CANARA BANK SECURITIES (CANMONEY) has worked out for the following stocks in respect of Railway Budget with a lumpsum 10% return in short term period:
Titagarh Wagons: Target Price: 550-560
Container Corporation of India: Target Price: 1350-1370
Kalindee Rail: 184 Target Price: 225-230
Hind Rectifier: 71.70 Target Price: 88-90
BEML: Target Price: 1075-1095
Stone India: Target Price: 85-88
Timken India: Target Price: 215-220
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TIMKEN INDIA (TIL): Timken India is the Indian subsidiary of global locomotive giant TIMKEN, USA. TIL has registered a praiseworthy performance in Q-2, 2011. TIL may post good profit in forthcoming quarters also, as reflected from the revival of its sales in key segments and foraying into new businesses areas in key markets. Following facts support this :-
1. The great impetus Govt is showing in revamping the railway infrastructure in the country, that is including the activities such as laying down new electrified tracks.
2. A huge boost to modified mass rapid transportation system ( such as Metro) in all major cities of India.
3. Vertically integrated approach that may give TIL an added boost to improve margins simultaneously decrease the cost.
4. Access to world class technology and other supports from US based Parent.
Modernization of the existing transportation infrastructure and development of new such verticals including electrifying the existing rail routes and Metro, Monorails networks etc is one of the prime priorities of Indian Government. As, improved infrastructure is very crucial to invite vital FDI into the country in addition to handle and help the growing economy, newer alternatives of transport like Metros, Monorails and electricity driven system are the calls of the day. Companies like TIL are having better chance to grow from this opportunity. However, owing to recovery issues in US and Euro Zone economies and in case of any abrupt withdrawal by FIIs, TIL may witness some temporary corrections before moving up.
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STONE INDIA (SIL): Stone India is a well established name in the field of Locomotive Brake Systems and belongs to the Duncan Goenka Group. Stone India has registered an impressive performance in Q-2, FY 2011. Stone India may post good profit in forthcoming quarters on account of the surge in the business parameters, vital for its existence. Following facts support this :-
1. As the mainline business verticals to which, Railways caters to, like Metal, mining, Oil& gas is on rise, the demand for revamping and development and initiation for more railways will be there. The great impetus Govt is showing in revamping the railway infrastructure in the country, that is including the activities such as laying down new electrified tracks.
2. A huge boost to modified mass rapid transportation system( such as Metro) in all major cities of India.
3. Strategic thrust of Govt to convert maximum railway tracks into electrical tracks, this may result into good business opportunities for Companies like SIL.
Modernization of the existing transportation infrastructure and development of new such verticals including electrifying the existing rail routes and Metro, Monorails networks etc is one of the prime priorities of Indian Government. As, improved infrastructure is very crucial to invite vital FDIs into the country in addition to handle and help the growing economy, newer alternatives of transport like Metros, Monorails and electricity driven system are the calls of the day. Companies like SIL are having better chance to grow from this opportunity. However, owing to recovery issues in US and Euro Zone economies and in case of any abrupt withdrawal by FIIs, SIL may witness some temporary corrections before moving up.
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BEML: BEML formerly Bharat Earth Movers was established in May 1964 as a Public Sector Undertaking for manufacture of Rail Coaches & Spare Parts and Mining Equipment at its Bangalore Complex. BEML has registered a moderate performance in September; FY2011. BEML may post good profit in forthcoming quarters also, as reflected from the revival of its sales in key global markets and acquisition of new businesses in key markets. Following facts support this :-
1. The growth of the Indian economy and the expansion of the railway sector in the faster phase results increased demand in coaches and Electric Multiple Units demand is estimated at around 23,000. But the current combined production capacity of railways is around 2500 units per annum only. This demand supply gap is getting increased.
2. A huge boost to modified mass rapid transportation system( such as Metro) in all major cities of India.
3. Access to world class technology & other supports from Government.
4. Company has recently completed phase-I of Palakkad plant in Kerala. The plant will manufacture Defense equipments besides parts and accessories of rail & metro. It is also setting up a manufacturing facility in Bengaluru for its Aerospace segment costing Rs. 3160 million.
Most of its plants are operating al most at100% capacity. Modernization of the existing transportation infrastructure and development of new such verticals including electrification of the existing rail routes and Metro, Monorails networks etc is one of the prime priorities of Indian Government. As, improved infrastructure is very crucial to invite vital FDIs into the country in addition to handle and help the growing economy, newer alternatives of transport like Metros, Monorails and electricity driven system are the calls of the day. Companies like BEML are having better chance to grow from this opportunity. However, owing to recovery issues in US and Euro Zone economies and in case of any abrupt withdrawal by FIIs, BEML may witness some temporary corrections before moving up.
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HIND RECTIFIER (HIRECT): Hind Rectifier was founded in 1958, in collaboration with Westinghouse, Brake & Signal, U.K. Company is engaged in the field of manufacturing and designing Railway transportation Equipments, Power electronic equipments and power semiconductors. HIRECT has registered a good performance in Q-2, FY2011. It may post good profit in forthcoming quarters also, as reflected from the revival of its sales in key global markets & business improvement in key segments. Following facts support this :-
1. Full production of the transformers from the Dehradoon facility.
2. The growth of the Indian economy and the expansion of the railway sector in the faster phase results increased demand in coaches and Electric Multiple Units, apart from the electricity driven engines, all these will augment the net demand of products from Hind rectifiers.
3. A huge boost to modified mass rapid transportation system( such as Metro) in all major cities of India.
4. Access to world class technology and technical support from the global biggies.4. In-House R&D and Customization capabilities.
Modernization of the existing transportation infrastructure and development of new such verticals including electrification of the existing rail routes and Metro, Monorails networks etc is one of the prime priorities of Indian Government. As, improved infrastructure is very crucial to invite vital FDIs into the country in addition to handle and help the growing economy, newer alternatives of transport like Metros, Monorails and electricity driven system are the calls of the day. Companies like Hind Rectifier are having better chance to grow from this opportunity. However, owing to recovery issues in US and Euro Zone economies and in case of any abrupt withdrawal by FIIs, Hind Rectifier may witness some temporary corrections before moving up.
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KALINDEE RAIL: Kalindee started as a private company in the year 1976 with a contract for up-gradation of signaling installation for high speed trains on Meter Gauge Trains. Kalindee has registered a good performance in Q-2, FY2011. Kalindee may post good profit in forthcoming quarters also, as reflected from the revival of its sales in key segments and business improvement in key areas. Following facts support this :-
1. Diversified working segments, beside the hugely labour intensive work of Track laying to extremely important work of signaling and communication, Kalindee has developed the capabilities to execute the same in record time and with perfection.
2.The growth of the Indian economy and the expansion of the railway sector in the faster phase results increased demand in coaches and Electric Multiple Units, apart from the electricity driven engines, all these will augment the net demand of products from main clients.
3. A huge boost to modified mass rapid transportation system (such as Metro) in all major cities of India.
4. Access to world class technology and technical support from the global biggies.
5. In-House R&D and Customisation capabilities.
6. Kalindee has started the telecommunications with simple line wire communications for Railways Safety Block and operation control circuits. Kalindee continued to diversify in new areas of telecommunication technology to suit developments in Railways. With introduction of railway Electrification Kalindee took up main line underground armored and screened cable suitable for long distance circuits on 25KV AC electric traction.
Modernization of the existing transportation infrastructure and development of new such verticals including electrification of the existing rail routes and Metro, Monorails networks etc is one of the prime concerns of Indian Government. As, improved infrastructure is very crucial to invite vital FDIs into the country in addition to handle and help the growing economy, newer alternatives of transport like Metros, Monorails and electricity driven system are the calls of the day. Companies like Kalindee Rail are having better chance to grow from this opportunity. However, owing to recovery issues in US and Euro Zone economies and in case of any abrupt withdrawal by FIIs, Kalindee Rail may witness some temporary corrections before moving up.
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CONTAINER CORPORATION OF INDIA (CONCOR): CONCOR has registered impressive results for Q-2, 2011. Company has undertaken some breakthrough expansion projects during the year, due to which performance figures may improve in future. Some of those are :-
1. Setting up an international freight handling business in JV with some foreign partner.
2. Setting up of the larger number of CFS (Container fright stations) to take the advantage of burgeoning local business.
The logistic business is directly related to the overall growth in the net export and import of the country plus the net available infrastructure to handle those volumes through an integrated multi model based transaction (logistic) system. After the grater emphasis given by Indian Govt for infrastructure development in the country, not only through the old established container handling ports, but also through the new ports, viz., the ports of Mundra, Pipavav & Vizag (VCTPL) good surge in the business volumes is being registered. This is likely to result in further increased level of tonnage of container traffic in the near future.
In order to meet the net demand owing to surge in the international and domestic export/ import business. CONCOR has established two new terminals at Durgapur (West Bengal) and Ratlam (Madhya Pradesh) in FY2010. Additionally to increase its penetration, expansion works were commissioned at Kota, White-field, Dadri, Malanpur, Phillaur, Khemli, Kanpur and Fathua. Company is giving special emphasis on adding the high speed railway wagons as on date company is having 10194 units. As on 31.03.2010, Company was having total 15,754 containers (owned as well as on lease). Due to deep penetration and vast infrastructure to handle bulk volumes, CONCOR is rightly set to gain from the surge in economic growth of the nation.
Due to the net rise in the business volumes across the globe and supportive measure adopted by the Indian Govt to boost its export and bulk business activities inside the country by offering PPP route for setting up private railway network etc, Logistic sector may fare well in FY2011. The long-term potential for India’s growth story, rising level of business volumes across the major countries and a 8.5 plus growth rate of GDP are indicating a long term business sustainability for the logistic industry in general and CONCOR in particular. However, owing to recovery issues in US and Euro Zone economies and in case of any abrupt withdrawal by FIIs, CONCOR may witness some temporary corrections before moving up.
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TITAGARH WAGONS (TWL): Titagarh Wagons is engaged in a wide range of manufacturing activities centered around the need of Indian Railway. TWL has registered a good performance in Q-2, 2011. It may post good profit in forthcoming quarters also, as reflected from the revival of its sales in key global markets and business improvement in key segments. Following facts support this :-
1. Diversified Customer base, besides Indian Railways, the Company`s largest single customer, TWL`s client list includes Indian Defence (DRDO), Director General of Border Road, CONCOR, NTPC, State Governments of Tripura and Arunachal Pradesh and Arshiya International, among others.
2. The growth of the Indian economy and the expansion of the railway sector in the faster phase results increased demand in coaches and Electric Multiple Units, apart from the electricity driven engines, all these will augment the net demand of products from TWL.
3. A huge boost to modified mass rapid transportation system( such as Metro) in all major cities of India.
4. Access to world class technology and technical support from the global biggies.4. In-House R&D and Customisation capabilities.
5. Overseas acquisition The acquisition would give Titagarh an access to additional capacity to manufacture up to 5,000 wagons per year in the European market.
6. Through its latest French, TWL, also get the technology related to the production of wagons used for transporting oil and cars, which is not easily available in India.
Modernization of the existing transportation infrastructure and development of new such verticals including electrification the existing rail routes and Metro, Monorails networks etc is one of the prime concern of Indian Government. As, improved infrastructure is very crucial to invite vital FDIs into the country in addition to handle and help the growing economy, newer alternatives of transport like Metros, Monorails and electricity driven system are the calls of the day. Indian Railways expects to achieve an origination loading of 1.1 billion tons by 2012, arising out of a growing increase in coal, ore, steel, food grain and container transportation, driving the offtake of wagons. Companies like TWL are having better chance to grow from this opportunity. However, owing to recovery issues in US and Euro Zone economies and in case of any abrupt withdrawal by FIIs, TWL may witness some temporary corrections before moving up.
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NOTE: Though almost all the above stocks made a decent upside during the last few days, still they have some upside left till Railway Budget. Around 5400-5000 (Nifty Spot)level, they are a compelling BUY.
For me, I will prefer CONCOR, BEML, KALINDEE AND TITAGARH WAGONS. IF YOU WISH TO ENTER, PLEASE REMEMBER YOU SHOULD EXIT JUST ONE DAY BEFORE THE RAILWAY BUDGET OR MAXIMUM ON THE SAME DAY FIRST HOUR.
