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Update on India Stock Recommendations

Recently one of my stock recommendation Teledata has been on a roller-coaster ride. In recent times, it has been locked in either upper or lower circuit limit of 5% (in India, many smaller stocks have circuit limits of 5 to 20% to avoid extreme fluctuations). When I recommended it first time on one of my post, it has gone from 47 to 96 and back to 63. As per previous news, it should be demerging in 3 different companies by end of May. My recommendation is to HOLD and BUY more if it goes below 50. From financial point of view, it has excellent balance sheet and is winning orders from many state governments. It has good product in education and shipping management software. Unfortunately there is not much information available on management. So at this time I am giving them benefit of doubt and would hold onto these shares for potential windfall.

I recommended Zee news at 40 and finally it has started moving. Last week it was trading at 46. Finally market has started realizing the potential of this company. Recommendetion: BUY

My last year's recommendation Aptech is still going great guns at 320. Even after rising from 60 to 320 in less than 24 months, its total market cap is about $300 M. With continuning boom in IT and BPO industries, there is tremendous potential in training and Aptech has excellent brand recognition and geographical reach. My new target is Rs 400 by Mar 2008

For long-term, Idea looks very strong. Cell-phone penetration in India is still less than 20% of population and there is tremendous growth ahead for at least 5 years. After that these companies would benefit from value added services. If we go with cell-phone companies valuations in developed countries, there is lot of growth ahead for all cell-phone companies. I particularly like Idea due to its relative cheap valuation compared to other companies. Recommendation: BUY

Overall market direction commentary:
We are in middle of May and I am surprised with strength in global markets. Looks like the strength will continue for some more time (maybe well into summer) with flood of merger news coming every Monday. Just now I am reading that Goldman and TPG are making a bid for Alltel and couple more annoucements in billion $ deals. IMO market is at cross-roads and it is becoming less clear which direction it would take. If you are averse to risk, my recommendation is to move some of your gains in cash and keep it handy since there would be opportunities coming to buy market at lower level in next few months. DOW will see 13000 (from 13500 last week) before it sees 14000!


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