Historical valuations.

Isn't that graph self explanatory.

Investors, we are gullible most of the time.
Have patiance. We would definately get better time to invest than what prevails.

The graph itself potrays that valuations are stretched drastically, and we have seen the effect of interest rate hike in US on our markets today.The short covering happened today was itself a confirmation that we would better time for medium to long term investments.

Technically above 2585 there are chances of upward movement , below that there is huge free fall can be expected.

Take care.

close positions

Dear Clients,

I request all the clients to close all the position be it in large, small, mid cap stocks.
there is huge correction impending.

Can go short in nifty and defty !

regards,
RP

Birla consolidation -first cut

Indo Gulf merger with Indian Rayon

Indo Gulf (IGFC IN, CMP Rs170, Mkt Cap Rs7.7b, BUY) is to be merged with Indian Rayon (IR) in the swap ratio of 1 share of IR for every 3 shares of IGFC. This values the Indo Gulf share at Rs 206-a 21% premium to its closing price on Friday; at 14.7x FY06EPS and 4.4x FY06 EV/EBITDA.

I believe the strategic reason behind the move is to utilize IGFC's excess cash (almost Rs3b as on 31 March 2005 ) in IR's financial services business. The company's fertilizer expansion plans had taken a backseat after government's decision not to divest PSUs and delay in clearance of its broken-field capacity expansion.

I have reason to believe that IGFC's fertilizer plant will also be sold in the near future, as fertilizer doesn't seem to be a focus area for the group. Some companies are evaluating the plant.

The premium to market price paid by Indian Rayon substantiates our view that efficient fertilizer companies are being under valued by the market, given the short term uncertainties over government policies. We continue to remain positive on Tata Chem (TTCH IN, CMP Rs 190, Mkt cap Rs46b, BUY) , which is trading at 12x FY06 EPS and Coromandel Fertilizers (CRFT IN, CMP Rs245, Mkt cap Rs6b, BUY) , trading at 9.2x FY06 EPS.

Pearl polymer has given decent break out.
Buy : CMP( please dont get into this scripts late)
Stop: 21
Tgts:First ;33 Second : 39
Happy investing.


Ravi Pathak

Name:City Union Bank
Break out pick for the next week.
Target: In short term may rise to 108, 115 Levels.
Caution: I have not checked the fundamental of this company.

Ravi Pathak