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'ITES will be a $20 billion industry'Mumbai, July 1, 2003: 'The market cap of whoever is the ITES leader should approach $3-$5 billion,' says Ramesh Shrichand Damani.Nachiketa : Sir, is it good time to enter stock market for a market novice like me or should I invest in mutual funds? Ramesh S Damani : Hello everybody and thanks for joining. Let's start…. if you are a novice then mutual funds would be better. anupta : Sir what is your idea about Graphite indiaFA..For FY03, Equity : Rs. 290mn, Net Sales : Rs. 4100mn, N/P : Rs. 334mn, EPS : Rs. 11, P/E : Rs. 4x, Dividend - 25% (F.V : Rs. 10/-)Current market price 46 Ramesh S Damani : They should be doing well with the steel cycle improving. SKK : Ramesh, At what leverl u want to come out with Opto Circuits. Stock is not moving in this market despite market moved up like anything. Ramesh S Damani : The stock moved from 35-45 saxviv : sir.. what is your call on man industries... it is 60 now Ramesh S Damani : They are doing well SKK : Are u ok with Sh. Rajasthan Syntes after seeing the result or u want to come out of the stock. Ramesh S Damani : I am okay. The company is in the process of turning around. Market cap at Rs 8 is about 6 crs. Not much downside. I own it. Mundhra : Sir, Have you gone through the B/SOF REDICO KHAITAN. Can we buy now Ramesh S Damani : I have. The numbers look good. I am thinking about it. Not bought yet. It does look good prima facie. SiliconInvestor : What is the reason for Geometric to be languishing in the last couple of months ? Ramesh S Damani : General tech malaise. hummingbird : do yu feel this market and many stocks have moved into operators hands and is it time to book profits mercilessly across all sectors or are yu now convinced that this is a full blown bull market and we have a long way to go Ramesh S Damani : I am not convinced it is a new bull market. If it is then look at PSU and Indian pharma stocks to lead the market higher. KAMAL : What is wrong with ESERVE . Every time it goes up met with heavy selling and comes back to 500 level. If it is expensive why do u want to stick with it. Must be something special with company Ramesh S Damani : There is no easy answer. The stock had a good run-up. If things work out this could be the benchmark stock of the ITES sector. We must learn to be patient in our picks. anaam : Sir,Inspite of such a buul run GAIL is not moving up. Is it because of fund selling or is there anything negative in the share which we have not noticed? Ramesh S Damani : The script has gone from 60 to 110. Recently from 80-110. That is a good move. BASANTMAHESHWARI : Ramesh babu Tat Ino came out with great results. The only concern that I see going forward is that it holds only 40% in the ITES JV with SIbel.Therefore results cannot be consolidated should one be that critical on this or just invest? Ramesh S Damani : Thanks for your letter and good luck in your career. I think Tata Infotech is on its way to recovery. I think they will consolidate at 40%. It looks cheap considering its pedigree. mayurdamani : Sir, did you find out about Mahindra Ugine Steel company. Last week, i requested you to find out what is the buzz in the counter. Did you find out sir? Last week, it was 12.7 when i asked you and now it is 13.7. what do you think sir? Ramesh S Damani : No particular news. The company does need new capital. SiliconInvestor : You have always recommended your stock picks based on market caps. Last week, we discussed benefits of E-Serve vs Infosys. Where do you forsee the market cap of E-serve to be in 5 years time ? A billon dollar market cap ??? Ramesh S Damani : ITES will be a $20 billion industry. The market cap of whoever is the ITES leader should approach $3-$5 billion. I own almost all the ITES stocks. PharmaBull : Please, please give your view on TISCO. I hear from a source that a major rerating is in line with a price target of 250 in near future?? Please comment. Thanks Ramesh S Damani : It certainly has potential. I own it. mayurdamani : Sir, at last Macmillan has participated in the rally. What do you think at this level? Shall I book profits? Ramesh S Damani : My estmate has gone up from18-20 to 20-22. The company's ITES business is growing at 69%. Looks good. I own it. SKK : which 5 big caps and 5 small caps u will recommedn in the market . Last time u have promised to do that Ramesh S Damani : In the large caps I like SBI, Dr Reddy, Tisco and in the small caps the picks are the same. McMillan, Tata Honeywell, McDowell etc in new sectors. Also look at textiles. I own all of them. kocharr : Textile Just Shree Rajasthan is your pick damnaji? Ramesh S Damani : I have also bought Mahavir Spg, Vardhman Spg and Zodiac clothes. KAMAL : Is ESERVE and Honeywell true ITES stock as they are only doing outsourcing for their principles.What other ITES company you have ? Ramesh S Damani : McMillan is another example. Bullseye : Sh. Rajasthan synatex is not showing any movement is it a long term investment or short term . What targets u are making for the script. Some Entry transfer is taking place in the counter it seems Ramesh S Damani : If you are looking for scripts to double in a week, I don't have any ideas to share. SiliconInvestor : What is a reasonable Price/Sale multiple one should pay for a true play ITES company ? My guess is around 3. Do you consider it too low ? Ramesh S Damani : 3 times sales is okay. kingcobra : shree raj 4qrt was a little dissapointing becos of high taxbut still co managed a net profit of 45lakhs better than last yearon a small equty base do yu see the results improving in the future Ramesh S Damani : Textile industry turnaround is1-2 years away. When the turnaround is visible the prices may be higher. jigs1 : Ramesh, your view on kirloskar oil's latest results. It looks cheap to me. your comments Ramesh S Damani : It looks good at current rate and prospects. BASANTMAHESHWARI : ACcenture is going all out for Financial outsourcing reports the Calcutta business papers. Mphasis is the outsourcing option for accenture. Does it not make mphasis a big prospect. Mind you Msource is yet to to the corner and the earnings are from the software dept. in majority.But is that not the oppurtunity if Msource with a workforce of 3000+ were to turn around the counter could go places. I hold Mphasis Ramesh S Damani : At current valuation I prefer Tata Infotech. They should end 2003 with 2000 plus people. Dividend is 7.5 compared to 3. Ii am not bullish on Mphasis. Ahmedabadguy : Mr. Damani If you are skeptical about fresh new bull market then do you feel market will topped out around 3730 level of previous top it made????And you advise very caution in making new purchases and booking profits instead???? Ramesh S Damani : There is no easy answer. We will have to watch the market. hummingbird : ipca labs and shasun chemicalsyour views on these stocks are awaitedconsidering the market cap of ipca is just 400crsand co is doing well Ramesh S Damani : IPCA is doing well…so hold on. Its Q1 results will be good. Shasun seems well prices. Joy : Rameshji how are you?Came after a long gap.I bought jct at 5.70,Shree Rajasthan at 8 ,Hindusthan Oil at 30 and Centurian bank at 11.65.Should I hold them?How long?Please guide.Best Regards. Ramesh S Damani : I own Shree Rajasthan and Hindusthan Oil. Ahmedabadguy : SIr in textile picks doesn't SUper spinning in you owning list?? Ramesh S Damani : I have bought some Super Spg KAMAL : PLEASE rate your top 3 ITES companies Ramesh S Damani : e-Serve (hold- but not buy at this rate), McMillan and Tata Honeywell. I own all 3. templeton : damaniji-- when ONGC was at 350-370, I have repeatedly asked u whether to buy it or not and u have told me not to buy it since it has a big market cap. I had told u that it has 27000 crores rs. in reserves and is likely for a huge devidend. Now the stock is near 500. What are ur comments??? Ramesh S Damani : I am just not comfortable buying a company, which is a monopoly thanks to the govt. In a deregulated market see what happened to UTI. It's a matter of philosophy, it is not the first time that the stock I have not recommended has gone up. It certainly is not the last. You have to take your own decisions. That is the key to being a good investor. kocharr : Damaniji, Guj. Alkaline has made profits after 4 years and is offering right issue at the rate of Rs 12.50 (with premium) in the ratio of 3 : 5 Do you think it is good to buy at around 37 sir? Ramesh S Damani : I don't follow the company. KAMAL : T. Honeywell was up10% yesterday . Any positive news.Is it still your second best ites pick after macmillan Ramesh S Damani : The company's balance sheet look good. jags78 : What price can we expect for Mphasis BFL after it goes ex-bonus on 3rd july , current price is 643What price can we expect for Mphasis BFL after it goes ex-bonus on 3rd july , current price is 643What price can we expect for Mphasis BFL after it goes ex-bonus on 3rd july , current price is 643What price can we expect for Mphasis BFL after it goes ex-bonus on 3rd july , current price is 643What price can we expect for Mphasis BFL after it goes ex-bonus on 3rd july , current price is 643 Ramesh S Damani : Theoretically it should open at 320. Half the price. No way to tell before hand. raja : sir its your time all of your old & new stock has gone up like tata info. , e-serve , indian rayon . Any new stock you r watching at present & your take on Blue star info? Ramesh S Damani : The management sent out a press release on United Breweries Holdings. The stock is around 22 and the company has declared a loss of 115 crore. It is time to clean up the balance sheet. The same press release states that management values the company conservatively at Rs 500 cr and at market trends around Rs 2000 cr. They have a large property in Bangalore and large holdings in McDowell etc. If you can handle some pain this makes sense. Dividend is unlikely for 2 years. I own it. I like Blue Star Infotech and all the other shares mentioned. KAMAL : AGAIN : Please advise on INDIAN RAYON and Carburundam Universal Ramesh S Damani : Both look good to me. goldeninest : pls answer anam"s question i also want the answer of same script crisi Ramesh S Damani : I am bullish on Crisil at the current time. SKK : ramsh i have asked more than 10 times. i am a snall investor - pl. reply abou t bongaoingaon refinery,maral oversea, everady, avery , good year Ramesh S Damani : These are not stocks I follow, however, they are well regarded small caps with good prospects. amitsbhatia : Good Evening Sir this is amit bhatia here Last week we had a talk abt Blue star limited sir on investsmartindia.com search for that stock and then go in for recent news u will find sales guidance growth of 100 % for FY 04. Ramesh S Damani : Thanks I'll look it up but it seems too aggressive. Ahmedabadguy : Sir do you see merits in story of MNC companies with indian outfits like fag bearing, cummins, bayer abs, clariantetc...and some indian expoting comp. in pharma,textiles, Auto parts and chemicals are pioneer in thisyear's strong market outperformance like IT comp. did in 2000..Your assessment sir???? Ramesh S Damani : In a bullish environment they all go up. Hard to make any a call so early. AnandBhatt : , SIR,YOU JUST ADVISED KAMAL IN YOUR TOP 3 PICKS TO HOLD ESERVE AT CURRENT LEVELS AND NOT BUY.WHY IS THIS?I THOUGHT ITS IN THIS PRICE RANGE FOR A LONG TIME,HAS NOT MOVED UP A LOT AND HAS AN EPS OF 20.PLEASE ANSWER. Ramesh S Damani : 2 reasons. 8% service tax on domestic business is being levied from July 1. The company needs to have new clients other than Citibank. That might take a year or 2. One client can force prices down hummingbird : ub beer has made a small profit of 1crs from a loss of 8crs last yr are yu happy and are yu happy with the guidance of16%going forwrd Ramesh S Damani : the indian beer marekt cant bevalued at 150 crs. that is the call. Valuations will improve overtime goldeninest : THANK FOR 1 ANSWER TO ME PLS TELL 2 WORDS ABOUT HPCL & IND.RAYON? Ramesh S Damani : hold both. i own hpcl raja : are u expecting any correction at present level , as every time we expect it but its looking like perfect bull market which have no resistence . on ub holding it has a major stake in Mcdowell & if mcdowell go up say 50 to 75 will it help much? Ramesh S Damani : it should help.look at the pressrelease the co has given,.it should be on some web site Pavan : Dear Damani, do you think the stocks of PSUs like CMC which are tech shares and also PSU(partly) need to be retained? Ramesh S Damani : it is now considered a Tata Share amitsbhatia : , Sir your call on Orient Abrevies with EPS of 32 Rs. and dividend of 5 Rs. at current mkt of 70 Should be Bought ?? Ramesh S Damani : Looks cheap. I will look into it. iampuru : I am a new investor trying to learn to invest in Markets. Apart from studying the market by tracking it regularly .is there any other way . I mean can some book or magazines help me ? Ramesh S Damani : Sure read 'One up on Wall Street' by Peter Lych. Read Forbes and Financial Times - London. hummingbird : esrve so dont yu feel it will be right to book profits now and enter at lower levels are yu selling a part of your holding Ramesh S Damani : That is always tricky. hummingbird : why is scottish and new castle investing 150crs in ub holdings dosnt make sense the should put 100%in ubbeerand mcdow Ramesh S Damani : To retire existing debt. durai : sir my name is duraimurugan i have invested in himatchal future and i am still trading at 1000rs loss is it advisible to hold the stock or to sell it. Ramesh S Damani : I am not bullish on it. Thanks all for joining. See you next week. Bye. |