st or’s Focus

Inve -Madhukar Das

Volume 1 Issue 3

Nava Bharat Ventures Ltd.

-Nov. 14, 2010
The markets have corrected by about 4% in the past few trading sessions. The correc-
tion is not expected to be deep therefore we would consider it to be an opportunity to Other Picks
do short term trades.
Fundamentally Speaking BUY :
Nava Bharat Ventures is a diversified company engaged in power generation, sugar
PTL Enterprise
production, ferro alloys and infrastructure business. It has international presence in
singappore and is engaged in several mining projects. In India, currently, the com- CMP—`36.30
pany has a total power generation capacity of 237 mw, including 94 mw at Paloncha Target—`39.2
in Khammam district and 20 mw at Dharmavaram in the East Godavari district of
Andhra Pradesh and is adding 64 mw at its Orissa plant. Net sales for Q2FY11 im- Stop Loss—`35
proved by 18% (YoY) but remained flat (QoQ) at Rs 2880 million. Sales growth over
Q2FY10 is attributed to 201% sales growth in ferro alloy, despite 13% and 7% sales
decline in power and sugar segment respectively. The management expects the mer- Sell :
chant power rates to recover from current level in Q4 FY11 and stabilize, increasing Reliance Comm.
the bottom line along with the topline growth in the current fiscal. The power plant
capacity increase is on the cards for NBVL and the planned capacity increase over CMP—`176.10
the next 2 years will hike it to 600mw. With net cash of Rs3bn as at Sept ’10, NBVL Target—`164
appears adequately funded for current growth plans. NBVL is attractively valued at
Stop Loss—`183
5.3x FY12 estimated earnings. Adjusted P/E for trailing twelve months is 6.08 and
P/B value stands at 1.65. DLF
CMP—`341.50
Technically Speaking Target—`319.50
Stop Loss—`355

Special points of in-

The daily price chart is forming a
rounded bottom pattern. If there is
again a fall of about 2% it may form a
head and shoulders pattern. Also the
weekly price chart is forming double
bottom pattern. Hence a short term buy
signal is indicated.
Healthy spike in volume in past few
trading sessions.
Stochastic chart shows that the
stock has remained in the oversold
region for past few session. The
prices has started moving up de-
spite sharp correction in markets
in last 3 sessions. Therefore prices
may move up when bulls step in
again.
RSI also in oversold region and
just crossed the line from below.
The Williams %R and Commod-
ity channel index also suggesting
that the stock remained in the
oversold region and has started to
move up signaling a short term
gain opportunity in the scrip.
Recommendation : BUY
CMP : `344
Target Price : `370-373
Stop loss : `330
terest:
Since we are looking at a
trading horizon of 15-30
days, we shall give more
weightage to technical
analysis and price trend
of the stock.
We shall also study the
fundamental aspects of a
company to avoid getting
into loss making trade
positions in case of
movement of market in
direction opposite to that
of my prediction.