metal sector oil and gas sector stock tata steel sail sesa goa delivery tips

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1) The year 2008 has seen the deep economic recession and it has impacted domestic as well as international economy and markets.

2) In the year 2009, some countries, had seen some marginal recovery. Indian companies have also seen some marginal recovery due to financial stimulus packages, lower interest rates etc

3) Going further, in next 2 to 3 years, the western and European countries will also recover and travel towards their growth path.

4) Lot of Indian companies are having international exposure and these companies will get benefits from the revival of western and European countries.

5) The gradual recovery in global economies indicates good news for India’s export -oriented companies as well as those with huge overseas exposure.

The following are some sector and their respective companies having large international exposure and would get benefited in long run in next 2 to 3 years from the recovery of international markets.

Please note - Taking into consideration about points companies stock prices have already factored in the future valuations so if you are planning to invest in any of the following companies then they should be bought at lower levels as current prices involves higher valuations or else you can write to us and we will mention then appropriate buying levels.
“Buying at appropriate levels is the fist basic step towards successful investing”

Oil and Gas Sector
Concerns of demand destruction from major crude oil consuming countries had seen crude oil prices drop to around $35 per barrel last year before recovering to $70-$75 per barrel currently.

Higher crude oil prices spell good news for offshore equipment companies like Aban Offshore, Great Offshore etc. In the case of markets like the Middle East, activities in the offshore oil exploration segment has picked up. However, in US and other markets things are yet to revive.

Reliance Industries (RIL), which generates a large part of its revenues from exports of petroleum products, also saw its gross refining margins (GRMs) take a hit-these dropped to almost $6 per barrel in September 2009 quarter from $13.4 per barrel last year. However, these are expected to improve gradually on the back of the economic recovery.

Analysts believe RIL’s GRMs will improve to $7.1 in 2009-10 and to $9.1 in 2010-11.
Please visit below link to see the stocks related to this sector and their expected returns in coming years.

In addition to above mentioned stocks you can also visit below link to see more stocks and their expected returns
http://www.daytradingshares.com/what_to_buy_stocks/oil_drilling_and_exploration_shares.html

Overview of Sectors and respective companies have mentioned below

Metal Sector
Tata steel
After the acquisition of Corus, UK almost 80 per cent of Tata Steel’s consolidated turnover comes from overseas markets.
Tata Steel, the improved demand in its major markets like Europe, higher capacity utilisation, cost cutting and relatively higher steel prices should help in the coming days. There has already been an improvement in steel demand in these developed countries on the back of stabilising demand, which suggests that Tata Steel’s prospects should continue to improve going ahead.

Hindalco
For aluminium major Hindalco, which bought Novelis, overseas markets now account for 70 per cent of its revenues. Last year, Novelis’ performance was impacted due to lower metal prices and severe demand destruction in two of its major markets (US and Europe).
This took a toll on Hindalco’s consolidated performance. China, too, has been responsible for the uptick in demand for metals.

Sesa Goa
Sesa Goa, India’s largest private iron ore miner could benefit given that over 90 per cent of its revenues come from the overseas markets, especially China. The demand revival is already reflecting in prices and volumes-- India’s export of iron ore grew by 88 per cent year-on-year to 6.25 million tonne in the month of September 2009, while spot iron ore prices are now around $100 a tonne.

Metal pipe companies like Welspun Gujarat, Jindal Saw and Man Industries also stand to gain from the economic revival particularly in oil producing countries (like Middle East).
The three pipe companies generate majority of their revenues from overseas markets, wherein experts suggest that capex is reviving and pricing environment improving.