Shanti Gears - Moving in top Gear.
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Emerging companies - Mid caps that can become large cap
Forum Discription: These are companies operating in growing markets having have certain niches or specific attributes like new sector plays. These are emerging multibaggers with high risks and high rewards.
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=376
Printed Date: 19/Apr/2025 at 9:22pm
Topic: Shanti Gears - Moving in top Gear.
Posted By: vivekkumar_in
Subject: Shanti Gears - Moving in top Gear.
Date Posted: 19/Sep/2006 at 5:01am
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Dear Mr.Basant,
How about Shanthi Gears(Rs 63) ? Manufactures gears for auto, textiles, manufacturing industries. It is held by quite a few Mutual funds. Can it be a multi-bagger ?
Regards,
VivekKumar
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Replies:
Posted By: basant
Date Posted: 20/Sep/2006 at 1:03pm
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Shanti Gears - Moving in top Gear.
Shanti gears (CMP Rs 64) is engaged in the manufacture of Gears, Gear Boxes, Geared Motors and Gear Assemblies both standard and custom-built. Over the past couple of years the company has seen a gradual hardening of demand in all its product segments This has lead to stupendous all round growth in the company’s products.
Over the past 3 years the company has increased its sales from Rs 63.80 crores to Rs 184.26 crores registering a compounded annual growth of 42.40% .During this period the net profit grew from Rs 6.51 crores to Rs 28.06 crores registering an annual compounded growth of 62%. This company appears to have been very well managed and the high RoE at 34.26 up from 14.16 in 2003 indicates the efficient use of capital. The company’s products are used in all the major sectors such as Steel, Sugar, Cement. Agriculture, Pharmaceutical, Paper, Fertilizers etc. General corporate buoyancy should lead to the growth momentum being maintained during the next couple of years in almost all these sectors. India Inc is expected to spend Rs 800,000 crores over the next 3 years and all induistries associated with capex should show supernormal growth for the said period. In India Shanti Gears remains the No. 1 Gear company as no other Gear Manufacturer is engaged in the Manufacture of such diversified high quality control facilities. To counter a sudden decline in domestic demand Shanti Gears has tried to go global and focus on exports. This would lead to a spreading of risks. In this connection the company is trying to break into the German market. Recommendations: Investors should buy into this stock as it seems attractively valuedwith potential to yield fairly high returns. This company should deliver between 30%- 40% annualized growth for the next 2 to 3 years and while it does that investors could make money because of the initiatives that are being rolled out which when completed should supplement the growth rate even further. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
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Posted By: vivekkumar_in
Date Posted: 20/Sep/2006 at 4:48am
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Impressive Basantji !
I am amazed how quick you come with such defendable research backed with Solid figues... Kudos..
One more line of question..
Do you think Shanthi Gears would come under a Cyclical industries classification considering it is closely linked with capex cycle of industries and with intrest rates going up the effect on that to capex cycle?
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Posted By: basant
Date Posted: 20/Sep/2006 at 9:16am
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Thank You. Although Shanti Gears is a cyclical but at least for the next 2-3 years I do not think that the company would be affected much. The spending on the company's product is a small percentage of the total spend and once the capex cycle is laid out replacement demand could come in after a few years. Over all the company;s innitiative to get penetrate into the European markets should keep it in good shape.Stock looks good and appears as a fit case for investment. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: vivekkumar_in
Date Posted: 23/Sep/2006 at 8:23am
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Shanthi Gears featured in Forbe's list 'Best under a Billion' article was published in Nov 2004.
On The Cover/Top Stories Best Under a Billion Tim W. Ferguson, 11.01.04 Finding 100 of the best smaller-size enterprises in both Asia/Pacific and Europe is, well, no small feat. First, compiler Mitchell Martin screened our databases to find 2,600 publicly traded companies that had under $1 billion a year in revenue and five-year returns on capital of at least 5%. Then we ranked the lot by sustained gains in sales and returns, plus latest-year market momentum. What emerges is the cream. While not all of these entities fit an entrepreneurial mold, we trust they represent economic dynamism in the two regions. But we are also looking for companies with a track record of rewarding their shareholders, so this leaves off most flashes in the pan. (For highlights of a similar list from the U.S., see p. 40.) FORBES GLOBAL has been refining this collection for six years now, and it has been a consistent guide to winners. The first roster, in 1998, included now-familiar names: Infosys, Johnson Electric, Anglo Irish Bank and Dassault Systemes. We suggest you could do worse in a small-company portfolio than these selections. But a word of caution: Liquidity and transparency can be a problem in even some of these better companies. Balance your holdings accordingly. One thing that's a surer bet: A country's climate for entrepreneurism is reflected in these ranks. Note that India, with 24 entries, has more than any nation except the U.K. This year we have 2 selections from China. As the private sector continues to develop there, we expect that number to increase. Japan does better this year, with its export rebound, but South Korea still trails in Best Under a Billion businesses. In Europe we welcome Poland to the list and include Turkey, recognizing its approach to membership in the EU. A continuing disappointment, given its industrious small concerns: Italy. <> .txt { color: #000000; font-family: arial; font-size: 11px; background-color: #EAE9E2; } .country { color: #ffffff; font-family: arial; font-size: 12px; background-color: #86A8BC; font-weight: bold; } .head { color: #ffffff; font-family: arial; font-size: 18px; background-color: #CF2035; font-weight: bold; } .sm { color: #000000; font-family: arial; font-size: 8px; background-color: #EAE9E2; }
------------- Often we forget there's a company behind every stock,and there's only one reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies. P Lynch |
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Posted By: Equity Buff
Date Posted: 23/Sep/2006 at 9:54am
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Dear Vivek,
Good you have posted this article. I read this article when it was published in Nov 2004. I think Shanthi Gears will do very well and the stock could give very good returns over the next 3 to 5 years.
Rgds.
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Posted By: basant
Date Posted: 23/Sep/2006 at 10:32am
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I would like to share an experience on this. SOmetime in 2002 Forbes had categorised MAstek as one of the best 200 emerging software companies. i did my diligence and bought it. The stock doubled in about 6 months and sometime in April 2003 (not sure about the month) Infy reported a poor guidance and Mastek showed lower then expected profits. Mastek was down 50% in one day and I was cut by half!!!
Now I am not saying that all such companies liisted above would be like that - just tried to share an experience as to what could happen even after these companies are taken into the Hall of fame! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: vivekkumar_in
Date Posted: 25/Sep/2006 at 3:22am
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You are right Basantji.. Couple of things that come out
- Even if it is a Hall of Famer still have to go by the game..
(But it shows us the Strength of the Managements that have produced 5 yrs of consistent growth & good Balance Sheet) Most of them on list have a solid management behind them... - We cannot invest based on the list alone, as there are other factors like type of industry-cyclicals, price vs value etc...
- Sector leader comes with lower guidance so all the sector stocks are hit.. As a seasoned investor you know this happens everywhere.. One multi-million lawsuit against some US Pharma company on possible side effects... all Pharma majors & minors tank and some of them hit lower circuit... ------------- Often we forget there's a company behind every stock,and there's only one reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies. P Lynch |
Posted By: basant
Date Posted: 25/Sep/2006 at 9:15am
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Yes. Now I have started to recognize these events. Not saying that this list would not help just tried sharing an experience as to what could happen even after a stock enters a hall of fame. Shanti Gears looks an excellent company to invest in. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: basant
Date Posted: 18/Oct/2006 at 12:24pm
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For the September quarter Shanthi Gears reported a decent 32% growth in sales to Rs 47.05 crores from 35.67 crores in the relevant quarter of the previous year.The operating profit increased by 42%. Operating profit increasing at a rate greater then sales is always a good sign for any company. It means that the company is able to spread its fixed costs over a larger number of units.
The Net profit for the same period grew by 44% to Rs 6.89 crores from Rs 4.80 crores.The EPS for the quarter was at Rs 0.85 per share.
The company saw an ijncrease in operating margin to 37.58% from 34.90% y-o-y. The stock remains a good long term buy.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: Chaman
Date Posted: 16/Nov/2007 at 4:56pm
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Basant ji and others, has anyone looked at Shanthi Gears recently?
I had a look at its financials for the past 3 years:
- Its sales have grown at more than 26% per annum.
- Operating Profit margin has been around 33%.
- Net Profit has grown at more than 30% per annum.
- RoE has been 27-29%.
Till recently, I have been very confident about Shanthi Gears.
Basant ji's lack of confidence has made me look at it again. Also, it has suddenly jumped to touch Rs. 95 y'day.
So wanted to get more opinion on this, incase I need to change my stance on this.
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Posted By: basant
Date Posted: 16/Nov/2007 at 8:25pm
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i was talking from the stock performance point of view also they export so the overhhang remains. Otherwise co. has given decent results.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kumardiwesh
Date Posted: 06/Sep/2008 at 11:10pm
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The net profit of Shanthi Gears rose 13.2% to Rs 11.17 crore on a 13.5% rise in sales to Rs 60.28 crore in Q1 June 2008 over Q1 June 2007.
Belgium-based Hansen Transmissions International NV, owned by Pune-based Suzlon Energy, is planing to buy between 50% and 100% of Shanthi Gears at around a 40%-70% premium to the current market price of Rs 70. ------------- "History does not tell you the probability of future financial things happening" - Warren Buffett |
Posted By: nikhil090
Date Posted: 18/Jun/2009 at 12:02pm
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Saw the annual report of Shanthi gears today - Seems a reasonable bet. One point which I noticed was that on sales of around 250 cr, they deduct depreciation of 25 cr. Isn't it very high? 10% of sales? can this be conservative accounting and reduces profit quite a lot? Any views?? |
Posted By: hit2710
Date Posted: 18/Jun/2009 at 12:20pm
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The company is a good solid company with sound management and manufactures industrial gears for non automotive industries. Company had to buy back some fccbs during the financial year.
It is a 1 rupee face value share and a good long term bet because the company is a play on the economic upturn of the manufacturing sector.
Rumours off and on come about suzlon and hansen picking up stake but without any take over also the company by itself is very good.
It should be a fast growth company if the economy picks up as it is expected to do. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: BGKGURU
Date Posted: 18/Jun/2009 at 11:53am
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I bough it at 45 after result announcement and will buy more below 40. ------------- Respect the Markets and do MAKE mistakes, but see to it that you can afford to stay in the markets even after the mistake-RJ |
Posted By: hit2710
Date Posted: 19/Jun/2009 at 2:24pm
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Very good idea, no need to buy at the same time in such a market.
Shanthi Gears is into some kind of restructuring exercise so stock may be rangebound for some time.
Good time and price to invest. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: BGKGURU
Date Posted: 25/Jul/2009 at 12:26pm
------------- Respect the Markets and do MAKE mistakes, but see to it that you can afford to stay in the markets even after the mistake-RJ |
Posted By: manish_okhade
Date Posted: 17/Oct/2009 at 10:10am
| Has anybody got the balance sheet? |
Posted By: hit2710
Date Posted: 30/Nov/2009 at 7:19pm
I read the downloaded annual report of the company. There is no mention of restructuring taking place in the company. But according to my understanding, the company is looking at projects as an avenue for growth because it feels the market for gears may reach saturation. Company could be back on track in FY 11. This company looks like a good strong company which has fallen on bad times (as many companies are likely to do during their lifespan) for 2-3 quarters. The half yearly results have been dismal with decline in both sales and net profits. Only consolation is the company has avoided going into the red. The management seems honest and forthright. Capital management also seems to be good. Not too much debt/unnecessary expansion. Can it be considered a contrarian bet at 41-42 and lower levels? I can draw some parallels with Lakshmi Energy when it was quoting at 60-70 odd levels. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: PKB2000
Date Posted: 30/Nov/2009 at 10:24am
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In my working experience I have found that a large number of equipment manufacturers were happy to place gears from SHANTI in their machines because of their shanti (satisfaction) from SHANTI. ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: hit2710
Date Posted: 30/Nov/2009 at 11:17am
To phir shanti se shanti ke share leke shanti se so jana chahiye.  ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: manish_okhade
Date Posted: 01/Dec/2009 at 12:17pm
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Only problem here is that how do i be sure about future business prospects of Shanthi? I tried but failed so finds investing here a pure gamble.
Can anybody help?
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Posted By: hit2710
Date Posted: 01/Dec/2009 at 12:30pm
I read a recent update wherein the company management reportedly claims that they will reclaim the lost sales in the year FY 11. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: excel_monkey
Date Posted: 01/Dec/2009 at 12:50pm
I don't follow this stock but found a 5 month old report for you ►Shanthi Gears Ltd. is one of the largest manufacturers of Gears catering to various industries such as textiles, process, power steel, cement, sugar and aviation. ►The product range includes worm gear box, Helical & Bevel Helical Gear Box, Geared Motor, Custom-built gear box, Mill gear box, Open gearing, products for textile industry and CNC machine tools. The range extends from gears for simple application to high-tech gears for supersonic jet aircrafts. ►The Company has a foundry as well as forging plant as a backward integration which gives it an edge over its competitors and enables it to improvise it's margins. ►It's order book stands at Rs. 1100 mn executable over a six months period. However, the order book has come down from Rs. 1500 mn in first half of FY09, which indicates slowdown in demand and a possibility of slower execution. The demand from key industries such as textiles, cement and steel are yet to shown signs of improvement. ►On back of the tough business environment, Shanthi has taken measures to revamp and restructure the entire operational and organizational structure,which may lead to scaling down of plant operations, cutting back its personnel and administration costs and a re-look at all the contracts. Shanthi has moderated its capital expenditure plans and may spend only Rs. 250-300 mn in FY 10. ►Shanthi has the highest margins in the peer group and the return ratios are also considerably high. Capital intensity in its Business is not very high leading to high cash generation. ►At CMP of Rs. 46, the stock is trading at a valuation of 1.4x its FY11E ABV & 8.4x FY11E Earnings. |
Posted By: hit2710
Date Posted: 01/Dec/2009 at 8:51am
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To me there are some positives for the company.
Promoters are very good in terms of ethics and integrity and have been running the business successfully since many years. While going for this restructuring, they talk about reducing costs and personnel, going in for project based business etc. We have to assume that they know what they are doing and that it is for the better of the company and the shareholders. Current price of the stock reflects poor business prospects for the next one or two quarters because price of the stock has not moved up in tandem with the markets. So this has to be seen as some sort of turnaround company (it never went into losses, but profits have reduced) which can get on the growth path after a couple of quarters. Once the company comes out with concrete restructuring details or some more order bookings, the stock price is bound to fly. Currently no one seems to be wanting to buy this stock and it could pay handsome rewards to go against the crowd. There might be some pain in the short term though. With the economy reviving, there should be no reason for such companies to languish behind in terms of sales and profit growth. To me it seems a good contrarian bet. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: samirarora
Date Posted: 01/Dec/2009 at 9:06am
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Warren buffet probabaly would have bought this at this time, were he operative in India? ------------- |
Posted By: hit2710
Date Posted: 01/Dec/2009 at 9:07am
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Looking at the last two quarters results,
The interest cost seems to have come down significantly. Interest paid in Sep qtr 0.58 crores, June qtr 0.85 crores and for preceding three quarters viz. Mar09 Dec08 and Sep 08 it was 1.36,5.6,0.94 respectively. Could have been lower due to lower order bookings and lower working capital requirements. But for a company showing degrowth, and restructuring, reduction of debt is a good beginning. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: basant
Date Posted: 01/Dec/2009 at 9:13am
Excel bhai please do not copy/paste the (any) report? The guys who write something are very fussy that their pearls of wisdom is going away for free
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: manish_okhade
Date Posted: 01/Dec/2009 at 10:54am
Not necessary. WB does not buy anything which is just cheap instead he prefers to buy something solid which becomes cheap due to market inefficiency. WB would have baught many stocks in Dec 08 like Co-Pm, Hero Honda and so on when they were dirt cheap but one can say with confidence that these businesses would be first to revive with time.
SGL may or may not grow that i do not know. But its very clear that nobody can predict the future business with reasonable certainty hence it's gamble to me. In my personal capacity present data does not support my conviction for future business prospect (I might be wrong here but i feel safer :-) )
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Posted By: excel_monkey
Date Posted: 01/Dec/2009 at 11:43am
Sure Basant Jee Now I would post only my understanding of the report. But what in case the report is public? |
Posted By: samirarora
Date Posted: 02/Dec/2009 at 1:56pm
It is of coarse, speculation whether WB would buy this or not, but then, what does it matter.. all i was saying is, that this is a solid good company, who had a bad time past year and stock price is very very ripe to pick up stock for portfolio and hold for long term.
As usual, just as anyone can be wrong , so can I.
best wishes.
samir. ------------- |
Posted By: manish_okhade
Date Posted: 02/Dec/2009 at 2:03pm
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Hi Samir,
"who had a bad time past year and stock price is very very ripe to pick up stock for portfolio and hold for long term."
Have you done any background check on above? It helps to come across some good consensus.
Thnx
Manish
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Posted By: samirarora
Date Posted: 02/Dec/2009 at 2:42pm
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"The company informed the exchanges on Tuesday that it is in the process of revamping and restructuring the entire operational and organisational structure. This may lead to slowdown in production in all units for a short tenure, it added. "
From:
http://economictimes.indiatimes.com/News/News-By-Industry/Indl-Goods-/-Svs/Engineering/Shanthi-Gears-to-revamp-operations-speculation-over-possible-takeover/articleshow/4556570.cms - http://economictimes.indiatimes.com/News/News-By-Industry/Indl-Goods-/-Svs/Engineering/Shanthi-Gears-to-revamp-operations-speculation-over-possible-takeover/articleshow/4556570.cms
If you google shanthi gears, all the various news shows up.. might be a good read through.. no need for me to copy and paste here
just google
shanthi gear news
best wishes,
samir. ------------- |
Posted By: hit2710
Date Posted: 02/Dec/2009 at 5:36pm
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Hi Samir,
The takeover news is now a thing of the past. Suzlon or its arm Hansen was rumoured to be interested in taking over Shanthi, but these were all rumours. These days Suzlon itself is in trouble so they will be busy putting their house in order. I read that for a good company(probably in Graham's book), earnings tend to catch up with the mean earnings and for Shanthi also it is a matter of time before it does. Someone with more enterprising accounting skills may calculate the net liquidation value and that would be the ideal price to get into the stock. I don't have that expertise and so I go by chart formations and they look okay unless all hell breaks loose. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: samirarora
Date Posted: 02/Dec/2009 at 6:14pm
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Dear Hitji,
No doubt, suzlon's takeover days are far away... i had just done a quick google and took out one article as to given an example of shanthi's recent troubles...and specified that many more such pages would open up, if one wanted to see whats been going on with shanthi this past year and why is it, that shanthi stock price is in doldrum presently.
Personally, i think its a great company and at rs.41-45 offers tremendous value. My purchase price has been rs.47 and if it touches 30s, i will buy more.. and if it touches 20s , then i will double whatever stake i have and so on...
Hope all else is well and that your portfolio is doing wonders for you. As for me, one of my top picks, ie Tata elxsi, performed very well today, and i have my fingers crossed that this continues for a few years!!!!
All the best,
Samir. ------------- |
Posted By: hit2710
Date Posted: 02/Dec/2009 at 6:36pm
Thanks, Samir. I saw Tata Elxsi locked in upper circuit today. Congratulations and may it move higher. Regarding Shanthi, I feel that management is doing something constructive and hence just started nibbling at it. Just like you I also have made some allowance for buying on the downside. Regards, Hitesh. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: nikhil090
Date Posted: 02/Dec/2009 at 7:23pm
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How much time will this take and will they really get back the sales they lost? Because getting entry where competitors are already entrenched is bound to be difficult. Either they will not be able to do it or if they do they will have to reduce prices, effectively reducing the margins..
I will stay away till I have clear idea about the reason and the impact of this on the future..
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Posted By: PKB2000
Date Posted: 03/Dec/2009 at 12:35pm
------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: samirarora
Date Posted: 03/Dec/2009 at 2:22pm
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For people who want to keep from sleeping... buying satyam, maytas, pyramid saimara, or hfcl, silverline shares could do wonders...
 ------------- |
Posted By: PKB2000
Date Posted: 03/Dec/2009 at 10:51pm
------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: hit2710
Date Posted: 08/Dec/2009 at 2:45pm
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Stock up 15% today on very high volumes.
Good news expected??  ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: PKB2000
Date Posted: 08/Dec/2009 at 3:13pm
------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: PKB2000
Date Posted: 14/Jan/2010 at 1:10pm
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Considering other stocks in today's market and the price available to purchase them I think there are better options available in the market than this one!
I have come out from this stock ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: Prasham
Date Posted: 07/Feb/2010 at 11:10am
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Shanthi Gears CMP - Rs. 39/-
What can be a 3 year target for this stock? ------------- |
Posted By: hit2710
Date Posted: 07/Feb/2010 at 11:24am
I think once restructuring is over and the company gets back on track, it could almost double from here. But as yet there have been no details about the restructuring and so the bet would have to be made on the management ability to deliver post restructuring. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: photophobic111
Date Posted: 26/Mar/2010 at 3:34am
| From where I can find 2009 Annual report for this company? Any further updates on this company about restructuring? Website looks not well maintained and not updated though.. |
Posted By: EquityInv
Date Posted: 26/Mar/2010 at 9:59am
I have it's AR.. you can msg me your mail id and i can send it across.. ------------- One of the best rules anybody can learn about investing is to do nothing, absolutely nothing, unless there is something to do – James Rogers |
Posted By: hit2710
Date Posted: 26/Mar/2010 at 10:10am
I have got a soft copy of the annual report. Let me have your email address by pm and i will mail it to you. Management has mentioned about revamp and restructuring in the annual report but no details are available. The following is what they have to say about it in AR Industrial activities during the 1st half of financial year has been generally good. However due to global financial crisis and consequential global economic recession affected the growth in 2nd half of the financial year. However the Company had taken effective measures to maintain profitability. The Company has taken measures to revamp and restructure the entire operational and organisational structure. This may lead to scaling down of plant operations, cut back of personnel and administration cost and a re-look of all the contracts. The Company anticipates that all the measures will help to maintain profitability. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: hit2710
Date Posted: 26/Mar/2010 at 10:36am
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Looking at the company website, in the infrastructure section the area of land has been mentioned as follows:
5,661,051 sq. ft. (526,120 sq. mt.) For 9 months ended dec09 company has paid interest of around 1.82 crores. Based on this the total debt would be around 25-30 crores. Now if land is valued at around 1000 per sq ft then valuation of land comes to around 566 crores.(I would request someone from coimbatore to corroborate the findings or guess the price of the land where the company is situated) Total market cap at cmp of around 38 is 309 crores. Hence the stock is available at below its NLV(net liquidation value).(if land valuation is correct) Here we are not assuming that company is going to sell the land but we are considering the NLV of the company so the margin of safety creeps into the investment theme. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: samirarora
Date Posted: 26/Mar/2010 at 11:31am
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HDFC mutual fund holds this stock in decent quantity in their otherwise conservative funds, which i think is another plus point for a person considering looking to purchase this stock....kind of adds another Positive data point to consider before jumping into the stock. Also L&T holds it in their mutual fund/s. and also, if i am correct, L&T has various business dealings with the company too.
Disclaimer: I am holding this stock and intend to add more if possible. ------------- |
Posted By: Prasham
Date Posted: 27/Mar/2010 at 12:00pm
Rate of land that it owns can't be 1000 sq. ft. Most of the industrial land that it owns is in the industrial area and hence the rate would be about quarter of what you've mentioned above. But nonetheless company is great and is performing consistently. Definitely worth some space in your portfolio. ------------- |
Posted By: balloon
Date Posted: 27/Mar/2010 at 12:19pm
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performing consistently? where?
------------- "The only way to win is work, work, work and hope to have a few insights" - Charlie Munger |
Posted By: rapidriser
Date Posted: 27/Mar/2010 at 1:15pm
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Why have the sales of the company fallen off a cliff in 2009? The comapny posted a turnover of Rs.244 cr in FY-2008 and Rs.252 cr. in FY-2009, whereas the 9 months sale in FY-2010 is only 89 cr.
What is more worrying is the fact that the sales for Dec-09 quarter are lower than the quarters ending Sep-09 & Jun-09, even though the industrial and auto receovery was in full swing during the Dec-09 quarter.
The land bank may provide safety margin from a valuation perspective, but the management really needs to step up from the business performance perspective. Mere statements in ARs about restructuring plans are not enough. ------------- When all else is lost, the future still remains. - Christian Nestell Bovée |
Posted By: manish_okhade
Date Posted: 27/Mar/2010 at 4:28pm
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Problem with this stockj is there is no info from mgmt about future execpt a concise breif that some restructuring is going on. Investors are cleless that from where growth will come hence shunning it.
Whatever is avilable in public domain is not enough to forcast anything hence a gmble stock. They may be having any land bank but neither company intend to utilize it nor liquidating itself so not a any big plus except a consolation to invested guy.
Lets hope any trigger (say Building mall) might bring life to scrip.
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Posted By: hit2710
Date Posted: 27/Mar/2010 at 5:07pm
You are very correct in the first part of the argument that the management is not giving any clue about what they intend to do in restructuring. About land bank etc, what I was trying to ascertain was the net liquidation value-- no assumption that the land was going to be developed. About rapidriser's query about revenues going down, in AR for 09 the management has categorically described that they might review contracts in hand and hence the fall in revenues were to be expected. But in dec09 results report put up by a subscription site I will not mention, management claims that they will regain lost revenues and profitability in fy11. Now investment in the company would be based on the promoters delivering or nearly delivering on the above statement. There are only four quarters to go for fy 11 end and hence if the management claims fructify, there could be a lot of gains to be made. Till that time the valuation of the company on NLV is a sort of comfort to the investor. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: samirarora
Date Posted: 27/Mar/2010 at 5:10pm
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all that is happening is that they are stopping production of mass products a.k.a low margin items and getting into specializied products , ie high margin products.. hence, while turnovers will go down, actual margins will remains either same or will increase with time..
This is the last statement , given a few months back by the company and i tend to think its a good thing that the company is doing.
There are gamble stocks out there, but i am of the opinion that shanthi will positively surprise if not in the next couple of quarters, but within a year
best wishes,s
samir. ------------- |
Posted By: samirarora
Date Posted: 27/Mar/2010 at 5:19pm
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http://www.myiris.com/newsCentre/storyShow.php?fileR=20090907201554200&dir=2009/09/07&secID=livenews - http://www.myiris.com/newsCentre/storyShow.php?fileR=20090907201554200&dir=2009/09/07&secID=livenews ------------- |
Posted By: rapidriser
Date Posted: 27/Mar/2010 at 7:05pm
The Gross Profit Margin % does not reflect the switch from low margin to high margin products. Let's wait and watch for a few quarters ------------- When all else is lost, the future still remains. - Christian Nestell Bovée |
Posted By: Alok Bhola
Date Posted: 27/Mar/2010 at 10:49am
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Shanthi Gears in a sense is similar to Mazda. The original promoter is getting old and losing his spark that originally led the company to where it is now. The transition to daughter(s) is not making any headway, leading to uncertainty about future. Focus on empowering the daughter(s) is resulting in de-motivation of the professional senior management who have been key to the growth and competitive advantage of these companies. If they eventually leave the company, the company (and the stock) might fall like a rock. |
Posted By: hit2710
Date Posted: 28/Mar/2010 at 1:55pm
Uncertainty actually is the friend of the buyer of long-term values. WB's quote. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: Prasham
Date Posted: 05/Apr/2010 at 4:07pm
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Flying again.... Chart show buying time...
RSI signals Oversold Position and Stoch shows Positive crossover. Volume too has picked up. ------------- |
Posted By: samirarora
Date Posted: 05/Apr/2010 at 4:43pm
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Out of the few down and out companies in which i have invested as a kind of contra call, i feel most confident about the revival of shanthi gears for various reasons.
Best wishes,
samir. ------------- |
Posted By: rampadma
Date Posted: 16/Apr/2010 at 11:47pm
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I read year back that restructure led to unrest in the company and senior management leaving. No more published news i can search about its affect on recent results of company. Your post only gave additional info about insights of things going behind screen.
I am eager to know any bit of news why once blue chip company became mediocre co. |
Posted By: hit2710
Date Posted: 24/May/2010 at 2:29pm
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Shanthi Gears q4 results and comparision of last four quarters
Source NSE and BSE websites March 10 qtr seems to be encouraging after two dull quarters of June and Sep 09. Sign of better things to come? Interest charges have progressively decreased and based on March 09 qtr interest payment company has paid off bulk of its debt. From my information, FY 11 full year is likely be excellent and sales and net profit growth likely to be very good. Need to watch another couple of quarters to confirm the above. disc: I am invested in this one. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: hit2710
Date Posted: 24/May/2010 at 2:36pm
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The company declares a dividend of 80 paisa per share of fv re. 1. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: ThirdPersonView
Date Posted: 24/May/2010 at 3:28pm
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Hitesh ji, what was your entry level for Shanthi Gears? I have been reading your posts on Shanthi for a while and also benefitted from your analysis of patels airtemp. Do you think cmp of around 40 is a good enough level to enter Shanthi Gears? ------------- Rewind and Erase |
Posted By: hit2710
Date Posted: 24/May/2010 at 3:35pm
I had got into shanthi gears at around 37 and exited around 47. Now with the stock coming down i have been accumulating it below 42 since almost last month. Regarding entry levels, you could think about accumulating around 40 and add on declines. (This is my personal opinion and you can decide based on your risk profile.) ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: Circuit
Date Posted: 24/May/2010 at 7:50am
Looking at the state of affairs, This company is capable of joining your "Cheaper Than Pack of Cigarettes" club
------------- Fundamentalists and anticipators may have difficulties with risk control because a trade keeps looking ‘better’ the more it goes against them....Ed Seykota |
Posted By: ThirdPersonView
Date Posted: 25/May/2010 at 1:15pm
Thanks Hitesh ji ------------- Rewind and Erase |
Posted By: adityancs
Date Posted: 13/Jun/2010 at 2:04pm
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The promotor (Father) got his daughter's shares transferred (promotor quota) on his name. Any idea about the reason behind it? Is it a normal transfer which is to be neglected.... It has been gathered that to avoid sale of block sale, father acquired the stake of daughter... |
Posted By: hit2710
Date Posted: 24/Jun/2010 at 5:42pm
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Some updates on restructuring plan of shanthi gears http://www.bseindia.com/qresann/news.asp?newsid=24add033-16cb-4126-8b45-e617341d27a6 - here
They are seeking shareholder nod to go ahead with disposal of some surplus land and have given details of business plan which they want to pursue. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: adityancs
Date Posted: 30/Jun/2010 at 10:54pm
| There were lot of problems last year. This company is to be watched very closely now. Whether restructuring will put the company back on track. Every bit of data is very important. |
Posted By: hit2710
Date Posted: 02/Jul/2010 at 8:40pm
Shanthi Gears weekly charts-- the triangular consolidation clearly shows the hopes and dissapointments of markets to various newsflows. Breakout above 47-48 with volumes will lead to substantial upsides.(disc: invested)
 ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: adityancs
Date Posted: 02/Jul/2010 at 10:54am
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Posted By: hit2710
Date Posted: 02/Jul/2010 at 11:33am
The chart seems to be very small in size and difficult to visualize and hence I am posting it again. Crossover of 47-48 with good volumes will spell good times for the stock.
 ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: adityancs
Date Posted: 03/Jul/2010 at 1:22pm
Thanks once again. I have taken a small position in the stock and watching closely. After restructuring, it appears to be progressing slowly.
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Posted By: adityancs
Date Posted: 10/Jul/2010 at 12:51pm
| Apart from the resignation of director Ms. Sangeetha (Her quota of shares were transferred to father earlier), any latest news on Shanthi Gears? |
Posted By: shivkumar
Date Posted: 21/Jul/2010 at 7:17pm
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Promoter has gifted shares from his personal quota to his employees, according to http://economictimes.indiatimes.com/news/news-by-industry/auto/auto-components/SGL-Promoter-gifts-shares-to-employees/articleshow/6192644.cms - this report. Every one of the 473 employees has been given 1000 shares each regardless of seniority. There is nothing like options or whatever. I am sure promoter must have told them it would be a multi-bagger in the coming years. Even if the stock goes up ten times in the next three to four years, it would be like another provident fund for the lower level employees! Don't think any thing can motivate people more than gestures like these. |
Posted By: hit2710
Date Posted: 21/Jul/2010 at 7:32pm
I also read the announcement and was surprised at the largesse of the promoter. 
Aisa to nahi ki worthless cheez ka daan ho raha hai? I hope not bcos it is going to hurt me.  ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: shivkumar
Date Posted: 21/Jul/2010 at 7:37pm
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Promoter is passing of 0.58 per cent of his stake to employees. Which is not much if it helps you win people's loyalty. Also any idea on the valuations of the two plots of land in Coimbatore? |
Posted By: hit2710
Date Posted: 21/Jul/2010 at 7:50pm
They had sent ballot papers for postal ballot to authorise them to proceed with restructuring which includes sale of plots. I guess results of these will be out in AGM on 13 Aug. Anybody from coimbatore can provide some inputs about these plots ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: hit2710
Date Posted: 22/Aug/2010 at 10:52pm
Welcome to the party. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: samirarora
Date Posted: 22/Aug/2010 at 10:23am
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yes....welcome!!!! from another shanthi gear believer
Samir. ------------- |
Posted By: hit2710
Date Posted: 28/Oct/2010 at 8:02pm
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Shanthi gears Q2 fy 11 results
Sales 35.94 crores Net profits 6.37 cr Half yearly results Sales 68.49 crores Net profits 12.32 crores Half yearly eps at 1.51 per share. Considering cash in hand versus debt as on Sep 2010, this is a debt free company getting back on track and results of restructuring likely to kick in, it seems to be in a sweet spot. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: Koti_gunda
Date Posted: 29/Oct/2010 at 4:42pm
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Hitji,
It Seems the results are not bad for this quarter, need to wait for one more quarter results to confirm it is getting back on track.
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Posted By: samirarora
Date Posted: 29/Oct/2010 at 6:40pm
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Sold 2/3rd holding on good results, put proceeds in a mutual fund.
Remaining 1/3rd holding i will now keep for long term since its become free... he he he!!! ------------- |
Posted By: hit2710
Date Posted: 29/Oct/2010 at 7:02pm
My targets are much higher so I am holding on to it. I think you are exiting when the going has become good for the company and the journey is just about to begin. regards ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: Koti_gunda
Date Posted: 29/Oct/2010 at 7:13pm
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Hitji,
I am very much getting attracted to this script after seeing your post's. I will do more analysys from my side & take a sizable position once i build my conviction on this.
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Posted By: subu76
Date Posted: 29/Oct/2010 at 7:16pm
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Wonder if the new business plan of the company is out for us to review. |
Posted By: bitu1978
Date Posted: 29/Oct/2010 at 8:17pm
I think this is the only stock on which "Hit" has not Hit the target .All the others like paral/ manjushree/vst/mayur are in different league now even Mazda and patels have shown some movements. so Hitesh bhai what do you say still this is a buy? |
Posted By: hit2710
Date Posted: 30/Oct/2010 at 8:50pm
I think you would have to build your own conviction. on charts 50-53 is a stiff resistance zone and on declines now stock seems to be getting supported around 46-47 levels. Turnarounds often test your patience but rewards are often great and unexpected. By some nimble trading my buy price is now around 27 levels so I am not too worried about this one. But in my personal opinion I think this is a good company to invest in. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: subu76
Date Posted: 30/Oct/2010 at 11:39pm
| Hitesh Bhai, any idea about the turn around plan that was being worked upon by the management |
Posted By: hit2710
Date Posted: 30/Oct/2010 at 1:11am
They are moving into the project side of the business and from the margin improvement this quarter the revenues from project side seems to have started flowing in . According to an old report I read the management were confident of making good the sales seen in pre restructuring days during fy 11 so I expect next two quarters to be good also. And the high OPMs should help the rerating of the company whenever it happens. I like the way the management has gone about the whole restructuring exercise in a steady manner which reflects maturity on their part. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: subu76
Date Posted: 30/Oct/2010 at 1:41am
| Thank you Sir...... |
Posted By: CHINKI
Date Posted: 30/Oct/2010 at 9:57am
The above calculation does not take into revenue to be generated from the new businesses which they have planned to enter. Also heard from the market (I am not sure of the reliability) that there are chances promoters want to sell off completely. ------------- TOUGH TIMES NEVER LAST, BUT TOUGH PEOPLE DO |
Posted By: Rishant007
Date Posted: 01/Nov/2010 at 9:28pm
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after looking at the results I have started buying in small lots. Hearing good opinion from diff analyst and they hopeful on the future of the company and the management has proved it based on last 2 qtrs.
Company focusing on High margin orders now. They are reluctant to add low margin orders.
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Posted By: Jaishrikrishna
Date Posted: 01/Nov/2010 at 11:10pm
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This is the latest reco. from capital market, they are expecting a 4-4.5 Rs EPS for FY.12, with high margins sustained, this stock could be re-rated. ------------- Don't Buy and Hold, Buy and Homework / Fish see the bait,but not the hook; Men see the profit, but not the peril. |
Posted By: adityancs
Date Posted: 04/Nov/2010 at 6:37pm
| All are in Diwali mood. I wish all Teddies of Shanthi Gears Thread a very Happy Diwali. |
Posted By: Rishant007
Date Posted: 08/Nov/2010 at 8:33pm
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today Shanthi Gears crossed its resistance levels and heading higher it seems.
Hiteshji's best rated stock on the move
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