India Equity Analysis, Reports, Recommendations, Stock Tips and more!
Search Now
Recommendations
Monday, April 30, 2007
Good Evening - Apr 30 2007
Key indices opened down nearly 1% as investors booked profits following the 4.5% gain in indices in the last five sessions. Weak Asian markets also hit sentiment. Asian markets were weak today due to a slide in metal prices and on concerns over Japan's economic growth. Bank of Japan today kept its overnight call rate unchanged. Profit sales after five straight sessions of gains and weakness in Asian market dragged Sensex and Nifty nearly 1% early today. The Nifty was weighed down by Cipla shares, which fell 14% to Rs 218 after the company Thursday reported a 34% drop in Jan-Mar net profit to Rs 1.26 bn. Citigroup has reduced the stock's target price to Rs 170. At 10:36AM, Sensex was 14089.57, down 139.37 points or 0.9%. Nifty was at 4135.85, down 42.00 points or 1.0%. The two indices have gained 4.5% over the last five sessions and are now nearing record highs touched in February. Investors here also unwound positions ahead of the weekend. The CNX Midcap Index was flat and S&P CNX 500 Index down 0.6%. On the BSE, there were 725 advances and 821 declines in morning session. Reliance Industries was down on profit sales after reporting better-than-expected Jan-Mar earnings Thursday. Among Nifty gainers: Ranbaxy Lab was up 1.1% at Rs 375, Wipro rose 1.0% to Rs 569, and Tata Motors was up 0.8% at Rs 773. Ranbaxy Lab gained ahead of its Jan-Mar earnings later today. The company's net profit is seen growing 76% on year to Rs 1.2 bn. Automobile shares extended gains as concerns over high interest rates cutting into demand and profits have slightly eased after the RBI left its key rates unchanged at its policy review Tuesday. The BSE Auto Index gained 1%. Investors will eye the inflation rate for week to Apr 14 and earnings of Bharti Airtel for further cues. In the mid trading session, indices were down 2%. Profit sales, after recent gains, and weakness in Asian markets .Sentiment was not affected even as inflation for the week to Apr 14 remained unchanged at 6.09%, against expectations of a rise to 6.14%. At 1:50PM, BSE Sensex was at 13976.08, down 252.80 points, or 1.8% from Thursday. NSE Nifty was at 4100.90, down 76.95 points, or 1.8%. Ranbaxy Laboratories was down 1% after it reported Jan-Mar earnings that missed street estimate. The company's net profit for the quarter was Rs 1.15 bn, up 129% on year. The BSE Healthcare Index shed 4%. Sterlite Industries was down 3% ahead of its March quarter earnings Thursday. Hindustan Zinc, from which Sterlite derives 70% of its profit, Thursday reported fourth quarter earnings below analysts' estimates. Among the few gainers, Siemens India gained 1.3%, Satyam Computer rose 1.4%, while Maruti Udyog rose 1%. Cipla, down 15%, was worst-hit among Nifty stocks. Reliance Industries shares were down 2.5% at Rs 1,555 due to profit-booking. No. of Scrips Value (Crs.) Advances 277 1894 Declines 767 6173 Unchanged 27 81 Total 1071 8148 Bharti Airtel fell 2% to Rs 844 after the company said average revenue per user for Jan-Mar quarter declined 5% from the previous quarter to Rs 406. Key indices ended down 2.4% as investors sold shares of pharmaceutical companies and heavyweights like ONGC, and Tata Steel. Today, Nifty fell more than 2% due to heavy selling in shares of pharmaceutical companies and index heavyweights. Weakness in Asian markets and lack of buying due to caution ahead of the weekend worsened the fall. Today, Bank of Japan left its overnight call rates unchanged. The finance minister and RBI officials meet later today to discuss ECB inflows, according to reports. Sensex ended at 13908.58, down 320.30 points or 2.3%, after touching a low of 13884.53 and a high of 14219.25 intraday. Nifty ended at 4083.50, down 94.35 points or 2.3%. It moved between a low of 4074.30 and a high of 4182.00. The combined turnover on both exchanges was 120 bn. The CNX Midcap Index was down 1% and S&P CNX 500 Index was down 2%. .Pharmaceutical shares were the worst hit in the Nifty after Cipla late Thursday reported Jan-Mar earnings that missed street expectations. The company's net profit for the March quarter was 1.3 bn, down 34%. Cipla shares ended at Rs 217, down 14%, the worst hit in the Nifty. Ranbaxy Laboratories erased the session's losses to end nearly flat at Rs 371. The company reported Jan-Mar net at Rs 1.15 bn, marginally above estimates. The BSE Healthcare Index ended down 4%. Some of the biggest losers today were heavyweights ONGC, down 3.3% at Rs 926, Tata Steel, down 4.1% at Rs 537, and Reliance Industries, down 3.6% at Rs 1,539. Sterlite Industries, which derives 70% of its profits from Hindustan Zinc, fell as Hindustan Zinc Thursday reported Jan-Mar earnings below analysts' estimates. Sterlite details fourth quarter results Thursday. Among the rare gainers, ABB was up 1% at Rs 4,141, extending gains on robust March quarter earnings detailed Wednesday. Tech stocks ended in mixed trend. Infosys was down at Rs 2005.15 with volumes of Rs 330.41 crs, Satyam was up at Rs 467.85 with volumes of Rs 159.98 crs, TCS was down at Rs 1234.50 with volumes of Rs 147.62 crs, and Wipro closed up at Rs 565.75 with volumes of Rs 52.64 crs. Pharma stocks ended negative with exception. Cipla was down at Rs 217.10 with volumes of Rs 406.56 crs, Ranbaxy closed up at Rs 370.70 with volumes of Rs 65.23 crs, Dr Reddy was down at Rs 701.55 with volumes of Rs 27.86 crs, and Sun Pharma closed down at Rs 1038.05 with volumes of Rs 14.08 crs. Banking stocks showed negativity with exception. In the Public Sector banks SBI closed down at Rs 1101.65 with volumes Rs 166.40 crs & Bank Of India closed down at Rs 195.70 with volumes Rs 60.37 crs. In the private sector ICICI Bank closed down at Rs 935.15 with volume of Rs 117.07 crs & Kotak Bank closed up at Rs 521.55 with volumes of Rs 68.97 crs. Auto Stocks ended down. Tata Motors closed down at Rs 749.35 with volumes of Rs.143.63 crs & M&M closed down at Rs 762.25 with volumes of Rs 68.24 crs. While in the 2 wheeler segment stocks, Baja Auto closed down at Rs 2456.30 with volumes of Rs 62.28 crs & Hero Honda closed down at Rs 667.40 with volumes of Rs 11.43 crs. Cement Stocks witnessed negative trend. ACC closed down at Rs 822.45 with volumes of Rs 62.73 crs, India Cement closed down at Rs 176.35 with volumes of Rs 42.63 crs, GACL closed up at Rs 117.35 with volumes of Rs 28.07 crs and Shree Cement closed down at Rs 1050.05 with volumes of Rs 7.06 crs. Nifty ended at 4084 down by 94 points
Market Close: bouyancy in the air !
On the last day of month indices traded weak at the start on negative global cues and more of lack of positive triggers. ICICI equity dilution along with its unimpressive results disappointed investors. This is a holiday shortened week with markets closed for 2 dats. Investors tend to play safe in such times. However markets managed to see recovery in late trading session to end flat. Last hour recovery was largely led by Reliance communication post is 4Q numbers. RIL also led to some recovery at the end. Selective mid and small caps outperformed for the day. Some economic worries seems to be hovering global markets we really needs to wait and watch how they pan out.
Sensex closed down by 36 points at 13872.37. Weighing on the Sensex were losses in ICICI Bk (865.9,-7 percent), HLL (199.4,-5 percent), Cipla (210.85,-3 percent), ONGC (911.9,-2 percent) and Bharti Tele (812.05,-2 percent). Losses were restricted by gains in RCVL (477.1,+4 percent), TCS (1265.7,+3 percent), Hero Honda (683.6,+2 percent), TISCO (549.6,+2 percent) and Infosys (2049.3501,+2 percent).
Reliance Communication declared excellent results for Q4FY07 results. Net profits jumped 154% to Rs 1,023 crore from Rs 403 crore in same period of last financial year and revenues up by 32.5% to Rs 3,936 crore versus Rs 2,970 crore. For quarter-on-quarter, it has posted net profit of Rs 1,023 crore versus Rs 924 crore, a growth of 10.7% and revenues of Rs 3,936 crore compared to Rs 3,755 crore in previous quarters, up by 4.8%. R Com?s Q4 EBITDA stood at Rs 1,635 crore and margin at 41.5%. Wireless margins in the fourth quarter were at 39%, global business margins at 24% and enterprise business margins at 49%. For FY07, the company has reported net profit of Rs 3,163 crore and revenues of Rs 14,468 crore. The results were above market expectation. The Telecom stocks ended in strong except few stocks. R Com closed up by 3.35% while its peer Bharti and MTNL closed down by 1.36% and 1.92%. VSNL and Tata Tele closed up by 1.3% and 7.79% respectively.
Hindustan Lever has posted healthy results for the quarter ended March 07. The company posted net profits of Rs 393 cr for the March end quarter against Rs 443 cr for the quarter previous year, up 7%. Total Income for the quarter increased by 14% and stood at Rs 3275 cr against Rs 2867 cr in the same quarter previous year. The results were not comparable to the extent of amalgamation of Modern Foods (India) Ltd and its subsidiary with the Company. Consumer goods ended in mixed while HLL closed down by 4.84% and its peer P&G also closed marginally down. Competition is high and with the need of stronger advertising and promodtion costs needed to drive growth markets seem to sense tougher times ahead on increased advertising costs. All media companies saw bouyancy. HT has announced a hike in advertising rates and that indicates tough times for FMCG companies.
Wipro is planning to set up an IT park in Nagpur at a new special economic zone (SEZ) near Multi-modal International Hub Airport (Mihan). The company informed that have acquired 117 acres of land by making a 20% upfront payment to the Maharashtra Airport Development Company (MADC). Wipro is believed to start a software development centre and will further consider expanding its other businesses such as business process outsourcing (BPO), business process management and knowledge services. The company has set a target of 1.5 - 2 years for the IT Park at Mihan to get operational. Earlier, MADC allotted 100 acres each to Satyam Computer Systems and Shapoorji Pallonji & Co, and 120 acres to L&T Infocity for setting up IT parks at Mihan. Software stocks ended in strong while Wipro closed marginally up and its peer Infosys and TCS closed up by 2.5%. The reason for the strength was a weaker rupee which was up on the RBI increasing the limits for MSS (Monetory stabilisation system) resources to 110000 cr. The RBI seems to have indicated that its ready to intervene after having waited out for 3 weeks.
Technically Speaking: It was a weak session for the whole day before closing. Sensex touched intraday high of 13901 and low of 13693. The Sensex has moved into a corrective phase but we believe the downside will be capped at around 13590-13600. On the higher side Resistance lies at 14075, 14190 levels, Support lies at 13757, 13621 levels. Market turnover was pretty low at Rs 3255 cr. Overall breadth was in favor of Advances, where the Advances stood at 1426, Declines stood at 1061.
Kotak - Bharti Airtel, ICICI Bank, Cairn India, Container Corporation, Ranbaxy, Glaxo, Bank of Baroda, Sesa Goa, Pantaloon, OBC, Nicholas Piramal, Cor
Labels:
Bank of Baroda,
Banking,
Bharti Airtel,
Cairn,
Concor,
Corporation Bank,
Energy,
Glaxo,
ICICI Bank,
Kotak,
OBC,
Pantaloon,
Polaris Software,
Ranbaxy,
Sesa Goa
DP Group! | Facebook | Twitter
Sensex spared a steep drop
The market staged a solid intra-day rebound in the second half, as Reliance Industries (RIL) rebounded after an initial slide. Reliance Communications (RCL) also shot back up on the back of strong Q4 results. A recovery in State Bank of India and HDFC Bank also came about in the latter of trading. IT stocks were in demand right from the onset of the trading session. But FMCG giant Hindustan Lever (HLL) came under selling pressure soon after its Q1 results hit the market in early afternoon trade.
Select side-counters were in demand due to their strong Q4 results. A few other scrips rose on expectations of good earnings.
The Sensex’s provisional closing was 13,893.66, a fall of just 14.92 points. It reverted from the lower level after having plunged as many as 214.99 points in mid-morning trade, as ICICI Bank tumbled after the bank announced a large equity issue along with a dismal financial performance in Q4 March 2007. The results were announced after trading hours on Saturday (28 April).
The BSE clocked a turnover of Rs 3255 crore.
Reliance Communications (RCL) gained 3.3% to Rs 475.50, off the session’s low of Rs 447. A strong 34.3 lakh shares changed hands in the counter on BSE. RCL today reported a consolidated net profit of Rs 1024.41 crore in Q4 March 2007. It did not give figures in the corresponding period last year. As per available data, RCL had a consolidated net profit of Rs 440 crore in Q4 March 2006.
Reliance Industries (RIL) rose 2% to Rs 1571, off an early low of Rs 1505. RIL had on Thursday reported stronger-than- expected 14% growth in net profit in Q4 March 2007.
IT firms rose as anxious market men awaited changes, if any, with respect to a proposal in the Union Budget 2007-08 for bringing employee stock options plans under the fringe benefit tax. Infosys rose 2% to Rs 2050.50, TCS added 2.5% to Rs 1265, Satyam Computer gained 1.4% to Rs 474, Wipro advanced 1.4% to Rs 574 and Tech Mahindra surged 9% to Rs 1612.90. The Union Budget 2007-08 is due to be passed by Parliament on Thursday (3 May).
Tata Steel gained 2.5% to Rs 55.10. The stock has been witnessing alternate bouts of buying and selling since unveiling a funding plan for the acquisition of Corus, which may lead to substantial equity dilution in phases.
Cement shares were in demand. ACC rose 2.2% to Rs 840 and Grasim gained 0.5% to Rs 2435.
Hindustan Lever (HLL) plunged 5% to Rs 199.05. The stock declined on high volume of over 17 lakh shares on BSE. HLL's net profit, excluding extraordinary gains, rose 13.6% to Rs 334 crore from Rs 294 crore.
ICICI Bank was down 7% to Rs 867, after announcing a large equity issue along with a dismal financial performance in Q4 March 2007. The stock hit a low of Rs 844.10. A whopping 9.8 lakh shares changed hands in the counter on BSE. ICICI Bank, on Saturday, posted lower-than-expected Q4 earnings due to higher cost of funds. ICICI Bank’s net profit rose 4.45% to Rs 825.12 crore in the quarter ended March 2007, against Rs 789.93 crore during the previous quarter ended March 2006. Total income for the bank rose 54.2% at Rs 8495 crore.
Concerns of huge equity dilution also weighed on the stock. Along with Q4 results, ICICI Bank’s board approved raising additional equity capital by way of a public issue of shares and of American Depositary Shares (ADSs). The exercise is expected to generate around Rs 20000 crore. The approval of shareholders will be sought by postal ballot, the private sector bank said.
Housing finance major HDFC lost 1.8% to Rs 1655. The company unveils Q4 March 2007 results on Thursday (3 May). Oil exploration major ONGC lost 2% to Rs 910.50, extending Friday’s decline.
The market remains closed on Tuesday (1 May) and Wednesday (2 May) on account of public holidays.
European shares were mixed in early trade on Monday. London’s FTSE 100 Index was down 0.06%, whereas key benchmark indices in Germany and France were up 0.2 - 0.5%.
Chinese stocks on Monday shrugged off a central bank announcement at the weekend that it will raise bank reserve ratios to help restrain loan growth. The Shanghai Composite Index was up 2.1%.
But other Asian markets were subdued, as exporters were hit by a weak US GDP growth data. A report on Friday showed the US economy grew by just 1.3% in the first quarter.
Strong earnings helped lift the Dow to another record close above 13,000 on Friday (27 April). It rose 15.44 points, or 0.12%, to end the day at a record 13,120.94, capping off its fourth straight week of gains. The Standard & Poor's 500 Index was down just 0.18 of a point, or 0.01%, to finish at 1,494.07. The Nasdaq Composite Index was up 2.75 points, or 0.11%, to close at 2,557.21.
Brent crude oil prices hovered above $68 a barrel following sharp gains at the end of last week, with investors still on the edge over a foiled plot to attack oil facilities in top-exporter Saudi Arabia. Brent rallied over 1% on Friday after Saudi Arabia said it fended off an Al-Qaeda-linked plot to attack oil facilities, military bases and public figures, arresting Islamist militants, including some trainee pilots preparing for suicide operations.
Market overcomes early blues
The market seems to be nearing to another phase of correction. After dipping over 300 points in the last session, today the market opened on a bearish note, down 86 points to its previous close on the back of weak Asian indices. The Sensex succumbed to heavy losses as bears tightened their grip by selling heavyweights, banking and information technology stocks. By the mid morning trades the Sensex touched the intra-day low of 13694. The market witnessed selective buying at lower levels in the afternoon and the Sensex recovered 200 points from its day's low. The Sensex finally ended the session with a loss of 36 points at 13872, while the Nifty gained four points at 4088.
The broader market remained positive. Of the 2,548 stocks traded on the BSE, 1,406 stocks advanced, 1,061 stocks declined and 81 stocks ended unchanged. Most of the sectoral indices ended in positive territory. The BSE IT Index gained 2.01% at 5053, the BSE Teck advanced 1.52% at 3725 while the BSE Bankex Index dropped 2.88% at 6883 and the BSE FMCG Index shed 1.13% at 1801.
Among the blue-chips, Reliance Communication shot up by 3.69% at Rs477, TCS soared 2.53% at Rs1,266, Hero Honda surged 2.30% at Rs684, Tata Steel advanced by 2.22% at Rs550, Infosys added 2.12% at Rs2,049, ACC moved up 2.06% at Rs839, Reliance Industries scaled up 1.42% at Rs1,560 and Satyam Computer was up 1.25% at Rs473. Among the laggards ICICI Bank dropped 7.26% at Rs866 and HLL shed 4.82% at Rs199 while Cipla, ONGC, Bharti Airtel, HDFC and Hindalco closed marginally lower.
Banking stocks came under sharp selling pressure. Oriental Bank tumbled by 7.55% at Rs197, Bank of Baroda slipped 2.86% at Rs236 and Bank of India slumped 1.94% at Rs192.
Over 3.58 crore IFCI shares changed hands on the BSE followed by Tata Teliservices (1.20 crore shares), GV Films (42.26 lakh shares), Orbit Corporation (39.48 lakh shares) and Reliance Communication (34.40 lakh shares).
Value-wise Reliance Communication registered a turnover of Rs160 crore on the BSE followed by IFCI (Rs154 crore), Reliance Industries (Rs117 crore), Tech Mahindra (Rs88 crore) and ICICI Bank (Rs85 crore).
Morning Call - Apr 30
Market Grape Wine :
In House :
Nifty at a support of 4055 & 4025 levels with resistance at 4130 & 4166 levels .
Markets to remain range bound with negative bias.Reduce position at higher levels.
Intra Day: Buy Parsavnath above 336 with a TGT of 347 and a SL of 331
Buy HCL Tech above 332.50 with aTGT of 342 and a SL of 326
Sell ICICIBANK with SL
Buy IDFC above 101 with SL
Out House :
Markets at a support of 13858 & 13786 levels with resistance at 14141 & 14242 levels .
Buy : RIL
Buy : Rolta
Buy : IDEA
Buy : Praj & GlenMark
Buy : ICRA & Crisil
Buy : JSW & Tisco
Buy : SesaGoa & ABAN
Indiainfoline - Intraday Calls
NIFTY (4083) S 4039 R 4128
Buy IOC at Rs436 with SL of Rs432 and target of Rs444, 446
Buy BEL at Rs1687 with SL of Rs1675 and target of Rs1710, 1715
Buy BEML at Rs980 with SL of Rs972 and target of Rs1000, 1005
Sell REL at Rs509 with SL of Rs514 and target of Rs501, 498
Sell UTI Bank at Rs455 with SL of Rs460 and target of Rs447, 445
STRATEGY INPUTS FOR THE DAY
Bulls on a summer holiday!
Holidays are an expensive trial of strength. The only satisfaction comes from survival.
We're all going on a summer holiday. That's the song bulls seem to be forced to sing. The melody is surely missing following Friday's sudden and sharp selloff despite stable inflation and strong corporate earnings. It is yet another reminder that you should not get too carried away when the market is rising continuously. Lock in some gains regularly to avoid a big hit when things suddenly turn gloomy. Having said that, we do not want to scare the bulls though the month of May has not been too kind to them in two of the last three years. April was a very good month after a volatile first quarter thanks mainly to the renewed strength in FII inflows. What the foreign funds have in mind for May is anybody's guess. With the result season drawing to a close, and the monetary policy also out of the way there may not be many triggers to push the key indices higher. Inflation and the fluctuations in the currency markets coupled with global factors like crude oil prices, and the state of the US, Chinese and Japanese economies will continue to drive the sentiment. Fund flows to emerging markets, including India, will definitely play a major role.
This week at least we do not see much happening as we will have two trading holidays on Tuesday and Wednesday. As for today, we expect a weak opening on the back of the sharp drop in Asian markets and a rangebound trading for the rest of the day. The lower than expected US GDP data may also cast a shadow on the market as will higher oil prices. The yen is up this morning from a record low against the euro after China curbed lending to cool its economy, prompting traders to cut down on the so-called 'carry trades' funded by borrowing the Japanese currency. As is the trend on Monday, traded volume will be low thereby leading to higher intra-day gyrations. We advise investors to stay a little cautious due to the emergence of the fresh set of negative global issues. Reliance Communications and HLL results today may have a bearing on the index movements.
FIIs were net sellers to the tune of Rs3.78bn (provisional) in the cash segment on Friday while domestic institutions pumped in Rs1.76bn. In the F&O segment, they were net sellers of Rs7.03bn on the same day. On Thursday, FIIs were net buyers of Rs3.6bn taking their net investment for April to $1.37bn. For the year so far, foreign funds' net buying is close to $3bn. Mutual Funds brought in Rs178mn on Thursday.
Shares of airline companies could rise amid reports that they are likely to jack up fuel surcharge from Rs750 to Rs900. DS Kulkarni is the stock to watch out for. A financial daily says that the company is close to signing a deal with a foreign developer for investment in two of its projects. ICICI Bank will remain in the limelight following the declaration of its results over the weekend and announcement of the fresh equity issue worth up to $5bn. Some market watchers say the stock might fall amid worries about equity dilution.
US stocks rose for the fourth straight week, sending the Dow Jones Industrial Average above 13,000 for the first time, powered by better than expected earnings and a surge in M&A deals.
On Friday, the Dow closed at a record high for the third day in a row and the Nasdaq hit its highest point in six years, despite a weaker-than-expected GDP reading.
The Dow Jones was up 15.44 at 13,120.94. For the week, the Dow gained 1.2%. The tech-heavy Nasdaq Composite rose 2.75 to 2,557.21. For the week, the Nasdaq was up 1.2%. The broader S&P 500 finished flat at 1,494.07. For the week, the S&P 500 gained nearly 0.7%.
US light crude oil for June delivery rose $1.40 to settle at $66.46 a barrel on the New York Mercantile Exchange. The front-month contract was 14 cents down at $66.32 a barrel in extended hours of trading in Asia.
COMEX gold for June delivery rose $1.50 to end at $679.50 an ounce. Treasury prices were mostly flat with the yield on the 10-year note at 4.69%, little changed from late on Thursday. In currency trading, the dollar slipped to an all-time low against the euro before paring some of its losses and also fell modestly versus the yen.
European shares weakened from six-year highs on Friday as the euro hit an all-time record against the dollar after weak US GDP data. The pan-European Dow Jones Stoxx 600 index declined 0.6% to 386.10. The UK's FTSE 100 shed 0.8% at 6,418.70, the German DAX Xetra 30 lost 0.1% to 7,378.12 and the French CAC-40 slipped 0.2% to 5,930.77.
Asian stocks fell to a one-week low amid concern about economic growth in the US and China. The Morgan Stanley Capital International Asia-Pacific excluding Japan Index lost 0.2% to 429.17 as of 10:03 a.m. in Hong Kong, the lowest since April 19. The index is up 5% this month, set for its biggest monthly advance since November. Taiwan's Taiex index slid 1%, while Hong Kong's Hang Seng Index declined 0.4%. Indexes fell elsewhere, except in Australia, New Zealand and China. Japan's market is closed today for a public holiday.
In the emerging markets, the Bovespa in Brazil was up 0.3% at 49,229 while the IPC index in Mexico gained 0.1% at 29,372.93 and the RTS index in Russia climbed 1% to 1935.51.
HOW MARKET FARED
Bulls take a breather
After holding firm through the week, the bulls decided to lock in some gains ahead of a truncated trading week. Reliance Industries and Bharti Airtel led the fall following mixed results while Cipla shares slumped after it reported a 34% drop in Q4 net profit. A weak Asian markets also contributed to the fall.
As a result, the benchmark BSE Sensex slid 320 points or 2.25% to end at 13,908.58 after being as high as 14,219.25 and as low as 13,884.53. The NSE Nifty finished 2.3% lower at 4083.50 after touching a high of 4182 and a low of 4074.30.
The BSE Small-Cap index and the Mid-Cap index were relatively better off, losing 1.1% and 0.9%, respectively.
The BSE Healthcare index bore the brunt of the selloff, plunging by nearly 4%, thanks largely to a 14.3% decline in Cipla. Other big losers in the pharma pack were Glenmark (4.5%), Sun Pharma (3.25%), GSK Pharma (3.2%) and Matrix Labs (3%).
Oil & Gas (3%), Banking and Metals (2.3% each) were the other big losers among the sectors. FMCG and Consumer Durable indices lost 1.1% each as well. The BSE IT index closed flat while Auto and Capital Goods shed 0.7% apiece.
Within the Sensex, the biggest losers were Cipla, Bharti Airtel (4.15%), SBI (4.1%), Tata Steel (4%), Reliance (3.7%), ONGC (3.2%), ICICI Bank (3.15%) and Grasim (3.1%). Satyam was the only major gainer, rising by 1.5%. Wipro and NTPC also ended marginally in the green.
Outside the Sensex, the prominent losers included Mahindra Gesco, Unitech, GHCL, Hindustan Construction, India Cements, Sterlite, Century Textiles, FT, Suzlon, Dabur and Reliance Capital.
MICO was a big gainer. The stock surged by 11.6% after its German parent Robert Bosch GmbH made an open offer to buy a 20% stake in the company at Rs4,000 per share or Rs25.64bn. Patni (6.2%), Crompton Greaves (3.3%) and Kotak Bank (3.2%) were the other notable gainers.
Deccan Aviation tumbled 5% after the low-cost carrier posted a loss in its third quarter. Loss for the three months ended March 31 reached Rs2.13bn, the company said in a statement without giving year-ago numbers. Total sales rose 66% to Rs4.57bn, while net sales were Rs4.38bn.
Market Volumes:
The turnover on NSE was down by 30% to Rs82.22bn. BSE Oil & Gas index was the major loser and lost 3.04%. BSE Auto index (down 0.69%), BSE Bank index (down 2.34%) and BSE PSU index (down 1.22%) were among the other major losers.
Volume Toppers:
IFCI, TTML, Cipla, Nagarjuna Fertilizers, IDFC, Orbit Corp, R Com, Idea, RPL, RNRL, SAIL, IREAL, IDBI, Tele Data Informatics, FSL, Bharti Airtel, Satyam Comp, RIL, Bank of India, HCC.
Lower Circuit:
Deccan Aviation, GHCL, GTC Inds, Tele Data and Unitech.
Results Today:
Alps Industries, APIL, Amtek India, Amtek Auto, Andhra Bank, BEL, Bharti Shipyard, CESC, GHCL, GBN, HLL, ICICI Bank, JSW Steel, Jain Irrigation, Mphasis BFL and Vijaya Bank.
Delivery Delight:
Arvind Mills, Asian Electronics, Bata India, Crompton Greaves, DCHL, Gammon India, HCL Infosystems and Infotech Enterprises.
Abnormal Delivery:
Raymond, Balrampur Chini, Cadila Healthcare, Wockhardt, Tata Tea, Hindalco and Grasim.
Stock Futures with Largest Increases in OI:
Cipla, Chennai Petro, J&K Bank, Crompton Greaves, Indian Bank, Bharti Airtel, Bongaigaon Refinery, ICICI Bank and Aban Offshore.
Stock Futures with Largest Decreases in OI:
BILT, ACC, IOC, Corp Bank, Zee, Divi’s Labs, India Cements, STAR, Cummins and Tata Steel.
Results Corner:
Ranbaxy Q1 group profit at Rs1.28bn (up 80%), net sales at Rs15.54bn (up 23%)
GlaxoSmithKline Consumer Q1 profit at Rs423mn (up 23%), revenue at Rs3.4bn (up 20%)
Cipla Q4 net income (down 34%) at Rs1.26bn and total sales fell 57%
Brokers Recommendations:
RIL – Outperformer from Man Financial with target of Rs1707
Wipro – Buy from ABN Amro with target of Rs690
Long Term investment:
Crompton Greaves
Major News
Inflation rate unchanged at 6.09% in week ended April 14 against expectation of 6.10%
Essar Propack plans to spend additional $14mn to expand in the US
JSW Steel may build US Steel Mill
Bharti plans to start Direct-to-Home TV Broadcast this year
SBI says ' No Decision' on share sale
Petron Engineering gets Rs45.5mn order
Market may resume weak
The market may exhibit cautious trend after taking a strong dip on Friday. Also major Asian gauges like the Hang Seng index, the Kospi index, Straits Times and the Jakarta index have declined in current trades and may drag down the indices in early trades. Among the local indices, the Nifty has an intra-day support at 4073 and on a break below 4073 the next support is at 4060. On the upside there is a resistance at 4100. The Sensex has a likely support at 13800 and may face resistance at 14050.
Key announcements like Alstom Projects, Amtek Auto, Andhra Bank, Bharat Electrical, Castrol, CESC, Gateway Distripark, Gemoet, GHCL, Gujarat Gas, HLL, JSW Steel, Moser Baer, Mphasis, Nestle, Proctor & Gamble, Reliance Communication, Sterlite Optical, Triveni Engineering, Vijaya Bank are expected to announce their figures.
US indices rose on Friday, with robust earnings pushing the blue-chip Dow Jones index to its third straight record close even as data showed the economy grew in the first quarter at its slowest pace in four years. The index gained 15 points to close at 13121 while the Nasdaq ended three points higher at 2557.
However, Indian ADRs were largely weak on the US bourses. Tata Motors and ICICI Bank dropped over 2% each while HDFC Bank, MTNL, VSNL, Dr Reddy's, Satyam, Wipro and Infosys were down around 1% each. Patni Computers and Rediff, however, ended with modest gains.
Crude oil prices in the global market moved up, with the Nymex light crude oil for June series rising by $1.40 at $66.46 a barrel. In the commodity segment, the Comex gold for June delivery surged $3.80 to settle at $681.80 an ounce.
Market may remain range-bound
The market may remain range-bound today, as traders are likely to refrain from taking up fresh positions ahead of the public holidays, on Tuesday (1 May) and Wednesday (2 May).
The Union Budget 2007-08 is due to be passed by the Parliament on Thursday (3 May), and markets will keep an eye for any rollback measures from Budget Day (28 February 2007). The markets will be watch whether Finance Minister P Chidambaram rolls back the export duty imposed on iron ore exports, which has hit exports to China, and any changes to bring employee stock options plans under the fringe benefit tax.
The key March 2007 quarter results today are FMCG giant Hindustan Lever and cellular services major Reliance Communications (RCL). RCL is seen reporting robust Q4 results on the back of surging new subscription additions.
The outcome of the ongoing seven-phased Uttar Pradesh assembly elections, is a key political event to watch out for. The assembly poll gets over in early-May 2007, and the vote is seen as a barometer of national political trends. Some opinion polls show the opposition Bharatiya Janata Party (BJP) could emerge second in the race, further adding to the woes of the ruling Congress, which is battling rising prices.
FIIs have pumped money heavily into Indian stocks, this month. Their buying picked up after IT major Infosys on 13 April 2007, issued a strong guidance for FY 2008, putting to rest concerns of a US economic slowdown on the IT sector. FII inflow for April 2007 (till 26 April) reached Rs 6874 crore. FIIs had pulled out a net Rs 1082 crore in March 2007.
But a bout of selling was witnessed from FIIs on Friday (27 April 2007). As per a provisional data, FIIs were net sellers to the tune of Rs 378 crore on Friday, the day when the Sensex had plunged 320 points.
Chinese stocks on Monday shrugged off a central bank announcement at the weekend that it will raise bank reserve ratios to help restrain loan growth. The Shanghai Composite Index was up 0.9%.
But other Asian markets were subdued, as exporters were hit by a weak US GDP growth data. A report on Friday showed the US economy grew by just 1.3% in the first quarter.
Strong earnings helped lift the Dow to another record close above 13,000 on Friday (27 April). It rose 15.44 points, or 0.12%, to end the day at a record 13,120.94, capping off its fourth straight week of gains. The Standard & Poor's 500 Index was down just 0.18 of a point, or 0.01%, to finish at 1,494.07. The Nasdaq Composite Index was up 2.75 points, or 0.11%, to close at 2,557.21.
Brent crude oil prices hovered above $68 a barrel on Monday, following sharp gains at the end of last week, with investors still on edge over a foiled plot to attack oil facilities in top-exporter, Saudi Arabia. Brent rallied over 1% on Friday after Saudi Arabia said it fended off an Al-Qaeda-linked plot to attack oil facilities, military-bases and public figures, arresting Islamist militants, including some trainee pilots preparing for suicide operations.
Sunday, April 29, 2007
Wkly Technical Analysis: Get set to reap profits
The NSE Nifty ended unchanged at 4,084 after coming in the striking distance of its all-time high at 4,245 by hitting the weekly peak of 4,218.
The NSE index may face stiff resistance for its short-term target of 4,250. A break of 4,035 this week could see the index dropping to a low of 3,955.
The weekly support and the resistance levels for the Nifty are as follows: the index is likely to face resistance around 4,145-4,165-4,180, while it may find support around 4,020-4,000-3,985.
The Sensex moved with a positive bias for most of the trading week until the Friday selloff, which saw the index shedding the entire gains in a single day. The index from a low of 13,850 rallied to a high of 14,384 -- an intra-week gain of 534 points. However, in Friday’s selloff, it ended almost flat at 13,909.
Last week, we had reported the possible short-term targets for the Sensex at 13,990-14,275-14,565 against which the index touched a high of 14,384.
While the possibility of the index attempting to scale 14,565 still remains intact, it may counter stiff resistance around 14,240 on its way up.
While there is no clear direction available on the Sensex chart, the broader range of the idex next week could be from 13,580 to 14,240.
The index may find support around 13,705-13,640-13,580, and may face resistance around 14110-14175-14240. Get set for a profitable week.
The march of the rupee
If you offer to exchange US dollars for Indian rupees, a person who is aware of market trends would probably decline the offer. The rupee is showing its mettle in the foreign exchange markets. It has appreciated to an eight-year high of Rs 42.90 against the dollar. Since January 2006 till date, it has appreciated by almost 4.8 per cent. During calendar year 2006, it went up more than 3 per cent.
Improving economic fundamentals and stronger growth prospects have led to a global interest in the Indian economy. Foreign money is pouring in to ride the economic boom and take advantage of the rising interest rates and stock and real estate prices.
The net FII inflow (debt and equity) since January 2006 was close to $10 billion. Non-Resident Indians also remitted home a considerable amount of dollars. The higher interest rates in the domestic market compelled companies to borrow in dollars in foreign markets (external commercial borrowings) to fund their expansions plans. Naturally, when the supply of dollars exceeded the demand, the rupee soared.
What implications does an appreciating rupee have on the economy and the common man?
Indian exports are denominated in dollars. If the rupee appreciates and the dollar depreciates (other currencies remaining stable), Indian exports will become expensive and uncompetitive, leading to lower volumes. The appreciating rupee could also adversely impact the employment generating software and outsourcing (BPOs and KPOs) sectors' income, which is also denominated in dollars.
Thankfully, the Indian economy is less export-dependent than some of its Asian peers, where falling exports slows growth and brings in higher unemployment. Exports constitute less than 20 per cent of India's GDP, yet they are an important part of the economy.
Higher imports may add to the trade deficit (imports minus exports), which is not always in the interest of the economy.
NRI deposits and remittances would fetch less rupees for their dollars if the rupee continues appreciating. With the trade deficit deteriorating sharply, these remittances have helped India remain in a surplus situation on the balance of payments.
FIIs usually get money in India in dollars to invest in stocks and other assets. A stronger rupee will mean that they get a lower amount to invest. A rising rupee will add to the dollar returns of FIIs that don't hedge the currency risk.In order to prevent a rapid appreciation of the rupee, the RBI buys dollars from banks and sells rupees, which enhances the liquidity in the banking system.
If this liquidity is not sterilised (absorbed) out of the banking system by the RBI, interest rates are likely to fall. These excess dollars usually find their way to the country's foreign exchange reserves. The RBI and the government incur costs on account of the sterilisation measures and maintenance of reserves.
Higher reserves can be helpful in the event of an external financial crisis, such as the foreign exchange crisis in India in 1991.
The long-term intrinsic value of a currency is a function of various other factors, such as interest rate differentials, trade equations, and so on. It should be kept in mind that the rupee has appreciated primarily on account of the excess dollars chasing the economic boom in India.
Any reversal of such flows due to a change in the global perception of India could put the rupee under pressure.
Trader's Corner
It would not be news to those associated with the stock markets that stock prices are sensitive to news. Memories of May 2004 when Sensex plummeted more than 15 per cent on a single day as the tidings of the BJP debacle in the Lok Sabha elections hit the markets would be indelible in the minds of most of us.
It is not always that news has this dire an impact on the stock prices. But research in this area shows that stock prices do react to news and the volatility in stock prices does increase in periods of high news flow and volatility subsides when news flow is lesser.
Trading on news is one of the forms of trading that is followed by the agile and active traders. There are two ways to do it. The first is to ferret out any potential news that can cause a major move in the stock price. We are not talking about listening at keyholes or any other under hand activity. All it would involve is simple research that would put you ahead of the rest of the pack.
The idea is to exploit the time lag that exists between the news being disseminated to the majority. One example is to keep track of international commodity prices such as sugar, copper, steel etc. These prices percolate down to the domestic commodity markets and then the relevant stocks start moving up.
The other way to trade on news is to take position as soon as the news breaks out in the media with the hope of having the first-mover advantage. As a greater number of people come to know about the development, the stock price would move higher/lower and the subsequent move should be utilised to exit the position. Needless to say this style of trading is fraught with risks.
Exaggerated moves made by markets in response to news often get corrected in the next trading session as was witnessed after the World Trade Centre bombing. The US market and the rest of the global markets bid adieu to a long-term bear phase the day after the event occurred. It would be prudent to wait for a period of consolidation after the news-driven breakout in which to enter in to a position.
Zensar Technologies: Hold
Investors can retain their exposure in the Zensar Technologies (Zensar) stock. At the current market price, the stock trades at a price-earnings multiple of 13 times its consolidated 2006-07 per share earnings.
It may be advisable for investors to consider an entry into the stock only on weakness linked to the broad market. We have a `buy' call outstanding on the stock at Rs 213 made in end- September 2006.
The company's strengths stem from its broad-based portfolio of service offerings, robust client additions, scope for acquisition-led growth and reasonable growth potential from these levels. However, as a mid-cap stock, Zensar's valuation may be influenced by its high client concentration, prospects of slowdown in IT spending in the US later this year and slower-than-expected shift in offshoring by its new clients (both organic and inorganic).
Key variables
Zensar's performance in 2007-08 is likely to be dictated by the following variables:
Broad-based portfolio: Zensar operates five business segments — Application portfolio management (APM), enterprise application services (EAS), innovative technology solutions (ITS), business process outsourcing and optimisation (BPO) and consulting services. APM has been the company's key contributor, accounting for 53 per cent of its revenues and 83 per cent of its profit before interest and tax (PBIT) for 2006-07 announced recently.
However, over the past year, the contribution from EAS has risen significantly to 28 per cent of revenues (from 21 per cent in the previous year), while PBIT share has more than doubled to 26 per cent (from 21 per cent in the previous year).
This trend is also reflected in the PBIT margin, which improved for EAS to 13.5 per cent in 2006-07 from 6.7 per cent in the previous year. The PBIT margin from APM also improved by two percentage points to 22 per cent for 2006-07. While the company has staged a turnaround in its contribution from BPO, its share from consulting services, the new segment added this year, has been fairly healthy.
The only disappointment has been the contribution from the ITS segment, whose revenues have also dipped from the previous year, and it has also incurred operating losses. This segment offers services that range from application modernisation, embedded systems, product engineering services and legacy migration.
Client mining: While the top ten clients of Zensar account for 69 per cent of revenues for the year ended March 31, 2007 (up from 60 per cent in the previous year), the company is well-placed to mine its existing clients in different areas.
For instance, it has increased the number of clients in the $1 million-$5 million bracket to five in 2006-07 from three in the previous year. This also reflects its long-standing client relationships with the Mark and Spencer, National Grid, Credit Suisse, Cisco, among others.
In addition, of the 236 active clients, 222 are below $0.5 million, and this offers ample opportunity for scale-up of select clients in the coming quarters.
Inorganic growth: Over the past quarter, the company has put through two key growth initiatives. One, it has acquired the US-based ThoughtDigital Inc. through its US subsidiary for an all-cash consideration of $24.9 million.
ThoughtDigital specialises in Oracle implementation, with clients in the communication, financial services and media space. It had reported revenues of $27 million for the year-ended December 2006.
It is expected to strengthen Zensar's presence in the enterprise applications space. Two, it recently entered into a 60:40 joint venture with the Tokyo-based software company, EZA.
This is likely to help Zensar get a foothold in the niche areas of media and entertainment in the Japanese market.
Texmaco: Buy
Investors with a two/three-year investment horizon can consider exposure to the stock of Texmaco, a leading supplier of wagons to the Indian Railways.
At the current market price, the stock trades at about 22 times its expected FY-08 per share earnings. Given the increase in capacity by the Railways, Texmaco's wagon division is likely to witness a significant growth in demand.
This apart, privatisation of container freight movement and entry of private logistics players into the railway freight business may also contribute to higher demand for wagons, leading to further growth potential. The proposed doubling of capacity of the steel foundry division and a robust demand environment for Texmaco's hydro-mechanical equipment and structurals division also lend optimism to earnings prospects.
Investment argument
Driven by increasing demand from the Indian Railways and the private sector, Texmaco's rail wagons division may be set to witness robust growth.
The government's proposal to expand the railway network, increase capacity of existing wagons and introduce higher capacity wagons are likely to scale up its revenues over the next two/three years.
The proposed setting up of dedicated freight corridors on Delhi-Mumbai and Delhi-Howrah sections could also contribute to topline growth. The introduction of wagon investment scheme, entry of wagon leasing companies and allowing private participation in inland container transport could also create a healthy demand scenario for Texmaco.
On the back of an on-going power shortage scenario, the government's planned capacity-addition in various hydropower projects is encouraging.
It is likely to open up newer markets and revenue outlets for the hydro-mechanical equipment division of Texmaco, which makes gates, penstocks, electromechanical and hydraulic hoists for dams, barrages and power stations. Also, given the untapped hydropower potential in the North-East India and Texmaco's proximity to it, it is likely to have an edge over other companies in procuring such orders.
The process equipment division, which caters mainly to sugar, industrial gas and space industry, on the contrary, could be a drag, given the slowdown in orders from the sugar industry.
The steel foundry division, apart from meeting the captive requirement of the wagon division, is a major supplier of bogies and couplers to other wagon builders. It is also the largest supplier of bogies and couplers to the Indian Railways with a market share of about 32 per cent and 42 per cent respectively.
A healthy demand scenario, doubling of capacity and the thrust on export lend confidence in the revenue visibility of this division. Consequently, the foundry division is likely to emerge as a growth driver in the future.
For the quarter-ended December 2006, Texmaco recorded a 61 per cent rise in revenues compared to the corresponding previous quarter. The operating profits margin, however, remained stable at about 13 per cent despite a rising cost scenario.
Concerns
Since a significant portion of the overall revenues is contributed by the Indian Railways, any slowdown or delay in orders could affect the earnings negatively.
Texmaco also faces the risk of under-utilisation of capacity, given the dependence of its wagon division arising from erratic planning and off-take of Indian Railways. Hence, when there are no orders from the Railways, margins could come under pressure.
This apart, an unprecedented rise in raw material cost, increase in competition and any unfavourable change in government policies also pose a downside risk to our recommendation.
Shree Renuka Sugars: Hold
Investors with a two/three-year perspective can retain their exposure in the Shree Renuka Sugars stock at the current price. This recommendation follows an earlier "book profits" recommendation on the stock at the Rs 1,030 levels. The revision in outlook is based on the stock's much cheaper valuations at the current price levels and the possible upside to stock price arising from the recent completion of the company's expansion projects.
Though the earnings outlook for the sugar sector, in general, appears bleak in the light of the weak trends in the domestic and global prices, Renuka Sugars may remain an out-performer on account of a recent scaling up of capacities and new revenue streams from the sale of ethanol and other by-products. The stock trades at about eight times its estimated FY-07 earnings (year-ending September 2007).
Scaling up production
Renuka Sugars raised funds through an IPO in October 2005 to substantially scale up its production, refining, ethanol and power cogeneration capacities that were spread across Karnataka and Maharashtra. The capex plans, which included cane crushing capacity of 12,500 tcd and cogeneration facility of 23.5 MW, were revised upwards after the IPO, to 20,000 tcd and 50 MW respectively. The company also flagged off a new 2,000 tcd sugar refining unit at Haldia to enable trading operations. The expansion plans envisaged in the IPO have been completed only recently, with the commissioning of crushing and distillery capacities in Munoli of 7,500 tcd and 120 klpd respectively, commissioning of the greenfield 4,000 tcd unit at Havalga and the setting up of the 6000 tcd unit at Athani. Given that each of these expansion projects have been completed in phases between December 2006 and March 2007, they can be expected to contribute to revenues and earnings only from the current quarter.
No doubt, the substantial ramp-up in the company's production capacity has been timed, rather unfortunately, to a downturn in the domestic sugar cycle. Domestic sugar prices have declined nearly 30 per cent over the past year after a series of upward revisions in domestic sugar output estimates. These revisions have left the latest production estimate for the 2006-07 season (ending September) at over 260 lakh tonnes, doubling sugar inventories to about 100 lakh tonnes at the end of season — a full six months' consumption.
Margins under pressure
With inventories at a comfortable level, and next year's sugar output forecast to grow further to 280 lakh tonnes, prices may remain in the depressed mode for some time to come. Even the recent lifting of the export ban and the incentives announced by the government may not provide significant succour from surplus stocks in the domestic markets. Global sugar prices have corrected significantly on the back of excess supply in the current crop year and expectations of a higher Indian output.
These factors suggest that the company's margins may be under pressure in the coming quarters. Declining sugar prices have already contributed to a sedate financial performance from the company in the quarter-ended March 2007, with consolidated net profits declining by almost half to Rs 22.9 crore in this quarter, despite an expansion in revenues.
Moderate growth
However, Renuka Sugars still appears well placed (compared to peers in the sector) to deliver moderate earnings growth over a one/two-year time-frame. For one, going forward, lower realisations on sugar may be offset partially by the substantial volume growth from the recently expanded capacities.
Second, with the company successfully bidding for contracts to supply ethanol to the oil marketing companies, it is set to scale-up its ethanol supplies to these companies from about six million litres a quarter to about 12 million litres over the few quarters. Though this is a fixed price contract (realisations at Rs 21.50 per litre), the higher ethanol sales would add directly to the bottomline. The company is among the largest ethanol suppliers in the domestic market. Third, with its factories located mainly in Karnataka and Maharashtra in surplus cane areas, the company faces relatively low competition for procurement of cane and low-cost pressures on this score. Fourth, the recent lifting of the export ban on sugar could enable the company to scale up its trading operations, which would contribute additional revenues. Export opportunities for ethanol and any realisations from carbon credit would be an added bonus.
In any case, locational advantages associated with the company's mills, its integrated processes and the ability to process raw sugar, all contribute to an extended crushing season and high operational efficiency and productivity for the company's operations. In light of these factors, shareholders can retain the stock in the hope of some upside to the price.
Tata Power: Hold
Shareholders can stay invested in the Tata Power stock, which has appreciated 10 per cent in the last seven trading days. The long-term prospects for the company appear bright as the ambitious capacity expansion programme will begin delivering results by 2010.
Fresh buying, with a medium-term perspective, can be contemplated at declines from the current levels linked to broad market trends.
Expansion-driven growth
Tata Power will be adding more than four times its current capacity of 2,300 MW in the next five years taking its total generation capacity to about 15,000 MW.
This includes the 4,000-MW Mundra Ultra Mega Power Project that formally came into the company's fold following the acquisition last week of the special purpose vehicle created for the purpose by the government.
This apart, Tata Power is also planning a 3,000-MW project in coastal Maharashtra that will be fuelled by imported coal, just like the Mundra plant, and a 1,000-MW plant in Chattisgarh based on domestic coal.
The smooth completion of all formalities for the Mundra Ultra Mega Power Project and the acquisition of two coal mining companies in Indonesia that will supply fuel to the project appear to be driving the present positive sentiment in the stock.
The acquisition of the Indonesian companies will secure 50 per cent of Tata Power's requirement of imported coal with the assurance of further supplies on production increases. Coal supplies at preferential prices and long-term fuel security are two obvious advantages for the company flowing from the Indonesian acquisitions.
Low-voltage growth
The expansion projects are critical to Tata Power's revenue and earnings that have remained stagnant over the last five years showing almost flat growth.
While revenues are hostage to fuel prices — low fuel cost means lower prices for electricity supplied — profits are largely a factor of the company's ability to rein-in costs and maintain a high plant load factor, which it has managed to do well ensuring that there is no dip in the bottomline.
Though revenues remained flat, Tata Power continued to increase generation and sale of electricity in unit terms. For instance, in the third quarter of 2006-07, electricity generation was higher by 12 per cent while electricity supplied grew 9 per cent to 3,655 million units.
The third quarter was financially a good one for the company, thanks to a Rs 159-crore tax write-back of provision made in earlier years. The final quarter's profits are likely to be affected by this, as the company is obliged to pass on the tax write-back benefit to its customers.
There is also a worry over the operating margin in the third quarter which, at 17.55 per cent, was the lowest in the first three quarters of 2006-07.
Meanwhile, North Delhi Power Ltd., the distribution subsidiary in Delhi, has been performing exceptionally well in curtailing aggregate technical and commercial losses and the experience in the tough Delhi circle should stand the company in good stead as it bids for other distribution privatisations in future.
Tata Power's stated intent to bid for other ultra mega power projects that are likely to be put up for competitive bidding, and its plans for the transmission line business, augur well for its growth prospects.
Shareholders should note that the company's revenue and earnings buoyancy may not be significant till the new capacities come on stream. As such, the stock is for those with a medium-term perspective.
KEC International: Buy
KEC International's strong financial performance, superior execution skills in power transmission projects and diverse client base provides high visibility to its earnings growth. Investors can consider investing in small lots. Any weakness related to the broad markets can be used to increase exposure.
At the current market price, KEC International trades at about 14 times its expected FY08 earnings. Investments can be considered with a two to three year perspective.
KEC is an integrated player in the power transmission business. The company's current order book at Rs 3,000 crore is about 1.4 times its FY07 revenue. KEC has reported a decline in its project execution cycle from 24 months a couple of years ago to 18 months now. This is likely to lead to quicker translation of revenue to earnings thus lending higher visibility to earnings in the near term. KEC has chosen to focus on project management and outsource the low-margin tower manufacturing business, unlike a few other players in this space who manufacture in-house. We view KEC's focus on the high margin project management segment as a positive to maintain margins and prevent any disruption in execution, arising out of capacity constraints.
KEC has a diversified client base with a firm footing in West Asia and Africa. It has recently entered into a joint venture with US-based Power Engineers, a power transmission distribution consulting sector. With this the company has bagged an order in the country. Over 70 per cent of KEC's present order book comes from overseas projects. While the strengthening of the rupee against the dollar may pose concerns on foreign exchange, the company operates in different currencies as the projects are spread across the globe. This may provide some against any particular currency risk. KEC is also looking to enter the Build Own Operate (BOO) model in power transmission through a joint venture. While the company will see strong competition from bigger players, success in this space could improve the margins for the company. A good number of KEC's overseas projects are fixed price contracts. Any steep hike in raw material costs can affect margins and remains a principal risk.
Saturday, April 28, 2007
IISL - Sesa Goa, Godrej Consumer Products, Patni Computers, Sona Koyo Steering
IISL - Patni Computers Q1CY07 Result Update (Reduce)
Board Meetings - May 1 to May 7 2007
| May 1 2007 | Apollo Tyres Ltd | Apollo Tyres Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 01, 2007, to consider and approve the following:1. Approve the Audited Financial Results for the financial year ended March 31, 2007.2. Approve split of face value of shares.3. Consider and recommend payment of final dividend, if any.The Company would be releasing the Audited Results for the quarter ended March 31, 2007 alongwith Financial Results for the year ended March 31, 2007. |
| May 1 2007 | Gujarat Hotels Ltd | Gujarat Hotels Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 01, 2007, inter alia, to take on record the audited financial results of the Company for the year ended March 31, 2007 and also to consider recommendation of dividend for the year ended March 31, 2007. |
| May 1 2007 | I-Flex Solutions Ltd | i-flex Solutions Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 01, 2007, inter alia, to consider the following:1. To adopt audited un-consolidated Indian GAAP Accounts for the quarter and year ended March 31, 2007.2. To adopt audited consolidated Indian GAAP Accounts for the quarter and year ended March 31, 2007.3. To recommend a dividend, if any, on equity shares.4. To approve allotment of 395,529 equity shares of face value of Rs 5/- each to GE Capital Mauritius Equity Investment upon their exercise of warrants allotted to them the year 2005. |
| May 1 2007 | IL&FS Investment Managers Ltd | IL&FS Investment Managers Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 01, 2007, inter alia, to consider the Audited Financial Results of the Company for the year ended March 31, 2007 and to consider declaration of dividend for the year 2006-2007. |
| May 1 2007 | Kesoram Industries Ltd | Audited Results |
| May 1 2007 | Mahalaxmi Rubtech Ltd | Mahalaxmi Rubtech Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 01, 2007, inter alia, to transact the following:1. To make allotment of Bonus Shares to the shareholders entitled for the same.2. To discuss and review the activities of the Company. |
| May 1 2007 | Navin Fluorine International Limited | Navin Fluorine International Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 01, 2007, inter alia, to consider the Audited Accounts of the Company for the Financial Year ended March 31, 2007 and also dividend, if any, for the Financial Year ended March 31, 2007. |
| May 1 2007 | Nitin Spinners Ltd | Audited Results |
| May 2 2007 | ABL Bio-Technologies Ltd | ABL Bio Technologies Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 02, 2007, inter alia, to discuss the following subjects:1. Approval of draft notice for convening the Annual General Meeting of the Company.2. Fixation of Book Closure period for the purpose of Annual General Meeting. |
| May 2 2007 | Archies Ltd | Archies Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 02, 2007, inter alia, to consider and approve, the audited financial result for the financial year ended March 31, 2007 and Appointment of Committee of Directors / Officers of the Company for the allotment of Equity Shares and Warrants convertible into Equity Shares on preferment basis. |
| May 2 2007 | Balkrishna Industries Ltd | Balkrishna Industries Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May, 02, 2007, to finalise the modalities of transferring the Paper Business and Textile business operations of the Company to its wholly owned subsidiaries named Balkrishna Paper Mills Ltd and Balkrishna Synthetics Ltd respectively. |
| May 2 2007 | Canara Bank | Canara Bank has informed BSE that a meeting of the Board of Directors of the Bank will be held on May 02, 2007, inter alia, to consider the Audited Financial Results for the Quarter / Year ended March 31, 2007 and also to recommend dividend (if any). |
| May 2 2007 | Gandhi Special Tubes Ltd | Audited Results |
| May 2 2007 | Gangadharam Appliances Ltd | Quarterly Results |
| May 2 2007 | ING Vysya Bank Ltd | ING Vysya Bank Ltd has informed BSE that a meeting of the Board of Directors of the Bank will be held on May 02, 2007, inter alia, to consider, the audited financial results for the year ended March 31, 2007 and declaration of dividend if any. |
| May 2 2007 | Kanoria Chemicals & Industries Ltd | Dividend & Audited Results |
| May 2 2007 | Shreeom Trades Ltd | Audited Results |
| May 2 2007 | SPS International Ltd | Audited Results |
| May 2 2007 | Supreme Yarns Ltd | Supreme Yarns Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 02, 2007, to consider expansion plans for Hand Knitting Yarns and contracts in which directors are interested. |
| May 2 2007 | Syschem (India) Ltd | Syschem India Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 02, 2007, inter alia, to consider & approve the consolidation of the Equity Share Capital of the Company which is presently one Equity Share of Re 1/- into Equity Share of Rs 10/- each. |
| May 3 2007 | Aditya Birla Nuvo Ltd | Aditya Birla Nuvo Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on April 30, 2007, inter alia, to consider and approve Audited Financial Result of the Company for the year ended on March 31, 2007.Aditya Birla Nuvo Ltd has informed BSE that the meeting of the Board of Directors of the Company which is scheduled to be held on April 30, 2007, inter alia, to consider and approve the audited financial results of the Company for the year ended March 31, 2007, will now be held on May 03, 2007.(As Per BSE Announcement Website Dated on 23/04/2007) |
| May 3 2007 | Bhansali Engineering Polymers Ltd | General |
| May 3 2007 | Century Enka Ltd | Audited ResultsCentury Enka Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 03, 2007, to approve the Annual Accounts (Audited) for the year ended March 31, 2007 and Financial Results for the quarter ended March 31, 2007.At the same meeting, the Board will also consider recommendation of dividend on Equity Shares for the financial year ended March 31, 2007.Further the Company has informed that, the Company will publish the Annual Audited Results and therefore, Unaudited Financial Results for the quarter ended March 31, 2007 will not be published. |
| May 3 2007 | Century Textiles & Industries Ltd | Century Textiles & Industries Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 03, 2007, inter alia, to consider the draft Directors Report and accounts for the year ended March 31, 2007.Since the Company will be releasing the audited results on May 03, 2007 i.e. within a period of three months from the end of the last quarter of the financial year, unaudited results for the last quarter will not be required to be published |
| May 3 2007 | Colgate-Palmolive (India) Ltd | Colgate Palmolive India Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 03, 2007, to transact the following:1. To consider and approve the audited accounts of the Company for the financial year ended March 31, 2007.2. To recommend final dividend for the year ended March 31, 2007. |
| May 3 2007 | Coromandel Fertilisers Ltd | Coromandel Fertilisers Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 03, 2007, inter alia, to consider and approve the audited financial results for the ended March 31, 2007 and to consider recommending declaration of Dividend for the year ended March 31, 2007. |
| May 3 2007 | Development Credit Bank Ltd | Audited Results |
| May 3 2007 | Eicher Motors Ltd | Audited Results |
| May 3 2007 | Ennore Foundries Ltd | Audited Results |
| May 3 2007 | GTL Infrastructure Ltd | Audited Results |
| May 3 2007 | Housing Development Finance Corporation Ltd | Housing Development Finance Corporation Ltd (HDFC) has informed BSE that a meeting of the Board of Directors of the Corporation will be held on May 03, 2007, inter alia, to consider and approve the Audited Annual Accounts of the Corporation for the financial year ended March 31, 2007 and matters related thereto. |
| May 3 2007 | IFCI Ltd | Audited Results |
| May 3 2007 | Info Edge (India) Ltd | Audited Results |
| May 3 2007 | Kansai Nerolac Paints Ltd | Accounts |
| May 3 2007 | Marsons Ltd | Audited Results |
| May 3 2007 | Orchid Chemicals & Pharmaceuticals Ltd | Orchid Chemicals & Pharmaceuticals Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 03, 2007, inter alia, to transact the following:1. Adopt the audited financial results of the Company for the financial year ended March 31, 2007.2. Consider recommendation of dividend on equity capital for the financial year ended March 31, 2007. |
| May 3 2007 | R S Software (India) Ltd | Audited Results |
| May 3 2007 | Sonata Software Ltd | Sonata Software Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 03, 2007, inter alia, to consider the audited results for the quarter and financial year ended March 31, 2007 and recommendation of final dividend for the financial year 2006-07. |
| May 3 2007 | Sterlite Industries (India) Ltd | Sterlite Industries India Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 03, 2007, inter alia, to approve the Audited Financial Results for the year ended March 31, 2007 and recommend Dividend, if any, on the Equity Shares for the financial year ended March 31, 2007. |
| May 3 2007 | Tata Sponge Iron Ltd | Tata Sponge Iron Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 03, 2007, inter alia, to consider and approve the audited financial results for the year ended March 31, 2007.Further the Company has informed that, at the said Meeting the Board will also consider recommendation of dividend, if any, for the year ended March 31, 2007. |
| May 3 2007 | Uniphos Enterprises Ltd | Audited Results |
| May 3 2007 | United Phosphorus Ltd | United Phosphorus Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 03, 2007, inter alia, to consider and take on record the Audited Financial Results of the Company for the year ended March 31, 2007. |
| May 3 2007 | Varun Shipping Company Ltd | Varun Shipping Company Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 03, 2007, inter alia, to consider and approve the audited accounts of the Company for the year ended March 31, 2007 and to recommend final dividend for the year ended on that date. |
| May 3 2007 | Venkys (India) Ltd | Venkys India Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 03, 2007 inter alia, to consider, approve and take on record the Audited Financial Results of the Company for the financial year ended on March 31, 2007 and to recommend dividend, if any. |
| May 4 2007 | Ansal Properties & Infrastructure Ltd | Ansal Properties & Infrastructure Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 04, 2007, inter alia, to consider, allotment of Bonus Shares to Members, whose names appear on the Register of members / beneficial owners as on the Record Date (i.e. April 24, 2007), in terms of the approval given by the members by way of voting through Postal Ballot on March 19, 2007. |
| May 4 2007 | Aro Granite Industries Ltd | Aro Granite Industries Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 04, 2007, inter alia, to consider the Audited Annual Accounts of the Company for the financial year ended on Match 31, 2007 and to recommend the dividend to be paid to the Shareholders of the Company for the year 2006-2007. |
| May 4 2007 | Ashok Leyland Ltd | Ashok Leyland Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 04, 2007 to take on record the Audited Financial Results of the Company for the year ended March 31, 2007. |
| May 4 2007 | Bluechip Tex Industries Ltd | Audited Results |
| May 4 2007 | City Union Bank Ltd | City Union Bank Ltd has informed BSE that a meeting of the Board of Directors of the Bank will be held on May 04, 2007, to consider further issue of equity shares by way of preferential allotment subject to the applicable laws and regulations including RBI & SEBI Guidelines. |
| May 4 2007 | EID Parry (India) Ltd | EID Parry India Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 04, 2007 to consider the Audited Financial Results of the Company for the year ended March 31, 2007 and declaration of final dividend for the financial year ended March 31, 2007. |
| May 4 2007 | Ganesh Housing Corporation Ltd | Ganesh Housing Corporation Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 04, 2007, inter alia, to consider about the declaration of Interim Dividend, if any. |
| May 4 2007 | Garware-Wall Ropes Ltd | Garware Wall Ropes Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 04, 2007, inter alia, to consider as well as to take on record the Audited Financial Results for the year ended March 31, 2007, and to recommend dividend, if any. |
| May 4 2007 | Great Eastern Shipping Company Ltd | Great Eastern Shipping Company Ltd (GE Shipping) has informed BSE that a meeting of the Board of Directors of the Company will be held on May 04, 2007, inter alia, to consider the following:1. Audited Accounts for the financial year ended March 31, 2007.2. Final Dividend for the Financial Year 2006-07, if any. (interim dividends for 2006-07 of Rs 4.00 per share & Rs 3.00 per share were declared & paid in October / November 2006 & January / February 2007 respectively). |
| May 4 2007 | Gujarat Alkalies & Chemicals Ltd | Gujarat Alkalies & Chemicals Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 04, 2007 for considering the Audited Accounts for the Financial Year ended March 31, 2007 and for recommendation of Dividend, if any. |
| May 4 2007 | Gujarat State Fertilizers & Chemicals Ltd | Gujarat State Fertilizers & Chemicals Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 05, 2007, to consider, approve and take on record the Audited Financial Results of the Company for the financial year ended on March 31, 2007, to consider recommendation of dividend and to decide dates of book closure.Gujarat State Fertilizers & Chemicals Ltd has informed BSE that the meeting of the Board of Directors of the Company scheduled to be held on May 05, 2007 for considering and approving audited Financial Results for the year ended on March 31, 2007, to consider recommendation of dividend and to decide dates of book closure, due to unforeseen circumstances, the said meeting has been pre-poned and will now be held on May 04, 2007.(As Per BSE Announcement Website Dated on 17/04/2007) |
| May 4 2007 | H T Media Ltd | HT Media Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 04, 2007, inter alia, to consider and approve the audited Financial Results of the Company for the year March 31, 2007 and consider payment of dividend. |
| May 4 2007 | Hindalco Industries Ltd | Hindalco Industries Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 04, 2007, for consideration of the Audited Accounts of the Company for the year ended March 31, 2007.Since the Company is declaring its Audited Result, it will not publish the Unaudited Financial Result by April 30, 2007, for the Fourth Quarter period from January 01, 2007 to March 31, 2007. |
| May 4 2007 | Kerala Chemicals & Proteins Ltd | Kerala Chemicals & Proteins Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 04, 2007, inter alia, to consider the following:1. Take on record the Audited Accounts of the Company for the year 2006-07.2. Recommendation of Dividend for the year 2006-07. |
| May 4 2007 | Kilitch Drugs (India) Ltd | Kilitch Drugs India Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 04, 2007, to consider following items:1. To increase authorized share capital of the Company.2. To issue and allot of securities on preferential basis to selected persons. |
| May 4 2007 | Rain Commodities Ltd | Rain Commodities Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 04, 2007, inter alia, to convene Extra-ordinary General Meeting of Shareholders for the following:1. Increasing the borrowing powers of the Board of Directors.2. To authorise the Board of Directors to create charge or mortgage on the Property of the Company.3. To reclassify Preference share capital in Authorised Share Capital into Equity Share Capital. |
| May 5 2007 | Abhishek Industries Ltd | Abhishek Industries Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 05, 2007, inter alia, to consider the following:1. Audited Financial Results for the Accounting year and Quarter ended March 31, 2007.2. Recommendation of dividend, if any.3. Employee Stock Option plan of the Company. |
| May 5 2007 | Allahabad Bank | Allahabad Bank has informed BSE that a meeting of the Board of Directors of the Bank will be held on May 05, 2007, inter alia, to consider / approve the following:1. Annual Financial Accounts as on March 31, 2007.2. Annual Book Closure.3. Declaration of dividend, if any.4. Date of Annual General Meeting. |
| May 5 2007 | Gujarat Industries Power Co Ltd | Gujarat Industries Power Company Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 05, 2007, to consider and adopt the Audited Annual Accounts for the Financial Year and 4th Quarter ended on March 31, 2007 and also for recommendation of Dividend, if any. |
| May 5 2007 | Gujarat Narmada Valley Fertilisers Company Ltd | Dividend & Audited Results |
| May 5 2007 | Maral Overseas Ltd | Audited Results |
| May 5 2007 | Rajkumar Forge Ltd | Audited Results |
| May 5 2007 | Subhkam Capital Ltd | Audited Results |
| May 7 2007 | Autoline Industries Ltd | Audited ResultsAutoline Industries Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 07, 2007, inter alia, to consider the following:1. Adoption of accounts for the financial year ended March 31, 2007.2. To take on record the audited financial results for the quarter / year ended March 31, 2007.3. Final dividend, if any, for the financial year ended March 31, 2007.(As Per BSE Announcement Website Dated on 27/04/2007) |
| May 7 2007 | Electrosteel Castings Ltd | Electrosteel Castings Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 07, 2007, to transact the following:1. To consider and adopt the Statement of Accounts of the Company for the year ended March 31, 2007.2. To take on record the Audited Results of the Company for the quarter ended on that Date.3. To consider declaration of final dividend. |
| May 7 2007 | KLG Systel Ltd | KLG Systel Ltd has informed BSE that a meeting of Audit Committee and Board of Directors of the Company will be held on April 28, 2007, to consider and approve the Annual Financial Results for the financial year ended March 31, 2007 and to consider the proposal for recommendation of dividend, if any, for the year ended March 31, 2007.KLG Systel Ltd has informed BSE that the meeting of the Audit Committee and Board of Directors of the Company which was scheduled to be held on April 28, 2007 has been rescheduled and will now be held on May 07, 2007 to consider and approve the Audited Financial Results for the financial year ended March 31, 2007 and to consider the proposal for recommendation of dividend, if any for the year ended March 31, 2007.(As Per BSE Announcement Website Dated on 20/04/2007) |
| May 7 2007 | Mid-Day Multimedia Ltd | Mid-day Multimedia Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 07, 2007, inter alia, to consider and approve the following:1. The Audited Annual Accounts for the year ended March 31, 2007.2. Recommendation for declaration of dividend, if any, for the financial year 2006-07. |
| May 7 2007 | Rashtriya Chemicals & Fertilizers Ltd | Rashtriya Chemicals & Fertilizers Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 07, 2007, inter alia, to consider the Audited Financial Results for the year ended March 31, 2007 & also to reocmmend the dividend, if any. |
| May 7 2007 | Tech Mahindra Ltd | Audited Results |
| May 7 2007 | Union Bank of India | Union Bank of India has informed BSE that a meeting of the Board of Directors of the Bank will be held on May 07, 2007, inter alia, to consider and take on record the audited financial results of the Bank for the 4th quarter and financial year ended March 31, 2007 and to recommend final dividend, if any. |
Subscribe to:
Posts (Atom)