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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Tuesday, January 13, 2009

BNP Paribas Securities puts REDUCE on Punj Lloyd( Part of Rakesh Jhunjhunwala Portfolio)

Our thesis of weak order inflow from oil and gas / petrochemical industries has played out. The company has disclosed new orders of approximately INR18.8b in 3QFY09, down 56% y-y.
Additionally, international orders declined 57% y-y. We believe new orders will be weak in the next 12-month period.

We estimate a decline of 22.4% y-y for new orders in FY10. There is also further evidence of a global slowdown in the petrochemical industry.

Our FY09E and FY10E EPS estimates have declined by 9% and 41%, respectively, due to lower order inflow assumptions.

SABIC has terminated its contract with Punj Lloyd (Punj) and is seeking liquidation of the performance bond and advance payment bond for a total of GBP28.5 million.

Punj may incur additional cash charges of GBP28.5 million (Rs2.1 billion) if SABIC succeeds in its claims.

We have not included this claim in our estimates; however, we now include the provision for an Rs3 billion loss (before tax) that should have been included in the FY08 results (qualified by the auditor in FY08). This loss reduces our FY09E EPS estimate by 55%.

We have lowered our target price from Rs146 to Rs86, which implies a 25.4% downside from current levels. Our Rs86 target price is based on 9x our FY10E consolidated EPS estimate of Rs9.54. We maintain our valuation multiple.

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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