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'Buy good value, small or big'Mumbai, February 17, 2004: 'Among the lead caps are Balaji and Sundaram Finance. In the small caps there are Goldiam, Opto and Godrej Industries,' says Ramesh Shrichand Damani.Shinna : Sir with the divestment ministry saying that, the retail investors would get a discount on the IPO's slated for the near future, what is your expectations on the values of these scrips? Ramesh S Damani : My sense is that they will be issued at a discount to continue the feel good factor. The issue will be well received and I think investors should apply for the PSU shares. Rohit : sir ur call on GSK Pharma,Cadila,Glenmark,Ranbaxy,Wockhardt hold or sell Ramesh S Damani : Drug industry is doing well, without going into the specifics in the chat I think investors should have some exposure to Indian/MNC drug stocks. Mathew : Hi Ramesh, there appears to be some unusual activity in Balaji. It moved up by Rs. 9 in the last 5 min of trade yesterday on very high volumes. Few days back somebody hammered it down to Rs. 72.5 for a very short time. Looks very suspicious. Your views pls. Ramesh S Damani : These things happen in the market and not to get carried away by it look at the big picture and underlying value. vit : I would like to invest in MFswhich is better one Ramesh S Damani : HDFC is a good place to look. chandani : hello sir, it is a tradition with almost every stock that after result it TANKS .. now what should be done with HINDUSTAN LEVER??? Ramesh S Damani : This typically happens that people sell on news. Just part of market regular movements. HiDamani : HI,I HAVE A VERY BASIC QUESTION . YOU SAY THAT MARKET CAP IS THE BEST INDICATOR THRO' WHICH WE CAN JUDGE THE PRICE OF A PARTICULAR SHARE OF ANY COMPANY.LETZ TAKE AN EXAMPLE OF SOME COMPANY X HAVING A MARKET CAP OF RS 'Y' AND ITZ SHARE PRICE IS RS 'Z', THEN HOW ARE WE GOING TO KNOW THAT IT IS UNDERVALUED, FAIRLY VALUED OR OVER VALUED AT THAT PRICE? I MEAN HOW ARE WE GOING TO KNOW THAT ITZ RISK/REWARD RATIO IS MORE THAN 1(IN CASE OF OVERVALUED) OR LESS THAN 1(IN CASE OF UNDERVALUED) OR 1(IN CASE OF FAIRLY VALUED) THANKS IN ADVANCE Ramesh S Damani : That is the art of stock picking. BEML at 20 had a market cap of Rs 70 crs and sales of Rs 1500 crs. Plus, growth in GDP was coming. So we know that the market cap favoured reward. Reverse in HFCL and Global at 2000 levels. Does the market cap make sense from sales, value point of view? IT should be the first check on a script. rki : Last week u said that u r keeping an eye on visualsoft technologies. Have u come to any conclusion? Pls answer. Ramesh S Damani : Not yet, though it looks like a decent punt at current prices. srt : Out of the IPO's (IPCL, CMC, IBP, Petronet, GAIL and ONGC) could you rate your preference and why? Ramesh S Damani : Too early let's wait for the prospectus, price band. CMC, I own. It looks a good bet. HiDamani : IS IT ADVISABLE TO MOVE OUT OF COLGATE PALMOLIVE TO SOME OTHER STOCK LIKE GOLDIAM OR NELCO ? THE REASON WHY I AM ASKING THIS IS BECAUSE EVEN IF WE ARE HAVING A GREAT ELIXIR OF 8% GROWTH RATE , PEOPLE WILL NOT START BRUSHING THEIR TEETH MORE THAN BEFORE. THANKS IN ADVANCE Ramesh S Damani : Toothpaste penetration in India is very low (rural areas) that is the call with 8 per cent growth. HiDamani : BASED ON UR SUGGESTIONS, I HAVE MODIFIED MY PORTFOLIO. I WOULD BE OBLIGED IF YOU COMMENT SOMETHING ON THIS-BALAJI TELEFILMS 1292@ RS107.13 COLGATE (326)@ RS170.95 GESHIPPING (176)@ RS145.15 GOLDIAM (935)@ RS52.88 HINDUJA TMT (74)@ RS356.65 ITC (45)@ RS1,109.35 MCDOWELL (717)@ RS61 MORGAN STANLEY (1640)@ RS18.16 NELCO (910)@ RS44.55 STATE BANK (112)@ RS482.03 UNITED BREWERIES (1200)@ RS45.28 THANKS IN ADVANCE Ramesh S Damani : I don't like to comment on individual portfolios. baracuda : sponsered programmes are eating into balajis profits what have yu to say about itand how long will it continue Ramesh S Damani : Run the numbers, see the tax he pays. At this valuations I am willing to take a bet. That's all. rki : Only big caps are doing well these days. Can one expect mid-caps to join the party soon. If yes ur recommendations pls. Ramesh S Damani : Buy good value, small or big. I have mentioned among the lead caps Balaji and Sundaram Finance. In the small caps Goldiam, Opto,and Godrej Industries. I own them all. TIGER : WHAT IS YR CALL ON E SERVE - HOLD/SELL/BUY Ramesh S Damani : I would hold on. Shinna : Sir, having said that, these IPO's are going to be at discount, how will these scrips fare in the secondary market? Ramesh S Damani : I think they will do well. Market conditions are buoyant. vikas2 : Is there any corelation of Macmillan and Hindustan Ink. If printing is expected to do well then Ink and specially hindustan Ink is bound to do well and they are getting=their act together. Pl advise Ramesh S Damani : I doubt it. It is stretching the point. skk : ramesh what is your general feeling one should apply n psu if it is given at a discount to what % from market price Ramesh S Damani : Let's cross the bridge when we come to it. vinaydixit : rameshji article of Mr.basant Maheshwari is quite informative I must say this forum is not only helping in creating wealth but helping us to sharpen our other skills also like you have been advocating about conviction it has helped me lot particularly in case of uti bk which i purchased in ipo at 21 and finally booked profit at 170 i never traded it however bad it was hammered thanks Ramesh S Damani : That would be great news. The idea is to become better informed, debate. Wealth will follow. It would never work as a tip show because "tips" rarely work. jigs : Hi Ramesh,Any view on Bimetal Bearings? Company has strong promoters and expected to clock an EPS of 30..Current Price gives PE of just 6.. Ramesh S Damani : Sorry, have not followed it. TIGER : WHAT ABT SBI - WHAT PRICE R U LOOKING AFTER 2 YRS Ramesh S Damani : Let's dream -- it should be significantly higher. baracuda : has united brewreies becom xrights and are we as share holders entitled to the rights Ramesh S Damani : Not yet. Mathew_M : Ramesh, have you looked at Geojit Securities. Very good numbers for Q3 and with the markets expected to remain bullish, should do well in the next 2 yrs. Also, the company is an early mover into commodities trading. Your views pls Ramesh S Damani : They seem to have established a good leadership position in the south. Keep an eye on them. srt : So, the first step in stock picking is to identify whether the market cap is less than the Sales is it? Then what about Bharti TeleVentures? Ramesh S Damani : No. It is one consideration. Lot of growth companies trade at multiples of sales routinely. starter : You said Indian investors should have a exposure to Pharma/Drug stocks. Could you suggest a few mid caps and state why?Any idea on Jupiter Bioscience? Is this a good Pharma investment? Ramesh S Damani : In MNC Glaxo/Wyeth look okay in Indian the choices are harder but one should look. TIGER : PLS ADVISE ON YR ONE ONE TIME HOT STOCK GEOMETRIC SOFTWARE Ramesh S Damani : Growth has been slow last year. Next year looks to be better. baracuda : do yu see tisco going much higher from these levels as it is mostly insulated from raw material price hikes only a chinese slow down could dent the share price so tisco hold or sell Ramesh S Damani : It remains along with SBI my favourite large cap. Prices should head much higher. I own it. jesselungmore : sir, bank of punjab - is it a good acquisition play at 29 Ramesh S Damani : Yes it is. vinod : Sir, I own UB holdings at 40/- and shiv- vani at 44/-..plssssssss advice Ramesh S Damani : UB Holding is a deep value stock and one needs to be patient for value to be unlocked. kcs : Sir,Every one says Petro chemical will do well. What's the logic behind that? Do you have any small or mid-cap stock to recommend? Ramesh S Damani : It's a large scale game not small scale. sidhartha : why do you consider sundaram finance a value pick and not Birla Global finance / Cholamandalam or for that matter tata finance Ramesh S Damani : Birla balance sheet is not in the best shape they have squandered money, Chola is okay. Sundaram balance sheet is value packed. The choices are pretty clear. vikas2 : UB Breweries : Is it a screaming buy at 85 or would u wait to fall down bit more as results were not good Ramesh S Damani : Don't watch them q-on-q. Look at it over 3-year period. The liquor industry is going to be deregulated and then value will be unlocked. Till then be patient or ignore these stocks. rki : Shree raj synt - mcap of 7 crores , annual sales of 130 crores , could you pls throw some light on growth prospects and ur recommendation pls. Ramesh S Damani : It is a great value buy it will be un locked in 2005. The company is doing well and should declare a small profit this year. i sold some recently tobook profit aroun 9/10 but still own some baracuda : have yu had a look at fci oen connectors jakes made a small mention of it other dayhaving checked out the co website it appears to be a good auto ancillary cotradingat around 12pefor fy 2004 ending dec 2003 Ramesh S Damani : Yes, I did. They are doing well and you could take an exposure. dc : Mr Damani, don't u think that for a long term investor, Balaji Tele is more skewed towards risk than reward considering that the management runs on the whims and fancies of a single person and that more and more people are getting bored by the the content of their serials. Ramesh S Damani : I don't buy that. sidhartha : " birla b/s is not in the best shaepthey have squandered money," - what - A company managed By AV Birla Corporate, has stakes in MUtual funds, Home finance, and Insurance and they have squandereed money? May be you are better informed then a retain investor like : ) Ramesh S Damani : A few years back they got 60 crs plus from a Canadian Insurance co. Lot of bad debts had to be written off. I used to own a lot of those shares and they have never delivered in an operating sense. Mathew_M : Ramesh, are you comfortable with the Bharti story? By now, it looks like CDMA will be the future. The other day I read someone from Lucent saying, voice will be commoditised in the near future and CDMA has considerable cost and technological advantages over GSM in data and other applications Ramesh S Damani : They do, but both will exist. You need GSM when traveling. mahaah : Sir, Jim Rogers predicts commodities especially the prices of sugar, coffee, oil&Gas etc. will shoot up in the next 3-5 years. In sugar which is scrip is the best bet? Pl advise. Ramesh S Damani : Eid Parry looks good. I own it. susmita : sir plz suggest some small caps which will give good return in next few months Ramesh S Damani : Try a basket of Goldiam (50) Opto circuits (60) and Godrej Ind (55) all pay dividend and are good value. I own them all. sanjivjindal : to continue with question rki asked about shree raj syntex do u know that they are recruiting people for very senior positions. Ramesh S Damani : No, I did not. vikas2 : Sab Miller : Its cheif who was or in India recently is bullish on indian liquor industry and thinks in future there is scope for expansion. How do u view this Ramesh S Damani : I am probably the most bullish broker on the industry. But be patient, the change won't happen next month or next quarter. baracuda : are yu still bullish on the metal pipe industry with so many kms of pipes still to be layed or are yu now worried about rising material costs and a possibility of import duties coming down and thus making imports of pipes cheaper Ramesh S Damani : Import is hard because of shipping costs. MALIK : what is the time frame of mid cap which u have recmmended last week lik logix, opto, crest,nelco Ramesh S Damani : In the tech basket -- a 2-3 year call. Mathew_M : Saw an âppointment ad in todays ET by Shree Raj Syn calling senior professionals. Anything major happening, since you track them?? Ramesh S Damani : Let me follow up this next week. vikas2 : UB Beer : Would u like to wait for industry to deregulate to have an exposure or catch 'em young Ramesh S Damani : I already own it. vinod : What is Your call on overall market Ramesh S Damani : I am bullish. We could test and then take out 6250 by the next 2-3 months. sidhartha : For commodity stocks do you see value in Indogulg (copper), BlramPurchini(Sugar), Tata Coffe (For coffee). Ramesh S Damani : Yes, they all are good companies. rekha : Sir Damaniji what is your view on NALCO with the rising aluminium prices Ramesh S Damani : Bullish. vikas2 : TECH : We v alue your 4 stocks but please advise if u think Infotech , polaris , visual and mastek will also outperform in next 1 yr. Ramesh S Damani : I can't answer that for sure but Visual and Infotech I follow. Mastek has disappointed too many times, Polaris I am not sure. SUDHIR : SIR YOU ARE RECOMMENDING UB FOR THE LAST 3 YRS.THE PRICE IS THE SAME. YOUR COMMENTS. Ramesh S Damani : Actually it has gone down. MALIK : sir, if u rememmber last year August or Sept when the share of Bharti Tele was 29 .u were not comfortable and confident of the management.How come u have change your opinion about co Ramesh S Damani : I was not comfortable you are right, they have delivered growth and survived the CDMA onslaught. Life moves on and I think I was too harsh at that time. SUDHIR : SIR HEARD THAT RJ HAD TAKEN BIG EXPOSURE ON MCDOWELL. HE IS YOUR FRIEND .ANY IDEAS ? Ramesh S Damani : I don't think that is true. baracuda : how do yu raise money to apply in the primary issue when one is fully invested in the secondary market and will not sell things like sbi tisco,reliance not yet should i take a od against shares and then close it once i get allotment or refunds Ramesh S Damani : Unfortunately I can't help you on that. conviction : Mr. Damani, Good Evening to you. Sir, lately there has been some movement in Shaw wallce and the news of SAB Miller buying the beer stake. Do you think Shaw wallace is a good buy at 56. There results dont seem to be promising, Revenue was on the lower sides, though the profit was higher. What do you say Sir? Which one of the two you would prefer or both when it comes to United Breweries and Shaw Wallace? Ramesh S Damani : I have a greater exposure to McDowell. I would split it 75/25 McDowell. Also own 40% of UB Beer. kurious : sir, if one buys ur view of the liquor industry, and that there is inherent value, and at some point or the other, the value would get unlocked. should one want to do systematic investment plan in the industry over the next few years. which basket of liquor stocks do u recommend. Ramesh S Damani : UB Beer, McDowell, Shaw Wallace, Radico Khaitan are good places to begin. I own them all. mahaah : Sir, Godrej Ind. with the launch of sofit - mixture of soya milk and some fruit juices are entering health bewerages. They say the test marketing has received overwhelming response. In the present scenario where soft drinks are involved in pesticide controversy, this launch by Goderj Ind. will address and garner a good market share, hopefully adding good amt. to bottom line. Pl comment. Ramesh S Damani : It's good value. Clearly what you said will help the food industry which is struggling. baracuda : had yu recomended bharti then at 25 then we would have all been very rich now how can yu compensate us for that error of judgement which we humans make from time to time Ramesh S Damani : That is my constant endeavour. However if people had bough Bharti at 29 they would have been out by 40. That is the way it is. Happy investing. Thanks for joining. See you next week. |