GIC Housing Finance - Safe Bet

GIC Housing Finance (GICHF) is a company floated by GIC- re insurer of the country. Its a small outfit compared to HDFC, LIC Housing etc. It fits in the category of Gruh Finance, Canfin Homes, Dewan Housing etc. GICHF's last year's revenue was around Rs 311 Cr. In first Half year of 2010 it has posted Rs 163. Cr in Sales and Rs 40 Cr in Net profit. It has started expanding. Now it has total 27 branches and its primary focus is tier II cities like Baroda, Nasik, Nagpur. This is where the next growth in housing will take place. It has been backed by one of the biggest insurance companies in India.

Following is the comparison of selected Housing companies.

In Cr.	GIC Housing	HDFC	LIC HF	Gruh Finance
Sales	311	11338	3456	308
PAT	67.09	2826	662	68.96
EPS	12.46	99.08	70.42	20.27
PE	8.4	32.2	13.6	16.7
Dividend Yield	4%	1.1%	1.6%	1.6%
YOY Growth for Sep’10 Half Year	16%	22%	51%	57%

GICHF is available at lowest PE and highest Dividend yield today compared to other HFCs. It has posted modest growth as well on half yearly basis. LICHF has posted very high growth but has been under clouds because of the recent issue.

Today's closing price was Rs. 111, it can further go down slightly because of interest rate concern and housing slow down. It will be the best opportunity to pick this stock. Looking at the current trend it can pay higher dividend this year.

This is my view on this stock. You should review the performance of any stock before buying

Tata Steel FPO

Who needs introduction for Tata Steel. A flagship company of Tata group with revenue of more than Rs 1 lakh crore !!!

Since company bought Corus from Europe, company’s debt has increased considerably. As of Mar-10 the total loan company had amounts to Rs 53,100 Cr. The interest portion is to the order of Rs 350 Cr. In the Sep-10 quarter.

From today the company is issuing additional public shares via FPO in the price range of Rs. 594 to Rs 610. Company is bringing 57 million shares and hoping to collect Rs 3477 Cr. With this funds company plans to expand its Jameshedpur plant as well as partly refund the high cost loans. Once the company pays some of the high price loans, its interest components will go down.

In the coming quarters analysts expect that company will do better. As of today it is available at price Rs 640/- in the market about 5% higher than the FPO price (at the higher end of the band). It hit 52 week high on Rs 740/- just 2 weeks ago. Addition of the new capital will not impact much on the earning per share and other ratios.

In the last few quarters company has turned around significantly. First half year’s EPS is Rs 40  while last entire year’s EPS is Rs 60.00. Company also pays good dividend. Last year it has paid Rs 8/- as dividend per share. This year it can pay better dividend as the profits have significantly.

In the long run Tata Steel will continue to give good returns. In the FPO it is available at 5% discount to market’s price. Its worth accumulating. 

Here is a summary

• Issue Open: Jan 19, 2011 - Jan 21, 2011 
• Issue Type: 100% Book Built Issue FPO 
• Issue Size: 57,000,000 Equity Shares of Rs. 10 
• Issue Size: Rs. 3,385.80 - 3,477.00 Crore 
• Face Value: Rs. 10 Per Equity Share 
• Issue Price: Rs. 594 - Rs. 610 Per Equity Share 
• Market Lot: 10 Shares 
• Minimum Order Quantity: 10 Shares 

Savita Oil Technologies

Savita Oil Technologies (previously known as Savita Chemicals) is in the business of oil based products such as transformer oil, white oil, lubricant oil. However transformer oil is its core business.

Its a medium size company with good prospects. Since electricity generation, transmission is on the priority, transformers and transformer oil also will be in the demand. It also high multiple wind power plants solely for internal consumption. The only downside is the crude prices which is its raw material.

Current PE ratio is barely 8.1. Last few quarter's results are promising. Q'2-11 profit has increased by 38%. The company also have ample reserves. The book value stands at Rs. 219 with capital of Rs 14 Cr. This whole years EPS will be more than 70. They issued bonus shares in 2007. Another bonus can not be ruled out.

Following are the company's financials.

	2Q’11	2Q’10	FY10	FY09
Sales	373.10	275.19	1340	1298
Net Profit	30.01	21.65	86.38	17.23
NPM	8.04%	7.86%	7.31%	1.49%
EPS	20.55	14.83	59.16	11.80
Book Value (in Rs)	NA	NA	218.99	177.32
Dividend (in Rs)			15.00	5.00