Which of the Birla Groups in India is most valuable? – Part 3

Sundaramurthy Vadivelu

Disclosure Please click the above link to view the disclosure document before reading this article. The contents may not be reproduced in any form without obtaining prior permission from the publisher. Please send your feedback

In this article let us analyze the KK Birla group companies.

This group manages the following:

• Chambal Fertilizers & Chemicals (Ammonia, urea etc.)

• Zuari Industries (Fertilizers, seeds, investments, etc.)

• Sutlej Industries (Textiles - yarn, fabric and garments)

• Texmaco (Engineering – machiney and equipments)

• Hindustan Times (Media – newspapers)

• Upper Ganges Sugar & Industries (Sugar, molasses, industrial alcohol, tea etc.)

• Oudh Sugar Mills (Sugar, molasses, industrial alcohol etc.)

• Gobind Sugar Mills (Sugar, molasses, bagasse)

Summary:

Scrip/NSE Ticker	BSE Group	Scrip Code	Price 16-Nov
Chambal Fertilizers & Chemicals (CHAMBALFERT)	A	500085	72.55
Zuari Industries (ZUARIAGRO)	B1	500780	315.20
SIL Investments (SILINV)	B1	521194	113.40

Scrip/NSE Ticker	BSE Group	Scrip Code	Price 16-Nov
Sutlej Textiles (SUTLEJTEX)	B1	532782	130.00
Texmaco (TEXMACOLTD)	B1	505400	1640.00
Upper Ganges Sugar & Industries (UPPERGANGES)	B1	530505	88.50
HTMedia	B1	532662

Gobind Sugar Mills is not a listed company.

The following table shows the key financial ratios:

Scrip	P/E	P/BV	Gain since 01-Jan
CHAMBALFERT	18.19	2.95	97.41
ZUARIAGRO	18.27	1.19	72.95
SILINV	10.49	1.11	31.86
SUTLEJTEX	4.58	0.42	(43.94)
TEXMACOLTD	46.92	11.41	30.39
UPERGANGES	-	0.61	(21.85)

Chambal Fertilizers & Chemicals:

We had discussed about this stock in my previous article, “Buy These 5 Stocks and Forget about them”. We indicated that the next targets for the stock were 71 and 91. It has now closed at 72.55.

Zuari Industries:

Read more about this stock in my previous article, “Top Five All-Around Value Stocks”. It was mentioned that the stock is likely to test its previous high at 364. This week, it has closed at 315.20.

SIL Investments:

Sutlej Industries was renamed as SIL Investments when it demerged the textile business in 2005 and formed a new company, Sutlej Textiles and Industries.

This stock performed very badly since May 2006 as it fell from 207.45 to a low of 55 during March this year. The weekly chart shown above suggests that the stock had broken its resistance at 86.30 during September 2007. It has gained reasonably so far. The stock is expected to test the resistance at 134 and if it breaks this level, one can expect a target of 149.40 which is 61.8% retracement. So this stock is bullish for the medium term.

Sutlej Textiles & Industries:

The stock got listed on December 14, 2006 and it has been on a steady downtrend. This week, it broke its previous low at 112 and more bearishness is on the cards. The company has declared a cumulative net profit of Rs.23.34 crores for the last 4 quarters but the crowd is simply not interested in the stock.

Texmaco:

This stock made a bullish breakout two weeks ago, when it broke the previous resistance at 1448. This was accompanied by very good volumes. The technical target for this upmove works out to 2121 and 2391. It trades at a higher P/E and P/BV ratio, meaning it is a ‘growth’ stock.

Upper Ganges Sugar & Industries:

The upper chart says it all. The stock had fallen from its high at 482 in April 2006 to a low of 55.90 in August 2007 (88% erosion in value). However, it is currently making higher highs and higher lows (see lower chart). This week, it broke the previous high at 89.80 but didn’t close above it. If it closes above the resistance with good volumes we can expect a bullish breakout. It has reported a net loss of Rs.29.09 crores for the 12 months ended June 2007.

Conclusion:

Technically, only Sutlej Textiles & Industries looks bearish. Upper Ganges Sugar & Industries has declared poor results. The rest are bullish.

Sundaramurthy Vadivelu

Suggested Reading

Which of the Birla Groups is Most Valuable? Which of the Birla Groups in India is most valuable? – Part 2

Top Five All-Around Value Stocks

(medium term perspective)

Sundaramurthy Vadivelu

Disclosure Please click on the above link to view the disclosure document before reading this article. The contents may not be reproduced in any form without obtaining prior permission from the publisher. Please send your feedback

In this article let us analyze 5 India stocks which are technically bullish for the medium term. The discussion is based on weekly charts.

Indraprastha Medical Corporation (Group: B1, Scrip Code: 532150):

Indraprastha Medical Corporation is the holding company for Delhi based multi-speciality Indraprastha Apollo hospitals, a joint venture between Apollo Hospitals and Government of Delhi. It specializes in cancer, cardiac, neuro surgery, radiology and paediatrics. It earned a net profit of Rs.14.7 crores for the financial year 2006 – 07.

http://groups.google.com/group/theindiastreet/web/INDRAMEDCO_160907.jpg

This stock recorded a high price of 54.90 in July 2005. Since September 2005 it has been on a downtrend. It formed its first higher low of 25.40 in March this year with the first wave ending at 36.35 in June. This week, it broke this resistance and closed above it with good volumes. The stock is expected to test its previous high at 54.90 in the medium term.

Indus Ind Bank Limited (Group: A, Scrip Code: 532187):

We discussed this stock in my previous article, “Hot or Not? Private sector banks on a roll!”. This bank is the brainchild of Srichand Hinduja, a non resident Indian businessman. Ashok Leyland Finance Limited, a leading hire purchase and leasing finance company merged with the bank in 2004. It declared a net profit of Rs.68.22 crores for the financial year 2006 – 07.

http://groups.google.com/group/theindiastreet/web/INDUSINDBK_160907.jpg

We discussed about the stock struggling to break its previous high at 64, even though it was making higher highs and higher lows. Ultimately, the breakout was achieved this week, with the stock closing at 65.90. The level of 64 could not be broken for more than a year. Now that the stock has overcome the strong resistance, we can expect the stock to test its previous high at 83.90 for the medium term.

Navneet Publications (India) Limited (Group: B1, Scrip Code:508989):

Navneet Publications is engaged in the publishing of educational books. The books list includes high quality books, supplementary books like guides and question sets in four languages, English, Hindi, Marathi and Gujarati. Navneet also produces various titles in the children and general books category, which are not based on syllabus, such as activity books for children, health series books, cookeries, etc. Navneet declared a net profit of Rs.43.5 crores for the financial year 2006 – 07.

http://groups.google.com/group/theindiastreet/web/NAVNETPUBL_160907.jpg

Navneet Publications has not seen much action in the stock market in the last 16 months. Just before the May 2006 collapse it registered a high of 70. It attempted to break this level in September 2006 but failed. This week, almost after one year, it has broken out with good volumes and closed at 77.80. The previous high at 70 should now act as a strong support for the stock. So, any decline in the stock should be used to accumulate or enter. The medium term target for the stock works out to 108.

Sabero Organics Gujarat Limited (Group: B1, Scrip Code: 524446):

Sabero Organics manufactures agrochemicals such as formulations/active ingredients and speciality chemicals/intermediates. The company exports its products to over 50 countries covering Australia, Asia, Africa, Europe, Middle East and the Americas. In order to facilitate the registration of its products and provide better customer service, the company has recently set up subsidiaries in Australia, Argentina, Netherlands and Brazil. The company’s net profits were Rs.0.41 crores in 2006 – 07 as compared to Rs.3.1 crores in 2004 – 05.

http://groups.google.com/group/theindiastreet/web/SABERORGAN_160907.jpg

The stock had been on a downtrend since last 2 years after hitting a high of 43.30. It however, found support when it reached a low of 9.85 in July last year. It was consolidating for a year since then. This week, it has managed to close above its previous high at 17.35 with more volumes than its previous peak. The stock’s target for the medium term works out to 30.30, which was its previous high and also 61.8% retracement level from a high of 43.30.

Zuari Industries Limited (Group: B1, Scrip Code: 500780):

We discussed about Chambal Fertilizers and Chemicals Limited, a K.K. Birla group company in my earlier article, “Buy These 5 Stocks and Forget about them”. Zuari Industries Limited (formerly Zuari Agrochemicals Limited) is another K.K.Birla group company. Zuari opertaes a nitrogeneous fertilizer plant in Goa, with an installed capacity of 946,200 metric tonnes. It comprises a single stream ammonia plant, a urea plant, an NPK plant and a DAP plant along with related on-site and off-site facilities for handling raw materials end products as well as the generation of steam and captive power. It declared a net profit of Rs.419 crores for the financial year 2006 – 07.

The stock last heavily during last year’s huge correction between May and June i.e. it fell from a high of 364 to a low of 128.50 (about 65%) loss. It bounced back and made a high of 248.40 in January 2007. But once again, it fell back near its previous support levels.

http://groups.google.com/group/theindiastreet/web/ZUARIAGRO_160907.jpg

Last week, it managed to break its previous resistance and closed above it with more volumes than the previous peak. More importantly, it managed to close above 61.8% retracement, which is a strong resistance level while pull back. The stock may be expected to reach 364 in the medium term, which was its previous high and another major resistance.

Sundaramurthy Vadivelu

Suggested Reading

5 India Stocks You Should Own for the Next 6 Months Buy These India Stocks and Hold for 6 Months If you’re an Investor, Our India Stock Picks will add to your Net Worth