Glodyne: the multibagger

Between Feb and August 2009, Glodyne increased from 160 to nearly 800, ie 5 times. It is but natural that it now takes a breather, consolidates around 700, before continuing its upward march to 500. ( exbonus)

My estimate is that by August 2010, the market should discount the FY2010 eps of 50+ by 25 times, giving a price of 1500.

CONSPIRACY OF SILENCE

As I had noted last year, once again there is a conspiracy of silence against Glodyne in the financial media. Each agency which had been consistently recommending Glodyne , like telefolio, Reliancemoney etc is silent, after its q1 result. Perhaps the well heeled, deep pocketed investors are accumulating the stock and have used their influence to silence the media while they accumulate it.

I am expecting the buy recommendations along with fresh targets , to appear in the media soon , as the date for announcement of q2 results approaches. This time the q2 results will include results from NREGA project as well as results of Broadllyne. It would be interesting to watch the results.

Glodyne : growing by leaps and bounds

As expected, Glodyne has performed very well. Mreover it has proved its investor friendliness by declaring a 42 % dividend and a 1:1 bonus. It has also entered into the education field by acquiring Broadllyne. It appreciated to 403 exbonus ( 806 cumbonus) before investors rushed to book profits. Still, the volumes are not sufficient to indicate a crash in the rice. Rather, I think manipulative forces might be at work, trying to hammer the price to enable their entry at a lower price.

The future outlook is bright. The q1 eps is around 10.25. If the performance continues on this track, we can expect a 50+ EPS for 2010.Aided by a few more acquisitions in the current year and by some more investor friendly announcements, like a 40 to 50% dividend for FY2010 and a stock split or another bonus could take the scrip to 1500 by sept 2010.

BUYING INSURANCE POLICIES

COMPARE OFFERS OVER DIFFERENT SITES
PRICE WISE : Untangle the Web before buying an insurance policy 

Anand Rawani 

COMPARE before you buy is the suggestion insurance brokers will probably give you and most of their websites will have the option of comparing the insurance policies being offered by different companies. 
While the online portals of insurance brokers or several insurance websites can save a lot of time and provide a comparison sheet for different policies, it could be misleading too. Sometimes the premium quotes provided by different websites for the same search same age, sum assured , terms and payment frequency may differ. 
SundayET ran a query for a nonsmoker of 28 years, sum assured of Rs 15 lakh and term of 10 years, from two wellknown websites Policybazaar.com and Click2insure.in. Interestingly, the premium quotes provided by both the websites were different. Click2insure.in gave quotes of Rs 3,253, Rs 4,603 and Rs 4,355 for a policy from Tata AIG Life Insurance, ICICI Prudential Life Insurance and Kotak OM Life Insurance, respectively. Policybazaar .com, however, gave the quotes of Rs 3,193, Rs 2,752 and Rs 3,392, respectively , for above mentioned companies. 
The reasons can be many for a price difference , but according to the guidelines laid down by Insurance Regulatory and Development Authority (IRDA), an insurance company cannot charge two different prices from different consumers of similar risk profile. According to Yashish Dahiya, CEO of policybazaar.com, the insurance companies provide uniform quotes. Many of the websites, which provide quotes, do not upload quotes in time and properly. But the prices must be the same, as one insurance company has exactly the same price for a certain policy across all channels. 
S K Sethi, V-P and director of Insurance Brokers Association of India, says, We are going for linking our website healthinsuranceindia.org with the websites of insurance companies so that figures get updated automatically and people get most updated figures. However , currently this is a reason for price discrimination as the latest quotes are not uploaded. 
Nevertheless, it may be possible that some of these website give quotes excluding the service charge, while in others service charges are inclusive. 
While reasons for price difference could be any, it certainly makes it difficult for a client to take a call for buying an insurance policy. SundayET provides a ready reckoner on what are the things you should look at before you buy an insurance policy online. 

SEE FEATURES, NOT JUST PRICE 

One should always look for the features that a policy has to offer you rather than just comparing on the basis of price. A low price does not necessarily mean a right choice. According to Dahiya, since insurance is a long-term product, one must go through the features of the policy and to see whether it suits the persons need. Also, only price comparison is avoidable because there are catches. 
According to Pankaj Arora, senior V-P at SMC Insurance Brokers, before you buy, make sure that a right comparison sheet is there in front of you. A right comparison sheet is one which not only provides you the price but also the coverage and exclusions of the policy. There are several kinds of risks and every policy does not necessarily cover all the risks. 

COMPARE APPLE TO APPLE 

Some of the websites such as Click2insure .in give you only premium quotes and do not mention the name of the scheme. This may be misleading in a sense that you cannot compare the features . Also, a consumer cannot have a fair price comparison, as one would not know which quotes are for which policies as most of the insurance companies offer a variant of schemes under the same category. 
In such a case, when you have a doubt, always go for some other website or cross check the figures from the website of the insurance company. In case you want to buy from the same broker or website, you should always call them for clarifications. Usually, the phone numbers of the customer support centre are mentioned on the website. 
Never forget to take screenshots or print-outs before closing the website because in the online channel the moment you close the site you lose the proof. 
Nevertheless, you may not get a comprehensive comparison of all the insurance companies from a single website. For instance, Policybazaar.com gives you quote from only six companies, whereas, Click2insure.in provides you a quote of around nine companies. Most of the websites provide the quotes for companies with which they have tie-ups . According to Arora, in case a website does not provide a comprehensive comparison , the customer should move on to some other websites, which include most of the insurance companies. anand.rawani@timesgroup .com

FILING INCOME TAX RETURNS

Happy RETURNS 

From filing I-T papers online to claiming refunds, new norms have evolved. Lisa Mary Thomson updates you on the changes


THIS IS one battle where aggression and speed are not critical to the outcome . To win this encounter with the taxman, the only trick is to go back to a lesson that you practiced daily in school, that of copying details accurately from the multiple financial documents in to the numerous columns that run down every page of the ITR form. Make a mistake somewhere and you may end up shelling out more of the big bucks that you earned after spending all those late nights in the office. 
So whats new After all, youve been doing this for years. Well, like almost everything else in life, income-tax norms too have evolved with time. To keep yourself in total control of the process, SundayET keeps you abreast of some of the changes that have come about in the process of filing your returns. 

THE ONLINE MODE 

If you find that youre out of your hometown or country in the week preceding July 31, which is the last date for salaried individuals to file returns, rest assured that there is a way out. The income-tax department has made provisions whereby you can register with their website, download the ITR form, fill it and then upload it. If you use a digital signature , then you just need to take a print out of the acknowledgment that is generated once the process is successfully transmitted. However , if the assessee does not use a digital signature for electronically transmitting the data, he is required to follow-up the electronic transmission of the data by submitting the Form ITR-V (i.e. provisional acknowledgment receipt with the income-tax ), says Divya Baweja, partner, BMR Advisors. The form needs to be submitted to the Centralized Processing Centre (CPC) of the income-tax department in Bangalore within a span of 30 days after completion of online formalities in contrast to the earlier time frame of 15 days. Once this is received, the CPC will send you an e-mail acknowledging the receipt of the form to the e-mail address that you have specified in your returns. If this process is not followed, then your returns will be considered invalid. 

KEEP YOUR EYES OPEN 

Even if youre choosing to fill your tax returns via paper, there are a couple of things that you need to watch out for. For instance, irrespective of whether you want to claim your refund via cheque or through the Electronic Clearing Scheme, it is mandatory to include details such as your bank account number, your MICR (Magnetic Ink Character Recognition ) code, to mention the type of account that you possess, your PAN number or the designation of the assessing officer. While these are routine requirements, Homi Mistry, partner at Deloitte, points out that in many cases, the MICR code is not entered or not filled in correctly and that many individuals find it difficult to locate the designation of the assessing officer in their area. An individual should always cross-check the MICR code from his cheque leaf or from the bank where he has an account. An individual can obtain the designation of the AO from My Jurisdiction after logging in on the income tax website, says Mistry. Also make sure that you quote your PAN number clearly as this is the only number that is used in your dealings with the income tax department and the tax laws also impose a penalty for not quoting your PAN number or for quoting it incorrectly . Its also important to ensure that there are no differences in the PAN number that you quote in the challan that you would need to fill for the payment of advance or self-assessment tax. Also make it a point to be honest with your disclosures as well as all the areas where you can claim deductions under Section 80C, 80D, 80E, 80G and 80GG of the income tax act. 
Another change that has come about since the financial year 2006-2007 is that when it comes to tax deduction, you do not need to file any annexures or certificates while filing your returns but simply need to include all the details in the return form. In fact, the tax officers may refuse to take your forms if you have additional certificates. Though the tax deduction certificates need not be filed as annexure to the return, it is recommended that the certificates are retained in files if required to be produced as proof of taxes deducted at source to the tax authorities at any later date, says Amitabh Singh, tax partner, Ernst & Young. 
From April 1 2009, the format of the tax withholding certificate (Form 16/16A) has been modified to include a Unique Transaction Number (UTN). This additional number needs to be filled in for individuals to claim credit for the taxes deducted and deposited by employer /tax deductor. However, Mistry points out that the system is not yet fully operational. 

FINAL CALL 

While the last date for salaried individuals for filing their tax returns is July 31, many individuals have expressed doubts as to whether they should wait for the Budget to be announced before they file their returns. Most experts, however, feel that any pronouncements that will be made will most likely only be applicable from the financial year starting April 2009. Even if the government comes up with certain change that has retrospective effect, an individual can always go ahead and revise his tax return . A return can be revised any time within one year from the end of the relevant assessment year or before the assessment is made, whichever is earlier, says Baweja. Once your return is filed, ensure that the tax officer returns the stamped acknowledgment sheet where the date and the serial number are legible. 

BE HONEST 

YOU WOULD NEED TO MAKE A DISCLOSURE IF YOU HAVE 

Cash deposits 

of more than ten lakh rupees in your account 

Credit card 

payment aggregating to two lakh rupees or more in a year. 

Spent two 

lakh rupees or more for purchase of units of Mutual Funds. 

Paid one 

lakh rupees or more for acquiring shares issued by a company. 

Bought bonds 

and debentures for five lakh rupees or more 

Purchased immovable 

property valued at thirty lakh rupees or more. 

Sold immovable 

property valued at thirty lakh rupees or more. 

Paid five 

lakh rupees to invest in bonds issued by RBI

Cool companies

Cool companies

May 28, 2009

What makes a company cool? Well, youth, as we have seen in the recent elections, is one barometer of “coolness”. But that isn’t the only factor. This listing is not an “objective” one made by researchers poring over data. Instead, we at Business Today went to our reporters and asked them to nominate companies. Companies that may or may not have made it into our various other listings. Companies, that, in more ways than one—product offering, communication, management style—were challenging assumptions. And, while putting this together, we realised that you don’t have to be young to be cool. The Indian National Congress will be 125 years old next year, but voters still love the party. So, we looked at larger, older companies, which were giving themselves a makeover as well. And we found some genuine surprises. We will not boast that our list is comprehensive or the “best”, but trust us, this is a cool listing made by a very cool bunch of people: Our reporters. So, sit back and enjoy the read! Pizza Mania: Domino’s Pizza Founded in 1995 Founders: The Indian Franchise, held by Jubilant Group Main business: Pizza Delivery Revenue: Over Rs 300 crore (approx.) Why it is cool: A delivery boy can become GM. (The GM for Western India is one such man) OK, delivery boy to GM is great for attracting talent. But what keeps the cash flowing into Domino’s is its skill at making pizzas an all-purpose affordable snack. “The biggest challenge for us is not from other chains but from roadside eateries—in a year if people have 60 meals outside home, pizza accounts for just about one,” says Ajay Kaul, CEO, Domino’s Pizza, India. Kaul told his “food technologists” to develop a low-cost pizza, and thus was born the “Pizza Mania” pizza starting at Rs 35. “This pizza began to draw in a whole new type of customer,” says Kaul, narrating how labourers and auto-rickshaw drivers began dropping in. It opened 60 outlets in 2008. Coming up next: a Domino’s in Gangtok, Sikkim, and many more new locations. —Kushan Mitra Ecomantra: Going Green  Founded in 2001 Founders: Ravi Goel (35) and Mahrukh Goel (35) Main business: ‘Green’ experiential learning Revenue: Rs 1 crore for 2008 Why it is cool:Ecomantra specialises in experiential learning via activities and eco-friendly holidays. The jungle offers city slickers everything—team building activities in a boom, salesmanship in a downturn. But it took Mahrukh and Ravi Goel to spot the perfect cocktail of eco-tourism, camping and corporate training. Shortly after their website Ecomantra.com went live in 2001 with offers of experiential learning exercises and holidays, the duo were chased by blue chips keen to outsource their learning activities. Ecomantra manages the Rivertrail eco-retreat, a camp site along the river Kundalika that is Maharashtra’s first and only community owned campsite. The next step for Ecomantra, he adds, is to get into sales training for companies. “In the last decade, teambuilding activities were the fad; now sales training will be vital.” The duo is aiming for revenues of Rs 70 crore by 2015. Ravi has been actively involved in setting up Indian Sustainable Tourism Network for eco-friendly tourism agencies to come together. —Anamika Butalia IndiGo: No-fuss growth Founded in 2005 Founders: Rahul Bhatia and Rakesh Gangwal Main business: Passenger Airline Revenue: Estimated at over Rs 750 crore for 2008-09 Why it is cool: While the big boys of Indian aviation are quickly reducing their fleet, IndiGo keeps on adding planes, destinations and routes At the 2005 Paris air show, Vijay Mallya made India sit up when he ordered five Airbus 380s. But a yet-to-be-launched Indian carrier, IndiGo, stunned the world and India by announcing plans to order 100 Airbus A320s. Even journalists from India were asking, “Who on earth is IndiGo?” Not any more. What makes IndiGo so special? IndiGo goes about its business quietly. Recently, it inducted its 20th aircraft. And this, when larger players like Jet and Kingfisher are sending aircraft back to lessors. “Well, we do market ourselves as India’s ‘Coolest Airline’,” jokes Aditya Ghosh, President, IndiGo. His formula for successs? “Simple ticketing, simple check-in, and ontime flying.” In less than three years, IndiGo has managed to fly almost 10 million passengers. “Listen, 94 per cent of our flights reach ontime and that is possibly the biggest ‘frill’ you can offer anyone,” Ghosh says. Slowdown or no slowdown, IndiGo plans to add destinations, is adding aircraft, and growing marketshare (from 10.5 per cent this time last year to 13.7 per cent currently). It also has a high load factor of over 70 per cent. —Kushan Mitra iYogi: Caught speeding! Founded in 2005 Founders: Uday Challu and Vishal Dhar Main business: Technical support to PC users at home and in small businesses Revenue: $7.1 million for 2008-09 Why it is cool: Present in US, UK, Canada, it’s growing 15 per cent a month and has now launched its services in Australia These are testing times for us,” says Uday Challu, Founder & CEO, iYogi. The slowdown? “No, because we are growing faster than ever…at 15 per cent a month,” he replies. What iYogi was adding in six months last year by way of capacity and customers, it is now adding each month. And it has just acquired a US-based PC concierge company. “The challenge is to get the growth right, but we have all good problems,” says Challu. iYogi, which Challu founded with Vishal Dhar, President, Marketing, provides technical assistance to home and small business computer-users via phone and remote access. Based out of Gurgaon, iYogi’s 500 yogis (that’s what it calls its agents) support about 70,000 customers across the US, the UK, Canada, and now Australia. “We have got right what IT industry has not,” says Challu. “OEMs understand enterprises, but the consumer is a different ballgame.” This year, iYogi wants to make waves in India. It is currently running a beta with a telecom service provider to provide complete management of IT services of small business users. Every exchange that an iYogi customer has with its staff ends with a “Good karma” wish for the customer. Seems all “good karma” is coming back to iYogi! —Saumya Bhattacharya  Lifecell: Cold store, hot growth Founded in 2004 Founder: Abhaya Kumar Main business: Stem-cell banking and stem-cell solutions provider Revenue: Rs 16 crore for 2008 Why it is cool: It now provides all the services coming under stem cells, thus entrenching itself as a first mover Mayur Abhaya, Executive Director, Lifecell, is gung-ho about his company’s prospects because of his first-mover advantage in stem-cells storage and application, through research and clinical trials. Starting with cord blood banking, it has moved on to cord tissue banking and is getting into menstrual blood banking. While the first is useful for some congenital diseases, the second can be used to treat a variety of disorders such as Type 1 diabetes, stroke, osteoarthritis, Parkinson’s disease and retinal nerve degeneration. Menstrual blood is particularly good for all kinds of tissue generation, including bone and other organs, owing to its intrinsic regenerative abilities. For men—who don’t have the benefit of stored menstrual blood tissue—LifeCell has tied up with Harvest Technologies of Boston for point-of-contact bone marrow aspirates (for clinical trials) that can inject the stem cell concentrate in 15 minutes. LifeCell has its own DSIR-approved research lab and is planning to set up one more in West Asia. It runs a clinical trial centre in Ramachandra Medical College at Chennai and has joined the select tribe of 600 clinical trials under way in this field globally. —Nitya Varadarajan Meru Cab Company: Taxiing for Takeoff Founded in 2006 Founder: Neeraj Gupta Main business: Radio taxi Revenue: Rs 100 crore (approx.) India's first and largest radio taxi operator, it changed the way metered taxis operate in India Why it is cool: India's first and largest radio taxi operator, it changed the way metered taxis operate in India Taxi commuters in cities like Mumbai and Delhi used to have nightmares dealing with flat rates and faulty meters—till Meru Cab rolled out its fleet of air-conditioned taxis outfitted with radio communications and GPS. Meru began in Mumbai and is now present in Delhi, Hyderabad and Bangalore. For Meru Cab’s Founder Neeraj Gupta, the biggest challenge was to get the permits: the government had stopped issuing fresh permits in Mumbai. So Meru came up with its first innovation: it bought the permits from existing operators by paying a premium. By the first quarter of 2007, it had 50 cabs on the roads. Meru owns the cabs, while the drivers pay it a fixed Rs 700 a day and buy their own fuel. They get to keep anything extra. This way, a driver earns an average of Rs 13,000-15,000 a month, nearly double the earnings of a regular cabbie. Meru also earns from advertising on the taxis. To fund the acquisition of its fleet, Meru brought in private equity firm India Value Fund, which owns majority stake in it. Gupta expects to make a profit from next year. —Virendra Verma Only much louder: Rocking Rock! Founded in 2000-01 Founders: Vijay Nair (25), Girish ‘Bobby’ Talwar (29) Main business: Artiste management Revenue: Rs 1.8 crore for 2008 Why it is cool: OML has created a niche business in which it remains the leader Vijay Nair can’t make music, but has been making pots of money by doing what he loves best: Giving Indian rock music the same visibility as traditional classical instruments or Bollywood. Nair, Founder of Only Much Louder (OML), was a teenager when he began by managing bands along with Sandeep Mittal, Founder of Gigpad.com, back in 1999. OML came two years later, when he founded it with Vishal Dadlani of the rock band Pentagram. They managed the engagements of other rock bands. In 2004, Girish ‘Bobby’ Talwar joined Nair and turned OML into a private limited company. By 2005, OML was working on over 100 events in a year. In 2007, it set up a record label, Counter Culture, which has cut ten albums for rock bands, and Babble Fish Productions, a production house to shoot live shows. Vishal and Vijay started without any capital; today their annual revenue is nearly Rs 2 crore. “We started out with zero capital and we’ve always made money,” says Nair. “It’s really an exciting business since I lack creativity… I can’t even play a musical instrument.” —Anamika Butalia Prime focus:‘Unqualified’ genius Founded in 1996 Founder: Namit Malhotra Main business: Integrated post-production and visual effects services company Revenue: Rs 266 crore for nine months ended December 2008 Why it is cool: A youthful Indian multinational that has been built purely on talent and technology Considering that they knew nothing about the business of television post-production and visual effects when they launched Prime Focus in 1996, Namit Malhotra and four of his friends have done pretty well: 60 per cent of the Indian market. Prime Focus offers end-toend services in every aspect of production and post-production, for film as well as advertising. “Imagine, a decade ago, when I started along with four of my friends, we knew nothing about this business. We did not have big qualifications and had never worked in big multinationals. But we are today the only Indian multinational in post-production and visual effects,” says Malhotra. He takes pride in employing many freshers who do not have any qualifications but are great creatives. Malhotra has another skill: taking over distressed assets abroad and turning them around, as Prime Focus has done with VTR in the UK and Frantic Films in the US. The acquisitions have given Prime Focus a chance to be associated with films such Spiderman 3, Fantastic Four and Superman Returns. A third of Prime is international talent. “… A significant amount of work can be carried out by facilities across time zones in a cost-efficient manner,” says Malhotra. —Anusha Subramanian Turtle: Ninja Turtle Founded in 1993 Founders: Sanjay Jhunjhunwala and Amit Ladsaria Main business: Branded men’s fashion wear(Shirts, suits and trousers) Revenue: Rs 62 crore for 2008-09 Why is it cool: Has posted best ever figures despite the downturn, with affordable high-fashion Recession is more in the mind—if your mind thinks there is recession, the recession is very strong,” says Amit Ladsaria, Director of Turtle Limited, the Kolkata-based men’s apparel maker. Turtle has just reported a turnover of Rs 62 crore, its highest ever, in 2008-09, up from Rs 46 crore the previous year. “We did better in the second-half…this year, we plan to grow by another 30 per cent,” he says, explaining why: “People will stop buying Louis Philippe and buy Turtle”. Turtle shirts end at Rs 900, way below its rivals. It has implemented Oracle e-biz to connect its 32 stores to its head office in grimy Howrah. “Our nature is not rampant growth,” says Ladsaria, adding that Turtle stands for turtles: slow and steady…long life…tough exterior, soft interior… When it comes to shirts, Turtle is fussy: it creates its own fabric designs and gets the fabrics made to order. Today, it also makes suits, trousers and denims as well. Last year, it created a sub-brand, London Bridge, for shirts made of blends, leaving the pure cotton shirts for Turtle. —Somnath Dasgupta COOL LARGE COMAPNIES Bata: Naughty boys to chic ladies Founded in 1931 Founder: Thomas Bata Main business: Footwear Revenue: Rs 1,008 crore for 2008 Why is it cool: Has emerged stronger in the face of competition from cheaper players in the unorganised sector Be surprised,” goes Bata’s campaign slogan. And surprised we are at Bata India’s turnaround story. For 2008, which is also Bata’s financial year, it posted its best-ever numbers: a PBT of Rs 71.84 crore, a growth of 30 per cent over the figure for 2007. Bata also stepped into new territories like industrial safety shoes, built a direct marketing channel and expanded its retail chain. The story hasn’t always been rosy: labour trouble, bad decisions, competition from cheaper brands. Things started looking up in 2005, when old loyalist Marcelo Villagran was made MD. New collections, a tiered store structure, specialised manufacturing bases and stores kept time with mall culture. “We started focussing on concept-based designs, and paid attention to the smallest of things: keeping stores open till late and displaying all our shoes in pairs,” recalls Villagran. New designers and changing collections also helped. No-frills school shoes gave way to chic high-heeled numbers and the customers returned. Bata plans to open 70 stores this year and is expecting a 10 per cent increase in sales. —Anumeha Chaturvedi  Cavinkare: Still blazing a trail Founded in 1983 Founder: C.K. Ranganathan Main business: Retailing personal care, foods Revenue: Rs 700 crore for 2008 Why is it cool: Has several unique lines of distribution and is getting into manufacturing to provide a benchmark from those it outsources Cavinkare, the company that pioneered the satchet revolution in personal care products, is still a pioneer in distribution, and remains cool. It acquired fame by fighting Hindustan Lever, but has never seen a negative growth since inception, either in top line or bottom line. Today, it files patent claims every other month, and has shifted from being a pure-play distributor to being a manufacturer also “only to set a benchmark for our vendors in terms of quality”, says C. K. Ranganathan, Chairman & Managing Director. He learnt the art of delegating and continued to build the company by acquiring new lines of business like packaged food. He also acquired the distributorship for Adidas, the men’s sportswear brand, to get an entry into high-end retail stores and leverage this with premium personal care products. CavinKare also has its own beauty parlours and plans to get into the restaurant business. “We plan to touch the customer every day some way,” says Ranganathan. The turnover target for 2009-10 is projected to be above Rs 1,000 crore. —Nitya Varadarajan HCC: The tougher the better Founded in 1926 Founder: Walchand Hirachand Main business: Construction Revenue: Rs 3,572 crore for 2008-09 Why it is cool: Taking up complex engineering projects like Bandra-Worli sea link in Mumbai, setting up India’s first man-made hill station Lavasa and Mumbai’s biggest commercial complex In early 2000, Hindustan Construction Company (HCC) got a real estate survey done through Accenture and Indian Market Research Bureau to find whether there was scope for setting up a selfsustained city. The findings: no, there was no market for such a thing. But HCC Chairman & MD Ajit Gulabchand went ahead. His dream project is coming up near Pune, as Lavasa hill station. The first phase is expected to be operational by next year; HCC subsidiary, Lavasa Corporation, has already reported a net profit of Rs 122 crore on revenues of Rs 212 crore for the quarter to March 2009. One of the oldest construction firms, HCC has a habit of going off the beaten track: it is also building the hugely complex Bandra-Worli Sea Link in Mumbai and has plans for the nuclear power sector. “We find large projects help us achieve our turnover targets with fewer projects that we can manage with fewer project management teams,” says Gulabchand. —Virendra Verma SBI: Banking on brand value Founded in 1921 Founder: Govt. of India Main business: Financial services Revenue: Rs 1,13,093 crore for 2008-09 Why it is cool: Introduced 8 per cent home loan when other banks were afraid to lend, received huge retail deposits after the financial crisis and improved profits despite lower lending rates What financial storm? State Bank of India seemed to be saying as depositors spooked by the global banking collapse stuffed their cash into SBI—at the rate of Rs 1,000 crore a day! Chairman O.P. Bhatt threw out this factoid while presenting the annual results for 2008-09 recently (a 35.5 per cent increase in net profit). “After the US crisis and liquidity crunch, investors felt the need for a safe place to park their money and SBI was preferred over other banks,” says Bhatt. When the government wanted the economy to get a fillip, it was left to SBI to lead the way. As the downturn bit, SBI also spooked rivals by offering cheap car loans and home loans (8 per cent a year for the first year). Mind you, Bhatt says the bank is making money at even this 8 per cent lending rate. So, even as fearful banks put the brakes on retail lending, SBI expanded its loan book, growing its home loan portfolio by 21 per cent in 2008-09 (industry growth: 17 per cent). In January 2008, it had become the No. 1 bank by market cap, overtaking private sector giant ICICI Bank—and has maintained its position since then. During the year, it also raised a total of Rs 16,000 crore via rights issues from the public and the government. —Virendra Verma  Madison World: Fun—and work too! Founded in 1988 Founder: Sam Balsara Main business: Media buying and planning Revenue: Over Rs 2,300 crore of media billings Why it is cool: Works hard to deliver cleint objectives and is the only Indian agency to pick up a majority stake in a foreign media agency Sell out to a foreign partner? What better way to kill such rumours than buying another agency. Last year, Sam Balsara and his home-grown agency, Madison World, took everyone by surprise when it picked up a 51 per cent stake in WPP’s media agency, Mediacom. Today, with media billings in excess of Rs 2,300 crore, Madison World is now second only to Group M agencies put together, and one of the fastest growing in India, with an annual rate of around 25 per cent. Its clients include P&G Gillette, Coca-Cola, Airtel, Godrej, Marico, TVS, Cadbury, GM, Levis and Indian Oil Corp. But while they work hard, they also have fun. Balsara admits that the fun thing became big ever since he decided to make Madison an employer of choice. Plus, the focus was never on growth or money. “All I always wanted was to do a good job for the clients…We look upon money and growth as by-products of our delivery to our existing clients,” he says. So, Madison is big on strategy sessions to discuss how to make the client’s business grow. None on growing Madison! —Anusha Subramanian  Larsen & Toubro: Tasked to build Founded in 1938 Founders: Henning Holck-Larsen and Soren Kristian Toubro Main business: Engineering, infrastructure, construction Revenue: Rs 25,187 crore for 2008 Why it is cool: Widely held, professionally managed, open organisation with an India-first motto An engineering major that loves hard-hats more than it does MBAs, a seniority-led company that has been restructured into a cluster of virtual companies allowing talent of any age to rise to the top. And the clincher: there is no defined “promoter” group or controlling faction, the bane of many Indian companies. That’s Larsen & Toubro for you. Why is it cool? Throw that question at L&T Chairman A.M. Naik and he says: “It’s India first, then the company and then the individual at L&T. There are many ways of making money, but we choose to make money while building the country.” It has faced takeover threats in the recent past—from Reliance and from AV Birla Group outfit, Grasim. “Our motto remains customer first. Even as there have been boardroom battles with Reliance and Grasim, they remained and still are our biggest customers,” says Naik.

CONSOLIDATION

Now thw price of Glodyne is consolidating around 450 levels.

If it delivers a blockbuster performance for q4 and FY09, then it should appreciate in around 900 levels.

It needs just 15 consecutive 5 % circuits to reach 900 from this level. We have seen how comfortable it almost tripled from 160 to 470 levels in just a couple of months. So , doubling to 900 from 450 is no big deal and it can surely happen by september, once the 2010 earnings become visible.

Of course , if the circuit limits are relaxed, then the time frames will be compressed and the target of 900 or 1000 will be reached much faster.

UPDATE

As I had predicted  in one of my previous posts, the price has appreciated more than 100 % from 175 to  420. But still ,the scrip is conspicuous by its absence in the print media. It is again a conspiracy of silence by the smart and well heeled investors. You can find recommendations about many other inferior performers , but not about Glodyne. It has been recommended once by telefolio, and by some other financial sites on the web. Telefolio is a paid service and searching these other reports on the web is like seearching for a needle in a haystack.

Now , the market is waiting for the q4 and fy04 results, which glodyne has decided to club together and announce by june 30th. Generally, the market hammers the companies which do this. However, glodyne has been spared. sarnaik has indicated in one of his interviews that the promoters are planning to increase their stake. Either they have skipped the q4 results to depress the price, or , they want to report an increased stake along with the q4/fy09 results and have bought time to enable them do the same.

9 FEB 2009

Today, the volumes of glodyne in BSE surged to 1.1 lakh shares while in NSE it was below 5000. This might be an all time high as far as trading volume on BSE is concerned. Perhaps it is due to the positive report from Reliancemoney. the stock was up 5 % on both the exchanges. 

I think once the entire floating stock in tghe hands of small investors passes into the hands of strategic long term investors, then we will start seeing reports in the media and the stock will start appreciating fast due to low2 floating stock,

180 X 1.05exp45 = 1617

Just as the price had continuously hit lower ckt for many days at a stretch, it might now hit the upper ckt continuously for many days. It just needs 45 upper ckts for it to reach 1700 which is the true price of the scrip in june 2010.

Maybe the mgmt colluded in hammering the price to increase their holdings . when they will need to go for a public issue, they will definitely ramp up the price.

CONSPIRACY OF SILENCE

Right now there seems to be a conspiracy of silence as far as glodyne is concerned. It  has declared excellent q3 results, but except for a small box item in ET, I have not seen the news anywhere in the print media. the result is available at many sites on the web, but searching for it in the print media is like searching for a needle in a haystack. Perhaps that is why  the operators in the scrip are able to frighten small investors into selling their holdings , by relentlessly hammering the price of the scrip . The trading volume in the scrip is mostly below 5000 in both the exchanges.

I  think action in the scrip will start once Reliancemoney or telefolio comes out with a buy report on the scrip. Only then will people become aware of its result and will start buying the scrip.

PATIENCE

Despitethe fact that Glodyne has come out which such fantastic results, its price keeps on falling. I think this is basically because of irrational fears in the minds of investors regarding  pledging of promoters quota shares .Moreover looking at the volumes, there might well be some unscrupulous brokers or investors pushing the price down by buying and selling  among themselves, so as to frighten the retail investors into dumping their shares. If a seasoned investor like me can feel so frightened, then what can we expect from poor retail investors  in the current environment.

It might also be the final bear charge before the tide turns due to a positive budget. Once the tide turns, it takes just 30 sessions of 5 % growth in price , to more than quadruple the price.

If glodyne declares a dividend of 20 % and a BV of 130 + in september, then that can take the scrip to a price of 800.

Triggers :

FY 09 EPs of 70 or mre.

Buyout of some company in the SOC space.

Dividend of 20 %.

Positive guidance for FY 2010.

Riding out such phases requires extreme patience and perseverance.

Riding out  this phase of a downturn in the market without selling your holdings in panic, requires lot of resilience and faith in yourself. Pray to God to provide you the necessary  strength.

4 feb 2009 : Glodyne vs ADSL

Allied digital is going down even though it runs both NOCs as well as SOCs. Glodyne at present is only present in NOCs. It is on the lookout for a suitable acquisition in the area of SOCs. The demand and margins in running SOCs are very high. The fact that glodyne is able to generate high profts despite not having the full range of RIMS infrastructure speaks volumes for its management quality and efficiency.

At present RIMS forms a small component of its IMS business.As it increases the RIMS component and as it gets into running SOCs, it is but natural that its margins will increase.

Clients also prefer providers whose core competence lies in the IMS area , rather than diversified software companies getting into this business because of the high margins.

Glodyne is a company run by technocrats. It also has an application software division which in combination with its IMS capabilities, ncreases the business prospects.

So, finally, keeping all these aspects in mind, I again say that if I were to have onlly one company in my portfolio, in this difficult business environment, it would certainly be Glodyne.......

At present Glodyne seems to be consolidating around 175. Once it reenters the 20 % price band, it will take  just 5 sessions for it to double to 350. Trigger could be some +ve news of an order or some acquisition abroad in the SOC space.

3 Feb 2009

Glodyne seems to be going through  a consolidation phase. It is trying to stabilize around 175.  Once its price band changes to 20 % , then it will take just 4 days for it to reach 310. Subsequently it can reach 600 in just 15 days. 

I think the pullback to 600 will also be as sharp as the downfall was, once the annual results are out, hopefully with some positive news of it taking over a company in the SOC space and once the new government is in place .

Anyhow I should never lose sight of my target of retaining just 15000 shares and selling the balance for a realization of around 40 to 50 lakhs. The 15000 shares that I retain can then be sold later for a net realization of at least 3 to 4 crores.