Himachal Futuristic Corporation Limited REPORT DATED 27.10.2007

8/14/2019 Himachal Futuristic Corporation Limited REPORT DATED 27.10.2007

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INVESTMENT RATIONALES

It is the 5It is the 5It is the 5It is the 5thththth company in the waitingcompany in the waitingcompany in the waitingcompany in the waiting

list of thelist of thelist of thelist of the telecom applicants thustelecom applicants thustelecom applicants thustelecom applicants thus

being ahead in the firstbeing ahead in the firstbeing ahead in the firstbeing ahead in the first come firstcome firstcome firstcome firstserve list.serve list.serve list.serve list. Moreover the company alsoMoreover the company alsoMoreover the company alsoMoreover the company also

stands a better chance as thestands a better chance as thestands a better chance as thestands a better chance as the

government hasgovernment hasgovernment hasgovernment has

conveyed that companies present, asconveyed that companies present, asconveyed that companies present, asconveyed that companies present, as

an operator inan operator inan operator inan operator in one circle will get aone circle will get aone circle will get aone circle will get a

priority to expand.priority to expand.priority to expand.priority to expand.

Once the disputes over the spectrumOnce the disputes over the spectrumOnce the disputes over the spectrumOnce the disputes over the spectrum

issue areissue areissue areissue are cleared a rerating of tcleared a rerating of tcleared a rerating of tcleared a rerating of thehehehe

stock is possible. Westock is possible. Westock is possible. Westock is possible. We strongly believestrongly believestrongly believestrongly believe

that hfcl stands a good chance tothat hfcl stands a good chance tothat hfcl stands a good chance tothat hfcl stands a good chance to winwinwinwin

the ALL INDIA TELECOM LICENSE.the ALL INDIA TELECOM LICENSE.the ALL INDIA TELECOM LICENSE.the ALL INDIA TELECOM LICENSE.

Hfcl also has received around 310 crHfcl also has received around 310 crHfcl also has received around 310 crHfcl also has received around 310 cr

from a landfrom a landfrom a landfrom a land deal in chennai. Thisdeal in chennai. Thisdeal in chennai. Thisdeal in chennai. This

works to around Rs.7 perworks to around Rs.7 perworks to around Rs.7 perworks to around Rs.7 per share.share.share.share.

Hfcl also has a telecom infrastructureHfcl also has a telecom infrastructureHfcl also has a telecom infrastructureHfcl also has a telecom infrastructure

busbusbusbusiness,iness,iness,iness, which is the only basis of itswhich is the only basis of itswhich is the only basis of itswhich is the only basis of its

present valuation. Inpresent valuation. Inpresent valuation. Inpresent valuation. In an interactionan interactionan interactionan interaction

with the management after the dismalwith the management after the dismalwith the management after the dismalwith the management after the dismal

performance in last quarter we wereperformance in last quarter we wereperformance in last quarter we wereperformance in last quarter we were

said that thesaid that thesaid that thesaid that the delay in bsnl multi billiondelay in bsnl multi billiondelay in bsnl multi billiondelay in bsnl multi billion

order to nokia andorder to nokia andorder to nokia andorder to nokia and ericcson the subericcson the subericcson the subericcson the subcontracts to hfcl got delayedcontracts to hfcl got delayedcontracts to hfcl got delayedcontracts to hfcl got delayed andandandand

hence the stock price fell to 17 levels.hence the stock price fell to 17 levels.hence the stock price fell to 17 levels.hence the stock price fell to 17 levels.

TheTheTheThe management has also hintedmanagement has also hintedmanagement has also hintedmanagement has also hinted

strongly that thestrongly that thestrongly that thestrongly that the September quarterSeptember quarterSeptember quarterSeptember quarter

results will also be belowresults will also be belowresults will also be belowresults will also be below xpectations.xpectations.xpectations.xpectations.

Now with entry of new companiesNow with entry of new companiesNow with entry of new companiesNow with entry of new companies

including hfcl itself we believe thatincluding hfcl itself we believe thatincluding hfcl itself we believe thatincluding hfcl itself we believe that

order bookorder bookorder bookorder book crunch will be a thingcrunch will be a thingcrunch will be a thingcrunch will be a thing ofofofof

the past. The companiesthe past. The companiesthe past. The companiesthe past. The companies telecomtelecomtelecomtelecom

infrastructure has been always valuedinfrastructure has been always valuedinfrastructure has been always valuedinfrastructure has been always valued

poorly by the market. We have given apoorly by the market. We have given apoorly by the market. We have given apoorly by the market. We have given avaluation ofvaluation ofvaluation ofvaluation of rs 21 based on 7.5 timesrs 21 based on 7.5 timesrs 21 based on 7.5 timesrs 21 based on 7.5 times

its Fy09E earnings.its Fy09E earnings.its Fy09E earnings.its Fy09E earnings. Sum of partsSum of partsSum of partsSum of parts

valuations shows that the marketvaluations shows that the marketvaluations shows that the marketvaluations shows that the market pricepricepriceprice

Can easily cross 50 in coming days.Can easily cross 50 in coming days.Can easily cross 50 in coming days.Can easily cross 50 in coming days.

But doBut doBut doBut do remember its not a buy callremember its not a buy callremember its not a buy callremember its not a buy call

and theand theand theand the ecision of theecision of theecision of theecision of the TDSAT ANDTDSAT ANDTDSAT ANDTDSAT AND

TRAI can bring major upside andTRAI can bring major upside andTRAI can bring major upside andTRAI can bring major upside and

limited downside( till 18 levels) to thelimited downside( till 18 levels) to thelimited downside( till 18 levels) to thelimited downside( till 18 levels) to the

stock.stock.stock.stock.

The company holds 62% in the bseThe company holds 62% in the bseThe company holds 62% in the bseThe company holds 62% in the bse

listed hfcllisted hfcllisted hfcllisted hfcl infotel. Hfcl infotel is ainfotel. Hfcl infotel is ainfotel. Hfcl infotel is ainfotel. Hfcl infotel is a

subsidiary of thesubsidiary of thesubsidiary of thesubsidiary of the ccccompanyompanyompanyompany aaaand isnd isnd isnd isgiving landline services andgiving landline services andgiving landline services andgiving landline services and

broadbandbroadbandbroadbandbroadband services in the state ofservices in the state ofservices in the state ofservices in the state of

Punjab.The company hasPunjab.The company hasPunjab.The company hasPunjab.The company has launchedlaunchedlaunchedlaunched

recenrecenrecenrecently cdma mobile services by thetly cdma mobile services by thetly cdma mobile services by thetly cdma mobile services by the

name of PING.The company hasname of PING.The company hasname of PING.The company hasname of PING.The company has

already paid thealready paid thealready paid thealready paid the license fee of 151 crlicense fee of 151 crlicense fee of 151 crlicense fee of 151 cr

for gsm service in the state offor gsm service in the state offor gsm service in the state offor gsm service in the state of Punjab.Punjab.Punjab.Punjab.

The valuation of hfcl infotel at cmp ofThe valuation of hfcl infotel at cmp ofThe valuation of hfcl infotel at cmp ofThe valuation of hfcl infotel at cmp of

rs 35 comesrs 35 comesrs 35 comesrs 35 comes tttto around 1900 crore.Theo around 1900 crore.Theo around 1900 crore.Theo around 1900 crore.The

company at currentcompany at currentcompany at currentcompany at current valuations is at avaluations is at avaluations is at avaluations is at a

discount to regional operators likediscount to regional operators likediscount to regional operators likediscount to regional operators like

spice tele and ttml. Although the latterspice tele and ttml. Although the latterspice tele and ttml. Although the latterspice tele and ttml. Although the latter

cant becant becant becant be strictly compared with hfclstrictly compared with hfclstrictly compared with hfclstrictly compared with hfcl

infotel as it hasinfotel as it hasinfotel as it hasinfotel as it has prestigious name likeprestigious name likeprestigious name likeprestigious name like

TATA attached with it.TATA attached with it.TATA attached with it.TATA attached with it.

Hfcl holds 32.57 crore shares in hfclHfcl holds 32.57 crore shares in hfclHfcl holds 32.57 crore shares in hfclHfcl holds 32.57 crore shares in hfcl

infotel which isinfotel which isinfotel which isinfotel which is valuedvaluedvaluedvalued at 1150 crore.at 1150 crore.at 1150 crore.at 1150 crore.

The interest shown by fiis inThe interest shown by fiis inThe interest shown by fiis inThe interest shown by fiis in hfclhfclhfclhfcl

infotel shows that the best in price isinfotel shows that the best in price isinfotel shows that the best in price isinfotel shows that the best in price is

yet toyet toyet toyet to come.come.come.come.

Hfcl current share capital is 442 crHfcl current share capital is 442 crHfcl current share capital is 442 crHfcl current share capital is 442 crdivided intodivided intodivided intodivided into

44.20 crore shares of Rs 10 each.44.20 crore shares of Rs 10 each.44.20 crore shares of Rs 10 each.44.20 crore shares of Rs 10 each.

Value per share in hfcl is rs 26.NoValue per share in hfcl is rs 26.NoValue per share in hfcl is rs 26.NoValue per share in hfcl is rs 26.No

holding co..holding co..holding co..holding co.. discount will be gidiscount will be gidiscount will be gidiscount will be given asven asven asven as

hfcl infotel will be eitherhfcl infotel will be eitherhfcl infotel will be eitherhfcl infotel will be either sold off ifsold off ifsold off ifsold off if

hfcl doesnt get a pan India license orhfcl doesnt get a pan India license orhfcl doesnt get a pan India license orhfcl doesnt get a pan India license or

merged with hfcl if it gets one.Upsidemerged with hfcl if it gets one.Upsidemerged with hfcl if it gets one.Upsidemerged with hfcl if it gets one.Upside

to valuationsto valuationsto valuationsto valuations possible if the stockpossible if the stockpossible if the stockpossible if the stock

continues to hit uppercontinues to hit uppercontinues to hit uppercontinues to hit upper circuitcircuitcircuitcircuits.s.s.s. Hfcl has applied for the pan IndiaHfcl has applied for the pan IndiaHfcl has applied for the pan IndiaHfcl has applied for the pan India

telecom licensetelecom licensetelecom licensetelecom license and we stronglyand we stronglyand we stronglyand we stronglybelieve that the company stands abelieve that the company stands abelieve that the company stands abelieve that the company stands a godgodgodgod

chance to win the same based on twochance to win the same based on twochance to win the same based on twochance to win the same based on two

reasons.reasons.reasons.reasons.


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ANDATORY DISCLOSURES:

This document is for information only and is meant for the use of the Recipient & not

or circulation. The information contained in this document has been taken from

ublicly available information trade and statistical services & other sources. While the

information contained herein is from sources believed to be reliable, we do not hold

ourselves responsible for its Completeness andaccuracy. All opinions and estimates included in this report constitute our judgment

as of this date and are Subject to change without notice. Investors are expected to use

the information contained in this report at their own risk. This report is not and

should not be construed as an offer or the Solicitation of an offer to buy or sell any

securities. TEAM STOCKRESEARCHERS and its affiliates may act as market maker

or have assumed an underwriting position in the securities of companies discussed

herein and may sell them to or buy them from

customers on a principal basis..

EXCLUSIVE TRIGGERS:-

Ace investor C.Sivasankaran has taken a 1% stakeAce investor C.Sivasankaran has taken a 1% stakeAce investor C.Sivasankaran has taken a 1% stakeAce investor C.Sivasankaran has taken a 1% stake in july in thein july in thein july in thein july in the

stock. We see hfcl as the best takeoverstock. We see hfcl as the best takeoverstock. We see hfcl as the best takeoverstock. We see hfcl as the best takeover target for any mnc totarget for any mnc totarget for any mnc totarget for any mnc toenter the Indian telecom arenaenter the Indian telecom arenaenter the Indian telecom arenaenter the Indian telecom arena and its valued cheap as comparedand its valued cheap as comparedand its valued cheap as comparedand its valued cheap as compared

to its subsidiaryto its subsidiaryto its subsidiaryto its subsidiary hfcl infotel.Chfcl infotel.Chfcl infotel.Chfcl infotel.C sivasankaran is thesivasankaran is thesivasankaran is thesivasankaran is the chairman of thechairman of thechairman of thechairman of the

sterling group and is the person who made billionssterling group and is the person who made billionssterling group and is the person who made billionssterling group and is the person who made billions in buying aircelin buying aircelin buying aircelin buying aircel

and selling it later to maxis ofand selling it later to maxis ofand selling it later to maxis ofand selling it later to maxis of Malaysia. Moreover the stock isMalaysia. Moreover the stock isMalaysia. Moreover the stock isMalaysia. Moreover the stock is

seeing highseeing highseeing highseeing high volumes andvolumes andvolumes andvolumes and most fiis have pared there holding ofmost fiis have pared there holding ofmost fiis have pared there holding ofmost fiis have pared there holding of

fccbs to stronger hands.fccbs to stronger hands.fccbs to stronger hands.fccbs to stronger hands. We will recommend a hold with theWe will recommend a hold with theWe will recommend a hold with theWe will recommend a hold with the

revised targetrevised targetrevised targetrevised target price of rs 39 and 58 for the stock.Key movementprice of rs 39 and 58 for the stock.Key movementprice of rs 39 and 58 for the stock.Key movementprice of rs 39 and 58 for the stock.Key movement

willwillwillwill happen post the announcement of the D.O.T onhappen post the announcement of the D.O.T onhappen post the announcement of the D.O.T onhappen post the announcement of the D.O.T on all INDIAall INDIAall INDIAall INDIATELECOM LICENSE. The secondTELECOM LICENSE. The secondTELECOM LICENSE. The secondTELECOM LICENSE. The second MMMMajorajorajorajor trigger should be a badtrigger should be a badtrigger should be a badtrigger should be a bad

quarterly result which willquarterly result which willquarterly result which willquarterly result which will give an oppogive an oppogive an oppogive an opportunity to buy.rtunity to buy.rtunity to buy.rtunity to buy.


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Himachal Futuristic Corporation Limited REPORT DATED 27.10.2007

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Transcript of Himachal Futuristic Corporation Limited REPORT DATED 27.10.2007