CENTUM ELECTRONICS - BUY FOR LONG TERM 3-5 yrs .

Centum Electronics is a Bangalore based company promoted by Mr Apparao V. Mallavaravu and engaged in the business of designing and manufacturing of electronic systems,sub-systems and components.The  Singapore based multi national EMS giantFlextronics is also holding  about 5% stake in Centum Electronics. Recently company merged another company of the samemanagement into itself which was in the business of  Electronic manufacturing Services (EMS) and Printed Circuit Board Assembly.The new entity’s products are used in industries like Space, Defense, Aerospace,Communications and Automotive.It also have another  subsidiary in the name of Centum-Rakon whichis a joint venture between Rakon Limited,New Zealand .Centum Rakon is one of the largest  manufacturer of frequencycontrol products in India . Centum’s main  business includesthe manufacturing of Signal Conditioners,  Multiplexers, RelayDrivers, Power Processing Units, Control Electronics  Modules,Sensor Electronics Modules and Crystal Oscillators includinghigh-end SPXO, VCXO, TCXO and OCXO . In India ,company isexpecting more  orders for their products and a bright futuredue to the increasing  participation of private sector in Defensearena . Interest of  Flectronics in this company is helping it to tapthe international opportunities . Recently company got some bigorders from Alcatel and  Ericsson ,and it is planning anotherfactory in Bangalore to meet the improving order flow fromoverseas. Flextronics is reportedly planning  to invest anotherRs.25 Cr in Centum Electronics to increase the  capacity .For the nine month ended December quarter , Centum posteda turnover of Rs.123 Cr , net profit of Rs. 3 Cr and an EPS ofRs.2.25. Recently company announced a sourcing agreementwith L-3 communication group for their aviation products division.Company is  expected to perform well due to the revivalin western economies  , increasing interest of private sectorin Defense and Space in India,  new commitments ofFlextronics and new alliances with global leaders in defense andspace arena .Long term investors may consider a BUY  at CMP of Rs.94/-

FIIs return to India. To do what?

The Indian stock markets have had a bumpy start to 2011. The markets seem to be tracing the steps of a cardiac monitor that has gone awry. There are several reasons for it that include higher inflation rates, commodity prices hurting company results, higher interest rates and not to forget the infamous corruption scandals. But a major reason for the fall has been the FIIs, who have sold shares worth Rs 50 bn in just one month. In a recently published interview to a leading daily, the director of Deutsche Asset Management, Mr. Bill Barbour, has cited all of the abovementioned points as plausible reasons for FIIs selling their shares. He has identified inflation as one of the biggest causes. The RBI is expected to raise interest rates to control inflation, which will have a negative impact on the growth. Particularly for the companies who are already reeling under the pressure of higher input prices thanks to the higher inflation. It's a vicious circle.

However, he also states that the current fall of over 12% has made Indian stocks attractive in terms of valuations. So this would again attract FIIs. He has stated that the FIIs would return thanks to their strong belief in 'India's growth story'.

So if Mr. Barbour's words are correct, we may see the influx of FII money returning to Indian shores in the coming times. But what would this lead to? Higher prices. Expensive valuations. And finally market crashes when the FIIs pull out again. Mr. Barbour is right. It is a vicious cycle and we are all stuck in the middle of it.

Want a better option? Forget what the FIIs are doing. Look for companies with strong competitive advantage, run by an honest management team and buy into the same at attractive valuations. We virtually guarantee that this will bring you much better results than worrying about what the FIIs do next.

Reliance Power Ltd. CMP 109 ......BUY FOR LONG TERM 3-5 YRS

Reliance Power Limited is a part of the Reliance Anil Dhriubhai Ambani Group group, one of India’s largest business houses. The group comprises companies in the telecommunications, financial services, media and entertainment, infrastructure and energy sectors. The energy sector companies include Reliance Infrastructure Ltd, Reliance Natural Resources Limited and Reliance Power Limited. Reliance Power has been established to develop the Reliance Anil Dhirubhai Ambani Group and is established to develop, construct and operate power projects domestically and internationally. The Company on its own and through subsidiaries has a portfolio of almost 35,000 MW of power generation capacity, both operational as well as under development.
The power projects are planned to be diverse in geographic location, fuel type, fuel source and off-take, and each project is planned to be strategically located near an available fuel supply or load center. The company has 600 MW of operational power generation assets. The projects under development include seven coal-fired projects to be fueled by reserves from captive mines and supplies from India and abroad, two gas-fired projects to be fueled primarily by reserves from the Krishna Godavari Basin (the "KG Basin") off the east coast of India, and seven hydroelectric projects, six of them in Arunachal Pradesh and one in Uttarakhand.
The company has won three of the four Ultra Mega Power Projects (Sasan UMPP, Krishnapatnam UMPP & Tilaiya UMPP) awarded by the Govt of India till date. The UMPP is an initiative by the government to collaborate with power generation companies to set up 4,000 MW projects to ease the country’s power deficit situation.
Besides these, Reliance Power is also considering the development of coal bed methane (CBM) power generation projects based from CBM blocks being exposed by its affiliates. The company is also planning to register projects with the Clean Development Mechanism executive board for issuance of CER certificates to augment its revenues...BUY WITH A TGT OF 500+++ IN 3-5 YRS.