My next pick: INDBANK MERCHANTBANKING ( BSE CODE: 511473 )

[ram.ramanathan]

Indbank Merchantbanking ( Bse Code: 511473 )

Just an introduction. I recommended Modern Dairies here for a Return on Investment of 530%. http://www.traderji.com/fundamental-analysis/11318-modern-dairies-good-value-stock.html

My next pick is: Indbank Merchantbanking ( BSE Code: 511473 ) - CMP Rs.39

Here is my analysis:

1. Indbank Merchantbanking is promoted by Indian Bank (that's why I mentioned excellent promoters). This is not some Benedict Arnold company or Munnabhai company. Solid promoters who hold around 65% equity.


2. Indbank Merchantbanking is involved in the following businesses: Merchant Banking, Stock Broking, Advisory Services, Depository Participant, Distribution of mutual funds and other financial products. Indbank is also looking at getting into Insurance business (article is in item number 5).


3. Indbank Merchantbanking is growing rapidly. The latest quarter results show a net Profit of Rs.16.86 crores on an equity of Rs.44.37 Crores. EPS just for the latest quarter is Rs.3.8 and forward annualised EPS is more than Rs.15.


Here are some excellent news articles that make Indbank Merchanbanking a solid investment. I always like to provide the exact weblinks so you get the unadulterated full story.


4. http://www.thehindubusinessline.com/2007/08/29/stories/2007082952521300.htm


5. http://www.business-standard.com/banking/storypage.php?tab=r&autono=296246&subLeft=1&leftnm=2


6. http://www.thehindubusinessline.com/2007/03/19/stories/2007031901911400.htm


7. In addition to all this: Indbank Merchantbanking has a solid portfolio of investments in companies it was the underwriter, for example: Punj Lloyd, Numeric Power Systems. These investments are to the tune of Rs.45 Crore.


8. Last but not least: Macro economics and the Banking sector looks extremely attractive. Indbank Merchantbanking fits all of that perfectly.


Now you know why I set the bar so high on myself. Now you know why I'm so confident of setting higher expectations.


Indbank Merchantbanking ( BSE Code: 511473 ) - CMP Rs.39

 

[rkkarnani]

U
Just an introduction. I recommended Modern Dairies here for a Return on Investment of 530%.

My next pick is: Indbank Merchantbanking ( BSE Code: 511473 ) - CMP Rs.45, Target Rs.150
(I'm giving a higher CMP just in case the stock is locked in upper circuit for a few days. I'm confident that even if you use Rs.45 as CMP, this stock should give excellent returns)

Here is my analysis in my usual style (point by point):

1. Indbank Merchantbanking is promoted by Indian Bank (that's why I mentioned excellent promoters). This is not some Benedict Arnold company or Munnabhai company. Solid promoters who hold around 65% equity.


2. Indbank Merchantbanking is involved in the following businesses: Merchant Banking, Stock Broking, Advisory Services, Depository Participant, Distribution of mutual funds and other financial products. Indbank is also looking at getting into Insurance business (article is in item number 5).


3. Indbank Merchantbanking is growing rapidly. The latest quarter results show a net Profit of Rs.16.86 crores on an equity of Rs.44.37 Crores. EPS just for the latest quarter is Rs.3.8 and forward annualised EPS is more than Rs.15.


Here are some excellent news articles that make Indbank Merchanbanking a solid investment. I always like to provide the exact weblinks so you get the unadulterated full story.


4. http://www.thehindubusinessline.com/2007/08/29/stories/2007082952521300.htm


5. http://www.business-standard.com/banking/storypage.php?tab=r&autono=296246&subLeft=1&leftnm=2


6. http://www.thehindubusinessline.com/2007/03/19/stories/2007031901911400.htm


7. In addition to all this: Indbank Merchantbanking has a solid portfolio of investments in companies it was the underwriter, for example: Punj Lloyd, Numeric Power Systems. These investments are to the tune of Rs.45 Crore.


8. Last but not least: Macro economics and the Banking sector looks extremely attractive. Indbank Merchantbanking fits all of that perfectly.


Now you know why I set the bar so high on myself. Now you know why I'm so confident of setting higher expectations.


Indbank Merchantbanking ( BSE Code: 511473 ) - CMP Rs.45, Target Rs.150

See you all at Rs.150. Note: All my picks are long term picks. But do your due diligence and those stocks might take off even sooner.


Good luck!!!

Regards
Ram

Excuse my ignorence, but where have you posted your other reco.
Regards

 

[ram.ramanathan]

Mr.rkkarnani

ignorance is ok. No problem.

Here is where it is posted:
http://www.traderji.com/fundamental-analysis/11318-modern-dairies-good-value-stock.html

 

[rkkarnani]

Mr.rkkarnani

ignorance is ok. No problem.

Here is where it is posted:
http://www.traderji.com/fundamental-analysis/11318-modern-dairies-good-value-stock.html

Thanks , a fantastic call based on fundamentals (modern dairies)

 

[AmoghG]

Awesome, Ram. Shall follow this one closely. Was slow on the Modern Dairies one.

Regards.

 

[AmoghG]

52wk H/L (Rs) 38.00 - 6.72

!

 

[gkpc]

I am new very new here,
do advise is it prudent to switch to Indbank from JCT Ltd., holding for 3+ years, entry at 3.65, cmp 10+....

 

[ram.ramanathan]

Hi gkpc

It would be unethical for me to recommend you to sell something else and buy my recommendation. I can only recommend my pick based on my analysis. You need to talk to your broker or someone that is independent about JCT and then make a decision.

 

[scorpio155]

Real great stuff Ram, liked the way you did your analysis for mordern dairies. I am following this one. You did show me how to compare company PE from the mordern dairy example - thank you for that.

 

[ram.ramanathan]

Indbank Merchant Banking (BSE: 511473) Fundamentals look very good, I'll keep adding during dips. Indbank is headed a lot higher.

Here is my latest analysis:

1. Indbank Merchant Banking has paid all of its loans as of June 30, 2007
2. Indbank Merchant Banking has wiped out all its losses (accumulated during the years 2001, 2002 etc) using share premium account and profits.
3. Indbank's investments in shares such as Punj Lloyd, Numeric Power etc. is worth around Rs.10 a share. Moreover Indbank has quite a lot of investments that are currently not traded, but if the economy keeps doing well, those assets could be recovered as well. But I'm not counting on it.
4. CMP Rs.38 minus Rs.10 of investments (shares held by Indbank), you are paying only Rs.28 per share
5. For Rs.28 a share you are getting a company which made Rs.7 in the last 2 quarters and an annualised EPS of Rs.15
6. The best part is Indbank's brokerage business is doing extremely well, derivatives business added, number of branches doubled, they're also going to add trading terminals in Indian Bank locations. Note: cost of setting up these terminals are extremely low compared to other brokerages since Indian Bank is the parent company. Indbank is also entering Insurance business.
7. All these 1-6 points are in addition to my original analysis that Indian Bank holds 65% equity (positive), Macro economics for financial companies and investment banks look very attractive.

So I would just buy Indbank and keep it and not sell it until I feel the valuations are right.

If you have any doubts about the holding strategy, please read this thread where I posted my last recommendation:
http://forum.mumbaibull.com/viewtopic.php?t=888