Indiabulls set to hive off consumer finanace business

IBFSL(indiabulls financial services limited) plans to demerge the consumer finance business to

form a separate company.the company's housing finance business would subsequently become a

susidiary of the demerged consumer enterprise.

concrete plans for the demerger will be announced before the end of current financial year itself...

this way indiabulls would have one company each for 3 different verticals ,namely

1. brokerage

2. real estate

3. consumer finance

indiabulls sees a huge growth opportunity in consumer finance and is targetting agressive
growth projections...Urban micro-finance is a key focus area for the company's consumer
finance business....Indiabulls is currently testing a model of loaning small amount of money in
the range of Rs 10,000-15,000 to small traders with a system of daily collection of small
amount of interest. a pilot project of this model is on in Mumbai and once approved ,Indiabulls
could implement it in 15 major cities by March-April this year......this is the first of its kind
model of financing in country


Loans against gold, loan for the small and medium enterprises(SME) segment and mortgage
loans are other areas of consumer financing that the company is present in....


the scrip of IBFSL is trading around 340 range ....it has moved up nicely in last two trading
sessions.....the scrip is clear buy n hold for short to medium term ......long term investors can

also buy it given the fact that both brokerage n consumer finance have good growth prospects
moving forward..

How much is Indiabulls Real Estate really worth?

the most pertinent question dogging the minds of investors in indiabulls is the valuation for its real estate arm.......here i would present possible valuation for it ...

it has 6 real estate projects namely :

1. Jupiter mills

2. Elphinstone mills

3. Tehkand housing

4. Sonepat township

5. Gurgaon housing

6. Multi-SEZ

according to Knight Frank (a consultancy firm) the value of these ventures is at a mind-boggling Rs. 21,570 crore,of which Indiabulls stake is put at Rs. 15,130 crore......based on this Indiabulls Real Estate is worth Rs. 796.2/share..

Merril Lynch ,on the other hand feels risk perception of SEZ is high ,so it has degraded the value of Indiabulls Real Estate division by 47-55% ......based on this the share price of real estate is around Rs. 423-430/share..

the scrip IBREL(indiabulls real estate limited) would list in mid-feb..

say yes to "YES BANK".....

Yes bank’s Q3FY07 net income grew 73%yoy (17%qoq) to Rs251mn driven by strong top line

(up 84%yoy led by loan growth of 150%yoy and margin expansion of 10bps qoq to 3%), rising

fee income (up 50%yoy) and higher treasury gains. Key highlight of result was roll out of 7 new

branches (total 29 branches now) enhancing visibility on the growth trajectory. Yes bank

maintained its healthy asset quality with Net NPL being Nil.

expect earnings to grow at a CAGR of 66% driven by
a) strong loan growth (as Yes bank leverages the rising corporate credit demand and its expanding distribution network) supported by margin expansion of 10bps due to increasing share of low cost demand deposits

b) rising fees (driven by new product launches and growing retail franchise).


Yes bank, trading at 5x FY08E Adj book, could sustain its multiple one year out owing to
a) strong earnings growth trajectory (earnings estimated to grow at 66% CAGR),

b) rising ROE to >20% by FY09 (factoring in equity dilution of 20%)

c) its attractive positioning as a take over target

the scrip has a target of rs 190 in medium term

Land Banks are crucial to valuing realty companies..

with real estate companies increasingly going public or bidding to raise institutional or bank funding for fast-track growth,the veil around their land banks is slowly being lifted........this is crucial as the worth of these land banks are crucial to the evaluation of these real estate companies

investors are now moving towards an asset-based or the sum-of-the parts(NAV) valuation approach for real estate stocks....

How does one assess large land banks? Typically , big indian developers have large land banks usually acquired at extremely low prices.This is unique in asia......In HongKong land banks last between 3-6 years......In India's case current land banks of Unitech and Mahendra Gesco ,for example,will last an average of 8-10 years.....So how does one value apiece of land that may not be developed for another 8-10 years ?....the answer is by taking the NAV of future profit for all projects until land supply is exhausted....taking into account long term changes in construction costs and residential prices..

A model for evaluating real estate companies can be as follows:

Land Bank Quality(40% weightage)

Management(25% weightage)

Asset Turnover(20% weightage)

Gearing(15% weightage)

for instance ,in evaluating land bank quality,SEZ-related land is seen as inferior to separately acquired non-SEZ land and there is a great deal of uncertainity and legal hassles surrounding around SEZ development..location(tier-I or II cities)and scale of projects planned also impacts determination of quality of land...

The 'Management' factor includes the ability to add value,management of capital,and vertical integration of business...

'Asset turnover' weighs the speed of asset turnover and how far the vagaries of market changes can be avoided and cash recycled faster...

On the above basis of evaluation..well-regulated and profitable property companies have a cheaper valuation compared to similarly to similarly placed stocks in IT,telecom,pharma,commodities and banks

FII inflows may cross $10 billion...

forget volatility.......forget the market at an all time high...forget fair(read stretched valuations)..'07 may turn out to b a bumper year for india in terms of foreign institutional investments.....we may see a slowdown in FII flow for the first half of the year,but since macro-economic parameters-which are the key drivers of robust corporate earnings growth-are still intact,FIIs will continue to plough money into india..FII flow into india will continue as the economy is doing extremely well.redemptions may occur at higher levels but new money will be pumped in at every correction

some important issues leading to FIIs bullishness are :

continued growth of second-rung companies

stable world economy

softening commodity prices including crude oil

domestic growth story

unless the world economy led by US undergoes a recessional phase ,emeerging markets will continue to be hotbeds of FIIs

as china and india are the key drivers,more money will flow into these two economies discounting valuations,inflation and currency risks as per report by Merrill Lynch

Each time sensex crosses a new milestone,there are fears whether the rally has run too long......however,so far, there has not been any abatement in FII flows...this is because india growth story continues to remain strong....in FY07,net profits of india inc. will grow faster than in FY06
in the past few months ,we have seen occasional bouts of FII selling,but each correction sees 'cherry-pickers' pump in more money.......the reason is strong underlying growth.....with nominal GDP growth at 14%,corporate net profits can easily touch 20% or more....

Pantaloon......a must have stock

now the important question in the mind of readers must be the reason for this rush to retail amongst who's who of India Inc......the reason is in retail sector the turnover is two times of assets.Even with net profit margins of only 4%,the return on investment is 16-18%.Besides,rising disposable income amongst India's middle class and the rather primitive state of current retail in india as compared to global scenario is lucrative for retail foray...

Retail sector is expected to grow at a healthy CAGR(compounded annual growth rate) of 35% over the next four years...considering this i am presenting few stock ideas.

Pantaloon Retail is a clear buy at current levels of 500 odd ....the stock has moved up nicely post its split.....its de-facto leader in retail sector n is expected to clock a healthy growth...in FY07 it plans to open 100 new retail stores across the country.....

The domestic retail industry is getting its act together.a revolution is set to sweep across the country in the next 3-5 years,as trdaitional markets make way for departmental stores,hypermarkets and western style malls.While penetration of organised retail in india remains slightly below 4%,domestic major retail players have announced aggressive expansion plans even as a plethora of new flashy malls are mushrooming in metros and second-rung cities....

Three big-bang initiatives are shaking up the retail sector:

Reliance Industries Rs. 25000 crore mega plan to create 100 million square feet of retail space and a sales target of Rs. 100,000 crore by 2011

Aditya Birla group's Rs.15000 crore retail foray

Retail Giant WalMart's entry via ajoint veture with Bharti

Meanwhile existing retail players r gearing up rapidly to india's retail opportunity

Pantaloon plans to have an operational retail space of 30 million sq feet by FY10......Shopper's Stop is looking at a retail space of 5-6 million sq ft by FY10.....Trent is looking to have nearabout 1.5 million sq ft by FY10....also RPG group,Provogue,Brand House(S kumars retail outlet)and Maxare rolling out ambitious plans across India's metros.tier-1 and tier-2 cities

the organised retail is estimated at over $7 billion and is slated to grow to $30 billion over the next four years....

moser baer.........a silent mover

world's second largest manufacturer of optical media ,MOSER BAER is betting heavily on photovoltaic technology......its the ability to take photons from light and convert them to energy.....as in solar cells........Moser Baere's PhotoVoltaic(MBPV)manufacturing plant would commence its manufacturing from first quarter of 2007-08,afterwhich the cost of solar cells would reduce.last year the global photovoltaic industry was worth $6billion(Rs. 27000 crore) and by 2010 it would reach $40billion(Rs. 1,80,000 crore)

just 2 get a glimpse of what this technology could do for moser baer have a look at this fact :one of the richest man in CHINA today is Shi Zhengrong (with net worth of $1.43billion or Rs. 6,435 crore),who started Suntech,a company that leads in solar energy....

the stock which is presently trading at 320-330 range can c a fresh breakout that would catapult it past 400 mark....

LnT........sleeping monster

Larsen & Toubro Limited (L&T) is India's largest engineering and construction conglomerate with additional interests in electricals, electronics and IT.

A strong customer-focus approach and constant quest for top-class quality have enabled L&T to attain and sustain leadership position over 6 decades.

L&T enjoys a premiere brand image in India and its international presence is on the rise, with a global spread of over 30 offices and joint ventures with world leaders.

the stock showed some weakness post its bonus .but appears poised 4 giant strides ahead now.....a demerger story is cooking on this counter .with plans of infotech division getting demerged gaining momentum.....demerger could occur either this year or next year(the management is keeping the matters under wrap).a huge unlocking of shareholder value would occur......the scrip is a buy at current levels n has accumulation tag on all declines......its a stock to watch out for 2007

BARTRONICS...........stock for future....

Bartronics India Limited (BIL) is a leading Identification technology specialist and is currently India's leading Automatic Identification and Data Collection (AIDC) solution provider offering consulting services, design software, hardware, personalisation and full implementation services. Bartronics works with its customers to deliver comprehensive, integrated and tailor-made AIDC based solutions

Bartronics product range includes Barcode scanners, barcode printers, Barcode Decoders, Smart Card Readers, Data Collection Terminals and Portable Transaction Computers, Radio Frequency (RF) and InfraRed (IR) based equipment and Access Control Systems. Bartronics also provides PVC Cards, Magnetic Cards, Smart Cards and contactless/Proximity Cards to its clients across the world.

as retail is the next big thing after real estate ....company like bartronics has strong future ahead......a very gud long term story is unfolding on this counter....

DLF, India's largest real estate developer engaged in the primary business of development of residential, commercial and retail properties, filed its DRHP with Sebi today, January 3, 2006, as per press release.

DLF proposes to enter the capital market with a public issue of 17,50,00,000 equity shares of Rs 2 each through 100% book building process.

Kotak Mahindra Capital and DSP Merrill Lynch are the global coordinators and BRLMs for the issue. Citigroup Capital Markets India, ICICI Securities, Lehman Brothers Securities, UBS Securities India and Deutsche Equities India are the BRLMs. SBI Capital Market is the co-BRLM for the issue. Karvy Computershare is the registrar to the issue.

unitech........my eternal favourite

the real estate behemoth is a gud buy at all declines


its a top-pick by GEORGE SOROS ,the legendary investor with knack for spotting winners.....

accumulate the stock nearabout 460-470 n njoy gud quarterly set of numbers.....

the stock has given 2833% returns on YoY basis for 2006.the highest amongst all stocks

with 100% FDI being allowed in real estate sector....unitech would rock in 2007 and beyond.....

just have it in ur portfolio n forget abt it

analysis demystefied....

Analysis is simplifying,

breaking down things into parts,

picking out strands and elements.

Analysis is comparing unknown things with things that are known. Analysis also involves picking out relationships and putting them back together as a whole.

-Edward de Bono

this is what this blog would do for u....

enter the world of rocky's investment ideas......

A LONG AWAITED DEMAND FROM FRENZ FINALLY BEARS FRUIT.......

I HEREBY UNVEIL A BLOG THAT WOULD PRESENT MY INVESTMENT IDEAS

IT WOULD CONTAIN STOCK TIPS THAT WOULD B HELPFUL FOR PPL INVESTING IN INDIAN STOCK MARKETS VIZ. BSE/NSE

IT WOULD HAVE METICULOUS ANALYSIS FOR STOCKS BEING RECOMMENDED BY ME

A SPECIAL FOCUS WOULD B ON MY FORTE REAL ESTATE , RETAIL AMONGST OTHERS

WHILE ALL CARE IS BEING TAKEN IN ANALYSING THE STOCKS .THE AUTHOR DOES NOT TAKE ANY RESPONSIBLITY FOR RETURNS ON STOCK IDEAS BEING RECOMMENDED.....N SO IS NOT TO B HELD RESPONSIBLE FOR ANY LOSS CAUSED THEREOF....