
     
    With the recent incremental hike in diesel price and floating petrol price in place, I assume that private OMCs like Reliance, Shell and Essar will be gainers compared to PSU OMCs. Already there is a preference in the urban areas to fill petrol from these bunks due to clean fuel and better mileage. If the price parity is gone, the private retailers will get more revenues due to their business model compared to PSU OMCs and they may even lure the PSU OMCs retail agencies to switch sides. In such a scenario, do you still suggest to stick on to PSU OMCs like IOC, HPCL, BPCL or advise to increase exposure in Essar Oil and Reliance by selling off IOC, HPCl, BPCL. My 40% of portfolio is only PSU OMCs and would like to get your expert views.
     
    Regards,
    KeeYes, Chennai

    Kalidas Says … Tuesday, June 04, 2013
    The effect of higher diesel, petrol and gas prices will be felt more by PSU OMC. The private sector will not have large impact, depending on whether or not they are domestic oriented or export oriented.

    Reliance for example, has over 65% turnover in exports. It is therefore not a beneficiary of higher oil prices in rupee terms. They will get only dollar denominated price for exports, and the only advantage will be “lower rupee” – against depending on whether or not they have entered into FOREX Forward contracts. Such information is never known to investors, as the companies are not required to fine tune their reporting.

    So before you make a move, make sure that you know how private refineries are placed – are they domestic oriented or export oriented. Most of PSU – OMC are import or domestic oriented, so they will be larger beneficiary of higher Oil/diesel/gas domestic prices. They do not have to depend more on government subsidy.

    When the subsidy could not be given to Reliance or Essar, they had to shut down their Petrol Pumps – none of PSU-OMC closed their gas station (Petrol Pump) during last 3 years.

    Further, when IOC begins to gain, its stock price will gain more than any other company because the revenue of IOC is nearly twice or thrice to other companies. As such, its market cap will rise, and finally it might become No. 1 company to qualify for inclusion in BSE Index. RIL is already in BSE Index, so any rise in their market value will have neutral effect.

  175. Financials are getting dirtier day by day of Opto circuits. 1500 crs as debtors. look like they are selling goods without asking money.
    I would like to know your views about this stock. Hold ,Sell or Add ?
    I am sorry for any errors as I am typing from mobile.
    Jayesh mange
    Vashi, Navi Mumbai 

  176. Dear sir,
    Good Morning
    I have holding in Essar shipping (1500@20), Opto circuits (1000@46). 
    I have 1 lac cash left in my account that I want to invest for longer period. 
    I know your views about Essar shipping so I don’t have any question about that. My question is about Opto circuits. 
    Few days back Optocircuits was hammered down by 40% in a single day, from 48 to 31 due to bad result posted. It is currently trading at 31. 52 week high is around 200 of this stock. 

  177. India Stock DQ Entertainment 
    Sir,
    I am having 5000 shares of DQ Entertainment bought @ Rs. 19. CMP is Rs 8. Kindly advise on potential  of the stock considering short and long term in view.        Regards.                                                                                                          Arun ,                                                                                                         Mumbai , India

  178. Hello Sir,
    I am very happy to see you Back in Action.
    I have 400 Mahindra Satyam@70, should I sell it now or should I use this correction to buy more?
     
    Regards,
    Brawnym M
    Pune , India

    Kalidas Says … Monday, June 03, 2013
    Kindly always mention CMP along with your cost. I have to check the CMP all the time for all the readers which is impossible. Otherwise, the answer may be delayed

    Positive Factors:

  179. Rupee is declining against dollar. 57% revenue of Satyam is from dollar zone. If the Rupee weakness becomes a trend, then its earnings and EBIDT will be higher, and any lower margin may be compensated with exchange gain.
  180. We presume that Satyam is not involved in FOREX speculation, and it does have hedge book in excess of $234 Millions. What kind of hedge it is, we do not know since it is internal matter.
  181. There is over 20% growth in new clients. Also the revenue is higher. % Margin has slightly improved, but it is competitive market
  182. At the moment, Software stocks in general are under pressure due to Infosys and WIPRO related developments. When the bellwether stock in any sector goes down, other members also go down
  183. Cash holding is nearly 3000 crores or about Rs 27 per share. If those FD are parked in India, then it is good because local rates are higher. However, such bi-furcation is not given in the financial statements.
  184. Satyam is still trading at lower P/E (about 14 times) against Industry PE of 18 times. May e due to lower growth perception compared to TCS and HCL. There are no worrying signs.
  185. Negative factors: They are more technicals. When the stock falls below 200 days moving average, it may sound trouble to technical players. I do not give too much importance to technicals, but they do dictate short term price trend.

    The stock did go to Rs 130 and now below Rs 108 ( a critical level). If it falls below Rs 103.50, and stays for 3 days or more, then it may be time to lighten up to current holders (not fresh entrants who were waiting in the wing to buy).

    My original target of Rs 160 is still intact. since the current price of Rs 108 is almost 50% away from my target, I do not sell, and pass my time until the stock comes within 20% of my target (say Rs 130 which it did come one time)

    Based on above fundamentals, earning picture, removal of almost all negatives, I would not mind holding stock until its my target. Yes, of course, some new negatives emerge which may need fresh assessment.

    Your investment is relatively small, just 400 shares. There is no scope for diversification because cost of swap is high. If you are small investor, and worried about market or the stock, you can sell all and retain the money in FD which may get you 8% interest. If I were you, I would hold the stock for better time.

  186. Dear kalidasji,
    I saw you suggesting  “Avoid buying Gold at the moment” to Mr Vijay on Jun 1/2013.
    I suppose you are (also) not suggesting selling Gold at the moment to take entry at lower level, right ? 
    My buying average is about 25K and I never traded (even at 32K) my physical position. I am heavy on Gold in my portfolio, about 40%. I don’t need to sell.
    Do you think I should change my strategy regarding Gold ? 
    Or just do nothing and wait ?

    Dongre/Mumbai

    Kalidas Says … Monday, June 03, 2013
    You have mistaken my comments. My suggestion was to someone who did not have any position. Gold has “inverse relationship” with dollar, and with recent continuing strength of dollar, I have suggested reader to wait until the consolidation phase of dollar was over.

    Gold is a hedge, and insurance, a precaution. It is not a trading commodity for a normal investor. You do not surrender LIC policy only because Reliance is cheaper to buy.

    I never suggested buying Gold in excess of 25%. (Gold and Silver taken together). Since you own 40% of portfolio in gold, and Silver has fallen more than gold in % terms, it makes sense to sell some gold and swap into silver. Do not exceed investment in Silver more than 8% of your total portfolio (consisting of cash, stocks, bonds, ETF, options, and Bank’s FD – the core property is excluded from considering portfolio)

  187. why Nandan Nilkeni was not given chairman post… I have heard that NRN doesn’t want him to be in that post?

    Kalidas Says … Monday, June 03, 2013
    Kindly “Append your signature” to your comments all the time. First line (Your name), Second line (City and Country) (Date). It helps everyone to know the geographical diversity of this blog. Orphaned comments may not be answered and may be deleted.

    Kalidas Replies:
    There are always likes and dislikes. There are always some differences in management functions, style and preference. It is indivisible part of any organization.

    May be Nilkeni is an asset from technical perspective. But he may not be as good as CEO. A Chairman of any company may not be able to please everyone. It is his job to displease some one at some time. He has thankless job to perform. (Look at us, we can not please every reader)

  188. For READERS:

    BREAKING NEWS, INSTANT VIEWS is restarted. Please consult this on daily basis. It will be updated daily. This is different from Stock Observatory column which will have different structure and needs. It will be also restarted after format change very soon.

    Anil Selarka (Kalidas)
    June 2, 2013, USA 

  189. Sub : MTNL and TTML
    Sir,
    Can you please let me know prospects of MTNL and TTML? I have been holding 45000 of MTNL at 27 and 75000 of TTML at 10.5
    Regards,
    Chetana
    Bangalore, India

    Kalidas Says … Monday, June 03, 2013
    I will reply you within 2 days, as I need time to study since your investment is quite high.

  190. Hello Sir,
    All i wanted to know is future of rupee . where is it heading towards.  today it almost reached the 57 level. As i deal with imports i am keen to know this and plan accordingly
     
    Regards
    Manjunatha.R

    Kalidas Says … Saturday, June 01, 2013
    If you are importing, just use the strength to book the order. Not at the time, when the stock goes up from 54.50 to 56.50 or by 4%.

    The dollar is firm due to manipulative reasons. When it could not harm Euro which is still near 1.30 level, they destroyed Japanese Yen by 25%. Indian Rupee is down only by 4%, so relax.

    I can not render short term Forex advice in this column. There are just many variables which are not foreseeable by normal people.

  191. Dear Sir,
    Seven long days have passed since your last posting ! 
    Please come back.we eagerly await your return.

    Kalidas Says … Saturday, June 01, 2013
    Returned

     

  192. Metal Stocks:
    Kalidas ji,
     
    http://www.moneycontrol.com/news/results/sail-q4-net-down-72higher-interest-cost_885502.html
    SAIL has announced its results today and both topline and bottomline has taken a hit. The price is already around 56 (52 week low). Please advise if you recommend averaging or swapping into other stocks. My metals portfolio is as follows.
     
    COAL INDIA:Qty 150, Buy Price 315, CMP 325
    STERLITE: Qty 910, Buy Price 111, CMP 91.45 (tuticorin copper plant is under suspension and case is pending in court)
    SAIL: Qty 680, Buy Price 76, CMP 59.70
     
    Regards,
    KeeYes, Chennai

    Kalidas Says … Saturday, June 01, 2013
    Allow the market to adjust to this news. Since dollar is still firm, and rupee falling, the metal prices internationally will remain weak, so give some more time to stock adjustment.

    When the stock hits Rs 48.35, just buy more (220).

  193. Hi Sir ,
    Unitech has put ads in news paper for deposit with rates ranging from 11.5 to 12.5 % PA non cumulative ! and up to 15 for 3 year cumulative depoist .
    Request your openion since it looks too good to be true .
    http://www.unitechgroup.com/unifd/aboutus-scheme.asp
     
    Sachin , Pune , India

    Kalidas Says … Saturday, June 01, 2013
    Dump it. Do not read it and waste your time. Bank deposits are safer than Unitech

  194. Essar shipping offer for sale (OFS) on 30 May 
    Dear kalidasji,
    Essar shipping has finally announced share sale to increase public holding to 25% and stock is down 10% cmp 20.5.

    Q4 results are also out. Reported revenue of 3200cr and reserves  of Rs 4943 cr. Please share your views on these developments. 

    Kalidas Says … Saturday, June 01, 2013
    Scroll down to read my reply to other readers. The stock was down mainly due to OFS which was result of SEBI requirement to bring down Promoter’s holding by 13% from 87% to the level of 75% as required. The sale of about 2.3 crore shares may net the revenue of just Rs 45 crores which is “peanut” for company’s promoters who are worth over Rs 30,000 crores.

    Arithmetical exercise does not over ride financial fundamentals. Use this as BUY opportunity. The stock will reverse its falling trend when the exercise of bringing down stake within 75% is over. Rs 19.50 is pretty damn good price to enter. Risk 10% to 12% and Reward 50% in 18 months. You decide if you are investor or speculator.
     
     
     
     

  195. Dear sir,
    We want to invest 20 lakhs in gold as long term investment. it it right time to catch or it may fall to 22k as predicted by many jewellers? I had already bought at 29k some quantity.

    Many of my relatives just believe in ” anil selarka” for gold investment now.
                             
    Satish
    Raipur, india, 28/05/2013 

    Kalidas Says … Saturday, June 01, 2013
    Avoid posting message from phone as words are not capitalized. I have to do your job.

    The Jewellers are “monkeys” who rehearse what other say. Same people will tell you Rs 40,000 once the gold turns around.

    The economic crisis is not over – it is deepening. While SENSEX is around 20,000, why every power and infra company say that India’s GDP growth may not be attainable?

    Gold will be the only savior. Buy Silver instead of gold at the moment. With Rupee sliding all the time, there is no possibility of Gold coming down to Rs 22,000. Silver may correct to Rs 42500 or about only due to exchange parity – that neither you nor I can predict. Remain on buy mode and add little by little, the way you take breakfast.

  196. Dear Sir,
    Essar Shipping posted results on today and shared closed up 10%.
    http://www.moneycontrol.com/stocks/stock_market/corp_notices.php?autono=676828
    Company has also intiated open offer for sale on 30th May.
    http://www.bseindia.com/xml-data/corpfiling/AttachLive/Essar_Shipping_Ltd_280513.pdf
    Need your expert advise whether to hold ?
     
    Regards
     
    Ravi Sehgal, Gurgaon, India

    Kalidas Says … Saturday, June 01, 2013
    It is the first point of entry. Read my views in reply to other readers on Essar Shipping, just scroll down. BUY NOW
     

  197. Subject: Real  estate  in Pune Mumbai  and Ahmedabad

    Dear  Kalidas Sir,

    Welcome  back after  long time.May god  bless you with long life.

    Most of us almost lost the patience, sincere apologies  about that.

    Our question  is regarding investment in real estate, as we are waiting for crash to happen since last 3 years, but instead  prices  are  keep on increasing. Hence I request you to guide me on Which city to buy a flat with budget  of 60 lakhs from  Ahmedabad, Mumbai or Pune.. which can give  the relatively higher return in next 3  years. I have fund availability of 60 lakhs, and I have short listed on Ahmedabad (Town – 3BHK), Mumbai (Suburb – 1BHK) , Pune (Suburb – 3BHK). I work in Pune, and plan to work here for 5 more years. I am fine to rent for next 5 years in Pune, if you recommend to invest in other two cities.
     
    Regards,
    $amir, 05/28, Pune

    Kalidas Says … Saturday, June 01, 2013
    The properties are best bought at the place of your stay. Pune is the best choice for you since you propose to stay there for another 5 years.

    I am still NEGATIVE on property. Yes, crash has not happened, still the prices are not up. The bank interest rates are nearly 8% to 9%, and in last 3 years, one may have earned around 24%. Has property gone up by 24% in these named city? I do not think so. I sold my Mumbai property in July 2010 and retained the money in bank’s FD earning me over 9.25% per year, that is, in 2 1/2 years, I have made over 23%. The same flat has not gone up in value by more than 10%, and it is just the asking price, not real business done.

    If I were you, I will place the money in FD and sleep well. I wait for the opportunity and just wait. Even in United States, many tell me to buy now, but I steadfastly refuse. I am happy with my money in the pocket.

    A few years ago, I was advising buying Agriculture property. I recently sold one of them making over 700% – and it is tax free because Agriculture property is not treated as capital asset if the farm is more than 8 kms away from the main city or municipality. My other assets are also up 700% in same sector which also I will sell as opportunity come by.

    BUY instead SILVER if you can not hold money lying in bank. It has become cheaper by 35%, so go for it.
     

  198. PSU OMCs vs Private OMCs
    Dear Kalidas ji,
     
    With the recent incremental hike in diesel price and floating petrol price in place, I assume that private OMCs like Reliance, Shell and Essar will be gainers compared to PSU OMCs. Already there is a preference in the urban areas to fill petrol from these bunks due to clean fuel and better mileage. If the price parity is gone, the private retailers will get more revenues due to their business model compared to PSU OMCs and they may even lure the PSU OMCs retail agencies to switch sides. In such a scenario, do you still suggest to stick on to PSU OMCs like IOC, HPCL, BPCL or advise to increase exposure in Essar Oil and Reliance by selling off IOC, HPCl, BPCL. My 40% of portfolio is only PSU OMCs and would like to get your expert views.
     
    Regards,
    KeeYes, Chennai

  199. India ,Stocks,Essar shipping
    Dear sir,

    The results have been publised. I already have a postion on this stock. Could you please suggest whether we could buy more. I am a long term investor. I could hold it for more than 5 years if needed.

    Parthiban,Chennai,India,05.28.2013

    Kalidas Says … Saturday, June 01, 2013
    The negative is the shipping sector reeling under low freight. The stock came down not due to its result, but more due to its compulsory sale of about 12% equity to bring down promoter’s holding less than 75% from currently 87%. SEBI rule require at least 25% equity in public hand. Once this placement or issue is over successfully, most of the negative will be out of way.

    Current price of Rs 19.50 – almost new issue price for dilution of promoters’ stake by 13% at near this price, is very attractive. The downside may be only 10% with upside over 50% at least in next 18 months. It makes sense to buy now or buy more if the previous cost is higher by at least 30% from current market price.

    Not much risk. Since the promoters are obliged to sell at a loss, they will make sure that the stock falls into their associate companies or persons. There may not real sale at current prices.

    The financials are otherwise good.

  200. Dear sir,
    I have a question about Hindalco Industry. kindly give suggestion for purchasing Hindalco
    Thanks & Regards
    Mohan Prajapati
    Nsp, M.P.

    Kalidas Says … Saturday, June 01, 2013
    Dollar strength or Rupee weakness is good for Hindalco because higher $ converted price in Indian Rupee may generate higher return for Hindalco.

    Current weakness in commodity stocks is mainly due to higher dollar which causes the weak prices and sentiments for this sector. However, Hindalco will be a winner.

    I have not evaluated this company for a while. While Weaker rupee is boon for this company, it is also negative for its acquisition of Canadian company a few years back. I need to study this before recommending stock or its level of entry.
     

  201. Subject : MRPL performance
    Sir,
    Did you get to analyze MRPL result. i have 5600 at 67 rs. Can this be added more at CMP of 42 Rs?
    Regards,
    Nadim Azami, 27 May 2013
    Kuwait

    Kalidas Says … Saturday, June 01, 2013
    Yes, ADD 2400 at current level.

  202. OMCs and general market direction
    Hello Sir,
    Hope you have found time to read up on markets and OMCs. I am eagerly awaiting your view on these two topics:
    1. How is the market supposed to behave in coming months?
    2. What is your current view on OMCs?
    Regards,
    Pawan,
    Delhi, India

    Kalidas Says … Saturday, June 01, 2013
    I will cover in next few days. Kindly wait.

  203. Subject: Petronet Lng
    Dear Sir,
    Thank You for Coming Back

    I am Holding 6000 shares of Petronet from almost last Four years and from almost last two years this Script Is trading between Rs.130 to Rs.160 and Now the CMP is Rs.140, Below is the link of Petronet last quarter Results
    http://www.moneycontrol.com/news/results/petronet-lng-q4-net-profit-falls-23-to-rs-245-cr-qoq_862007.html

    Another Link of Audited Financial Results for the year ended 31 March 2013
    http://www.petronetlng.com/PDF/Q4_30042013.pdf

    Now My question is What Should I do with Petronet Now?

    And According to your Stock Observatory Report on Petronet published on December 2009 This script should trade near Rs.300  till now and Rs.500 till 2014.

    Now Do you think the above targets are achievable?

    AND the most important Question that What Is The future OF PETRONET LNG from hereon after the recent Discovery of Gas By Reliance.

    And do you think That we should still hold it for Long Term Investment and If Yes Then what Kind Of targets we can get.

    Your Comments will be Very Help full

    Thanks and Regards
    Basant kejriwal, Delhi, India

    Kalidas Says … Saturday, June 01, 2013
    You are seeking my advice by not telling me what was your cost of purchase? You are referring my report of 2009 when the stock was trading near 70s and even at current depressed prices, the stock is still up 90% and went up as high as 200%. Unless I know the cost of purchase, it is difficult to render meaningful advice. However, let us look at the fundamentals which affect the stock price of Petronet:

    1. In 2009, the stock was recommended at Rs 73+ with a target of Rs 180 in 36 months or say in 3 years or say by 2012. This was achieved. I did not mention target of Rs 500. Highest target was Rs 235 followed by Rs 360. These targets were based on the gas related pricing policy which has of late changed. We can not anticipate political decision 5 years in advance.
    2. We expected EPS at Rs 19.63 whereas actual achieved was Rs 15.32, mainly due to devaluation of Rupee by 20% – exchange rate game is difficult to predict 4 years in advance.

      Nevertheless, as against the Target of Rs 180 mentioned in 2011-12, it was achieved

    3. Coming to prospects, please note the following “negative” political decisions which were absent in 2009.

    4. The gas prices were not controlled in 2009, whereas it is proposed to be regulated as per recent euphoria due to close election.
    5. One negative for Petronet is its long term contract of buying gas from Qatar at high prices. If Reliance gas comes cheaper domestically, then Petronet profits may suffer.
    6. RIL news on its own is a good news for Petronet because more and more companies will be reverting to Gas from Petrol. Most power plants will seek gas from RIL and if RIL refuses them, they will have to approach Petronet even at higher prices.
    7. The company is financially liquid otherwise. Its interest cost is just about 3% of sales, which is excellent. No other company can achieve this milestone except RIL which got funds from BP by selling its stake.
    8. Except for radical revision on gas price policy ahead of election, it does look that Petronet will continue to perform better and better.
    9. Due to election ahead, a very sensitive issue for Gas companies, I think that original target of Rs 235 and Rs 360 may be deferred by 18 months at least. Until election is out of the way, we can not anticipate government policy
    10. The stock may return at least 50% from current level by Dec 2014

     
     
     

  204. Dear Sir,
    I have a question about divestment. I am in urgent need to around 4-5 Lakh rupees. I have 2 options,
    1) Either sell OMC investment. 
    2) Sell Silver.
    Kindly suggest.
    Thanks,
    Prakash
    Rotterdam, The Netherlands

    Kalidas Says … Saturday, June 01, 2013
    SELL OMC for the moment.

  205. Dear Sir,
    I am a silent follower of your website. i have invested money in essar shipping, gold etfs and silver presently.
    Essar shipping 14500 @ rs 30, CMP rs 20.5
    hdfc gold etf 171 @ rs 2950, CMP  rs2570
    silver 6.16 kg @ rs 62k, CMP Rs 45k
                             Please advice if any swap can do for me or should i stay invested with long term horizon.Is it advisable for me to swap some essar shipping to silver , as you said to one follower no stock is immune during market crash.
    I had invested earlier money in ioc @330 but had booked loss @ 300 due to some unexpected family expenses need .Ihave some cash as fd in bank also if market gives an opporunity as you are advising to many followers.
    Thanks in advance.
    Tee, Delhi, India

    Kalidas Says … Saturday, June 01, 2013
    Essar Shipping: The stock has been coming down due to proposed selling of new shares at Rs 19.50 due to SEBI rules to bring down the promoter’s holding below 75% from currently at 84% or about. This is arithmetical reason, and I suggest you to buy 3500 shares at the moment with a view to buying more (4500) later when the shipping business improves. Its earnings did not rise mainly due to industry’s problem of lower freight rates. However, we personally believe that Essar has been collecting less lease rates to help out it other group company.

    Not much actions suggested on gold and silver front, due to firm dollar. Let the dollar;s firm days be over, and then we will take fresh approach.

    EXCEPT do the following:
    Your losses on gold is about 13% and in Silver 27%. SELL gold upto Rs 90,000 value and buy 2 kgs of Silver. You are selling one precious metal at lower loss, and buying another precious metal with greater loss. It should work fine. New positions in gold/silver is not suggested. (Except for new investors who have no position in such metals – they may buy Silver at current level)

      

  206. Stock Swaps
    Dear Kalidasji,
    Jai Shri Krishna. Pleasure writing to you after long time. We need your suggestion to swap some of our loss making investments.
    1)We have 300 SPICEJET bought at 43 and 300 IL&FS (Mayras Infra previously) at 120. Both are now trading at 38. Can we swap them to DCB, AShok Leyland, Essar Shipping, TVS or South Bank?
    2)We also have 500 Autoline Inds at 175 (CMP is 82). Can we swap it to Sterlite, IDBI, Arviind or Essar Oil?
    We are holding these loss making investments for last 3 years now. And we wouldnt mind to hold them for further 3-5 years too. Please advise as always.
    Thanks,
    Sonali M Bhatt
    Bangalore, India

    Kalidas Says … Saturday, June 01, 2013
    Too many stocks to watch and advise at the moment. I have not followed Maytas infra for a while but let me tell you the alternative as under:

    1. DCB is not a stock which may perform well in future. The Indian Economy is still not out of woods.Hold Spicejet for a while. No need to do anything

      The company is under financial squeeze. Although Saudi Arabian Bin Laden group has taken some stake, we do not know how the things will shape up. Its balance sheet is “botched” and too complicated. It may sound too late to sell these shares, but I do not know other stock which may rise in value 3 times to recover your investment.

      I do not have ready advise for you this time, as my knowledge of other stocks are somewhat flawed due to long absence. Just wait for 7 days more before we can decide. Until such time, do nothing.

     

  207. Sir, 
             Had posted a query on gold yesterday, dont see it here. so reposting. I had 725gms of gold @ average price of 22k. I sold it @average price of 28k fearing a total meltdown. And I couldnt get your advice during this period. Please suggest re-entry levels and quantity as well.
     
    Thanks,
    Vijay
    Bangalore

    Kalidas Says … Saturday, June 01, 2013
    I do not reply for posts without proper signature and city’s name.

    Avoid buying Gold at the moment. I think Silver is better choice, but so long as false strength in dollar continues, these commodities will be under pressure.

    I will advise in this column when to re-enter.

  208. Dear Anilji,
    NHPC/IFCI
    Another of the scripts is NHPC , CMP 19.6 as of May 24 2013. It has crashed from a peak of Rs 29 which it made 4-5 months back. Any specific reason for this fall, and is it a right time to buy some more . I am holding around 3000 shares at the IPO price of Rs 36. Is it a good bet to invest.
    Also would appreciate if you could provide your views on IFCI, is it a good price to enter IFCI at CMP  Rs. 27

    Thanks
    Rahul Bondre
    Illinois , US
    24th May 2013.

    Kalidas Says … Saturday, June 01, 2013
    NHPC:
    You bought the stock at very high price at the height of hype relating to India’s GDP growth story and expectation that Power will be having magnetic demand due to expected double digit growth. The government sensing the demand, brought out IPO at very high multiple.

    The power is highly controllable commodity. The government policy to its owned unit is more “socialistic” and election oriented rather than rational commercial policy. As such, we can not expect power rates to go substantially higher in consonance with rise in oil prices in US dollar and continued devaluation of rupee, again due to deliberate government and RBI policy.

    Another is arithmetical factor- that is – the government came out with small value stock-Rs 36 per share by making available only 13.5% of total shares which amounted to 123 crores. The government owned therefore 86.7% against SEBI norms to have maximum 25% in public hand. Such low prices do not encourage the fund managers and pension funds to invest into such volatile stocks. If the government has floated just 12 crore shares against 123 crores, the fund managers and pension funds would have natural mandate to invest into such companies. The MF and PF normally have charter to invest into Morgan Stanley Capital Index stocks which rely on at least 45% to 50% widely held shares as against just 13.5% in the present case. Further, small values below $5 equivalent or about Rs 280 per share at current exchange rate, are considered as “penny stocks” of volatile nature, and they are prevented from investing into such companies. DF (Domestic Mutual Funds may invest out of sheer obligation to invest into govt owned companies)

    Further, there is no excitement in power utility stocks. The capital expenditure is very high, price control stringent, and as such there is no excitement on the prospects of earnings. The stock market relies on expectation and boosting of profits due to many variables. Since such variables are almost absent, there is no excitement about the earning prospects. Normally, a utility company has predictable earnings and predictable dividend policy. They are not SEXY stocks to invest in. I never invest into Utility company. No major investor ever made much money by investing into such companies around the world. It is said that those who do not know how to invest, invest into such utility companies.

    There is nothing wrong with the company which is reporting good numbers consistently but these companies are plagued by long period of realization of sales proceeds due to budgetary constraints of Power Distribution companies (State Electricity Boards).

    The government is obliged to reduce its holding to 75% or below to ensure continued public listed company. This is why it is floating new Issue which will raise Rs 2400 crores by reducing its stake by 12% or about 13.5 crores of shares, valuing the company stock price at around Rs 19 or Rs 20. This was announced only on 28/5/2013 with the result that the stock had gone down to near this level.

    Nothing to worry about this stock, and to average down this stock, buy about twice or same quantity held by you. Treat new purchase as trading investment, and if the stock does go up by 20% 3 or 4 months after the successful new issue, sell it in the market. Do not count on average cost. You will have long way to go.

    Alternatively, you may invest into identical value stock of private owned companies which may move faster on news and promoter driven rally. Otherwise, treat as core holding of long term nature.

    IFCI:
    The cat is out finally. IFCI was under pressure due to internal talks relating to its MD and CEO Atul Kumar Rai who was considered not on favourable terms with the government. The latest news just out after your comments, that ATUL KUMAR RAI has resigned following his differences with the Government. The stock went down as result to close at Rs 25.50 which is very attractive price to enter with just 10% worst scenario downside.

    My view relating to IFCI is well known who have followed me since my days at Money control, where I mentioned consistently that Atul Kumar Rai was a very big liability on the company, and that unless he departs the stock may not perform well despite good financial performance of the company. Now that the Government has listed to my inner voice, the departure of Atul Kumar Rai is an event to celebrate by buying this stock. The big negative is removed after about 5 years. He was destined to continue until 2017 otherwise.

    The market may react negatively on this news initially and will wait who is appointed now and what shape of change he will bring about.

    Financially, the IFCI EPS has gone down due to enhanced equity in the hands of government who raised the stake by converting its bond.

    All these negative factors are now behind. I therefore take the view that IFCI will be a good counter to watch closely and start taking position. I do not suggest any entry level because the stock is too newsy and recent news may be viewed negatively. Since Government has approved the departure of Atul Kumar Rai, it may already have some game plan which will be implemented by the new comer. In other words, the only news that can come out will be good news – bad days for the company may be over. It also looks like that newcomer will implement to convert IFCI into a banking company which will generate lot of excitement in the market place.

  209. Dear Anilji,
     
    Could you throw some light on GSPL(Gujurat State Petrochemical Ltd.) , it has been constantly falling , and CMP is Rs. 58.50 as on 24th May 2013.
    I want to invest in this stock , but want to know your views. You had recommended this stock when it was in its mid 60’s , with target of 90+, is its gas distribution business in trouble , due to lack of volumes, as Reliance has not been pumping out gas from its KG basins?
     
    Thanks
    Rahul Bondre
    Illinois , US
    24th May 2013.

    Kalidas Says … Friday, May 24, 2013
    The stock has been falling due to proposed price structure which may be effective from 1st April, 2014. There is otherwise nothing wrong in financials.

    GSPL is having 89% Gross Profit margin. Its higher or lower profit profile is largely affected by the volume of gas transported which is (1) Imported Gas and (2) Domestic Gas. The imported gas cost around $14 to $15 mmb whereas domestic gas price is pegged at 50% lower than the imported volume.

    If gas produced domestically rise the company benefits. Only today, there is a newsout that Reliance and BP have found largest ever gas find in Kaveri basin tagged as D 55. If this is true, then there could be heavy demand for gas transportation that could boost the price performance of gas distribution companies like GSPL. Other companies are GAIL and Petronet.

    It looks to me that the market correction relating to possible downgrading of gas volume is nearly over. The stock below Rs 60 is a good buy, but I would wait for while before jumping in due to (1) election being near, the gas price control policy need to be studied strongly. and (2) If RIL/BP venture goes ahead on Well D 55, there would be huge demand for gas transporter like GSPL (pure gas transporter) and GAIL, Petronet.

    Two factors viz. RIL find of new gas in Kaveri basin, and demand for gas transportation will rise in next 3 years, AND if the government does not revise the gas prices down by bringing this industry, are stock positive events.

    Due to political overtones on gas prices fixation, it will be difficult to lay down specific entry level. Current sentiments being negative on entire sector, better wait for some more time to follow the stock closely. It is just persistent stock weakness that tells me to wait for last phase of correction on the downside.

    BUY a small quantity now, and buy more at the level of Rs 53.50. Stagger your purchases to buy more at every fall. The last 4 quarters does show good EPS which may not have shown higher growth.

    The stock should begin to perform well from beginning of Oct-Dec quarter. All depend on how soon RIL/BP gas come on stream. Many gas based power plants have become idle due to lack of gas supply. The possible surge in supply from D 55 Kaveri Basin may revive those plants who in turn will revert to companies like GSPL for domestic transportation needs. The EPS of nearly Rs 8 also make this stock relatively inexpensive. Higher gas transportation will force EPS higher.

  210. Sub:Essar oil’s loan pact with Chinese bank and equity dilution
    Dear Sir,
    Essar oil has signed a $1 billion loan pact with China development bank as per news paper reports.Economic times news report is giving a hint that they may consider an equity dilution also.
    http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/essar-to-ink-deal-with-chinese-cos-to-tap-billion-dollar-funds-for-vadinar-products/articleshow/20142220.cms
    regards,
    Joy.Joseph
    Mangalore,India,24.05.2013
     
    Kalidas Says … Friday, May 24, 2013
    I do not know whether CDB (China Development Bank) would seek equity in Essar Oil. If at all, they do, it will be through Petro China.

    Essar Oil is required to dilute its equity holdings from high of 85% to lower than 75% to meet the listing rules as prescribed by SEBI and other stock exchanges. May be the recent deal may point to that direction – we do not know.

    In any case, it was positive event for Essar Oil who is able to tap low interest bearing resources to replace high interest carried domestic debt. But the exchange risk remains. Ruia are not known to expert in Foreign Exchange, and they have always lost.

  211. Will you please throw some light on the present situation of Indian Oil and its future prospects ? I have 100 shares at an average price of Rs 310/-.

  212. ONGC to MRPL Swap
    Dear Sir, 
    As per current prices today ONGC 331 & MRPL 42.5, is it making sense to swap it to MRPL. 
     
    Regards
    Amit Sydney 23/05/2013

    Kalidas Says … Thursday, May 23, 2013
    Excellent suggestion. Sell some ONGC and buy MRPL. Selling one ONGC share gets you 8 MRPL shares. This fits into my own Stock Commandments released earlier. Read my Stock Commandments again.

    The poor financial show of MRPL was irrational and mainly due to some manipulation in favor of ONGC.

    Do it. Please note that final numbers of MRPL will be out on 24/5. Read my comments on MRPL to other readers – scroll down.
     

  213. Sub:Pricing of petroleum products from trade parity to export parity.
    Dear sir,
    Government is planning to change the pricing policy for petrol and diesel from ‘trade parity’ to ‘export parity’.How will this affect  profitability of OMC. Please give your opinion.
    http://www.moneycontrol.com/news/business/oil-retailers-plungeexport-parity-pricing-talks_877914.html
    regards
    Joy.Joseph,Mangalore,India,23.05.2013

    Kalidas Says … Thursday, May 23, 2013
    I will reply here within a day or so. I have read the news item but need time to think.

  214. Subject: Precious metals article
    hello Mr selarka,
    when is your article on precious metals coming ?
    regards,
    micky.
    new jersey.
     
     
     
     
     

  215. Dear Anil,
    Welcome back ! With repo rate and CRR rate cuts, interest rates are expected to fall down ! What is your analysis on Gilts and Government Securities? PNB Gilts, a subsidiary of PNB is quoting around Rs.30 which has a book value of over Rs.45 and expected to announce bonus shares tomorrow. Do you think it is a good buy at CMP?
    TOTALVIEW
    LUCKNOW, INDIA
    22nd May 2013
     

  216. Good to see you back, it gives me warm feeling, in spite of cold & wet weather in Auckland!

    Regards
    Manoj

  217. Dear Readers,

     

    My both laptops have recently crashed in quick succession, giving me most difficult BSOD message. (Blue Screen of Death). I had to reset entire operating system to original factory setting, which made me work much longer to reinstall many softwares. 

     

    At least one computer has been restored.I will make up the lost time from tomorrow morning (US time) and try to finish pending queries. 

     

    Anil Selarka, USA

    May 21, 2013

  218. Dear Sir

    Few months back just after the Obamas’ re election I had put this question( around Jan 20th) hoping you would see that( You might not have seen). Coincidently that was the time when Indian Govt  announced the plan to increase 50Paisa every month for the diesel price decontrol. I am cutting and  pasting that here again

    Quote
    Hope everything is fine and  you are enjoying stay in India .  At last your  favorite stocks OMCs  started making money for us. Hope government  wont’ reverse  decision/policy on diesel decontrol.  Looks like next Three and half years   will be bullish till Obama’s era  ends.  Till 2016 Middle I don’t think we need to worry like 2003-2007 middle,  during Bush’s second term. I feel when  US president gets reelected second term market will be bullish and  problems starts popping when  respective second term is about to end /  beginning of new president.  During  Clinton’s second term it was bullish and ended in Dotcom burst when Bush took over. Things repeated when Obama took over.

    Just wanted to know if it is good to move from Gold to IOC now.
    Please find couple of minutes and  say Hi so that we  all feel very  happy and excited. Hope you have  Net access and your laptop is ok..
    UnQuote

    Looking at the way  market is moving now and gold is getting beaten, I wish I should have sold some more gold  when it was around 30K+ ( I did sell some and moved to IOC though )

    My above opinion is more based on US politics but that is what is happening last couple of decades if you look at the market from the very broad perspective. (You might be remembering your great call of market collapse in  Nov2007-Jan2008  when Bush era was ending and Obama was taking over)

    Do you think we just have to  sit and enjoy rally for next couple of years  and start moving out in 2016 before Obama’s period ends. .. Or  there are some black holes about to  suck the rally and make the market to collapse?
     
    Shiva
    Minneapolis USA

    Kalidas Says … Thursday, May 23, 2013

    1. True that politics does play important part in market mechanism, but only for a short while. Politics never have ever lasting effects on the market. For that matter, any event of short term character does not have long lasting effect.

      While I do consider “politics” for short term prediction, my long term investment strategy is never based on politics or any kind of social upheaval. The economic fundamentals always prevail in the long term investment strategy.

      Whether it is Bush or Obama, the fact of the matter is that the kingpins at Fed and Treasury call the shots. Neither Bush nor Obama nor even future President will have sound economic knowledge and in depth understanding of market mechanism. If they were in total control, the economic crisis which you witnessed in 2007-2009 (which is still continuing in spite of huge rise in the market – a distinctive corollary). I do not want to rely on such political factors while assessing or evaluating any stock.

    2. It is true that Gold has crashed in spite of strong fundamentals. The fact is that the evils of derivatives have not ended with the onset of crisis in 2007 onwards. On the contrary, it has derived strong momentum of late.
    3. Earlier, US wanted to attack Euro as a mean of resolution of economic crisis and to avoid persistent weakness in US dollar. When it saw that Euro can not be attacked at will, and that European Union was more determined than ever with every bad or ugly event thrust upon them, FED appear to have decided to throw the towel and find rather easy target with more political affiliation. Who that country could be? Which country would be more amenable to US wish, who wanted to see its currency lower all the time and would be prepared to toe its line? Just guess…
    4. Japan, yes it was Japan. Japan is suffering from a phobia that weaker currency could be the only solution to pull it out of recession, and this is why Japanese government and Bank of Japan have been making concerted efforts to lower the exchange value of Yen and buy as many dollars as possible to keep the Yen lower. This is what is being adapted by India as well.

      It was easy to use hedge funds to attack Japanese Yen because interest differential was almost Zero. There would not be any interest arbitrage, so the capital value could be traded through derivative at will.

      While US dollar Index rose to 84 recently, about 5% gain in recent months, Euro weakened only by 1.5%, whereas Japan lost almost 25%. The loss of Japanese Yen by 25% was the main reason for rise in Dollar value. Since most people use USD Index as mean to judge the strength in the currency, they shorted Gold and Silver. Palladium did not suffer as much drop.

      Gold is something I would never use as a trading item. It is a hedge, solid defense, and ultimate savior.

      It does make sense to divert from Gold to IOC or entire OMC group (ONGC, IOC, HPCL, BPCL and also Oil India), but I normally go from higher plateau to lower level. In case of gold/IOC swap, we are selling gold at lower range and entering IOC at relatively higher range. Regardless of strength in OMC following diesel price hike, the fact remains that they are stock ultimately who would not be “immune” to stock market crash. Only Gold would be the gainer.

      If at all, I sell Gold, I would buy MRPL rather than other OMC including ONGC, the parent of MRPL. In this case, I would be selling Gold about 20% lower, but entering MRPL almost 40% cheaper, and almost 67% cheaper from last two years high. There is nothing wrong with MRPL, and we will know when final result is out.

      Presume that you sold gold and entered OMC. If massive rally ensues in OMC, we are guessing of course, then entire industry would gallop, and the gain in MRPL would be more stronger than any other candidate.

      Yes, IOC will gain more if one holds for longer period, and my original recom stands in this regard. I predicted 7 years wait, of which unfortunately nearly 3 1/2 years are gone. But the fact remains that economic certainty prevailed, not politics of Manmohan Singh, Pranab Mukherji or P Chidambaram.

      Please note that Japan would emerge strong buyer of gold in days to come. When Yen drops by 25%, the price of gold in terms of yen has to rise by 25%, however, when the gold itself dropped by say 15%, the net gain in terms of yen will be 10%. So while Gold would drop in every country, in local currency terms, it would rise in Japan.

      Whether US hits here or there, there is always a wicket keeper in the form of Gold who is waiting to stump the batsman the moment he tried to get out of the crease. Let us wait how the situation develops.

  219. Hi,
    How do you see US markets shaping-up in next few months …. the rally since Jan took everyone by surprise. It’s not only about US but all the markets accross worldwide (Europe, Japan, Asia … even smaller economies like Philippines, pakistan, Banladesh at all time high) are on one way street — north. Probabily this is causing investors (not in indian context) to move from gold to equity.   
    This is ofcourse due to easing by major central banks …. what do you think …. how long this party will continue. Earlier it looked like, rise in inflation will put a dent ….with crash in bond market….. but now it doesnt look like developed economies are going to face inflation soon & that too now when commodites are cooling off.     
    I know its difficult to identify bubbles & time it … but I am not looking for exact timing …. say party to continue for 1 yr / 2 yr or 3 yrs & the reasons. Following reasons have been rulled out atleast for near term-
    1. Rise in inflation which will cause bond market to crash
    2. EU breakdown
    3. Any lehman like crises as central banks will be always thr for help
    It seems only when everyone realises that any QE is not going to get growth so will it result into crash?? …. just like commodities r getting cooled off
    Thanks, nilesh India

    Kalidas Says … Thursday, May 23, 2013
    Very pertinent question. I will answer here itself in rejoinder in next 3 or 4 days.
     
      

  220. Investment in Gold & Silver in India, while $ is strong?!!/Essar shipping/sterlite.
    Dear Mr. Anilji,
    Welcome back. Happy to see you on the blog.
    Pl. let us know your views on investing in gold/silver in India in the backdrop of $ becoming stronger and stronger. It will be highly appreciable if we get to know the answer before change of scenario.
    And I am also waiting for your reply for action on Essar shipping and Sterlite industries, in which the CMP has fallen by 20% and 19% respectively in my holding.
    Regards
     
    Jamuna Sundararaman, Bangalore, India.
     
    Kalidas Says … Thursday, May 23, 2013
    $ Index is getting stronger only due to heavy weakness in Japanese Yen (25% down against dollar in last 6 months)/ Against heavily weighted Euro, it rosé marginally. 6 months ago, Euro used to trade between 1.30 to 1.32 whereas today it is at 1.2865 – just 2% down.

    Other counters will be covered in next week.
     

  221. Dear Sir,
       My parents gifted Rs 5Lacs to my 2 kids. Would like to take your suggestion as how to invest it for their future?
    cheers,
    mohit, Hyderabad, India

    Kalidas Says … Thursday, May 23, 2013
    For the time being, use local FD for short to medium term investments. When the market drops steeply, then only cash the FD and buy the desired stocks. Right now, the market is too expensive by my standard.

  222. Dear Kalidas,
    RBI has announced floating of Inflation Indexed Bonds (http://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=28671). These will be similar to TIPS in USA. Although initial few auctions will be for Banks and Institutions, retail investors will also be allowed to purchase soon. Do you think it will be a good idea for us to buy them.
    Thanks,
    Bhushan (Hassan, Karnataka, India)

    Kalidas Says … Thursday, May 23, 2013
    RBI always mimics FED in USA belatedly. In fact, India also mimics USA in almost every respect. Look at BSE 30 which is on the line of Dow Jones 30. BSE 100 are equivalent to Standard and Poor S&P 100.

  223. Dear Kalidasji,
    For long time I wanted to ask this question to you but your absence did not provide any opportunity. So, here it is :-
    Is it possible to retire having investments ONLY in following 4 asset classes.
    1 Gold & Silver
    2 Real Estate
    3. FD’s
    4 And very little Cash portion.
    Idea is not having to look at the market on a day-to-day basis. 
    Dongre/ Mumbai

    Kalidas Says … Thursday, May 23, 2013
    Right now only Gold/Silver + FD. Rest are all expensive.
     

  224. Dear Sir ,
    MRPL  is making yearly low today , Please advice if this is an investment opportunity one must or one should let this pass (since OMC is part of the p/f already  ).
    Sachin , Pune , India .

    Kalidas Says … Thursday, May 23, 2013
    Scroll down for my reply on MRPL to other reader.

    Yes, it is very attractive buy. The result of the last 3 quarters appear to have been window dressed for ulterior motive, most possibly to benefit ONGC (its parent)

    MRPL would report final numbers on 24/5. Follow this counter closely for next seven days. I am inclined to buy 50% of intended quantity BEFORE the final audited result is out. Rest later. It is time to take preliminary position on this counter. Make purchases in 3 installments. 1/2 now, rest in two installments after digesting final numbers.

  225. India Stock Market
    Dear Sir,
    I am happy to see you on your blog. welcome come back sir.
    what are you thinking on india stock market. please suggest some stock (IFCI, ESSAR SHIPPING, UNITECH, IOC and gold, silver).
    Regards,
    Amit Jain
    Ajmer, India

    Kalidas Says … Thursday, May 23, 2013
    In course of time, of course, since we are in Annual Result reporting seasons. Let all Audited Result be out, and allow me to study them so that I could give full hearted comments on each individual counters. At the moment, I am not fully equipped.

  226. Dear sir I honestly subimit that I have made money on some srcips that you have recommended and lost some money on srips that you have recommeded. But I made money by investing in gold and silver from 12000 for 10 gms and 16000 for a Kg onwards respectively. Hence I have full faith in your wisdom and acumen and also of prognosis of analysis of things as they may take place. I perosonally do not have any query and I will read this blog and analyse the answers you made and keep on silently following your answers. Over all I keenly appreciate your knowledge and wisdom and your approach to the events and I my self deveoped to certian extent how to anylsise the news that appear in news papers and recieve it.

    Thanking you Sir for making reapperance after a long time lull.

    Kalidas Says … Thursday, May 23, 2013
    No need to thank me if you have made money. We share knowledge here and if it helps you in your actions, then it is due to lady luck. Kalidas is non-entity.
     
      

  227. Dear sir,
    Its really relieving to see you back. Thankyou so much!
    i am in the huge loss, could you please help me?
    my ‘seriously sick’ portfolio is:
    confidence petroleum 25000 @9, CMP 2.4
    Essar shipping 3500 @26, CMP 23.5
    Kingfisher 12000 @11.5, CMP 6.5
    Ashok Leyland 1000 @26, CMP 22.5
    Dish TV 400 @73, CMP 66
    I have extra cash of 3L that is my Homeloan accout that saves my interest of 8%pa. I can withdraw it anytime.
    Many Thanks in advance
     
    Shaan
    Bangalore, 15th May, 2013

    Kalidas Says … Thursday, May 23, 2013
    Except for Confidence Petroleum, where you invested pretty large sum against our standard advice not to invest too much in low value stocks, other counters appear okay. Even Kingfisher Airline can not be written off so soon.

    Wait for a few more days, when I would be analysing in Stock Observatory every single stock commented here before. Do nothing for the moment, nor even touch your bank deposits when the market is at the highest point.

  228. Dear Anil Sir,
    Great to see you back in action. this banker seems to be your reader,
    http://www.rediff.com/business/report/indian-companies-facing-the-heat-in-foreign-acquisitions/20130515.htm
    finally they realized but its too late..
    Amit 
    Galway IReland 15/05/2013

    Kalidas Says … Wednesday, May 22, 2013
    RBI and Government of India is to blame. In order to keep the Indian Rupee weaker, they wanted Indian Businesses to go abroad to bid for expensive acquisitions. When billions of dollars are bought to fund the expensive purchases, the rupee goes down, and so it did from stable plateau of Rs 46-47 to as low as Rs 57 at one time.

    On one hand, Government of India is promoting India as “growth story” to attract foreign investment, whereas on other plodding or proactively advising Indian companies to buy foreign assets in billions of dollars. The Indian companies do not know the intricacies of foreign markets – they knew only restricted Indian financial markets for over 60 years. So they failed.

    No one was prepared to touch CORUS which Ratan Tata bought paying billions of dollars it did not have. It bought CORUS which was five times the size of local Tata Steel outfit. It was the biggest mistake Tata ever made. To justify his actions, he bought even Jaguar after which he could not refinance his foreign debts.

    When whole world was inspired to invest in India, what was the necessity for Ministry of Finance and RBI to advise Indian companies to invest abroad, and give them “green signal” to transfer billions of dollars abroad to buy foreign assets?

    The idea was “Keep Rupee weaker, weaker and only weaker”. Mahatma would be crying in cold corner seeing his image printed rupee getting lower and lower.

  229. http://economictimes.indiatimes.com/news/international-business/lehman-brothers-goes-beyond-grave-for-millions/articleshow/20057134.cms?curpg=2

    How this will benefit/affect Indian financial institutions, if any?

    ( I see a lot of difference in approach – I vividly remember your comments about Global Trust Bank when it was merged with Oriental Bank of Commerce., though the matter is different. )

    VC Sekar Delhi, India
    14/5/2013 

    Kalidas Says … Wednesday, May 22, 2013
    Indian financial institutions have nothing to do with the news item you have quoted. I do not see any relationships.

    Lehman Brothers were made scapegoat to boot the losses in entire banking system. This institution was identified to let it go bankrupt because it would be considered a single entity. Most of the US banks and investment banks transferred large chunk of their losses to Lehman bros during last days, so that they could salvage their operations. In UK, just minutes before filing bankruptcy, Lehman Bros transferred massive US$ 9 Billions to USA for payment to certain entity whose identity has not been revealed until now (We could guess Citibank, Chase and Goldman Sachs). If Lehman did not go bankrupt, many banks could have collapsed which would have led to the conclusion that entire banking system had collapsed and massive crash could have ensued. (more severe than what we witnessed)

    Lehman was almost employee owned company with 65% being owned by the employees. The American Capitalists do not like employee owned outfits, so they ensure that these companies collapsed. It happened before in the case of United Airlines which was also majority was owned by employees. When the entire equity of employees was wiped out under the garb of court order, the company was revived by the bond holders and today it is surviving with almost all troubles gone. The bond holders are happy to have destroyed employees of UAL.

    When the companies are employee owned, it is easy to bribe some senior official to get something done, such as Bankruptcy.

  230. Thanks for coming back & reward our patience 
    Regards
    Mohan , Mumbai , India
     

  231. Great to know you are back again to guide us.
    May the Lord keep you always in best of health,peace and joy.

  232. Dear Kalidasji,
    I have no query, just want to  thank you for coming back to this blog.
    Kind Regards,
    Prakash, Rotterdam, The Netherlands

  233. Dear Kalidasji,
    Feels great to see you back again.
    We missed you a lot.
    yours sincerly,
    kiran khair
    mumbai, India, 11/05/2013

  234. Subject : MRPL
    Dear Sir,
    I am not holding any qty curretly on MRPL , but has been on my watch list. Current CMP : 46.80 is near to 52 week low, do you suggest taking position in this stock.
    Thanks,
    Atharva Pune , India

    Kalidas Says … Wednesday, May 22, 2013
    I prefer to buy 60% of intended quantity now, and rest after its final result is announced on May 24, 2013 (only day after tomorrow). The reasons are:

     

    1. There is no consistency in company’s reporting of its financial result in 2012-13 period so far. It looks like that for the quarter ended June 2012 (1Q 2012-13), revenue dropped massively by Rs 3000 crores whereas the cost of oil input was down only by Rs 1,000 crores. It can never be. We have to know why the revenue numbers have come down when the prices are looking up all the time. The company never clarified why the revenue dropped so much and why the cost of purchase did not come down proportionately. What was the unusual item which hurt the revenue?
    2. The company has been profitable consistently for over 5 years. There is no way the company could lose so much in revenue in its very first quarter. There are some obvious adjustments, mostly in house, some transfer entries which must have been exchanged between its parent (ONGC with 87% holding) and itself (MRPL). There is something fishy out there.
    3. While almost every refinery has been showing improvement (IOC, HPCL, BPCL, Reliance, Essar Oil), we do not understand why MRPL could be heading in opposite directions. We strongly suspect that some accounting entries were passed to manipulate the numbers of ONGC at the cost of MRPL
    4. This is why we suggest buying some stock before final numbers were out. Alternatively, one may wait until day after tomorrow, see the result and buy almost entire quantity immediately after final numbers.
    5. We believe that numbers were “cooked” during last 3 quarters. Most adjustments would be made in the last quarter. There is no logical explanation otherwise.

     

  235. General market direction
    Sir,
    What is your opinion on general market direction. Markets have been going higher and higher each day. Is it time to sell some stocks and wait for a correction?
    Regards,
    Pawan

    Kalidas Says … Sunday, May 12, 2013
    Honestly, I was out of market for a few months, so trying to get into its swing. May be later, we can comment. At the moment, the market direction is only side ways. Narrow range is going to continue for some more time.

  236. Sub – VST(cmp-1560), HDIL(cmp-55), IVRCL(cmp-20), MANPURRAM(cmp-16), RELCAP(cmp-373) & RELINFRA(cmp-402)
    Dear Kalidasji,
    VST: A debt free company with BV of Rs.267, announced dividend of Rs 65. UP govt reduced VAT on cigarettes from 50% to 25%. GODFREY PHILLIPS up > 20%. (cmp-1560/52H-1960/52L-1480)
    HDIL: Beaten down reality stock Mcap-2300cr Revenue 9months – 850cr (cmp-55/52H-124/52L-44)
    IVRCL: Beaten down infra stock Mcap-615cr Revenue 9months – 3400cr (cmp-20/52H-58/52L-18)
    MANPURRAM: Beaten down gold loan stock Mcap-1380cr Revenue 9months – 1900cr (cmp-16/52H-45/52L-15)
    RELCAP: Beaten down NBFC stock Mcap-9184cr Revenue 9months – 3000cr (cmp-373/52H-508/52L-282). Trigger – increasing FDI limit to 49% in insurance.
    RELINFRA: Beaten down infra stock. Mcap-10500cr Revenue 9months – 10500cr (cmp-402/52H-580/52L-315). Holds 32% stake in Rpower(Mcap 22000cr)
    Need your views on above stocks.
    Thanks
    Srinivas | Bangalore | 10 May 08:50

    Kalidas Says … Wednesday, May 22, 2013
    I have noted your queries. I will update myself with these companies, and let you know as rejoinder in this space within next 4 days (latest by Wednesday, next week)

  237. India – Stock – IFCI
    Dear Anil,
    Good to have you back!
    Wanted to check your views on IFCI (CMP 31). There are speculations that it will be granted banking license, also that it could be merged with IDFC to create a mega financial institution in India to fund major infra projects.
    What are the impacts that you foresee in either scenario? Thanks!
    Regards,
    Niranjan Shetty, UK
    (Moved here from Doha – Qatar)

    Kalidas Says … Sunday, May 12, 2013
    Nothing much may happen to its off repeated story of banking license. Ignore such stories.

    See my comments to other reader on IFCI – scroll down a bit. Some brokers are spreading story to push its price higher so that they can get out. I do not see much improvement in financial matters.

  238. Sub : India, Equity , Essar oil (CMP 81) .
    Kalidasji,
         I have essar oil (AVG – 62) , CMP 81, holding for more than a year .
    This stock has been moved quickly from 70+ to 94 in last few months and now again at 80+ .
    can you please suggest course of action for this stock, looking at it results to be announced at 10th May .
     
    Thanks & regards,
    Prashant, India, Bangalore.
    Note : Resending query since first one was not seen on blog.

    Kalidas Says … Saturday, May 11, 2013
    The company will be reporting its final numbers soon, but there will be no major surprises. Its Quarterly number for March 2013 is already published. The only difference will be due to balance sheet related adjustments.

    Higher refining margin, rise in revenue and more and more decontrol of diesel and petrol prices are all factors befitting Essar Oil. However, nearly 75% profit is eaten away only by finance cost (Interest cost due to high level of debt).

    Sell some stock at Rs 92 level and more at Rs 108. Always retain some stock, about 40% of current holding for long term haul. The only negative picture could be forced selling of shares to bring the Controlling shareholders stake below 75% to maintain its listing status.

    The company’s CFO is on record to take EOL into $1 billion profit league (Rs 5400 crores) which is a wishful thinking. Unless the finance cost come down by at least 35%, the chances of higher profits are less due to heavy interest charges.

  239. Sir,
    I have 3100 RCOM shares at an average of Rs.257. Its currently at Rs.111. Do you want me to hold it or sell. I have been holding it for the last 4 years. Should i sell right now and wiat for it to come down and the buy back or sell and invest in some other share so that i get back my money. Pls advice.

    Kalidas Says … Saturday, May 11, 2013
    I did suggest buying into this company around Rs 60 or about. When the stock falls by 75% from your purchase cost, you have to look only at the price to average down.

    The recent rise of nearly 200% from low of Rs 48 to current price of Rs 112 suggest that it is a strong selling point. The rise in profit is not accompanied by rise in revenue, so I would use its profit numbers with caution.

    Nevertheless, its worst days appear to be over. Be a seller than buyer due to rapid advance in stock price.

  240. Welcome Back, Great to see you..
    How about Mahindra Satyam,  which is sliding back and forth between 117 to 106 from the high of 126 ? Should I  lighten up a little as my average is around 90 /share and holding 2000 shares.  Your suggestion in March 2011 of Mahindra financial was great as it moved 3 times ahead of your suggestion at 400 to 1120 and  recently it had seen share split after which it  moved from Rs.180 to Rs. 263 today.
    Saravanan, Chennai, 08/05/2013/ 11.38 p.m

    Kalidas Says … Saturday, May 11, 2013
    Mahindra Satyam: This is a debt free company now with lot of cash moving around. While its business is growing vertically, the Net Margin appears to be shrinking a bit. However,its recent foray into eCommerce and Banking might generate new accounts and higher margin. Banks are usually liberal in giving away cost increase.

    The market is expecting some good news in gaining new customers. Generally, March quarter *Jan to March) is good for computer service industry, as most of new contracts are awarded during this period, coming as it does on new budget allocation by companies.

    Still, I do not expect much fire work. May be you can sell some shares now. The final numbers are only a few days away. 16th May to be exact…

    Due to its debt free balance sheet, and most of its hidden liability away, I would always keep some stock in inventory. May be you can sell about 30% of stocks for now.

  241. Feeling really great to see you back.
    Regards,
    Nadim
    Kuwait, 8th May 2013

    Kalidas Says … Saturday, May 11, 2013
    Thanks

  242. Dear Sir,
     
    Its nice to see you back.
     
    Cheers!
    Shaan

  243. Dear Sir,

     Very very glad to see you again. Thank you very much for re start this column.

    Kind Regards
    Rajmohan Babu.M
    Kampala
    Uganda 

    Kalidas Says … Saturday, May 11, 2013
    Thanks for waiting. I will compensate for lost time.

  244. SUB- Sun Pharma- CMP 980
    Very glad to see you back after a very very long break.Can you pls throw some light on this script.It  has consistently gone up and its m-cap is almost bigger than 3 top rivals.I hold this shares and would like to know if shld keep holding the same or sell.

    Sanjay Shah,Mumbai,India 

    Kalidas Says … Saturday, May 11, 2013
    No doubt that this is a good stock and a company with solid management. However, its spate of acquiaitions puts me back. I suggest you to sell at least 60% of your holding and retain the balance which may also be sold in any rally due to strong market.

  245. Sir,
    What is your view on Renuka sugar?
     
    Kalidas Says … Saturday, May 11, 2013
    The debt level is very high, though the revenue growth is also good. Nevertheless, I would stay away. The only positive news is Government policy of partial decontrol of its prices and liberal permission to sell in domestic or export market interchangeability.

  246. What is your view on Opto Circuits? Seems to be a very good and investor friendly company. However, there is lot of debt on its books. It has fallen from 200+ levels to 50+ levels.
    Please do provide your inputs on it.
     
    Regards,
    Vinod,Bangalore, India

    Kalidas Says … Saturday, May 11, 2013
    This stock is not on my radar. However, I will look at it due to heavy slide. Give me a few days to comment. I am sorry I can not provide immediate comments now due to my unfamiliarity.

  247. Happy to see you again. Hope you are doing well.
    What are your thoughts on IFCI. CMP:31.
     
    Thanks
    Rahul , Noida, India

    Kalidas Says … Saturday, May 11, 2013
    IFCI will report is financials on 20th May. The company took lot of hits in Dec 12 quarter writing off or providing for Rs 69 crores. Its book value (which used to be negative) is around Rs 58 per shares, almost twice the current price. However, book value does not play important rôle in stock prices which are mostly profit based.

    It may be noted that providing for Rs 69 crores may not be necessarily a loss, since the assets are written down when interest amount (say Rs 6.9 crore per year) is not paid.

    I would not buy finance shares at the moment. Let us wait for final result due on 20th May. If the company does report lower profits compared to last year (which is more likely), the stock could climb down to Rs 26 level. I do not see much upside for the time being.

  248. Dear Sir,
    I have been eagerly waiting since morning IST , to read  the replies as today being ‘Tuesday’.  It feels like ages to have read your analysis which I personally believe is always logical and true.
    Pl find some time to respond to the posts.
    Thanks,
    Atharva, Pune, India

    Kalidas Says … Monday, May 06, 2013
    I may be slow in reply due to long absence. I am catching up now and will be more and more active as the days go by. I do not want to jump start and give wrong advice in my opinion.

    I am replying out of turn just to inform other readers that their stock specific query is being answered after I have perused latest events relating to market, stock itself and industry it is in.
     
     
     

  249. Dear Sir,
    Great to hear from you after a long time! Have sent one email some 3 4 months back.
     Request you provide your valuable suggestion on
    Essar Shipping CMP 20.50 BUYING PRICE 26 QUANTITY 10000
    PTC India Financial CMP – 14 QUANTITY 20000
    Regards
    Ravi Sehgal
    Gurgaon , India

    Kalidas Says … Saturday, May 11, 2013
    I wrote a long comments here and suddenly disappeared after my nearly 30 minutes of work. I do not know how to retrieve it but will surely reply tomorrow. Watch this space.
     

  250. Sub – Spice Jet
    Hello KalidasJi,
    What is your call on SpiceJet? I am holding 2700 shares with 47 per share average from couple of years. I am looking forward for Long term holding, as you suggested earlier do you see SpiceJet can multifold investment over long term?
    Jinal
    USA, May 6, 2013

    Kalidas Says … Wednesday, May 08, 2013
    Read my reply to other readers on this subject. It appears that Jhunjhunwala’s sudden interest has revived the Investors sentiments on this counter. There may be some hidden news or developments (like some other Airlines taking stake in Spicejet after Jet Airways’s developments. I have a feeling that there could be some amalgamation of Spicejet and some other unlisted Airline (like Indigo) who appear to be doing extremely well. The Airline like Indigo could get indirect listing by buying into Spice Jet. This is my personal speculation – there are no evident signs or news to my knowledge and I could be terribly wrong)

    Whatever may be the news, I feel that you should lighten up by 30% of your holding at around Rs 48 level with a view to buying back later after full news story is out.
     
     
     

  251. That is very nice to hear Sir. This time it was pretty long wait for us.
    Shiva
    Minneapolis, USA

    Kalidas Says … Wednesday, May 08, 2013
    Thanks for your patience. I will try my best to reward the Readers for staying with this blog for so long.

  252. Sub: Silver & Gold
    Sir,Most of the Silver that we have acquired are around the $35 level. Please advice if we can accumulate more now? What are the prospects of  Silver & Gold and the near 2-3 years?

    P.S. Please excuse last post which i submitted without signature, it has been a while since I posted.

    Thanks
    -Andy Aiyer , May 6th, 2013 Chicago, USA 

    Kalidas Says … Wednesday, May 08, 2013
    I suggest you to buy more Silver at current prices (below $24) due to substantial difference in prices. You should be prepared to sell this new lot at around $29.35 level, and do not count the average cost. More in the Article.

  253. Sub : GOLD
    Great to see you back sir after a long absenceWelcome !!! 
    Kindly advice on future of Gold, i had an late entry 29K INR  levels  for 100 gms(as i had in between sold  my old holdings for cash requirement).  So this leaves me at a loss at current price. Is it worthstill holding on , add more to average out price etc.
     
    Thanks,
    Atharva, Pune, India

    Kalidas Says … Wednesday, May 08, 2013
    The difference in your purchase and current prices is not much – what is the quantity held? Let me analyze the full situation in next few days and come back to Readers in the form of an Article.

  254. HPCL
    Hello Sir,
    Welcome back after the long absence.
    I am holding 2000 stocks of HPCL at 320 (CMP 305) which is almost 40% of my total portfolio. After the diesel deregulation announcement, the stock did jump up to 375 but I did not sell because anything less than 500 is not worth it considering the wait we have already gone through in OMCs.
    A few lines with expected target price with time-frame will enable all readers to keep faith in OMCs.
    Regards,
    Pawan,
    Delhi, India
     
    PS: Please delete my previous comment which got posted with id fubar

    Kalidas Says … Tuesday, May 07, 2013
    No actions are suggested at the moment. I have seen last 3 quarters financials and noted wild fluctuations in the profitability, mainly due to “exceptional item”. For example, for June 2012 quarter, there was exceptional loss of Rs 8900 crores. While I do not see any specific item, I noticed that the Revenue for Jun 12 was sequentially down by Rs 9000 crores whereas the most expense items were almost same. It means that there was some Balance Sheet related adjustment.

    Further, I find that the Employees cost has been coming down drastically during last 3 quarters. The figures are Rs 950 crores (June 12), Rs 679 crores (Sep 12 – down by Rs 271 crores ) and Rs 530 crores for Dec 12 quarters (down by Rs 169 crores from Sep 12 quarters). The employee cost always remain same unless there are Assets disposals where the employees are transferred to new buyer. We do not have any idea nor there is any news item I could locate.

    Otherwise, my OMC recommendations are well in place. I am still bullish and will give extra 12 months to my target period to achiev my goal.

    We will have better idea when the Audited Result for March ended 2013 is announced.

  255. Essar Shipping Ltd (CMP 20) & Essar Oil Ltd (CMP 75)
    Dear Kalidasji,
    I am happy to have you back.
    Essar port has reporting good results for FY13 and dividend of 5%, but no movement in stock price.
    http://www.bseindia.com/xml-data/corpfiling/AttachHis/Essar_Ports_Ltd1_180413_Rst.pdf
    Net profit of Essar Ports  jumped to Rs 92 crore in the quarter ended March 31, 2013 from a net loss of Rs 61.5 crore in the year-ago period. During the period, the company’s consolidated income from operations grew 34 percent to Rs 387 crore versus Rs 288.3 crore in the corresponding quarter last fiscal.
    Its consolidated EBITDA was up 27 percent at Rs 298 crore versus Rs 234 crore y-o-y. The board of the company has also approved a dividend of 5 percent to all shareholders
    Highest ever cargo handled in a year at 55 MMT, up from 43 MMT in FY12, 26% jump.
    Essar Oil results on 10 May. No dates about Essar Sipping results.
    Is there any change in your views wrt to ESL and EOL ?
    Thanks
    Srinivas | Bangalore | 05 May 17:40

    Kalidas Says … Tuesday, May 07, 2013
    The stock came down sharply immediately after Budget for which reasons are not yet known. The budget was said to be “neutral” to the shipping sector. Yes, Baltic Index came down by 60% in last 12 months which appear to have weighed down on the entire sector. There are mixed signals – on one hand the world economy is reported to be improving which has propelled almost all markets to fresh 5 year high, whereas the core shipping sector which denotes basic transportation appears to have been under pricing pressure.

    Further, GE shipping only yesterday reported pleasing result for the latest quarter which is shipping sector positive. However, the investors are not so convinced and showing no buying interest.

    This company has undergone lot of structural changes, and as result, I am not able to guide myself for any decision. For instance, for the year ended 31/3/2012 (Last year), the book value is shown to be Rs 267 against the present stock price of just Rs 19.85 This is amazing contradiction. A stock trading at nearly 90% discount. What appears to be the restructuring and spinning off of some subsidiary which event do not appear to have been included in the financials.

    I would eagerly await the March 2013 figures which will tell me what is the true picture of its Book Value. The company is still profitable on 9 months basis. Since the stock has corrected sharply from year high of Rs 30.90, I would buy some shares (about 30%) of existing holding. More buying would be considered only after final result is made public.

    Another important factor is the total promoter’s holding is around 84%, entire quantity of which is pledged (to IDBI Bank or its Trustees). Continued listing require Controlling Shareholders; holding of 75%. Thus, around 9% may have to be liquidated this year depending on type of approval given by the SEBI.

    I would give precise opinion after final result (audited) declared by the company. Essar Oil is not covered under this section.

  256. Gold & INR
    Sir,
    Extremely happy to have you back. There was a  bloodbath in the world markets, especially gold. As a layman, we were absolutely clueless to  behind the scene players. We would be very happy to get some  information on gold movements & currency war.
    Thanks & regards
    Mohan
    Qatar.

    Kalidas Says … Monday, May 06, 2013
    I am never worried about these metals. When I am sure that the present economic recovery is poor or even negative, the attack on gold and silver is more technical driven, Whenever the price of any commodity falls by 39% or more, the bears attack to bring it down to 50% from highest record level. In fact, after taking significant profit, I have finally decided to take a plunge in Silver at less than $24 level. I would be buying almost 300 ounces of Silver to start with.

    Wait for a few days for me to catch up the crash related events. I was out of touch with almost all markets, so let me come back in few days. I may write an article to avoid frequent queries from the readers.

  257. Thank god!! Guruji u r back!!! happy to see u again.
    pls,  
         Kalidas ji  can u provide some light on SPICE JET ‘S prospects @ future
                                    K B RAO
                                    GUNTUR: AP

    Kalidas Says … Monday, May 06, 2013
    Spicejet is more in reckoning due to stake taken by Jhunjhunwala, higher market share due to weakness of its peers like Air India and King Fisher, and recent foreign interest in Jet Airways.

    However, on operating level, the company is heavily indebted, its worth is negative and fundamentals of airline industry are still not improving. An analyst like Tulsian is predicting a level of Rs 65 against current price of about Rs 41.50 (rise of 50%)

    The market world over are in bullish phase despite poor fundamentals. The market is therefore on your side. However, I would not be a buyer at current level due to operational weakness. I may rather hold for a while to ride the rally. We suggested the stock in lower twenties, so it is almost doubled. Nevertheless, I would be looking for taking profit rather than taking supplemental positions.

  258. India ,Stocks,Reliance Industries
    Dear sir,
    So happy to hear you again,hope you are fine and everything is OK at your end .My query is about RIL.They have completed share buyback process.Though Gas production in KG basin is on the decline, considering the growth shown in retail business and new  venture in telecom is it the right time to buy RIL share.
    regards
    Joy.Joseph,Mangalore,India,05.05.2013

    Kalidas Says … Monday, May 06, 2013
    I have to study RIL in detail which I may do so in next 3 to 4 days. I have gone through its latest result which revealed that out of its Revenue turnover of Rs 371,000 crores, Exports clocked Rs 239,000 crores or about 64%.

    In other words, it is now an export dominated company. Strength or weakness of rupee vs dollar could reduce or increase its profit significantly. While making judgement call, one has to consider the prospective exchange rate of Rupee versus dollar. If Rupee falls vs dollar, RIL would be a large beneficiary.

    Its refining margin is on rise, and another important fact is that the company is no longer a simple company to analyze. It has become too complex to analyze in short time.

    Another aspect is that its debt level thought at massive Rs 72,000 crores, it is almost NIL when compared with its huge Cash and Bank balances which amount to over Rs 80,000 crores. RIL mentioned that it is now almost a “Debt Free company” on NET DEBT basis.

    Since its revenue has risen to nearly Rs 400,000 crores, a very large base, it will be difficult to register heavy % rise in revenue or profit as witnessed about 10 years ago. Many analysts want % rise in profit and revenue to trigger the share prices. It is no longer a growth company but a rather matured company.

    The shares at the moment at Rs 825 appear to be fair price to enter. Since the market correction as expected by me in the past is not taking place, one may buy RIL on safety basis. However, do not expect significant gains like 30% or more due to its very large capital base and relatively lower single digit growth in future.

    This is perhaps a good stock to collect on SIP basis as many call it. One dark horse driver will be its success in “shale gas venture” in United States where it has invested over $5 billions.

    I am always a buyer in steep correction in the market or the stock/commodity price. While buying RIL, also try to buy some Silver which is down by 50% in last 18 months. It may enhance your total overall return in 3 years time.
     

  259. Dear Readers

    I AM BACK NOW in United States, and this interactive column is re-started. 

    Please note the following:

    READERS’ OLD QUERIES

    Due to my long absense, I may not have time to go through Readers’ old queries posted from December 12 to April 13. Some of the queries may have become too old or redundant. 

    Kindly post new queries from today onwards under this quarter. They alone will be attended. Do not refer to your old post which may be deleted. kindly repost them afresh if they are relevant.

    REPLY ONLY ON TUESDAY AND FRIDAY (India time)  UNTIL MAY END

    I have to catch up with pending events. I need about two weeks to get into my gears. I will be regular from June 1, 2013 on daily basis. 

     

    Thanks for your patience. 

     

    Anil Selarka (Kalidas)

    USA, May 4, 2013

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