Please read the DISCLAIMER at the bottom of the blog.

Rakesh Jhunjhunwala is considered to be the greatest investor in Indian Market. He is supposed to have made Rs 5000 crores by just investing Rs 5000 in Indian Stock Market. Rakesh Jhunjhunwala guru mantra to be successful in stock market is as enumerated below:

(a) He advises people to become interested in a stock when none is interested in the same stock. As per him BUY RIGHT & HOLD TIGHT for years to come. He has been holding few stocks for last 10 years and he is still minting money from those stocks.

(b) He further advises that one should not follow big investors blindly as their risk profile and long term goals with time frame may be difficult to be followed by retail investor.

(c) Market is supreme and every thing is reflected in the price and thus their is no point in fighting the trend as market is always right.

(d) One should be able to create a balance between the fear and greed.

(e) As per his words one has to learn the stock market trading as none can teach the market as stock market experience is the best teacher.

Thus follow Rakesh Jhunjhunwala advice in stock market, BE PATIENT and grow big like Warren Buffet or this iconic man from Dalaal Street.

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Wednesday, November 19, 2008

A Report on Punj Lloyd by BNP Paribas Securities ( Rakesh jhunjhunwala has a stake in Punj Lloyd)

Punj Lloyd is a global engineering firm with exposure to the Middle East, Southeast Asia, South Asia, North Africa and the Caspian regions.
The company specializes in engineering, procurement and construction (EPC) projects for the oil & gas industry. Additionally, Punj Lloyd is an EPC contractor for the infrastructure industry.
The mid-and downstream oil and gas industry contributes approximately 70% of the company’s revenue.
The sudden sharp decline in crude oil and natural gas prices, demand, and the global credit crunch has resulted in delays and cancellations of several new projects across the Middle East and Southeast Asia.
We expect the slowdown to gather momentum over the near term; so, new projects may be deferred until the prevailing conditions improve.
Over 49% of the company’s total debt is short-term in nature and will have to be renewed within the year. Renewal itself may be a challenge in the current environment due to the long gestation nature of the projects in the infrastructure industry.
The prevailing high interest rate environment will also have an adverse impact on profitability. We estimate a 140bp increase in the blended interest cost in FY10 over current levels. Our sensitivity analysis indicates that a 100bp change in interest cost results in a 3.4% change in our FY10 EPS estimate.
Auditors had qualified at the time of the FY08 results that the company had not provided for a potential loss on one of their projects.
The company claims that the project should not result in a loss as the dispute with the client is over the change in scope of the project.
At the end of Q2FY09, the amount under dispute is Rs2.2 billion or approximately 50% of our FY09 net profit estimate and approximately 8% of net worth (FY08). We expect the negative sentiment to persist until the dispute is resolved.
We have arrived at our target price of Rs146 based on 9x our FY10 consolidated EPS estimate of Rs16.24. Our 9x multiple is the lowest 1-year forward multiple that the stock has traded at since its listing. Our target price implies a 15.8% downside from the current levels.

As per Sep 08 share holding pattern of the company, Rakesh jhunjhunwala is holding 5,040,000 shares


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DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.

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