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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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Monday, February 8, 2010

McNally set for better days in a benign growth climate

Shares of McNally Bharat Engineering have surged by over 600% in the past 12 months, way ahead of the appreciation of 80% for the Sensex and 115% for the capital goods index.

The company has benefited, thanks to strong financial performance and also an aggressive expansion strategy, featuring not just expansion but also acquisition and a foray into greenfield areas. Despite the sharp rise in borrowings and its debt-servicing cost, the company seems to be managing its growth quite well.

McNally Bharat is primarily engaged in the manufacture of equipment for material handling and conveying, mineral processing, coal washing and port cranes. It now has a consolidated order book of Rs 4,000 crore, which is equivalent to nearly three years of trailing 12-month sales. Further, most of its orders are from high growth areas such as power, steel and cement, providing good revenue visibility.

In line with its growth projections, the company has undertaken aggressive expansion activities, spending close to Rs 150 crore in FY09 for capital expenditure, which has swelled its balance-sheet size by over 60%. While this has increased its borrowing and interest outgo significantly, it looks well-placed to be able to service its debt obligations.

Despite the near doubling of its interest expenditure, the company has managed to record growth in profits. In fact, the company plans to spend an additional Rs 80 crore to venture into highways and road projects.

Apart from organic expansion, it is also undertaking aggressive acquisitions as well. It recently acquired a German equipment manufacturing company for close to Rs 70 crore, which would boost the bottomline by FY11. It has also signed an agreement to acquire another domestic company, in the business of construction of civil structures for cement and power plants.

The acquisition, for a consideration of Rs 37 crore subject to another independent valuation, would help it expand the scope of its work from engineering to civil works also. In another development, it has signed a technical partnership with a Singapore-based company, for constructing seawater desalination and wastewater plant.

In terms of financials, the company has shown a sharp growth of 59% in sales and a near doubling of profit (excluding extraordinary items) for Q3 of FY10. Its growth for nine months of this fiscal is also equally impressive, with a growth in sales of 80%, and a growth of 94% in profit.

With a robust order-book position, and improving operating environment, the company looks quite well-placed to record a high growth rate in the next few quarters.

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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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