Cravatex Ltd

Cravatex is mainly a trading company. It sells fitness equipment (gym and home exercising) under the “Proline Fitness” brand. It is also the sole distributor of FILA and Dunlop in India. Primary customers are gyms and retail customers.

The sector is growing. Health consciousness in growing a lot. Talwalkar’s and Gold’s Gym are growing well. Talkwalkar

’s expect to grow 30% in the next 2-3 yrs.

Cravatex has strategic tie-ups with both these chains.

FILA has the lowest market share amongst the established brands of international footwear in India. The market leader is Adidas (including Reebok), followed by Nike & Puma. FILA is just getting into the market and is competitively priced. So, market share is likely to increase provided it can increase its distribution capacity significantly. In the fitness space, the company has 28% of market share.

The promoter holding has been consistent at 75% over a fairly long period.

The company's networth has been steadily rising. From 10.74cr (2002-03) to 30.85 cr (2012).

It has increased its RoE significantly in the last 3 years. This has come mainly from an increase in net margins (probably the FILA brand making its impact felt).

Risks & Concerns

Total debt is 28.14 cr (cons). It has gone up from 17.64 cr (cons) from 2011. D/E is 0.87. It seems to be on the higher side.

Cash flow has been consistently negative over the last 3-4 years.

Valuation

Cashflow is negative so can't really do a DCF analysis.

On EPS estimates, with an assumption of 15% growth for 2013 & 2014, the expected EPS are 36 & 42 for the next 2 years.

Assuming a PE range between 10-15, the optimistic and pessimistic price ranges work out to:-

2013 –> 367 to 551

2014 -> 420 to 630

Conclusion: At CMP (425), the stock price has nearly halved from its high of nearly Rs. 800. The results for Q2 is also likely to be weak and the under-performance for the stock is likely to continue for some more time. On the medium term, however, the stock is priced well enough for adventurous investors to take a bite.

D- Street Is On High

21 September: The party on the D- street continues and weBrings a Smile Even In A Bleak Market believe that over the weekend the rally should continue unless there is any roll back or political unstability.Why we were saying to be cautious about markets earlier. There is a lot of uncertainty in the market.What has led so dramatic change in the market.

1.The Finance minister P Chidambaram has made

 a lot of difference.Where a lot was spoken when he was elected as the finance minister as Pranab Mukherjee failed to deliver.There was a lot of positive energy was built up and this was the start.

2.As everyone must be aware the crude prices in the month of late july and early August was quiet low so the fiscal deficit was down and the underrecovery as often said by our OMCs in 12 months for the first time announced they were in profit.

3. Rate cut in the CRR was the major booster for the market in earlier policies as well as the recent policy which was on 17th where again CRR was cut by 25 BPS Rs 17000cr infused indirectly in the market.

4.The long wait of the FDI all cleared in Aviation, Retail,, DTH providers,Power exchanges. All the four sectors are now open in for foreign investments. This policy much awaited sent out a loud message to the global investors as well as the industrialist that there is no problem with the GOI.

5. Price hike in Diesel by Rs5, and LPG cylinder capped to 6 as much and on top if any one bought they have to buy as per the market rate.

6. Rajiv Gandhi equity scheme guidelines in effective from today.

7. Guidelines issued by the GOI on FDI in aviation,retail,power exchanges, DTH.

8.The crude basket of India is down to 106$ as low.

9.Rupee is appreciating against dollar,it is on the 4 months high.

10.Expected that reforms in the much awaited insurance sector will be out on by Tuesday.

11. Disinvestment Process picked up where in 6 months they will raise as much as Rs15000cr.

12.For the first time in nearly even we dont know Air India in its June quarter reported a minute profit of 30 --40Cr.

13. Its always the main TMC where "DIDI" the Indian tigress was just on papers .We have always heard about dirty politics. Today we saw how TMC is no longer supporting Congress. Its sad to know but that is seen as positive by many sentimental investors as this gives no room for the congress to go back and lie down on its knees. Now we feel there will be more reforms more announcements which one common investors must have not thought of.

14.More announcements to come in for the projects which are locked down due to regulatory issues pace for clearence and more easy norms will be published for the laggards Infra , Realty, capital Goods sector.

Dr Reddys

Dr Reddy's Laboratories announced today that it has launched Amoxicillin Tablets Capsules, and Oral Suspension, a bioequivalent generic version of Amoxil® (Amoxicillin) Tablets, Capsules, and Oral Suspension in the US Market on September 17, 2012. Amoxicillin Tablets (500 mg and 875 mg), Capsules (250 mg and 500 mg), and Oral Suspension (125 mg/5 ml, 200 mg/5 ml, 250 mg/5 ml, and 400 mg/5 ml) are approved by the United States Food and Drug Administration (USFDA).

The Amoxil brand and generic Tablets (875 mg) has U.S. sales of approximately $22.2 million, Capsules has U.S. sales of approximately $67.2 million, and Oral Suspension has U.S. sales of approximately $89.5 million, all for the most recent twelve months ending June 2012 according to IMS Health.

Dr. Reddy's Amoxicillin Tablets in 500 mg and 875 mg are available in bottle counts of 20 and 100. Amoxiciliin Capsules in 250 mg and 500 mg are available in bottle counts of 100 and 500. Amoxicillin Oral Suspension in 200 mg/5 ml and 400 mg/5 ml are available in bottle sizes of 50 ml, 75 ml, and 100 mi. Amoxicillin Oral Suspension in 125 mg/5 ml and 250 mg/5 ml are avaiiable in bottle sizes of 80 ml, 100 ml, and 150 ml.

Top Stories

TODAY'S HEADLINES

TOP STORIES
* Pressure grows for aid to Spain, time for Greece
* German investor confidence gets a lift from ECB move
* U.K. inflation slows despite surge in oil costs
* With help from exports, U.S. current account gap narrows
* Lawrence Summers sees vital global role for Asian capital
* No matter the fiscal cliff, U.S. appears set for dismal 2013
MARKET ACTIVITIES
* INTERNATIONAL MARKETS OVERVIEW
* Asian shares go down again over China-Japan tensions
ECONOMIC TRENDS & OUTLOOK
* With lower growth, India's fiscal deficit target appears out of range
* Chinese housing prices rise but in fewer cities
* South Korea sees sharp slide in corporate direct financing
* August plunge in exports may spell recession for Singapore
* Bank of Korea keeping an eye on other central banks
* Myanmar edges toward more market-oriented economy
CAPITAL MARKETS & FINANCIAL PRODUCTS
* Japan challenges China as top foreign holder of U.S. Treasurys
* South Korea tops 6 other major Asian economies for foreign investment
* Bank of Taiwan wins clearance bank status for NT dollar on mainland
* U.S. easing may put Singapore's central bank in a bind
INDUSTRY & REGULATORY UPDATE
* Chinese central bank's reform plan is laid out

MACRO DATA:

In the US, builder confidence rose to a 6-year high with NAHB homebuilders survey rising 3 pts m-m to register a reading of 40 in Sept. This set of data -along with other recent housing data- suggests that the housing market is turning around the corner, showing resilience amid a global slowdown.

In Germany, investor confidence rose for the first time in 5 months, from -25.5 in August to -18.2 in September, outperforming the marketed expected -20. The improvement reflects positive response to ECB’s earlier announcement of bond purchasing. 

In UK, CPI advanced 2.5% y-y in August, slightly slower than July’s 2.4%. CPI for goods rose by 1.8% y-y, compared to July’s 1.9%, and CPI for services slowed to 3.2%, from July’s 3.4%. Core inflation slowed to 2.1% in August, after July’s 2.3% y-y pace. Though inflation has been stepping down because of weak economy, upside risk still exists because the earlier US drought, which reduces crops, might push up food price towards the end of the year. BOE will review their 375 bn pounds bond-purchase target later today (19 Sep 2012).   

In China, 35 out of the 70 major cities saw increased new residential apartment price in August from a month ago, 16 saw unchanged and 19 saw decreased. This compares to July’s 49 increasing, 12 unchanged and 9 decreasing. The fact that few cities saw housing price increasing somehow relieves the concern that the government’s earlier two interest rate cut might inflate the housing price which could reduce the scope for further monetary loosening. To bolster the economy, the Chinese government has been adding scale to fiscal stimulus, and earlier announced to take more measures to support the nation’s export sector. So far the government has been holding back RRR and benchmark rate cuts, to examine the effects of earlier monetary loosening and fiscal stimulus. We are of the view that the government would have no difficulty to achieve its full year growth target of 7.5%.

In Hong Kong, unemployment rate in the 3 months period ended in August stayed at 3.2% sa, unchanged from the same period ended in July, while the market predicted it would worsen to 3.3%. So far, Hong Kong’s export is still undergoing significant pressure from China’s slowdown, Europe debt crisis and weakened US demand. The recent bond purchase announced by ECB and QE3 announced by FEB could be some positives for Hong Kong’s export outlook. The government has reduced its whole year growth expectation to 1-2%. 

In India, CPI inflation accelerated from 9.9% in July to 10.0% in Aug, owing to higher food costs (+12.0%). Recall the Reserve bank of India stood pat - maintaining the policy repo rate at 8% in Sept (consistent with our expectations). Nonetheless, the RBI slashed the cash reserve ratio by 25 bps to 4.5% in anticipation of expected liquidity tightness. The Indian economy is confronted with headwinds on both the external as well as domestic fronts. Furthermore, we expect inflationary pressures to persist on account of a weak rupee as well as possibly higher food and energy prices. Thus, despite a slowdown in the Indian economy, we opine odds of a rate cut in the near term are low going forth as such a dovish stance would worsen inflationary pressures (which are still elevated), rather than provide a significant boost to growth. However, we opine that if the government succeeds in addressing some of the structural growth constraints and inflationary pressures ease in the coming months, the Reserve Bank of India is likely to review its monetary stance and consider cutting rates to stimulate growth.

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India In A Political Mess!!!!

Mamata pulls out of UPA

After her 72-hour deadline and an over three-hour long meeting in Kolkata with Trinamool Congress MPs and leaders, West Bengal Chief Minister Mamata Banerjee on Tuesday finally walked out of the Congress-led United Progressive Alliance Government.

A

fter her 72-hour deadline and an over three-hour long meeting in Kolkata with Trinamool Congress MPs and leaders, West Bengal chief minister Mamata Banerjee on Tuesday finally walked out of the Congress-led United Progressive Alliance government.

Mamata Banerjee took the decision to pull out of the UPA after meeting her party leaders, which was attended by all the MPs including the six ministers belonging to the Trinamool Congress in the Union ministry.

Addressing mediapersons after the meeting, the West Bengal chief minister accused the UPA of not giving the respect to the Trinamool Congress that it deserved.

She even said that the latest steps taken by the UPA were attempts to divert the attention of the country from the coalgate controversy.

Talking about the decision of her party, Banerjee said that her ministers in the Union government would resign on Friday.

"The Trinamool Congress stands for principles. We will organise country-wide agitations," said Banerjee, adding, "this government will last only three to six months."

The West Bengal chief minister said that the decision by the Centre was "unilateral", and even Parliament was not informed about it.

"I told Sonia Gandhi that this decision was wrong and asked for roll back but did not happen," said Banerjee. She, however, added that her "personal relations" with the UPA chairperson would continue.

The West Bengal chief minister even left a room for negotiation saying she might reconsider her decision if the government went for a roll back before Friday.

Reacting to the decision of the TMC chief, the Samajwadi Party called her withdrawal of support "a very serious issue".

Samajwadi Party leader Ramgopal Yadav said, "The withdrawal by Mamata is a very serious issue. Congress should have given a chance to Mamata...almost all parties are against FDI, diesel price hike and LPG issue."

The Bharatiya Janata Party also attacked the UPA government over the issue terming it as a result of the "Congress' arrogance of power".

"This is the Congress way of dealing with their alliance. They are not consulted in a Congress government," said BJP spokesperson Prakash Javadekar.

Trinamool Congress leader Mukul Roy is of Cabinet rank and holds the Railways portfolio while other five MPs from the party are ministers of state. They are minister of urban development Saugata Roy, minister of health and family welfare Sudip Bandyopadhyay, minister of information and broadcasting Choudhury Mohan Jatua, minister of tourism Sultan Ahmed and minister of rural development Sisir Kumar Adhikari.

Congress core group meets after Mamata decides to exit UPA

The meeting of the Congress core group chaired by Gandhi at the Prime Minister's residence deliberated at length on the political scenario after Mamata Banerjee's announcement of withdrawing support to the government.

A

day after Trinamool Congress decided to withdraw there support to UPA, the Congress top brass was on Wednesday huddled in a meeting with party president Sonia Gandhi and Prime Minister Manmohan Singh deliberating over the strategy ahead.

The meeting of the Congress core group chaired by Gandhi at the Prime Minister's residence deliberated at length on the political scenario after Mamata Banerjee's announcement of withdrawing support to the government.

Minutes before the core group meeting began, the Prime Minister held confabulation with Deputy Chairman of Planning Commission Montek Singh Ahluwalia.

There have been indications from the party earlier that they should be "ready to bite the bullet" as reforms are necessary at this juncture.

Trinamool Congress yesterday decided to withdraw its ministers from the Union government and its support.

The second biggest constituent of the UPA with 19 members in Lok Sabha said the party could reconsider its stand if the government rolls back its decisions on FDI, raised the cap on subsidised LPG from six to 12 cylinders besides reducing diesel hike from Rs5 by Rs3 or Rs4. "We are withdrawing our support... Our ministers will go to Delhi, meet the Prime Minister and tender their resignations at 3pm on Friday," the TMC chief and West Bengal Chief Minister had said.

Immediately after the Trinamool's announcement yesterday, Digvijay Singh said on twitter, "FDI decision was taken in national interest fulling knowing its political fallout and I hope the government will stand firm as it did on the nuclear deal."

If the Trinamool Congress goes ahead with its decision to withdraw support, the UPA will be reduced to 251, 21 short of the majority mark of 272 in the 545-member Lok Sabha. However, with the support of outside allies--Samajwadi Party (22), BSP (21) and some others-- the government is still comfortably placed with the support of over 300 members.

Source Money Control.com

PUBLIC SECTOR BANKS AT DIRT VALUATIONS!!!!

Company Name	Last Price	52 wk	52 wk	Market Cap		52 WEEK LOW	52 WEEK HIGH	Current P/BV
		High	Low	(Rs. cr)	Book Value	P/BV	P/BV
SBI	2,129.00	2,474.80	1,576.00	142,865.45	1,251.00	1.98	1.26	1.70
Bank Of Baroda	739.95	881	606.25	30,514.60	666.29	1.32	0.91	1.11
PNB	785.65	1,091.00	659	26,647.57	777.39	1.40	0.85	1.01
Canara Bank	382.8	566	306	16,958.04	465.57	1.22	0.66	0.82
Bank Of India	293.75	408	253.8	16,876.53	343.35	1.19	0.74	0.86
IDBI bank	96.25	121.5	77.15	12,304.77	151.97	0.80	0.51	0.63
Union bank	187.85	273.85	150.1	10,342.06	235.91	1.16	0.64	0.80
Oriental Bank	279.95	324	190.1	8,167.85	379.93	0.85	0.50	0.74
Idian bank	186.05	265	152	7,995.87	214.94	1.23	0.71	0.87
Allahabad Bank	140.45	211.4	103	7,022.87	192.92	1.10	0.53	0.73
Syndicate Bank	102.5	121	67.45	6,169.99	133.5	0.91	0.51	0.77
IOB	75.35	119	66.2	6,005.38	135.34	0.88	0.49	0.56
Corpoartion bank	403	528.45	335.5	5,969.61	558.7	0.95	0.60	0.72
Andhra Bank	103.5	138.5	79	5,791.66	133.66	1.04	0.59	0.77
Central Bank	70.7	111.8	62.3	5,204.34	121.42	0.92	0.51	0.58
Uco bank	74.45	95	44.8	4,948.78	94.72	1.00	0.47	0.79
Dena Bank	101.5	104	47.5	3,553.09	122.59	0.85	0.39	0.83
Bank Of Maharashtra	47.55	58.7	37.75	2,803.51	63.77	0.92	0.59	0.75
Vijaya bank	53.25	68.9	43.85	2,638.75	76.17	0.90	0.58	0.70
St Bank Of Bikaner	369	470	302.25	2,583.00	594.98	0.79	0.51	0.62
St Bank Of Travancore	510	671.35	451	2,550.00	773.23	0.87	0.58	0.66
St Bank Of Mysore	495.3	610	408.1	2,317.99	729.22	0.84	0.56	0.68
United Bank	61.5	87.15	45.55	2,220.14	114.65	0.76	0.40	0.54
Punjab & Sind	68.9	94.65	56.05	1,613.69	141.73	0.67	0.40	0.49
					WACC	1.02	0.60	0.78

Upside Potential Is 0.24 to the Current P/BV

Now its always heard that the PSU's are lagging behind and there is always a huge risk  for the increase in their NPA's . Now what made us to do valuation on the Psu banks as they are quiet undervalued to the CMP and compared to the Private Banks.For traders there is always an opportunity to mint money as well as for the investors. Now what is the strategy The most of the PSBUs they trade low as to 0.60 to the book value and the exit takes to around 1.25 max. this is a really a very good strategy to enter and exit in PSUs stocks. Now one has to ask question to themselves yesterday we saw a Rate cut by 25 BPS and SBI is the biggest beneficiary from it. why previously there were questions raised to the NPAS and deterioration in the asset quality of banks. NOW the countrys central government wont take any measure to revive the PSBUs banks they have to. one should always have the PSBUs in their portfolio at lower levels of their P/BV . with the recent lows. We recommend a buy in all the PSBUs Banks partially positions can be added. If Nifty has to Move up its the banking stocks that will have to participate in the rally. Its always said  Banks are the backbone of the Economy. The total contribution in the GDP of the service sector is around more than 50% which itself indicates this is it.banks will always move higher as for any transaction in by a common man and by different sectors in the economy they have to pass through these banks and thats what drives us to Quote buy when the Banks are near lows to P/BV of 0.70.............