Investement Idea

SEAMEC

CMP 201/-

SEAMEC - is a MNC outfit of Technip Group of France. Its leader in operating MSVs/DSV in India, with 4 out of 6 vessels belonging to it and balance 2 are with ONGC. There are just about 30-35 MSV's operating in the world. They are specialized vessels used for undertaking any kind of underwater engg, maintenance and developmental works.

The company now has strategy of deploying vessels on long term charters as against in the spot market, therefore the cash flow for the future is better predictable.

All the ships are fully deployed right now and charter rates are also strong, due to strong demand for such vessels. In past due to focus on spot market and also due to some kind of accidents etc, the performance of company was quite erratic and thus valuations of stock suffered too much.

Company's balance sheet is quite robust with Zero debt, huge cash balances and it is also likely to generate almost Rs. 265 cr for year ending Dec.'09. With market Cap of just Rs 680 Crs, this stock with likely [for Dec'09] NAV of Rs 350 per share and EPS of Rs 70; appears dam cheap at Rs 200/-. 

I think by the time annual results for Dec'09 are announced, stock can easily reach 260-280. BUY.

Free Trading Tips

First calls



LARSEN & TOUBRO( LT)
Execution Price Range                                     Stop Loss                             Target
Buy Between Rs 1570 to 1582                       1555                                     1618



HDFC LTD
Execution Price Range                                     Stop Loss                             Target
Buy Between Rs 2670 to 2682                        2655                                    2717


SBIN (STATE BANK OF INDIA)
Execution Price Range                                    Stop Loss                           Target
Buy Between Rs 2200 to 2210                      2186                                    2242

Daily Trading Calls

Dollar

USD/INR Daily



Dollar futures gave up its gains on Thursday after touching multi week high of 47.74 in morning session. Dollar closed at Rs.47.31/usd a fall of 43 paisa from the high as dollar index fell after 5 days of rise to touch 75.79 from high of 76.63 which it touched on Wednesday. However divergence was seen between USDINR and Indian Equity markets as despite fall in currencies, Nifty also fell and closed 75 points down at 4750 levels. Monthly expiry of futures contract was the key reason behind the fall in equity markets as bulls remained under pressure this month. One of the key indicators responsible for reversal in major asset classes was the GDP data of U.S. American quarterly GDP figures surpassed expectations as the world’s largest economy rose by 3.5% against anticipation of 3.2%. Dow Jones rose by 199 points or 2.05% after release of this data with index touching 9962 points. India’s inflation continued to rise with WPI rising by 1.51% against previous week’s rise of 1.21%. Looking at today’s trend of USDINR we expect a gap down opening of the currency pair. 46.97 is expected to act as a crucial support for the pair on intraday basis.

Market Summary

Last trading day: Thursday, 29 October

 Global weakness, end of October F&O series saw volatility on the Indian market that ended at the low point of the day but on heavy volumes. The recovery in the day was seen as a short covering rally. Experts believe there could be a bounce in the near-term after 8 straight days of correction and this could be used as an opportunity to book profits. Sensex shut shop at 16052, down 230 points and Nifty was at 4750, down 75 points from the previous close. CNX Midcap index was down 1.25% and BSE Smallcap index was down 1.29%. There was heavy selling in realty stocks, index down 6%. The market breadth was in the negative with advances at 317 against declines of 958 on the NSE. Top Nifty gainers included Mahindra & Mahindra, BPCL and Ranbaxy while losers were DLF, RCom and Reliance Capital.