Networth Stock - India Market Weekly

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NetworthStock - Parsvnath Developers - IPO

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The Week That Was - Sensex gains 224 points

Market continued its winning streak to settle at lifetime high on strong demand for index pivotals.

The Sensex rose 223.98 points or 1.73% for the week ended 3 November 2006 to 13,130.79. Nifty gained 66 points or 1.76% for the week to settle at 3,805.35.

Sensex rose 117.45 points on Monday to settle at 13,024.26, as investors mopped up heavyweights and scrips that have reported strong Q2 results. Sensex declined 62.36 points to 12961.90 on Tuesday, on selling pressure throughout the day.

The benchmark index advanced 71.14 points on Wednesday, to settle at 13,033.04 as investors bought blue chip shares. On Thursday, the Sensex finished 58 points higher to 13,091.12. Sensex rose 39.67 points on Friday to settle at 13,130.79, a lifetime closing high, as shares staged a rebound in later part of the day.

The total inflow of FIIs in the Indian equity market was Rs 1848.60 crore in the first four days of the week till Thursday (2 November).

On 31 October, Reserve Bank of India in its mid-term review of annual policy kept Reverse Repo rate unchanged at 6%, while the Repo rate was raised by 25 basis points to 7.25%.

Bank rate was kept unchanged at 6% while the Cash Reserve Ratio (CRR) was kept steady at 5%. The central bank also raised 2006/07 economic growth forecast to "around 8%" from a previous 7.5-8% estimate. The central bank said inflation would be driven by demand conditions rather than supply-side effects. It said keeping inflation in 5.0-5.5% range needed monitoring, appropriate policy response.

PSU oil exploration major ONGC surged 12.06% to Rs 884.50 for the week. The stock was boosted by news on Thursday that Norway's Norsk Hydro had offered it stake in two exploration blocks. Also there were reports, that it plans joint ventures with Russian oil companies to acquire oil and gas assets. The joint ventures would look for properties in Russia and other countries but not India. ONGC once again regained its numero uno slot in terms of market cap displacing Reliance Industries from that slot.

Reliance Industries rose 5.41% for the week to Rs 1289. It had surged to a lifetime high of Rs 1298.50 on Thursday. RIL kickstarted its retail initiative by opening its first retail store in Hyderabad. Also there were on reports that it will invest $5.2-billion to double the output from its D6 block in Krishna Godavari basin to 80 million standard cubic meters per day (mmscmd). RIL had earlier proposed investment of $2.47 billion to produce 40 mmscmd from discoveries - Dhirubhai 1 and 3 (in the D6 block) - out of a total 34 wells. RIL plans to raise up to $2 billion overseas to fund its oil & gas exploration and production business.

FMCG major, Hindustan Lever (HLL) advanced 4.15% to Rs 236 for the week. The company posted 60% rise in September quarterly earnings on strong demand for soaps, shampoos and packaged foods, as well as one-off gains from stake sales. Net profit rose to Rs 520.74 crore for the quarter ended 30 September 2006 where as the same was Rs 325.96 crore for the quarter ended 30 September 2005. The net profit included exceptional items such as gains from sale of stakes in some firms. Total Income rose to Rs 3162.82 crore (Rs 2816.42 crore).

Bharti Airtel rose 3.78% to Rs 547 for the week. It reported 79% growth in net profit to Rs 934 crore for the quarter ended September 2006, from Rs 521 crore in the corresponding period of the previous year. The company's net sales jumped 61% to Rs 4,357 crore from Rs 2,709 crore.

Colgate surged 11.44% for the week, to Rs 419.30. It reported 25% fall in net profit for Q2 September 2006 due to a huge VRS outgo of Rs 58.80 crore. Colgate’s net profit in Q2 September 2006 declined 24.9% to Rs 23.18 crore (Rs 30.88 crore). Net sales rose 15% to Rs 320.01 crore (Rs 278.12 crore).

Jaiprakash Associates surged 30.73% to Rs 596 during the week, after the cabinet of state government of Uttar Pradesh gave clean chit to a land development project which was earlier awarded to the company by the state government.

Cummins India rose 5.88% to Rs 270.70 during the week, after it reported 66% surge in net profit for Q2 September 2006 to Rs 62.69 crore (Rs 37.76 crore). Net sales has surged 30.8% to Rs 467.44 crore (Rs 357.29 crore).

KPIT Cummins Infosystems jumped 24.70% during the week, to Rs 619. The company’s board would meet on 08 November 2006 to consider a 1 for 1 bonus issue and splitting its 5-rupee share into shares of 2 rupees face value each.

AIA Engineering jumped 23.48% to Rs 1145, during the week, after it reported a 122.4% surge in net profit for Q2 September 2006 to Rs 14.81 crore (Rs 6.66 crore). Net sales rose 35.1% to Rs 95.51 crore.

The latest economic data showed infrastructure sector output grew 9.9% in September 2006 from a year earlier, much faster than revised annual growth of 5.7% in August 2006. Output rose an annual 6.3% in September 2005. It was up an annual 7.3% in the April-September 2006 period compared with 6.1% during the same period a year earlier.

Sensex sizzles past 13100 in late rally

A sudden late spurt in heavyweight and sectoral stocks saw the Sensex close at 13131.
The northbound trend remained intact for the third consecutive session, with the Sensex registering smart gains on buying in heavyweights and several
sectoral stocks. After opening in positive territory at 13119, the market came under the influence of weak Asian indices and tumbled to an intra-day low of 13018 amid profit taking. The Sensex moved into positive territory and rallied past 13100 to touch a new high of 13147 in a late rally. The Sensex wrapped up the session with gains of 40 points at 13131. The Nifty gained 14 points to close at 3805.

However, the market breadth was negative. Of the 2,602 stocks traded on the BSE, 1,408 stocks declined, 1,116 stocks advanced and 78 stocks ended unchanged. Among the sectoral indices the BSE CD index led the upmove and rose 1.45% at 3266 followed by the BSE PSU index (up 1.24% at 6119) and the BSE Oil & Gas index (up 1.05% at 6318).

Leading the rally REL vaulted 6.90% at Rs511. ONGC surged 4.62% at Rs878, Gujarat Ambuja advanced 3.27% at Rs123, Dr Reddy's jumped 2.62% at Rs781, HDFC soared 2.6% at Rs1,480, ACC added 2.54% at Rs1,007, Bajaj Auto surged 2.12% at Rs2,839, NTPC gained 1.70% at Rs132 and Tata Steel moved up by 1.13% at Rs493. BHEL, Grasim, RIL, SBI and Cipla ended the day with marginal gains. However, Tata Motors shed 1.68% at Rs815, TCS was down 1.24% at Rs1,067 and Hindalco closed with losses of 1.06% at Rs187. HLL, Maruti, HDFC Bank, ITC, Wipro, Hero Honda, ICICI Bank, Infosys Technologies, Bharti Airtel, Satyam, Reliance Communication, L&T and Ranbaxy ended the day with marginally losses.

Over 133.02 lakh IFCI shares changed hands on the BSE followed by Silverline Technologies (92.39 lakh shares), Voltas (61.38 lakhs shares), Reliance Natural Resources (50.78 lakh shares) and Petronet LNG (47.02 lakh shares).

Value-wise Reliance Industries registered a turnover of Rs152.26 crore on the BSE followed by Kalyani Steel (Rs91.85 crore), McDowell (Rs80.18 crore), Reliance Capital (Rs74.17 crore) and Hindustan Zinc (Rs71.62 crore).

Edelweiss - Cummins

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Motilal Oswal - Colgate

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Anand Rathi - Monthly Presentation

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Commodities - Bullions: Cautiously bullish

Gold and silver continued to move up at a slow, sustained pace. Gold slipped from a seven-week high as the dollar rose against the euro and the yen, reducing the precious metal's appeal as an alternative investment. We continue to maintain a cautiously bullish view and being a Friday, a blip cannot be ruled out.

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Sunlight Is The Best Disinfectant

To say that Securities and Exchange Board of India chairman M Damodaran is a busy man is to put it lightly. Back from London for just a day, en route to China, he met us in his office in Mumbai. As we sat outside his cabin, our eyes spotted an article in a foreign daily on China considering having a new “super regulator” and financial watchdog for it banking and finance industries.

When we asked him if there was anything coincidental about the article and his trip, he laughed and brushed it off and said he was going to sign an agreement on exchange of information. Though hard pressed for time, he showed no signs for stress or jet lag as he chatted about his views and plans for the fund industry.

Mutual funds have become powerful players over the past few years with fund managers having much more money at their disposal than Ketan Parekh or Harshad Mehta. This should trigger a proactive tightening of the regulations surrounding their market actions. What is SEBI's gearing towards this?
The first issue is: Who can manage funds? To distribute funds you need qualifications but to manage them you don't seem to need any. Almost anyone can be a fund manager since there is no regulation specifying any qualifications. We are addressing that. Interestingly, the board for prescribing qualifications for fund managers was cleared this morning. I think at the next board, we will clear the structure of what qualifications people need to manage funds. Other jurisdictions have that, no reason why we should not, especially when they are managing huge sums of money.

The second issue is in terms of what is happening within the business of asset management.

We believe trustees have an extremely important role to play. I think this business of trustees being the custodians of the fund and asset managers only being responsible to manage the investments properly, be consistent with regulations and deliver results over a long period of time - that somehow has got diluted in the public consciousness.

People have begun to believe that you give money to Asset Management Companies and they are the custodians of the fund. The theoretical possibility that trustees can tell the AMC that you are not performing well and we are ready to change you and bring in someone else should be conveyed to the public. I am not saying that the trustees can get up every morning and change the AMC. We don't want that destabilisation.

But the message should go across that the trustees have the responsibility to question the AMC if they do not deliver and, if not satisfied with the answers or believe that practices followed by the AMC are inappropriate, they have the right to change the AMC keeping the investor interests in mind.

The point is: Who are the people who are appointed as trustees? And I have said this before. They are people who come from good backgrounds and are appointed for the right reasons. That said, whether they have a complete understanding of not just the letter of the regulations but of the spirit of it - who are trustees, what are their responsibilities, what do they need to do? Not simply as one level of compliance but also as first level regulators of the industry. There is much more work involved.

This should be discussed more with them. We are now corresponding with them much more than earlier. We are writing back to them too. We want them to be more proactive and do their job correctly.

For instance, on new fund offerings we have told the trustees that they need to see if there is anything new in the scheme. Is there already a scheme in their basket which is being duplicated? At least now people have started to justify NFOs. Earlier there was no need for justification. In a couple of cases we have sent it back to the trustees telling them to look at this scheme again and tell us how this is different from the existing ones. At the end of the day, it is their judgment versus mine - is it different or is it not? Not that we are going to take the final call but we force them to look at it a little more closely. It is not that we will not clear it but we are certainly going to tell the trustees to certify that they looked at what is being offering and are of the opinion that it is different.

What other issues are you tackling?
We have now persuaded the asset managers to identify distribution as a problem. We are not yet regulating distributors but we have told them till such time as we do, they are your agents and you are responsible for any misconduct.

That is a kind of double whammy for them. On one hand they find that the distributor is walking away with the money and they are not getting too much because we have capped what they can get. On the other, they are being held responsible for the distributors. Yet, they say, how can we reach out to people, we need these distributors.

We told them is that if you find that the distributor has committed some wrong, you must get rid of that guy quickly and convey the message that you are serious.

Over time, driven by distributors, fund houses have come out with new schemes and never marketed the old ones even though they may be great performers for years. Simply because there is nothing in it for the guy marketing it. This cannot go on.

I have started telling the players that their success is not measured by the number of schemes they launch. Neither is it success measured by the Assets Under Management. This is something we want to get into now - the battle for AUMs. Everyone is taking credit for “my AUMs”. But if most of your money is in the market and the market goes up by 1000 points, your AUM will go up without you doing anything. We are saying, look at your unit capital and start reporting unit capital - we will operationalise this soon - then you will see whether the industry is growing or not or just moving from here to there because of stock prices.

We are also looking at advertising. We are now in dialogue with AMFI and have got their written suggestions on this issue. Does the advertisement communicate the essence of the scheme or is it obscure and confuses the investor? Is the scheme wrong projected? We want all advertisements and marketing material to communicate clearly about the scheme and not mislead.

Another issue that happens with the lack of frequency of disclosure is exiting from questionable stocks just before the reporting date. Buying and selling into questionable stocks between two reporting periods because you don’t want it seen on your portfolio. These are practices that happen and we cannot impose legislation or prescribe for all of these. But we can create a climate and that is what we are working towards.

In the next 12 months, the mutual fund industry will be a hot topic of discussion where we ensure that some of these issues will be raised and addressed by us and we will want the players to respond to it.

You mentioned frequency of disclosure. Transparency is a great deterrent to any scam. Why do you ask only for a six month disclosure of portfolio and not more frequently? In spite of this, most fund houses declares it on a monthly basis, but some stick to the regulations and declare it once in six months.
Well, if market practice is better than regulations - which is the case here where they are disclosing more often though they are required to do so only every six months - then we need to move regulation towards market practice rather than vice versa.

As they say - sunlight is the best disinfectant. The more things come out in the open, the better.

Having said that, you should not prescribe a regime which is extremely costly. No one is in this business for charity. At the end of the day, all the costs involved in some manner or the other get passed onto the investor.

Compliance is very good but should not become so costly that it’s a disincentive to the investor. As regulators we are in the business of compliance but we also have to grow the market and ensure that first time investors see mutual funds as an entry level into the market and should not see it as prohibitive. They may see the high costs and shy away.

So you have to put in place a frequency of disclosure which is not disproportionate. For example, there is one regulation, when I was on the other side I found it quite amusing, every six months we had to declare all our holdings in all our schemes in a newspaper. We had to take out a 28 page advertisement. Now who would read a 28-page advertisement?

Frequency of disclosure in a cost effective manner has to be addressed. For instance, putting it on the company website is definitely a more cost effective method rather than a newspaper advertisement. It can be made available on a continuing basis on the website of an AMC. But, the problem with this country is that not everyone who is invested in the mutual fund industry is looking at a website. I would not call it a digital divide but a digital inequality and some will access it and some will not.

But, undoubtedly, it will bring accountability once put into the public domain. Clearly, frequency and disclosure on the website is something we can look at.

The issues that fund managers face is that if they disclose their portfolios everyday, their stocks ideas will be open to the public. So would you suggest disclosure with a time lag of a month or even longer?
I don’t buy the argument of a time lag and of someone saying that I had this great idea that came into the public domain. Just because someone had a great idea does not mean everyone will buy into it and think it is great. The greatness of the idea will be known over time.

I don’t think it is the issue of the time lag, I think that it is a matter of convincing people that if you have been doing something that is better than what the regulations demand, then continue with that spirit.

How happy are you with the fact that now all funds are launching close-ended schemes to take advantage of the amortisation ruling?
You have close ended funds being launched now or funds that are close ended for 18 months and then become open ended. Even during this 18 month close-ended time period, they have intermediate dates for exit.

We saw that there was a problem. We decided to fix it. Close-ended funds were discouraged at one point in time and everyone was told to make all funds open ended. I remember in the past (referring to his UTI days) where we too converted some close-ended funds into open-ended ones.

But now, the issues that faced the industry then are addressed separately so we do not see it as much of a problem as fund houses launch close-ended funds. The advantage of a close-ended fund if you do not allow too many intermediate entries and exits, you have a finite time frame. The investor will know for how long the money will stay locked and exit only at the end. The fund manager, on the other hand, will know how long the money will be with him and where he can invest for that time frame.

But taking advantage of it in order to curb the structure is something we will definitely look into. We are seeing how people are using their ingenuity to work around regulations. End of the day we will see how it affects the investor.

The issue which I find needs to be addressed is this: If someone in the fund for a short term, should he be subsidised by someone who is in the fund for the long term? The fee structure should reward the person who stays longer.

Another problem we have is the way funds are presented and judged by people who write about them. They look at performance over a month and then hype it up as the best performing fund. That is not in the interest of investors. I am not saying look at the lifetime performance of the fund because that will depend on the year the fund was launched and the market performance then. But look at reasonably comparable performances like a three- and five-year time frame.

End of the day, we also have to see how this industry can be grown. It is our firm belief that we need to grow the fund industry to see that more people come to the market. We don’t want the average man to enter the market by himself and then come to grief.

Sharekhan Highnoon dated November 03, 2006

The Nifty opened in positive territory and is currently trading sideways...

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PYT - Trading Calls

Buy Jyoti Structure around Rs 118.70 with a stop loss of Rs 116. Its an intra-day call

Buy RPG Transmission around Rs 161.60 with a stop loss of Rs 157. Its an intra-day call

Buy Zee Telefilms at Rs 327-324. Stop Loss at Rs 320 (Intra-day Call)

Buy Jyoti Structure at Rs 122 Stop Loss at Rs 119 (Intra-day Call)

Trend may remain positive

After gaining over 129 points in the last two trading session, the market may show more exuberance and advance further on the last day of the week on the back of bullish sentiment amongst investors. Yesterday, the Sensex crossed 13100 mark and settled at 13091, for the first time amid buying in several heavyweight and sectoral stocks. However marginally fall in US & European indices coupled with mixed in Asian indices in the morning trades may make the domestic indices volatile in the early trades.

US indices on Thursday were down marginally with the Dow Jones losing 12 points to close at 12019, while tech heavyweight, the Nasdaq shed 0.33 points to close at 2334.

Indian ADRs largely ended on a mixed note on the US bourses. ICICI Bank and Patni gained over 1% each while Infosys, Dr Reddy's, Tata Motors and HDFC Bank ended the day with steady gains. However, VSNL tumbled over 1%, Satyam, Wipro, MTNL and Rediff ended with marginal losses.

Crude oil prices in the US market took a small hit, with the Nymex light crude oil for December delivery dropping by $0.83 to close at $57.88 a barrel while the London Brent crude was down by $0.05 at $58.98 per barrel. However, in the commodity space, the Comex gold for December series advanced $8.50 to settle at $627.80 an ounce.

On Nov 01 2006, FIIs were net buyers of stocks to the tune of Rs368.50 crore (purchases worth Rs1898.60 crore and sales of Rs1530.20 crore).

FII & MF Figures

FII: +Rs 368.50 Cr & MF +Rs311.13Cr

FII Gross purchases Rs 1898.60 Cr Gross Sellers Rs 1530.20 Cr Net Buyer Rs 368.50 Cr

MF Gross Purchases Rs 539.05 Cr Gross Sellers Rs 227.92 Cr Net Buyers Rs 311.13 Cr

Sharekhan Stock Idea - Sundaram Clayton

Company details

• Price target: Rs1,550
• Market cap: Rs 2,280 cr
• 52 week high/low: Rs1,373/770
• NSE volume: 2,415
  (No of shares)
• BSE code: 520056
• NSE code: SUNDRMCLAY
• Sharekhan code: SUNCLA
• Free float: 0.38 cr
  (No of shares)

Result highlights

• The Q2FY2007 results of Sundaram Clayton Ltd (SCL) are slightly below our expectations due to a marginal fall in the company’s operating profit margin (OPM) owing to high raw material prices.
• The net sales for the quarter rose by 34.1% to Rs203.4 crore. The revenue growth of both the air-brake and the die-casting divisions remained strong during the quarter.
• The OPM declined by 100 basis points to 14.6% primarily due to a rise in the price of the raw materials, particularly non-ferrous metals. Consequently, the operating profit grew by 25.6% to Rs29.6 crore for the quarter.
• The other income, as expected, was higher at Rs13.8 crore due to the dividend income received from the subsidiaries. Stable depreciation charge and taxes led to a 58.3% growth in the net profit to Rs23 crore.
• The value of SCL''s total investment in the group companies works out to Rs950 per share. While computing SCL''s value, we have assumed a 75% discount to the company''s total investment. After adjusting for the same, the SCL stock is currently trading at around 12.6x its stand-alone FY2008E earnings and at 10.2x its stand-alone FY2008E earnings before interest, depreciation, tax and amortisation (EBIDTA). We maintain our Buy recommendation on the stock with a price target of Rs1,550.

Strong top line growth
The net sales for the quarter exceeded our expectations, growing at 34.1% to Rs203.4 crore. The growth in both the air-brake and die-casting divisions remained strong for the quarter. The revenues from the air-brake division stood at Rs114.8 crore as against Rs99.7 crore in Q2FY2006, marking a growth of 15.1% year on year (yoy). The die-casting division continued to perform brilliantly as its revenues increased by 70.3% from Rs52.0 crore to Rs88.6 crore this quarter.

The company continued its strong growth in exports with the export revenues reaching Rs38.4 crore (rising by 75.2% yoy). During this year, the company had won an export contract from the global automobile major Volvo for the supply of engine and transmission castings for trucks. The revenues from this order are expected to touch Rs60 crore in the next two years.

SCL continues to be on the look-out for newer clients. Last quarter it added a new customer, Asia Motor Works, to its air-brake division. At the moment, it has a strong client list with orders from automobile majors like Tata Motors, Ashok Leyland, Honda Siel Cars, Sona Koyo Steering, Tata Holset, Ford India and Visteon.

Higher input costs affect margins
The OPM declined by 100 basis points yoy to 14.6% and was stable on a sequential basis. The margins were affected as a result of a rise in the raw material cost, which rose from 48.6% to 54.4% as a percentage of sales. However, the sharp rise in the input cost was offset by the savings on the employee cost and other operational efficiencies.

The other income at Rs13.8 crore was higher for the quarter compared with Rs7.2 crore last year, as the dividend income was accounted for during the quarter. Stable interest and depreciation charges helped the company to register a growth of 58.3% in its net profit to Rs23 crore.

Looking at the first-half numbers, the margins have remained stable at 14.6% in comparison with last year. However, we expect the margins to improve further in the subsequent quarters because of (a) price hike due from its original equipment manufacturer customers, particularly Tata Motors; and (b) higher exports contribution.

Capacity expansion plans for the year
For FY2007, SCL has lined up a capital expenditure (capex) plan under which Rs48.63 crore has been earmarked for the air-brake division and Rs75 crore for the die-casting division. The capex would be used for capacity expansion and new product development. SCL plans to increase its casting capacity to 50,000 tonne from the current 24,000 tonne. The company has increased its capex in both the divisions, which has increased its interest cost.

ABS—a huge opportunity
The regulations regarding the usage of anti-lock braking system (ABS) in commercial vehicles (CVs) are expected to be implemented soon. We are of the view that this should trigger a huge replacement demand in case the usage of ABS is made mandatory in CVs. SCL has already given samples of the product to CV majors, Ashok Leyland and Tata Motors. The cost differential between an ABS and an air brake is in the range of Rs30,000-35,000 per vehicle since the margins in the ABS are higher than those in the conventional braking systems. This should further help the company to post better margins going forward.

Outlook and valuations
We believe that SCL would benefit from the buoyancy in the country''s CV industry. The shift from hydraulic brakes to air brakes that is expected to take place in the CV industry augurs well for SCL. Also, there is a huge outsourcing potential considering that WABCO is looking for a low-cost producer of brakes. Considering all these factors we maintain our positive outlook on the company.

We are marginally increasing our sales estimates for FY2007 due to higher-than-expected revenue growth from the domestic air brakes sales and strong sales registered by the die casting division. However, the gains from the same would be offset by slightly lower margins and higher interest costs as a result of increased capex during the year.

SCL has a huge investment portfolio with an investment value of Rs950 per share. It holds 56.8% in TVS Motors (8.8% directly and 48% indirectly through its 100% subsidiary Anusha Investments. In valuing the company we have assumed a 75% discount to the total investment value per share. After adjusting for the investments, the stock is currently trading at around 12.6x its stand-alone FY2008E earnings. We maintain our Buy recommendation on the stock with a price target of Rs1,550.

Motilal Oswal Reports

Vardhaman Textiles

Indian Overseas Bank

Ashok Leyland

Glaxo

Thanks Ramesh

Info Edge (India) IPO Oversubscription Details

Qualified Institutional Buyers (QIBs) 83.9203 times
Non Institutional Investors 68.2197 times
Retail Individual Investors (RIIs) 12.2133 times

Overall - 54 times

Q2FY2007 Earnings Review: Sharekhan Special

Q2FY2007 Earnings Review

• The Q2FY2007 earnings of the Sensex companies grew by 22.7% year on year (yoy) and 8.4% quarter on quarter (qoq) compared with the consensus expectations of 20.0% growth yoy and 6.0% growth qoq. Capital goods, cement, and information and technology (IT) companies led the growth in the earnings.
• The quarter was a celebration of sort as of the total thirty companies in the Sensex twenty five companies reported results above or in line with expectations.
• While the sales of the non-banking companies in the Sensex grew by 29.3% yoy, the operating profit of these companies grew by a slower 24.4% as their operating profit margin (OPM) contracted by 120 basis points yoy to 23.5%.
• The earnings of the BSE200 companies grew by 35.0% yoy. The sales of the non-banking companies reported a revenue growth of 34.1% whereas their operating profit grew faster at 40.6% driven by an 80-basis-point expansion in the margins.
• The consensus estimates for the earnings growth of the Sensex companies has been upgraded to 22.6% for FY2007E and FY2008E. The earnings growth estimate for FY2007 has been upgraded to 22.6% from the earlier 21% whereas the FY2008 consensus estimate has seen a sharper upgrade from 11% to 14.6%. At the current level of 13,091, the Sensex is trading at 16.2x its one-year forward earnings which is towards the higher end of its valuation range.
• Many of the companies in our universe have seen upgrades in their earnings, led by cement and banking sectors. The IT sector is not far behind with almost all the IT companies also witnessing upgrades in their FY2007 and FY2008 estimates. The ratio of upgrades to downgrades in full year's earnings after Q2FY2007 stands at a stupendous 28:5.
  


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Motilal Oswal - Reports

Colgate Palmolive

BL Kashyap

Aurobhindo Pharma

Gokaldas Exports

GAIL

BPCL

The deluge continues :) - Thanks Ramesh

Sensex beats previous best

Widespread buying across the board saw the Sensex end the day at a new closing high of 13091.
Buoyed by the strong international indices and continuing foreign institutional investor inflows, the market extended its upmove for the second
consecutive session and touched a new intra-day high of 13138 on broad-based buying support. The Sensex made a perfect start by commencing firm at 13063, 30 points above its previous close of 13033. After crossing 13100 in early trades, the market remained extremely upbeat in the second half of the trading session as strong gains led by oil and gas, CD, PSU and CG stocks lifted the index to a new intra-day high of 13138. The Sensex wrapped up the session with gains of 58 points at 13091, while the Nifty advanced 24 points to close at 3791.

Driving the rally, ONGC surged 4.35% at Rs839. Maruti advanced 2.03% at Rs982, RIL gained 1.53% at Rs1,284, HDFC Bank surged 1.47% at Rs1,009, Bajaj Auto shot up by 1.41% at Rs2,781, Ranbaxy jumped 1.41% at Rs404, Bharti Airtel added 1.40% at Rs549, L&T moved up by 1.35% at Rs1,339 and Dr Reddy’s was up 1.26% at Rs761. HDFC, Reliance Communication, SBI, Grasim, ACC, ICICI Bank, HLL and Hero Honda also ended in positive territory. However, on the negative side, Satyam was a major loser and shed 1.79% at Rs427 followed by ITC that was down 1.05% at Rs187. Infosys shed 0.90% at Rs2,081 and Hindalco slipped 0.84% at Rs189. NTPC, Wipro, Tata Steel, Cipla, REL, TCS, BHEL, Gujarat Ambuja and Tata Motors ended the day with marginal losses.


The breadth of the market was mixed. Of the 2,591 stocks traded on the BSE, 1,224 stocks advanced, 1,295 stocks declined and 72 stocks ended unchanged. On the sectoral front, the BSE Oil & Gas index was the biggest gainer and was up 1.86% at 6252 followed by the BSE PSU index (up 1.17% at 6045), the BSE CD index (up 1.03% at 3220) and the BSE CG index (up 0.78% at 8807).

Over 89.35 lakh Development Credit Bank shares changed hands on the BSE followed by Silverline Technologies (88.85 lakh shares), Reliance Natural Resource (50.42 lakh shares), Indiabulls (42.62 lakh shares) and Morepen Laboratories (39.99 lakh shares).

Value-wise Reliance Industries registered a turnover of Rs207.21 crore on the BSE followed by Indiabulls (Rs200.64 crore), Gayatri Projects (Rs80.59 crore), Ansal Infrastructure (Rs80.46 crore) and Tata Motors (Rs78.10 crore).