Buy Raymond

Raymond (Cmp 381) Buy with a stop loss of 370 for 432

Raymond Monsanto SRF and ACE

Raymond (Rs 367.5): Raymond was moving at a sedate pace, in the band between Rs 180 and Rs 270, till August this year. But the stock suddenly spiked higher this month to record an increase of Rs 185 or 81 per cent in just nine sessions. Immediate resistance for the stock is at Rs 416. This is a key medium- and long-term resistance since it occurs at 61.8 per cent retracement of the decline from May 2006 peak.

Investors with short- to medium-term perspective can divest some of their holdings on a failure to move beyond this resistance. Stop-loss for investors with medium-term horizon can be at Rs 280 while long-term investors can hold the stock with stop at Rs 200.

Long-term targets on a weekly close above Rs 416 are at Rs 480 and Rs 625.

Monsanto India (Rs 1,836): If we consider the long-term chart of Monsanto India, the stock is straggling along in a trading band between Rs 1,100 and Rs 2,500 since October 2003. Upper target for the long-term will stay in the zone between Rs 2,200 and Rs 2,500. It is hard to envisage a break beyond this zone just yet. But if the stock does so, next target would be Rs 2,900.

Investors can hold the stock with the stop at Rs 1,400. Medium-term range for the stock is likely to be between Rs 1,500 and Rs 2,000. Short-term investors can buy close to the lower boundary and sell near the upper.

Can you please clarify whether the stop-loss levels recommended in your column for medium-term refer to daily closing or weekly closing basis? S. Uma

The stop-loss recommended for medium- and long-term investors is on a weekly closing basis. This is because stocks often tend to breach the stop-loss on a particular day but they tend to move back below the stop in a day or two. Such moves are called false break-outs. Adhering to stops on a daily basis for medium-term holdings will result in premature exit from a position.

It is also recommended to have a filter of three sessions for medium-term positions. That is, the stock should continue to close below a stop for three sessions before it is assumed as violated. This will take care of instances when stop-losses are breached on Friday or close to the weekend. This will also prevent a wrong closing out of positions due to whip-saw movements in stock prices.

Business Line

SRF (Rs 216.7): The long-term decline that commenced from the July 2006 peak of Rs 373 came to an end in February 2009 at Rs 62.

A strong fight-back was witnessed since this low and the stock has retraced half of the down-move recorded from 2006 when it made the peak of Rs 220 in October last year. However, the resistance around Rs 220 is proving to be too strong to breach and the stock has made three unsuccessful attempts to do so over the last seven months.

That said the reversals from this peak have been quite shallow resulting in a sideways move between Rs 170 and Rs 220 in the aforementioned period.

Investors with medium-term investment horizon can hold the stock with stop at Rs 168. It can attempt to move to Rs 258 over this period.

The long-term trend will however turn positive only on a strong weekly close above Rs 258, subsequently paving the way for a rally to the stock's former peak at Rs 373. Long-term investors can hold the stock as long as it trades above Rs 150.

Action Construction Equipment (Rs 50.2): Action Construction Equipment was

one of the stocks that had a stellar run in the last quarter of 2007 only to be decimated in the crash that followed. The recovery that ensued from the first quarter of last year has not yet managed to take the stock above the key intermediate term trend deciding level of Rs 57.

The stock needs to record at least two weekly closes above this level to signal that it is on the road to a sustainable recovery. Else it can decline to Rs 27 or even below. A sideways move between Rs 27 and Rs 60 then becomes a strong likelihood for the medium-term.

A close above Rs 57 can take the stock higher to Rs 71 or Rs 86 over the long-term. It is hard to envisage a move beyond Rs 86 in the foreseeable future and investors can divest part of their holding on a failure to move beyond this level.

Business Line

SRF (Rs 344.3): SRF faces key long-term resistance at Rs 375. Since the stock is reversing lower after moving close to this zone, the correction can now pull the stock down to Rs 330 or Rs 310. Investors with short- to medium-term perspective can cash out at this level since the stock is likely to struggle to move above Rs 375 in the ensuing months.

Investors with long-term perspective can hold with stop at Rs 300. Next downward target is Rs 270. Strong move above Rs 375 is required to take the stock to its record peak of Rs 444.

Monsanto India (1,897.2): Monsanto India is also reversing downward from its key long-term resistance at Rs 1,975. This decline can pull the stock to Rs 1,800 or Rs 1,700 over the ensuing weeks. Investors with short-term perspective can book some profit at current level and hold the rest with stop at Rs 1,800. The stock will however find it hard to move above Rs 1,975 in the upcoming months. A broad side-ways move between Rs 1,700 and Rs 2,000 appears likely over the medium-term.

Business Line

I have invested in Monsanto India at Rs 1,450 with long term perspective. The stock has been falling since January. What would be the technical stop loss if you suggest a ‘hold’? Does the gap left on daily charts in June 2008 need to be filled? Sandeep Dhawan

Monsanto India (Rs 1,488.1): Monsanto India has been moving in a broad range between Rs 1,500 and 2,500 since 2004. This stock is currently poised close to the lower end of its long-term range. The stock is certainly a ‘hold’ at this juncture. The stop loss level for long-term investors ought to be at Rs 1,100. Those wishing to acquire this stock can do so in the band between Rs 1,100 and Rs 1,400. A rally towards Rs 2,200 is likely over the next couple of years. Medium-term resistances for the stock would be at Rs 1,600 and then Rs 1,750.

Though we are positive regarding the long-term prospects of Monsanto, it would not do to wait for the gap in the chart formed in June 2008 to be filled anytime soon. The gap in question is a breakaway gap that followed a sideways movement between Rs 1,850 and Rs 2,000. Breakaway gaps occur at major reversal points and are not always filled. Secondly, the gap in June along with the gap in the daily chart in May formed an island cluster reversal pattern. This pattern too implies a significant turnaround that takes a while to reverse.

Business Line

I would like to know the importance of trading volume in the context of technical analysis. — Sandeep Dhawan

Trading volume has relevance while studying chart patterns and arriving at investment decision based on technical analysis. Typically, a move in price that is accompanied by a pick-up in trading volume would be considered as a healthy sign. Investment positions may be considered with a high degree of conviction in such a scenario, as it indicates that there is growing market interest towards the stock. This theory is valid for both upward and downward moves.

Typically, ahead of a sharp move, price tends to congest in a narrow trading zone while the daily trading volume tends to swell. As the buying pressure builds up, prices tend to explode in the direction of the breakout. Similarly, after a prolonged upward or downward move, the momentum behind the earlier move would wane. Trading volumes would also subside. Prices would get into a consolidation mode and trading volumes would gradually pick-up, resulting in the reversal of the earlier trend. Identifying such trend reversals early would be a key aspect to success at market place.

Business Line

Raymond - The Complete Man

Raymond ( Cmp 386) Weekly Chart

Buy for Target 465-540 with stop loss of 365 on weekly basis.

Raymond - Best yet to come

Raymonds ( Cmp 368 ) Advised few days back @ 242 for 272 and 318

Move very fast and made high of 413.

Hold your nerves it is expected to do 451.

Support area is 334 & 342.

Buy Raymond - The Complete Man

Raymond (Cmp 242) - Buy Raymond with a stop loss of 220 for 271 & 318.

Expect upside in Raymond: Rajen Shah

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Shah told CNBC-TV18, "Raymond is a very solid brand. This is a very prominent company in the textile space. With the textile industry doing very well and the export doing very well as well as the domestic demand firming up, this company has almost about 2.5-3,000 crore of turnover should benefit immensely on account of strong domestic demand.”

He further added, “The company has shut down production at its Thane unit and its shifting all the production to its Vapi unit. Because of this shut down they offered VRS to workers at Thane and now they are shifting to Vapi, so the margins are going to be higher by 4%. So the full impact of this 4% margin we will realize in the next year that is for March 2011 we realize this 4% extra margin. Because of this VRS now the company is keen on developing this 120 acre of land at Thane; the value of that is about Rs 1,200 crore where as the market cap is about Rs 1,351 crore. Infact the work is already started on about 15-20 acres of land, so I think we will see the full impact of this development in the coming years. Over the next five years, I expect this company to post in almost Rs 1,200 crore of net profit from this project.”

“The company has got almost Rs 700 crore of investment, so if you add Rs 1,200 crore of land to Rs 700 crore of investment that is about Rs 1,900 crore of assets plus the Rs 3,000 crore business and all that you are getting for just about Rs 1,350 crore. So there is an immense upside in Raymond’s."

Raymond - Into Real Estate

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India textile firms rush to sew up global buyouts

Dozens of Indian textile firms are foraging the global market for acquisition opportunities that will bring them scale, technology and design capabilities, but hardening asking prices are proving to be a hurdle, experts said.

At least 50 firms, many of them home textiles and garment makers, are pursuing merger and acquisition (M&A) deals, but have had to jostle with competitors from other low-cost countries, a foreign investment banker said.

The number of proposals on the works suggest strong cross border M&A activity in the textile space for two years at least," the banker said.

Among listed firms scouting for deals are Raymond, Welspun India Alok Industries, Himatsingka Seide, House of Pearl Fashions, Gokaldas Exports, RSWM and GHCL.

"Indian firms have done what they know best, expand to reach scale. But they are still toddlers when it comes to market access, technology and designs." Prashant Agarwal, Associate Vice-President at consultancy Technopak, said.

"An overseas acquisition solves all that," Agarwal said adding that many of Technopak's 100 or so textile clients were looking at tie-ups or buyouts inspired by recent success stories.

Welspun, which has expanded its capacity with a Rs 6.5 billion investment, bought a controlling stake in British home textile firm Christy in July to gain a wider presence in the UK. "We have the volumes and are ready for a global presence," Joint Managing Director Rajesh Mandawewala said.

Alok, which is spending 23 billion rupees on expansion, is also looking for distributors to prop up supply chains in Europe and the United States, Managing Director Dilip Jiwrajka said. The company bought 60 per cent of Czech firm Mileta in September.

Home textiles firm GHCL expects its upcoming acquisitions to add at least $500 million to sales. It bought US-based Dan River and is looking at retailers and firms that sell to hotels and hospitals.

RSWM, on its part, claims to be just 'weeks away' from an acquisition. It has a unit in the Netherlands to buy specialised yarn makers and is looking at deals in Indonesia and Spain.

Valuations Richer

Courted by eager suitors also from countries such as China, and Turkey sellers have started demanding higher and higher prices and are thus delaying or defeating deals, managers at Indian textile firms said.

S Kumars Nationwide Ltd came close to buying US-based American Pacific but backed out after the asking price remained high. But Indian firms are not giving up and 'it is still possible to get a gem', the investment banker said.

According to Welspun's Mandawewala, deals had been struck at 3-4 times the target company's core earnings, but prices had shot up to as much as 7 times now. "That, in the textile industry, is very rich," he said.

But with production increasingly shifting to low-cost countries and the West remaining the biggest market, Indians' appetite for global acquisitions will continue for some time to come, experts said.

"Valuations for the right assets should preferably ease. Yes, there are too many distressed assets for cheap, but are we yet ready to take them and turn it around," Gokaldas' executive director, Rajendra Hinduja, said.

Source : Financial Express

P.S : Another year of consolidation ?

Raymond Q4 & FY 07 results

Raymond Ltd has announced the following Audited results for the quarter & year ended March 31, 2007:

The results for the Quarter ended March 31, 2007

The Company has posted a net profit of Rs 106.70 million for the quarter ended March 31, 2007 as compared to Rs 348.10 million for the quarter ended March 31, 2006. Total Income (net of excise) has decreased from Rs 4002.20 million for the quarter ended March 31, 2006 to Rs 3570.90 million for the quarter ended March 31, 2007.

The results for the Year ended March 31, 2007

The Company has posted a net profit of Rs 2021.20 million for the year ended March 31, 2007 as compared to Rs 1210.00 million for the year ended March 31, 2006. Total Income (net of excise) has decreased from Rs 13942.10 million for the year ended March 31, 2006 to Rs 13542.10 million for the year ended March 31, 2007.

The Consolidated results are as follows:

The consolidated results for the Year ended March 31, 2007

The Group has posted a net profit of Rs 1399.90 million for the year ended March 31, 2007 as compared to Rs 1360.30 million for the year ended March 31, 2006. Total Income (net of excise) has increased from Rs 17932.10 million for the year ended March 31, 2006 to Rs 21187.20 million for the year ended March 31, 2007.

Raymond Ltd has informed BSE that the Board of Directors of the Company at its meeting held on April 27, 2007, inter alia, has recommended a dividend of 50% on the Equity Share Capital for the year 2006-2007. The dividend, if sanctioned by the Shareholders, will be paid on or after June 19, 2007.

Raymond readies to cook with Italian GAS

Raymond and Italian apparel brand Grotto SpA, through a 50:50 joint venture, launched the high-end fashion brand GAS in the capital. With the launch, Pradeep Bhandari, group president, Raymond, also announced an ambitious retail expansion plan. Besides launches in Mumbai and Bangalore, the company plans to have 600 selling points by the end of three years, which include 80 exclusive stores, 12 flagship stores as well as multi-brand outlets. Raymond expects a turnover of Rs 200 crore from its casual high-end fashion wear business by the end of three years.

Both Raymond and Grotto have collectively pumped in Rs 50 crore for business expansion. However, additional monies will be spent on brand promotion in mass media as well as below the line.

The price range of the GAS collection is pegged between Rs 1,800 and 6,000. The brand targets the cosmopolitan, international-trend conscious consumers and hence the steep range would be the least of concerns says Bhandari. Claudio Grotto, founder, chairman and CEO, GAS, is quite optimistic about the Asian market. “There is a lot of excitement in the Asian markets, especially in India. A lot of Indian young men and women are very passionate about fashion and I am sure they associate with the GAS’ essence of fashion.”

GAS had, in fact, recently opened a flagship store at Causeway Bay in Hong Kong. “Europe is a little quiet at the moment, though we are opening another store in London as well, but there is a great opportunity in Asia.” GAS is present in 56 countries and is available at 3000 selling points. When asked if the GAS would consider adaptations in its product range for India, Grotto says the GAS range reflects the global design and therefore it will continue to be just that.

Among its other plans, Raymond is keenly looking at the executive women wear segment. Though Bhandari did spell out its business plans, he says there is tremendous market potential in women wear. Also, Raymond has signed a memorandum of understanding with the National Institute of Fashion Technology (NIFT) for design inputs and tailoring support.

Source : http://www.dnaindia.com/report.asp?NewsID=1090444

Raymond’s sewing up a complete plan

Raymond Ltd has set aside Rs 70 crore for the next two years as part of an aggressive retail expansion plan. The Rs 2,500 crore Mumbai-based textile and apparel firm has also struck strategic tie-ups with global players to enter new product categories.

Raymond, which now has 433 stores across the country, plans to have 594 stores by fiscal 2008, 739 by fiscal 2009 and 947 retail network across the country by the end of fiscal 2010 and with over 2 million sq ft retail space.

It expects the branded apparel segment to record revenue CAGR of 25%, over the next two years.

Analysts said margins in the branded apparel segment could be negatively impacted due to the high rentals and increasing real estate price though market for textile and apparel business continues to be buoyant.

Aniruddha Deshmukh, president, Retail and FMCG, Raymond, told “There is not much margin pressure due to increase in real estate price. The consumers are growing at rapid speed and footfalls are increasing every quarter.”

Recently, the company opened its flagship store in Mumbai and Pune and is also increasing exclusive brand outlets for various brands in its portfolio. It opened its 350th store of Raymond Shop on Thursday at Atria Mall in Mumbai.

Raymond owns five apparel brands — Park Avenue (formal wear), ColorPlus (premium casual wear), Parx (casual wear), Manzoni (premium formal wear) and ZAPP! (kids’ wear).

While organised retail in India is only 2.85% of the total $300 billion retail industry, it is expected to grow 25% annually, driven by changing lifestyles of consumers, rising income and favourable demographic patterns. Industry experts said apparel retailing is the country’s second-largest segment for organised retailers. It is no longer an urban phenomenon and companies are now quickly penetrating to smaller cities in an effort to cash in on the consumer spending boom.

Apparel manufacturers were among the first to foray into organised retailing. Raymond, Arvind Brands, Madura Garments (Indian Rayon) and Zodiac Clothing have built an extensive retail network over the years. The clothing market is highly fragmented with numerous players operating across a wide variety of formats.

Fashion has also played an important role in shaping apparel consumerism. As lifestyle changes, fashion in countries like India is becoming more stratified, as in the West.

The core segment of the apparel market comprises menswear, women’s wear and children’s wear. The segment which has been growing at a faster pace is the women’s wear market (at about 9%) which is at a much higher pace than both the men’s and the kid’s wear. The reason is obvious - more and more women are working and there has been a rise in disposable incomes in general.

Disclosure : have exposure.