Highway Malls Next Biggest Thing in Real Estate

By Vipin Agnihotri

The concept of the highway mall, though new to India is fast catching up with more and more top international brands signing up with developers of these malls. Gurgaon at this moment of time has become the hot spot of malls, also other side of Delhi is coming up with highway malls, namely, the north of Delhi border, Sonepat and beyond.

It is worthwhile pointing that from a handful of malls in the mid 90s, India has more than 100 malls spread across large and small cities. Generally speaking, developers have been experimenting with different retail formats now and then to offer something new to the customers like specialty stores, department stores, hypermarket, but highway malls is the new retail mantra that has caught the fancy of developers right now.

It has come into the notice of The India Street that big developers such as TDI, Ansals, Omaxe Group & Parsvnath Group have already realized the potential of these brands. Brands like Blackberry, Adidas, McDonald’s, Reebok, Provogue, Adlabs have already signed up with the developers for a space in highway malls.

The very fact that these leading brands are eager to be a part of the highway mall culture is because the land cost in metros is high and the return on investment is low as compared to non-metros, hence it becomes difficult for the brands to sustain themselves in the long run.

Another significant benefit of big format highway malls is that zoning can be created with utmost ease. In my opinion, the success of mall culture in Delhi and other metro cities has had a ripple effect in non-metro cities. Also, taking into account the burgeoning purchasing power even in the suburban areas and a change in the lifestyle preferences of the consumer there, developers are optimistic about the success of the project expecting a footfall of more than 20,000 people per day including local residents and highway traffic.

If experts are to be believed, highway malls is the next big thing amongst real estate developers serving as a one-stop shop for those travelling on the highway. There is no doubt in my mind that success of this new retail format can be foreseen with the fact that most of the top national and international brands are jumping in to take a pie in all the upcoming highway malls across India.

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These 5 India Stocks Set to Move Up in the Short Term

Analysis of select India stocks (short term perspective)

Disclosure

In this article let us review some stocks which are technically bullish for the short term. As I have mentioned in my earlier articles these stocks are selected either from A category or B1 category of BSE (Bombay Stock Exchange). This helps in eliminating illiquid stocks, those with listing related issues etc.

Arvind Mills Limited:

This is a very popular, fundamentally good textile stock. It has a P/E ratio of 40 and book value of 70. During the financial year 2006 – 07 the company has reported a net profit of Rs.121.34 crores. But what has happened in the last few years to the stock price? Let’s see the price chart below.

http://groups.google.com/group/theindiastreet/web/ARVINDMILL.JPG

The weekly chart displayed above indicates clearly that the stock has fallen from its resistance zones at 148.30 (September 2005) to 41.80 in April 2007. How do we compare the financials for 2006 – 2007 and the stock price then? On March 31, 2006 the stock price was 100.50. Exactly a year later it was 43.45.

I have been writing in my earlier articles that the stock prices always discount other criteria. A good profit making company, with strong fundamentals, has not attracted the investors for more than a year. This is where technical analysis outscores fundamental analysis.

For the short term, watch the daily chart. We can see the strong consolidation between April and July this year. The low made by the stock on April 2 has remained intact. The resistance at 49.20 has been broken on July 10 with volumes. The “dark cloud cover” candlestick pattern on July 5 has been nullified by a green candle on July 6.

Moving ahead, the stock is expected to continue its uptrend. The next resistances for the stock are at 63.25 and 72.70.

Gujarat Narmada Valley Fertilizers Company Limited:

The company’s manufacturing facilities at Bharuch, Gujarat produce fertilizers such as urea, ammonium nitrate, ammonium phosphate, diammonium phosphate, miurate of potash and chemicals such as methanol, acetic acid, formic acid, nitric acid and ammonium nitrate. The company has the world’s largest single stream fuel oil based ammonia - urea plant. It is also India's only producer of glacial acetic acid through cutting edge methanol route. The company reported a net profit of Rs. 326.47 crores in the financial year 2006 – 07.

In the stock market, the stock has really struggled for more than a year. It fell from its previous high of 144.95 in May 2006 to 78.50 in June 2006. It didn’t pierce its resistance at 116.90 until yesterday (July 11). Watch the “cup and handle” breakout chart pattern. We have discussed about this for polyplex corporation in my previous article, “5 India Stocks You Need to Own Now”.

http://groups.google.com/group/theindiastreet/web/GNFC.JPG

The cup and handle pattern has taken about 6 months time, as can be seen in the chart. The stock is expected to test its previous high of 144.95. The stock is also bullish on long term (monthly charts).

Power Finance Corporation Limited:

PFC provides financial products and services like project term loan, lease financing, direct discounting of bills, short term loan etc. for various power projects in generation, transmission, distribution sectors as well as for renovation and modernisation of existing power projects.

http://groups.google.com/group/theindiastreet/web/PFC.JPG

The stock has been in consistent uptrend since April this year. Yesterday its previous resistance at 166.80 has been broken. The stock has completed one full elliot wave cycle; it is in the first wave of a fresh cycle. Any correction/decline in the stock is a good opportunity for entering the stock. Next targets for the stock are 193 and 209.

Parsvnath Developers Limited:

This stock is one of the constituents of the recently introduced BSE Realty Index.

The New delhi based real estate company has presence in 46 cities and 17 states across the country. The company has a diversified portfolio with projects varying from residential complexes to commercial/shopping centers, multiplexes, from metro malls at Delhi Metro Rail Corporation stations to Hotels and IT Parks, and integrated townships. The company has approvals for 12 Special Economic Zones from the Ministry of Commerce, which have financial outlay of Rs. 37,500 crore in next 5 years. The company reported a net profit of Rs.292.21 crores for the financial year 2006 – 2007 with diluted EPS of 18.16.

Technically, the stock has consolidated from April 25 to July 2 this year. It is currently in its fifth wave. A two month consolidation pattern can be seen in the chart below.

http://groups.google.com/group/theindiastreet/web/PARSVNATH.JPG

The first wave, was very small; the second wave almost tested its previous low. The third wave wasn’t lengthy either. The stock has formed a near “triple bottom” as shown above. It has broken out on July 3 with volums. Once again it has started its uptrend after correcting for a couple of days.

The next target for the stock works out to 440 which is 61.8% retracement from a low of 221.10.

Tata Metaliks Limited:

Tata Metaliks is engaged in the business of manufacturing pig iron. Its plants are located at Kharagpur (West Bengal) and Redi (Maharashtra). The company provides its customers with critical support across their entire business cycle viz. raw material, process and end products. The company reported a net profit of Rs.29.51 crores for the financial year 2006 – 07 with EPS of 11.67.

This stock has also been in consolidation since April. It has broken its resistance at 136.95 on July 11. Like the Parsvnath, this has also completed one full elliot wave cycle and currently on its first wave. Corrective declines may be used to enter this stock. The next resistances for the stock are at 158 and 173.95.

http://groups.google.com/group/theindiastreet/web/TATAMETALI.JPG

SUNDARAMURTHY VADIVELU