Srisai's Instinct Stock Calls from Dt: 04.11.2009

Srisai's Instinct Stock Calls from Dt: 04.11.2009

This(Srisai's Instinct Stock Calls) will be a New Initiative of this blog to Publish Blog Author's Own Investment/Trading Calls for Short-Medium Term perspective. But All these Calls are not given on Purely Technical perspective. Most of these Calls are given by Blog Author from His past Investment/Trading experiences. So Do not expect More depth in Calls. Author has tried his best to give some calls for the benefit of Investors/Traders from his experience and from some media/web/news based call. So author request all the investors/traders to take/try these Calls as RISK CALLS. And Keep Strict Stop Loss Own (or) Keep Resi,Supp levels As Stop Loss for their Trading(or) Trade/Invest @ your Own Financial Risk. All type of Comments are Welcome about this New Initiative. Dont Forget to Keep Stop Loss and Again Author Remembering you that he is giving calls only from his past trading experience...



Nifty Future: cmp 4559

Nifty Future crucial support at 4557 level... If this level does not hold for 2-3 days (Closing basis) further downside expected upto 4420-4300-4230 levels.... Mkt in Oversold region.... PCR ratio is at 0.80 level... So mkt may bounce back in short term (+100 to +150 likely in few sessions)... But NFut will have Strong resi @ 4721-4765 levels...



Dr.Reddy: cmp 1038

Buy Above 1060 level for Target 1135-1150 level.... Keep 1010 as Strict StopLoss...


Reliance Capital: cmp 693

Stock has fallen from Recent high range of 900-930 levels.... I think Almost Worst over for the Stock near term... Go LONG with Strict StopLoss of 630.....
Resi @ 745-775-783 levels.


Gujarat NRE coke: cmp 53

Stock has Good support at 55-56 levels.. Stock may try to cross this and try for 61-62 levels near term.... But If not able to cross 55-56 levels, then it could fall 49-46 levels...


Marico cmp 100

Stock has good support at 88-91 levels.. Keep This Level as Strict StopLoss and Go LONG.... 10-12 % uoside expected... But Keep Strict StopLoss.



GPIL(Godawari Power and ISpat Ltd): cmp 129

Stock has recently breached its Strong resi @ 146 levels... But now stock trades below this.... Stock may try reach that 146 level. So RISK Traders try this stock for LONG positions with Own StopLoss/Risk....


By


Srisai

Chances of a deeper correction are rising: Chris Wood (CLSA)

Chances of a deeper correction are rising: Chris Wood

Published on Tue, Nov 03, 2009 at 10:57 , Updated at Tue, Nov 03, 2009 at 15:49
Source : CNBC-TV18

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Global equities have surged about 70% in six months on hopes of a rebound in the US economy. However, with valuations getting stretched, central banks raising the drumbeat on policy tightening, and fear that governments may withdraw their stimulus measures, the road ahead looks bleak for global equities.

Chris Wood, Equity Strategist, CLSA, says the chances of a deeper correction in global equities are rising.

Jim Walker, MD, Asianomics, too doesn't see a V-shaped recovery in global equities. "If you look at the level of activity across the world from Europe to America to Japan to Asia, it is weak. It's a very weak recovery so far and as governments withdraw stimulus over the course of the next year, it is going to get weaker still."

On US markets:

After Friday's sell-off, US markets ended Monday in the green zone on positive manufacturing data. The US economy grew at a better-than-expected annualised rate of 3.5% in the third quarter. The return comes after four successive quarters of shrinking economic activity. Experts hail this as the end of the recession which was worse than the Great Depression of 1930s.

The ISM manufacturing index rose to 55.7 from 52.6 in September. This is the third straight month of growth and highest reading since April 2006. Pending home sales rose to their highest level in nearly three years in September. Also, construction spending rose 0.8% in September.

But Wood is still cautious. He

says there is some initial indication of a technical breakdown in the US. "The US market will be vulnerable early next year the US market. If it becomes clear, after this inventory cycle, that consumption, employment is not really recovering, then the market will go down. You will then get renewed stimulus in the US and measures trying to generate growth. The key variable in the West is government policy." CLSA's best case scenario is 1,200 on the S&P 500 by year-end, he added.

However, Richard Bernstein of Richard Bernstein Capital Management is a lot more bullish. "Right now, there is a blurring between the secular issues and the cyclical ones. There are people, including me, who are concerned about the secular issues, but we can't ignore the fact that the economy is getting better, employment is improving. When that happens you will see a cyclical rebound."

Also see: Obama warns on US job losses, urges export boost

Michael Darda of MKM Partners too sees the markets headed higher. "We have moved a very long way in a very short period of time, so we are building in recovery expectations. A period of consolidation and correction will not be out of line. I believe that the recovery process is underway. Even if the big gains are behind us in percentage terms, I still think that in the next 6-8 months the markets will move higher, correction and pullbacks notwithstanding."

On Asia:

Today, Asian markets ended weak ahead of the two-day monetary policy meeting of the Federal Reserve. Wood feels an easy monetary policy in Asia can create asset bubbles. (Read: Easy monetary policy in Asia may create asset bubbles: CLSA) "The worst case correction in Asia is at one-third of highs." Wood advises investors to use significant corrections in Asia to buy stocks. “We have reduced our weight on India, and increased our weight on China."

On India:

In last week's credit policy, the Reserve Bank had stated that it would be looking to raise rates going forward on the back of positive August IIP numbers. This didn't go down well with the market which sees a further rise in borrowing cost. The street sees the recovery in India Inc on the back of lower expenses, rather than a pick-up in business.

According to Wood, India is most likely to see the first rate hike in Asia. But was quick to add that the Reserve Bank won't be aggressive in monetary tightening. "Going into Q1 of next calendar year, the Indian stock market will have to deal with a likelihood of monetary tightening. That is not a disaster. It just creates some negative noise in the short-term."

CLSA +ve on power, road; bullish on metals

CLSA +ve on power, road; bullish on metals

Published on Tue, Nov 03, 2009 at 10:32 , Updated at Tue, Nov 03, 2009 at 16:07
Source : CNBC-TV18

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N Krishnan, Head of Research - India, CLSA, is optimistic on the power and road sector and bullish on metal stocks. He sees no triggers yet to buy telecom scrips.

Commenting on Q2 FY10 numbers, Krishnan says earnings are ahead of expectations. "We expect earnings growth of 5-6% this year. We see strong topline growth in H2 on a base effect, but margins are likely to be under pressure."

Related News:
• See what other experts are saying about markets
• See what FIIs are saying about the markets
• See what Udayan Mukherjee is saying about the markets

Here is a verbatim transcript of an exclusive interview with N Krishnan on CNBC-TV18. Also watch the accompanying video.

Q: We had a big rally and somewhat of a correction over the last couple of weeks in India. Do you think markets had run ahead of themselves or you are confident that valuations are not too stretched?
A: The markets have had a very strong run from the lows of March, while we have seen that reflected in earnings upgrades as well. Clearly, valuations are a little above their historical average. What the market seem to be pricing in is a smooth recovery right into FY11. What we have seen globally is clearly having some impact on investors thinking, including those who were at our conference since yesterday. In our view the key for further performance of the market is going to be pick up in the investment cycle because a lot of the low hanging fruit from the recovery of the consumer is now largely in the numbers. However, we are quite confident that we will see that coming through because there are enabling conditions in the form of domestic recovery, in the form of interest rates being pretty low and also in the form of equity markets still being a lot more supportive for capital raising than what they were a few months ago.

So we will start to see those upgrades coming through in the next couple of quarters and that will actually drive the next leg of earnings upgrade. For now, the first run has largely been digested.

Q: How has earnings season gone by for you this time around, there seemed to be some large scale disappointments but for you how did Q2 perform?
A: if you look at the aggregate numbers, they were actually slightly ahead of our expectations. We were looking at a headline de-growth for the Sensex about 1.5% because of year on year comparison. However, we came out with a small growth of about 3%. When we look at our broader universe of 110 stocks, the situation was fairly similar a beat of about 5% points. The beat was largely on account of margins surprises and particularly benefit of lower raw material costs and treasury gains for number of banks. So relative to Q1, we are clearly seeing momentum of surprises coming off. There was disappointment in some sectors for some of the property stocks. We were quite disappointed with the numbers and the picture was mixed in some of the other sectors as well.

Q: Looking ahead into two-four quarters, do you find reasons to bring about significant earnings upgrade from here or do you think this is not going to be one more of those cycles where every quarter you see sharp acceleration in earnings upgrades as often happens when the market takes off?
A: The momentum has already started to flag. You can attribute it to the fact that the upgrades which you have seen since the bottom have come on account of recovery in consumer led sectors whether its autos have seen volumes pick up. I would say every property relative to forecast we had in early 2009, we saw volumes starting to pick up. Therefore, we needed to upgrade our numbers. In some of the global cyclical, the assumptions at that point of time may have been pessimistic. So we have seen is a reset of very pessimistic estimates and the recovery in consumer sentiment playing into these upgrades.

However, if one looks at the composition of market earnings and particularly driving growth between FY10 and FY11, you now need to start seeing meaningful upgrades coming through sectors like banks like Oil & Gas, metals, IT services. All of these are more co-related to either investment cycle picking up; credit growth coming back for banks or to the global recovery getting a bit more traction.

You have a bit of breather over the next quarter or two. However, by early 2010, you will start to see a pick up there as well. Globally, our view is that you will see global traction midway to 2010 and that will essentially mean looking 12 months out we should still be in midst of earnings upgrade cycle. However, there is a pause for next quarter or two.

Q: In the nearer-term for the rest of this financial year, what is your earnings growth estimate? What will it mean for the second half by way of growth uptick you would want to see?
A: For this year we have a rather muted growth expectation of about 5-6%. This is because we have some of the large contributors to earnings the global cyclical facing a much tougher comparison. What it does mean is that you will see topline numbers being fairly strong as we go into second half because of YoY comparisons for the domestic sectors. However, you will start to see the gains that you saw on margins coming off as we go later in the year. We have seen input cost move up. Some of the operating leverage gains will not be as strong because cost structures will start to move up.

The overall earnings momentum will get somewhat more muted. In FY11, you will see a pick up yet again and that will be on a low base. This is because FY08 to FY10 have virtually been growthless years if you take the aggregate two year period

Q: Do you see any apprehension on part of people who are attending on conference on infrastructure sector on how sanguine they are about capex actually picking up?

A: Some investors are doubtful because the sector has actually held up fairly well in terms of valuations and while there is visibility in the medium term for some companies due to strong order book, you cannot give the benefit of that for an extended period of time. The reason why we think that the investment cycle should pick up is what we are hearing or seeing from corporates that have deferred their capex plan last year around this time in response to they credit crunch and the fact that the demand really fell off severely. They are coming back slowly. The mood is still of caution, so they are coming back slowly but what we also see is that even for the smallest of companies, the SMEs which we track through a quarterly survey, the capex intentions are clearly rising. So two quarters ago, just a little more than a quarter the companies in that sample were investing in that capex, the rest of them had put their plans on hold and less than only around the third we are actually looking at undertaking capex in 2009, things are changing on both counts. Hence, about 40% are now in investment mode and a little more than 50 are talking about investing in the next 12 months. Therefore, the momentum is starting to pick up and outside of this like power and roads, there was clearly a big pipeline that had got built up but where projects got delayed or deferred because of capital constraints or in some cases policy related issues as well and I am quite optimistic with at least in these two infrastructure sectors, one should start to see things picking up.

Q: You have two of the largest telecom companies being profiled today. So what you have made of that space that has easily been the biggest earnings disappointments this quarter?

A: Yes that was the sector in which it pulled down the growth what we were expecting. The sector is in a fairly early stage of disruptive pricing. By this I mean that the companies responses are still coming in, but you do have tariff levels which are already very competitive. So we could argue about how much further price erosion you could see. You also have a number of new entrants which are yet to make a big impact on the space and their own response and signals on how aggressively they will enter the market may start to change or they may indicate that they would not be as positive on this market as they would have been. Hence, according to me, there is a bit of trouble in the short term. The market may look at the stocks and say that these are levels that which there seems to be value or buying into the stocks just yet especially because you have not had even a quarter of results after these big tariff cuts have come through. So the sector is going to be a bit sluggish for the next couple of quarters but you would probably find some value investors who have got ht e luxury of taking a much longer term horizon starting to nibble around these price levels.

Q: Where do you stand on global commodities because numbers from some of those companies, the large ones like Hindalco, Tisco have not exactly been up to street estimates? Are you bullish on global commodity stocks generally or you think they could correct from here?

A: There is again here a short term versus the longer term issue. Some of the global commodities correct a bit in terms of prices, it is in the short term again going to be a function of what you see on the dollar and whether risk aversion creates a stronger dollar and correspondingly impacts commodity prices. When I look at most of the stocks in the metals space, compared to any time in the past ten years or so, this is the first time that I can see most companies in the sector having a reasonably strong volume growth story over the next two-three years and that is something that which is the attraction of the sector that right now so we are positive on some of the names. Principally, we think that even if there isn’t a very strong price recovery, we have a combination of good volume growth coming on account of new capacities. In some cases that is going to lead to meaningful cost savings as well just because of economies of scale and some cases of restructuring of overseas operations. So we are actually quite bullish on that space. Some of the stocks have corrected and are starting to look very interesting.

Q: How much margin pressure you expect to see over the next two-four quarters because that is what has helped to autos and even cements to some extent?

A: You will definitely see margins tapering off. The commentary from all the auto companies during the results season has been that the margins have been very good this quarter. However, I don’t expect them to sustain. So they have been very cautious on that and I do think that as the cost trends up a little. We will see some margin pressure. The extent of disappointment may not be that much because companies have been guiding for that. Cement is another sector which is in the relatively early stage of price correction but as supply comes on and there is a lot of it over the next 12 months, we could see prices coming under more pressure which will mean that margins will take a beating. So I do think that the margin outlook for the second half of the year is certainly going to be a lot more challenging than what we have seen till now.

Src: Moneycontrol.com

*******************************************************************

Other Mkt Related Stories

Nifty ends below 4550; Suzlon, DLF fall

RIL falls; Reliance Natural jumps

Is Sensex entering a corrective zone?

Src: Economictimes.com

8 stocks to watch out for in this falling market and Stock Views

8 stocks to watch out for in this falling market

Sanjeev Sinha, ECONOMICTIMES.COM

The stock markets are again in the correction mode. Till Friday (October 30) close, the Sensex had lost over 1,590 points, or 9.12%, since its Diwali day high of 17,493. Investors, at the same time, have lost Rs 4.6 lakh crore with BSE’s market capitalisation now being at Rs 53.5 lakh crore. All, however, is not lost and is not bad for investors at least as experts feel that some quality stocks with 10-30% retracement look more attractive in the present market scenario.

Here we take a look at some good stocks which have witnessed a correction over the last two weeks, in line with the declines in the broader markets, and are attractively placed in terms of investment:

1. Reliance Industries Ltd 2 Nov 2009, 1444 hrs IST

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Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History Fall over the last 2 weeks (Till Friday morning): 15.7% Outlook: The company has successfully executed its two mega ventures, viz. KG basin gas and the RPL refinery. “We expect them to be the key drivers of profitability over the next few years. We remain positive on RIL’s future growth prospects. After a recent fall at current market price of Rs 1950, RIL is currently trading at 16.8x and 12.5x of FY10E and FY11E earnings, respectively, which appears attractive. We expect RIL to deliver 30.8% CAGR in earnings over next two years (FY09 – FY11E). Historically the stock trades at an average of 15x its 1 year forward earnings. Considering this, our target price for the stock stands at Rs 2,475 (15x of FY11E earnings of Rs 165), providing an upside potential of 20% from current levels,” says Ashish Kapur, CEO, Invest Shoppe. Invest Shoppe recommends a ‘Buy’ on RIL.

2. Tata Steel Ltd 2 Nov 2009, 1442 hrs IST

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Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History Fall over the last 2 weeks: 19.2% Outlook: Tata Steel is one of the top 10 steel producers in the world with an existing annual crude steel production capacity of 30 mtpa. It is an integrated steel plant and is geographically diversified through investments in Corus, Millennium Steel and NatSteel Holdings, Singapore and a well-established marketing network in 50 countries. “The company has impressive expansion plans which have the potential to catapult it to one of the leading players in the steel industry. Steel as a commodity is in a long-term bull market and Tata Steel is likely to be one of the major beneficiaries. The demand from domestic as well as international players is expected to increase with the economic stability in the world,” says Kapur. Invest Shoppe, therefore, recommends a ‘Buy’ on Tata Steel.

3. Maruti Suzuki India Ltd. 2 Nov 2009, 1441 hrs IST

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Latest Quotes | Charts | News/Announcements | Quarterly Results | P&L | Price History Fall over the last 2 weeks: 9.2% Outlook: “Maruti will continue to be a dominant player in the PV segment, and will enjoy a preferred brand image in the domestic market. Moreover, capacity addition will provide it with additional support to spread its wings further into the overseas markets, and to enhance its exports. At the CMP of Rs 1, 380, the stock is trading at 15x FY2011E EPS,” says Sarabjit Kour Nangra, VP–research, Angel Broking. Angel Broking recommends a ‘Buy’ on the stock, with a Target Price of Rs 1,656.

More on this : 8 stocks to watch out for in this falling market

World's top 10 secretive financial centers

Mid-term picks / Top 10 shipping stocks

NSE, BSE likely to extend trade timings by next month

Src: Economictimes.Indiatimes.com

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Deadpresident Blog Updates:

426 companies aggregate net profit up 74.90% in Q2

Kewal Kiran Clothing

Annual Report - Unitech - 2008-2009

Jay Bharat Maruti

India Strategy - Nov 1 2009

Biocon / Hindustan Zinc

IDFC / Rolta India

Yes Bank /

Sintex Industries

Cadila Healthcare / Wyeth

Punj LLoyd Ltd

FMCG Sector

Pancea Biotec

Crompton Greaves

Usha Martin

SEAMEC

Ramsarup Industries

Weekly Wrap - Nov 1 2009

GAIL, CIPLA. HCL, Bank of Baroda , ACC, Ambuja Cements, Sun TV, HPCL, Shriram Transport, Tata Tea, India Cement, Havells, Hexaware

Top Picks - Nov 1 2009

Best Picks

Src: Deadpresident.blogspot.com

Srisai's Instinct Stock Calls for Dt: 03.11.2009

Srisai's Instinct Stock Calls from Dt: 03.11.2009

This(Srisai's Instinct Stock Calls) will be a New Initiative of this blog to Publish Blog Author's Own Investment/Trading Calls for Short-Medium Term perspective. But All these Calls are not given on Purely Technical perspective. Most of these Calls are given by Blog Author from His past Investment/Trading experiences. So Do not expect More depth in Calls. Author has tried his best to give some calls for the benefit of Investors/Traders from his experience and from some media/web/news based call. So author request all the investors/traders to take/try these Calls as RISK CALLS. And Keep Strict Stop Loss Own (or) Keep Resi,Supp levels As Stop Loss for their Trading(or) Trade/Invest @ your Own Financial Risk. All type of Comments are Welcome about this New Initiative. Dont Forget to Keep Stop Loss and Again Author Remembering you that he is giving calls only from his past trading experience...



Nifty Future cmp 4707

Nifty's 200 DMA comes nearly at 4633-4626 levels.... That level should be strong support for the near term.... But if breaches that level, then could expect further 2-3 downside from there.... Immediate uptrend only above 4792 levels... Then 4880 level will act as a Strong Resistnce Zone.... Keep Watch these levels and Trade according to that... Other Supports are 4688-4654-4633...


Sterlite: Cmp 771

Stock has support at 737 levels... Short term investors Keep 705 level as Stoploss and Go Long.... Accumulate upto 737 range and Keep SL at 705 level... That is strategy... Buy in Small Qty...


Jetair: Cmp 379


Stock has support at 335-340 levels... Buy at that level if falls below 350 and keep Stoploss at 315 levels and Go Long.. Resi @ 415-420 levels... Furhter Resi at 434-455 levels.... Upside only above 420 levels...



Results Review:

1) HinduStan Lever, Suzlon, RCOM, Bharti, Hindalco results well Below mkt estimates...
2)PNB,Sterlite results well above mkt estimates.
3) Unitech Profit down 50%....
3) SBI, ICICI Bank Results above mkt estimates.... But ICICI Bank NPA is a concern...
4) Midcap results somewhat Ok than Largecaps...
5) Relinfra, JindalStel&Power are inline...




By Srisai

Market Views from Various Sources

Intermediate trend reversal confirmed


Prices collapsed in settlement week with the Nifty dropping 5.7 per cent to close at 4,711.7 points. The Sensex was down 5.5 per cent, closing at 15,896 points. The Defty was down 6.8 per cent with the dollar bouncing from over-sold levels

The poor sentiment was mainly due to continuous and heavy selling by FIIs. Although domestic institutions bought, they couldn’t match the supply on offer. Volumes were pretty heavy in both cash and derivatives segments. Advances were heavily outnumbered by declines. The BSE 500 dropped 6.2 per cent while the Midcaps dropped 7.8 per cent.

Outlook: The market is testing a critical support at 4,700 and there are some signs that it is over-sold. If the support holds, a short-term uptrend till around 4,950 level is possible. If the 4,700 support breaks, the next support is at 4,600. The intermediate trend is clearly bearish and net losses through November look likely. Expect a rise in volatility.

Rationale: The intermediate trend is into week two of bearishness, following 13 weeks of bullishness. Normally intermediate trends last between 6-10 weeks so net losses are likely through November. Chart patterns indicate a downwards breakout from range-trading between 4,900-5,100, with an initial target of 4,750, which has been exceeded. Volatility has already risen on the breakout.

Counter-view: Momentum indicators suggest the market is oversold in the short-term.

So there could be a bounce – especially if the FIIs reverse their attitude. The long-term trend is still positive as far as we can tell. In such circumstances, it’s possible that the intermediate downtrend could end fairly quickly. As of now, the maximum upside appears to be around 5,050. However, if the intermediate downtrend ends, the first signal would be 5,050 being exceeded.

Bulls & bears: There were sell-offs across most sectors except for sugar, which has been on a sustained bull run. The worst-hit sectors included banking and realty while the IT sector showed comparatively greater defensive strength. Metals also saw big losses following weak trends in international commodity markets. FMCGs displayed their traditional defensive strength in crisis situations.

This sort of across-the-board movement suggests that any market recovery will also occur across the board. As and when the market bounces, the worst-hit sectors will also rebound the highest. Hence, an optimist will be going long on the high-volume bank and realty stocks. Pharma and IT trends will depend to some extent on dollar movements.

MICRO TECHNICALS

Bajaj Hindustan
Current Price: Rs 196.45
Target Price: Rs 215

---

The stock has corrected from recent highs and is consolidating on support. Keep a stop at Rs 192 and go long.

Book partial profits between Rs 210-215. There is a chance that the stock could rise till around the Rs 225 levels so it makes sense to retain around one-third of the original position above Rs 215.

TCS
Current Price: Rs 628
Target Price: Rs 600

---

The stock is developing an encouraging pattern of higher highs and lows. However, it is in correction mode right now and likely to ease down till it hits support at around Rs 595-605. Keep a stop at Rs 635 and go short. Start booking profits at below Rs 605.

Dr Reddy’s Labs
Current Price: Rs 1,019
Target Price: Rs 1,070

---

The stock has made an upwards breakout on reasonable volumes. It has a potential target of around Rs 1,070-1,100. Keep a stop at Rs 1,000 and go long. Increase the position above 1,040. Start booking profits above the Rs 1,070-mark.

Axis Bank
Current Price: Rs 907
Target Price: Rs 990

---

The stock has hit a fairly strong support. If it rebounds, there could be a clear run-up till around the Rs 990 mark. Keep a stop at Rs 900 and go long. Increase the position if the stock crosses the Rs 930-mark. Start booking profits above Rs 970.

Mahindra & Mahindra
Current Price: Rs 921.95
Target Price: Rs 900

---

The stock is still settling down and consolidating around support between Rs 900-930. It is likely to test the bottom of this range again. Keep a stop at Rs 935 and go short. Start covering the position at around Rs 905.

****************************************
Deep cuts in Smart Portfolios

Markets at a glance

Analysts' corner

Expect sharp rise in volatility

Improving outlook

Gathering speed

Domestic gains

Provisioning woes

******************************************
Top 10 shipping stocks

Check out mid-term picks of the day

Investors look for the big winners of next upturn



Src: Business-Standard, EconomicTimes,

A professor's multi-million-dollar bread biz

A professor's multi-million-dollar bread biz

Fifty-four-year-old M Mahadevan is today known not only in India, but overseas too, as 'Hot Breads Mahadevan'.

His journey from being a professor at the Madras University to an entrepreneur in charge of a multi-million-dollar business spanning various countries can only be described as amazingly inspiring.

But the man is still the same: simple hearted and hard working. Here is his interesting story.

Early days

I come from a simple town in Tamil Nadu called Udumalpet; it is 65 kilometres from Coimbatore. Though both my parents were doctors, I took my post graduate degree in Commerce.

My interest in the hotel industry began after reading Arthur Hailey's Hotel. I had just joined college then. In hindsight, I feel what attracted me to the hotel industry was people; I love meeting people.

My parents also met people, but only those who were in pain and misery, and I want to meet people who are happy. Those who come to a bakery or restaurant are always in a joyous mood.

I came to Chennai in 1979 as an Assistant Professor at Madras University. I taught Marketing to management and accounts students. That was during daytime.

The passion to be in the hotel industry was so intense that I started working for four hours at Hotel Ambassador Pallava at night to learn more about the industry. I was a trainee, a bell boy, a receptionist: everything. So, you can say I was a professor during day time and a bell boy in the evening.

My mother was aghast when she came to know about what I was doing. She asked, 'Are you mad? You are a teacher, and then you are going and cleaning tables? I can't understand this. I will not be able to find a girl to marry you!'

Image: M Mahadevan with the goodies prepared at his Hot Breads bakery.
Photographs: S Ramesh

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In those days, no girl from any good family in Chennai would marry a man who worked in hotels! In short, my mother didn't like it a bit. But I told her, 'One day, I will become the owner of a hotel and give employment to many people.' She was happy to hear that part.

First enterprise, a take-out with Rs 60,000

I met my partner while I was working in the hotel, and we started our first take out -- at the Tic-Tac unit in Chennai. The unit was selling north Indian food and I started a Chinese take-away there.

I opened my kitchen with Rs 60,000, and it opened at 5 p.m. and closed at 11.30 p.m. That was the time Chinese food was a craze among the people here.

One of the persons who came to take the food was building a commercial tower and asked me whether I was interested in taking up a place there.

That was how the restaurant Cascade opened. We served Chinese, Thai, Malay and Japanese cuisine.

Those who sold Chinese had red and green as the interiors, but I wanted something different. I got Parmeshwar Godrej from Mumbai through my neighbour, who was artist M F Hussain's son. And I told her I wanted all white and blue. I wanted my restaurant to look different and the interiors became a selling point. Many came to see the interiors.

From then on, business roared. That was in 1986.

Image: 'Hot Breads Mahadevan'.
Photographs: S Ramesh

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From hotel to bakery

I used to go to Singapore to buy my ingredients like Chinese sauces for my hotel and that was when I saw these little bakeries. I decided to open a bakery in India and sell bread. Many told me, 'people look at bread as something that they take when they are ill. How are you going to sell bread?'

My partner said, 'You are crazy. The success of Cascade has got to your head!' So, whatever money I had (Rs.300,000) in Cascade, I took with me, and decided to start my bread unit on my own. I got Rs 800,000 as loan. I started Hot Breads with Rs 11 lakh (Rs 1.1 million) in 1989.

We had to import bread making machines in those days. It was the license regime then -- not like today. I gave the project plan and it took four months for the committee to take a decision though they met every month.

Once you got the license, it was mentioned in it what machine I was to import and at what cost. Not even a dollar more I was supposed to bring in to the country!

I was not looking at selling just bread alone but curry buns, pastries, pizzas, burgers, etc. Bread was only a trap for the customer to come inside.

We took a bun, filled it with curry and made it a curry bun. We filled chicken tikka inside a Croissant. I got the idea to make these things Indian after I saw what Japanese did to their bakery items. Our curry buns are a big hit even in Paris.

People used to crowd in our unit at Alsa Malls in Chennai.

From day one, we started making profits as the concept was unique and the product tasty. It was a perfect cocktail. We broke even in the first year itself and never looked back.

In the third month itself, people from Kochi and Bangalore came to me to start Hot Breads units there.

Soon, I came to be known as 'Hot Breads Mahadevan'!

Image: Some of the breads, pastries, etc on display at a Hot Breads outlet.
Photographs: S Ramesh

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First overseas Hot Breads unit in Dubai

In 1994, a Tamil couple who had come to Chennai saw how Hot Breads attracted people in Chennai. They asked me, 'Would you like to come to Dubai?' I said, 'Yes!'

I had around 12 units in India by then. We went to Dubai, started a unit there and it was a huge success. But we had to close it down after a year as it became a no-parking zone. When we were about to wind up, I was a bit sad that my overseas venture did not take off.

We soon got a contract from a union co-operative society. From day one, it was a roaring success. It was a Godsend. Like they say, when one door closes, ten others open.

For 14 years, we were at the same place. Only last year, they replaced us but then now, we have so many other units in Dubai.

The strangest demand we got was for Arabic bread. A gentleman came to our shop and said, if you don't have Arabic bread when you are here, shut your shop'. The very next day, I hired a Lebanese guy and we started making Arabic bread. Kids might like sandwich bread, but elders still prefer Arabic bread. But what is catching up is the curry-flavoured bread all over.

Image: Hot Breads is a booming business.
Photographs: S Ramesh

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Becoming a Non-Resident Indian

After I opened my first unit in Dubai, I decided to become an NRI. The rules in India were stringent then. If you are investing from India, you have to take permission. Even if you had to cough or sneeze, you had to call the Reserve Bank of India and ask, 'Can we sneeze?'

The stringent rules forced me to be a Non-Resident Indian. Anyway, I would be away for more than 180 days to build my units. The profits you make internationally are not taxed here. The profits I made were put back to start more units abroad. The rules are different now. But I am happy that I chose the NRI route.

The second stop was Paris

In the last 20 years, I have opened -- with help from others -- 130 bakeries in 16 countries: the United States (New York and San Francisco), Ghana, France (Paris), UAE (Dubai), Botswana, Kuwait, Muscat, Singapore, Malaysia, the United Kingdom (London), etc. Now we are going to Australia.

But the market in India is booming and we have 68 units here.

We started with Rs 60,000. Now, we make around Rs 100 crore (Rs 1 billion) in India and internationally around Rs 120 crore (Rs 1.2 billion).

Image: M Madhavan with a friend.
Photographs: S Ramesh

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Hand of God

I believe in the hand of God. You have to be at the right place at the right time, and God's hands have to be there to help you and guide you. Wherever I went -- Dubai, Botswana, San Francisco -- a force took me there.

My ideas worked because they came at the right time. Instead of 1989, if I had opened in 1980, I would have gone bust. Doing your homework is very important which is studying and understanding the market.

I have made many mistakes, but I try to learn from them. We keep learning.

My advice to budding entrepreneurs is, innovate and think different. Don't follow anyone's footsteps; leave your own footprints for others to follow. Try to be lean and mean. Don't take your customers for granted.

Unless you have passion, you will not be able to carry a smiling face. More than hard work, it is the passion that you need to succeed.

My 'boys'

I have 3,000 boys working for me in India. I started with 14 boys in Dubai, now we have more than 1,000 boys working abroad. I love my boys, but I am a hard taskmaster. I don't accept laziness. I don't like procrastination. I drive them crazy, I know. Some of my boys run to my mother and complain about me!

We started 'Winners' in Chennai to teach poor, bright boys to bake. When you teach them a skill, you give them a life.

My happiness is not in turning my Rs 60,000 into Rs 120 crore. I am happy because I give employment to 3,000 boys in India. India needs not one but 10,000 Mahadevans to give employment to thousands of people. What I have done, anybody can do. I am an ordinary guy from a small town, but I had big dreams and commitment.

Image: A worker displays baguettes (French stick), bread made with organic flour, at a bakery in Paris.
Photographs: Benoit Tessier/Reuters

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Six remarkable unknown PSUs

Six remarkable unknown PSUs

Six remarkable unknown PSUs

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By Moinak Mitra, ET Bureau

Till recently, not many people had heard of Satluj Jal Vidyut Nigam. Then the government announced that the company would a candidate for divestment in the coming months and now everyone is suddenly interested in knowing more about Satluj Jal Vidyut Nigam.

With the government preparing for another round of divestment, a fresh new set of public sector undertakings (PSUs) are preparing to capture the limelight. They’re not the big ticket ‘navratnas’ like ONGC, SAIL and GAIL which the public has come to recognise. Instead, they are hitherto unknown companies and nobody is quite sure what they do. The companies picked by the Government for divestment are all set to become familiar names for investors in the months to come.

Meanwhile, Corporate Dossier decided to pre-empt matters by taking a close look at six little-known PSUs that have executed remarkable turnarounds in recent years.

EDCIL

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CMD: Anju Banerjee

Under Banerjee’s leadership, EDCIL’s turnover has grown from just Rs 25 crore to over Rs 54 crore and its grading by the Department of Public Enterprises has moved up from ‘fair’ to ‘excellent’. In educational projects, typically, the gestation is long but Banerjee seems to be happy with the 10-16% margins her business bears.

Also, she has sketched out high-value areas for her company, quality certification and school accreditation, technical audit for institutional construction, IT education, educational fairs and online testing facilities. Categorised as a ‘Mini Ratna’ by the government, EDCIL provides placement to international students from over 30 countries and sends expert faculty to more than 15 countries.

Today, 65% of the work comes from the government and the remaining 35% from the private sector. Banerjee wants a 50:50 ratio. “I want to get more private and international clients. I’d like to add more professionals and specialists to add value to our client base,” she says.

Heavy Engineering Corporation

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CEO: GK Pillai

People do move from the public to the private sector, but Pillai’s reverse swing from the Sanmar Group in Chennai to HEC at nearly one-tenth the annual remuneration was an eye-opener.

Pillai takes pride in the fact that for the first time in the company’s 50-year-history, it has booked a profit for three consecutive years. The turnover per employee has improved from Rs 4.41 lakh in 2004-05 to Rs 15.73 lakh today.

In 2007-08, sales spiked to Rs 413 crore from Rs 297 crore in the previous year. And in 2008-09, the sales have touched Rs 454 crore with a profit of Rs 18 crore against a targeted profit of only Rs 6 crore. In 1958, the company was created to serve the steel and coal sectors. But Pillai chose a strategic shift. “I want HEC to serve strategic sectors like defence, space and the nuclear.”

In other words, he realised it was time to de-commoditise the company, away from market fluctuations, toward the sweet spot of exclusivity. In line with the new thinking, HEC has developed a very special material for nuclear-grade steel and also supplied the heaviest (810 tonnes) launchpad for India’s space mission.

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