Electrotherm, an Ahmedabad-based manufacturer of steel and electric bikes, is embarking on a Rs 300-crore expansion.
The capital expenditure would be infused across its engineering projects division, steel, power and electric vehicles divisions over the next one year.
The company is also expected to start manufacturing 60,000 to 70,000 lead acid batteries at a Chinese company's facility, with whom Electrotherm had tied up last year.
Electrotherm has a capacity of 25,000-tonne per month at its Samakyali manufacturing plant in Kutch. It is looking at expanding it to 35,000 tonne per month in the next few months.
Nearly Rs 80 crore will be pumped into its engineering projects business, where the company is planning to manufacture transformers soon, while around Rs 50 crore will be invested in its electric bike facilities. The rest will be infused into the company's steel and captive power facilities.
To fund its expansion, the company intends to offload nearly 12.5 per cent stake worth Rs 82 crore to DEG of Germany. Naveen Nakra, director (finance and projects), Electrotherm, said the final approval from the DEG board was being awaited.
Currently engineering projects division brings in Rs 300 crore, while electric bikes business is worth Rs 50 crore. The company draws maximum revenues to the tune of Rs 950 crore from its steel and TMT bar business.
To further consolidate its presence in the TMT bar market, Electrotherm has launched Electro CRS Gold, a corrosion-resistant steel bar. Targeted at major real estate projects, SEZs and other constructions, the product is around Rs 4,000 more than the market price of one tonne of TMT bar.
“Due to the vast coastal line and humid weather conditions in Gujarat and Maharashtra, where corrosion is a serious problem, we will make our corrosion resistant bars available there initially,” said Avinash Bhandari, director (operations), Electrotherm.
The company had earlier inked an MoU with Canadian firm Electrovaya to set up an advanced lithium super-polymer battery plant with a capacity of up to 10 MW hours a month. Bhandari said that modalities of the venture had not yet been drawn out.
Electrotherm, which registered a turnover of Rs 730 crore during the last financial year, expects to garner Rs 1,200 crore in the current fiscal.
Understanding Short Term Trading
Before I begin, this blog is not for intraday traders. My definition of short term implies duration of around 2 to 3 months.
Short Term stock picking is no rocket science, but rather a visual interpretation of technical charts. A basic moving average on a time frame chart will show the direction of the securities movement.
Moving averages is a mathematical results calculated by averaging a number of past data points. Moving averages (MA) in it's basic form is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. Once the value of MA has been calculated, they are plotted onto a chart and then connected to create a moving average line. Typical moving averages used for short term trading are 50 MA and 100 MA.
Types of Moving Averages
1) Simple Moving Average (SMA)
SMA is calculated by taking the arithmetic mean of a given set of values on a rolling window of timeframe. The usefulness of the SMA is limited because each point in the data series is weighted the same, regardless of where it occurs in the sequence. Critics argue that the most recent data is more significant than the older data and should have a greater influence on the final result.
2) Exponential Moving Average (EMA)
EMA overcomes the limits of SMA, where more weight is given to the recent prices in an attempt to make it more responsive to new information. When calculating the first point of the EMA, we may notice that there is no value available to use as the previous EMA. This small problem can be solved by starting the calculation with a simple moving average and continuing on with calculating the EMA.
The primary functions of a moving average is to identify trends and reversals, measure the strength of an asset's momentum and determine potential areas where an asset will find support or resistance. Moving averages are lagging indicator, which means they do not predict new trend, but confirm trends once they have been established.
A stock is deemed to be in an uptrend when the price is above a moving average and the average is sloping upward. Conversely, a trader will use a price below a downward sloping average to confirm a downtrend. Many traders will only consider holding a long position in an asset when the price is trading above a moving average.
In general, short-term momentum can be gauged by looking at moving averages that focus on time periods of 50 days or less. Looking at moving averages that are created with a period of 50 to 100 days is generally regarded as a good measure of medium-term momentum. Finally, any moving average that uses 100 days or more in the calculation can be used as a measure of long-term momentum.
Support, resistence and stoploss can be infered by referring the closet MA below or above the market price. The other factor that is used in short term momentum is the trading volume. The moving averages along with the trading volume can provide a better insight to short term movement.
Markets are moved by their largest participants - I believe this is the single most important principle in short-term trading. Accordingly, I track the presence of large traders by determining how much volume is in the market and how that compares to average. Because volume correlates very highly with volatility, the market's relative volume helps you determine the amount of movement likely at any given time frame--and it helps you handicap the odds of trending vs. remaining slow and range bound.
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